Daily FX & Stock Indices Technical Trend Bias/Key Levels (Tues 04 Dec)

Further USD corrective decline while stock indices face further downside pressures as trade war truce optimism fades.

FX –  Further potential USD corrective down move within a major/primary uptrend

  • EUR/USD – Trend bias: Up. In the midst of shaping a corrective up move from 12 Nov 2018 low of 1.1216 within a major downtrend in place since 16 Feb 2018 high of 1.2555. Key short-term support now at 1.1320 (gapped up formed  in the aftermath of the U.S/China trade war truce + minor ascending trendline from 28 Nov 2018 low) for a further potential push up to target the next intermediate resistance at 1.1470/1500 (the minor swing high areas of 07/20 Nov 2018). On the other hand, failure to hold at 1.1320 put the corrective up move scenario at risk for a decline to retest 1.1270 and even the 12 Nov 2018 swing low of 1.1216 next.
  • GBP/USD – Trend bias: Push up within range configuration. The pair had continued to inch lower yesterday to retest the significant 1.2700 “Descending Triangle” range support in place since the 15 Aug 2018 low as it grappled with the impending U.K parliament vote on the latest Brexit deal on 11 Dec. Interestingly, it had formed a daily “Long-legged” Doji candlestick at the end of yesterday, 03 Dec U.S. session coupled with a bullish divergence signal seen in the 4-hour Stochastic oscillator at its oversold region. These observations suggest the recent downside momentum of price action seen in the past 2 weeks has started to abate. Key support will be at 1.2700 for a potential push back up within the “Descending Triangle” range to target the intermediate resistance at 1.2850/2890 in the first step (26 Nov 2018 minor swing high + minor range resistance of 16/22 Nov 2018 + 38.2% Fibonacci retracement of the recent push down from 07 Nov to 03 Dec 2018 low). On the other hand, a daily close below 1.2700  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 within range configuration.  In the medium-term (1 to 3 weeks), the pair is expected to evolve in a chopping range configuration after it failed to make a clear bullish breakout from its 114.55  major range resistance at 114.55 in place since 10 May 2017. In the shorter-term, the recent rallies has stalled by a descending trendline resistance from 04 Oct 2018 high of 114.55 and yesterday, 03 Dec post U.S/China trade war truce optimism has found a “ceiling” right below the aforementioned descending trendline resistance and formed a daily “Doji” candlestick pattern. These observations suggest a lack of conviction from the bulls to push prices higher. Key short-term resistance now at 113.80 (03 Dec 2018 minor swing high area + pull-back resistance of the former minor ascending trendline from 20 Nov 2018 low) for a further potential push down to retest the 20 Nov 2018 swing low area of 112.30 in the first step. On the other hand, a break above 113.80 negates the bearish tone for a squeeze up towards the 114.55 major range resistance.
  • AUD/USD – Trend bias: Up. In the midst of shaping a corrective up move from 26 Oct 2018 low of 0.7021 within a major downtrend in place since 26 Jan 2018 high of 0.8135. Key short-term support now at 0.7335 (former minor swing high areas of 17 Nov/29 Nov 2018 + close to 23.6% Fibonacci retracement of the recent up move from 28 Nov 2018 minor low to yesterday, 03 Dec high of 0.7393) for a further potential push up to target the medium-term range resistance at 0.7440/7460 (swing high areas of 09 Jul/09 Aug 2018 + Fibonacci retracement/projection cluster). On the other hand, failure to hold at 0.7335 negates the bullish tone for a slide towards 0.7310/0.7280 support (the gap support of  0.7310/0.7300 formed in the aftermath of the U.S/China trade war truce + 30 Nov 2018 minor swing low).  
  • NZD/USD – Trend bias: Up. In the midst of shaping a corrective up move from 08 Oct 2018 low of 0.6424 within a major downtrend in place since 16 Feb 2018 high of 0.7437. Key short-term support now at 0.6910 (minor ascending trendline from 29 Nov 2018 low + yesterday, 03 Dec 2018 U.S. session low + 23.6% Fibonacci retracement of the on-going up move from 27 Nov 2018 low to today, 04 Dec Asian session current intraday high of 0.6962) for a further potential push up to target the medium-term resistance of 0.7050 (07 Jun 2018 swing high + former major ascending range support from 24 Aug 2015 low + 61.8% Fibonacci retracement of the downtrend from 16 Feb 2018 high to 08 Oct 2018 low). On the other hand, failure to hold at 0.6910 negates the bullish tone for a slide towards the next near-term support at 0.6830 (29 Nov 2018 minor low + medium-term ascending channel support from 26 Oct 2018 low).

