Daily Global Macro Technicals Trend Bias/Key Levels (Fri 16 Mar)
Kelvin Wong March 16, 2018 4:37 AM
Mix bag in FX space with USD strength remains on resistance against GBP & JPY. Major stock indices are trapped in sideway ranges, the S&P 500 needs to break above 2760 to trigger a potential short-term up move in options expiration today.
FX – Mix bag while USD strength remains on resistance against GBP & JPY
- EUR/USD – Broke below the 1.2340 key short-term support that invalidate the push up scenario within a minor “triangle range” configuration in place since 16 Feb 2018 high. Right now, the pair is likely to shape a potential short-term push down within the aforementioned range configuration. Turn bearish in any bounce below 1.2350 (former minor swing low of 14 Mar 2018 + 61.8% Fibonacci retracement of yesterday’s decline from its Asian session high of 1.2383 to today, 16 Mar Asian session current intraday low of 1.2295) for a further slide to retest 05/09 Mar 2018 swing low area of 1.2280/2265 which also confluences with the 61.8% Fibonacci retracement of the previous up move from 01 Mar 2018 low to 08 Mar 2018 high. On the flipside, a clearance above 1.2350 should invalidate the bearish tone for a push up to retest the minor triangle range resistance of 1.2400/2410.
- GBP/USD - Yesterday’s slide seen in the U.S. session has managed to stall at 1.3910 key short-term support (pull-back support of the “Flag” bullish breakout + former minor range resistance of 06/13 Mar 2018). No change, maintain bullish bias above 1.3910 support now with 1.4000 as the upside trigger level (minor range resistance that has formed since 14 Mar 2018). A break above 1.4000 is likely to reinforce a further potential push up to retest 1.4140 in the first step (16 Feb 2018 minor swing high + close to 61.8% Fibonacci retracement of the recent decline from 25 Jan high to 01 Mar 2018 low). However, failure to hold above 1.3910 should indicate a failure bullish breakout for a slide back to retest 1.3780 (minor swing low of 09 Mar 2018).
- AUD/USD – Recalled that we had turned neutral yesterday after its up move has almost met the 0.7920/7935 short-term resistance/target due to the bearish divergence signal seen in the 4 hour Stochastic oscillator. Yesterday, the pair broke below the 0.7840 short-term lower neutrality zone which validated a potential short-term push down scenario. Turn bearish in any bounce below 0.7850 key short-term resistance (former minor swing low of 14 Mar 2018 + pull-back resistance of the former ascending channel support from 01 Mar 2018 low) for a further slide to retest the 01 Mar 2018 swing low area of 0.7715. However, a clearance above 0.7850 should negate the bearish tone a squeeze up to retest the descending trendline from 27 Jan 2018 now resistance at 0.7900.
- NZD/USD – Broke below 0.7300 key short-term support that invalidated the push up scenario to retest the 0.7435 medium-term swing high areas of 24 Jan/16 Feb 2018). Turn bearish now in any bounce below 0.7300 key short-term resistance (former minor swing low of 14 Mar 2018 + pull-back resistance of the former ascending channel support from 01 Mar 2018 low) for a further potential push down to retest the 0.7200 significant neckline support of an impending medium-term bearish “Double Top” configuration in shape since 24 Jan 2018 high. On the other hand, a clearance above 0.7300 should negate the bearish tone a squeeze up to retest the 0.7435 range resistance.
- USD/JPY – Expected bearish tone still prevailed as expected as yesterday, 15 Mar U.S. session push up had stalled below the predefined 106.80 key short-term resistance (14 Mar U.S. session high + close to the minor descending trendline from 13 Mar 2018 high). Maintain bearish bias in any bounce below adjusted key short-term resistance now at 106.42 (yesterday, 15 Mar U.S. session high) for a further residual push down to retest the 105.50/25 key medium-term support (also the ascending trendline from Jun 2016 low). However, a break above 106.40 should invalidate the bears to restart the corrective rebound phase to target the 107.50/60 resistance in the first step (range resistance area of mid Feb to 27 Feb 2018).
Stock Indices (CFD) – Testing/holding at supports with options expiration in U.S.
