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Daily FX Technical Trend Bias/Key Levels (Fri 08 Mar)

FX – USD remains on support & further potential JPY strength due to risk off factor

  • EUR/USD – Trend bias: Down. The pair has inched lower as expected and performed beyond our short-term view as it broke below the support/target at 1.1235 (12 Nov 2018 + 15 Feb 2019 low). It printed a low of  1.1175 in yesterday, 07 Mar U.S. session reinforced by a dovish ECB and a new TLTRO programme for Eurozone banks. No clear signs of bullish reversal yet except for the risk of a minor bounce to retrace the on-going decline from its 28 Feb 2019 high of 1.1420 based on extreme oversold readings seen in the hourly RSI/Stochastic oscillators and Elliot Wave structure. Maintain bearish bias in any bounces below a tightened key short-term resistance at 1.1265 (former swing low areas of 28 Nov/14 Dec 2018 & 11 Feb/15 Feb 2019 + 38.2% Fibonacci retracement of the decline from 28 Feb 2019 high to 07 Mar 2019 low) for a further potential decline to target the next support at 1.1130 (61.8% Fibonacci retracement of the last corrective up move cycle from 03 Jan 2017 low to 16 Feb 2018 high + swing low areas of 30 May/20 Jun 2017) and below 1.1130 exposes 1.1060 next. On the flipside, a clearance above 1.1265 negates the bearish tone for a steeper bounce towards the next intermediate resistance at 1.1320 (minor swing high areas of 06/07 Mar 2019 + 61.8% Fibonacci retracement of the decline from 28 Feb 2019 high to 07 Mar 2019 low).
  • GBP/USD – Trend bias: Push down within range. The pair is challenging the 1.3090 key short-term support and ended yesterday, 07 Mar U.S. session with a bearish candlestick that closed below the lows of the prior two days (05/06 Mar) Dragonfly Doji and Hammer candlesticks. The conviction for a potential minor rebound scenario towards 1.3270/3290 has been reduced. Flip back to a bearish bias below short-term key resistance at 1.3150 (yesterday, 07 Mar high + minor descending trendline from 27 Feb 2019 high) for a further potential push down to target the next near-term support at 1.2980 (22 Feb 2019 minor swing low + Fibonacci retracement/expansion cluster). On the flipside, a break above 1.3150 revives the minor rebound scenario towards 1.3270/3290 resistance (the minor swing high areas of 01/04 Mar 2019).
  • USD/JPY – Trend bias: Down. Continued to inch lower as expected. No change, maintain bearish bias with a tightened key short-term resistance at 111.70 (former minor swing low areas of 05 Mar/07 Mar 2019 low + minor descending trendline from 05 Mar 2019 high) for a further potential slide to target the next near-term support at 111.05 (former minor swing high areas of 14/26 Feb 2019). On the flipside, a break above 111.70 negates the bearish tone for a squeeze back up to retest the 112.20 key medium-term resistance.
  • AUD/USD – Trend bias: Sideways. The pair is now challenging the 0.7020 neckline support of a minor -term bearish reversal “Head & Shoulders” configuration in motion since 11 Jan 2019 swing high. It printed a low of 0.7005 and ended yesterday, 07 Mar U.S session with a close of 0.7015. In addition, yesterday’s price action took on a form of a “small-body” candlestick which indicated mix sentiment at the 0.7020 neckline support. Thus, prefer to turn neutral now between 0.7000 and 0.7050 (yesterday’s swing high). A clearance above 0.7050 revives the minor rebound scenario towards the 0.7090/7115 intermediate resistance. On the flipside, a break below 0.7000 shall trigger the “Head & Shoulders” bearish breakdown to target the next supports at 0.6950 and 0.6870 in the first step (61.8% Fibonacci retracement of the rebound from 03 Jan 2019 flash crash low to 31 Jan 2019 high + 03 Jan 2019 swing low area excluding the spiked down).  
  • NZD/USD – Trend bias: Sideways. The pair is now challenging the 0.6750 key short-term support as per highlighted in our previous report and exhibits similar elements as seen in the AUD/USD. It ended yesterday, 07 Mar U.S. session with a small-body candlestick with a close of 0.6755 after an intraday low of 0.6745. Thus, prefer to turn neutral now between 0.6745 and 0.6790 (yesterday’s swing high). A clearance above 0.6790 revives the minor rebound scenario towards the intermediate resistance of 0.6830/6850 (minor swing high areas of 04/05 Mar 2019). On the flipside, a break below 0.6745 sees a slide towards 0.6720 next (the lower boundary of the medium-term “Symmetrical Triangle” range configuration in motion since 04 Dec 2018 swing high).        

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