Daily Global Macro Technical Trend Bias/Key Levels (Tues 16 Oct)
Kelvin Wong October 16, 2018 4:38 AM
Mix bag for FX. Residual push down in stock indices before risk of countertrend/corrective rebound.
FX – Mix bag
- EUR/USD – Trend bias: Residual countertrend/corrective rebound remains in progress. Whipsawed around the 1.1575 key short-term support on last Fri, 12 Oct as it sliced through it to print at low of 1.1533 before it reversed up back up above 1.1575 in yesterday, 15 Oct European session. Therefore, the on-going minor corrective rebound in place since 09 Oct 2018 low of 1.1429 remains intact and based on Elliot Wave/fractal analysis, last Fri’s rebound from its low of 1.1533 is likely to potential residual push up of the minor corrective rebound phase with key short-term support now at 1.1530 to target the 1.1650/1670 intermediate resistance (Fibonacci retracement/projection cluster + former neckline of the failure bullish “Inverse Head & Shoulders” breakout from 07 Jun 2018 high) before another potential downleg materialises. However, a break below 1.1530 put the corrective rebound scenario at risk of a decline to retest the 1.1430/1410 support (swing low area of 09 Oct 2018 + 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).
- GBP/USD – Trend bias: Push down within range configuration. The pair had staged a bearish break down below the lower limit of the short-term/minor neutrality range at 1.3180 and tumbled straight towards the 1.3130 near-term support/target as per highlighted in last Fri, 12 Oct report (printed a low of 1.3081). Flip to a bearish bias with key short-term resistance at 1.3190 (61.8% Fibonacci retracement of last Fri, 12 Oct slide from its high of 1.3258 to its low of 1.3081 + former minor swing low of 11 Oct 2018) for a further potential push down to retest the near-term supports of 1.3030/3020 (minor swing low areas of 08/09 Oct 2018 + Fibonacci retracement/projection cluster) within a potential minor “triangle range” configuration in motion since 20 Sep 2018 high of 1.3300). However, a clearance above 1.3190 shall see a push up to retest the 1.3300 range resistance.
- USD/JPY - Trend bias: Countertrend/corrective rebound. The pair broke below the lower limit of the short-term/minor neutrality range at 111.90 as per highlighted in our previous report and met the downside/support target of 111.65/50 (printed a low of 111.59 in yesterday, 15 Oct European session. Recall that the 111.65/50 zone is defined as the key medium-term support (medium-term ascending channel support from 26 Mar 2018 low +former medium-term range resistance from 31 Jul 2018 high) and right now, there is a minor bearish exhaustion signal being detected; the 4-hour Stochastic oscillator has shaped a bullish divergence signal at its oversold region which indicates a slowdown in the downside momentum of its recent decline since 04 Oct 2018 high of 114.55. Flip to a bullish bias with key support at 111.50 and 112.25 as the upside trigger level (the minor descending trendline from 04 Oct 2018 high). An hourly close above 112.25 reinforces a potential corrective rebound to target the next intermediate resistance at 113.30/40 (minor swing high of 09/10 Oct 2018 + 61.8% Fibonacci retracement of the decline from 04 Oct 2018 high to 15 Oct 2018 low of 111.59). However, failure to hold at 111.50 sees an extension of the on-going impulsive down move to target the next near-term support at 110.65 (06 Sep 2018 swing low + 38.2% Fibonacci retracement of the medium-term up move from 26 Mar 2018 low to 04 Oct 2018 high.
- AUD/USD - Trend bias: Countertrend/corrective rebound. The pair had broken above the 0.7120/7126 key short-term resistance and continued to print marginal minor “higher highs” since 11 Oct 2018 low of 0.7041. These observations suggest that the pair is still in the motion of undergoing a countertrend/corrective rebound to retrace the recent decline seen from post FOMC high of 0.7315 printed on 26 Sep 2018. Key short-term support to watch at 0.7100 (the minor swing low areas of 13/15 Oct 2018) for a further potential push up to target the 0.7200/7220 resistance (Fibonacci projection/retracement cluster + upper boundary of the medium-term descending channel from 26 Jan 2018 high). However, a break below 0.7100 reinstates the bearish tone for a slide to retest the recent 06 Oct 2018 swing low area of 0.7040 in the first step.
