Daily Global Macro Technicals Trend Bias/Key Levels (Mon 07 May)

Recent USD strength at risk of a setback in EUR & GBP. S&P 500 remains bullish for a potential residual push up within range. Bullish breakout in WTI Crude.

FX –  Mix bag with risk of USD strength setback seen in EUR & GBP

  • EUR/USD – Trend bias: Coming close to short-term support, risk of mean reversion rebound/consolidation. The pair inched lower post U.S. NFP data release on last Fri, 04 May 2018 below the predefined adjusted key short-term resistance at 1.2065 to print a U.S. session low of 1.1910 which is just 20 pips above the 1.1890 short-term support/target (former medium-term swing high areas of 24 Nov/01 Dec 2017 that was tested & held on 10 Jan 2018 + Fibonacci projection cluster – refer to previous report). Elliot Wave/fractal analysis, candlestick pattern (an emergence of a daily bullish “Hammer” candlestick at the end of last Fri, 04 May U.S. session and momentum indicator (bullish divergence signal seen in the 4 hour Stochastic oscillator at the its oversold region) advocates the risk of a mean reversion rebound/consolidation at this juncture. Flip to a bullish bias above 1.1890 key short-term support with 1.2030 as the upside trigger level (minor swing high areas of 02/03 May 2018) and an hourly close above 1.2030 is likely to reinforce a further push up to target the next intermediate resistance at 1.2130/2180 (former minor swing low areas of 18 Jan/02 Mar 2018 + minor swing high area of 28 Apr 2018 + close to 50% Fibonacci retracement of the decline from 17 Apr high to 04 May 2018 low). On the hand, failure to hold at 1.1890 sees an extension of the down move towards 1.1730/1700 next (the swing lows area of 21 Nov/12 Dec 2017 + 38.2% Fibonacci retracement of the 1 year of up move from 03 Jan 2017 low to 16 Feb 2018 high).
  • GBP/USD - Trend bias: Coming close to short-term support, risk of mean reversion rebound/consolidation. The pair inched lower post U.S. NFP data release on last Fri, 04 May 2018 below the predefined adjusted key short-term resistance at 1.3670 to print a U.S. session low of 1.3486 with is just 16 pips above the lower limit of the 1.3470/3430 short-term support/target (swing low area of 11 Jan 2018 + 38.2% Fibonacci retracement of the 16-month up move from 16 Jan 2017 high to 17 Apr 2018 high – refer to previous report). Elliot Wave/fractal analysis and momentum indicator (bullish divergence signal seen in the 4 hour Stochastic oscillator at the its oversold region) advocates the risk of a mean reversion rebound/consolidation at this juncture. Flip to a bullish bias above 1.3430 key short-term support for a potential mean reversion rebound to target the next intermediate resistance at 1.3700/3760 (pull-back resistance of the former medium-term ascending channel support from 14 Mar 2017 low + former swing low areas of 09 Feb/01 Mar 2018 + 23.6% Fibonacci retracement of the on-going slide from 17 Apr high to 04 May 2018 low). On the hand, failure to hold at 1.3430 sees an extension of the down move towards 1.3280/3200 next (former congestion area of 13 Oct/01 Nov 2017 + 50% Fibonacci retracement of the 1 year of up move from 16 Jan 2017 low to 17 Apr 2018 high).
  • AUD/USD - Trend bias: Unclear. The pair had manged to test the 0.7550 predefined key short-term resistance and inch lower to print post NFP U.S. session low of 0.7506 (has not reach the 0.7370/7330 support/downside target). Low conviction for a further push down at this juncture given the technical configurations of GBP/USD & EUR/USD as per highlighted above plus the AUD/USD ended last week with a weekly bullish “Hammer” candlestick pattern. Prefer to turn neutral first between 0.7500 (minor ascending trendline from 01 May 2018 low) & 0.7550. An hourly close above 0.7550 is likely to see the start of a potential mean reversion rebound towards the next intermediate resistance at 0.7600/7640 (the former swing low areas of 29 Mar/09 Apr 2018 + 38.2%/50% Fibonacci retracement of the down move from 19 Apr high to 01 May 2018 low). On the other hand, a break below 0.7500 resumes the down move to target 0.7370/0.7330 next (the swing low areas of 08 May/01 Jun 2017 + 61.8% Fibonacci retracement of the up move from 15 Jan 2016 low to 26 Jan 2018 high).
  • NZD/USD - Trend bias: Unclear. Maintain neutrality stance between 0.7000/6985 and 0.7095. Only a clear break below 0.6985 (an hourly close below) is likely to see an extension of the down move to target  the next support at 0.6930/6910 in first step (former swing high area of 09 Nov 2017 + 76.4% Fibonacci retracement of the up move from 17 Nov 2017 low to 16 Feb 2018 high).
  • USD/JPY - Trend bias: Sideways within medium-term uptrend from 26 Mar 2018 low.  Tested the lower limit of the short-term neutrality zone of 108.70 (refer to previous report) as it printed an intraday U.S. session low of 108.65 last Fri, 04 May upon the release of the NFP data before an hourly close back above 108.70. No change, maintain neutrality stance above 108.70 and 109.40. Only a clear break above 109.40 (an hour close above it) reinstates the bullish tone for another round of potential upleg to target the 110.85/111.00 resistance (the former medium-term swing low area of 27 Nov 2017 & the 61.8% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low).  On the flipside, failure to hold at 108.70 sees a deeper slide towards the key medium-term support zone of 107.80/40 (former medium-term swing high area of 21 Feb 2018 + 50% Fibonacci retracement of the on-going up move from 26 Mar low to 02 May 2018 high).  

