Daily Global Macro Technical Trend Bias/Key Levels (Thurs 01 Nov)

Mix bag for USD with further potential weakness in USD/JPY. S&P 500 ended yesterday session with a weak closing, risk of fresh downleg.

FX –  Mix bag with further potential weakness in USD/JPY

  • EUR/USD – Trend bias: Down.  The pair had pushed down lower as expected and hit the first support/target of 1.1320/1300 (printed a low of 1.1300 in yesterday, 31 Oct U.S. session) before it staged a rebound of 40 pips to print a current intraday high of 1.1344 in today, 01 Nov Asian session. No clear signs of bearish exhaustions from 4 & 1-hour momentum indicators (Stochastic), maintain bearish bias with a tightened key short-term resistance now at 1.1375 ( former minor swing low areas of 29/30 Oct 2018 + minor descending trendline from 16 Oct 2018 high + 23.6% Fibonacci retracement of the on-going decline from 16 Oct 2018 high to yesterday, 31 Oct low of 1.1300) for a further potential drop to target the next near-term support at 1.1240/1.1200 (Fibonacci projection cluster). However, a break above 1.1375 put the bears on hold for a minor corrective rebound towards the 1.1420/1430 resistance (upper boundary of the minor descending channel from 24 Sep 2018 high + minor swing high area of 27/29 Oct 2018 + 38.2% Fibonacci retracement of the on-going decline from 16 Oct 2018 high to yesterday, 31 Oct low of 1.1300).
  • GBP/USD – Trend bias: Corrective rebound. The pair had failed to stage the residual push down towards the 1.2660/2640 support/target as per highlighted in our previous report. From its low of 1.2694, it rebounded and broke above tightened key short-term resistance of 1.2780 triggered by positive Brexit related news flow where U.K Brexit Secretary Raab commented that the expects an agreement on Brexit to be finalised with EU officials on 21 Nov. The pair is now likely to be undergoing a minor corrective rebound phase to retrace the recent minor degree impulsive down move from 16 Oct 2018 high of 1.3236 towards the 1.2920/2950 intermediate resistance (50% Fibonacci retracement of the decline from 16 Oct 2018 high to 31 Oct 2018 low + former minor swing low of 04 Oct 2018) with key short-term support at  1.2780 (previous minor support now turns pull-back resistance). However, failure to hold at 1.2780 reinstates the bears for a downleg to target the 1.2660/2640 support (15 Aug 2018 medium-term swing low + Fibonacci projection cluster).
  • USD/JPY - Trend bias: Push down within range. The pair had managed to inch down lower as expected from the 113.40/50 key short-term resistance as per highlighted in our previous report and met the first support/target of 112.70 in today, 01 Nov early Asian session. In addition, it ended yesterday, 31 Oct U.S. session with a daily “Spinning Top” candlestick pattern that suggests the lack of inertia from the bulls to push prices higher. No change, maintain bearish bias in any bounces below a tightened key short-term resistance now at 113.15 (61.8% Fibonacci retracement of the yesterday’s push down from 113.38 high + former minor swing low area of the “last push up” seen in yesterday, 31 Oct European session) for a further potential push down to target the next support at 112.30 (the ascending channel support from 26 Mar 2018 low). However, a break above 113.15 negates the bearish tone for a probe to retest the 113.40/50 resistance (former minor congestion area of 28 Sep/09 Oct 2018 and a Fibonacci projection cluster).
  • AUD/USD – Trend bias: Push down within range. The pair had staged a 67 pips squeeze up in today, 01 Nov Asian session from yesterday, U.S. session low of 0.7066 to print a current intraday high of 0.7133. Right now, it is hovering just below  its minor range resistance of 0.7140/7150 in place since 15 Oct 2018 that confluences with the medium-term descending channel resistance of 0.7160 from 26 Jan 2018 high. Elliot Wave/fractal analysis highlights the risk of another push down leg within the minor range configuration in place since 05 Oct 2018 low of 0.7039 coupled with overbought readings seen in both the 4 & 1-hour Stochastic oscillators. Flip to a bearish bias with 0.7140/7160 as key short-term resistance and 0.7100 as downside trigger level to reinforce a potential push down to target the 0.7060/7050 near-term support (minor swing low areas of 23/25/30 Oct 2018) in the first step. However, a clearance above 0.7160 triggers a corrective rebound towards the next intermediate resistance at 0.7280/7315 (swing high area of 21/26 Sep 2018 + 23.6% Fibonacci retracement of the decline from 26 Jan 2018 high to 26 Oct 2018 low).
  • NZD/USD - Trend bias: Push down within range. No change, maintain bearish bias below 0.6580 key short-term resistance (also the upper boundary of the medium-term descending channel from 07 Jun 2018 high + 76.4% Fibonacci retracement of the recent push down from 22 Oct 2018 high to 26 Oct 2018 low) for a potential push down to retest the near-term support of 0.6360/6325 (09/26 Oct 2018 swing lows). However, a break above 0.6580 negates the bearish tone for a squeeze up to retest 0.6610/6620 (19/21 Oct 2018 swing high).

