Daily Global Macro Technical Trend Bias/Key Levels (Fri 05 Oct)

FX space remains mix with USD strength intact in AUD & NZD. S&P 500 looking for a further drop to test 2860 medium-term downside trigger level.

FX –  Mix bag with USD strength intact in AUD & NZD ahead of NFP

  • EUR/USD – Trend bias: Sideways & continues to exhibit risk of countertrend rebound. Within our expectation as per highlighted in our previous report, the pair consolidated within the short-term neutrality zone of 1.1410 and 1.1530 (the former minor swing low areas of 04/10 Sep 2018 + median line of the minor descending channel since 24 Sep 2018 high) as it pushed up to test the 1.1530 (printed an intraday high of 1.1543 in yesterday, 04 Oct opening U.S. session but no hourly close above 1.1530). Recalled that 1.1445/1410 is a major support as per defined by the by the major pull-back range support from May 2015/Jul 2017 of a 2-year range configuration that was challenged but held recently on the week of 13/17 Aug 2018. Bears should also take note of yesterday’s U.S. session close where the pair has formed a “Bullish Harami” candlestick pattern right above the 1.1445/1410 key support. These observations suggest that downside momentum of the recent down move from 24 Sep 2018 high of 1.1815 has started to abate. No change, maintain neutrality stance between 1.1410 and 1.1530. An hourly close above 1.1530 triggers a potential corrective rebound to target the next intermediate resistance at 1.1640/1680 (the 50%/61.8% Fibonacci retracement of the down move from 24 Sep 2018 high to 03 Oct 2018 low + upper boundary of the aforementioned minor descending channel). On the flipside, a break below 1.1410 sees an extension of the down move to target the next support at 1.1350/1300 (15 Aug 2018 swing low + Fibonacci projection cluster).
  • GBP/USD – Trend bias: Sideways. The pair staged a break above the tightened 1.3000 key short-term resistance as per highlighted in our previous report in yesterday, 04 Oct U.S. session (printed an intraday high of 1.3041 with an hourly close above 1.3000).  Technical elements are mixed , thus no conviction for the pair to resume its downleg at this juncture. Prefer to turn neutral first between 1.3040 and 1.2960 (former minor swing low area of 03 Oct 2018 + 61.8% Fibonnaci retracement of the yesterday push up from 04 Oct 2018 low of 1.2921 to its intraday high of 1.3041). An hourly close above 1.3040 opens up scope for a potential countertrend rebound within its on-going minor downtrend in place since 20 Sep 2018 high to target the next intermediate resistance at 1.3100 (upper boundary of the minor descending channel from 20 Sep 2018 high + minor swing high area of 01 Oct 2018). A break below 1.2960 reinstates the bears for a potential push down to target the next near-term support at 1.2890 (minor swing low areas of 24 Aug/05 Sep 2018). An hourly close below 1.2890 is likely to trigger a further potential downward acceleration towards 1.2810/2790 (the minor swing low areas of 24 Aug/05 Sep 2018 + 76.4% Fibonacci retracement of the recent up move from 15 Aug 2018 low to 20 Sep 2018 high).
  • USD/JPY - Trend bias: Down. Broke below the lower limit of the neutrality zone at 114.00 as per highlighted in our previous report. The pair is now at risk of staging a corrective decline within its on-going minor uptrend in place since 07 Sep 2018 low of 110.38. Turn bearish in any bounces below 114.25 (former minor swing low of  04 Oct 2018, Asian session + close to 61.8% Fibonacci retracement of recent push down from 03 Oct 2018 high of 114.54 to yesterday, 04 Oct low of 113.60) for a further potential push down to target 113.00/112.90 support next (former medium-term swing high area of 18/19 Jul 2018 + 38.2% Fibonacci retracement of the minor uptrend from 07 Sep 2018 low to 03 Oct 2018 high of 114.54). On the flipside, a clearance above 114.25 sees a squeeze up to test 114.70 (upper boundary of the minor ascending channel from 07 Sep 2018 low + Fibonacci projection cluster).
  • AUD/USD – Trend bias: Down. Continued to inch lower as expected and printed a new minor “lower low” of 0.7062 in today, 05 Oct Asian session. Maintain bearish bias in any bounces below tightened key short-term resistance now at 0.7120 (close to the former swing low areas of 07/11 Sep 2018 + minor descending line from post FOMC high of 26 Sep 2018 + 23.6% Fibonacci retracement of the on-going slide from the post FOMC 26 Sep 2018 high to today, 05 Oct Asian session intraday low of 0.7062) for a another round of potential downleg to target next support at 0.6970/50 (Fibonacci projection cluster + lower boundary of the aforementioned medium-term descending channel).  On the flipside, a clearance above 0.7120 sees a squeeze up to retest 0.7240/7260 (minor swing high of 28 Sep/02 Oct 2018 + upper boundary of the aforementioned medium-term descending channel).
  • NZD/USD - Trend bias: Down. Broke (hourly close) below the 0.6475 lower limit of the neutrality zone as per highlighted in our previous report. A further potential down move has been validated, turn bearish now in any bounces below a key short-term resistance at 0.6535 (former minor swing low area of 15 Sep 2018 + 23.6% Fibonacci retracement of the on-going slide from the post FOMC 26 Sep 2018 high to today, 05 Oct Asian session intraday low of 0.6468 + minor descending trendline from the post FOMC 26 Sep 2018 high) for a decline to target the next support at 0.6360/6330 (Fibonacci projection cluster + lower boundary of the aforementioned medium-term descending channel). On the flipside, a clearance above 0.6535 negates the bearish tone for a squeeze up to test 0.6640/6660 (upper boundary of a medium-term descending channel from 07 Jun 2018 high).

