Daily Global Macro Technical Trend Bias/Key Levels (Mon 04 Jun)

USD strength setback remains in progress except against the JPY. Major stock indices are still evolving within their respective medium-term uptrend configurations.

FX – USD strength setback except against JPY

  • EUR/USD – Trend bias: Short-term recovery scenario remains intact. Traded sideways on last Fri, 01 Jun holding above the key adjusted short-term support at 1.1600/1590 (refer to previous report) as it printed a low of 1.1617 after the release of better than expected U.S. NFP data for May (223K versus a consensus of 188K). Short-term technical elements remain unchanged with positive momentum reading seen in the 4 hour Stochastic oscillator as it inches upwards and has not reached an extreme overbought level. Maintain bullish bias in any dips with 1.1600/1590 remains at the key short-term support for a further potential push up with next intermediate resistances at 1.1760 (former minor swing low areas of 21 Nov/12 Dec 2017) follow by 1.1880/1940 (38.2% Fibonacci retracement of the decline from 16 Feb 2018 high to 29 May 2018 low + former minor swing low area of 09/10 Jan 2018 that was rejected on 14 May 2018). On the other hand, failure to hold at 1.1590 negates the recovery process for a slide to retest last week’s low of 1.1510 and a below it exposes the lower limit of the key major support zone at 1.1430 (the former resistance of a basing configuration that occurred in  May 2015/Jun 2016 + 50% Fibonacci of the multi-year up move from Jan 2017 low to 16 Feb 2018 high of 1.2555).
  • GBP/USD – Trend bias: Short-term mean reversion rebound in progress. The pair cleared above the 1.3350 upper limit of the short-term neutrality zone (refer to previous report) that validated a potential short-term rebound scenario. In addition, price action has formed a weekly bullish “Hammer” candlestick pattern coupled with the daily RSI oscillator that has just exited from its oversold region. These observations suggest a revival of a short to medium-term upside momentum of price action. Turn bullish in any dips with key short-term support at 1.3295 (former minor swing low areas of 23/28 May 2018 + minor ascending trendline from 29 May 2018 + 61.8% Fibonacci retracement of the on-going up move from 29 May 2018 low to today, 04 Jun Asian session current intraday high of 1.3370) for a further potential push up to target the next intermediate resistance at 1.3480 (former minor range congestion support from 04/18 May 2018 + 23.6% Fibonacci retracement of the on-going down move from 17 Apr 2018 high to 29 May low of 1.3205) in the first step. However, a break below 1.3295 invalidates the short-term rebound scenario for a continuation of the medium-term down move to target the next support at 1.3200/3160 (29 May 2018 swing low area + 50% Fibonacci retracement of the multi-year up move from Oct 2016 low to 17 Apr 2018 high of 1.4377).
  • AUD/USD – Trend bias: Short-term mean reversion rebound scenario remains intact. The pair had pull-backed and staged a rebound right at the predefined 0.7520/7500 key short-term support as expected (refer to previous report. It printed a low of 0.7514 on last Fri, 01 Jun after the release of the U.S. NFP data for May. Maintain bullish bias with adjusted key short-term support now at 0.7550 (the minor congestion area of 31 May/01 Jun 2018 + minor ascending trendline from 30 May 2018 low) for a potential residual push to target the 0.7625/7655 resistance zone (pull-back resistance of the former major “Ascending Wedge” support from Jan 2016 low + 50%/61.8% Fibonacci retracement of the down move from 19 Apr high to 09 May 2018 low) before risk of another leg of bearish impulsive downleg resumes. Failure to hold at 0.7550 negates the short-term rebound scenario for a slide to retest the 0.7520/0.7500 support.
  • NZD/USD - Trend bias: Short-term mean reversion rebound remains in progress. The pair had managed to hold right above the 0.6970/6950 predefined key short-term support (refer to previous report) before it staged a bounce after a print of an intraday low of 0.6960 seen in last Fri, 01 Jun U.S. session. Short-term momentum remains positive with the 4 hour Stochastic oscillator that has continued to inch upwards and has not reached an extreme overbought level. No change, maintain bullish bias with 0.6970/6950 remains as the key short-term support for a further potential push up to target the next intermediate resistance at 0.7050/7060 (former minor swing high area of 04 May 2018 + Fibonacci projection/retracement cluster). On the other hand, failure to hold at 0.6970/6950 negates the bullish tone to see a deeper slide to retest the 30 May swing low area of 0.6890/6883.
  • USD/JPY - Trend bias: Short-term mean reversion rebound remains in progress. Push up as expected and almost hit the short-term resistance/target of 109.80 (printed a high of 109.73 in last Fri, 01 Jun U.S. session). No change, maintain bullish bias in any dips with adjusted key short-term support now at 109.06 (former minor swing high area of 30 May 2018 + minor ascending trendline from 30 May 2018 low) for a another round of potential push up to target the next intermediate resistance at 110.10/30 (minor swing high of 24 May 2018 + 61.8% Fibonacci retracement of the decline from 21 May high to 29 May 2018 low). On the other hand, failure to hold at 109.06 negates the bullish tone for a deeper slide to retest 108.40 and even 108.10 (29 May 2018 swing low area).

