Daily Global Macro Technical Trend Bias/Key Levels (Thurs 19 Jul)

USD up move remains intact in JPY & GBP while S&P 500 continues to shape a potential residual push up.

FX –  USD up move remains intact in JPY & GBP while the rest is shaping minor consolidation

  • EUR/USD – Trend bias: Push down scenario within range configuration remains intact. The pair had staged a bounce from yesterday, 18 Jul European session low of 1.1602 and carried over into the U.S. session to print a high of 1.1662 before it consolidated within a tight range of 25 pips. Overall, the predefined 1.1710 key short-term resistance has not been taken out (refer to yesterday’s report) and yesterday’s bounce can be considered as a corrective rebound to retrace the recent minor degree downleg from 17 Jul  2018 high of 1.1744 to yesterday, 18 Jul low of 1.1602 within the its minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840. Elliot Wave/fractal analysis and observations from the 4 hour/1 hour Stochastic oscillators (both are still showing further potential upside before reaching their respective extreme overbought levels) suggests that the on-going corrective rebound may still have a “residual push” towards 1.1680/90 (Fibonacci retracement/projection cluster). No change, maintain bearish bias in any bounce below the 1.1710 key short-term resistance for another potential push down to retest 1.1600/1590 (yesterday’s low + 02 Jul 2018 minor swing low) before targeting the 1.1530 minor “Descending Triangle” range support. On the other hand, a clearance above 1.1710 sees a squeeze up to retest the “Descending Triangle” range resistance at 1.1780/1790.
  • GBP/USD - Trend bias: Medium-term down move remains intact. Weakness continued to prevail as the pair inched lower as expected and breached below the first intermediate support/target of 1.3050 (28 Jun 2018 low).  It printed an intraday low of 1.3010 in yesterday, 18 Jul European session, reinforced by a tame U.K. inflation data for Jun (Core CPI at 1.9% y/y versus consensus of 2.2% y/y). No change, maintain bearish bias in any bounce below adjusted key short-term resistance now at 1.3130/50 (former minor swing low areas of 02/18 Jul 2018 + 50% Fibonacci retracement of the recent slide from 16 Jul 20118 minor high of 1.3293 to yesterday, 18 Jul low of 1.3010) for a further potential push down to target the next intermediate support at 1.2900  (the lower boundary of the descending channel from 09 May 2018 + 61.8% Fibonacci retracement of the 16-month up move from 16 Jan 2017 low to 17 Apr 2018 high).  However, a clearance above 1.3150 negates the bearish tone for a squeeze up to retest the 1.3250 (the upper boundary of the descending channel) max the 1.3300 medium-term resistance.
  • AUD/USD - Trend bias: Sideways The pair had staged the expected push down as expected but failed to meet the second downside target of 0.7320/0.7300 as it only printed a low of 0.7343 in yesterday, 18 Jul European session. Thereafter, it staged a swift rebound to retest the 0.7440 minor range resistance in place since 16 Jul 2018 reinforced by better than expected AU job data for Jun (50.9k added versus consensus of 17k). Technical elements suggests that since its 02 Jul 2018 low of 0.7310, the pair may be consolidating now within a minor “Symmetrical Triangle” range configuration reinforced by Elliot Wave/fractal analysis. Yesterday, 18 Jul low of 0.7343 stalled at the 76.4% Fibonacci retracement of the push up from 02 Jul 2018 low of 0.7310 to 09 Jul 2018 high of 0.7483 and today’s 19 Jul Asian session current intraday high of 0.7441 is now coming close to 0.7450; the 76.4% Fibonacci retracement of the recent slide from 09 Jul 2018 high of 0.7483 to yesterday, 18 Jul low of 0.7343. Prefer to turn neutral first now between 0.7450 (the potential upper limit of the aforementioned minor “Symmetrical Triangle” range) and 0.7390 (today, 19 Jul Asians session current intraday low formed at the opening). An hourly close below 0.7390 shall take the pair down to retest the “Symmetrical Triangle” range support at 0.7350. On the flipside, a clearance above 0.7450 sees an extension of the mean reversion rebound towards the 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: Push down within range. No change, maintain bearish bias in any bounce below 0.6840 key resistance for a further potential downleg to retest 0.6725 minor swing low of 13 Jul 2018 before the 0.6690 swing low of 03 Jul 2018. On the other hand, a break above 0.6840 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: Medium-term up move remains intact. Yesterday’s pull-backed from its 18 Jul Asian session high of 113.13 had managed to hold right above the predefined 112.50 key short-term support (refer to yesterday report) as it printed a current intraday low of 112.65 in today, 19 Jul Asian session. In addition, the hourly Stochastic oscillator has started to shape a bullish divergence signal at its oversold region. No change, maintain bullish bias with 112.50 remains as the key short-term support (former  minor swing high area of 16 Jul 2018 + close 61.8% Fibonacci retracement of yesterday’s up move from 17 Jul low of 112.20 to yesterday, 18 Jul high of 113.13) for a further potential push up to target the next intermediate resistance at  113.55/80 in the first step (the swing high areas of 12/21 Dec 2017, the upper boundary of the minor ascending channel from 09 Jul 2018 low). On the other hand, failure to hold at 112.50 negates the bullish tone for a deeper pull-back to retest 112.00.

