Daily Global Macro Technicals Trend Bias/Key Levels (Fri 01 Jun)

Major stock indices are still Holding at/above supports amid a wall of worries from trade tensions and Eurozone political uncertainties

FX – Mix bag

  • EUR/USD – Trend bias: Short-term recovery scenario remains intact. The pair had managed to remain resilient despite the negative news flow from Spain’s politics where a no-confident vote is being tabled today, 01 Jun to force incumbent PM Rajoy out of office and the escalation of a full blown global trade war where U.S. White House  announced that steel and aluminium tariffs will be impose on EU, Canada and Mexico by today, 01 June after their temporary exemptions ended. The pair pull-backed from yesterday, 31 intraday high of 1.1724 and printed a low 1.1640 in the U.S. session which is right above the 1.1590/1570 predefined pull-back targeted range as per highlighted in yesterday report. Short-term momentum readings remain positive as the 4 hour Stochastic oscillator has started to inch upwards and has not reached an extreme overbought level of 94. Maintain bullish bias in any dips with adjusted short-term support now at 1.1600/1590 (50%/61.% Fibonacci retracement of the up move from 29 May low to yesterday, 31 May high of 1.1724 + minor swing low of 30 May 2018) for a further potential push up with 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). On the other hand, failure to hold at 1.1590 negates the recovery process for a slide to retest this week 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: Sideways. The pair did not have a positive momentum follow through after another attempt to break above the 1.3300 level (the former minor swing low areas of 23/26 May 2018). It printed an intraday high of 1.3348 in yesterday, 31 May European session before it pull-backed below 1.3300 in the U.S. session. Prefer to turn neutral now between 1.3350 and 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). An hourly close above 1.3350 is likely to open up scope for a potential short-term rebound towards the 1.3480 intermediate resistance (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) in the first step. On the flipside, failure to hold at 1.3200/3160 shall trigger a continuation of the down move to target the next support at 1.3000/2880 in the first step (swing low area of 06 Oct/03 Nov 2017 + 61.8% Fibonacci retracement of the multi-year up move from Oct 2016 low to 17 Apr 2018 high of 1.4377).
  • AUD/USD – Trend bias: Short-term mean reversion rebound scenario remains intact. The pair had started to stage a pull back from yesterday, 31 May high of 0.7593 with the 4 hour Stochastic oscillator now back at its oversold region. No change, maintain bullish bias above the 0.7520/7500 key short-term support (61.8% Fibonacci retracement of the push up from 30 May 2018 low to yesterday, 31 May 2018 high of 0.7593 + psychological) for a further potential push up to target the 0.7625/7655 resistance zone (pull-back resistance of the former major “Ascending Wedge” support from Jan 2016 low + 50%/61.8% Fibonacci retracement of the down move from 19 Apr high to 09 May 2018 low). A break below 0.7500 reinstates the bearish tone for a slide towards the next intermediate supports at 0.7450 (minor swing lows of 15/16 May 2018) follow by 0.7410 (swing low of 09 May 2018).
  • NZD/USD - Trend bias: Short-term mean reversion rebound remains in progress. The pair had continued to inch higher as expected and print a minor higher high of 0.7024 in yesterday, 31 May U.S. session. The hourly RSI oscillator has traced out a bearish divergence signal at its overbought region which highlights the risk of a pull-back to retrace some of the gains seen from the recent push up from the 30 May low of 0.6883. Maintain bullish bias in any dips above adjusted key short-term support now at 0.6970/6950 (former minor swing high of 22 May 2018 + 38.2%/50% Fibonacci retracement of the recent push up from 30 May low to 31 May 2018 high of 0.70240) for a further potential push up to target the next intermediate resistance at 0.7050/7060 (former minor swing high area of 04 May 2018 + Fibonacci projection/retracement cluster). On the other hand, failure to hold at 0.6970/6950 negates the bullish tone to see a deeper slide to retest the 30 May swing low area of 0.6890/6883.
  • USD/JPY - Trend bias: Short-term mean reversion rebound remains in progress. Inched higher as expected and cleared above the 109.10 level (former minor swing high areas of 29 May/30 May 2018 that has capped previous rebound since 2 days ago). A sign of positive momentum at least in the short-term. Maintain bullish bias in any dips with adjusted key short-term support now at 108.70 (the minor ascending trendline from 30 May 2018 low + today, 01 Jun Asian session current intraday low) for a further potential push up to target the intermediate resistance at 109.80 (minor swing high of 28 May 2018 + close to 50% Fibonacci retracement of the decline from 21 May high to 29 May 2018 low). However, a break below 108.70 invalidates the rebound scenario for a deeper slide to retest 108.40/20 (minor swing low areas of 31/30 May 2018).

