Daily Global Macro Technicals Trend Bias/Key Levels (Mon 09 Apr)

Further potential short-term USD weakness & watch 106.65 support on USD/JPY. S&P 500 needs to clear above 2630 to reinstates bullish tone.

FX –Further potential short-term USD weakness, watch 106.65 support on USD/JPY

  • EUR/USD – Trend bias: Push up within “triangle range”. The pair has managed to bounce right at the predefined key short-term support 1.2230/2190 (excess; swing low areas of 28 Feb/01 Mar 2018 + lower boundary of the “triangle range” from 08 Feb 2018-refer to previous report) reinforced by a mix U.S. NFP report where March NFP increased by 103K (below consensus of 193K) while hourly earnings increased by 0.3% m/m (above consensus of 0.2% m/m). The pair printed a high of 1.2290 in last Fri, 06 Apr U.S. session before it pull-backed to a low of 1.2265 in today, 09 Apr early Asian session (coincides with a former minor swing low & minor swing high areas of 03/06 Apr 2018). No change, maintain bullish bias with adjusted key short-term support now at 1.2215 (last Fri, 06 Apr low)  for a further potential push up to target  1.2340 (minor swing high area of 02 Apr 2018) before the upper boundary/resistance of the “triangle range” at  1.2420/2440. However, failure to hold above 1.2215 negates the bullish tone for a slide to retest 1.2190. Only a clear break below 1.2190 (an hourly close below it) opens  up scope for a potential deeper slide towards the key medium-term support at 1.2070/2030 (former medium-term swing high area of 29 Aug/08 Sep 2017 + Fibonacci retracement cluster).
  • GBP/USD – Trend bias: Unclear. Pushed up to retest 1.4090 (printed an intraday high of 1.4106 on last Fri, 06 Apr U.S. session but no hourly close above it again) which was the short-term upper neutrality zone highlighted In our previous report. Maintain neutrality stance between 1.4090 & 1.4018. Only a clear break above 1.4090 (an hourly close above it in today’s European session) is likely to reinstate the bullish tone for a potential upleg to  retest 1.4200/4240 (26 Mar 2018 minor swing high) in the first step.
  • AUD/USD - Push up within descending range. Continued to hold the 0.7667 key short-term support.  Maintain bullish bias with 0.7667/7658 key short term support for a potential push up to retest 0.7725 (05 Apr 2018 minor swing high) before targeting 0.7755/7780 (22 Mar 2018 minor swing high). On the flipside, a break below 0.7667 (an hourly close below it) invalidates the push up scenario for a further slide towards the lower boundary of a major “Ascending Wedge” range configuration in place since Jan 2016 low now acting as a support at 0.7600.
  • NZD/USD - Trend bias: Push up within sideways range. Tested the 0.7250 key short-term support before it reversed up on last Fr, 06 Apr U.S. session (printed an intraday low of 0.7243). No change, maintain bullish bias with 0.7250/7243 key short-term support for a further potential push up to retest 0.7322 before the next intermediate resistance at 0.7345 (minor swing high areas of 26 Feb/14 Mar 2018) in the first step. On the flipside, a reintegration below 0.7250/7243 negates the bullish tone for a deeper slide back to retest the 0.7190 range support in place since 08 Feb 2018).
  • USD/JPY - Trend bias: Unclear. Intraday break below the adjusted 107.00/106.90 key short-term support (former minor swing high of 29 Mar 2018 + 38.2% Fibonacci retracement of the on-going up move from 04 Apr low to 05 Apr 2018 U.S. session high) on last Fri, 06 Apr post NFP data release has negated the bullish tone for a direct rise towards 107.80 intermediate resistance (former medium-term swing low of 08 Sep 2017).  Mix elements now, prefer to turn neutral between 107.10 (former minor swing low of 06 Apr 2018 –before NFP data release) & 106.65 (the former minor swing high area of 04 Apr 2018 +  minor ascending channel support from 26 Mar 2018 low. A break back above 107.10 reinstates the bulls for 107.80 next. On the flipside, failure to hold 106.65 put the current recovery in place since 26 Mar 2018 low of 104.64 at risk to trigger another round of potential downleg towards 105.80/65 intermediate support in the first step (minor swing low area of 03 Apr 2018 + close to the 61.8% Fibonacci retracement of the current recovery from 26 Mar 2018 low to 05 Apr 2018 high of 107.48).

