Daily Global Macro Technical Trend Bias/Key Levels (Wed 10 Oct)

Mix bag seen in FX with USD weakness in GBP & JPY. Countertrend rebound phase remains in progress for stock indices.

FX –  Mix bag with USD weakness seen in GBP & JPY

  • EUR/USD – Trend bias: Sideways. The pair had tumbled as expected and met the target/key major support zone of 1.1445/1.1410 (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) as it printed a low of 1.1429 in yesterday, 09 Oct U.S. opening session. Interestingly, it ended the U.S. session with a daily bullish “Dragonfly Doji” candlestick pattern right at the 1.1445/1410 major support which indicates a potential change in sentiment that can lead to a potential minor  corrective/mean reversion rebound to retrace the on-going down move from 24 Sep 2018 high to yesterday, 09 Oct low of 1.1429. Prefer to turn neutral first today between 1.1520 (the median line of the minor descending channel from 24 Sep 2018 high + pull-back resistance of the former minor ascending support from 04 Oct 2018 low + 23.6% Fibonacci retracement of the on-going down move from 24 Sep 2018 high to yesterday, 09 Oct low of 1.1429) and 1.1460 (the former minor swing low areas of 04/08 Oct 2018 + 61.8% Fibonacci retracement of yesterday’s push up from 1.1429 low to today, 10 Oct Asian session current intraday high of 1.1515).   A clearance above 1.1520 triggers the potential corrective rebound to target the next intermediate resistance at 1.1580/1600 (38.2% Fibonacci retracement of the down move from 24 Sep 2018 high to 09 Oct 2018 low) follow by 1.1620 next (minor swing high areas of 28 Sep/01 Oct 2018 + 50%  Fibonacci retracement of the down move from 24 Sep 2018 high to 09 Oct 2018 low + upper boundary of the aforementioned minor descending channel). On the flipside, failure to hold at 1.1460 sees the continuation of the impulsive downleg to target 1.1410 and even the next support at 1.1355/1.1300 (the medium-term swing low of 15 Aug 2018 + Fibonacci projection).
  • GBP/USD – Trend bias: Corrective rebound extends. The break of 1.3135 short-term resistance has put the bears on hold where the pair is now likely to see an extension of its on-going corrective rebound from  04 Oct 2018 low of 1.2922. Short-term key support now at 1.3090 (the former minor swing high of 09 Oct 2018 + 50% Fibonacci retracement of the recent push up from yesterday, 09 Oct U.S. session low of 1.3031 to today, 10 Oct Asian session high of 1.3162) for a further potential push up to target the next intermediate resistance at 1.3220/3240 (Fibonacci retracement/projection cluster + 27 Sep 2018 minor swing high area). On the flipside, a break below 1.3090 sees a slide to retest the next near-term support at 1.3030/3010 (08 Oct 2018 minor swing low + the former congestion level seen from 28 Sep/05 Oct 2018).
  • USD/JPY - Trend bias: Down. No change, maintain bearish bias in any bounces below the tightened key short-term resistance now at 113.60 (close to the minor descending trendline from 04 Oct 2018 high + pull-back resistance of former minor ascending channel support from 07 Sep 2018 low + former minor swing low areas of 03/04 Oct 2018) for a further potential push down to target the next near-term support at 112.10/111.95 (61.8% Fibonacci retracement of the prior up move from 07 Sep 2018 low to 04 Oct 2018 high + pull-back support of the former major descending resistance from 05 Jun 2015 +  medium-term ascending channel support from 26 Mar 2018 low). On the flipside, a clearance above 113.60 sees a revival of the bulls to retest 114.05 before the 04 Oct 2018 high of 114.55.
  • AUD/USD - Trend bias: Down. The on-going push up from yesterday, 09 Oct U.S session low of 0.7051 has reached the tightened key short-term resistance at 0.7120 as per highlighted in our previous report (printed a current intraday high of 0.7126 in today, 10 Oct Asian session) coupled with an extreme overbought reading seen in the 4 hour Stochastic oscillator with a bearish divergence signal  seen in the 1 hour Stochastic oscillator. These observations suggest the upside momentum of yesterday’s push up has started to abate. Maintain bearish bias below 0.7120/7126 key short-term resistance for a potential push down to retest 06/08 Oct 2018 swing low area of 0.7040 and a break below it reinforces a further potential drop to target next support at 0.6970/50 (Fibonacci projection cluster + lower boundary of the medium-term descending channel in place since 26 Jan 2018 high). On the flipside, a clearance above 0.7120/7126 sees a squeeze up to retest 0.7240/7260 (minor swing high of 28 Sep/02 Oct 2018 + upper boundary of the aforementioned medium-term descending channel).
  • NZD/USD - Trend bias: Down.  The on-going push up from yesterday, 09 Oct U.S session low of 0.6424 has almost reached the tightened key short-term resistance at 0.6500 as per highlighted in our previous report (printed a current intraday high of 0.6496 in today, 10 Oct Asian session) coupled with an extreme overbought reading seen in the 4 hour Stochastic oscillator with a bearish divergence signal  seen in the 1 hour Stochastic oscillator. These observations suggest the upside momentum of yesterday’s push up has started to abate. Maintain bearish bias below the 0.6500 key short-term resistance the minor descending trendline from post FOMC 26 Sep high of 0.6696 + former minor swing low areas of 11/12 Sep 2018) for a further potential push down to target the next support at 0.6360/6330 (Fibonacci projection cluster + lower boundary of the medium-term descending channel in place since 07 Jun 2018 high). On the flipside, a clearance above 0.6500 negates the bearish tone for a squeeze up to test 0.6630 (upper boundary of a medium-term descending channel from 07 Jun 2018 high).