Stock Indices (CFD) – Holding at/above supports amid a wall of worries from trade tensions and Eurozone political uncertainties 

  • US SP 500 – Trend bias: Push up within minor range configuration. Interestingly, yesterday, 31 May decline seen in the U.S. session had managed to stall right above the predefined 2696 key short-term support as per highlighted in yesterday report (printed a low of 2699) coupled with a positive momentum reading seen in the 4 hour Stochastic oscillator as it has started to inch up from its oversold region. No change, maintain bullish bias with 2696 remains as the key short-term support (61.8% Fibonacci retracement of the recent up move from 29 May low to 30 May 2018 U.S. session high) for a potential push up to retest 2728 (30 May 2018 minor high) before targeting the 2738/41 minor range resistance in place since 14 May 2018.
  • Japan 225 – Trend bias: Short-term recovery remains in progress. Yesterday’s slide seen in the U.S. session has managed to stall right above the 22000 key medium-term support (printed a low of 22015) No change, maintain bullish bias for a further potential push up to target the next intermediate resistance at 22500/620 (minor swing high areas of 25/28 May + descending trendline from 21 May 2018 high). On the other hand, a daily close below 22000 opens up scope for an extension of the down move to target the next support at 21360 (61.8% Fibonacci retracement of the up move from 24 Mar low to 21 May 2018 high + primary ascending channel support from Jun 2016 low). 
  • Hong Kong 50 – Trend bias: Push up within range configuration. Inched higher as expected and met the first intermediate resistance/target of 30500 (printed a high of 30673 in yesterday, 31 May Asian session) No change, maintain bullish bias in any dips with adjusted key short-term support at 30200/100 (yesterday, 31 May Asian session low + 61.8% Fibonacci retracement of the recent push up from 29 May U.S. session low to 31 May 2018 high of 30673) for another round of potential push up to target the next intermediate resistance at 30800 (minor swing high areas of 24/28 May 2018). Failure to hold at 30100 sees a further slide to retest the 29900 minor range support from 26 Apr/07 May 2018.
  • Australia 200 – Trend bias: Sideways. Drifted lower in yesterday, 31 May U.S. session to challenge the 5980 key medium-term support (pull-back support of the former “Symmetrical Triangle” resistance from 09 Jan 2018 + 38.2% Fibonacci retracement of the up move from 04 Apr low to 10 May 2018 high) but managed to have a daily close above 5980. Due to the lack of upside momentum, prefer to turn neutral first between 6010 (minor descending trendline from 30 May minor swing high) and 5980. An hourly close above 6010 reinstates the potential short-term rebound scenario towards the intermediate resistance at 6068 (minor descending trendline from 14 May 2018 high + 61.8% Fibonacci retracement of the recent decline from 14 May high to 29 May U.S. session low of 5943. On the other hand, a daily close below 5980 opens up scope for a deeper corrective decline to target the next support at 5870/850 (61.8% Fibonacci retracement of the up move from 04 Apr 2018 low to 10 May 2018 high + former minor swing high areas of 27 Mar/10 Apr 2018).
  • Germany 30 – Trend bias: Sideways. Staged another intraday waterfall slide as its being hit by both trade tension between US/EU and on-going political uncertainties in Italy and Spain. The Index printed an intraday low of 12545 before it recovery and had a daily close slightly above the 12600 medium-term support (former range resistance of a medium-term “bottoming” configuration from early Feb 2018/26 Mar 2018). Lack of upside momentum, prefer to turn neutral first between 12600 and 12825 (minor swing high area of 30 May 2018 that stalled right at the former minor swing low areas of 24/28 May 2018). Only an hourly close above 12825 reinstates the bullish tone for a potential push up to retest the 13000/13050 intermediate resistance (minor swing high area of 28 May 2018 before the recent steep decline occurred). On the other hand, a daily close below 12600 sees a deeper corrective decline towards the next support at 12300/200  (swing low area of 25 Apr 2018 + primary ascending trendline from Feb 2016 low + 61.8% Fibonacci retracement of the up move from 26 Mar low to 22 May 2018 high).

*Levels are obtained from City Index Advantage TraderPro platform




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