Despite it being a US holiday, markets have been active, and the US stock markets were in-fact open and currently seem to have some short term upside momentum after having bounced off the day’s lows. The medium term looks a little more unsettled though and selling rallies is still preferred. The ASX looks more negative all round and an eventual test of 6000 would not surprise.
The currencies are mixed today, but in the short term, both the Aud and the Kiwi may have found a base and look relatively underpinned, although further out both the AudUsd and NzdUsd seem to have further downside potential against the US$.
Elsewhere I still like to look for levels to resell the Euro, as the dailies are turning increasingly lower. There is no change in our view that while the Fed continue to hike rates -and bond yields move higher, – the dollar should continue to outperform. A long term support line is coming into view at 1.1400. I doubt that this will be taken out at the first attempt so buying at the trend support with a tight SL may be a plan.
The same theory should apply to US$Jpy although the shakeout yesterday in the Asian stock markets has seen some safe-haven demand for the Jpy and the pair does look a little heavy, so trading EurJpy from the short side may be a plan.
As before, keep an eye on the Cad$, where higher levels still seem to lie ahead, at least against the Aud$, even though it has already come quite a long way. Look to sell near term rallies.
Note that EurGbp did break below the 200 DMA support, as we discussed on Friday, and appears to have further downside momentum ahead of it. A return to 0.8700 and possibly to 0.8615 could be on the cards. We sold the overnight rally to 0.8800 and now have a SL at just above the Monday high, placed at 0.8810.
Gold and Silver fell hard on Monday and both look a little heavy although in the longer term both seem relatively range bound and while above support at 1180 and 14.20 respectively I would not be getting too excited, perhaps looking to buy dips with a tight SL placed just above the support levels.
WTI ended up being rather choppy and directionless on Monday and more of the same could be in store today. Although in the longer term I suspect we still move towards the Head/Shoulders target at around 80.00, the near term the charts now suggest that we may see a run back towards the neckline, currently at 72.00. Sell rallies towards 75.00, with a SL placed above the trend high of 76.00.
*Trade of the day: October 9, 2018 6:44 AM(AET)
*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.
Sell WTI @ 75.00. SL @ 76.00, TP @ 72.50
Sell EurUsd @ 1.1540. SL @ 1.1580, TP @ 1.1420
Buy EurUsd @ 1.1400. SL @ 1.1345, TP @ 1.1500
Sell AudUsd @ 0.7110. SL @ 0.7155, TP @ 0.7030
Buy GbpAud @ 1.8400. SL @ 1.8250, TP @ 1.8990
Range Trade: Gold: 1180/1190