Daily Global Macro Technical Trend Bias/Key Levels (Tues 23 Oct)

Further USD strength intact except in AUD. Stock indices have resumed its potential impulsive down move sequence.

FX –  Further USD strength intact accept in AUD

  • EUR/USD – Trend bias: Down. Continued is downward spiral as expected from the 1.1570 key short-term resistance as per highlighted (close to the neckline of a broken down minor bearish reversal “ Double Top” that was formed from 12 Oct/16 Oct 2018 + 61.8% Fibonacci retracement of the recent slide from 16 Oct 2018 high to 19 Oct 2018 low) in our previous report. No clear signs of bearish exhaustion except on the shorter-term 1-hour Stochastic oscillator which has just reversed up from its oversold region with a prior bullish divergence signal. This observation indicates a potential minor bounce first to retrace yesterday (22 Oct) steep intraday decline from its European session high of 1.1550. Thus, maintain bearish bias in any bounces with a tightened key short-term resistance at 1.1520 (close to 61.8% Fibonacci retracement of yesterday decline from 1.1550 high to its U.S. session low of 1.1455 +  former minor swing high areas of 20/22 Oct 2018) for a further potential push down to target 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) and even the recent 15 Aug 2018 medium-term swing low area  of 1.1300. However, a break above 1.1520 negates the bearish tone for a squeeze up to retest the intermediate resistance of 1.1575/1605 (Fibonacci projection/retracement cluster + upper limit a triangle range configuration in place since 09 Oct 2018 low.
  • GBP/USD – Trend bias: Down. Pushed down as expected from the 1.3150 key short-term resistance and broke below the 1.3030/3000 near-term support/target as per highlighted in our previous report. It printed a low of 1.2954 in yesterday, 22 Oct U.S. session and its downward movement from yesterday high of 1.3090 seems impulsive which indicates that the pair is likely to have kickstart of another round of potential impulsive down move sequence that can break below 04 Oct 2018 low of 1.2921. Maintain bearish bias in any bounces below the a tightened key short-term resistance now at 1.3050 (minor descending trendline from 16 Oct 2018 high + former minor swing low of 22 Oct 2018) for a further potential push down to target the next near-term support at 1.2890/2870 (minor swing low areas of 06/10 Sep 2018 + Fibonacci projection/retracement cluster). However, a clearance above 1.3050 negates the bearish tone for squeeze up to retest the next intermediate resistance at 1.3140 (minor swing of 18 Oct 2018 + 61.8% Fibonacci retracement of the decline from 12 Oct 2018 high to 1.3258 to yesterday, 22 Oct low of 1.2954).
  • USD/JPY - Trend bias: Countertrend/corrective rebound remains in progress. Continued to inch higher as expected to print a minor “higher high” of 112.88 in yesterday, 22 Oct U.S. session. Maintain bullish bias with a key short-term support now at  112.30 (lower boundary of a minor ascending channel from 15 Oct 2018 low + 19/20 Oct 2018 minor swing low areas) for a further potential push up to target the 113.30/40 resistance (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 + close to the upper boundary of the aforementioned minor ascending channel). However, a break below 112.30 put the corrective rebound scenario at risk for a slide to retest the 111.65/50 key medium-term support (medium-term ascending channel support from 26 Mar 2018 low +former medium-term range resistance from 31 Jul 2018 high).
  • AUD/USD – Trend bias: Sideways. The pair has continued to push down lower after breaking below 0.7100. Right now, it is fast approaching the lower limit of a minor “triangle range” in place since 05 Oct 2018 low now acting as a support at 0.7040 with a bullish divergence signal seen in the shorter-term 1-hour Stochastic oscillator at its oversold region. Thus, the pair may see a push back up towards the triangle range upper limit/resistance. Prefer to turn neutral between 0.7040 and 0.7095 (former minor swing low areas of 19/22 Oct 2018). A break above 0.7095 sees a push up to retest the triangle range resistance at 0.7140/7150. An hourly close below 0.7040 opens up scope for another leg of potential impulsive down move to target the next supports at 0.6970/50 (Fibonacci projection cluster) and 0.6860 (lower boundary of the medium-term descending channel in place since 26 Jan 2018 high).
  • NZD/USD - Trend bias: Down. The recent push up from 19 Oct 2018 low of 0.6521 has printed a high of 0.6618 in yesterday, 22 Oct early Asian session which is also the upper boundary/resistance of a medium-term descending channel in place since 07 Jun 2018 high. Thereafter, it has reversed down and formed a daily “Bearish Harami” candlestick pattern at the end of yesterday, 22 Oct U.S. session. These observations suggest the potential start of an impulsive down move. Flip to a bearish bias in any bounces with key short-term resistance at 0.6580 (former minor swing low area of 22 Oct 2018 seen in Asian session) for a further potential push down towards the next near-term support at 0.6495 (the minor swing low of 15 Oct 2018) in the first step. However, a break above 0.6580 negates the bearish tone for a squeeze up to retest 0.6618.

