Daily Global Macro Technical Trend Bias/Key Levels (Fri 13 Jul)

USD strength resurgence remains intact with USD/JPY bullish breakout sighted. Stock indices remain in short-term bullish configuration with Nikkei 225 joining the bandwagon.

FX –  USD strength resurgence remains intact with bullish breakout seen in USD/JPY

  • EUR/USD – Trend bias: Push down within range scenario remains intact. The push up from yesterday, 12 Jul 2018 European session low of 1.1650 had managed to stall right below the predefined  1.1705 key short-term resistance as per highlighted in yesterday report (printed a high of 1.1695 in yesterday, U.S. session. No major changes on its short-term technical elements as it continues to evolve within a minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840. No change, maintain bearish bias below the 1.1705 key short-term resistance (the former minor swing low areas of 10/11 Jul 2018) for a further potential slide towards 1.1590 before the 1.1530 minor “Descending Triangle” range support. However, a clearance above 1.1705 sees a squeeze up to retest the range resistance at 1.1780/1790.
  • GBP/USD - Trend bias: Pull-back scenario to retrace the first wave of mean reversion rebound in progress. The pair continued to inch lower as expected and printed a new minor lower low of 1.3170 in today, 13 Apr Asian session since the on-going slide started on 09 Jul 2018 high of 1.3363. No clear signs of short-term bearish exhaustion, maintain bearish bias in any bounce below 1.3240 key short-term resistance (former minor swing low of 11 Jul 2018 + close to minor descending trendline from 09 Jul 2018) for a further potential push down to target the next intermediate supports at 1.3140 and 1.3110. (minor swing low of 02 Jul 2018 + Fibonacci retracement/projection cluster). However, a clearance above 1.3240 sees a squeeze back up to retest 1.3300 (09 Jul 2018 swing high area + medium-term descending trendline from 10 May 2018 high).
  • AUD/USD - Trend bias: Push down within range. The push up from 0.7360 low of 12 Jul 2018 had tested the upper limit of the short-term neutrality zone at 0.7415 (refer to yesterday report) without a clear hourly close above it (printed an intraday high of 0.7419 in yesterday, 12 Jul U.S. session low). In today, 13 Jul Asian session, the pair has attempted to test the 0.7415 (printed a current intraday high of 0.7422 before an hourly close below 0.7415) and interestingly, the shorter-term hourly Stochastic oscillator has flashed a bearish divergence signal at its overbought region. These observations suggest the push up from 12 Jul 2018 low of 0.7360 has started to lose upside momentum. Flip to a bearish below key short-term resistance at 0.7440 (former 10 Jul 2018 minor swing low area + minor descending trendline from 09 Jul 2018 high + 61.8% Fibonacci retracement of the slide from 09 Jul 2018 high to 12 Jul 2018 low of 0.7360) for a potential push down to retest 0.7360 before targeting the 0.7320/0.7300 swing low of 02 Jul 2018. On the other hand, a clearance above 0.7440 reinstates the second wave of mean reversion rebound scenario to retest 0.7484 recent swing high of 09/10 Jul 2018 before targeting the 0.7540 resistance (upper boundary of the medium-term descending channel from 26 Jan 2018 + 38.2% Fibonacci retracement of the decline from 14 Mar 2018 high to 29 Jun 2018 low).
  • NZD/USD - Trend bias: Down move remains intact. No change, maintain bearish bias in any bounce below the 0.6805 key short-term resistance (former minor swing low of 10 Jul 2018 + 61.8% Fibonacci retracement of the on-going slide from 11 Ju 2018 minor swing high to today, 12 Jul Asian session current intraday low of 0.6748) for a further potential downleg to retest 0.6690 swing low of 03 Jul 2018 before targeting the next support at 0.6600/6575 (the lower boundary of the medium-term descending channel in place since 13 Apr 2018 + swing low areas of 16 Feb/15 Mar 2016). On the other hand, a break above 0.6805 negates the bearish tone for a squeeze up to retest 0.6865 (the pull-back resistance of the  former neckline support of the major “Double Top” that broke down on 27 Jun 2018 and the 23.6% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low).
  • USD/JPY - Trend bias: Further up move validated.  The pair had staged a bullish breakout with a daily close above the 112.30 major resistance (Fibonacci retracement/projection cluster + major descending resistance in place since Jun 2015 high). Flip back to a bullish bias from yesterday’s neutrality stance in any dips above the 112.00 key short-term support (the pull-back support of the former major descending resistance from Jun 2015 high + 38.2% Fibonacci retracement of the recent up move from 11 Jul 2018 low to today, 13 Jul Asian session current intraday high of 112.77 + steeper minor ascending trendline from 11 Jul 2018 low) for a further potential push up to target the next intermediate resistance at 113.30/40 (Fibonacci projection cluster + swing high areas of 21 Dec 2017/05 Jan 2018) before 114.10 (medium-term swing high area of 01 Nov 2017 + upper boundary of the medium-term ascending channel in place since from 26 Mar 2018 low). However, failure to hold at 112.00 implies a failure bullish breakout for a slide back to retest 111.40/111.00 in the first step(the former swing high of 21 May 2018 + medium-term ascending channel support from 26 Mar 2018 low).

