Daily Global Macro Technical Trend Bias/Key Levels (Fri 26 Oct)

USD strength remains intact. Residual push down in stock indices before risk of corrective rebound.

FX –  USD strength remains intact except in JPY

  • EUR/USD – Trend bias: Down. Continued to inch down lower as expected. No clear signs of bearish exhaustion yet, maintain bearish bias with a tightened key short-term resistance now at 1.1400 (minor descending trendline from 22 Oct 2018 high + former minor ascending support from 24 Oct 2018 low prior to yesterday ECB meeting) for a further potential push down to target the next support at 1.1320/1300 (15 Aug 2018 medium-term swing low area + Fibonacci projection cluster). On the flipside, a clearance above 1.1400 negates the bearish tone for a squeeze up to retest the next intermediate resistance of 1.1430/50 (25 Oct 2018 high + former minor swing low area of 19 Oct 2018).  
  • GBP/USD – Trend bias: Down.  Continued to tumble as expected and even dropped below the 1.2890/2870 short-term support/target as per highlighted in our previous report. No clear signs of bearish exhaustion yet, maintain bearish bias in any bounces with a tightened key short-term resistance now at 1.2900 (minor descending trendline from 16 Oct 2018 high + close to 25 Oct 2018 minor swing high + 23.6% Fibonacci retracement of the on-going decline from 16 Oct 2018 high to yesterday, 25 Oct U.S. session low of 1.2796) for a further potential push down to target the medium-term support of 1.2660/2650 (15 Aug 2018 medium-term swing low + Fibonacci projection cluster). On the flipside, a clearance above 1.2900 negates the bearish tone for a squeeze up to retest the next intermediate resistance at 1.2960/3015(former minor swing low area of 22/23 Oct 2018 + 38.2%.50% Fibonacci retracement of the on-going decline from 16 Oct 2018 high to yesterday, 25 Oct U.S. session low of 1.2796).
  • USD/JPY - Trend bias: Sideways. Continued to churn in a sideways motion above the 111.65/50 key medium-term support (medium-term ascending channel support from 26 Mar 2018 low + former medium-term range resistance from 31 Jul 2018 high). Mix elements prevail, prefer to maintain neutrality stance between 111.65/50 and 112.90 (minor swing high area of 22/23 Oct 2018). A daily close below 111.50 opens up scope for at least a medium-term (multi-week) down move back inside a long-term/major range configuration in place since 05 Jun 2015 high to target the next support at 110.70/40 in the first step (06/07 Sep 2018 low).
  • AUD/USD – Trend bias: Down. Pushed down as expected and staged the bearish breakdown from the 3-weeks minor triangle range configuration in place since 05 Oct 2018 low. No change, maintain bearish bias in any bounces with a tightened key short-term resistance now at 0.7065 (pull-back resistance of the former minor triangle range support + 61.8% Fibonacci retracement of the on-going side from 25 Oct minor high of 0.7085 to today, 26 Oct Asian session current intraday low of 0.7021) for a further potential push down to target the next near-term support at 0.6970/6950 (Fibonacci projection cluster) in the first step. On the flipside, a clearance above 0.7065 negates the bearish tone for a squeeze up to retest the triangle range resistance at 0.7140/7150.   
  • NZD/USD - Trend bias: Down.  Pushed down as expected and met the short-term support/target of 0.6495. No clear signs of bearish exhaustion yet, maintain bearish bias in any bounces with a new key short-term resistance now at 0.6510 (minor descending trendline from 22 Oct 2018 high + former minor swing low areas of 25/26 Oct 2018) for a further potential push down to target the next support at 0.6430 (swing low areas of 08/09 Oct 2018 + 1.618 Fibonacci projection from 22 Oct 2018 high). On the flipside, a clearance above 0.6510 negates the bearish tone for a squeeze up to retest the 0.6540 intermediate resistance ( former support of minor congestion zone of 18/23 Oct 2018).

