Daily Global Macro Technical Trend Bias/Key Levels (Thurs 12 Jul)
Kelvin Wong July 12, 2018 7:23 AM
USD strength resurgence but cautious for USD/JPY bulls as it is now testing the 112.30 major resistance. Stock indices still showing further upside potential except in Nikkei 225.
FX – USD strength resurgence while USD/JPY is testing its major resistance at 112.30
- EUR/USD – Trend bias: Push down within range. The break below the 1.1680 key short-term support has reduced the odds of another leg of mean reversion rebound scenario to target the 1.1840/1880 intermediate resistance (swing high areas of 07/14 Jun + 38.2% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low). Right, it is likely to be consolidating within a minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840 with the risk of shaping a slide to retest the bottom of the range. Turn bearish in any bounce key short-term resistance now at 1.1705 (the former minor swing low areas of 10/11 Jul 2018) for a further potential slide towards 1.1590 before the 1.1530 minor “Descending Triangle” range support. However, a clearance above 1.1705 sees a squeeze up to retest the range resistance at 1.1780/1790.
- GBP/USD - Trend bias: Pull-back scenario to retrace the first wave of mean reversion rebound in progress. The pair staged the bearish breakdown from the minor “Pennant” range support at 1.3225 as expected (refer to yesterday report). No change, maintain bearish bias in any bounce below the adjusted 1.3240 key short-term resistance (former minor swing low of 11 Jul 2018 + minor descending trendline from 09 Jul 2018) for a further potential push down to target the 1.3140/3110 support (minor swing low of 02 Jul 2018 + Fibonacci retracement/projection cluster). However, a clearance above 1.3240 sees a squeeze back up to retest 1.3300 (09 Jul 2018 swing high area + medium-term descending trendline from 10 May 2018 high).
- AUD/USD - Trend bias: Sideways. The break below 0.7400/7380 key short-term support has reduced the odds of the second wave mean reversion rebound scenario to target the 0.7540 intermediate resistance. Mix elements now, prefer to turn neutral between 0.7360 (yesterday, 11 Jul U.S. session low that has managed to stall at the previous hourly minor “Hammer” candlestick low of 05 Jul 2018) and 0.7415 (former minor swing high areas of 02/04 Jul 2018). A break below 0.7360 sees a further slide to retest the 0.7320/7300 swing low of 02 Jul 2018. On the flipside, a reintegration above 0.7415 sees the revival of the mean reversion rebound scenario to retest 0.7484 recent swing high of 09/10 Jul 2018 before targeting the 0.7540 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).
- NZD/USD - Trend bias: Down move resumes. The break below the 0.6810 lower limit of the short-term neutrality zone (refer to yesterday report) has increased the odds of the continuation of the medium-term down move in place since 13 Apr 2018 high. Flip back to a bearish bias in any bounce below the 0.6805 key short-term resistance (former minor swing low of 10 Jul 2018 + 61.8% Fibonacci retracement of the on-going slide from 11 Ju 2018 minor swing high to today, 12 Jul Asian session current intraday low of 0.6748) for a further potential downleg to retest 0.6690 swing low of 03 Jul 2018 before targeting the next support at 0.6600/6575 (the lower boundary of the medium-term descending channel in place since 13 Apr 2018 + swing low areas of 16 Feb/15 Mar 2016). On the other hand, a break above 0.6805 negates the bearish tone for a squeeze up to retest 0.6865 (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. The pair has staged the expected push up and met the 111.50/60 resistance/target. Right now it is testing the upper limit of major resistance at 112.30 (Fibonacci retracement/projection cluster + major descending resistance in place since Jun 2015 high) Mix elements now as the 4 hour Stochastic oscillator has reached an extreme overbought level of 94 coupled with a bearish divergence signal being flashed at its respective hourly Stochastic oscillator. Prefer to turn neutral first between 112.30/38 (today, 12 Jul Asian session current intraday high) and 111.88 (11 Jul U.S. session minor swing low + 23.6% Fibonacci retracement of the on-going up move from 04 Jul 2018 low to today current intraday high of 112.38). An hourly close below 111.88 opens up scope for a pull-back to retest the 111.40/111.00 (the former swing high of 21 May 2018 + medium-term ascending channel support from 26 Mar 2018 low). On the flipside, a clearance above 112.38 (an hourly close above it) see a bullish breakout to target the next intermediate resistance at 113.30/40 in the first step (Fibonacci projection cluster + swing high areas of 21 Dec 2017/05 Jan 2018).