- NZD/USD - Trend bias: Residual countertrend rebound in progress. Last Fri, 15 Oct price movement of the pair had managed to hold the 0.6480 key short-term support and pushed higher as expected to print a minor “higher high” of 0.6595 in yesterday, 15 Oct U.S. session. Maintain bullish bias in any dips with a tightened key short-term support now at 0.6530 (former minor swing high of 12 Oct 2018 + minor ascending trendline from 09 Oct 2018 low) for a further potential residual push up to target the 0.6630/0.6660 resistance (upper boundary of a medium-term descending channel from 07 Jun 2018 high + 38.2% Fibonacci retracement of the down move from 06 Jun 2018 high to 08 Oct 2018 low of 0.6421) before another impulsive downleg materialises. However, failure to hold 0.6530 reinstates the bears for a slide to retest 0.6430/20 swing low area of 08/09 Oct 2018.
Stock Indices (CFD) – Residual push down before risk of countertrend/corrective rebound materialises
- US SP 500 – Trend bias: Residual push down. Since its minor high of 2793 printed on last Thurs, 11 Oct 2018, the Index has started to consolidate in a minor “triangle range” configuration. Based on Elliot Wave/fractal analysis (for its details, refer to our latest weekly technical outlook), the Index is now likely coming to its tail-end of its intermediate term impulsive down move from 03 Oct 2018 all-time high of 2940 where the risk of an imminent multi-week countertrend/corrective rebound increases at this juncture. Maintain bearish bias with 2793/97 remains as the key short-term resistance for a potential residual push down to target the 2700/2690 support (Fibonacci retracement/projection cluster + medium-term swing low areas of 29 May/28 Jun 2018 + pull-back support for the former primary/long-term ascending channel resistance bullish breakout from Mar 2009). However, a clearance above 2797 triggers the corrective rebound towards the 2825 intermediate resistance in the first step (50% Fibonacci retracement of the down move from 03 Oct 2018 high to 11 Oct 2018 low of 2708).
- Japan 225 – Trend bias: Residual push down in progress. The Index had declined as expected to print a minor “lower low” of 22033 in yesterday, 15 Oct European session. No change, maintain bearish bias with a tightened key short-term resistance now at 22600 (23.6% Fibonacci retracement of the on-going decline from 01 Oct 2018 high to yesterday, 15 Oct low of 22033 + upper boundary of the minor bullish “Descending Wedge”) for a potential residual push down to target the 21850 support (swing low areas of 13/15 Aug 2018 + major ascending channel support from Jun 2016 low + lower boundary of the “Descending Wedge”) before a potential countertrend/corrective rebound materialises. However, a clearance above 22600 triggers the corrective rebound to target the 22750 intermediate resistance in the first step.
- Hong Kong 50 – Trend bias: Residual push down in progress. The recent bounce up from its 11 Oct low of 25080 has managed to stall below the predefined 25815 key short-term resistance (upper limit of 10 Oct Asian session opening gapped down + Fibonacci retracement cluster) as expected. No change, maintain bearish bias with 25815 remains as the key short-term resistance for a potential residual push down to target the 24740 support (lower boundary of the medium-term descending channel from 07 Jun 2018 high + Fibonacci projection cluster) before a potential countertrend/corrective rebound materialises. However, a clearance above 25815 kickstarts the corrective rebound to target the 26100 intermediate resistance (former minor swing low areas of 11 Sep/08 Oct 2018) in the first step.
- Australia 200 – Trend bias: Residual push down. 5900 key short-term resistance (minor swing high of 12 Oct 2018 + 23.6% Fibonacci retracement of the on-going decline from 17 Aug 2018 high to 11 Oct 2018 low) for a potential residual push down to retest the 11 Oct low of 5750 max 5700 support (medium-term swing low areas of 09 Feb/04 Apr 2018). However, a clearance above 5900 kickstarts the countertrend/corrective rebound to target the 5930 intermediate resistance (38.2% Fibonacci retracement of the recent down move prior the bearish flag breakout from 28 Sep 2018 high to 11 Oct 2018 low) in the first step.
- Germany 30 – Trend bias: Residual push down. 11800 key resistance to watch (the neckline resistance of the major bearish reversal “Head & Shoulders” configuration that was broken down on last Wed, 10 Oct - refer to latest weekly technical outlook for details) for a potential residual push down to retest 11400 (lower boundary of the medium-term descending channel from 14 Jun 2018 high) max 11300 support (former medium-term swing high area of 22 Nov 2015). However, a clearance above 11800 kickstarts a countertrend/corrective rebound to target the 12100 intermediate resistance (former minor swing low of 28 Jun 2018 + 38.2% Fibonacci retracement of recent down move from 22 May 2018 high to 11 Oct 2018 low).
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