Daily Global Macro Technical Trend Bias/Key Levels (Tues 09 Oct)

USD strength resumes except in USDJPY. Stock indices now at risk of shaping minor countertrend rebound except in ASX200.

FX –  Potential USD strength resumes except in JPY

  • EUR/USD – Trend bias: Down. Post NFP (U.S. non-farm payroll) price action seen on last Fri, 05 Oct had failed to stage a “clean” bullish breakout above the 1.1530 upper limit of the short-term neutrality range as per highlighted in our previous report. Thereafter, it broke below its minor ascending trendline in place since its prior minor swing low area of 1.1463 printed on 04 Oct 2018 which indicated a revival of potential downside momentum to revive the impulsive minor downleg phase in place since 24 Sep 2018 high of 1.1815. Flip back to a bearish bias with key short-term resistance at 1.1515 (the median line of the minor descending channel from 24 Sep 2018 high + pull-back resistance of the former minor ascending support from 04 Oct 2018 low + 61.8% Fibonacci retracement of the on-going slide from last Fri, 05 Oct post NFP high of 1.1549 to yesterday, 08 Oct low of 1.1458) for a further potential push down to target the 1.1445/1.1410 major support (the major pull-back range support from May 2015/Jul 2017 of a 2-year range configuration bullish breakout that was challenged but held recently on the week of 13/17 Aug 2018). On the other hand, a clearance above 1.1515 triggers a potential corrective rebound to target the next intermediate resistance at 1.1580/1600 (38.2% Fibonacci retracement of the down move from 24 Sep 2018 high to 08 Oct 2018 low + upper boundary of the aforementioned minor descending channel).
  • GBP/USD – Trend bias: Down. Recalled that we had turned neutral prior to last Fri, NFP release due to lack of bearish conviction. The pair had broken above the 1.3040 upper limit of the short-term neutrality range as per highlighted in our previous report and rallied towards the countertrend target/resistance of 1.3100 (printed a high of 1.3123 on last Fri, 05 Oct + upper boundary of the minor descending channel in place since 20 Sep 2018 high of 1.3300). Yesterday, 08 Oct, it has staged another attempt to break above 1.3123 with an intraday high printed at 1.3134 but its rally stalled again and closed below 1.3100, at the upper boundary of the aforementioned descending channel. In addition, it ended yesterday, 08 Oct U.S. session with a daily “Bearish Hanging Man” candlestick pattern which indicates that the upside momentum of last Fri’s up move has abated. Flip back to a bearish bias with key short-term resistance at 1.3135 (yesterday, 08 Oct swing high + Fibonacci retracement/projection cluster) with 1.3010 as downside trigger level (the former congestion level seen from 28 Sep/05 Oct 2018). An hourly close below 1.3010 reinforces the start of another potential impulsive downleg to retest the 04 Oct 2018 swing low area of 1.2925 before targeting the next near-term support at 1.2890 (minor swing low areas of 24 Aug/05 Sep 2018). On the other hand, a clearance above 1.3135 sees an extension of the corrective rebound towards the next intermediate resistance at  1.3220 (27 Sep 2018 minor swing high area +  76.4% Fibonacci retracement of the decline from 20 Sep 2018 high to 04 Oct 2018 low).
  • USD/JPY - Trend bias: Down . Declined as expected and met the support/target of 113.00/112.90 as expected (former medium-term swing high area of 18/19 Jul 2018 + 38.2% Fibonacci retracement of the minor uptrend from 07 Sep 2018 low to 03 Oct 2018 high of 114.54). No clear signs of bearish exhaustion except for the 4-hour Stochastic oscillator that has just started to turn up from an extreme oversold level which highlights to risk of minor bounce at this juncture within its on-going minor downtrend in place 04 Oct 2018 high of 114.55. Maintain bearish bias in any bounces below tightened key short-term resistance now at 113.60 (minor descending trendline from 04 Oct 2018 high + pull-back resistance of former minor ascending channel support from 07 Sep 2018 low + former minor swing low areas of 03/04 Oct 2018) for a further potential push down to target the next near-term support at 112.10/111.95 (61.8% Fibonacci retracement of the prior up move from 07 Sep 2018 low to 04 Oct 2018 high + pull-back support of the former major descending resistance from 05 Jun 2015 +  medium-term ascending channel support from 26 Mar 2018 low). However, a clearance above 113.60 sees a revival of the bulls to retest 114.05 before the 04 Oct 2018 high of 114.55.
  • AUD/USD - Trend bias: Down. Pushed down lower as expected to print a new minor “lower low” of 0.7039 on last Fri, 05 Oct. No clear signs of bearish exhaustion, maintain bearish bias in any bounces below the tightened key short-term resistance now at 0.7120 (close to the former swing low areas of 07/11 Sep 2018 + minor descending line from post FOMC high of 26 Sep 2018 + close to 38.2% Fibonacci retracement of the on-going slide from the post FOMC 26 Sep 2018 high to last Fri, 05 Oct low of 0.7039) for a another round of potential downleg to target next support at 0.6970/50 (Fibonacci projection cluster + lower boundary of the medium-term descending channel in place since 26 Jan 2018 high). On the other hand, a clearance above 0.7120 sees a squeeze up to retest 0.7240/7260 (minor swing high of 28 Sep/02 Oct 2018 + upper boundary of the aforementioned medium-term descending channel).
  • NZD/USD - Trend bias: Down.  Pushed down lower as expected to print anew  minor “lower low” of 0.6421 on 08 Oct 2018. No clear signs of bearish exhaustion, maintain bearish bias in any bonces with a tightened key short-term resistance now at 0.6500 (the minor descending trendline from post FOMC 26 Sep high of 0.6696 + former minor swing low areas of 11/12 Sep 2018)  for a further potential push down to target the next support at 0.6360/6330 (Fibonacci projection cluster + lower boundary of the medium-term descending channel in place since 07 Jun 2018 high). However, a clearance above 0.6500 negates the bearish tone for a squeeze up to test 0.6630 (upper boundary of a medium-term descending channel from 07 Jun 2018 high).

