Daily Global Macro Technical Trend Bias/Key Levels (Fri 20 Jul)
Kelvin Wong July 20, 2018 6:16 AM
Mix bag in FX with USD/JPY at risk of shaping a deeper minor pull-back. Hang Seng is challenging the key major support at 28000.
FX – Mix bag with USD/JPY at risk of shaping a deeper minor pull-back
- EUR/USD – Trend bias: Push down scenario within range configuration remains intact. The pair had indeed shaped the expected “residual push up” to towards the 1.1680/90 level (Fibonacci retracement/projection cluster) as per highlighted in yesterday report after an early drop to print a low 1.1575 in yesterday, 19 Jul European session. The pushed up seen in the U.S. session can be attributed to U.S. President Trump’s criticism on the current Fed’s interest rate normalisation policy via a media interview. Overall, the technical picture remains the same as it is still “trapped” within a minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840. Maintain bearish bias in any bounce below the 1.1710 key short-term resistance (the upper boundary of a minor descending channel that has just taken shape since 09 Jul 2018 minor high of 1.1790 + 61.8% Fibonacci retracement of the recent slide from 09 Jul 2018 high to yesterday, 19 Jul low of 1.1575) for another potential push down to target the 1.1530 minor “Descending Triangle” range support. On the other hand, a clearance above 1.1710 sees a squeeze up to retest the “Descending Triangle” range resistance at 1.1780/1790.
- GBP/USD - Trend bias: Medium-term down move remains intact. The pair had continued to trade lower as expected and shaped a new minor “lower low” of 1.2956 in yesterday, 19 Jul European session. No change, maintain bearish bias in any bounce below adjusted key short-term resistance now at 1.3090 (Fibonacci retracement/projection cluster + the minor swing high area formed in yesterday, 19 Jul Asian session) for a further potential push down to target the next intermediate support at 1.2900 (the lower boundary of the descending channel from 09 May 2018 + 61.8% Fibonacci retracement of the 16-month up move from 16 Jan 2017 low to 17 Apr 2018 high). However, a clearance above 1.3090 negates the bearish tone for a squeeze up to retest the 1.3125 (the former minor swing low area of 13 Jul 2018) and above it sees 1.3250 next (the upper boundary of the descending channel) max the 1.3300 medium-term resistance.
- AUD/USD - Trend bias: Push up within range. The pair had staged a bearish breakout below the 0.7390 lower limit of the short-term neutrality zone as per highlighted in yesterday report and tumbled towards the “Symmetrical Triangle” range support/target of 0.7350/7320. Right now, the 4 hour Stochastic oscillator has started to shape a bullish divergence signal at its oversold region which indicates the risk of a bounce back towards the “Symmetrical Triangle” range resistance at 0.7440/50. Flip back to a bullish bias with 0.7310/7300 as the key short-term support (the minor “Symmetrical Triangle” range support) for a potential push up to target 0.7375 before 0.7440/50. However, a break below 0.7300 opens up scope for another impulsive downleg of the medium-term down move in place since 26 Jan 2018 high towards the next support at 0.7160 (the lower boundary of the medium-term descending channel in place since 26 Jan 2018 high + swing low areas of 24 May/23 Dec 2016).
- NZD/USD - Trend bias: Push down within range. The pair had inched down as expected and hit the first intermediate support/target of 06725 as it printed a low of 0.6714 in yesterday, 19 Jul U.S. session. No change, maintain bearish bias below in any bounce below adjusted key short-term resistance now at 0.6805 (the minor swing high area of 19 Jul 2018) for a further potential push down to retest the 0.6690 swing low of 03 Jul 2018 However, a break above 0.6805 negates the bearish tone for a squeeze up to retest 0.6840/0.6865 (17 Jul 2018 minor swing high + 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: Sideways. Yesterday’s swift pushed down below the 112.50 short-term support has negated the impulsive upleg scenario to target 113.55/80 intermediate resistance (the swing high areas of 12/21 Dec 2017, the upper boundary of the minor ascending channel from 09 Jul 2018 low). Overall, the medium-term uptrend in place since 26 Mar 2018 low remains intact but the risk of shaping a deeper minor pull-back from its recent 19 Jul 2018 high of 113.17 increases at this juncture. Prefer to turn neutral first between 112.05 (yesterday, 19 Jul U.S session low + former swing lows of 14 Dec 2017/02 Jan 2018) and 112.80 (former minor swing high of 13 Jul 2018 + Fibonacci retracement/projection cluster). Only an hourly close above 112.80 reinstates the bulls for an upleg to target 113.55/80. On the flipside, a break below 112.05 kickstarts a deeper pull-back towards the 111.30 support (pull-back support of the former major descending trendline resistance from Jun 2015 high + the former medium-term swing high area of 21 May 2018 + Fibonacci retracement cluster).
