Daily FX & Stock Indices Technical Trend Bias/Key Levels (Mon 04 Jan)

USD weakness remains intact. Bullish exhuastion signals seen in S&P 500.

FX – USD weakness remains intact

  • EUR/USD – Trend bias: Push up within medium-term range configuration. The pair has cleared above the 1.1455 upper limit of the short-term neutrality zone as per highlighted in our previous report. Further potential up move has been validated. Flip to a bullish bias in any dips above 1.1400 key short-term support (minor swing low areas of 28/30 Jan 2019 + 50% Fibonacci retracement of the recent push up from 25 Jan 2019 low to 31 Jan 2019 high) for a further potential push up to retest 31 Jan 2019 high of 1.1514 before targeting 1.1570/1590 next (the 10 Jan 2019 swing high + upper boundary of the ascending range configuration in place since 12 Nov 2018 low). On the flipside, failure to hold at 1.1400 negates the bullish tone for a slide towards the next near-term support at 1.1340 (76.4% Fibonacci retracement of the recent push up from 25 Jan 2019 low to 31 Jan 2019 high + close to the lower boundary of the ascending range configuration in place since 12 Nov 2018 low).
  • GBP/USD - Trend bias: Push up within medium-term range configuration. No change, maintain bullish bias with key short-term support at 1.3010/3000 (the pull-back support of the former complex descending range resistance) for a further potential push up to retest 26/29 Jan 2019 swing highs area of 1.3200 before targeting 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. However, failure to hold at 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 minor range configuration. Short-term key support will be at 109.00 (the former minor swing high of 01 Feb 2019 + 61.8% Fibonacci retracement of the recent push up from 31 Jan 2019 low to today, 04 Feb current Asian session intraday high of 109.60) for a further potential push up to retest the 111.00 range resistance in place since 19 Jan 2019. However, a break below 109.00 negates the bullish tone for a push down to retest 31 Jan 2019 low of 108.47 follow by the major support of 108.00/107.80 (the major ascending trendline from 23 Jun 2016 low + 61.8% Fibonacci retracement of the recent rebound from 03 Jan 2019 swing low-exclude the spike down from the flash crash to 23 Jan 2019 high).
  • AUD/USD – Trend bias: Corrective rebound remains in progress. Pushed up as expected and hit the first target/resistance of 0.7240 as per highlighted in our previous report (printed a high of 0.7295 on 31 Jan 2019). Maintain bullish bias in any dips with a tightened key short-term support now at 0.7200 (the former minor swing high of 28 Jan 2019 + pull-back support of the former minor descending range resistance from 11 Jan 2019 high) for a further potential push up to retest 0.7295 before targeting the next intermediate resistance at 0.7390 (03/04 Dec 2018 minor swing high + Fibonacci retracement/expansion cluster). However, failure to hold at 0.7200 negates the bullish tone for a slide to retest 0.7073/7060 (swing low area of 25 Jan 2019).
  • NZD/USD – Trend bias: Corrective rebound remains in progress. Pushed up as expected and printed a high of 0.6939 on 31 Jan 2019. No change, maintain bullish bias with a tightened key short-term support now at 0.6860 (former minor swing high area of 28 Jan 2019 + minor ascending trendline from 22 Jan 2019 low) for a further potential push up to target the next intermediate resistances at 0.6970 (04 Dec 2018 minor swing high + minor ascending channel resistance from 03 Jan 2019 low). However, failure to hold at 0.6860 negates the bullish tone for a slide back to retest the minor ascending channel support at 0.6780/6760.

Stock Indices (CFD) – Bullish exhaustion signals seen in S&P 500

  • US SP 500 – Trend bias: Risk of minor bearish reversal.  The Index had continued to inch higher as expected post FOMC and hit the 2700/10 key medium-term pivotal resistance as per highlighted in in our earlier weekly technical outlook report, click here for a recap. The Index printed an intraday high of 2717 on last Fri, 01 Feb before it closed below 2710 at the end of the U.S. session. 3 bullish exhaustion signals have emerged. The daily price action of Index has formed a “Spinning Top” candlestick pattern at the end of last Fri, 01 Feb U.S. session, the daily RSI is now hovering right below a significant resistance level at 68 which is closed to the overbought region of 70. Thirdly, the top 2 highest weightage stock in the S&P 500, Microsoft (MSFT) and Amazon (AMZN) has ended last week with bearish candlestick patterns below significant resistances after their respective push up post earnings releases (see charts below). Thus, flip to a bearish bias with 2710/20 (excess) key pivotal resistance and a break below the 2695 downside trigger level (23.6% Fibonacci retracement of the recent minor push up from 28 Jan 2019 low to 01 Feb 2019 high + minor swing low of 01 Feb 2019) is likely to see a potential push down to target the next near-term support at 2670 in the first step (the former minor range resistance from 19/25 Jan 2019). On the flipside, a clearance  above 2720 sees a further up move to target 2773 and even the key long-term pivotal resistance at 2815 (also the swing high areas of 16 Oct/07 Nov/03 Dec 2018).
  • Japan 225 – Trend bias: Sideways. No change, maintain neutrality stance between 20950 and 20730 (the minor ascending trendline from 29 Jan 2019 low). A break below 20730 sees a slide back to retest the minor range support of 20380 in place since 23 Jan 2019. On the flipside, a clearance above 20950 sees a further push up to test the 21020 key medium-term pivotal resistance.
  • Hong Kong 50 - Trend bias: Risk of minor bearish reversal. Last week’s push up has managed to stall right at the 28000 key medium-term pivotal resistance (printed an intraday high of 28215 on last Fri, 01 Feb) and ended last week with a weekly “Spinning Top” candlestick pattern seen on the cash Hang Seng Index. Flip to a bearish bias with 28000/215 (excess) as key pivotal resistance for a potential push down to target the near-term supports at 27650 and 27370 (minor swing low area of 29 Jan 2019 and the 23.6% Fibonacci retracement of the entire up move from 03 Jan 2019 low to the key medium-term pivotal resistance swing high area of 28000/215). On the flipside, a daily close above 28000/215 sees a further corrective rebound towards the next resistance at 29100 (swing high area of 26 Jul 2018 & 61.% Fibonacci retracement of the recent down move from 29 Jan 2018 all-time high of 33530 to 26 Oct 2018 low). Note: the Hong Kong stock market will be closed on 05 Feb to 07 Feb 2019 for CNY holidays and reopen on 08 Feb 2019.
  • Australia 200 - Trend bias: Push down within range. Key short-term pivotal resistance will be at 5910 (the pull-back resistance of the former minor ascending trendline support from 24 Jan 2019 low) for a potential push down to retest the minor range support at 5835/5830 in place since 23 Jan 2019. On the flipside, a clearance above 5910 sees a further push up towards the 5950/6000 key medium-term range resistance (also the pull-back resistance of the former major ascending channel support from 10 Feb 2016 low).
  • Germany 30 – Trend bias: Push down within range. The Index has formed a weekly “Spinning Top” candlestick pattern right at the 11310 minor range resistance. Flip to a bearish bias for a potential push down to retest the key medium-term range support at 11000 (the former swing high areas of 13 Dec 2018/15 Jan 2019). On the flipside, a break above 11310 sees a further push up to target the 11540 key medium-term range resistance (also the descending trendline in place since 14 Jun 2018 high).

click to enlarge charts


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