Daily Global Macro Technical Trend Bias/Key Levels (Wed 18 Jul)

USD strength remains intact. Watch out for the risk level of 2840 on the S&P 500.

FX –  USD strength remains intact

  • EUR/USD – Trend bias: Push down within range configuration. The pair has continued to evolve within a minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840. From its last Fri, 13 Jul low of 1.1611, the pushed up to yesterday, 17 Jul high of 1.1744 managed to stall at the 76.4% Fibonacci retracement of the recent slide from 09 Jul 2018 high of 1.1790 to 13 Jul 2018 low before it staged another slide to print a current intraday low of 1.1648 in today, 18 Jul Asian session.  No change, maintain bearish bias in any bounce below 1.1710 key short-term resistance (the swing high areas of 16/17 Jul 2018 + 61.8% Fibonacci retracement of yesterday’s slide from 17 Jul  2018 high to today, 18 Jul current intraday low of 1.1648) for a further potential push down to retest 1.1611 before targeting the 1.1530 minor “Descending Triangle” range support. On the other hand, a clearance above 1.1710 sees a squeeze up to retest the “Descending Triangle” range resistance at 1.1780/1790.
  • GBP/USD - Trend bias: Medium-term down move set to resume. The pair had staged the expected slide to hit the intermediate support/target of 1.3110  on last Fri, 13 Jul as it printed a low of 1.3102. The pushed up thereafter had failed to surpass the 1.3300 medium-term resistance (the descending trendline from 10 May 2018 high + 76.4% Fibonacci retracement of the recent slide from 09 Jul 2018 high to last Fri, 13 Jul low of 1.3102). Yesterday, daily price action has almost formed  a bearish “Marubozu” candlestick pattern after a preceding daily “Long-legged Doji” formed on Mon, 16 Jul. Therefore, the probability of a second wave of mean reversion rebound scenario is low at this juncture. Maintain bearish bias in any bounce below the adjusted 1.3200 key short-term resistance (former minor swing low areas of 09/12 Jul 2018 + 61.8% Fibonacci retracement of the recent slide from 16 Jul 2018 high to yesterday, 17 Jul U.S. session low of 1.3066) for a further potential push down to retest the 1.3050 low of 28 Jun 2018 before targeting the next intermediate support at  1.2900 (the lower boundary of the descending channel from 09 May 2018 + 61.8% Fibonacci retracement of the 16-month up move from 16 Jan 2017 low to 17 Apr 2018 high).  However, a clearance above 1.3200 negates the bearish tone for a squeeze up to retest the 1.3300 medium-term resistance.
  • AUD/USD - Trend bias: Push down within range. The pushed up from last Fri, 13 Jul low of  0.7366 had stalled at the minor descending trendline from 09 Jul 2018 high and close to the 61.8% Fibonacci retracement of the recent slide from 09 Jul 2018 high to 12 Jul 2018 low at 0.7440. No change, maintain bearish bias in any bounce below the adjusted key short-term resistance at 0.7425 (the minor descending trendline from 09 Jul 2018 high + Fibonacci retracement/projection cluster) for a further potential push down to retest the 12 Jul 2018 minor swing low area of 0.7360 before targeting the 0.7320/0.7300 swing low of 02 Jul 2018. On the other hand, a clearance above 0.7425 reinstates the second wave of mean reversion rebound scenario to retest 0.7484 recent swing high of 09/10 Jul 2018 before targeting the 0.7540 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).
  • NZD/USD - Trend bias: Down move remains intact. The pushed up from last Fri, 13 Jul low of 0.6722 to 17 Jul 2018 high of 0.6840 had stalled at the medium-term descending channel resistance from 13 Apr 2018 high. No change, maintain bearish bias in any bounce below 0.6840 key resistance for a further potential downleg to retest 0.6690 swing low of 03 Jul 2018 before targeting the next support at 0.6600/6575 (the lower boundary of the medium-term descending channel in place since 13 Apr 2018 + swing low areas of 16 Feb/15 Mar 2016). On the other hand, a break above 0.6840 negates the bearish tone for a squeeze up to retest 0.6865 (the pull-back resistance of the  former neckline support of the major “Double Top” that broke down on 27 Jun 2018 and the 23.6% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low).
  • USD/JPY – Trend bias: Up move remains intact. The pair continued to rally as expected since its bullish breakout from its former major descending trendline resistance from Jun 2015 high and cleared above the 112.80 minor swing high of 13 Jul 2018. No change, maintain bullish bias in any dips above adjusted key short-term support now at 112.50 (former  minor swing high area of 16 Jul 2018 + 61.8% Fibonacci retracement of yesterday’s up move from 17 Jul low of 112.20 to today, 18 Jul Asian session current intraday high of 113.07) for a further potential push up to target the next intermediate resistance at  113.55/80 (the swing high areas of 12/21 Dec 2017, the upper boundary of the minor ascending channel from 09 Jul 2018 low). On the other hand, failure to hold at 112.50 negates the bullish tone for a deeper pull-back to retest 112.00.

