Daily FX & Stock Indices Technical Trend Bias/Key Levels (Fri 25 Jan)

USD strength except in GBP & NZD S&P500 still remains below 2650 resistance

FX – Mix bag with USD weak against GBP

  • EUR/USD – Trend bias: Down. The pair broke below the tightened key short-term support at 1.1365 and even the 1.1335 ascending range configuration support in place since 12 Nov 2018 low reinforced by dovish comments made by ECB Draghi on concerns of an economic slowdown in Eurozone during yesterday, 24 Jan ECB monetary policy press conference. Flip to a bearish bias below key short-term resistance at 1.1350 (pull-back resistance of the former ascending range support from 12 Nov 2018 low + 23.6% Fibonacci retracement of the on-going decline from 10 Jan 2019 high to yesterday, 24 Jan U.S. session low of 1.1288) for a further potential decline to target the next near-term support at 1.1220/1215 (swing low area of 12 Nov 2018) in the first step. On the other hand, a clearance above 1.1350 jeopardises the bears for another round of choppy consolidation for a push up to retest the 18/23 Jan 2019 minor swing high areas of 1.1390/1410.
  • GBP/USD – Trend bias: Push up within range configuration. Yesterday, 24 Jan European session’s slide had managed to hold above the 1.2930 key short-term support as expected. It printed a low of 1.3010 before it reversed up and broke above the previous minor swing high at 1.3094. No change, maintain bullish bias above a tightened key short-term support now at 1.3010/3000 (the minor ascending channel support from 03 Jan 2019 low + the pull-back support of the former complex descending range resistance) for a further potential push up to target the next intermediate resistance at 1.3300/3400 (20 Sep 2018 swing high + 50% Fibonacci retracement of the previous decline from 17 Apr 2018 high to 03 Jan 2019 low) within a longer-term sideways range configuration in place since Oct 2016 low of 1.1950. On the other hand, a break below 1.3000 negates the bullish tone for a reintegration back into the descending range from 20 Sep 2018 high to retest the next near-term support at 1.2830 (minor swing low areas of 17/21 Jan 2019).
  • USD/JPY – Trend bias: Push up within range configuration. No change, maintain bullish bias with 109.10 remains as the key short-term support (22 Jan U.S. session low + minor ascending channel support from 03 Jan 2019 swing low). No change, maintain bullish bias with 109.10 remains as the key short-term support and added 110.00 as a upside trigger level (23 Jan swing high) to reinforce another round of potential upleg to target the 111.10/40 (swing high area of 26 Dec 2018 + Fibonacci expansion/retracement cluster + minor ascending channel resistance). On the other hand, failure to hold at 109.10 invalidates the bullish scenario for a slide to retest the 108.00/107.80 minor swing low areas of 10/14 Jan 2019.
  • AUD/USD – Trend bias: Down.  Continued to inch lower as expected and almost hit the first short-term target/support at 0.7060 (printed a low of 0.7076 in today, 25 Jan Asian session). No change, maintain bearish bias with a tightened key short-term resistance now at 0.7130 (former minor swing low area of 23 Jan 2019 + Fibonacci retracement cluster) for a further potential slide towards 0.7060 and 0.7015/7000 support (50%/61.8% Fibonacci retracement of the recent rebound from the 03 Jan 2019 swing low area to 11 Jan 2019 high and the former minor congestion zone of 27 Dec 2018/02 Jan 2019). On the other hand, a clearance above 0.7130 negates the bearish tone for a squeeze up to retest the 0.7155/7167 resistance (yesterday’s 24 Jan bearish reversal high + descending trendline from 11 Jan 2019 high).
  • NZD/USD – Trend bias: Sideways. No change, maintain neutrality stance between 0.6800 and 0.6700. A break below 0.6700 opens up scope for a further slide to test 0.6635 major ascending trendline support in place since 05 Oct 2018 low. On the flipside, a break above 0.6800 sees a further push up towards the next intermediate resistance at 0.6840/6870 (minor swing high areas of 15 Jan 2019/18 Dec 2018 + 76.4% Fibonacci retracement of the recent decline from 04 Dec 2018 high to 03 Jan 2019 low) and the 04 Dec 2018 swing high area of 0.6940/6970.

