Daily Global Macro Technical Trend Bias/Key Levels (Thurs 05 Jul)

USD strength setback remains in progress while USD/JPY is still holding above 110.25 key short-term support. ASX 200 is showing signs of an imminent potential bullish breakout.

FX –  USD strength setback remains in progress while USD/JPY holding above key short-term support

  • EUR/USD – Trend bias: Mean reversion rebound scenario remains intact. Yesterday, 04 Jul, the pair traded in a tight range of 51 pips and held above the 1.1620 predefined key short-term support (printed a low of 1.1630 in yesterday European session. No change, maintain bullish bias with 1.1620 as the key short-term support (03 Jul low area + lower boundary of minor ascending channel from 28 Jun 2018 low) for a potential minor rebound to target the 1.1740 intermediate resistance (23.6% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low + former minor range support from 08/13 Jun 2018 + upper boundary of minor ascending channel from 28 Jun 2018 low). On the flipside, a break below 1.1620 reinstates the bears for a slide to retest 1.1510 in the first step (the range support that was formed since 29 May 2018).
  • GBP/USD - Trend bias: Mean reversion rebound in progress. Inched up higher as expected and printed a new minor “higher high” of 1.3250 in yesterday, 04 Jul U.S. session that surpassed the first intermediate resistance/target of 13230 as per highlighted in our previous report. No clear signs of short-term bullish exhaustion, maintain bullish bias in any dips with an adjusted key short-term support at  1.3170 (yesterday, 04 Jul European session low + lower boundary of the minor ascending channel from 28 Jun 2018 low + 50% Fibonacci retracement of the recent push up from 02 Jul 2018 low to yesterday 04 Jul U.S. session high of 1.3250) for a further potential minor upleg to target the next intermediate resistance at 1.3310/3360 (22 Jun 2018 minor swing high + descending trendline from 10 May 2018 + 23.6% Fibonacci retracement of the multi-month down move since 17 Apr 2018 high to 28 Jun 2018 low).  However, failure to hold at 1.3150 sees another slide to retest 1.3100 before the 1.3050 low of 28 Jun 2018.
  • AUD/USD - Trend bias: Mean reversion rebound in progress. Pull-backed from its 04 Jul Asian session high of 0.7424 but managed to hold the 0.7350 predefined adjusted key short-term support (printed a current intraday low of 0.7367 in today, 05 Jul Asian session). In addition, its shorter-term hourly Stochastic oscillator has started to form a bullish divergence signal which indicates the pull-back from 04 Jul high has started to lose downside momentum. No change, maintain bullish bias with 0.7350 remains as the key short-term support (minor ascending trendline from 02 Jul 2018 low + 61.8% Fibonacci retracement of the on-going push up from 02 Jul  2018 low to 04 Jul 2018 high) for a further potential push up to target 0.7450 intermediate resistance (former medium-term swing low area of 09 May 2018 that had managed to stall the previous push up on 25 Jun 2018). An hourly close above 0.7450 is likely to reinforce a further mean reversion rebound towards the 0.7540/0.7600 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). On the other hand, failure to hold at 0.7350 negates the bullish tone for a slide back to retest 0.7300 (09 May 2017 swing low area + 61.8% Fibonacci retracement of the up move from Jan 2016 low to 26 Jan 2018 high).
  • NZD/USD - Trend bias: Mean reversion rebound remains intact. Traded in a tight range of 34 pips. No change, maintain bullish bias in any dips with the key short-term support remains at 0.6730/20 (former minor swing low of 29 Jun 2018 + 50%/61.8% Fibonacci retracement of the on-going push up from 03 Jul 2018 low to today, 04 Jul 2018 high) for a further potential push up to target the 0.6830/6865 intermediate resistance (the former neckline support of the major “Double Top” + 23.6% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low). However, a break below 0.6720 negates the bullish tone for a slide back to test the 0.6675/50 support (30 May 2016 medium-term swing low + 1.00 Fibonacci projection of the down move from 27 Jul 2017 high to 17 Nov 2017 low projected from 16 Feb 2018 high).
  • USD/JPY - Trend bias: Up move still intact. Traded a range of 31 pips and ended yesterday, 04 Jul U.S. session with a bullish daily “Hammer” candlestick right above the 110.25 excess key short-erm support as per highlighted in the previous report. No change maintain bullish bias with 110.25 remains as the key short-term support (50% Fibonacci retracement of the recent up move from25 Jun 2018 low to 03 Jul 2018 high + medium-term ascending channel support from 26 Mar 2018 low) and 110.65 as the upside trigger level. An hourly close above 110.65 is required to reinforce a further push up to retest the 21 May 2018 high of 111.39 before targeting the lower limit of the major resistance at 112.00 (the upper boundary of a major descending resistance in place since Jun 2015 high + Fibonacci projection/retracement cluster). On the flipside, a break below 110.25 sees another round of choppy slide back to retest the 109.35/25 medium-term range support in place since 08 Jun 2018.

