Daily Global Macro Technicals Trend Bias/Key Levels (Fri 23 Feb)

Signs of USD weakness have resurfaced except against the NZD. Stock indices remain firm above supports with U.S. S&P 500 rebounded from 2690 key inflection level. Downside momentum has started to abate in Gold.

FX – Signs of USD weakness has resurfaced except against NZD

  • EUR/USD – Recalled that we had highlighted in our report yesterday that the recent decline since its 1.2555 high printed on last Fri, 16 Feb had reached an inflection level (based on Elliot Wave/fractal analysis coupled with readings seen from short-term momentum indicators), the pair had indeed staged a rebound in yesterday, 22 Feb European session close to the 14 Feb 2018 minor swing low of 1.2276 (post Jan U.S. CPI data release) which also confluences with a medium-term ascending trendline support from 07 Nov 2017 low and ended yesterday U.S. session with a daily bullish candlestick after a series of bearish candlesticks since 16 Feb 2018. Flip back to a bullish bias above 1.2276/2260 key short-term support with 1.2370 as the upside trigger (former minor swing low area of 19 Feb 2018 that was rejected on 21 Feb U.S. session) to reinforce a potential push up towards the recent range resistance of 1.2506/2555 in the first step. On the flipside, failure to hold above 1.2260 should invalidate the push scenario for a slide to test the key 1.2200 neckline support of an impending “Double Top” that is forming since 01 Feb 2018 high.
  • GBP/USD – Pushed up but still below the 1.4010 key short-term resistance as per highlighted in yesterday’s report. However, the conviction to see a slide to retest the 1.3800 low of 14 Feb 2018 has been reduced due to positive elements seen in EUR/USD coupled with a daily bullish “Hammer” candlestick seen in the GBP/USD after the end of yesterday, U.S. session. Prefer to turn neutral now between 1.3857 (yesterday low) & 1.4080 (descending trendline resistance from 25 Jan 2018). A break above 1.4080 is likely to reinforce the start of another potential upleg to target the recent Jan medium-term swing high of 1.4345.
  • AUD/USD – Pushed up slightly above the 14 Feb 2018 minor swing low of 0.7773 and tested the 0.7860 upper limit of the short-term neutrality zone (refer to yesterday report for details). Thereafter, it started to pull-back in a series of “small-bodies” candlesticks  as seen in the hourly chart and formed a bullish “Flag” continuation chart pattern. Turn bullish above  0.7790/7770 key short-term support with 0.7860 as upside trigger to reinforce a potential push up towards 0.7900 near-term resistance (former minor range support from 15 Feb/20 Feb 2018) follow by the recent 16 Feb swing high area of 0.7970. However,  a break below 0.7770 is likely to trigger another downleg to target the  next near-term support at 0.7650 (76.4% Fibonacci retracement of the previous up move from 08 Dec 2017 to 26 Jan 2018 + congestion area of 27 Oct/05 Dec 2017).
  • NZD/USD – Inched lower as expected after initial push up seen in yesterday, early U.S. session was rejected below the predefined 0.7370 key short-term resistance. Maintain bearish bias below adjusted key short-term resistance now at 0.7365 (yesterday U.S. session high) for a further potential push down to retest the 14 Feb 2018 low of 0.7240. However, a break above 0.7365 is likely to reinstate the bulls for a push up towards the 0.7485/7500 major range resistance in place since 07 Sep 2016.
  • USD/JPY – Declined as expected and hit the first short-term support/target of 106.70 (refer to yesterday report for details) and ended yesterday U.S. session with a daily bearish “Marubozu” candlestick. Maintain  bearish bias with a tightened key short-term resistance now at 107.26 (former minor swing low of 22 Feb 2018 + 50% Fibonacci retracement of yesterday’s decline from 21 Feb 2018 U.S. session high to yesterday, 22 Feb U.S. session low) for a further potential slide to retest the recent 105.55 swing low of 16 Feb 2018. On the flipside, a clearance above 107.26 should invalidate the bearish scenario for a squeeze up towards the 108.30/50 resistance (upper boundary of a descending channel in place since 08 Jan 2018 + former minor range support from 27 Jan 2018 low + the 0.382% Fibonacci retracement of the decline from 08 Jan 2018 high to 16 Feb 2018 low).

