Daily Global Macro Technical Trend Bias/Key Levels (Wed 04 Jul)

USD strength setback except in USD/JPY. Minor rebound in progress for stock indices.

FX –  USD strength setback in progress except against JPY

  • EUR/USD – Trend bias: Mean reversion rebound. The pair had continued to hold above the medium-term ascending channel support in place since 02 Jan 2017 low since last week low of 1.1527 with positive reading seen in the shorter-term 4 hour Stochastic oscillator (a momentum indicator). Flip to a bullish bias in any dips above the 1.1620 key short-term support (yesterday, 03 Jul low area + lower boundary of minor ascending channel from 28 Jun 2018 low) for a potential minor rebound to target the 1.1740 intermediate resistance (23.6% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low + former minor range support from 08/13 Jun 2018 + upper boundary of minor ascending channel from 28 Jun 2018 low). On the flipside, a break below 1.1620 reinstates the bears for a slide to retest 1.1510 in the first step (the range support that was formed since 29 May 2018).
  • GBP/USD - Trend bias: Mean reversion rebound.  Inched higher as expected and almost met the intermediate support/target of 1.3230 as per highlighted in pervious report (printed a current intraday high of 1.3216 in today, 04 Jul Asian session).  No signs of short-term bullish exhaustion, maintain bullish bias in any dips with an adjusted key short-term support now at 1.3150 (03 Jul 2018 former minor swing high + pull-back support of former minor descending trendline resistance from 14 Jun 2018 high + lower boundary of minor ascending channel from 28 Jun 2018 low) for a further potential push up towards 1.3230 before targeting the next intermediate resistance at 1.3310/3360 (22 Jun 2018 minor swing high + descending trendline from 10 May 2018 + 23.6% Fibonacci retracement of the multi-month down move since 17 Apr 2018 high to 28 Jun 2018 low).  However, failure to hold at 1.3100 sees another slide to test the 1.3050 low of 28 Jun 2018.
  • AUD/USD - Trend bias: Mean reversion rebound in progress. Pushed up as expected from the 0.7330/7300 key support and met the first intermediate resistance/target of 0.7400 as per highlighted in our “Chart of the day” report published yesterday, 03 Jul. No change, maintain bullish bias in any dips with adjusted key short-term support now at 0.7350 (minor ascending trendline from 02 Jul 2018 low + 61.8% Fibonacci retracement of the on-going push up from 02 Jul  2018 low to today, 04 Jul Asian session current intraday high of 0.7424) for a further potential push up to target 0.7450 intermediate resistance (former medium-term swing low area of 09 May 2018 that had managed to stall the previous push up on 25 Jun 2018). An hourly close above 0.7450 is likely to reinforce a further mean reversion rebound towards the 0.7540/0.7600 resistance (upper boundary of the medium-term descending channel from 26 Jan 2018 + 38.2% Fibonacci retracement of the decline from 14 Mar 2018 high to 29 Jun 2018 low). On the other hand, failure to hold at 0.7350 negates the bullish tone for a slide back to retest 0.7300 (09 May 2017 swing low area + 61.8% Fibonacci retracement of the up move from Jan 2016 low to 26 Jan 2018 high).
  • NZD/USD - Trend bias: Mean reversion rebound. Pushed down as expected on Mon, 02 Jul U.S. session and almost met the support/target of 0.6675/50 (printed a low of 0.6688 on 03 Jul). The 4 hour RSI oscillator has flashed a bullish divergence signal which suggests the recent downside momentum of price action has started to abate. Flip to a bullish bias in any dips with 0.6730/20 as the key short-term support (former minor swing low of 29 Jun 2018 that was surpassed above yesterday + 61.8% Fibonacci retracement of the on-going push up from 03 Jul 2018 low to today, 04 Jul Asian session current intraday high of 0.6778) for a further potential push up to target the 0.6830/6865 intermediate resistance (the former neckline support of the major “Double Top” + 23.6% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low). However, a break below 0.6720 negates the bullish tone for a slide back to test the 0.6675/50 support (30 May 2016 medium-term swing low + 1.00 Fibonacci projection of the down move from 27 Jul 2017 high to 17 Nov 2017 low projected from 16 Feb 2018 high).
  • USD/JPY - Trend bias: Up move still intact. Pushed up as expected to print a minor high of 111.13 yesterday, 03 Jul Asian session before it pull-backed to challenge the 110.45 key short-term support (printed a low of 110.28 in today, 04 Jul early Asian session) Right now, it is has started to stage a bounce coupled with a bullish divergence signal seen in the shorter-term hourly Stochastic oscillator. These observations suggest that the downside momentum of the slide seen in yesterday, 03 Jul U.S. session has started to abate. Tolerate the excess and maintain bullish bias with adjusted key short-term support at 110.25 (50% Fibonacci retracement of the recent up move from25 Jun 2018 low to 03 Jul 2018 high + medium-term ascending channel support from 26 Mar 2018 low) with 110.65 as the upside trigger level (former minor swing low area of 02 Jul 2018) and an hourly close above 110.65 is likely to reinforce a further push up to retest the 21 May 2018 high of 111.39 before targeting the lower limit of the major resistance at 112.00 (the upper boundary of a major descending resistance in place since Jun 2015 high + Fibonacci projection/retracement cluster). On the flipside, a break below 110.25 sees another round of choppy slide back to retest the 109.35/25 medium-term range support in place since 08 Jun 2018.

