There has been some interesting movements with some of the majors in recent weeks as well as gold, silver and now oil. The dollar has gone from zero to hero even after worse than expected job figures. Many clients are confused and asking “what do we make of this?” Well the answer is, let’s play each day as it comes, look at the technicals and watch out for the fundamental data for a more medium term approach. Sounds simple? Well it’s trading 101. When things are not so clear, just go back to basics.
What we are watching
We reported yesterday that the outlook for the AUD/USD is weak. In the short term we see a break past 0.7300 but with the downward pressure building this will be short lived and we see a shift to the downside to reach support at 0.7255 and even 0.7235. Currently the pair is trading at 0.7276 with a high of 0.7286 and a low of 0.72711 at the time of writing. Technically we see a intraday support level at .7263 followed by 0.7255, 0.7235 and 0.7220. On the upside look for a break above 0.7290 to confirm the trend and target 0.7305 followed by o.7340 but anything further would be a greedy in this case.
The pound has not looking healthy either. In fact I would say it’s looking more like a dirty buffet with a No Brexit Deal on the table. With the dollar having its run of good fortune, it doesn’t help the pounds situation. Yesterday we predicted a drop to 1.3239 followed by a target of 1.3185. Well lets say that those numbers were heard loud and clear by the bears as they drove the cable down to a low of 1.3140. Today we do not see the situation improving for the cable as a break past the low of 1.3137 could see the pound go to 1.3120 to a possible 1.3050-1.3060.
As for Gold we are seeing some downward momentum developing. This mainly a result of ongoing consolidation after its record run to $2,075 an ounce just 2 weeks ago. a sideways trend is expected to follow with a range between $1,908 – $1992. As it stands much like the Aussie, gold is a hard one to trade but intraday levels you may want to consider an upside target of $1935 followed possible by 1948. On the more likely downside a consideration of $1,916.42 may be likely however this being the low of last week you would expect a lot of support here and a run past this seem unlikely intraday.
The other pair that is not really getting too much love is the EUR/USD. The trend remains a Bearish one although looks to be flat lining from here. Keep an eye out for these bearish levels 1.803, 1.1789 followed by 1.1766. The alternative would have us take 1.1835 as the first target and Fridays high of 1.865 to follow.
Finally a bull shows its horns with the USD hold strong amidst a calamitous Japan GDP result. Japans Q2 GDP report came in showing a decrease of 28.1% in the economy for last quarter which came in higher than the preliminary readout which expected only 27.8%. The USD holds strongly above 106.00. As this article went to print, the USD/JPY was trading at 106.29. As it trades sideways over the lunch period we still consider 106.35 as the first target followed by a more aggressive target of 106.70 followed by 107.10. On the downside you may want to consider 105.90 as your initial target with 105.50 to follow.