Daily FX & Stock Indices Technical Trend Bias/Key Levels (Tues 11 Dec)

Further potential weakness in GBPUSD. Stock indices can see another leg of minor corrective rebound except in ASX200.

FX – Mix bag with GBP at risk of further weakness

  • EUR/USD – Trend bias: – Trend bias: Sideways. Challenged the upper limit of the 1.1420 short-term neutrality zone as per highlighted in the previous report in yesterday, 10 Dec early Asian session (printed a high of 1.1442) before it traded lower and sold off in the European & U.S. sessions to print a low of 1.1350 after U.K PM May decided to call off the Brexit deal parliamentary vote on Tues, 11 Dec.  Interestingly, it ended yesterday, 10 Dec U.S. session with a daily bearish “Shooting Star” candlestick pattern within a range configuration in place since 12 Nov 2018 low of 1.1216. Tolerate yesterday’s excess and maintain neutrality stance between 1.1440 and 1.1300. A break below 1.1300 sees a push down to retest the 12 Nov 2018 low of 1.1216 (2018 current low). On the flipside, an hourly close above 1.1440 sees a further potential push up to test the 1.1520/1590 (the upper boundary of a medium-term descending channel from 17 Apr 2018 high + Fibonacci retracement/projection cluster).
  • GBP/USD – Trend bias: Down. The “push up” within range scenario did not materialise and a bearish break was triggered through the breakdown of 1.2700 (the range support in place since 15 Aug 2018) reinforced by postponement of the Brexit deal parliamentary vote that was supposed to be held today, 11 Dec. Flip to bearish bias in any bounces below 1.2700 key short-term resistance (former range support + upper boundary of a minor descending channel in place since 07 Nov 2018 high) for a further potential push down to target the next near-term supports at 1.2415/2360. On the other hand, reintegration back above 1.2700 invalidates the bearish breakdown scenario for a squeeze back up to retest the next intermediate resistance at 1.2840 in the first step (minor swing high areas that capped previous rallies since 29 Nov 2018.
  • USD/JPY – Trend bias: Push down within range. The pushed up from last Thurs, 06 Dec low of 112.20 has managed to stall around the 113.20 upper limit of the short-term neutrality zone as per highlighted in our previous report. Interestingly, it has started to exhibit minor bullish exhaustion signals at the 113.20/40 minor resistance zone. It shaped a 4-hour “Doji” candlestick pattern right below 113.20/40 coupled with an extreme overbought level seen in the 4-hour Stochastic oscillator. Flip back to a bearish bias below 113.40 key short-term resistance (the pull-back resistance of a former minor ascending trendline support from 26 Oct 2018 low + minor descending trendline from 29 Nov 2018 high + minor swing high area of 06 Dec 2018 + 61.8% retracement of the recent slide from 29 Nov high to 06 Dec 2018 low) for a potential push down to retest the 06 Dec 2018 low of 112.20. An hourly close below 112.20 reinforces a further potential drop towards 111.60/40 medium-term range support (the swing low areas of 15/26 Oct 2018 + pull-back support of a major former descending resistance from Jun 2015 high). On the flipside, a break above 113.40 invalidates the push down scenario for a squeeze up to retest 114.00 (the descending trendline that has been capping previous rallies since 04 Oct 2018 high).
  • AUD/USD – Trend bias: Sideways. Mix elements, prefer to maintain neutrality stance between 0.7240 (minor swing high of 06/07 Dec) and 0.7170 (yesterday, 10 Dec European session low). An hourly close above 0.7240 sees minor corrective rebound towards the next intermediate resistance at 0.7280 (the pull-back resistance of a former minor ascending range support from 26 Oct 2018 low + 50% Fibonacci retracement of the recent slide from 03 Dec high to 10 Dec 2018 low). On the flipside, a break below 0.7170 sees a further push down towards the next support at 0.7100/7070 (the pull-back support of the former major descending channel resistance from 26 Jan 2018 high + ascending trendline from 05 Oct 2018 low).
  • NZD/USD   Trend bias: Down. No change, maintain bearish bias below key short-term resistance at 0.6915/25 ( minor swing high area of 05 Dec 2018 + 61.8% Fibonacci retracement of the recent slide from 04 Dec high to 10 Dec 2018 low) with 0.6840 as the downside trigger level (yesterday, 10 Dec low). An hourly close below 0.6840 reinforces the a further potential slide to target the next near-term support at 0.6710 (the former congestion area of 02 Jul/21 Sep 2018). However, a clearance above 0.6925 put the corrective rebound scenario back in shape for a push up to retest 0.6969 swing high area of 04 Dec 2018 and even 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).     