Stock Indices (CFD) – U.S/China trade truce optimism fades

  • US SP 500 – Trend bias: Down.  Yesterday, 03 Dec gapped up stalled right below the lower limit of the 2825/40 key medium-term pivotal resistance zone as per highlighted in our latest weekly technical outlook report (click here for the details). It printed a high of 2813 and formed a daily “Doji” candlestick at the end of yesterday’s U.S. session which suggest that the bulls are hesitant to push prices higher.  Today’s key short-term resistance will be at 2813 for a further potential push down to test the 2750 downside trigger level set for this week (the former minor swing high area of 30 Nov 2018 +  minor ascending trendline from 23 Nov 2018 low). A break with an hourly close below 2750 reinforces the start of a potential fresh impulsive dowleg to target the next near-term support of 2690/70 in the first step (former minor congestion area of 29 Oct/15 Nov 2018). On the other hand, a break above 2813 sees an extension of the corrective rebound towards 2825/40 key medium-term resistance.
  • Japan 225 – Trend bias: Down. Bearish reaction below the predefined 23000 key medium-term pivotal resistance as per highlighted in our latest weekly technical outlook report. In today, 04 Dec Asian session it has broken down below the 22400/620 gap support formed yesterday in the aftermath of the U.S/China trade war truce. Right now, it is approaching the 22060 medium-term downside trigger level set for this week (the minor ascending trendline from 21 Nov 2018 low + former minor swing high are of 27 Nov 2018). Bearish bias with key short-term resistance will be at 22550 (former minor swing low area formed in yesterday, 03 Dec U.S. session + 61.8% Fibonacci retracement on the on-going slide from 03 Dec 2018 high to today, 04 Dec Asian session current intraday low of 22159) and a break with an hourly close below 22060 reinforces the start of a potential fresh impulsive dowleg to target the next near-term support of 21500in the first step (minor swing low areas of 22/23 Nov 2018).  On the other hand, a break above 22550 resumes the corrective rebound scenario towards 22780/23000 resistance.
  • Hong Kong 50 - Trend bias: Down. The 4-hour Stochastic oscillator has exited from its overbought region and still has room for further downside before it reaches an extreme oversold level. Bearish bias with key short-term resistance at 27300 (close to yesterday, 03 Dec high + Fibonacci retracement/projection cluster) for a further potential push down towards the minor gap support of 26560 in the first step (formed in the aftermath of the U.S/China trade war truce). On the other hand, a clearance above 27300 sees an extension of the corrective rebound towards the 28000 key medium-term pivotal resistance.
  • Australia 200 – Trend bias: Down. Bearish reaction from the 5785/90 upper limit of the minor “Expanding Wedge” range configuration in place since 21 Nov 2018 low. Right now, it has inched lower and approaching the 5685 medium-term downside trigger level (minor “Expanding Wedge” range support). Bearish bias with key short-term resistance at 5741 (former minor swing low of 03 Dec U.S. session + a minor descending trendline from 03 Dec 2018 high) and an hourly close below 5685 reinforces the start of a potential fresh impulsive downleg to target the next near-term support at 5595 in  the sfirst step (21 Nov 2018 swing low area).  On the other hand, a clearance above 5790 sees an extension of the corrective rebound towards the 5950 key medium-term pivotal resistance).
  • Germany 30 – Trend bias:  Down. Rally stalled right at below the 11600/690 key medium-term pivotal resistance as it printed a high of 11570. Bearish bias with key short-term resistance set for today at 11570/600 for a further potential push down to target the 11340 key medium-term downside trigger first (the minor ascending trendline from 20 Nov 2018). An hourly close below 11340 sees further downside towards 11050 support (the swing low areas of 25 Oct/20 Nov 2018 low). On the other hand, a break above 11600 sees a squeeze up to test the upper limit of the key medium-term pivotal resistance at 11690.   

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