Friday’s US jobs data was a good was a good result for the dollar, which headed higher; and from the look of the daily DXY chart it has further upside potential in the sessions ahead. As a result of this, commodities are back under some downside pressure although both Gold/Silver finished well off their lows. WTI was up by 1.8% but remains confined to its recent range.
EurUsd: The Euro fell sharply after the NFP on Friday, taking out the 100 DMA (1.1255) and reached 1.1207 before finishing at 1.1225, in line with the Fibo level at 1.1223 (61.8% of 1.1106/1.1411). The 4 hour/daily charts look heavy and if 1.1200 can be taken out then we could see a move towards 1.1178 (76.4%), which ties in with the 18 June low. Below there would then open the way to 1.1150 and to strong support at 1.1105/15. On the topside, resistance will be seen at the 100 DMA 1.1255, ahead of minor levels at 1.1280, 1.1300 and at 1.1315 ahead of the 200 DMA at 1.1350.Above here looks unlikely in the near future, but further gains could then see a run towards 1.1400 and the 25 June high of 1.1411, beyond which the next target is at 1.1447 (20 March high), which ties in with the Fibo level (23.6% of 1.2555/1.1106). With the daily charts looking a little heavy I still prefer to look to sell rallies in the Euro.
DXY: (97.17) The DXY ended the week on a positive note, up by +0.47% and with the daily momentum indicators looking positive I think we could see further gains in the coming sessions although the 100 DMA at 97.08 may act as a magnate today. If the index does head higher, the initial resistance is seen at 97.43 (Friday high) and then to 97.76 (18 June high), but probably not today. Beyond here would then target 98.00 and the trend high at 98.37 (23 May). Below the 100 DMA (97.08), nearby support is seen at 97.00, below which would allow for a run back to 96.85 and to the 200 DMA (96.65) ahead of 96.40 (minor) and 96.00 (200 WMA) and then at last week’s low of 95.84. Buying dips currently seems to be the plan, with a SL placed below 96.60 (approx 1.1300 EurUsd)
US$Jpy: is higher at the start of the week, underpinned by the US jobs data and the strong rise in US yields. Having reached 108.63 on Friday, this will be the first level of resistance after having closed at 108.45. Beyond there, the 11 June high at 108.80 and the Fibo level at 108.90 (38.2% of 112.40/106.78) will see good offers, above which would open the way to 109.00 and higher, with minor resistance seen at 109.10/15, beyond which would open 109.50 (50% of 112.40/106.78). Support will now be seen at 108.15/20, at 108.00 and at 107.77 (Friday low) ahead of 107.53 (04 July low). This seems some way off right now but further support would arrive at 107.35 and 107.00. I remain neutral on US$Jpy and prefer to trade the Jpy through the crosses, looking to sell EurJpy or AudJpy.
US$Chf: reached a high of 0.9930 on Friday, and with the 4 hour/daily momentum indicators looking constructive, buying dips may be the plan. Support would arrive at 0.9900 and then at 0.9880 both minor levels, ahead of the 200 WMA (0.9847) and the 100 WMA (0.9830), so looking to buy on approach to these, with a tight SL placed under 0.9830 might be an idea. On the topside, resistance will be seen at 0.9930 and then at the 200 DMA (0.9980) and at the 100 DMA (1.0013). Further out, 1.0100 would be a more distant target.
AudUsd: The Aud has moved lower higher following Friday’s US jobs data, reaching 0.6957 ahead of a bounce into the week’s close, at 0.6980. While the daily charts currently look rather no-committal, possibly turning slightly lower, the 4 hour charts are heavy and a return to 0.6955/65 (0.6965; 38.2% of 0.6831/0.7048) could be on the cards. This should be strong support given that it is a minor triple-bottom, but a break of 0.6950 would suggest further declines towards 0.6940 (50%) and to 0.6913 (61.8%). On the topside, minor resistance will be seen at 0.7000, 0.7020 both minor and at 0.7035/40 (Daily cloud top/100 DMA),ahead of the 0.7048 trend high, which would be strong if we were to see it, being the 18 month descending trend resistance. If that gets broken at any stage, stops would be triggered and allow for a run towards 0.7070 – which should be strong – (61.8% of 0.7207/0.6831/ weekly cloud base, ahead of the 200 DMA at 0.7095.
NzdUsd: The Kiwi fell heavily on Friday from a high of 0.6695 to a low of 0.6601, before closing the week at 0.6625. The charts suggest further downside momentum on Monday and a break of support at 0.6600 would all for a move towards 0.6578 (61.8% of 0.6487/0.6726) and then to 0.6555 (minor) and to 0.6543 (76.4%). Selling rallies now seems to be the plan, where resistance should arrive at 0.6635/40, 0.6670, 0.6695 (100 DMA)/0.6705 (200 DMA). The hourly charts are turning higher, so a short squeeze is possible but I don think will be very strong, and eventually lower levels seem likely.
Gold: Having made a 6 year high at 1439 last Tuesday, Gold has since traded a highly volatile range of 1438/1380, leaving the outlook rather clouded. The daily charts have become overbought and appear to be turning lower so, for now, I prefer to look to sell rallies, with a SL placed above 1440. Above 1440 would look towards 1450 (12 May ’13 high), beyond which there is little in the way of 1481 (50% pivot of 1921/1048) and even 1500. On the other hand, the weekly charts are building positive momentum so at some stage I suspect that 1440 will be taken out for a run to the topside, albeit that will depend on Fed policy later in the year. For now, resistance is seen at 1420, 1430 and 1440. On the downside, support will be seen at 1380 and then at 1376 (38.2% of 1275/1439) and to 1365 below which there is not a whole lot to stop it heading towards 1355/50.
Stocks: have been rallying strongly to successive all time highs in both the S+P and the DJI, and although Friday’s jobs data took some of the steam out of the indices, as doubts grow of a July rate cut by the Fed, the overall uptrend remains firmly intact. That being the case, we could see a steady climb towards new blue sky levels. A good deal of caution is required up here though as there are increasing warnings of bearish divergence both in the short term and in the long term charts, where the weekly RSIs in particular seem to be running out of steam.
*Trade of the day: July 8, 2019; 8:46 AM(AET)
*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.
All trades are good till 5.00pm NY time. All “in the money trades” should have the SL raised to break-even, or managed manually. All “out of the money trades” should keep original SL in place.
Sell EurUsd @1.1250. SL @ 1.1305, TP @ 1.1150
Buy EurUsd @ 1.1250. SL @ 1.1215, TP @ 1.1310
Buy UsdChf @0.9875. SL @ 0.9825, TP @ 0.9975
Sell AudUsd @ 0.7000. SL @ 0.7025, TP @ 0.6915
Buy AudUsd @0.6925. SL @ 0.6895, TP @ 0.7000
Sell Gold @ 1425. SL @ 1442, TP @ 1385