Stock Indices (CFD) – Further potential downside

  • US SP 500 – Trend bias: Down. The Index had staged a breakdown below the 2912 lower limit of the short-term neutrality zone after the bearish elements as per highlighted in our previous report right after its 3rd test on the key 2940 long-term pivotal resistance. Further potential down move below key short-term resistance at 2919 (yesterday, 04 Oct U.S. session high + 61.8% Fibonacci retracement of the recent slide from 03 Oct high of 2940 to yesterday, 04 Oct low of 2883) to test the 2860 medium-term downside trigger level (the medium-term ascending trendline from 02 Apr 2018 low + minor swing low area of 07 Sep 2018). However, a clearance above 2919 put the bears on hold again for a squeeze up to retest the 2940 key long-term pivotal resistance.
  • Japan 225 – Trend bias: Down. Yesterday’s price action of the Index failed to stage a daily close back above 24200 which indicated a failure bullish breakout above the former medium-term range resistance  from 23 Jan 2018 which was also a 26-year high since Oct 1991. Turn bearish now in any bounces below key short-term resistance at 24000 (minor swing high area of 04 Oct 2018 + 50% Fibonacci retracement of the on-going slide from 03 Oct 2018, U.S. session high to 04 Oct 2018, U.S. session low of 23615) for a further potential down move to target the next near-term support at 23560/23500 (Fibonacci projection/retracement cluster). However, a clearance above 24000 negates the bearish tone for a squeeze up to retest the next intermediate resistance at 24340 (minor swing high area of 03 Oct 2018 + pull-back resistance of former ascending trendline support from 07 Sep 2018 low).
  • Hong Kong 50 – Trend bias: Down. Inched down lower as expected a printed a new minor “lower low” of 26283 in yesterday, 04 Oct U.S. session. Maintain bearish bias in any bounces below tightened key short-term resistance now at 26700 (close to the 38.2% Fibonacci retracement of the recent slide from 03 Oct 2018 high to yesterday, 04 Oct U.S. session low + minor swing high of 26672 printed in yesterday, 04 Oct U.S. session) for a further potential push down to target the next near-term support at 26120 (the minor swing low area of 11 Sep 2018). An hourly close below 26120 opens up scope for potential downside acceleration to target the 25640/500 medium-term support/target (refer to latest weekly technical outlook). However, a clearance above 26700 negates the bearish tone for a corrective rebound to retest 27000/100 (04 Oct Asian session gapped down + minor descending trendline from 28 Sep 2018 high).  
  • Australia 200 – Trend bias: Down. No change, maintain bearish bias below 6200 (pull-back resistance of the former “bearish flag” ascending range support from 07 Sep 2018) for a potential push down to target the 6100 support (swing low area of 06 Sep 2018). On the flipside, a clearance above 6200 put the bears on hold for a further corrective rebound to test the 6250 key-medium-term resistance (refer to latest weekly technical outlook).
  • Germany 30 – Trend bias: Down. The Index staged a push down to retest 12188 (the minor range support in place since last Fr, 28 Sep 2018). No clear signs of bullish reversal, maintain bearish bias below 12375 key short-term resistance and a break (an hourly close) below 12188 is likely to open up scope for a potential downside acceleration to target the next near-term support at 12000 (minor swing low of 18 Sep 2018 + 61.8% Fibonacci retracement of the rebound from 11 Sep 2018 low to 27 Sep 2018 high). On the flipside, a break above 12375 negates the bearish tone for another round of choppy up move to retest the minor range resistance of 12460 in place since 21 Sep 2018.


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