Daily Global Macro Technicals Trend Bias/Key Levels (Mon 14 May)

USD strength sees further risk of a short-term setback. Major stock indices remain in bullish configurations.

FX –  Short-term USD strength setback scenario remains intact

  • EUR/USD – Trend bias: Short-term mean reversion rebound remains in progress.  Inch higher as expected and printed a minor higher high of 1.1968 on last Fri, 11 May U.S. session. No change, maintain bullish bias in any dips with an adjusted key short-term support now at 1.1890 (minor swing low area of 11 May 2018 + minor ascending trendline from 09 May 2018 low + 50% Fibonacci retracement of the on-going rebound from 09 May low to last Fri, 11 May high of 1.1968) for a further potential push up to target the intermediate resistance of 1.1990/1.2000 intermediate resistance (minor swing high areas of 03/04 May 2018 + 0.764 Fibonacci projection of the up move from 09 May 2018 low) in the first step within the short-term mean reversion rebound phase. On the other hand, a break below 1.1890 invalidates the mean reversion rebound scenario for an extension of the down move towards the 1.1740/1700 support (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 + 2.618 Fibonacci projection of the down move from 27 Mar 2018 high).
  • GBP/USD - Trend bias: Short-term mean reversion rebound scenario remains intact. The pair inched higher for an attempt to retest the 1.3607 as the upside trigger (refer to previous report) before it retreated to print a U.S. session low of 1.3532 on last Fri, 11 May. Positive elements that advocate for a potential short-term mean reversion rebound prevails as its ended last Fri, U.S. session with a bullish daily “Inverted Hammer” candlestick pattern” as well as a ‘Doji” on a weekly time frame. No change, maintain bullish bias with 1.3430 remains as key short-term support (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) and 1.3607 as the upside trigger (an  hourly close above it) to reinforce a potential push up 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). On the other 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: Short-term mean reversion rebound remains in progress. Inch higher as expected and printed a minor higher high of 0.7566 on last Fri, 11 May European session. No change, maintain bullish bias with an adjusted short-term support at 0.7520 (minor swing low area of 11 May 2018 + minor ascending trendline from 09 May 2018 low + close to 23.6% Fibonacci retracement of the up move from 09 May low to 11 May 2018 high) for a further potential push up towards the medium-term resistance of 0.7600/7640 (the former swing low areas of 29 Mar/09 Apr 2018 + 50% Fibonacci retracement of the down move from 19 Apr high to 01 May 2018 low + pull-back resistance of the former major bearish “Ascending Wedge” support from Jan 2016 low).  On the other hand, a break below 0.7520 negates the bullish tone for a deeper pull-back towards the 0.7490/7470 (50%/61.8% Fibonacci retracement of the on-going rebound from 09 May low to 11 May high).  
  • NZD/USD - Trend bias: Downtrend at risk. Traded sideways on last Fri, 11 May within the short-term neutrality zone. No change, maintain neutrality stance between 0.70000 and 0.6900. Only a break above 0.7000 (an hourly close above it) puts the mean reversion rebound scenario into play for a push up to retest the next intermediate resistance at 0.7095 (the minor swing high areas of 26/28 Apr 2018 + 38.2% Fibonacci retracement of the on-going decline from 13 Apr high to 10 May 2018 low).
  • USD/JPY - Trend bias: Minor consolidation within medium-term uptrend in place since 26 Mar 2018 low. The pair staged a retest on the 109.35/109.20 key short-term support on last Fri, 11 May but managed to hold above it. Based on current price action, the pair has started to evolve inside an a potential minor bullish continuation/consolidation chart pattern called “Ascending Triangle” in place since  02 May 2018 high with the upper limit of the triangle acting as a near-term resistance at 110.00. Thus, given the USD weakness seen in the rest of the major pairs and major stock indices that remain in bullish configurations, the pair will be fighting against opposite forces given its direct correlation with risk assets such as equities.  Thus prefer to turn neutral first between 109.35/20 and 110.00. On a break above 110.00 (an hourly close above it) is likely to open up scope for another potential upleg to target 110.85/111.00 resistance next (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 other hand, failure to hold at 109.35/20 triggers a deeper slide back to retest the 108.70 minor range support in place since 04 May 2018 low.  

