Daily Global Macro Technical Trend Bias/Key Levels (Wed 06 Jun)
Kelvin Wong June 6, 2018 5:24 PM
Mix bag in FX space with USD/JPY uptrend remains intact. Major stock indices continue to exhibit bullish configurations.
FX – Mix bag with USD/JPY uptrend intact supported by risk on behaviour
- EUR/USD – Trend bias: Short-term recovery scenario remains intact. Yesterday, 05 June, the pair had continued to trade in a sideways fashion within 79 pips. On a positive note, it has managed to shaped a minor higher low of 1.1651 versus the previous low of 1.1616 printed on 01 Jun as seen on its hourly chart. In addition, the recent days of sideways movement has formed an impending minor bullish continuation/consolidation pattern; “Ascending Triangle” in place since the 31 May 2018 high of 1.1724. No change, maintain bullish bias in any dips with adjusted key short-term support at 1.1616 (the lowest point of the “Ascending Triangle”) for a further potential push up towards the next intermediate resistances at 1.1760 (former minor swing low areas of 21 Nov/12 Dec 2017) follow by 1.1880/1940 (38.2% Fibonacci retracement of the decline from 16 Feb 2018 high to 29 May 2018 low + former minor swing low area of 09/10 Jan 2018 that was rejected on 14 May 2018 + also now the potential breakout target of the aforementioned minor “Ascending Triangle”). On the other hand, failure to hold at 1.1616 negates the recovery process for a slide to retest last week’s low of 1.1510 and a below it exposes the lower limit of the key major support zone at 1.1430 (the former resistance of a basing configuration that occurred in May 2015/Jun 2016 + 50% Fibonacci of the multi-year up move from Jan 2017 low to 16 Feb 2018 high of 1.2555).
- GBP/USD – Trend bias: Residual push up before risk of sideway/consolidation movement. The pair had continued to inch higher as expected and printed a current intraday minor higher high of 1.3417 in today, 06 Jun Asian session. Elliot Wave/fractal analysis suggests that the on-going short-term mean reversion rebound in place since 29 May 2018 low of 1.3205 may take a pause coupled with the 4 hour Stochastic oscillator that is coming close to an extreme overbought level of 93. No change, maintain bullish bias in any dips with a tightened/adjusted key short-term support at 1.3340 (05 Jun 2018 minor swing low + lower boundary of a minor ascending range configuration in place since 29 May 2018 low) for a further potential residual push up to target the next intermediate resistance at 1.3480 (former minor range congestion support from 04/18 May 2018 + 23.6% Fibonacci retracement of the on-going down move from 17 Apr 2018 high to 29 May low of 1.3205). However, a break below 1.3340 invalidates the short-term rebound scenario for a continuation of the medium-term down move to target the next support at 1.3200/3160 (29 May 2018 swing low area + 50% Fibonacci retracement of the multi-year up move from Oct 2016 low to 17 Apr 2018 high of 1.4377).
- AUD/USD – Trend bias: At risk of resuming its medium-term down move. The pair had indeed staged a push down to hit the first intermediate support/target zone of 0.7600/7585 as it printed a low of 0.7595 in yesterday, 05 Jun U.S. session. It staged a bounce back up in today, 06 Jun Asian session on the back of a better than expected Q1 AU GDP (3.1% y/y versus a consensus of 2.8% y/y). It still remains below the predefined key major resistance of 0.7670/7690 (the pull-back resistance of the former major bearish “Ascending Wedge” support from Jan 2016 and the former medium-term swing low area of 20 Mar 2018). No change, maintain bearish bias with key resistance remains at 0.7690 for a potential push down to retest 0.7585 and a break below 0.7585 (an hourly close below it) opens up scope for a further potential down move to target the next intermediate support at 0.7515 (the minor swing low of 01 Jun 2018 & the lower boundary of the minor ascending channel from 09 May 2018 low). On the other hand, a clearance above 0.7690 invalidates the bearish scenario for a further squeeze up towards the next resistance at 0.7800 (medium-term swing high of 13/19 Apr 2018 & close to 50% Fibonacci retracement of the entire down move from 26 Jan 2018 high to 09 May 2018 low).
- NZD/USD - Trend bias: Sideways. No change, maintain neutrality stance between 0.7060 (former minor swing high area of 04 May 2018 + Fibonacci projection/retracement cluster) and 0.7000 (yesterday, 05 Jun U.S. session low). A clearance (an hourly close) above 0.7060 triggers a potential squeeze up to retest a significant medium-term resistance at 0.7190 (the former range support from 08 Feb/20 Mar 2018 before the recent bearish breakdown that led to a decline of 330 pips + 61.8% Fibonacci retracement of the decline from 13 Apr 2018 high to 16 May 2018 low). On the flipside, failure to hold at 0.7000 opens up scope for a decline towards the next intermediate support of 0.6960 (the former minor swing low area of 01 Jun 2018) and below exposes the next support of 0.6900 (psychological + minor ascending trendline from 15 May 2018/the start of the current short-term rebound).