Stock Indices (CFD) – Minor rebound scenario remains intact with ASX 200 showing signs of an imminent potential bullish breakout  

  • US SP 500 – Trend bias: Minor rebound scenario remains intact. 2709 remains the key short-term support (minor ascending trendline from 28 Jun 2018 low + close to 76.4% Fibonacci retracement of the recent push up from 02 Jul 2018 low to the minor range resistance of 2740) for another round of potential minor rebound to retest the 2740/44 minor range top/resistance in place since 27 Jun 2018. On the flipside, a break below 2709 sees a slide towards the 2680 key medium-term support. 
  • Japan 225 – Trend bias: Minor rebound scenario remains intact. 21600 remains the key short-term support (10/11 Apr 2018 low + Fibonacci retracement/projection cluster) to maintain the minor rebound scenario to target the 21900/22000 intermediate resistance (former minor swing low area of 26 Jun 2018 + 38.2% Fibonacci retracement of the down move from 21 Jun 2018 high to 03 Jul 2018 low). However, failure to hold at 21600 opens up scope for another round of downleg to target the next support at 21300 in the first step (07 Apr 2018 low + Fibonacci projection cluster).
  • Hong Kong 50 – Trend bias: Minor rebound scenario remains intact. In today, 05 Jul Asian opening session, the Index breached below the 28000 key support before an hourly close back above it (printed a current Asian session intraday low of 27885). In addition, the shorter-term hourly Stochastic oscillator has flashed a bullish divergence signal which indicates a slow down in downside momentum of its recent slide in place since 29 Jun 2018. No change, maintain bullish bias with 28000 remains as the key support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low) for a potential push up to retest the 29000 intermediate resistance (minor swing high areas of 27/29 Jun 2018). However, a daily close below 28000 opens up scope for a multi-week corrective decline to target the next support at 27100/27000 in the first step (Fibonacci projection cluster + 14/18 Aug 2017 swing low areas).
  • Australia 200 – Trend bias: Potential bullish breakout from minor range. Inched up higher as expected and it is now fast approaching the minor “Symmetrical Triangle” range resistance/target of 6230 (printed a current intraday high of 6217 in today, 05 Jul Asian session). Interestingly, Elliot Wave/fractal analysis suggests the minor “Symmetrical Triangle” range configuration in place since 22 Jun 2018 high of 6257 has completed  its tail end of its “form” at 6174 low where a potential bullish breakout is imminent. In addition, both the 4 and 1 hour RSI & Stochastic oscillators continue to exhibit positive momentum readings. Maintain bullish bias with an adjusted key short-term support now at 6170 and an hourly close above 6230 triggers a potential bullish breakout to kick start another round of fresh up leg to retest the 6257 high of 22 Jun 2018 before targeting the next intermediate resistance at 6270/80 (Fibonacci projection cluster) in the first step. On the other hand, failure to hold at 6170 shall put the bulls on hold for another round of minor slide to retest the 6140/6136 support (former range resistance from 10 Jan/10 May 2018).
  • Germany 30 – Trend bias: Sideways. Maintain neutrality stance between 12430 and 12100. An hourly close above 12430 is required to trigger a further potential minor mean reversion rebound towards the 12630 intermediate resistance (the former swing low area of 31 May 2018 + 50% Fibonacci retracement of the recent decline from 15 Jun 2018 high to 28 Jun 2018 low).

*Levels are obtained from City Index Advantage TraderPro platform


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