Stock Indices (CFD) – Remains in bullish configurations

  • US SP 500 – Trend bias: Uptrend remains intact. Inch higher as expected and printed a new minor higher high of 2733 on last Fri, 11 May U.S. session. No clear signs of bullish exhaustion yet, maintain bullish bias in any dips above key adjusted short-term support now at 2697 (23.6% Fibonacci retracement of the on-going up move from 03 May low to 11 May 2018 high + pull-back support of the former medium-term Symmetrical Triangle range resistance) for a further potential push up to target the intermediate resistance at 2743 (1.00 Fibonacci projection of the up move from 03 May 2018 low) follow by 2765 next (upper boundary of a minor ascending channel from 03 May 2018 low + 1.236 Fibonacci projection from 03 May 2018 low). However, failure to hold at 2700 negates the bullish tone  for a deeper pull-back towards the next support at 2662/55 (minor swing low area of 08 May 2018 + former minor swing high area of 03 May 2018).
  • Japan 225 Trend bias: Uptrend remains intact.  No change, maintain the bullish bias in any dips above adjusted key short-term support at 22560/550 (former minor swing high area of 08 May 2018 + minor ascending trendline from 03 May 2018 low) for a further potential up move to target the next intermediate resistances at 22840 (1.00 Fibonacci projection of the minor up move from 03 May 2018 low) follow by 23000/23090 next (psychological + former minor swing low area of 31 Jan 2018). However, failure to hold at 22550 negates the bullish tone for a deeper pull-back to retest the 22360/40 support (former minor swing high area of  04 May that has been tested and saw a rebound on 09 May 2018).
  • Hong Kong 50 Trend bias: Push up towards medium-term range resistance in progress. No change, maintain bullish bias in any dips above adjusted key short-term support at 30970/800 (former minor range resistance from 20 Apr/10 May 2018 + 23.6% Fibonacci retracement of the on-going up move from 04 May low to 11 May U.S. session high of 31346) for a further potential push up to target the 31800 medium-term range resistance (the failure bullish breakout that occurred on 21 Mar 2018). However, a break below 30800 shall invalidate the further push up scenario for another round of choppy decline towards the next support at 30500/400 (former minor swing high area of 08 May 2018 + 61.8% Fibonacci retracement of the on-going up move from 04 May low to today, 11 May U.S. session high of 31346).
  • Australia 200 – Trend bias: Uptrend remains intact. No change, maintain bullish bias with key short-term support at 6087 (minor range bottom in place since 08 May 2018) for a further potential push up to target the 6210 intermediate resistance next (upper boundary of a minor ascending channel from 25 Apr 2018 low + Fibonacci projection cluster). On the other hand, failure to hold at 6087 negates the bullish tone for a deeper pull-back to retest the 6054 (minor swing low areas of 03/04 May 2018).
  • Germany 30Trend bias: Uptrend remains intact. Last Fri, 11 May, the pull-back stalled right above the 12930/12900 predefined key short-term support as expected (printed a low of 12962 in the European session). No change, maintain bullish bias in any dips above 12930/900 adjusted key short-term support (minor swing low of 10 May 2018 + close to the 23.6% Fibonacci retracement of the on-going up move from 01 May 2018 low to 10 May U.S. session high of 13037) for a further potential push up to target the next intermediate resistance at 13140/150 (76.4% Fibonacci retracement of the steep down move from 23 Jan high to 06 Feb 2018 low + upper boundary of a minor ascending channel from 04 Apr 2018 low). However, failure to hold at 12930/900 negates the bullish tone for a deeper pull-back to retest the 12800 support (minor swing low area of 07 May 2018).

Commodities – WTI Crude at risk of undergoing a deeper pull-back

  • WTI Crude (Jun 2018) – Trend bias: Unclear. Pull-backed to stage a retest on the 70.60 support in last Fri, 11 May U.S. session (printed a low of 70.46) and ended with a daily “Bearish Engulfing” candlestick pattern. Prefer to turn neutral first between 70.46 and 71.63 (minor swing high area of 11 May 2018).  Only a break above 71.63 (an hourly close) is likely to reinstate the bullish tone 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).  On the flipside, failure to hold at 70.46 opens up scope for a deeper pull-back towards the next intermediate support at 69.20/68.60 (recent reversal low area of 08 May 2018 + minor ascending trendline from 02 May 2018 low).
  • Gold - Trend bias: Unclear. Last Fri, 11 May initial push up to print a high of 1326 was stalled a minor descending trendline from 11 Apr 2018 high and ended the U.S. session with a daily “Doji” candlestick pattern; a sign of indecisiveness by the bulls. Prefer to maintain neutral stance between 1326 and 1300. Only a break above 1326 (an hourly close above it) sees a potential push up towards the next intermediate resistance at 1341/50(50%/61.8% Fibonacci retracement of the recent decline from 11 Apr high to 01 May 2018 low + minor congestion area of 16/19 Apr 2018) within a major sideways range configuration in place Jul 2016.

*Levels are obtained from City Index Advantage TraderPro platform


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