Stock Indices (CFD) – Up move in progress except in Nikkei 225
- US SP 500 – Trend bias: Up move has resumed. The Index hadperformed better than expected and did not shaped the residual pull-back towards 2756/55 support (the minor ascending trendline from 28 Jun 2018 low. The 4 hour Stochastic oscillator remains positive and still shows room for further potential upside before it reaches an extreme overbought level of 98. Maintain bullish bias with an adjusted key short-term support now at 2763 (11 Jul 2018 minor swing low + pull-back support of the former minor descending resistance from 13 Jun 2018) for a further potential push up to retest 2800 intermediate resistance in the first step (psychological + swing high areas of 12 Mar/14 Jun 2018 + Fibonacci projection cluster) and an hourly close above it opens up scope for a further potential rally towards 2838 (upper boundary of the medium-term bearish “Ascending Wedge” configuration in place since 03 Apr 2018 low + Fibonacci projection cluster). However, failure to hold at 2763 negates the bullish tone for a deeper pull-back towards the 2740/38 key medium-term support.
- Japan 225 – Trend bias: Sideways. The Index has shaped the expected corrective rebound and met its target/resistance of 22180. Right now, it is hovering right below the 22350 key medium-term resistance (the descending trendline from 12 Jun 2018 high + 26/29 Jun 2018 swing high areas + Fibonacci retracement/projection cluster) with mix elements. Prefer to turn neutral first between 22350 and 21990 (today, 12 Jul Asian session current intraday low + minor ascending trendline from 05 Jul 2018 low). An hourly close below 21990 sees another round of slide to retest 21750 minor low of 11 Jul 2018. On the flipside, a daily close above 22350 opens up scope for an extension of the rebound to target the next resistance at 22650/750 (the minor swing high area of 21 Jun 2018 + 76.4% Fibonacci retracement of 12 Jun 2018 high to 05 Jul 2018 low).
- Hong Kong 50 – Trend bias: Corrective rebound in progress. Continued to inch higher as expected. No change, maintain bullish bias with adjusted key short-term support now at 28170 (today, 12 Jul Asian session current intraday low) for a further potential push up to retest 28980/29000 intermediate resistance (minor swing high of 10 Jul 2018). An hourly close above 29000 opens up scope for a test on the next intermediate resistance of 29400 (former minor swing low of 04 Apr 2018). On the other hand, failure to hold at 28170 sees another round of slide to retest the 28000 major support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low).
- Australia 200 – Trend bias: Up move in progress. The Index has shaped the expected rebound right above the 6200 key short-term support (refer to yesterday report). No change, maintain bullish bias in any dips with adjusted key short-term support now at 6235 (former minor swing high of 11 Jul 2018 + 61.8& Fibonacci retracement of the on-going push up from yesterday, 11 Jul U.S. session low of 6205 to today, 12 Jul Asian session current intraday high of 6271) for a further potential up move to retest the 10 Jul 2018 minor high of 6318 before targeting the 6350 resistance (Fibonacci projection cluster). However, failure to hold at 6235 negates the bullish tone for a pull-back to retest 6205/200.
- Germany 30 – Trend bias: Corrective rebound in progress. Met the expected residual down move target/support at 12420/400 (refer to yesterday report) coupled with a positive reading seen in the 4 hour Stochastic oscillator (a momentum indicator). Flip to a bullish bias in any dips above the 12400/390 key short-term support (former minor range resistance from 27 Jun/03 Jul 2018 + minor ascending trendline from 28 Jun 2018) for a potential corrective bounce towards the 12630 key medium-term range resistance (see latest weekly technical outlook). However, a break below 12400/390 opens up scope for a slide to retest the 12100 major support (the neckline of a bearish reversal “Head & Shoulders” configuration in the making since 20 Jun 2017).
*Levels are obtained from City Index Advantage TraderPro platform
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