Stock Indices (CFD) – Residual push up scenario remains intact for S&P 500

  • US SP 500 – Trend bias: Residual push up remains intact. The pull-backed from last Fri, 13 Jul high of 2805 had managed to find support right at 2790 intermediate support (the former swing high areas of 13 Jun/11 Jul 2018 -  refer to the latest weekly technical outlook) as it printed a low of 2788 in yesterday, 17 Jul U.S. opening session before it rallied to surpass the 2805 level to print a high of 2815. No change, maintain bullish bias in any dips above 2793/90 (also the minor ascending trendline from 05 Jul 2018 low + close to the 61.8% Fibonacci retracement of yesterday’s rally from 2788 low to today, 18 Jul Asian session current intraday high of 2815) for a further potential push up to target the next resistance at 2840 (the bearish “Ascending Wedge” upper boundary + Fibonacci projection cluster). However, failure to hold at 2790 sees a deeper slide to test the 2763 key medium-term support (the swing low of 11 Jul 2018 + pull-back support of the former descending resistance from 13 Jun 2018).
  • Japan 225 – Trend bias: Sideways. Rallied as expected and surpassed the 22650/750 intermediate resistance/target. Right now, it is hovering below the 23020 key medium-term range resistance (refer to the latest weekly technical outlook) with the 4 hour Stochastic oscillator at an extreme overbought level of 97. Prefer to turn neutral first between 23020 and 22690 (the 17 Jul 2018 minor swing low + minor ascending trendline from 11 Jul 2018 low). An hourly close below 22690 sees a deeper pull-back towards the 22355 support (minor swing high areas of 27/29 Jun 2018 + 50% Fibonacci retracement from 11 Jul 2018 low to today, 18 Jul Asian session current intraday high of 22954). On the flipside a clearance above 23020 opens up scope for a further potential push up to target the next intermediate resistance at 23550/650.
  • Hong Kong 50 – Trend bias: Corrective rebound in progress. 28000 remains the key major support to watch (the swing low areas of 19 Oct/07 Dec 2017 & the primary ascending trendline in place since Feb 2016 low) to maintain a potential corrective rebound scenario to retest 28500 intermediate resistance (a upper boundary of a minor “Symmetrical Triangle” range configuration in play since 10 Jul 2018 high of 28980). However, a daily close below 28000 opens up scope for a multi-month corrective decline with the first intermediate downleg potential target at the 27400/290 support (the swing low areas of  06/28 Sep 2017).
  • Australia 200 – Trend bias: Up move remains intact. The recent pull-backed from its 10 Jul 2018 high of 6318 has managed to stage at the 6205/200 level (the pull-back support of the former minor “Symmetrical Triangle” range resistance from 23 Jun 2018 high). Maintain bullish bias in any dips above 6219 key short-term support (the pull-back of the former minor descending trendline from 13 Jul 2018 high + 61.8% Fibonacci retracement of yesterday’s rally from 17 Jul 2018 low of 6196 to today, 18 Jul Asian session current intraday high of 6235) for a further potential push up to retest the intermediate resistance at 6290 in the first step (minor swing high areas of 10 Jul/13 Jul 2018). However, failure to hold at 6219 sees another choppy slide to retest 6205/200.
  • Germany 30 – Trend bias: Corrective rebound extends. The Index had a daily close above the 12630 key medium-term range resistance which validated a further potential corrective mean reversion rebound in place since 12100 swing low of 28 Jun 2018. Flip back to a bullish bias in any dips above 12600 key short-term support (former minor swing high area of 16 Jul 2018) for a further potential push up to target the next intermediate resistance at 12900/950 (the former swing high areas of 05/12 Jun 2018 + Fibonacci retracement/projection cluster). However, failure to hold at 12600 implies a failure bullish breakout for another slide back into the 12630/12100 medium-term range configuration for a test on the 12400/390 minor swing low area of 11 Jul 2018 in the first step.  

*Levels are obtained from City Index Advantage TraderPro platform


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