Stock Indices (CFD) – Potential impulsive down move sequence resumes

  • US SP 500 – Trend bias: Down. The bearish breakdown of 2780 seen last Thurs, 18 Oct had resumed its expected impulsive down move sequence. Key short-term resistance now will be at 2780 (the minor descending trendline from 17 Oct 2018 high + yesterday, 22 Oct European session high) for a further potential push down to retest the recent 12 Oct low of 2708 before targeting the next support at 2674 (see latest weekly technical outlook for details). However, a clearance above 2780 put the bears on hold for another round of corrective rebound to test the 2822 key medium-term pivotal resistance.
  • Japan 225 – Trend bias: Down. Broke below a minor ascending trendline support in place since 15 Oct 2018 low of 22033 where a potential impulsive down move sequence has resumed. Flip back to a bearish bias in any bounces below key short-term resistance at 22480 (yesterday, 22 Oct U.S. session former minor swing low + close to the pull-back resistance of the former minor ascending trendline support form 15 Oct 2018 low) for a further potential push down to target the 21850 support next (major ascending channel support from Jun 2018 low). However, a clearance above 22480 put the bears on hold for a squeeze up to retest the recent minor range resistance of 22690/710 formed on 19/22 Oct 2018.
  • Hong Kong 50 - Trend bias: Down. In today, 23 Oct Asian session, it has almost gave up all its gains seen yesterday, 22 Oct that was reinforced by recent verbal intervention from key China’s policy makers to smooth the recent steep down move seen in China stock markets. The Index had reintegrated back below the minor range resistance of 25785 formed on 12/17 Oct 2018 where it may start to shape a new impulsive down move sequence. Flip back to a bearish bias in any bounces below key short-term resistance at 25990 (61.8% Fibonacci retracement of the on-going slide from 22 Oct 2018 high of 26242 to today, 23 Oct Asian session current intraday low of 25524) for a further potential push down to retest the recent 11/19 Oct 2018 low of 25080 in the first step. However, a clearance above 25990 invalidates the impulsive down move scenario for an extension of the corrective rebound towards the next intermediate resistance at 27000 (also the upper boundary of the medium-term descending channel from 07 Jun 2018 high).
  • Australia 200 – Trend bias: Down. The break below of the 5900/5891 short-term support on last Thurs, 18 Oct has invalidated the residual corrective rebound scenario. Another round of potential impulsive down move sequence is likely to have just started, flip back to a bearish bias with key short-term resistance at 5918 (minor descending trendline from 17 Oct 2018 high + pull-back resistance of former minor ascending trendline support from 11 Oct 2018 low) for a further potential push down to retest the 11 Oct 2018 swing low areas of 5750 in the first step. However, a break above 5918 negates the bearish tone for a squeeze up to retest recent range resistance of 5950 formed on 17/19 Oct 2018.
  • Germany 30 – Trend bias: Down. Last week’s push up corrective rebound has been rejected right below the 11800/900 key neckline resistance of the major “Head & Shoulders” bearish breakdown. Thereafter, it has continued to drift lower with a series of minor “lower lows”. These observations suggest that the Index is likely in the midst of undergoing another round of impulsive down move sequence. Flip back to a bearish bias in any bounces below key short-term resistance at 11670 (former minor swing low area of 17 Oct 2018 + close to the minor descending trendline from 17 Oct 2018 high + 61.8% Fibonacci retracement of the on-going decline from 17 Oct 2018 high to current 23 Oct Asian session intraday low of 11401) for a further potential push down to target the near-term support of 11300 in the first step. However, a clearance above 11670 put the bears on hold for a squeeze up to retest the 11800/900 key medium-term pivotal resistance (see latest weekly technical outlook).       


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