Daily Global Macro Technical Trend Bias/Key Levels (Tues 19 Jun)

USD strength resumes except in USD/JPY. Recent decline seen in S&P 500 is coming close to 2740 key medium-term support.

FX –  USD strength resumes except against JPY

  • EUR/USD – Trend bias: Minor mean reversion rebound coming close to inflection zone for another potential downleg. The pair has inched up as expected and almost met the minor mean reversion rebound target/resistance of 1.1650/1.1660 (refer to yesterday report). It printed a current intraday high of 1.1644 in today, 19 Jun Asian session. The 4 hour Stochastic oscillator has reached its overbought region coupled with a bearish divergence signal seen in the hourly Stochastic oscillator. These observations suggest yesterday’s upside momentum of price action has started to wane. Flip back to a bearish bias in any bounce below key short-term resistance now at 1.1670 (former minor range support from 31 May/05 Jun 2018 + close to the 38.2% Fibonacci retracement of the recent steep decline from 14 Jun 2018 high to 15 Jun 2018 low) for another potential downleg to retest last week low of 1.1543 before targeting the lower limit of the key long-term support at 1.1470/50 (the former resistance of the major basing configuration from Mar 2015 to Mar 2017). However, a clearance above 1.1670 shall see an extension of the mean reversion rebound towards the next resistance at 1.1720/1735 (the former minor range support from 08/13 Jun 2018 + 61.8% Fibonacci retracement of the recent steep decline from 14 Jun 2018 high to 15 Jun 2018 low).
  • GBP/USD - Trend bias: Minor mean reversion rebound coming close to inflection zone for another potential downleg. The pair has inched up as expected and printed a current intraday high of 1.3273 in today, 19 Jun Asian session. 47 pips below the mean reversion rebound expected target/resistance of 1.3320/3340 (refer to yesterday report).  Current price action has started to evolve into a minor “Pennant” bearish continuation chart pattern. Flip back to a bearish bias in any bounce below key short-term resistance at 1.3330 (former minor swing low area of 13 Jun 2018 + 50% Fibonacci retracement of the steep decline from 14 Jun to 15 Jun 2018 low) for another potential downleg to retest last week low of 1.3210 before targeting the next intermediate support at 1.3020/3000 (minor swing low areas of 05 Oct/03 Nov 2017 + psychological). However, a clearance above 1.3340 shall see an extension of the mean reversion rebound towards the next resistance at 1.3400/3420 (minor descending trendline from 07 Jun 2018 + 76.4% Fibonacci retracement of down move from 07 Jun 2018 high to 15 Jun 2018 low).
  • AUD/USD - Trend bias: Down move resumes. The pair failed to meet the minor mean reversion target/resistance of 0.7480/7500 as it only printed a high of 0.7454 in yesterday, 18 Jun European session before it broke below the 0.7410 support. Flip back to a bearish bias in any bounce below key short-term resistance now at 0.7450 (18 Jun 2018 minor swing high area + close to 23.6% Fibonacci retracement of the on-going decline from 13 Jun 2018 high to today, 19 Jun Asian session current intraday low of 0.7393) for a further potential down move to target the next intermediate support at 0.7330/7300 (09 May 2017 swing low area + 61.8% Fibonacci retracement of the up move from Jan 2016 low to 26 Jan 2018 high). However, a clearance above 0.7450 reinstates the minor mean reversion rebound scenario for a push up towards the 0.7480/7500 intermediate resistance.
  • NZD/USD - Trend bias: Down move resumes. The pair inched up but failed to break above the 0.6960 upper limit of the short-term neutrality zone (refer to yesterday report). It printed a high of 0.6956 in yesterday, 18 Jun European session and started to evolve into a minor “Pennant” bearish continuation chart pattern. Flip back to a bearish bias in any bounce below key short-term resistance at 0.6960 (15 June 2018 minor swing high area + close to the “Pennant” upper boundary) for another potential down leg to target 0.6900 before the 0.6820 medium-term range support in place since 08 May 2017. On the other hand, a clearance above 0.6960 reinstates the minor mean reversion rebound scenario towards the 0.6980/6995 intermediate resistance (minor swing low area of 05 Jun/14 Jun 2018 + 50%/61.8% Fibonacci retracement of the steep decline from 14 Jun 2018 high to 18 Jun 2018 low).
  • USD/JPY - Trend bias: Deeper pull-back validated. The pair had broken below the 109.90 lower limit of the short-term neutrality zone as per highlighted in yesterday report. Right now, it is likely undergoing a deeper pull-back within its medium-term uptrend phase in place since 26 Mar 2018 low. Flip to a bearish bias in any bounce below 110.15 key short-term resistance (pull-back resistance of the former minor ascending trendline from 30 May 2018 low) for a further potential push down to target the next intermediate supports at 109.60 and 109.20 (former minor swing high of 08 Jun 2018 + minor swing low area of 08 Jun 2018 + lower boundary of the medium-term ascending channel from 26 Mar 2018 low). On the other hand, a clearance above 110.15 negates the bearish tone for a squeeze up to retest the minor range resistance at 110.80/90 (swing high areas of 14/15 Jun 2018).