Stock Indices (CFD) -  Another leg of minor rebound cannot be ruled out except in ASX 200

  • US SP 500 – Trend bias: Corrective rebound within medium-term down movement. Yesterday, 10 Dec upside reversal of 2.4% seen in the second half of the U.S. session right at the 2603/2600 intermediate support has reinforced the minor corrective rebound scenario as per highlighted in the latest weekly technical outlook report published yesterday (click here for a recap). In addition, hourly Stochastic oscillator has flashed out a bullish divergence signal prior to its exit from its oversold region which suggests a slowdown in the recent downside momentum of price action from last Fri, 06 Dec slide. As long as the 2603/2600 key short-term support holds, the Index may shaped a further corrective push up to retest 2670 and 2695 intermediate resistances (the minor swing high area of 07 Dec 2018 + 50% Fibonacci retracement of the recent decline from 03 Dec high to yesterday, 10 Dec low of 2582). On the other hand, failure to hold at 2600 sees the continuation of the impulsive down move to towards the 2540/2530 key long-term downside trigger (also the neckline support of the major bearish reversal “Head & Shoulders” that is taking shape since 01 Jan 2018 high).
  • Japan 225 – Trend bias: Corrective rebound within medium-term down movement. Key short-term support at 20800 (the swing low areas of 26/30 Oct 2018) for a further corrective rebound to retest the intermediate resistance of 21650/720 (38.2% Fibonacci retracement of recent decline from 03 Dec high to yesterday, 10 Dec U.S. session low of 20950 + pull-back resistance of the former minor ascending range support from 30 Oct 2018 low). On the other hand, failure to hold at 20800 sees another round of decline to target the 20550/330 support (swing low areas of Feb/Mar 2018 low + neckline of a major bearish reversal “Double Top” that is taking shape since 23 Jan 2018 high).
  • Hong Kong 50 - Trend bias:  Corrective rebound within medium-term down movement. The 4-hour Stochastic oscillator has just flashed a bullish divergence signal at its oversold region which indicates a slowdown in the recent downside momentum of price action since last Fri, 07 Dec sell-off. Key short-term support will be 25390 (yesterday, 10 Dec U.S session low) for a further potential push up towards 26030/26300 intermediate resistance zone (the gapped down formed on 08 Dec 2018 + pull-back resistance of the former minor ascending range support from 30 Oct 2018 low + 50% Fibonacci retracement of the recent decline from 03 Dec high to yesterday, 10 Dec U.S session low of 25390). On the other hand, failure to hold at 25390 sees a continuation of the impulsive down move to target the next near-term support of 25000 (13 Nov 2018 minor swing low) in the first step.
  • Australia 200 – Trend bias: Down. Key short-term resistance will be at 5600 (the former swing low of 07 Dec 2018 that stalled yesterday, 10 Dec U.S. session rebound) for a further potential push down to target the next support at 5470 in the first step (Fibonacci projection cluster). On the other hand, failure to hold at 5600 opens up scope for a further corrective rebound towards the next intermediate resistance at 5660 (the former minor swing low area of 07 Dec 2018 + 50% Fibonacci retracement of the recent decline from 03 Dec high to yesterday, 10 Dec U.S session low of 5522).
  • Germany 30 – Trend bias: Corrective rebound within medium-term down movement. The 4-hour Stochastic oscillator has exited from its oversold region and still has room to manoeuvre to the upside before it reaches an extreme overbought level coupled with a bullish divergence signal seen in the hourly Stochastic oscillator. These observations suggest a slowdown in the recent downside momentum of price action. Key short-term support will be at 10580 (yesterday, 10 Dec U.S. session low) for a further potential corrective rebound to target the intermediate resistance at 10950/11000 (minor swing high area of 07 Dec 2018 + 38.2% Fibonacci retracement of recent decline from 03 Dec high to yesterday, 10 Dec U.S. session low). On the other hand, failure to hold at 10580 sees the continuation of the impulsive down move to target the next support at 10440 (lower boundary of the minor descending channel in place since 04 Oct 2018 high + Fibonacci projection).                

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