Stock Indices (CFD) – Potential minor rebound in progress

  • US SP 500 – Trend bias: Minor rebound in progress. The Index has continued to trade within a range of 49 points since last Thurs, 28 Jun low of 2691. Yesterday, it staged a push up to retest the 2740 range top before it pull-backed and retraced 76.4% of the gains seen from 02 Jul 2018 low of 2696 to yesterday, 03 Jul high of 2740. Interestingly, today, 04 Jul current Asian session low of 2709 has managed to stall right at the minor ascending range support from 28 Jun 2018 with the 4 hour Stochastic oscillator back at its oversold region. Therefore, as long as the 2709 key short-term support holds, the Index may see a push up again to retest the minor range top/resistance at 2740/44 area. On the other hand, a break below 2709 sees a slide towards the 2680 key medium-term support.  Note that the U.S. stock market will be close for a public holiday today.
  • Japan 225 – Trend bias: Minor rebound in progress. Pushed down and hit the 21600 intermediate support where a potential mean reversion rebound is likely to occur as per highlighted in the our latest “Weekly Technical Outlook” report published on Mon, 02 Jul. Indeed, the Index has staged a rebound yesterday after a print of 21577 low. Still using the 21600 as the key short-term support for another round of potential push up towards the 21900/22000 intermediate resistance (former minor swing low area of 26 Jun 2018 + 38.2% Fibonacci retracement of the down move from 21 Jun 2018 high to 03 Jul 2018 low). However, failure to hold at 21600 opens up scope for another round of downleg to target the next support at 21300 in the first step (07 Apr 2018 low + Fibonacci projection cluster).
  • Hong Kong 50 – Trend bias: Minor rebound. The recent slide has managed to hold at the 28000 key major support (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low) as it printed a low of 27987 on 03 Jul 2018. Using 28000 as the key support for another round of potential push up to retest the 29000 intermediate resistance (minor swing high areas of 27/29 Jun 2018). However, a daily close below 28000 opens up scope for a multi-week corrective decline to target the next support at 27100/27000 in the first step (Fibonacci projection cluster + 14/18 Aug 2017 swing low areas).
  • Australia 200 – Trend bias: Push up within minor range. Since its 6257 high of 22 Jun 2018, the Index has started to evolve into a minor “Symmetrical Triangle” range configuration holding above the 6140/6136 key short-term support (former range resistance from 10 Jan/10 May 2018). No change, still using 6140/6136 as the key short-term support for a potential push up  retest the upper boundary of the “Symmetrical Triangle” range now acting as a resistance at 6230. On the other hand, a break below 6136 shall put the bulls on hold for a further pull-back towards the 6085 key medium-term support (the lower boundary of the medium-term ascending channel from 04 Apr 2018 low + former minor range support from 07/12 Jun 2018).
  • Germany 30 – Trend bias: Sideways. The Index has indeed staged to push up to test the upper limit of the short-term neutrality range at 12400 (printed a high of 12430 on 03 Jul 2018). Mix elements, prefer to maintain neutrality stance between 12430 and 12100. An hourly close above 12430 sees a further minor mean reversion rebound towards the 12630 intermediate resistance (the former swing low area of 31 May 2018 + 50% Fibonacci retracement of the recent decline from 15 Jun 2018 high to 28 Jun 2018 low).

*Levels are obtained from City Index Advantage TraderPro platform


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