Stock Indices (CFD) – S&P 500 managed to hold the 2585 key medium-term support

  • US SP 500 – Trend bias: Unclear. The Index has staged another round of “dramatic decline” of  2.2% after mix remarks from key U.S. administration officials on whether U.S. & China are still working on a negotiation deal to prevent an all-out trade war. The Index broke below the 2610  key short-term support to print an intraday low of 2585 on last Fri, 06 Apr U.S. session which is also the key medium-term support) before it rebounded to close at 2604.  Last Friday’s decline has retraced 76.4% of the previous up move from 04 Apr 2018 low of 2560 to 05 Apr 2018 high of 2672 & stalled at the pull-back support of a former minor descending resistance from 13 Mar 2018 high.  No clear signs of a major risk off yet as the high beta/momentum driven NYSE FANG+ Index has managed to hold its major support of 2334/2300 and ended last Fri with a bullish weekly “Hammer” candlestick pattern. In the short-term, prefer to turn neutral first on the SP 500 between 2630 (06 Apr former minor swing low) & 2585. An hourly close above 2630 reinstates the bullish tone for a potential recovery to  target the next intermediate resistance at 2690 in the first step (former minor swing low areas of 07/20 Mar 2018).
  • Japan 225 Trend bias: Up within sideways range. Managed to hold the 21300 key short-term support (pull-back support of the former “Descending Wedge” resistance + close to the 61.8% Fibonacci retracement of the up move from 04 Apr European session low of 21035 to 05 Apr 2018 U.S. session high). No change, maintain bullish bias with 21300 as key short-term support for a further potential push up to target the next intermediate resistance at 22100 (minor swing high area of 13 Mar 2018) in the first step. However, failure to hold at 21300 negates the bullish tone for another round of choppy slide to retest 21000/20900 minor range support in place since 02 Apr 2018 low).
  • Hong Kong 50 - Trend bias: Push up within sideways range. Managed to inched higher from last Fri, 06 Apr U.S session low of 29850 to open slightly above the 30000 psychology level. In addition, the pull-back seen on last Fri, U.S. session managed to stall at the pull-back support of the former minor descending resistance from 21 Mar 2018 high. Maintain bullish bias with adjusted  Key short-term support now  at 29600 (minor swing low area of 06 Apr 2018  + pull-back support of the former minor descending resistance from 21 Mar 2018 high) for a potential push up to retest the next intermediate resistance at  30850 (the minor swing high area of 27 Mar 2018). However, failure to hold at 29700 negates the recovery process for a slide to retest 26220/160 (04 Apr 2018 low).
  • Australia 200 – Trend bias: Push up within sideways range. Gapped up to 5777 in today, 09 Apr Asian opening session after a challenge on its 5755 key short-term support on last Fri, 06 Apr U.S. session (printed an intraday low of 5746). Tolerate the excess and maintain bullish bias with 5755/46 as the key short-term support for a potential push up to test the 5850/80 intermediate resistance next (former minor swing low of 05 Mar 2018). On the flipside, a break below 5746 shall see a deeper slide to retest the 5705/700 area.
  • Germany 30Trend bias: Push up within sideways range. Maintain bullish bias with adjusted key short-term support at 12140/12090 (former minor swing high area of 29 Mar/ 02 Apr 2018 + 38.2% Fibonacci retracement of the recent recovery from 04 Apr low to 05 Apr 2018 high) for a further potential push up to target 12500 (intermediate range resistance from  07 Feb 2018 high).On the other hand, a break below 12090 (an hourly close below it) invalidates the push up scenario for another round of choppy decline to retest the 11900/800 major support.

Commodities – 1345/48 remains the short-term key resistance for Gold

  • Gold - Trend bias: Push down within sideways range. Maintain the bearish bias below 1345/48 key short-term resistance for a further potential push down to retest the 1310/1305 range support in place since 08 Feb 2018 low. On the other hand, a break above 1348 shall see a squeeze up to towards the 1365/78 major range resistance in place since Jul 2016.
  • WTI Crude (May 2018) – Whipsawed around the 62.07 key short-term support (printed an intraday low of 61.82 on last Fri, 06 Apr U.S. session). Mix elements right now as it is still holding above the medium-term ascending channel support from 14 Feb 2018 low). Prefer to turn neutral now between 63.10 (minor descending resistance from 27 Mar 2018 high) & 61.80. Only an hourly close above 63.10 reinstates the bullish tone for push back up to retest 65.40 (minor swing high area of 02 Apr 2018) before targeting 66.40/66.66 (medium-term range resistance in place since Jan 2018).  On the flipside, a break below 61.80 opens up scope for a further slide towards the next intermediate support at 60.18/10 (01/08 Mar swing low areas).

*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.