Stock Indices (CFD) – Up move in progress with Nikkei 225 joining the bandwagon

  • US SP 500 – Trend bias: Up move remains intact. Pushed up as expected and hit the intermediate resistance/target at 2800. No clear signs of bullish exhaustion with higher beta/momentum driven Technology sector that played the leading role where its respective ETF (XLK) outperformed the S&P 500 with a gain of 1.58% in yesterday, 12 Jul U.S. session versus a gain of 0.87% seen in the S&P 500. After yesterday’s rally, the Index may shape a minor pull-back at this juncture as both the 4 hour and 1hour Stochastic oscillators have reached their respective extreme overbought levels. No change, maintain bullish bias in any dips with adjusted key short-term support now at 2782 (former 11 Jul 2018 minor swing high +  minor ascending trendline from 05 Jul 2018 low + Fibonacci retracement cluster) for a further potential push up to target the next resistance at 2838 (upper boundary of the medium-term bearish “Ascending Wedge” configuration in place since 03 Apr 2018 low + Fibonacci projection cluster). On the other hand, failure to hold at 2782 negates the bullish tone for a deeper pull-back to retest 2767/63 (11 Jul 2018 minor swing low area + pull-back support of the former descending trendline from 13 Jun 2018 high).
  • Japan 225 – Trend bias: Further rebound validated. The Index had surpassed above the 22350 key medium-term resistance (the descending trendline from 12 Jun 2018 high + 26/29 Jun 2018 swing high areas + Fibonacci retracement/projection cluster) that invalidated the medium-term bearish scenario to retest the 21500 support (05 Jul 2018 swing low area). Right now, the Index is likely to be undergoing an extension of the corrective rebound in place since 05 Jul 2018 low. Turn bullish in any dips above the 22320 (the pull-back support of the former descending trendline from 12 Jun 2018 high) for a further potential push up to target the next resistances at 22650/750 (the minor swing high area of 21 Jun 2018 + 76.4% Fibonacci retracement of 12 Jun 2018 high to 05 Jul 2018 low) and 23020 next (21 May/12 Jun 2018 swing high areas). However, failure to hold at 22320 implies a failure bullish breakout a slide back to retest 21900/800 intermediate support (former minor swing high area of 03 Jul 2018 +  minor ascending trendline from 05 Jul 2018 low).
  • Hong Kong 50 – Trend bias: Corrective rebound in progress. Continued to push higher as expected. No change, maintain bullish bias with an adjusted key short-term support now at 28460 (yesterday, 12 Jul low + minor ascending trendline from 11 Jul 2018 low) for a further potential push up to retest 28980/29000 intermediate resistance (minor swing high of 10 Jul 2018). An hourly close above 29000 opens up scope for further up move towards the next resistance at 29400 (former minor swing low of 04 Apr 2018). On the other hand, failure to hold at 28460 sees another round of slide to retest the 28000 major support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low).
  • Australia 200 – Trend bias: Up move in progress. No change, maintain bullish bias in any dips with key short-term support remains at 6235 (former minor swing high of 11 Jul 2018 + 61.8& Fibonacci retracement of the on-going push up from yesterday, 11 Jul U.S. session low of 6205 to today, 12 Jul Asian session current intraday high of 6271) for a further potential up move to retest the 10 Jul 2018 minor high of 6318 before targeting the 6350 resistance (Fibonacci projection cluster). However, failure to hold at 6235 negates the bullish tone for a pull-back to retest 6205/200 (the minor ascending trendline from 26 Jun 2018 low).
  • Germany 30 – Trend bias: Corrective rebound in progress. Pushed up higher as expected. No change, maintain bullish bias in any dips above adjusted key short-term support now at 12480 (the former minor swing high area of 12 Jul 2018 + minor ascending trendline from 28 Jun 2018 low) for a further potential corrective bounce towards the 12630 key medium-term range resistance (see latest weekly technical outlook). On the other hand, failure to hold at 12480 negates the bullish tone for a slide back to retest the 12400/390 minor range support (former minor range resistance from 27 Jun/03 Jul 2018).

*Levels are obtained from City Index Advantage TraderPro platform


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