Stock Indices (CFD) – Holding above supports with a rebound seen on the S&P 500 at the 2690 inflection level

  • US SP 500 –  The Index had managed to rebound right at the 2690 inflection level (refer to yesterday report for details) and recovered almost the losses triggered after the release of the Fed FOMC minutes on 21 Feb late U.S. session. Maintain bullish bias in any dips  above 2990/83 key short-term support for a further potential push up to retest the 2745 medium-term upside trigger level (61.8% Fibonacci retracement of the decline from 29 Jan high to 06 Feb 2018 low). A daily close above 2745 is required the increase the conviction for the start of another potential impulsive upleg to target the next near-term resistance at 2800/2810 in the first step (former minor swing low area of 01 Feb 2018). On the other hand, failure to hold above 2683 should see an extension of the decline to test the 2662 key medium-term support (see latest weekly technical outlook).
  • Japan 225 –  Managed to hold above the predefined 21570 key short-term support. No change, maintain bullish bias above 21570 support for a potential push up to retest the near-term resistance zone of 22185/22250 (21 Feb 2018 high +  minor swing high area of 07 Feb 2018).  However, a break below 21570 should negate the bullish tone for a slide back to retest the 21000 minor swing low areas of 13/14 Feb 2018.
  • Hong Kong 50 – Started to shape a rebound  above the 30700/560 tightened key short-term support as expected. Maintain bullish bias above 30700/560 support for another potential upleg to target the next near-term resistance at 31800/32000 (gapped down formed on 06 Feb 2018 + 61.8%  Fibonacci retracement of the decline from 29 Jan high to 09 Feb 2018 U.S. session low). However, failure to hold above 30700/560 should negate the bullish tone for a deeper slide to retest the next near-term support at 30075 (former minor swing high of 13 Feb 2018 +close to  61.8% Fibonacci retracement of the on-going up move from 09 Feb 2018 low to yesterday, 21 Feb 2018 U.S. session high).  
  • Australia 200 – Pushed up as expected and hit yesterday’s resistance/target of 5990. Recall that in our weekly technical outlook published earlier on Mon, 19 Feb, the 5990 level is the medium-term upside trigger level where a daily close above it should reinforce the start of the another potential medium-term (multi-week upleg).  Technical elements remain positive at this juncture with the daily RSI oscillator that has continued to inch upwards above the 50% level (an indication of upside momentum of price action). Maintain bullish bias in any dips above tightened key short-term support now at 5928 (yesterday low + close to the minor ascending channel support from 09 Feb 2018 U.S. session low) for a further potential upleg to target the next near-term resistance at 6100/6130 (aforementioned minor ascending channel resistance + Fibonacci projection cluster). On the flipside, a break below 5928 should negate the bullish tone for a deeper slide to retest the 5870 former minor swing high area of 13 Feb 2018.
  • Germany 30 – Challenged  12370/330 key short-term support before it staged a rebound (printed a low of 12281 in yesterday European session  but no hourly close below 12330)  Maintain bullish bias in any dips above 12370/330 support for a potential push up to test the 12650/12845 resistance in the first step (neckline of the minor “Double Bottom” in place since 06 Feb 2018 low + 61.8% Fibonacci retracement of the steep decline from 23 Jan 2018 high). However, failure to hold at 12370/330 should negate the bullish tone for a slide back to retest 14 Feb 2018 swing low area of 12110/12070.

Commodities – Downside momentum has started to abate in Gold, watch the 1336 resistance

  • Gold – Pushed up from 22 Feb Asian session low of 1321 but still the 1336 keys short-term resistance (refer to yesterday report for details). However, conviction for a push down to retest the 08 Feb 2018 low of 1309 has been reduced as the 4 hour Stochastic oscillator has traced out a bullish divergence signal at its oversold region (an indication that the recent downside momentum of price decline from 16 Feb 2018 high has started to abate). Thus, prefer to turn neutral between 1336 & 1321. A break above 1336 may see a push up towards 1346 near-term resistance(61.8% Fibonacci retracement of the recent decline from 16 Feb high to yesterday, 22 Feb 2018 low + former minor swing low area of 17/19 Feb 2018) and above it reinforces an up move towards the major range resistance zone of 1365/1378.
  • WTI (Apr 2018) – Clearance above 61.86 key short-term resistance has negated the bearish tone. Mix elements, prefer to turn neutral first between 63.15 (61.8% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 10 Feb 2018 low which is also closed to yesterday, U.S. session high of 63.09) & 60.76.  A clearance above 63.15 is likely to see a further push up to target the next near-term resistance at 64.40/65.00 (76.4% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 10 Feb 2018 low + descending trendline from 25 Jan 2018 high)

*Levels are obtained from City Index Advantage TraderPro platform



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