Daily Global Macro Technical Trend Bias/Key Levels (Tues 30 Oct)

USD remains on support with another potential downleg looms for stock indices.

FX –  USD remains on support

  • EUR/USD – Trend bias: Down. Recent bounces seen since last Fri, 26 Oct has not breached above (no hourly close above) the tightened key short-term resistance of 1.14000 as per highlighted in our previous report. No change, maintain bearish bias below 1.1400 for a further potential push down to target the next support at 1.1320/1300 (15 Aug 2018 medium-term swing low area + Fibonacci projection cluster). However, an hourly close above 1.1400 negates the bearish tone for a squeeze up to retest the next intermediate resistance of 1.1430/50 (25 Oct 2018 high + former minor swing low area of 19 Oct 2018).  
  • GBP/USD – Trend bias: Down. Pushed down lower as expected to print a marginal lower low of 1.2775 on last Fri, 26 Oct European session before it traded sideways. No clear signs of bearish exhaustion yet, maintain bearish bias below tightened key short-term resistance now at 1.2865 (former minor swing low of 25 Oct 2018 + minor descending trendline from 16 Oct 2018 high) for a further potential push down to target the medium-term support of 1.2660/2650 (15 Aug 2018 medium-term swing low + Fibonacci projection cluster). However, a clearance above 1.2865 negates the bearish tone for a squeeze up to retest the next intermediate resistance at 1.2960/3015(former minor swing low area of 22/23 Oct 2018).
  • USD/JPY - Trend bias: Sideways. Last Fri 26 Oct, the pair had traded lower and challenged on 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). Interestingly, it did not have a clear break below 111.65/50 (printed an intraday low of 111.35 before it reversed back up before the end of last Fri, 26 Oct U.S. session. Mix elements still prevail, prefer to maintain neutrality stance between 112.90 (minor swing high area of 22/23 Oct 2018) & 111.50/35. Only a daily close below 111.50 opens up scope for at least a medium-term (multi-week) down move back inside a long-term/major range configuration in place since 05 Jun 2015 high to target the next support at 110.70/40 in the first step (06/07 Sep 2018 low). On the flipside, an hourly close above 112.90 sees a push up towards the next intermediate resistance of 113.30 (minor swing high of 09 Oct 2018 + 61.8% Fibonacci retracement of the recent decline from 04 Oct 2018 high  to last Fri, 26 Oct low of 111.35.
  • AUD/USD – Trend bias: Sideways. Last Fri 26 Oct, the pair had reintegrated back above 0.7065 (the minor range support in place in place since 05 Oct 2018 low) during last Fri, 26 Oct U.S. session which invalidated the earlier bearish breakdown seen on last Fri, 26 Oct Asian session. The pair has continued to evolve inside a choppy configuration since 05 Oct 2018, prefer to turn neutral now between 0.7140 (range resistance) and 0.7020 (last Fri, 26 Oct swing low area). An hourly close below 0.7020 validates a potential new downleg to target the next support at  0.6970/6950 (Fibonacci projection cluster) in the first step. However, a break above 0.7140 sees an extension of the corrective rebound towards 0.7180/7200 resistance (upper boundary the medium-term descending channel from 26 Jan 2018 high).  
  • NZD/USD - Trend bias: Push down within range. No change, maintain bearish bias below 0.6580 key short-term resistance (also the upper boundary of the medium-term descending channel from 07 Jun 2018 high + 76.4% Fibonacci retracement of the recent push down from 22 Oct 2018 high to 26 Oct 2018 low) for a potential push down to retest last Fri, 26 Oct low area of 0.6460. However, a break above 0.6580 negates the bearish tone for a squeeze up to retest 0.6610/6620 (19/21 Oct 2018 swing high).