Stock Indices (CFD) – Residual push up scenario remains intact for S&P 500 while Hang Seng (Hong Kong 50) remains weak

  • US SP 500 – Trend bias: Residual push up remains intact.  No change, maintain bullish bias with adjusted key short-term support now at 2804 (the former minor range resistance from 13/16 Jul 2018 + minor ascending trendline from 05 Jul 2018 low) for a further potential push up to target the 2840 medium-term resistance (the bearish “Ascending Wedge” upper boundary + Fibonacci projection cluster). On the other hand, a break below 2804 negates the bullish tone for a deeper pull-back to retest the recent 17 Jul 2018 minor swing low area of 2790.
  • Japan 225 – Trend bias: Sideways. Traded sideways below the 23020 key medium-term range resistance. No change, maintain neutrality stance between 23020 and 22690 (the 17 Jul 2018 minor swing low + minor ascending trendline from 11 Jul 2018 low). An hourly close below 22690 sees a deeper pull-back towards the 22355 support (minor swing high areas of 27/29 Jun 2018 + 50% Fibonacci retracement from 11 Jul 2018 low to 18 Jul 2018 high of 22954). On the flipside, a clearance above 23020 opens up scope for a further potential push up to target the next intermediate resistance at 23550/650.
  • Hong Kong 50 – Trend bias: Corrective rebound in progress. The weakest among the major stock indices that we cover as it continued to evolve within a minor ‘Symmetrical Triangle” range configuration in place since 10 Jul 2018 high of 28980 holding above the 28000 major key support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low). No change, as long as the 28000 major key support holds, the Index may still see a push up to retest the upper boundary of the  “Symmetrical Triangle” now acting as a resistance at 28400. However, a daily close below 28000 opens up scope for a multi-month corrective decline with the first intermediate downleg potential target at the 27400/290 support (the swing low areas of  06/28 Sep 2017).
  • Australia 200 – Trend bias: Up move remains intact. Pushed up higher as expected from the 6219 key short-term support to print a current intraday high of 6275 in today, 19 Jul Asian session. No change, maintain bullish bias in any dips above adjusted key short-term support now at 6233 (minor ascending trendline from 17 Jul 2018 low + 50% Fibonacci retracement of the on-going up move from 17 Jul 20187 low to today, 19 Jul current Asian s session intraday high of 6275) for a further potential push up to retest the intermediate resistance at 6290 before targeting the 10 Jul 2018 high of 6318. However, a break below 6233 negates the bullish tone for another choppy slide to retest 6205/200.
  • Germany 30 – Trend bias: Corrective rebound extends. Maintain bullish bias in any dips above 12600 key short-term support (former minor swing high area of 16 Jul 2018) for a further potential push up to target the next intermediate resistance at 12900/950 (the former swing high areas of 05/12 Jun 2018 + Fibonacci retracement/projection cluster). However, failure to hold at 12600 implies a failure bullish breakout for another slide back into the 12630/12100 medium-term range configuration for a test on the 12400/390 minor swing low area of 11 Jul 2018 in the first step.   

*Levels are obtained from City Index Advantage TraderPro platform


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