Stock Indices (CFD) – Mix bag, watch 2650 resistance in S&P 500

  • US SP 500 – Trend bias: Down. Key short-term resistance remains at 2650 and added 2633 as downside trigger level to reinforce a further potential slide towards the next near-term support at 2610 (Fibonacci expansion cluster) follow by the medium-term lower neutrality zone limit at 2600. However, an hourly close above 2650 invalidates the bearish scenario for a squeeze up to retest 18 Jan 2019 swing high area of 2675.
  • Japan 225 – Trend bias: Sideways. In today early Asian session, the Index has breached above the 20725 predefined key short-term resistance as per highlighted in our previous reports (61.8% Fibonacci retracement of the recent slide from 19 Jan 2019 high to 22 Jan 2019, U.S. session low of 20350 + former minor swing low area of 21 Jan 2019) led by a better than expected earnings release announcements from several key U.S. semiconductor stocks (Texas Instruments, Xilinx) and shrugged off a comment made by U.S. Commerce Secretary that a trade deal between U.S. and China “is miles and miles away”. Also, a weaker than expected earnings release and Q1 2019 guidance from Intel. Mix elements now as short-term (1 & 4-hour) momentum indicators remain positive at this juncture while Elliot Wave/fractal analysis advocates the risk of a minor bearish reversal level at 20820. Thus, our initial bearish view is being tapered, prefer to adopt a neutral stance between 20820 and 20510 (the minor ascending trendline from 14 Jan 2019 low). A break above 20820 sees a further push up towards the 21020 key medium-term resistance (the upper boundary of the descending channel from 01 Oct 2018 high + former range support from 30 Oct/11 Dec 2018). On the flipside, a break below 20510 reinstates the bears for a slide to retest the 20350 (23 Jan 2019 swing low) and even the 20100 key medium-term range support (the lower limit of the medium-term neutrality zone).
  • Hong Kong 50 - Trend bias: Push up to test key medium-term resistance. Broke above the 27275 key short-term resistance in today early Asian session which invalidated the short-term bearish scenario. Key short-term support now at 27100 (former minor swing high area of 23 Jan 2019 + pull-back support of a former minor descending trendline resistance from 19 Jan 2019 high) for a further potential push up to test the 28000 key medium-term resistance (the descending trendline in place since 33530 all-time high printed on 29 Jan 2018 + former major ascending support from Feb 2016 low). On the other hand, failure to hold at 27100 reinstates the bears for a slide back to retest 22/24 Jan 2019 minor swing low area of 26850 and even 26740/700 (former minor swing high area of 11 Jan 2019 + the lower limit of the medium-term neutrality zone).
  • Australia 200 - Trend bias: Push up to test key medium-term resistance. Broke above 5890 key short-term resistance that invalidated the short-term bearish scenario. Key short-term support at 5880 (the minor ascending trendline from 24 Jan 2019 low + former minor swing high area of 24/25 Jan 2019) for a further potential push up to test the key medium-term resistance at 5950/6000 (61.8% Fibonacci retracement of the entire down move from 17 Aug 2018 high to 23 Dec 2018 low + swing high areas of 19 Oct/12 Nov 2018). On the other hand, failure to hold at 5880 reinstates bears for a slide back to retest 23/24 Jan 2019 minor swing low area of 5830/22.
  • Germany 30 – Trend bias: Sideways. Tested the 11160 key short-term resistance in yesterday,24 Jan early U.S. session and managed to hold below 11160 till the end of yesterday U.S. session. Mix elements at this juncture where short-term (1 hour) momentum indicator remains positive at this juncture and Elliot Wave/fractal analysis advocates the risk of a minor bearish reversal at 11230. Prefer to turn neutral between 11230 and 11140 (former minor swing high areas of 23/24 Jan 2019). A break above 11230 sees a further push up to target the 11350 key medium-term resistance (also the major descending trendline from 14 Jun 2018 high). On the flipside, failure to hold at 11140 reinstates the bears for a slide to retest 11000/10950 support (the former minor range resistance from 09/14 Jan 2019 + minor bearish flag support from 26 Dec 2018 low).  

*Levels are obtained from City Index Advantage TraderPro platform


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.