Daily FX & Stock Indices Technical Trend Bias/Key Levels (Mon 12 Nov)

Further potential USD weakness while no clear signs of bottoming yet for stock indices.

FX –  USD strength remains intact

  • EUR/USD – Trend bias: Down. The pair has continued its descend as expected to print a low of 1.1310 in today, 12 Nov early Asian session which is just 10 pips away from the first support/target of 1.1300 (swing lows of 15 Aug/31 Oct 2018) as per highlighted in our previous report. No clear signs of bearish exhaustion signs, maintain bearish bias with a tightened key short-term resistance now at 1.1360 (minor swing high areas of 09/10 Nov 2018 + upper boundary of a minor descending channel from 07 Nov 2018 high + 23.6% Fibonacci retracement of the on-going slide from 07 Nov 2018 high to 12 Nov current intraday low of 1.1310) for a further potential down move to retest 1.1300 before targeting the next near-term support at 1.2510 (lower boundary of the minor descending channel from 07 Nov 2018 high + 0.618 Fibonacci projection of the on-going slide from 07 Nov 2018 high to 09 Nov 2018 low projected from 10 Nov 2018 high) and a break below 1.2510 further reinforces the bearish tone towards  1.1180/1130 support next (Fibonacci projection/retracement cluster + swing lows of 30 May/20 Jun 2017). However, a clearance above 1.1360 negates the preferred bearish tone to revive the corrective rebound phase to retest the next intermediate resistance at 1.1410/1440 (pull-back resistance of the former minor ascending trendline support from 01 Nov 2018 low + 50% Fibonacci retracement of the on-going slide from 07 Nov 2018 high to 12 Nov current intraday low of 1.1310).
  • GBP/USD – Trend bias: Push down within range configuration. Continued to drop lower as expected and hit the first minor support/target of 1.2950/2920 (50% Fibonacci retracement of the previous push up from 31 Oct 2018 low to 07 Nov 2018 high + minor swing low of 03 Nov 2018) as per highlighted in our previous report. It printed a current intraday low of 1.2908 in today, 12 Nov early Asian session reinforced by the renewed uncertainty over U.K PM May’s Brexit plan that came under siege from the Tory party. No clear signs of bearish exhaustion yet, maintain bearish bias below tightened key short-term resistance now at 1.2990 (minor descending trendline from 08 Nov 2018 minor high + 23.6% Fibonacci retracement on-going slide from 07 Nov 2018 high to 12 Nov current intraday low of 1.2908) for a further potential push down to target the 1.2700 minor range support in place since 15 Aug 2018 low of 1.2662. However, a clearance above 1.2990 negates the bearish tone for a squeeze up to retest the 1.3040/3070  intermediate resistance (minor congestion zone formed near the swing highs of 09/10 Nov 2018 + 61.8% Fibonacci retracement on-going slide from 07 Nov 2018 high to 12 Nov current intraday low of 1.2908).
  • USD/JPY USD – Trend bias: Sideways. No change, maintain neutrality stance 114.55 (major range resistance in place since 10 May 2017) and 113.50 (minor ascending trendline from 26 Oct 2018 low + former minor swing high of 07 Nov 2018). A break above 114.55 triggers a bullish breakout from a 18-month range configuration since May 2017 to target the next intermediate resistance at 115.30/50 (medium-term swing highs of 19 Jan/10 Mar 2017). On the flipside, failure to hold above 113.50 revives the push down within range scenario towards the 112.60 support (minor swing low of 02 Nov 2018 + medium-term ascending channel support from 26 Mar 2018 low).                  
  • AUD/USD – Trend bias: Down. Continued to drop lower as expected to print a current intraday low of 0.7208 in today, 12 Nov early Asian session which is just 28 pips away from the first minor support/target as per highlighted in our previous report. After the close of last Fri, 09 Nov U.S. session, it ended the week with a bearish weekly “Shooting Star” candlestick pattern. No change, maintain bearish bias with a tightened key short-term resistance now at 0.7250 (minor congestion area formed on 09 Nov) for a further potential push down towards 0.7180 (minor swing lows of 03/05 Nov 2018) and 0.7145/7130 (minor ascending trendline in place since 26 Oct 2018 low + pull-back support of the former medium-term descending channel resistance from 26 Jan 2018 high + 61.8% Fibonacci retracement of the recent rebound seen from 26 Oct 2018 low to 08 Nov 2018 high). However, a clearance above 0.7250 negates the bearish tone for a squeeze up to retest the 0.7300 swing high of 07/08 Nov 2018.
  • NZD/USD – Trend bias: Down. Inched down lower as expected. No change, maintain bearish bias with a tightened key short-term resistance at 0.6780 (61.8% Fibonacci retracement of the on-going slide from 08 Nov 2018 to today, 12 Nov Asian session current intraday low of 0.6721 + former minor swing low of 08 Nov 2018) for a further potential push down to target the near-term supports of 0.6680  and 0.6630 (minor swing low of 05 Nov +minor ascending trendline from 26 Oct 2018 low). However, a clearance above 0.6780 negates the bearish tone for a squeeze up to retest 0.6818 (08 Nov high + former medium-term swing low of 17 Nov 2017 + 38.2% Fibonacci retracement of the prior decline from 16 Feb 2018 high to 08 Oct 2018 low). Only a clearance above 0.6818 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).