Stock Indices (CFD) – Another potential downleg looms

  • US SP 500 – Trend bias: Down. As per highlighted in our previous report, the Index had shaped the expected drop to hit the 2630/20 near-term support/target on last Fri, 26 Oct U.S. session (printed a low 2626) before the anticipated corrected rebound took place. In our latest weekly technical outlook published yesterday, 29 Oct (click here for details), we had highlighted the potential minimum corrective rebound target at 2708/10 where the Index had almost met in yesterday, U.S. opening session (printed a high of 2706) before it plummeted to new marginal lower low of 2603 at the end of the U.S. session. Sector rotation analysis further supports the revival of another impulsive down move after 2 days of corrective rebound since last Fri, 26 Oct where the “high beta/risk on” sectors ETFs underperformed the S&P 500 (-1.69% for Technology, -1.55% for Communications Services, -1.65% for Industrials & -0.85% for Consumer Discretionary). Maintain bearish bias in any bounces below tightened key short-term resistance at 2692 (close to 76.4% Fibonacci retracement of the yesterday slide from 2706 high to 2603 low + minor descending trendline from 18 Oct 2018 high) for another potential downleg to retest 2603 before targeting the next support at 2590/85 (Fibonacci projection cluster + swing low area of 03 May 2018). However, a break above 2692 negates the bearish tone for a squeeze up to retest 2706/2710 intermediate resistance (yesterday high + the former long-term ascending channel pull-back support from Mar 2009 low).
  • Japan 225 – Trend bias: Push down within range. The Index has traded back up in today, 30 Oct early Asian session to retest the upper limit of minor range configuration in place since 26 Oct 2018 with extreme overbought reading seen in the 1-hour Stochastic oscillator. Flip back to a bearish bias with key short-term resistance now at 21500 (minor range resistance) for a potential push down to retest the range support at 20800. However, a break above 21500 sees an extension of the corrective rebound towards the next intermediate resistance at 21770 (upper boundary of the minor descending channel from 01 Oct 2018 high + former 23 Oct 2018 minor swing low area).
  • Hong Kong 50 - Trend bias: Down. The recent bounces seen in the Index since last Fri, 26 Oct has been capped below the predefined short-term resistance of 25170 (former minor range support of 11/23 Oct 2018). No change, maintain bearish bias below 25170 key short-term resistance for a further potential push down to target 24360 and 24000 supports (also the lower boundary of the medium-term descending channel from 07 Jun 2018 high) before risk of corrective rebound materialises. However, a break above 25170 put the bears on hold for a corrective rebound towards the 25580/26070 resistance (upper boundary of a minor descending channel from 26 Sep 2018 high + minor swing high area of 22 Oct 2018).
  • Australia 200 – Trend bias: Push down within range. The Index had squeezed back up towards the upper limit of the medium-term range zone at 5785 (refer to latest weekly technical outlook) as it printed a current intraday high of 5764 in today, 30 Oct Asian session. In addition, the 1-hour Stochastic oscillator has reached an extreme overbought level, Thus, the Index may see a drop below 5785 to retest the range support at 5640/12. However, a break above 5785 negates the bearish tone for a corrective rebound towards the next intermediate resistances at 5860 and 5950 (50% Fibonacci retracement of the decline from 29 Aug 2018 high to 26 Oct 2018 low +  minor swing high areas of 17/19 Oct 2018).
  • Germany 30 – Trend bias: Down. Yesterday’s push up in the European session had met the corrective rebound target of 11400/500 as per highlighted in our latest weekly technical outlook (printed a high of 11447, right at the minor descending channel resistance from 04 Oct 2018 high + former minor swing low area of 12 Oct 2018 + pull-back resistance of former medium-term descending channel support breakdown from 14 Jun 2018 high). Thereafter, it reversed down and formed a daily “Spinning Top” which indicates the bulls are indecisive to push prices up higher. Maintain bearish bias below key short-term resistance at 11500 for a potential push down to retest last Fri, 26 Oct swing low area of 11050 before targeting the next support of 11800 (Fibonacci projection cluster + former range resistance of Aug/Nov 2016). However, a break above 11500 sees an extension of the corrective rebound towards the 11600 key medium-term pivotal resistance.                   

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