Daily Global Macro Technical Trend Bias/Key Levels (Wed 17 Oct)

Stock indices are undergoing a countertrend/corrective rebound phase in line with a firmer USD/JPY

FX –  Mix bag with further potential corrective rebound in USD/JPY

  • EUR/USD – Trend bias: Residual countertrend/corrective rebound remains in progress. No change, maintain bullish bias with key short-term support remains at 1.1530 to target the 1.1650/1670 intermediate resistance (Fibonacci retracement/projection cluster + former neckline of the failure bullish “Inverse Head & Shoulders” breakout from 07 Jun 2018 high) before another potential downleg materialises. However, a break below 1.1530 put the corrective rebound scenario at risk of a decline to retest 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).
  • GBP/USD – Trend bias: Sideways. Another messy movement yesterday as it whipsawed around the 1.3190 short-term resistance. Prefer to turn neutral now between 1.3300 range resistance and 1.3120 (minor ascending trendline from 04 Oct 2018 low). An hourly close below 1.3120 sees a potential slide within its range configuration to retest the next support at 1.3030/3020 (minor swing low areas of 08/09 Oct 2018 + Fibonacci retracement/projection cluster). On the flipside, a clearance above 1.3300 opens up scope for an extension of the countertrend/corrective rebound to target the next intermediate resistance at 1.3500/3580 (50% Fibonacci retracement of the down move from 17 Apr 2018 high to 15 Aug 2018 low + minor swing high areas of 08/14 May 2018).
  • USD/JPY - Trend bias: Countertrend/corrective rebound in progress. The pair cleared above the 112.25 upside trigger level as per highlighted in our previous report. Maintain bullish bias with a tightened keys short-term support now at 111.90 (former minor swing high of 16 Oct 2018 + minor ascending trendline from 15 Oct 2018 low) for a further potential push up to target next intermediate resistances at 112.80 follow by 113.30/40 (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). On the flipside, a break below 111.90 negates the bullish tone for a further 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 pushed up but failed to break above the previous 15 Oct 2018 minor swing high area of 0.7148/7150 and started to display a bearish divergence signal on its 4 -hour Stochastic oscillator at its overbought region. These observations indicate that its recent upside momentum has started to abate and the conviction to see a further countertrend/corrective rebound move to target 0.7200/7220 resistance (Fibonacci projection/retracement cluster + upper boundary of the medium-term descending channel from 26 Jan 2018 high) has been reduced. Prefer to turn neutral now between 0.7150 and 0.7100 (the minor swing low areas of 13/15 Oct 2018). An hourly close below 0.7100 reinstates the bearish tone for a slide to retest the recent 06 Oct 2018 swing low area of 0.7040 in the first step.
  • NZD/USD - Trend bias: Residual countertrend rebound in progress. Continued to print higher minor lows, maintain bullish bias with a tightened key short-term support now at 0.6550 (minor ascending trendline from 09 Oct 2018 low) for a further potential residual push up to target the 0.6630/0.6660 resistance (upper boundary of a medium-term descending channel from 07 Jun 2018 high + 38.2% Fibonacci retracement of the down move from 06 Jun 2018 high to 08 Oct 2018 low of 0.6421) before another impulsive downleg materialises. On the flipside, failure to hold 0.6550 reinstates the bears for a slide to retest 0.6430/20 swing low area of 08/09 Oct 2018.

Stock Indices (CFD) – Countertrend/corrective rebound remains in progress after potential dip