Stock Indices (CFD) –  No clear signs of bottoming yet

  • US SP 500 – Trend bias: Down to retest key medium-term range support. The Index had dropped lower as expected from the key medium-term range resistance of 2825 and almost hit the key range support at 2762 as it printed a low of 2763 on last Fri, 10 Nov 2018 U.S. session. Click here for more details on our updated weekly outlook on the S&P 500. Last Fri’s drop had been led by the “risk on/high beta” sectors; the Technology, Communication Services and Industrials where these sectors ETFs  recorded losses of -1.73%, -2.05% and -1.01% respectively versus a decline of -0.92% seen in the S&P 500. In today, 12 Nov Asian session, the Index has rallied by close to 1% to print a current intraday high of 2795 from an extreme oversold condition seen in the shorter-term hourly Stochastic oscillator and reinforced from positive new flows on a potential OPEC oil production cut in 2019 and Alibaba’s record breaking flagship online “Singles Day” retail sales bonanza that topped US$30 billion over in Sun, 11 Nov. Interestingly, the on-going pushed up is now coming close to the 2800 pull-back resistance of the former ascending trendline support from 29 Oct 2018 low and the 61.8% Fibonacci retracement of the last Fri’s slide from 08 Nov high of 2817 to Fri’s low of 2763. Bearish bias with 2800 as the key short-term resistance for a push down back to retest the  2762 key medium-term range support. However, a break above 2800 sees a squeeze up to test the key medium-term resistance of 2825.
  • Japan 225 – Trend bias: Sideways. Mix elements, neutral between 21840 (former minor swing high of 31 Oct 2018 + minor ascending trendline from 26 Oct 2018 low) and 22570 (08 Nov minor swing high) An hourly below 21840 reignites the bears for a slide to retest 21500 follow by the 26/30 Oct 2018 swing low area of  20800. On the flipside, a break above 22570 sees an extension of the corrective rebound towards the 23000 multi-month range resistance in place since 21 May 2018.
  • Hong Kong 50 - Trend bias: Down. Last week’s push up had failed right at the 26700 key medium-term resistance. Maintain bearish bias with key short-term resistance now at 26110 (gapped resistance of 09 Nov 2018 + former minor swing low areas of 06/07 Nov 2018) for a further potential push down to retest the near-term supports of 25090 (former minor swing high of 29/30 Oct 2018) follow by the 26/30 Oct 2018 low of 24490. However, a clearance above 26110 negates the bearish tone for squeeze up to retest the 26700 key medium-term resistance.
  • Australia 200 – Trend bias: Sideways. Mix elements, neutrality stance between 5940 (08 Nov 2018 swing high) and 5875 (former minor swing high areas of 01/06 Nov 2018 + minor ascending trendline from 26 Oct 2018 low). An hourly close below 5875 reignites the bears for a slide to retest the next near-term support of 5745 (former minor swing low of 11 Oct 2018). However, a clearance above 5940 sees an extension of the corrective rebound towards the 5990 key medium-term resistance.
  • Germany 30 – Trend bias: Down. Last Fri, 09 Nov U.S. session pushed up has led the Index to hover at the 11600/690 key medium-term resistance with extreme overbought conditions seen in the 4 & 1-hour Stochastic oscillators. Bearish bias below 11600/11690 for a potential push down to retest the 11400 key medium-term downside trigger level that held the bearish floodgate since 06 Nov 2018. However, a clearance above 11600/690 sees an extension of the corrective rebound towards the 11800/900 neckline resistance of the major “Head & Shoulders” bearish breakdown seen on 10 Oct 2018.  

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