Stock Indices (CFD) – Further potential push up in S&P 500 before risk of setback

  • US SP 500 – Trend bias: Push up within “Symmetrical Triangle” range configuration. Rallied as expected from the 2585 key medium-term support and hit the 2660/63 short-term resistance/target (see previous report). Maintain bullish bias above adjusted key short-term support at 2657 (former minor swing high areas of 02/03 May for a further potential residual push up to target the 2685/90 intermediate resistance (Fibonacci retracement/projection cluster + minor swing high areas of 24/30 Apr 2018) before risk of a setback. Only the other hand, failure to hold at 2658 sees the start of the setback towards the 2635 support (pull-back support of the former minor descending trendline from 30 Apr 2018 high + former minor swing high area of 04 May 2018).
  • Japan 225 Trend bias: Push up towards range resistance/key medium-term upside trigger. The Index had managed to “recapture” the 22400 level (former minor swing high areas of 03/04 May 2018) on last Fri, 04 May U.S. session to print a high of 22540. In today, 07 May early Asian, the Index has staged a decline to retest the 22400 level with the hourly Stochastic oscillator back at its oversold region and shaped an hourly “Doji-liked” candlestick right at 22400. Flip back to a bullish bias above 22340 key short-term support (current intraday low) for a further potential push up to target the 22710 range resistance/medium-term upside trigger level (61.8% Fibonacci retracement of the decline from 23 Jan high to 23 Mar 2018 low). However, failure to hold at 22340 see a slide back to retest last week  low of 22088.
  • Hong Kong 50Trend bias: Pushed up towards range resistance.  No change, maintain bullish bias with 30000/29950 remains as the key short-term support for a potential push up to retest the minor range resistance of 30760/830. However, a break below 29950 opens up scope for a deeper slide towards the 29360/29070 key medium-term support zone.  
  • Australia 200 – Trend bias: Uptrend remains intact. No change, maintain bullish bias with 6054 remains as the key short-term support for a further potential push up to target the next intermediate resistance at 6150 (09 Jan 2018 swing high area). On the other hand, a break below 6054 opens up scope for a deeper pull-back to retest the former “Symmetrical Triangle” range resistance now acting as a pull-back support at 5995.
  • Germany 30Trend bias: Imminent bullish breakout from 3-month range configuration. The Index had managed to push higher as expected and tested the 12850 key medium-term upside trigger level on last Fri, 04 May U.S. session. No change, maintain bullish bias with adjusted key short-term support now at 12760 (the former minor swing high area of 04 May 2018 + close to the 23.6% Fibonacci retracement of the on-going up move from 25 Apr 2018 low to today, 07 May current Asian session high of 12892).  An hourly close above 12850 in the European session today reinforces a further potential push up to target the 13020 intermediate resistance (1.618 Fibonacci projection from 25 Apr 2018 minor swing low). On the flipside, failure to hold at 12760 negates the bullish tone for a pull-back to retest the 12620 support (the former minor range resistance from 18 Apr to 02 May 2018 + minor ascending channel support from 04 Apr 2018 low).

Commodities – Bullish breakout in WTI Crude

  • WTI Crude (Jun 2018) – Broke above the 69.90 upper limit of the short-term neutrality zone. Flip to a bullish bias in any dips with key short-term support now at 69.40/30 (the former minor swing high areas of 19/24 Apr/01 May 2018) for a further potential push up to target the next resistance at 73.30/90 (the upper boundary of a major ascending channel from Feb 2016 low + Fibonacci projection cluster). However, failure to hold above 69.30 negates the bullish tone for a slide back to retest the  minor range support of  67.15 from 23 Apr/02May swing low areas.
  • Gold - Trend bias: Unclear. No change, maintain neutrality stance between 1300 and 1323 (former minor swing low areas of 29 Mar/23 Apr 2018). Only a break above 1323 (an hourly close above it) sees a potential push up towards the next intermediate resistance at 1334/41 (the minor descending resistance from 11 Apr 2018 high + former minor swing low of 13 Apr 2018) within a major sideways range configuration in place since Jul 2016.

*Levels are obtained from City Index Advantage TraderPro platform




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