Daily Global Macro Technicals Trend Bias/Key Levels (Fri 20 Apr)

Short-term USD strength resurfaces. No negative ripple effect yet despite yesterday's weak performance seen in the U.S S&P 500, watch the 2680/70 support next.

FX – Short-term USD strength resurfaces

  • EUR/USD – Trend bias:  Push up towards “triangle range” resistance. The pair is still holding/testing the 1.2340/2336 (excess) key short-term support and given the USD strength revival seen in the rest of the majors, it needs to break above 1.2380 (minor descending trendline from 17 Apr 2018) to increase the conviction for a further push up scenario  to target the upper boundary/resistance of the “triangle range” at  1.2420/2440 (also a Fibonacci cluster). On the other hand, failure to hold at 1.2345/2336  opens up scope for a deeper slide back towards the intermediate support of 1.2280/2265 (the former minor swing high areas of 05/07 Apr 2018).
  • GBP/USD - Trend bias: Corrective decline within medium-term uptrend remains in progress.  Declined as expected and hit the short-term support/target of 1.4090 (refer to yesterday report). Maintain bearish bias in any bounce below adjusted key short-term resistance now at 1.4175 (former minor swing low areas of 18/19 Apr 2018 + minor descending trendline from 17 Apr 2018) for a further potential slide to target the next support at 1.3990/3960 (05 Apr 2018 minor swing low + Fibonacci cluster).  However, a clearance above 1.4175 negates the bearish tone to see a squeeze back up towards 1.4280/4345 (the range resistance from late Jan 2018 that saw a failure bullish breakout recently on 17 Apr 2018).
  • AUD/USD – Trend bias: Unclear.  Broke above 0.7790 in yesterday, 19 Apr Asian session and printed an intraday high of 0.7813. But lack of bullish follow through as it declined and tumbled below the 0.7740 keys short-term support in the U.S. session.  Yesterday’s slide seen in the U.S session has led to pair to rest just above a near-term minor support of 0.7690 (former congestion area of 06/10 Apr 2018) coupled with a bullish divergence signal seen in the short-term hourly Stochastic oscillator at its oversold region. Risk of a minor mean reversion rebound to retrace yesterday’s down move, prefer to turn neutral first between 0.7690 &  0.7760 (former minor range support from 11 Apr 2018 low + 50% Fibonacci retracement of the current slide from 19 Apr high to today,20 Apr Asian session current intraday low of 0.7705).  A break below 0.7690 shall see a further extension of the  down move to target the key major support of 0.7650/7600 (swing low areas of 29 Mar/09 Apr 2018 + long-term “Ascending Wedge” support from Jan 2016 low).
  • NZD/USD - Trend bias: Unclear. Tumbled as expected and hit the intermediate support of 0.7275/7260. The pair is now resting a minor support of 0.7240/7230 (minor swing low area of 06 Apr 2018 + Fibonacci cluster) coupled with a bullish divergence signal seen in the short-term hourly Stochastic oscillator at its oversold region. Risk of a minor mean reversion rebound to retrace yesterday’s down move, prefer to turn neutral first between 0.7230 &  0.7315 (minor descending trendline from 13 Apr 2018 high + 50% Fibonacci retracement of the current slide from 13 Apr high to today,20 Apr Asian session current intraday low of 0.7250). A break below 0.7230 shall see a further extension of the  down move to target the medium-term range support of 0.7190/7170.
  • USD/JPY - Trend bias: Push up within range.  Continued to inch higher as expected. Maintain bullish bias in any dips with adjusted key short-term support now at 107.25 (yesterday, 19 Apr U.S. session low +  minor ascending trendline from 17 Apr 2018 low) with 107.80 remains as the upside trigger level (former medium-term swing low area of 08 Sep 2017 that was tested & retreated on last Fri, 13 Apr) and a clear break (an hourly close) above 107.80 reinforces a further potential up move to target the next intermediate resistance at 108.45 (former medium-term swing low area of 26 Jan 2018 + 38.2% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low).  However, failure to hold at 107.25 negates the bullish tone to see a deeper pull-back to test the 106.90/80 support (17 Apr 2018 swing low + former range resistance from 09/28 Mar 2018).

Stock Indices (CFD) – Despite yesterday’s sell-off seen in S&P 500, no negative ripple effect, watch 2680/70 support next