Stock Indices (CFD) – Medium-term uptrend remaints intact

  • US SP 500 – Trend bias: Recovery process remains in progress. The Index continued to inch higher as expected and it is now coming close to the 2738/41 short-term target/resistance (minor range resistance in place since 14 May 2018). No signs of bullish exhaustion and other leading high beta sectors/indices have staged a bullish breakout above their respective parallel minor range resistances on last Fri, 01 May; Nasdaq 100 above 7008, NYSE FANG+ Index above 2767, U.S. Semiconductor sector ETF above 187.67. Maintain bullish bias in any dips with adjusted key short-term support now at 2715 (minor ascending trendline from 30 May 2018 low) and an hourly close above 2741 reinforces a further potential push up to target the next intermediate resistance at 2760/65 (minor swing high area of 15/16 Mar 2018). Failure to hold at 2715 negates the bullish tone for a deeper pull-back to retest 2700 (31 May  2018 minor swing low).  
  • Japan 225 – Trend bias: Short-term recovery remains in progress. Pushed up as expected and almost met the 22500/620 intermediate resistance/target (printed an intraday high of 22494 in today, 04 Jun Asian session). No change, maintain bullish bias in any dips above adjusted key short-term support now at 22260 (former minor swing high areas of 30/31 May 2018 + minor ascending trendline from 29 May 2018 U.S. session low of 21923) for a further potential up move to target the next intermediate resistance at 22600/640 (minor swing high area of 24 May 2018 + 61.8% Fibonacci retracement of the recent decline from 21 May 2018 high to 29 May 2018 low). On the other hand, failure to hold at 22260 negates the recovery process for a slide to retest the key medium-term support area of 22000/21900.
  • Hong Kong 50 – Trend bias: Push up within range configuration remains in progress. Pushed up as expected and hit the intermediate resistance/target of 30800. No change, maintain bullish bias in any dips above adjusted key short-term support now at 30660 (former minor swing high area of 31 May 2018 + minor ascending trendline from 30 May 2018 low) for a further potential push up to target the next intermediate resistance at 31240 (minor gap resistance of  22/23 May 2018 + 76.4% Fibonacci retracement of the recent slide from 14 May to 30 May 2018 low). However, failure to hold at 30660 sees another choppy down move to retest the 30000/29900 minor range support from 26 Apr/07 May 2018.
  • Australia 200 – Trend bias: Short-term recovery validated. Broke above the 6010 upper limit of the short-term neutrality zone as per highlighted on last Fri, 01 Jun report. Turn bullish now in any dips above 6010 key short-term support (the pull-back of the former minor descending trendline resistance from 31 May 2018 high + minor ascending trendline from 30 May 2018 low) for a further potential push up to target the next intermediate resistances at 6068 and 6087 (minor congestion area from 07 May/21 May 2018 + 61.8%/76.4% Fibonacci retracement of the recent decline from 15 May high to 29 May 2018 U.S. session low of 5943). On the other hand, a break below 6010 negates the bullish tone for another round of choppy pull-back to retest 5970 (01 Jun 2018 minor swing low) and even last week low of 5943.
  • Germany 30 – Trend bias: Sideways with upside bias. Watch the 12830 upper limit of the short-term neutrality zone (minor swing high area of 30 May 2018 that stalled right at the former minor swing low areas of 24/28 May 2018). An hourly close above the 12830 level in the European session is likely to validate at least a short-term push up to target the 13000/13050 intermediate resistance (minor swing high area of 28 May 2018 before the recent steep decline occurred). On the other hand, a daily close below 12600 sees a deeper corrective decline towards the next support at 12300/200  (swing low area of 25 Apr 2018 + primary ascending trendline from Feb 2016 low + 61.8% Fibonacci retracement of the up move from 26 Mar low to 22 May 2018 high).

*Levels are obtained from City Index Advantage TraderPro platform




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