Daily FX Technical Trend Bias/Key Levels (Fri 09 Nov)

USD strength set to resume except in USD/JPY

FX –  USD strength resumes

  • EUR/USD – Trend bias: Down. The pair had failed to make any further upside headway after it hit the first minor corrective rebound target/resistance of 1.1465 as per highlighted in our previous report. It printed a high of 1.1499 on Wed, 07 Nov and formed a daily “Long-legged Doji” candlestick pattern followed by a bearish break (yesterday, 08 Nov post FOMC) below the 1.1400 minor ascending trendline support that was in place since the minor corrective rebound started on 31 Oct 2018 low of 1.1300.  These observations suggest that the bears are in control, flip back to a bearish bias in any bounces with key short-term resistance now at 1.1410 (minor descending trendline from 07 Nov 2018 high + 61.8% Fibonacci retracement of the recent drop seen post FOMC from 08 Nov 2018 high of 1.1446 to today, 09 Nov Asian session current intraday low of 1.1340) for a further potential push down to retest the 1.1300 support (swing lows of 15 Aug/31 Oct 2018). A break below 1.1300 reinforces the start of another impulsive down move to target the next support at 1.1180/1130 (Fibonacci projection/retracement cluster + swing lows of 30 May/20 Jun 2017). On the other hand, a clearance above 1.1410 negates the preferred bearish tone to revive the corrective rebound phase to retest the 07 Nov high of 1.1499 before heading towards the next resistance at 1.1600/1620 (the swing high of 12/16 Oct 2018 + 61.8% Fibonacci retracement of the decline from 21 Sep 2018 high to 31 Oct 2018 low).
  • GBP/USD – Trend bias: Push down within range. The corrective rebound target/resistance of 1.3125 (pull-back resistance of the former ascending trendline from 15 Aug 2018 low) has been met as per highlighted in our previous report. The prior 3-days of price action since Tues, 06 Nov has formed a bearish daily “Evening Star” candlestick pattern after the close of yesterday, 08 Nov U.S. session. Flip back to a bearish bias in any bounces with key short-term resistance at 1.3175 (07 Nov 2018 high + minor range descending trendline from 20 Sep 2018 high + pull-back resistance of the former ascending trendline from 15 Aug 2018 low) for a further push down within a minor range configuration in place since 15 Aug 2018 low of 1.2662 with next near-term supports coming in at 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) and 1.2700 (minor range support in place since 15 Aug 2018 low of 1.2662). On the other hand, a clearance above 1.3175 sees the continuation of the corrective rebound towards the 1.3300 medium-term range resistance in place since 20 Sep 2018 high and also a Fibonacci projection/retracement cluster.
  • USD/JPY USD – Trend bias: Sideways. The “push down within range” scenario has been invalidated through the bullish break of the predefined 113.10 short-term resistance. Yesterday, 08 Nov price action movement has led the pair to hover just below the 114.30/55 major range resistance in place since 10 May 2017. No clear signs of bullish exhaustion except for an extreme overbought condition seen in the 4-hour Stochastic oscillator. Mix elements, prefer to turn neutral first between 114.55 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. The pair had pushed up as expected to shape the corrective rebound to target the 0.7290/7340 intermediate resistance (congestion zone of 27 Jun/21 Aug 2018 + 23.6% Fibonacci retracement of the on-going medium-term down move from 26 Jan 2018 high to 26 Oct 2018 low) as it printed a high of 0.7303 on 08 Nov. Based on bullish exhaustion signals seen from shorter-term momentum indicators where the both the 1 & 4-hour Stochastic oscillators have flashed bearish divergences at overbought conditions and Elliot Wave/fractal analysis suggest that the pair is now undergoing a minor retracement/pull-back to retrace the first leg of the corrective rebound phase that has started from 26 Oct 2018 low of 0.7021. Flip to bearish bias in any bounces below key short-term resistance at 0.7305 (minor swing highs of 07/08 Nov 2018) for a further potential push down to target the next near-term support at 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). On the other hand, a clearance above 0.7305 revives the corrective rebound to target the next intermediate resistances at 0.7340 and 0.7450 (50% Fibonacci retracement of the multi-month decline from 26 Jan 2018 high to 26 Oct 2018 low).
  • NZD/USD – Trend bias: Down. The minor corrective rebound target/resistance has been met at 0.6780 as per highlighted in our previous report (it printed a high of 0.6818 in yesterday, 08 Nov U.S. session). It has formed a daily “Bearish Harami” candlestick pattern right below the 0.6780 resistance after the close of yesterday, 08 Nov U.S. session  coupled with a revival in short-term downside momentum as indicated by the 4 & 1-hour RSI oscillators. Flip to bearish bias in any bounces below key short-term resistance at 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) for a further potential push down to target the next near-term support at 0.6590/6560 in the first step (the former swing high areas of 15/22 Oct 2018 + pull-back support of the former descending channel resistance from 07 Jun 2018 high). On the other hand, a clearance above 0.6818 negates the preferred bearish tone for 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).

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