Monday was a mostly quiet session and the charts show little direction although a “risk-on” theme seems to dominate the general thinking. That can change quickly but in the mean time, the stock indices still look reasonably positive, while the Jpy, used as a funding currency, still looks soft against both the US$ and on the crosses.
Elsewhere the FX markets still look rather muddled although EurUsd may see some mild downside pressure again today, so selling rallies towards 1.1500 with a tight stop maybe worthwhile.
Both the Aud$ and the NZ$ may be putting in a top on the charts although there is no real momentum to be seen on the momentum indicators at this stage. The RBA and the Australian Retail Sales are due today, and with the economic activity having been poor recently the RBA may adopt a dovish stance, so I prefer to be short heading into the data today.
As we said before though, some stiff resistance lies ahead, with the S+P 100 DMA currently acting as a bit of a magnate at 2705, although the S+P is currently trading above it after having broken higher on Monday, but the 200 DMA lies ahead at 2744. The DJI is also making a strong attempt to break higher from the convergence of the 100 DMA /200 DMA, both now at 24940. The DJI is currently 100 pips above this level, so buying here, or on dips towards 24950, with a SL placed at around 24850, may be a plan.
WTI was choppy again on Monday and ended the session right on the neckline of the previously mentioned reverse Head/Shoulders formation.
I still prefer buying dips but this is not an easy trade as too many people are watching it. The momentum indicators do seem headed higher though so patience is required. The 200 WMA is at 52.25, so looking to buy the dips again, with a SL below this level may be an idea.
Gold still looks heavy in the short term but the longer term momentum indicators still point higher so buying dips towards 1300, with a SL placed below, seems to be the idea.
By February 5, 2019
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*Trade of the day: February 5, 2019; 10:49 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 AudUsd @ 0.7250. SL @ 0.7385, TP @ 0.7180
Buy AudUsd @ 0.7155 SL @ 0.7125, TP @ 0.7225
Buy US$Jpy @ 109.40. SL @ 108.90, TP @ 110.20
Buy Gold @ 1305. SL @ 1295, TP @ 1325
Buy EurUsd @ 1.1375. SL @ 1.1345, TP @ 1.1450
Sell EurUsd @ 1.1465. SL @ 1.1505, TP @ 1.1385
