Risk sentiment improved on Monday after news that Italy is finally showing some flexibility to adjust its 2019 budget deficit target. US stock markets gained by about 1.5% and the action once again looks set to revolve around these on Tuesday, with the charts suggesting further short term gains. Further out, with the weeklies retaining a negative outlook, I still prefer to sell into rallies.
In the FX markets it was mostly choppy although the Jpy is generally softer as the need for a safe-haven recedes while stocks remain firm. Overall though, I suspect the currency markets will have a similar session to Monday in the absence of any data, albeit there are various CB speakers due today. Cable looks to be in the quiet area before the major storm breaks out. Stay well clear. It looks as though the Brexit deal could well be voted down by the UK parliament, in which case it will fall like a rock but until the vote it will remain very nervous.
WTI still look very heavy in the medium term although right now the short term momentum indicators suggest that we could squeeze a bit higher. I prefer to look for levels to sell and suspect that eventually we are in for a more severe test of 50.00, below which would then target 48.00.
By November 27, 2018
*Trade of the day: November 27, 2018; 7:13 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.
Range Trade: EurUsd: 1.1370/1.1270 (SL 30 pips either side)
Sell: EurUsd: @ 1.1385 SL @ 1.1415, TP @ 1.1290
Range Trade: AudUsd: 0.7285/0.7200 (SL 30 pips either side)
Range Trade: US$Jpy: 114.10 /113.10 (SL 30 pips either side)
Sell AudUsd @ 0.7280. SL @ 0.7305, TP @ 0.7165
Buy WTI @ 50.50. SL @ 59.80, TP @ 53.00