Stock Indices (CFD) – Mix bag with weaker indices (Hang Seng/Hong Kong 50) at risk of shaping a multi-month corrective down move
- US SP 500 – Trend bias: Residual push up scenario remains intact. The Index had broken down below the 2804 adjusted key short-term support and shaped our alternate scenario which is a deeper minor pull-back to test the 2790 support (the 17 Jul 2018 minor swing low area + former 13 Jun 2018 swing high area). It printed a current intraday low of 2792 in today, 20 Jul Asian session coupled with bullish divergence signal seen in the hourly Stochastic oscillator at its oversold region. Maintain the bullish bias with 2790 as the key short-term support and added 2809 as the upside trigger level (today’s Asian session high before the swift sell-off + minor descending trendline from 18 Jul 2018 high). An hourly close above 2809 is likely to reinforce another upleg to target the 2840 risk level (the bearish “Ascending Wedge” upper boundary + Fibonacci projection cluster). However, failure to hold at 2790 sees a further slide towards the 2763 key medium-term support set for this week (refer to latest weekly technical outlook).
- Japan 225 – Trend bias: Pull-back in progress. The Index had staged a bearish exit from the lower limit of the short-term neutrality range at 22690 as per highlighted in yesterday report. Turn bearish below 22730 (yesterday, 19 Jul U.S. session former minor swing low) for a further potential slide to target the 22355 support (minor swing high areas of 27/29 Jun 2018 + 50% Fibonacci retracement from 11 Jul 2018 low to 18 Jul 2018 high of 22954). On the flipside, a break above 22730 sees a squeeze up to retest the 23020 key medium-term range resistance.
- Hong Kong 50 – Trend bias: At risk of shaping a multi-month corrective down move. The Index had breached below the 28000 key major support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low) in today, 20 Jul Asian session as it printed a low of 27743. Given that the 28000 level is a major support and it requires a daily close below it to validate the start of a potential multi-month corrective down move to target the intermediate/short-term support at 27400/290 (the swing low areas of 06/28 Sep 2017) in the first instance. An hourly close back above 28110 renew the corrective rebound scenario to retest the 28400 resistance; upper boundary of the minor “Symmetrical Triangle” from 10 Jul 2018 high.
- Australia 200 – Trend bias: Up move remains intact. Hit the first intermediate resistance/target of 6290 as it printed a current intraday high of 6299 in today, 20 Jul Asian session. No change, maintain bullish bias in any dips above an adjusted key short-term support now at 6251 (minor swing low area of 19 Jul, U.S session) for a further potential push up to target the 10 Jul 2018 high of 6318 next. On the other hand, failure to hold at 6251 negates the bullish tone for a deeper slide to retest 6205/200.
- Germany 30 – Trend bias: Corrective rebound scenario remains intact. Yesterday’s slide from 18 Jul 2018 high of 12777 has stalled right at the predefined 12600 key short-term support (former minor swing high area of 16 Jul 2018) with a bullish divergence signal seen in the short-term hourly Stochastic oscillator at its oversold region. No change, maintain bullish bias with 12600 remains as the key short-term support for a further potential push up to target the next intermediate resistance at 12900/950 (the former swing high areas of 05/12 Jun 2018 + Fibonacci retracement/projection cluster). However, failure to hold at 12600 sees a further slide towards the 12400/390 minor swing low area of 11 Jul 2018.
*Levels are obtained from City Index Advantage TraderPro platform
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