Safe haven demand returned on Friday with the Jpy, Chf and Gold all feeling the benefit, and which looks as though it could continue early in the coming week. I still like to sell Gold into strength though, in anticipation of the Head/Shoulder formation that is building on the charts although the pattern is now reaching maturity so a tight SL should be placed tight above the shoulder around 1540 or above the double top of 1556.
Elsewhere, the Aud and the Nzd remain heavy both against the US$ and also against the Jpy, so selling rallies in either is preferred. Sterling is toppish in the short term charts but still appears to have legs to head higher in the medium/longer term.
Stocks are choppy but also look constructive in the longer term charts, while WTI is best left alone right now I think.
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*Trade of the day: September 23, 2019; 8:33 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 @ 1.1050. SL @ 1.105, TP @ 1.0975
Buy EurUsd @ 1.0960. SL @ 1.0940, TP @ 1.1050
Sell AudUsd @ 0.6785. SL @ 0.6815, TP @ 0.6735
Buy AudUsd @ 0.6715. SL @ 0.6695, TP @ 0.6785
Sell NzdUsd @ 0.6275. SL @ 0.6315, TP @ 0.6200
Sell Gold @ 1525. SL @ 1545, TP @ 1485
EurUsd: The Euro ended the week a little lower but well within the range of the previous sessions, leaving the outlook rather muddied and requiring a neutral stance for Monday. On the topside the September 18/19 highs at 1.1075/72 will again provide resistance ahead of 1.1100/10 (38.2% of 1.1411/1.0925/descending trend resistance), above which would then target 1.1125(61.8% of 1. 1249/1.0925) and the 26 August high of 1.1163. Further resistance then lies at 1.1175(76.4% of 1. 1249/1.0925), at 1.1185 (100 DMA) and then at 1.1260 (200 DMA) although that remains some way off yet. On the downside, minor support will be seen at 1.1090/1.1000, which again underpinned it on Friday but below which would open the way to 1.0965/70 and then to 1.0940/50 ahead of the 1.0925/27 double bottom. I don’t see it down here today, but if wrong, below 1.0925 opens the way to 1.0900 and to 1.0860 (76.4% of 1.0340/1.2555), and further out there is a weekly chart gap that would take us to 1.0772. A range trade of 1.1040/1.0970 may well cover ittoday.
US$Jpy: was unable to hold on above 108.00 on Friday and some safe haven demand during the US session saw the pair fall to the support at 107.50, which has so far held but looks vulnerable in early Monday trade. 107.50 remains decent support (16 Sept low/23.6% of 104.43/108.47) but below which would open the way to 107.10/20 (minor) and to 106.92 (38.2% of 104.43/108.47)although I don’t think we head down there today. If wrong, steeper losses could take the pair towards106.62 (6 Sept low) and then towards 106.45 (50% pivot of 104.43/108.47). On the topside, minor resistance now lies at 107.75/80 and then again at 107.95/108.00 (200 HMA/100 DMA). Back above here looks unlikely now, but if wrong, further gains could see a test of the Wednesday/Thursday highs at around 108.50. With the dailies turning lower it may be time to look to sell into strength with a SL today placed above 108.10.
AudUsd: The Aud$ remains heavy at the start of the week after ending Friday at a 3 week low, at 0.6760. The 4 hour momentum indicators remain heavy, and on the downside, having closed the week just below Fibo support at 0.6765 (61.8% of 0.6687/0.6894) the next downside target will be at 0.6750 (minor) and then at 0.6735(76.4%). Further out, I still suspect that we may see a return to 0.6700/10 as an RBA rate cut looms on the horizon, below which would open the way back to 0.6688, where we have a minor double bottom( 3 Sept/26 August lows) and which comes ahead of 0.6675 (7 Aug low). Below 0.6675, there is minor support at 0.6660, but under there would open the way to 0.6500 and, further out, the next major Fibo level is not seen until 0.6250 (76.4% of 0.4773 (April 2001)/1.1082 (July 2011)). On the topside, resistance will now be seen at 0.6780/85 (minor) and then at 0.6810 (Friday high) ahead of 0.6830 and 0.6845 (200 HMA). Selling rallies towards 0.6800, with a SL at 0.6815 seems to be the plan.
NzdUsd: The Kiwi remains very heavy and closed the week at a new 4 year low of 0.6255, and is now seemingly headed for the next meaningful support at the September 2015 low at 0.6235. Below here, more distant bids would arrive at the August 2015 low at 0.6125, which could be where we are headed if the RBNZ cut rates on Tuesday. Having cut by 0.5% at the last meeting, another cut this month seems unlikely but the RBNZ has demonstrated its willingness to take bold steps and may do so again. A dovish outlook is more likely, which will keep the downside pressure on the Kiwi and a slow creep lower would not surprise. On the topside, minor resistance is now in place at 0.6270 ahead of 0.6300 and 0.6320/30. Further resistance would lie at 0.6355/60, above which we could see a squeeze back to 0.6375-80 and then to 0.6400/10. Above here, unlikely in the near term, would allow a move towards 0.6420/25 and on to the trend high of 0.6450 (12 Sept). Trading from the short side is preferred and selling rallies with a SL placed above 0.6310.
By September 23, 2019
Source: FXCharts
