Daily FX Technical Trend Bias/Key Levels (Tues 26 Feb)

Bullish exhuastion seen in the recent rebound phase of USD/JPY from 03 Jan 2019 flash crash low.

FX – USD weakness in EUR & GBP with risk of bullish exhaustion seen in USD/JPY

  • EUR/USD – Trend bias: Push up within range. Managed to hold the 1.1320 key short-term support as per highlighted in our previous report and now probing last Wed, 20 Feb minor swing high area of 1.1370. No change in elements, maintain bullish bias with 1.1320 as key short-term support for a further potential push up target the next intermediate resistance at 1.1400 within a potential medium-term descending triangle range configuration in motion since 13 Nov 2018 low of 1.1214. On the flipside, failure to hold at 1.1320 sees another round of choppy slide to retest 19 Feb 2019 swing low area of 1.1270.
  • GBP/USD – Trend bias: Push up within range. Continued to inch higher as expected from the 1.2970 key short-term support after a test on it last Fri, 22 Feb. Maintain bullish bias in any dips with a tightened/adjusted key short-term support now at 1.3035 (close to the minor swing low of 25 Feb 2018 + lower boundary of a minor ascending channel from 15 Feb 2019 low) for a further potential push up to target the 26 Jan 2019 swing high area of 1.3200/3220 and even 1.3310 next (1.00 Fibonacci expansion of the recent rebound from 14 Feb 2019 low to 21 Feb 2018 high projected from last Fri, 22 Feb low + medium-term swing high area of 09 Jul/20 Sep 2018). On the flipside, failure to hold at 1.3035 negates the bullish tone for a slide to retest last week low at 1.2970/60.
  • USD/JPY – Trend bias: Push down within range. The pair has inched higher as expected and hit the minor range resistance/target at 111.10 (printed a high of 111.23 in yesterday, 25 Feb U.S. session). The pair has traded within a range of 98 pips in the past 2 weeks since 14 Feb 2019. The weekly candlestick has formed a “Star-liked Doji” pattern for last week’s price action coupled with a bearish divergence signal seen in the daily RSI oscillator. These observations suggest that the upside momentum of the on-going rebound since 03 Jan 2019 flash crush low has started to wane (the rebound moves in line with the recent steep recoveries seen in equities). Thus, bulls should be cautious over at this juncture. Flip to a bearish bias with key short-term resistance at 111.20 for a potential push down to retest the 110.10/110.00 near-term support (former minor swing high areas of 23 Jan/04 Feb 2019 + minor ascending channel support from 03 Jan 2019 swing low area). On the flipside, a break above 111.20 sees the revival of bulls for another push up to probe 111.80 (former swing low areas of 15/26 Oct 2018) follow by 112.30 resistance (former swing low areas of 20 Nov/06 Dec 2018 + close to 76.4% Fibonacci retracement of the recent decline from 12 Nov 2018 high to 03 Jan 2019 swing low area).
  • AUD/USD – Trend bias: Push down within range. Key short-term resistance will be at 0.7200 with downside trigger level at 0.7150 (the minor ascending trendline from last Thurs, 21 Feb 2019 low). A break below 0.7150 reinforces the push down within range scenario for a slide to retest the minor swing low area of 0.7085/7070 formed from 14/21 Feb 2019 in the first step. On the flipside, a break above 0.7200 negates the bullish tone for an extension of the corrective rebound to target the next resistance at 0.7250 (the descending trendline from 03 Dec 2018 high + 76.4% Fibonacci retracement of the recent slide from 31 Jan 2019 high to 12 Feb 2019 low).
  • NZD/USD – Trend bias: Push down within range. The pair has staged the expected push down towards the first support/target of 0.6800 before it bounced back up within its “symmetrical triangle” range configuration that is in motion since 08 Oct 2018 low. It printed a low of 0.6756 on 22 Feb 2019. No change, maintain bearish bias below 0.6900/6920 (the upper boundary of the “symmetrical triangle” + Fibonacci retracement/expansion cluster) for another potential slide to retest 0.6756 and 0.6725 next. On the flipside, a break above 0.6920 invalidates the push down scenario for a squeeze up to retest 0.6970 (04 Dec 2018 swing high).               

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