Daily Global Macro Technicals Trend Bias/Key Levels (Mon 05 Feb)

FX – Mix bag with AUD/USD showing risk of minor rebound

  • EUR/USD – Ended last Fri, 02Feb with a weekly “Spinning Top” candlestick pattern which suggests a lack of upside momentum. In the shorter-term, the pair has continued to evolve within a minor sideways range configuration in place since 25 Jan 2018. Maintain the bearish bias below the  adjusted key short-term resistance at 1.2520 (the minor range top + high of the weekly “Spinning Top” candlestick) for a potential push down to retest the minor range support at 1.2335/2320. However, a break above 1.2520 is likely to see a squeeze up towards the key 1.2560/2585 medium-term resistance (Fibonacci cluster + exit potential of the “Double Bottom” bullish breakout configuration formed in Mar 2015 to July 2017).
  • GBP/USD – Inched down as expected from the 1.4260 key short-term resistance.  No change, maintain bearish bias below 1.4260/80 resistance with 1.4000 as the downside trigger level to increase the conviction for a potential minor corrective decline to target the next near-term support at 1.3930 in the first step (the former minor swing high areas of 18/19 Jan 2018). Below 1.3930 exposes  1.3830/3800 support next (50% Fibonacci retracement of the up move from 18 Dec 2017 to 25 Jan 2018 high + major swing low areas of Jan 2009 + Jun 2001 that has been reintegrated above on 17 Jan 2018).  On the flipside, a break above 1.4260/80 should reinstate the bullish tone for another round of potential upleg to retest the recent high of 1.4345 before targeting 1.4500/4570 (Fibonacci cluster +  major congestion zone of Feb/May 2016 before Brexit vote).
  • AUD/USD – Decline as expected and hit the support/downside target of 0.7890/7880 (printed a current intraday low of 0.7890 in today, 05 Feb Asian session). The shorter-term 4 hour Stochastic oscillator has started to turn up from its oversold region coupled with a bullish divergence signal that highlights the risk of a corrective rebound to retrace the recent decline from its 27 Jan 2018 high of 0.8136. Turn bullish above 0.7880 key short-term support for a potential minor corrective rebound to target the near-term resistance of 0.7990 (close to 38.2% Fibonacci retracement of the on-going decline from 27 Jan 2018 high to current intraday low of 05 Feb 2018 + former minor swing low of 01 Feb 2018) and above 0.7990 sees 0.8040 next (61.8% Fibonacci of the on-going decline from 27 Jan 2018 high to current intraday low of 05 Feb 2018 + minor swing high area of 02 Feb 2018). On the other hand, failure to hold above 0.7880 should trigger an extension of the decline towards 0.7820/7800 next (swing low area of 09 Jan 2018 + 50% Fibonacci retracement of the up move from 08 Dec 2017 low to 27 Jan 2018 high).
  • NZD/USD – Inched down from the 0.7420 key short-term resistance as expected and right now, it is hovering above the 0.7270 downside trigger level (minor range support in place since 22 Jan 2018). No change, maintain bearish bias in any rebound below 0.7420 resistance with 0.7270 remains as the downside trigger level for a potential push down to target the next near-term support at  0.7200/0.7190 (former medium-term swing of 13 Oct 2017 + 38.2% Fibonacci retracement of the up move from 08 Dec 2017 to 24 Jan 2018). However, a clearance above 0.7420 should reinstate the bullish tone for a potential upleg to target the major resistance of 0.7485/7520 (swing high areas of 27 Jul 2017/06 Sep 2016).
  • USD/JPY – Rise in progress and hit the first corrective rebound target/resistance of 110.45 (printed a high of 110.48 on last Fri, 02 Feb 2018) as expected. Maintain bullish bias in any dips above tightened key short-term support at 109.20 (minor swing low areas of 01/02 Feb 2018 + 61.8% Fibonacci retracement of the recent up move from 30 Jan 2018 low to 02 Feb 2018 high) for a further corrective mean reversion rebound to target the next near-term resistance of 110.80/111.00 (former medium-term swing low area of 27 Nov 2017 + 50% Fibonacci retracement of the decline from 12 Dec 2017 high to 26 Jan 2018 low). However failure to hold above 109.20 should negate the bullish tone for a slide to retest the 108.30 support.