Stock Indices (CFD) – Potential residual push down before countertrend/corrective rebound kicks in

  • US SP 500 – Trend bias: Residual push down. The Index had managed to plunge as expected and hit the support/target of 2674 on 24 Oct (printed a low of 2651 in the U.S. session). Yesterday, 25 Oct, it shaped a bounce of 1.8% to print a high of 2723 in the U.S. session. Interestingly, price action of the Index had managed to reversed down from 2723 which is defined by a minor descending resistance from 19 Oct 2018 high, the former minor swing low of 24 Oct 2018 & 76.4% Fibonacci retracement of the recent steep fall from 24 Oct minor high of 2745 to 2651 low. Elliot Wave/fractal analysis suggest a potential residual/push down to end the final downleg of the minor impulsive down move structure in place since 17 Oct 2018 high of 2821 before a corrective rebound materialise (more significant that the bounce since on Tues, 23 Oct & yesterday, 25 Oct) with near-term supports coming in at 2630/20 (medium-term swing low area of 25 Apr/03 May 2018 + Fibonacci projection cluster) with key short-term resistance now at 2700 (former minor swing low of 23 Oct 2018 + minor descending trendline from 19 Oct 2018 high). In addition, the daily RSI oscillator has started to flash an impending bullish divergence signal at an extreme oversold level of 25 which indicates that the recent downside momentum of price action has started to abate. On the flipside, a clearance above 2700 invalidates the last push down scenario to kick start the corrective rebound towards 2750/55 (23 Oct 2018 minor swing high area + upper boundary of a minor descending channel from 03 Oct 2018 high).
  • Japan 225 – Trend bias: Sideways with risk of countertrend/corrective rebound. The Index had continued to drop lower as expected. Right now, it is hovering right above a significant minor support of 20870 (lower boundary of a minor descending channel from 22 Oct 2018 high + Fibonacci projection cluster). Elliot Wave/fractal analysis suggests a potential 5th wave end target at 21000/20870 to end the on-going minor impulsive down move structure in place since 22 Oct 2018 high of 22711 coupled with an extreme oversold reading seen in the shorter-term 1-hour Stochastic oscillator but 4-hour Stochastic oscillator has yet to reach oversold condition. Thus, prefer to turn neutral first between 20870 and 21760 (upper boundary of the minor descending channel from 22 Oct 2018 high ). A break below 20870 sees an extension of the impulsive down move to target the next medium-term support of 20550 (the swing low area of 23 Mar 2018). On the flipside, a clearance above 21760 opens up scope for a corrective rebound towards the 22190 resistance (23 Oct 2018 minor swing high + upper boundary of a minor descending channel from 01 Oct 2018 high).
  • Hong Kong 50 - Trend bias: Residual push down. The Index continued its downward spiral as expected and hit the 24740 support/target. No clear signs of bearish exhaustion yet from momentum indicators but Elliot Wave/fractal analysis suggests the risk of a 5th wave in progress of completion soon to end the minor impulsive down move structure in place since 28 Aug 2018 high of 28585 with potential end target at 24360/24000 (refer to latest weekly technical outlook). Maintain bearish bias with a new key short-term resistance now at 25170 (former minor range support of 11/23 Oct 2018) for a further potential push down to target the 24360 and 24000 supports (also the lower boundary of the medium-term descending channel from 07 Jun 2018 high) before risk of corrective rebound materialises. On the flipside, a clearance above 25710 invalidates the residual push down scenario to kick start the corrective rebound towards the 26200/240 intermediate resistance (22 Oct 2018 minor swing high) in the first step.
  • Australia 200 – Trend bias: Residual push down. The Index had continued to tumbled as expected and met the medium-term support/target of 5635 (refer to our latest weekly technical outlook). Maintain bearish bias with a new key short-term resistance at 5720 (minor descending trendline from 22 Oct 2018 high) for a potential residual push down to target the 5565 support (Fibonacci projection cluster + former medium-term swing high area of 24 Jul 2016). On the flipside, a clearance above 5720 invalidates the residual push down scenario to kick start a corrective rebound towards the 5780 intermediate resistance (former minor swing low areas of 11/23 Oct 2018) in the first step.
  • Germany 30 – Trend bias: Residual push down. The Index had tumbled within our expectation and hit the short-term support/target of 11100 on Wed, 24 Oct. Maintain bearish bias with a new key short-term resistance at 11270 (former minor swing low area of 23 Oct 2018 + minor descending trendline from 22 Oct 2018 high) for a potential residual push down to target the 10900/800 medium-term support (refer to latest weekly technical outlook). On the flipside, a clearance above 11270 invalidates the residual push down scenario to kick start a corrective rebound towards the 11400/500 resistance (minor swing high area of 24 Oct 2018 + upper boundary a minor descending channel from 04 Oct 2018 high).

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