- US SP 500 – Traded sideways in yesterday, 15 Mar U.S. session between the 2755/40 key short-term support & the 2760 upside trigger level (refer to yesterday report for details). It tested the 2760 level but failed to have an hourly close above it. Sector rotation analysis still paints a positive picture as the high beta S&P Technology sector and even the Industrials & Financials outperformed the benchmark S&P 500 in yesterday U.S. session. These sectors ETF; Technology (XLK), Industrials (XLI) & Financials (XLF) recorded gains of 0.06% , 0.29% & 0.03% respectively versus a loss of 0.08% seen in the S&P 500. No change, maintain bullish bias above 2755/40 key short-term support with 2760 remains as the upside trigger (the minor descending trendline from 13 Mar high) to reinforce a potential recovery to retest 2802 (13 Mar high) before targeting the next intermediate resistance at 2835 in the first step. (minor range resistance from 31 Jan/02 Feb 2018 + Fibonacci projection cluster). However, failure to hold above 2740 should see a deeper pull-back towards the next support at 2700/2680 (key medium-term support + lower boundary of the medium-term ascending channel from 06 Feb 2018 low).
- Japan 225 – No change, maintain bullish bias above 21680/500 key short-term support for a potential push up to retest the 21880 minor range resistance from 15 Mar 2018. On the flipside, a break below 21500 should negate the bullish tone to trigger a deeper pull-back to test the next support at 21200/21180 (minor swing low area of 07 Mar 2018).
- Hong Kong 50 – No change, maintain bullish bias in any dips above 31060 key short-term support (the minor ascending channel support from 05 Mar 2018 low + 38.2% Fibonacci retracement of the up move from 07 Mar 2018 low to 13 Mar 2018 high) to target the 31800 key medium-term upside trigger level in the first step (the gapped down seen on 06 Feb 2018 + 61.8% Fibonacci retracement of the recent decline from 29 Jan high to 09 Feb 2018 U.S. session low). However, failure to hold above 31060 should invalidate the recovery for a deeper slide to retest the 30100/30070 key medium-term support (refer to latest weekly technical outlook for details).
- Australia 200 – Challenging the 5950 upper limit of the short-term neutrality zone. An hourly close above 5950 is likely to trigger a further potential push up to test the next intermediate resistance at 6000/6010 (the upper limit of a potential triangle range configuration in place since 27 Feb 2018 high + 76.4% Fibonacci retracement of this week decline from 12 Mar high to 15 Mar 2018 low). On the flipside, a break below 5910 should negate the bulls for a deeper slide to retest the 5880 key medium-term support.
- Germany 30 – Broke above 12300 upper limit of the short-term neutrality zone. Turn bullish now in any dips above 12230 key short-term support (close to yesterday, 15 Mar European session low + minor ascending trendline from 14 Mar 2018 low) for a further potential push up to test the 12550 neckline resistance of an impending “Double Bottom” in shape since 06 Feb 2018 low. However, failure to hold above 12230 should negate the bulls for another round of choppy decline to retest the 11900/11800 major support zone.
Commodities – Gold is testing short-term support at 1317/12
- Gold – Tested the 1317 key short-term support and formed an hourly “Doji” candlestick pattern in today, 16 Mar Asian session coupled with a bullish divergence signal seen in the hourly Stochastic oscillator. These observations suggest the downside momentum of yesterday’s decline has started to abate. Tolerate the excess and maintain a bullish bias at the 1317/1312 key short-term support (minor swing low of 09 Mar 2018) for a potential push back up towards the minor range resistance of 1327/29 (where the previous up move stalled on 14 Mar 2018). However, a break below 1312 reinstates the bears for a slide towards the 1303/1300 medium-term range support.
- WTI Crude (Apr 2018) - No change, maintain neutrality stance between 60.15 (minor swing low areas of 02/09 Mar 2018) & 62.00 (descending trendline from 27 Feb 2018 high + minor swing high of 13 Mar 2018). Failure to hold above 60.15 opens up scope for a deeper slide to retest the medium-term support of 58.30/57.90 (swing low areas of 09 Feb/14 Feb 2018).
*Levels are obtained from City Index Advantage TraderPro platform
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