- USD/JPY - Trend bias: Up move remains intact. The pull-back from its 109.99 Asian session high of 05 Jun 2018 had managed to stall around the 109.60 adjusted key short-term support as per highlighted in yesterday report. It printed an intraday low of 109.47 in yesterday, 05 Jun U.S. session before it staged a rebound. In addition, the hourly Stochastic oscillator has flashed a bullish divergence signal at its oversold region which indices a lack of downside momentum follow through is yesterday’s slide from 109.99 to 109.47. No change, maintain bullish bias in any dips with key short-term support remains at 109.60/47 (excess) for a further potential push up to target the intermediate resistance at 110.10/30 (minor swing high of 24 May 2018 + 61.8% Fibonacci retracement of the decline from 21 May high to 29 May 2018 low) and above it opens up scope for a further rally towards 110.60 next (upper boundary of the aforementioned minor ascending channel + Fibonacci retracement/projection cluster). However, failure to hold at 109.60/47 negates the bullish tone for a deeper pull-back to retest the next intermediate support at 109.35 (the minor swing low of 04 Jun 2018) and below it triggers a further extension towards 109.10/109.00 support next (psychological + former minor range resistance from 29/30 May 2018 + minor ascending trendline from 30 May 2018 low).
Stock Indices (CFD) – Bullish configurations remain intact
- US SP 500 – Trend bias: Up move remains in progress. Yesterday, 05 Jun U.S. session minor pull-back had managed to stall above the 2725 adjusted key short-term support (printed a low of 2739) before it reversed up to erase its initial losses to record a slightly higher close of 2748 at the end of yesterday, U.S. session. No change, maintain bullish bias with tightened adjusted key short-term support now at 2739 (yesterday low + lower boundary of the minor ascending channel from 30 May 2018 low) for a further potential push up to target the next intermediate resistance at 2760/65 and above it sees a further rally towards 2785 resistance (the upper boundary of the minor ascending channel from 30 May 2018 low + 1.618 Fibonacci projection of the on-going up move from 30 May low to 31 May 2018 high projected from 01 Jun 2018 low). However, a break below 2739 negates the bullish tone for a deeper pull-back to retest the 2725 support (the former minor swing high area of 31 May 2018).
- Japan 225 – Trend bias: Up move remains in progress. Continued its upward movement as expected to retest the recent minor swing high of 22606 printed on 05 Jun 2018, Asian session. No change, maintain bullish bias with adjusted key short-term support now at 22440 (yesterday, 05 Jun U.S. session swing low area) for a further potential push up to target the next intermediate resistance at 22730 (also the medium-term upside trigger level, the former swing low areas of 16 May 2018 before the recent steep pull-back occurred + 76.4% Fibonacci retracement of the decline from 21 May high to 30 May 2018 low). On the other hand, a break below 22440 negates the bullish tone for a deeper pull-back to retest the next intermediate support at 22260 (former minor swing high areas of 30/31 May 2018 + minor ascending trendline from 29 May 2018 U.S. session low of 21923).
- Hong Kong 50 – Trend bias: Push up within range configuration remains in progress. Inched up higher as expected and shaped a minor higher high of 31322 in today, 06 Jun Asian session with the first intermediate resistance/target met at 31240 (minor gap resistance of 22/23 May 2018 + 76.4% Fibonacci retracement of the recent slide from 14 May to 30 May 2018 low). No change, maintain bullish bias in any dips above adjusted key short-term support now at 30880 (yesterday, 05 Jun Asian session low + minor ascending trendline from 30 May 2018 low) for a further potential push up to target the next intermediate resistance at 31500 (minor swing high of 21 May 2018) and above it sees a further rally towards 31800 (the key medium-term range resistance in place since 27 Feb 2018). On the other hand, a break below 30880 negates the bullish tone for a deeper pull-back to retest 30660/430 intermediate support zone (the former minor congestion area of 31 May/01 Jun 2018 + 50%/61% Fibonacci retracement of the on-going up move from 30 May 2018 low to today, 06 Jun Asian session current intraday high of 31322).
- Australia 200 – Trend bias: Sideways. Still trapped within the short-term neutrality zone. Maintain neutrality stance between 5980 key medium-term support (pull-back support of the former “Symmetrical Triangle” resistance from 09 Jan 2018 and the 38.2% Fibonacci retracement of the up move from 04 Apr low to 10 May 2018 high) and 6036 (minor swing high areas of 31 May/04 Jun 2018). Only an hourly close above 6036 is likely to see a push up towards the next intermediate resistances at 6068 and 6087 (minor congestion area from 07 May/21 May 2018 + 61.8%/76.4% Fibonacci retracement of the recent decline from 15 May high to 29 May 2018 U.S. session low of 5943).
- Germany 30 – Trend bias: Short-term up move validated. The Index had managed to stage a bullish breakout above 12850 (the former minor swing low area of 24 May 2018 & the minor descending trendline from 22 May 2018 high) in yesterday, 05 Jun European session to print a high of 12928. Thereafter, it started to pull-back to retrace its initial gains to print a low of 12750 towards the end of the European session. Interestingly, the aforementioned pull-back staged right at the pull-back support of the former minor descending trendline from 22 May 2018 high, 04 Jun 2018 minor swing low & the 50% Fibonacci retracement of the on-going recovery from 31 May 2018 low to yesterday, 05 Jun high of 12750 which confluences at the 12750/710 zone. In addition, the 4 hour Stochastic oscillator has just started to exit from its oversold region, a sign of positive momentum in the short-term. Maintain bullish bias with 12750/710 as the key short-term support for another round of potential push up to target the next intermediate resistance at 13000/13050 (minor swing high area of 28 May 2018 before the recent steep decline occurred). However, failure to hold at 12750/710 sees a deeper pull-back to retest the 12630 key medium-term support (the former 3-month range resistance of the “Bottoming” configuration from 07 Feb/24 Apr 2018 + the 38.2% Fibonacci retracement of the up move from 26 Mar low to 22 May 2018 high.
*Levels are obtained from City Index Advantage TraderPro platform
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.