Stock Indices (CFD) – Volatile session for S&P 500 that remains below resistance

  • US SP 500 – Trend bias: Down. Another volatile session yesterday where the Index had rebound by 3.9% from its 30 Oct low of 2633 to print a high of 2737 before it ended the U.S. session back below the 2713 key short-term resistance as per highlighted in our previous session to close at 2711. Interestingly, it formed a bearish daily “Shooting Star” candlestick pattern coupled with both the 4 and 1-hour Stochastic oscillators that have reversed down from their respective extreme overbought levels. No change, maintain bearish bias but adjusted the key resistance to 2745 which is the medium-term pivotal resistance as per highlighted in our latest weekly technical outlook, click here for details given the current high volatile environment with Apple earnings announcement out later today after the close, 2690 downside trigger level (the minor ascending trendline from 29 Oct 2018 low + former minor swing high area of 29 Oct 2018) to reinforce another potential fresh downleg to retest the recent 29 Oct low of 2603 in the first step. However, a daily close above 2745 jeopardises the bears for an extension of the corrective rebound to target the next resistances at 2800 and 2822 (17 Oct 2018 swing high + 61.8% Fibonacci retracement of the decline from 21 Sep 2018 all-time high to 29 oct 2018 low).
  • Japan 225 – Trend bias: Down. Pushed up but managed not to surpass the 22030 key medium-term pivotal resistance. No change, maintain bearish bias with 21500 remains as the downside trigger to reinforce the start of a new potential downleg to retest the recent swing low of 20800 printed on 26/29 Oct 2018 in the first step. However, a clearance above 22030 put the on-going downtrend in place since 01 Oct 2018 high at risk for a further up move to target the next resistance at 22700 follow by 23000 (multi-month range resistance in place since 21 May 2018. 
  • Hong Kong 50 - Trend bias: Sideways. The Index had breached above the 25170 key short-term resistance reinforced by the prospect of more planned fiscal stimulus from China policy makers after a key Politburo meeting held on Wed, 31 Oct chaired by President Xi. Right now, it is approaching the 25580/26070 corrective rebound resistance/target as per highlighted in our weekly technical outlook. Mix short-term elements now as both the 4 and 1-hour Stochastic oscillators have reached extreme overbought levels. Thus, prefer to turn neutral today between 26070 and 25000 (former minor range resistance in place since 29 Oct 2018). Only an hourly close below 25000 reinstates the bears for another potential downleg to target  24360 and 24000 supports (also the lower boundary of the medium-term descending channel from 07 Jun 2018 high). On the flipside, a break above 26070 sees an extension of the corrective rebound towards the 26700 key medium-term pivotal resistance (also the upper boundary of the medium-term descending channel from 07 Jun 2018 high).         
  • Australia 200 – Trend bias: Corrective rebound target almost reached, another potential downleg. Pushed up as expected to print a high of 5873 in today, 01 Nov early Asian session which is closed to the 5900 corrective rebound target/resistance as per highlighted in our previous report (38.2% Fibonacci retracement of the decline from 29 Aug 2018 high to 26 Oct 2018 low + 23 Oct 2018 minor swing high). In addition, the 4-hour Stochastic oscillator has shaped a bearish divergence signal at its overbought region which suggests that the upside momentum of the on-going push from 29 Oct 2018 low of 5640 has started to abate. Flip back to a bearish bias with 5900 as key short-term resistance and 5785 as downside trigger (former minor swing high of 30 Oct 2018 +  minor ascending trendline from 26 Oct 2018 low) to reinforce the start of a potential fresh downleg to retest the recent 29/26 Oct swing low of 5640/5611 in the first step. However, a clearance above 5900 negates the bearish tone for an extension of the corrective rebound towards the next resistance at 5950 (swing high areas of 17/19 Oct 2018).
  • Germany 30 – Trend bias: Down. Pushed up but stalled at the 11500 resistance and started to form a minor bearish “Ascending Wedge” configuration since 29 Oct 2018 low of 11154. No change, maintain bearish bias below key short-term resistance at 11500 with 11395 (lower limit/support of the minor “Ascending Wedge”) as a downside trigger to reinforce for a potential push down to retest  11154 before last Fri, 26 Oct swing low area of 11050. However, a break above 11500 sees an extension of the corrective rebound towards the 11600 key medium-term pivotal resistance.                   

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