Daily FX & Stock Indices Technical Trend Bias/Key Levels (Fri 16 Nov)

MIx bag in FX space while stock indices are still capped below resistances

FX –  Mix bag with GBP/USD hovering right above triangle range support

  • EUR/USD – Trend bias: Down.  Yesterday’s push up managed to stall at the predefined 1.1360 key short-term resistance (upper boundary of the minor descending channel from 24 Sep 2018 high + 23.6% Fibonacci retracement of the on-going decline from 24 Sep 2018 high to 12 Nov 2018 low) as per highlighted in our previous report, it printed a high of 1.1362 in yesterday, 15 Nov U.S. session. Interestingly, it ended the U.S. session with a daily “Spinning Top” candlestick pattern right below the 1.1360 key short-term resistance coupled with bearish divergence signal seen in the 4-hour Stochastic oscillator at its overbought region. These observations suggests a lack of upside momentum of price action. Maintain bearish bias and added 1.1290 as the downside trigger (the minor ascending trendline now in place since the recent 13 Nov low of 1.1216) and a break below it reinforces another fresh impulsive downleg to retest 1.1216 before targeting the next support at 1.1130/1100 (Fibonacci projection/retracement cluster + swing lows of 30 May/20 Jun 2017 + lower boundary of the minor descending channel from 24 Sep 2018 high). However, a clearance above 1.1360 negates the bearish tone for an extension of the corrective rebound towards the 1.1500 swing high area of 07 Nov 2018.
  • GBP/USD – Trend bias: Push up within range configuration. The pair had managed to push down towards the lower limit of the “Descending Triangle” range configuration below the predefined 1.3047 short-term resistance as per highlighted in our previous report. Yesterday, it printed a low of 1.2722 in the U.S. session which was just 22 pips away from the 1.2700 support/target of the lower limit of the “Descending Triangle” range reinforced by the on-going disagreement among U.K politicians on PM May’s latest Brexit deal that saw the resignation of Dominic Raab, the Minister in charge of Brexit affairs. Right now, the pair is now hovering just above the 1.2700 support of the “Descending Triangle” range configuration in place since 15 Aug 2018 low of 1.2660 coupled with a bullish divergence signal seen in the 1-hour Stochastic oscillator at its oversold region. Flip to a bullish bias with key short-term support at 1.2700/2660 for a potential push up towards 1.2920 (former minor swing low areas of 14/15 Nov 2018) before the minor range resistance of 1.3030/70 in place since 14 Nov 2018 in the first step. However, a daily close below 1.2660 triggers a bearish breakdown from the “Descending Triangle”  range configuration to open up scope for a fresh impulsive downleg to target the next support at 1.2135 (the 09/14 Mar 2017 swing low + exit target of the “Descending Triangle” bearish breakdown.
  • USD/JPY USD – Trend bias: Push down towards medium-term ascending channel support.  The pair had broken down below the 113.50 lower limit of the short-term neutrality zone as per highlighted in our previous report that validated at least a minor decline. In addition, yesterday’s push down in price action also triggered a bearish breakdown of a minor “Head & Shoulders” bearish reversal configuration that has formed since 09 Nov 2018 minor high of 114.08. Flip to a bearish bias below key short-term resistance at 113.65 (neckline resistance of the minor “Head & Shoulders”) for a further potential push down to target the next support at  112.85/60 (medium-term ascending channel support from 26 Mar 2018 low. However, a break above 113.65 sees a squeeze up to retest the  114.55 major range resistance in place since 10 May 2017.      
  • AUD/USD – Trend bias: Further corrective rebound. The pair had breached above the 0.7250 key short-term resistance which invalidated the bearish push down scenario to test the 0.7145/7130 minor ascending trendline in place since 26 Oct 2018 low reinforced by a stronger that expected AU job data for Oct where employment change recorded an increase in 32.8K versus a consensus increase of 20K.  Right now, positive readings are seen in both the 4 and 1-hour Stochastic oscillators which suggest that short-term upside momentum of price action remains intact. These observations suggest that the pair is in the midst of undergoing the second leg of a potential minor corrective rebound to retrace the medium-term downtrend from 26 Jan 2018 high to 26 Oct 2018 low. Flip to a bullish bias in any dips above 0.7230 key short-term support (former minor swing high of 14 Nov 2018 +  minor ascending trendline from 13 Nov 2018 low) and a break above 0.7305 (the minor range resistance in place since 21 Sep 2018) reinforces a further potential push up to target the next intermediate resistances at 0.7365 (the swing high of 21/28 Aug 2018) follow by 0.7460 (the range resistance from 09 Jul/09 Aug 2018 + Fibonacci rertracement/projection cluster). However, failure to hold at 0.7230 negates the corrective rebound scenario for another choppy push down to test the 0.7145/7130 minor ascending trendline in place since 26 Oct 2018 low and the pull-back support of the former medium-term descending channel resistance from 26 Jan 2018 high.
  • NZD/USD – Trend bias: Sideways. Right now, the pair is testing the former medium-term swing low area of 11 May/08 Dec 2017 now acting as a resistance at 0.6840/50 which also confluences with the 38.2% Fibonacci retracement of the medium-term downtrend from 16 Feb 2018 high to 08 Oct 2018 low and the 2.00 Fibonacci projection of the rebound from 08 Oct 2018 low to 22 Oct projected from 26 Oct 2018 low. No change, maintain neutrality stance between 0.6840/50 and 0.6790 (the former minor swing high of 08 Nov 2018 + minor ascending trendline from 13 Nov 2018 low).  A clearance above 0.6850 validates a continuation of the corrective rebound towards the next intermediate resistance at 0.7030/7050 (the pull-back resistance of the former primary/major ascending channel support from 24 Aug 2015 low + swing high area of 06/13 Jun 2018).  On the flipside, a break below 0.6790 sees a slide towards the next near-term support at 0.6680 (the former minor swing high areas of 21/27 Sep 2018 & 02/03 Nov 2018 + minor ascending trendline from 26 Oct 2018).