Stock Indices (CFD) – Potential relief rebound within medium-term downtrend

  • US SP 500 – Declined as expected  and hit both the short-term support/target at 2790 follow by the medium-term support/target of 2766 on last Fri, 02 Feb 2018. In today (05 Feb) Asian session, it gapped down to hit a minor support of 2740 (1.618 Fibonacci projection from the 29 Jan 2018 high that also confluences with the minor swing low areas of 08/10 Jan 2018) after ex Fed Chair Yellen commented  that U.S. stocks prices were elevated in a recorded interview broadcasted by CBS over the weekend. Interestingly, the shorter-term 4 hour Stochastic has reached an extreme overbought level which increases the probability of a relief rebound above 2740. Turn bullish above 2740/32 key short-term for a potential relief rebound towards the near-term resistance of  2768/2772 (former minor swing low areas of 12 Jan/17 Jan 2018 + 38.2% Fibonacci retracement of the recent decline from 31 Jan 2018 minor swing  to today current intraday low of 2732). However, a break below 2740/32 should see the continuation of the medium-term down move to target the next support at 2694 (see latest weekly technical outlook).
  • Japan 225 – Declined as expected and hit support/downside target of 22700/600 as per highlighted in last Fri, 02 Feb report. In today (05 Feb) Asian session, it printed a current intraday low of 22577 coupled with the 4 hour Stochastic oscillator that has started to inch up from its extreme oversold level. Risk of a minor rebound to retrace the recent decline from 23 Jan 2018 high, turn bullish above 22600/577 key short-term support (Fibonacci cluster + minor swing low areas of 15 Dec/30 Dec 2017) for a potential relief rebound to target the near-term resistance of 23100 (former minor swing low of 31 Jan 2018 + close to 38.2% Fibonacci retracement of the decline from 23 Jan to today low of 22577). On the flipside, failure to hold above 22600/577 should invalidate the relief rebound scenario for an extension of the decline towards the next support at 22400.
  • Hong Kong 50 –  Support/downside target has been met at 32150/32000 as per highlighted in last Fri, 02 Feb report. Today, Asian session gapped down has started to stablish at the 31800/700 minor support (minor congestion area of 17 Jan 2018 + close to the 1.00 Fibonacci projection of the recent decline from 29 Jan 2018 high to 31 Jan 2018 minor low of 32314 projected from 31 Jan 2018 minor swing high of 33021) coupled with a bullish divergence signal seen in the hourly Stochastic oscillator at its oversold region. Turn bullish in any dips above 31700 key short-term support for a minor rebound towards the near-term resistance of 32360/410 (former minor swing low area of 30 Jan 2018 + Fibonacci retracement cluster). However, failure to hold above 31700 should trigger the continuation of medium-term down move to target the next support at 31445/300 (see latest weekly technical outlook).
  • Australia 200 – Inched down from 6109/39 range resistance towards the medium-term range support of 5986 (see latest weekly technical outlook). The hourly Stochastic oscillator has flashed a bullish divergence signal at its oversold region which advocates a bounce back up towards the range resistance. Turn bullish above the 5986 range support for a potential push back up to retest 6068 (former minor swing low areas of 01/02 Feb 2018) and above sees 6109 next.  
  • Germany 30 – Support/downside target has been met at 12820/740 as per highlighted in last Fri, 02 Feb report. Right now, it is coming close to a minor support at 12430/355 (congestion zone of 30 Jun/04 Aug 2017 & the 2.618 Fibonacci projection of the decline from 23 Jan 2018 high to 25 Jan 2018 minor low projected from 29 Jan 2018 minor high) coupled with the 4 hour Stochastic oscillator that has started to turn up from an extreme oversold level. Turn bullish in any dips above 12430/355 key short-term support for a potential relief rebound towards the near-term resistance of 12845  (former range support from 15 Nov 2017 low + close to 38.2% Fibonacci retracement of the on-going decline from 29 Jan 2018 high to today’s current intraday low of 12534).  However, failure to hold above 12430/355 should see a further extension of the decline to test the key long-term support at 11900/800 (see latest weekly technical outlook).

Commodities – Watch the 1325 support for Gold

  • Gold – Bearish reaction as expected below the 1347/50 key short-term resistance and hit short-term support/target of 1327/25. Mix elements, prefer to turn neutral now between 1325 & 1342 (minor descending trendline from 25 Jan 2018 high). A break below 1325 may open up scope for a further corrective decline to target the next suport at 1309/1300 (swing low area of 09 Jan 2018 + close to 50% Fibonacci retracement of the up move from 12 Dec 2017 low to 25 Jan 2018 high).
  • WTI Crude (Mar 2018) – Last Fri, 02  Feb Asian session rally has managed to stall at its minor range resistance of 66.30 before it staged a pull-back. Current price action suggests that WTI is now “trapped” in a minor “triangle range” configuration in place since 25 Jan 2018.  Right now, it has retreated to test the “triangle range” support at 64.47 coupled with the hourly Stochastic oscillator that has started to turn up from its oversold region. Turn bullish above 64.47 key short-term support for a potential push up within the range towards the near-term resistance of 65.76 max 66.30 (range resistance). On the flipside, a break below 64.47 is likely to open up scope for a minor corrective decline towards the 62.25/61.60 support zone (former medium-term swing high area of May/Jun 2015).

*Levels are obtained from City Index Advantage TraderPro platform


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