Stock Indices (CFD) – S&P 500 is coming close to key medium-term support

  • US SP 500 – Trend bias: Coming close to inflection level for a fresh potential upleg. The Index had inched lower as expected and met the pull-back target/intermediate target of 2752/47. It is now hovering right above the 2740 key medium-term support (the lower boundary of the medium-term uptrend from 03 May 2018 low, the former minor range resistance from 14/25 May 2018 & close to 23.6% Fibonacci retracement of the up move from 03 May 2018 low to 13 Jun 2018 high)with oversold readings seen in both the 4 hour/1 hour Stochastic oscillators. Flip back to a bullish bias as long as 2740 key medium-term support holds for a potential push up towards the 2770/73 intermediate resistance in the first step (yesterday, 18 Jun U.S. session high + minor descending trendline from 13 Jun 2018 high). However, a daily close below 2740 invalidates the medium-term uptrend for a choppy corrective decline towards the next support at 2680 (close to the pull-back support of the former “Symmetrical Triangle” range resistance from 29 Jan 2018 high).
  • Japan 225 – Trend bias: Coming close to inflection level for a fresh potential upleg. The Index had inched lower as expected and met the pull-back target/intermediate target of 22550/450 (refer to the yesterday report). The daily RSI oscillator is now right above a significant corresponding ascending trendline support at the 44 level coupled with oversold readings seen in both the 4 hour/1 hour Stochastic oscillators. Flip to a bullish bias above the 22000 as key medium-term support (swing low area of 22000 + Fibonacci projection/retracement cluster) for a potential push up to retest the 22500/600 intermediate resistance in the first step (former minor swing low areas of 08/18 Jun 2018). However, a daily close below 22000 invalidates the medium-term uptrend phase for a multi-week corrective decline to target the next support at 21360 in the first step (61.8%/76.4% Fibonacci retracement of the up move from 23 Mar low to 21 May 2018 high).
  • Hong Kong 50 – Trend bias:  Push down towards key medium-term range support. Broke below the 29900 lower limit of the short-term neutrality that validated a further push down scenario within 5-month range configuration in place since 10 Feb 2018. Flip to a bearish bias in any bounce with key short-term resistance now at 29900 (former minor range support from 18 Apr/30 May 2018 low) for a further potential push down to target 29160 (minor swing low of 04 Apr 2018) and below it exposes the 29070 key medium-term range support. On the other hand, a clearance above 29900 invalidates the bearish tone for a squeeze up to retest the 30280 intermediate resistance (former minor swing low area 14 Jun 2018).
  • Australia 200 – Trend bias: Minor pull-back in progress. The Index had pushed up as expected and hit the 6150 intermediate resistance (the swing high area of 15 May 2018) as it printed a 6159 in yesterday, 18 Jun U.S. session). The 4 hour Stochastic oscillator has started to exit from its overbought region and still has room for further downside before it reaches an extreme oversold level at 4. Thus, the Index now may see a further pull-back to retest the 6070/40 intermediate support zone (former minor range resistance from 07 Jun/11 Jun 2018 + lower boundary of the medium-term ascending channel from 04 Apr 2018 low) with key short-term resistance at 6150. On the flipside, a clearance above 6150 reinstates the bulls for another upleg to target the next intermediate resistance at 6210 (Fibonacci projection cluster).
  • Germany 30 – Trend bias: Sideways. Broke below the 12900 key short-term support and erased all of last week’s post ECB induced gains. Another round of choppy movement ahead. Prefer to turn neutral between the key medium-term support of 12630 and 12900. Only a clearance above 12900 reinstates a short-term bullish tone to retest the 13020/13075 intermediate resistance (minor swing high area of 18 Jun 2018).      

 *Levels are obtained from City Index Advantage TraderPro platform


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