Daily Global Macro Technicals Trend Bias/Key Levels (Fri 26 Jan)

FX – USD down move is coming close to major supports

  • EUR/USD – Pushed up as expected and hit the lower limit of a major resistance/target of 1.2520/2560 (printed a high of 1.2537) during ECB Draghi press conference before it pull-backed in yesterday, 25 Jan late U.S. session after U.S President Trump’s remark that he favoured a strong USD on the sidelines in Davos (WEF). The pull-backed has led the pair to rest just above predefined key short-term support of 1.2340/2320.  Based on Elliot Wave/fractal analysis and hourly momentum indicators (RSI & Stochastic), the pair can still see a potential residual push up to target the upper limit of the major resistance at 1.2560 (Fibonacci cluster + exit potential of the “Double Bottom” bullish breakout configuration formed in Mar 2015 to July 2017) holding above the 1.2340/2320 support.  On the other hand, failure to hold above 1.2320 should trigger a minor corrective decline towards the 1.2215/2160 support zone (38.2% Fibonacci retracement of  the up move from 13 Dec 2017 low to yesterday high + 18 Jan 2018 swing low).
  • GBP/USD – Pull-back and tested the 1.4100 key short-term support before it staged a rebound in today Asian session. No change, maintain bullish bias for potential residual push up  above 1.4100/4080 (yesterday, 25 Jan U.S. session low) to target the next resistance at 1.4500/4570 Fibonacci cluster +  major congestion zone of Feb/May 2016 before Brexit vote). However, a break below 1.4100/4080 should negate the bullish tone to see a minor corrective decline towards the next support at 1.4000/3930 (the former minor swing high areas of 18/19 Jan 2018).
  • AUD/USD – Tested the 0.8040/20 key short-term support before it staged a rebound in today’s Asian session. Based on Elliot Wave/fractal analysis and hourly momentum indicators (RSI & Stochastic), the pair can still see a potential residual push up to target the major resistance at 0.8130/8170 (Fibonacci cluster + swing high of 08 Sep 2017 + major pull-back resistance of a former ascending trendline from Apr 2001 low). On the flipside, failure to hold above 0.8020 should negate the bullish tone for a minor corrective slide towards the  next support at 0.7960 (23 Jan 2018 low + ascending channel support from 09 Dec 2017 low).
  • NZD/USD – Broke below the 0.7310 key short-term support before it pushed back in today Asian session. However, the daily RSI oscillator has flashed a bearish divergence signal at its overbought region which indicates a slow-down in the medium-term upside momentum of price action. Time to be cautious for the bulls, prefer to turn neutral now between 0.7270  (19/22 minor swing low areas + ascending channel support from 08 Dec 2017 low) & 0.7390. Only clearance above 0.7390 is likely to revive the bullish tone for another potential upleg to target the 0.7530 major resistance.
  • USD/JPY – Pushed up and stalled right below the upper limit of the predefined 109.50/80 key short-term resistance. Based on Elliot Wave/fractal analysis and hourly/4-hour momentum indicators (RSI & Stochastic), the pair can still see a residual push down to target the major support zone of 108.40/108.00 (Fibonacci projection cluster + major ascending trendline from Jun 2016 low) holding below the 109.80 resistance. On the flip side, a clearance above 109.80 should dampen the bears for a corrective rebound to retest 110.25 and 110.80 resistances (former swing low areas of 16/17 Jan 2018 + descending trendline from 08 Jan 2018 high + former swing low of 27 Nov 2017).

Stock Indices (CFD) – Mix bag with Japan & Germany showing risk of further downside to test their key medium-term supports

  • US SP 500 – Traded sideways above the 2825/23 key short-term support. No change, maintain bullish bias above 2825/23 key short-term support (also the ascending channel support from 30 Dec 2017 low) for another potential upleg to target 2860 next  (lower limit of the 2nd medium-term resistance-see latest weekly technical outlook). On the flipside, failure to hold above 2825/23 should negate the bullish tone for a deeper pull-back to test the next support at 2814/10 (former minor range top from 16 Jan/20 Jan 2018).
  • Japan 225 –  Broke below the 23650 lower neutrality range zone. Hourly momentum indicators (RSI & Stochastics) are advocating that short-term downside momentum of price action remains intact. Turn bearish below 23800/830 key short-term resistance (minor descending trendline from 23 Jan 2018 high + 50% Fibonacci retracement of the decline from 23 Jan 2018 high to yesterday, 25 Jan U.S. session) for a further potential push down to target the 23400/23325 key medium-term support (see weekly technical outlook).
  • Hong Kong 50 – Pull-backed managed to stall above the 32350 key short-term support with bullish divergence signal seen in the hourly Stochastic oscillator at its oversold region. No change, maintain bullish bias above 32350 for a potential push up to target 33330 next (lower limit of medium-term resistance zone-see latest weekly technical outlook). However, failure to hold above 32350 should negate the bullish tone for a deeper pull-back towards the 32000/31850 support.
  • Australia 200 – Traded sideways above 6030/18 key short-term support. Maintain bullish bias for a potential push up to test 6109 (the medium-term upper neutrality range -see weekly technical outlook). However, failure to hold above 6030/18 should negate the short-term bullish tone to see another slide to retest the 6000/5986 key medium-term support.
  • Germany 30 – Broke below the 13400/13340 short-term support and spiralled down towards the key medium-term support of 13130 (printed a low of 13220 in yesterday, 25 Jan European session). It seems that a strong EUR/USD is still having a negative impact on the European stock markets despite ECB Draghi’s optimistic  view on the on-going Eurozone recovery. Since  the EUR/USD still has the potential to shape a residual push up towards the major resistance of 1.2560 (see above), the Germany 30 is likely  to see another round of short-term/intraday weakness/push down towards the 13130 key medium-term support holding below the 13450 key short-term resistance (minor swing highs of 25 Jan 2018) before a potential recovery materialises. On the flipside, a break above 13450 may negate the bearish tone to see a revival of the bulls to retest the current all-time of 13600 in the first step.

Commodities – Gold & WTI are still holding above supports

  • Gold – Tested the 1350 key short-term support but no clear break below it (still holding above its medium-term ascending channel support from 12 Dec 2017 low). Tolerate the excess to 1342 (yesterday lo) and maintain bullish bias above the 1350/42 support for another round of potential push up towards the significant resistance of 1375/1378 (major upside trigger level for a potential multi-month up move). However, a break below 1342 should damage the medium-term uptrend for a minor corrective decline towards the next support at 1324/1317 (former swing high of 05/10 Jan 2018 + 38.2% Fibonacci retracement of the up move from 12 Dec 2017 low to 25 Jan 2018 high).
  • WTI Crude (Mar 2018) – Yesterday, 25 Jan U.S. session pull-backed from its 66.66 high has managed to stall right at the 64.90 predefined tightened key short-term support. The 4 hour Stochastic oscillator has started to inch up from its oversold region which suggests a potential revival of short-term upside momentum of price action. Maintain bullish bias above 64.90 support for another round of potential upleg to retest 66.66 before targeting the next near-term resistance at  67.60/68.40 (Fibonacci projection cluster + upper boundary of medium-term ascending channel from 14 Dec 2017 low). Below 64.90 should negate the bullish tone for a deeper slide to retest the minor range support of 63.00/62.80 in place since 12 Jan 2018. 

*Levels are obtained from City Index Advantage TraderPro platform


  

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