Stock Indices (CFD) – Risk of countertrend rebound except in ASX 200

  • US SP 500 – Trend bias: Countertrend rebound. The Index had pushed down lower as expected after the failure 3rd attempt to break above the 2940 key long-term pivotal resistance. Yesterday’s price action has almost hit the short-term support/target of 2860 (printed a low of 2862 before it rallied by 0.9% to close higher at the end of yesterday, 08 Oct U.S. session and ended with a daily bullish “Hammer” candlestick pattern. Recalled that 2860 is our medium-term downside trigger (refer to our latest weekly technical outlook report) and the occurrence of such positive candlestick pattern indicates the risk of a countertrend rebound at this juncture. Turn bullish now in any dips above 2860 support for a further potential push up to retest the intermediate resistance of 2910/12 (the minor swing high area of 05 Oct 2018 + 61.8% Fibonacci retracement of the recent down move from 03 Oct 2018 high to yesterday, 08 Oct low of 2862) before another potential impulsive downleg materialises. However, a break with a daily close below 2860 revives the bears for a continuation of the decline to target the near-term support of 2802/2800 in the first step (15 Aug 2018 minor low + psychological).
  • Japan 225 – Trend bias: Countertrend rebound. Pushed down lower as expect and met the support/target of 23560/23550 (Fibonacci projection/retracement cluster) as per highlighted in our previous report. Right now, the 4-hour Stochastic oscillator has flashed a bullish divergence signal at its overbought region which reinforces the risk of a countertrend rebound at this juncture. Turn bullish in any dips above 23360 key short-term support for a potential corrective rebound to target the intermediate resistance of 23900/24050 (50%/61.8% Fibonacci retracement of the on-going decline from 01 Oct 2018 high to yesterday, 08 Oct low of 23361 + minor swing high area of 05 Oct 2018). However, a break with an hourly close below 23360 sees an extension of the down move to target the 23000 key medium-term range support (refer to our latest weekly technical outlook report).
  • Hong Kong 50 – Trend bias: Countertrend rebound. Pushed down lower as expect and met the support/target of 26120 (the minor swing low area of 11 Sep 2018) as per highlighted in our previous report. Latest reading from the 4-hour Stochastic oscillator (reached an extreme oversold level) coupled with Elliot Wave/fractal analysis highlights the risk of a countertrend rebound at this juncture. Turn bullish in any dips above key short-term support at 26000 for a potential push up to target 26800/27040 intermediate resistance (38.2%/50%Fiboancci retracement of the on-going decline from 26 Sep 2018 high to yesterday, 08 Oct low of 26000 + minor gap resistance of 04 Oct 2018). However, a break below 26000 sees the continuation of the impulsive downleg to target the next support at 25640/500.
  • Australia 200 – Trend bias: Down.  Continued to inch down lower as expected. No clear signs of bearish exhaustion at this juncture, maintain bearish bias in any bounces below tightened key short-term resistance now at 6084 (minor swing high of 08 Oct 2018 + minor descending trendline from 05 Oct 2018 high) for a further potential push down to target the upper limit of the medium-term support at 5980 (swing low area of 01 Jun 2018 + Fibonacci projection). However, a clearance above 6084 triggers a potential corrective rebound towards the intermediate resistance of 6110/120 (former minor swing low areas of 07 Sep/02 Oct 2018).
  • Germany 30 – Trend bias: Countertrend rebound. Pushed down as expected and met the near-term support/target of 12000 as per highlighted in our previous report. Right now, the Index has printed a minor lower low of 11898 yesterday, 08 Oct which is closed to our medium-term downside trigger level of 11800 (the neckline support of the impending major “Head & Shoulders” bearish reversal configuration in place since 20 Jun 2017) coupled with a bullish divergence signal seen in the 4-hour Stochastic oscillator at its oversold region which highlights the risk of an impending countertrend rebound. Turn bullish in any dips above 11800 support for a potential countertrend rebound to target the intermediate resistance of 12100/140 (50% Fibonacci retracement of the on-going decline from 04 Oct 2018 high to 08 Oct 2018 low + minor swing high area of 08 Oct 2018). However, a break with a daily close below 11800 opens up scope for a potential multi-month impulsive down move phase to target the medium-term support at 11550 (refer to our latest weekly technical outlook report).              

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