  • US SP 500 – Trend bias:  Push up towards “Symmetrical Triangle” resistance. Broke below the 2700 key short-term support and shaped the alternate scenario that saw a deeper pull-back towards the 2680/70 (printed a low of 2681 in yesterday, 19 Apr U.S session). Yesterday’s decline was reinforced by a weak revenue guidance from the world largest semiconductor chip maker, TSMC due to an expectation of slower smart phones sales. Apple is a significant customer of TSMC which represents close to 20% of TSMC’s global revenue and Apple’s share took a hit and tumbled by 2.8%. Despite yesterday’s weak performance seen in the S&P 500, it did not cause a ripple effect into other key stocks or sectors; other high beta FANGs stocks such as Amazon, Alphabet/Google, Facebook) managed to close with a positive gain. Also, another key S&P sector; the Financials which has a significant weightage (the 2nd largest) of 14.6% in the S&P 500 saw its respective ETF (XLF) outperformed the S&P 500 with a gain of 1.53%. Technically, yesterday’s decline has led the S&P 500 to now rest on its minor ascending trendline from 04 Apr 2018 low now acting as a support at 2780 which confluences with the former minor range resistance from 27 Mar/05 Apr 2018 at 2670 and close to the 23.6% Fibonacci retracement of the up move from 07 Apr 2018 low to 18 Apr 2018 high. In addition, the 4 hour Stochastic oscillator has shaped an exit from its oversold region which suggests that yesterday’s decline has been overstretched. Maintain bullish bias above 2680/70 support with 2708 as the upside trigger level to reinforce a further potential push up to target the medium-term resistance/risk zone of 2740/50 (upper boundary of “Symmetrical Triangle” in place since its all-time high of 27 Jan 2018 + Fibonacci cluster). On the other hand, failure to hold at 2670 invalidates the recovery scenario for an extension of the down move towards the 2585 key medium-term support (the lower boundary of the “Symmetrical Triangle” in place since 06 Feb 2018 low.
  • Japan 225 Trend bias: Pushed up within sideways range. Tested the adjusted key short-term support of 20100 in yesterday, 19 Apr U.S. session to print an intraday low of 22050 before it rebounded back above 20100 towards the close of the U.S. session coupled with a bullish divergence signal seen in the shorter-term hourly Stochastic oscillator at it oversold region. Tolerate the excess and maintain the bullish bias with 22100/22050  remains as the key short-term support for a further potential push up to target the next intermediate resistance at 22510/600 (upper boundary of the minor ascending channel in place since 26 Mar 2018 low + medium-term swing high area of 27 Feb 2018). On the flipside, failure to hold at 22050 sees a deeper pull-back to retest the 21900 support (former minor range resistance from 05 Apr/16 Apr 2018).
  • Hong Kong 50 - Trend bias: Push up within sideways range. Maintain bullish bias in any dips above adjusted key short-term support at 30350 (minor ascending trendline from 18 Apr 2018 low + former minor swing high area 17 Apr 2018) for a further potential push up to target the next intermediate resistance at 31165 (former minor range support from 14/20 Mar 2018 that was tested & rejected on 12 Apr 2018). However, failure to hold 30350 negates the bullish tone to see another round of slide to retest the key short-term support of 30000/29950 (psychological level +  former swing low areas of 23 Mar/03 Apr 2018 + 61.8% Fibonacci retracement of the up move from 04 Apr 2018 low to 12 Apr 2018 high).
  • Australia 200 – Trend bias: Sideways.  Maintain neutrality stance between 5910 and 5850 (the former minor swing high areas of 10/11 Apr 2018). Only a clear break above 5910 (an hourly close above it) validates a further potential up move to target the next intermediate resistance at 5960 (minor swing high of 21/22 Mar 2018) in the first step.
  •  Germany 30Trend bias: Push up within sideways range.  The Index has managed to hold the 12500 key short-term support despite the weak performance seen in the major U.S. stock indices.  Maintain bullish bias with 12500 remains as the key short-term support (the pull-back support of the former neckline resistance of a  minor “Double Bottom” configuration from 07 Feb 2018 high) for a further potential push up to target the next intermediate resistance at 12750/865 (former range support from 15 Nov 2017/02 Jan 2018 + 61.8% Fibonacci retracement of the decline from its current all-time high printed on 23 Jan 2018 to 06 Feb 2018 low). On the other hand, a break below 12500 negates the bullish tone for a deeper pull-back towards the next intermediate support at 12400 (former minor swing high areas of 16 Mar/10 Apr 2018 + 23.6% Fibonacci retracement of the on-going up move from 26 Mar 2018 low to 18 Apr high of 12640).

Commodities – Sideways configuraitons

  • WTI Crude (Jun 2018) - Trend bias: Sideways.  Yesterday’s pull-back from its intraday high of 69.55 (close to the resistance/target of 69.90 – refer to yesterday report) has managed to hold at the 68.00 key short-term support (psychological + minor ascending trendline from 17 Apr 2018 low). However, It ended yesterday, 19 Apr U.S. session with a daily “Spinning Top” candlestick pattern which indicates indecisiveness by the bulls to push prices higher. Mix elements, prefer to turn neutral between 68.00 and 69.90. A break below 68.00 opens up scope for a  a deeper pull-back to retest the next intermediate support of 66.50/10 (former medium-term range resistance from 25 Jan/23 Mar 2018).
  • Gold - Trend bias: Sideways. Maintain neutrality stance between 1353 and 1332 (13 Apr 2018 minor swing low. Short-term bears need to see a break below 1332 (an hourly close below it) to trigger a deeper slide towards to test the 1322/1320  minor swing low area of 06 Apr  2018

*Levels are obtained from City Index Advantage TraderPro platform


  



Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.