The US$ did suffer a minor setback following the soft NFP reading on Friday, but while the daily DXY charts still point higher I still prefer to buy it on dips against most of the majors for the medium term trade , albeit that in the short term the Euro, Aud and Kiwi may be able to move a little higher. Overall I think any near term rally probable offers a sell opportunity for each of these currencies. US$Jpy looks rather mixed and is probably best left alone while Sterling looks heavy because of the usual Brexit confusion.
As we said last week, the DXY reached a high of 97.71 on Thursday, forming a double top with the 14 Dec 2018 high, but not seen previously since 20 June 2017, when the high was 97.87. This will continue to be very strong resistance, also being (61.8% of 103.82/88.25, but a break would suggest a trip towards 98.00 and possibly towards 100.15 (76.4% of 103.82/88.25). Despite Friday’s minor setback, the momentum indicators look increasingly positive for the dollar, so trading from the long side is still preferred.
On the crosses, Sterling now looks rather heavy against the Euro, Jpy and the Aud but elsewhere things look rather mixed.
The metals may have put in a short term base according to the charts and may squeeze a little higher although if I am right about the US$, commodities are likely to come under pressure if it continues to strengthen, so selling the metals and oil may be a medium term plan
*Trade of the day: March 11, 2019; 10:44 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 @1.1275. SL @ 1.1315, TP @ 1.1175
Sell AudUsd @ 0.7070. SL @ 0.7110, TP @ 0.6970
Sell Gold @ 1310. SL @ 1320, TP @ 1290