Stock Indices (CFD) – Potential countertrend rebound phase in progress

  • US SP 500 – Trend bias: Countertrend rebound. The Index had managed to hold above the 2860 support (our key medium-term downside trigger level) as expected and inched higher as expected to print an intraday high of 2895 in yesterday, 10 Oct U.S. session before it traded sideways.  No change, maintain bullish with a tightened key short-term support now at 2870 (yesterday, 09 Oct European session low + close to the minor ascending trendline in place now since 08 Oct 2018 low) for a further potential push up to target the intermediate resistance of 2910/12 (the minor swing high area of 05 Oct 2018 + 61.8% Fibonacci retracement of the recent down move from 03 Oct 2018 high to 08 Oct low of 2862). A break below 2870 sees a slide to retest 2860 and only a daily clos below 2860 reinforces the continuation of the impulsive downleg to target the next near-term support of 2802/2800 in the first step (15 Aug 2018 minor low + psychological).
  • Japan 225 – Trend bias: Countertrend rebound. The Index staged a push down to print a low of 23321 in yesterday, 09 Oct European session, a slight breach below the predefined key short-term support of 23360 as per highlighted in our previous report with another bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region. Tolerate the excess and maintain bullish bias above 23360/320 key short-term support for a potential countertrend rebound towards the intermediate resistance of 23900/24050 (50%/61.8% Fibonacci retracement of the on-going decline from 01 Oct 2018 high to yesterday, 08 Oct low of 23361 + minor swing high area of 05 Oct 2018). However, a break with an hourly close below 23360 sees an extension of the down move to target the 23000 key medium-term range support (refer to our latest weekly technical outlook report).
  • Hong Kong 50 – Trend bias: Countertrend rebound. Managed to hold at the predefined 26000 key short-term support as per highlighted in our previous report. No change, maintain bullish bias with 26000 remains at the key short-term support for a countertrend rebound to target 26800/27040 intermediate resistance (38.2%/50%Fiboancci retracement of the on-going decline from 26 Sep 2018 high to 08 Oct low of 26000 + minor gap resistance of 04 Oct 2018) before the impulsive downleg resumes. However, a break below 26000 sees the continuation of the impulsive downleg to target the next support at 25640/500.
  • Australia 200 – Trend bias: Sideways with risk of a countertrend rebound. The Index had inched down lower as expected to print a fresh minor “lower low” of 6008 seen in yesterday, 09 Oct U.S. session. The upper limit of the medium-term support at 5980 (swing low area of 01 Jun 2018 + Fibonacci projection) has not been met. However, short-term elements are mix at this juncture with the 4-hour Stochastic oscillator that has reversed up from its oversold region and still has room to manoeuvre before it reaches an extreme overbought level. Thus, prefer to turn neutral now between 6054 (minor range resistance formed since yesterday, 09 Oct U.S. session) and 6008. A break above 6054 sees a potential countertrend rebound towards the next intermediate resistance of 6084/6108 (38.2%/50% Fibonacci retracement of the on-going slide from 05 Oct 2018 high to yesterday, 09 Oct low of 6008 + former minor swing low area of 02 Oct 2018). On the flipside, a violation below 6008 reinforces the continuation of the impulsive downleg to target the 5980 support next.
  • Germany 30 – Trend bias: Countertrend rebound.  The Index had managed to hold the crucial 11800 neckline support of the neckline support of the impending major “Head & Shoulders” bearish reversal configuration in place since 20 Jun 2017 which is also our medium-term downside trigger level (refer to our latest weekly technical outlook report) as expected. Interestingly, it ended yesterday, 09 European session with a daily bullish “Dragonfly Doji” candlestick pattern. No change, maintain bullish bias with 11800 remains as the key support for further potential countertrend rebound to target  the intermediate resistance of 12100/140 (close to the 50% Fibonacci retracement of the on-going decline from 27 Sep 2018 high to 09 Oct 2018 low + minor swing high area of 08 Oct 2018). However, a break with a daily close below 11800 opens up scope for a potential multi-month impulsive down move phase to target the medium-term support at 11550 (refer to our latest weekly technical outlook report).              

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