The week begins with the US$ looking rather mixed after Friday’s US employment data, and with the main interest today being in Sterling, which appears strong, and the Aud and Kiwi which are still under severe downside pressure. In the short term, both GbpAud and GbpNzd have risen a long way, but they do appear to have further topside potential and buying dips may be a plan, looking for further medium term gains.
The AudUsd and NzdUsd seem to have further downside potential against the US$, and elsewhere I still like to look for levels to resell the Euro as the dailies are turning increasingly lower. There is no change in our view that while the Fed continue to hike rates and bond yields move higher, the dollar should continue to outperform. Buying dips is favoured as a medium term trade.
As before, keep an eye on the Cad$, 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..
Gold and Silver are choppy, going nowhere fast, and best left alone today, while WTI gave back significant ground at the end of the week although Friday ended up being rather choppy and directionless. , 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.
US stocks are also lower today and we may have now seen a medium term top. Selling the S+P near current levels, ideally above 2900, with a SL placed above 2930 may be a plan.
By October 8, 2018
*Trade of the day: October 8, 2018 7:19 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 @ 1.1600. SL @ 1.1680, TP @ 1.1460
Buy EurUsd @ 1.1475. SL @ 1.1445, TP @ 1.1540
Sell AudUsd @ 0.7085. SL @ 0.7105, TP @ 0.6985
Sell AudUsd @ 0.7125. SL @ 0.7155, TP @ 0.7030
Sell EurGbp @ 0.8825. SL @ 0.8860, TP @ 0.8700
Buy GbpAud @ 1.8400. SL @ 1.8250, TP @ 1.8990