  • US SP 500 – Trend bias: Countertrend rebound in progress. The Index has staged a breakout above the 2793/97 which invalidated the last push down scenario. Right now, the Index is likely shaping the early anticipated corrective rebound as per highlighted in our latest weekly technical outlook led by the battered down Technology sector where the S&P Technology sector ETF (XLK) outperformed the &P 500 as seen in yesterday’s U.S. session returns (3.01% versus 2.15%). Flip to a bullish bias in any dips with key short-term support at 2780 (former minor swing high area of 12 Oct 2018 + 50% Fibonacci retracement of yesterday’s push up from 15 Oct U.S. session low of 2743 to today, 16 Oct Asian session current intraday high of 2816) for a further potential push up to target the 2850 resistance (pull-back resistance of the former ascending trendline support from 02 Apr 2018 low + 50% Fibonacci retracement of the previous impulsive down move from 03 Oct 2018 high to 11 Oct 2018 low. On the flipside, failure to hold at 2780 negates the corrective rebound scenario for a slide to retest the 11 Oct 2018 low of 2708.
  • Japan 225 – Trend bias: Countertrend rebound in progress. The Index has broken above the 22600 short-term resistance, also the upper limit/resistance of the minor bullish “Descending Wedge” configuration. Residual push down scenario has been invalidated. Flip to a bullish bias in any dips with key short-term support now at 22400 (15 Oct 2018 former minor swing high + 61.8% Fibonacci retracement of the on-going push up from 15 Oct 2018 low to today,17 Oct Asian session current intraday high of 22950) for a further potential push up to target the next resistance at 23270/320 (minor swing low of 09 Oct 2018 + 50% Fibonacci retracement of the previous impulsive down move from 01 Oct 2018 high to 15 Oct 2018 low). On the flipside, failure to hold at 22400 negates the corrective rebound scenario of a slide to retest the 15 Oct 2018 swing low area of 22170/22000.
  • Hong Kong 50 - Trend bias: Sideways. Even though, the Index has yet to break above the 25815 key short-term resistance (upper limit of 10 Oct Asian session opening gapped down + Fibonacci retracement cluster) but the conviction to see a residual push down to target the 24740 support (lower boundary of the medium-term descending channel from 07 Jun 2018 high + Fibonacci projection cluster) has been reduced due to the movement seen in the rest of the major stock indices. Prefer to turn neutral now between 25815 and 25220 (minor ascending trendline from 11 Oct 2018 low). A break above 25815 opens up scope for a potential countertrend/corrective rebound to target the next resistances at 26100 follow by 27260/500 (close to the upper boundary of the medium-term descending channel from 07 Jun 2018 high + 38.2% Fibonacci retracement of the impulsive down move from 07 Jun 2018 high to 11 Oct 2018 low). On the flipside, failure to hold at 25220 reinstates the bearish tone for a slide to retest the 11 Oct 2018 low of 25080 and even the 24740 support.
  • Australia 200 – Trend bias: Countertrend rebound in progress. Broke above 5900 which invalidated the residual push down scenario. Flip to a bullish bias in any dips above key short-term support at 5900 (former minor swing high of 12 Oct 2018) for a further potential push up to target the next resistances at 5980 and even 6045 (50%/61.8% Fibonacci retracement of the previous impulsive down move from 28 Sep 2018 high to 11 Oct 2018 low). On the flipside, failure to hold at 5900 negates the corrective rebound scenario for a slide to retest the 5750/5700 support (11 Oct 2018 low + medium-term swing low areas of 09 Feb/04 Apr 2018).
  • Germany 30 – Trend bias: Sideways. The Index is now challenging the 11800 neckline resistance of the major “Head & Shoulders” bearish breakdown as it has recorded a daily close of 11828 in yesterday’s 16 Oct U.S. session. Thus, the conviction to see a residual push down scenario to target the 11400/300 support has been reduced. Prefer to turn neutral now, an hourly close above 11800 in today, 17 Oct European session opens up scope for a potential countertrend/corrective rebound to target the 12100/12300 resistance (former minor swing low of 28 Jun 2018 + 38.2% Fibonacci retracement of recent down move from 22 May 2018 high to 11 Oct 2018 low + close to the upper boundary of medium-term descending channel from 14 Jun 2018 high). On the flipside, failure to hold at 11700 (former minor swing high areas of 11/12 Oct 2018 + minor ascending trendline from 12 Oct 2018 low) negates the corrective rebound scenario for a slide to retest 11400/300 support.                    

                     


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