Stock Indices (CFD) – Still below resistances

  • US SP 500 – Trend bias: Down. Inched down lower as expected to print a low of 2670 in yesterday’s 15 Nov U.S. session before a rally of 2.5% to print a high of 2735 in the closing hour of the U.S session that recorded its first daily gain not seen in the past 5 days since 08 Nov 2018. Yesterday’s rebound in price action was accompanied by a lower volume of 2,741 million versus the previous rebound seen on 30 Oct 2018 with a volume of 3,336 million that kickstarted a 5% rebound to print a post U.S. medium-term elections high of 2817 on 08 Nov 2018. Interestingly, yesterday’s rebound led the Index close to our predefined 2770 key short-term resistance (10 Nov 2018 former minor swing low area + minor descending trendline from 08 Nov 2018 high) as per highlighted in our previous report which also confluences closely with the 61.8% Fibonacci retracement of the recent decline from 08 Nov 2018 high to yesterday, 15 Nov low. No change, maintain bearish bias with 2770 remains as the key short-term resistance and added 2709 as downside trigger level (the former minor swing high area of 15/16 Nov 2018) to reinforce another potential fresh impulsive downleg to target the recent 29 Oct 2018 swing low area of 2627/2603 in the first step. However, a break above 2770 put the bears on hold for a retest on the 2825 key medium-term range resistance as per highlighted in our latest weekly technical outlook.
  • Japan 225 – Trend bias: Down. Maintain bearish bias with key short-term resistance at 22080 which also coincides with a minor descending trendline from 08 Nov 2018 high and added 21535 as the downside trigger level (the minor range support in place since 13 Nov 2018) to reinforce a further potential push down to retest 20800 (the swing low areas of 26/30 Oct 2018). However, a break above 22080 sees an extension of the corrective rebound to retest the 22300 descending trendline resistance in place since 01 Oct 2018 high.
  • Hong Kong 50 - Trend bias: Push down within range. Tested the 26110 key short-term resistance before it inched back down. Printed a high of 26171 in today, 16 Nov Asian opening session coupled with a bearish divergence signal seen in the 4-hour Stochastic oscillator at its overbought region.  Tolerate the excess and maintain bearish bias with key short-term resistance at 26110/171 key short-term resistance (gapped resistance of 09 Nov 2018 + former minor swing low areas of 06/07 Nov 2018 + minor descending trendline from 02 Nov 2018 high) and added 25835 as the downside trigger (the minor ascending trendline from 13 Nov 2018 high) for a potential push down to retest the 25090/25013 range support in place since 13 Nov 2018. However, a break above 26171 negates the bearish tone for a squeeze up towards the 26700 key medium-term resistance as per highlighted in our latest weekly technical outlook.
  • Australia 200 – Trend bias: Down. Since its recent low of 5684 printed on 15 Nov 2018, Asian session, the Index seems to be consolidating in a bearish “Flag” ascending range configuration. No change, maintain bearish bias below 5827 key short-term resistance (13 Nov former minor low + minor descending trendline in place since 12 Nov 2018 high) and added 5703 as the downside trigger (lower limit of the “Flag”) for a further potential push down towards the 5635 recent swing low area of 26 Oct 2018 in the first step. However, a break above 5827 negates the bearish tone for a steeper rebound to retest the minor range resistance of 5935/48 in place since 17 Oct 2018.
  • Germany 30 – Trend bias: Sideways. Since 14 Nov 2018, the Index has started to evolve within a choppy range configuration with upper and lower limits at 11550 and 11250 respectively. Thus, prefer to turn neutral between 11550 and 11250 for now. Only an hourly close below 11250 shall trigger a range bearish breakdown to target the next near-term support of 11050 (the swing low area of 25/26 Oct 20118). On the flipside, a clearance above 11550 put the bears on hold for a squeeze up to test the 11600/690 key medium-term resistance as per highlighted in our latest weekly technical outlook.

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