Daily Global Macro Technicals Trend Bias/Key Levels (Mon 23 Apr)

Recent short-term USD strength is overextended, at risk of a mean reversion decline/retracement except in JPY. Major stock indices are still holding above key short-term supports, watch the 2670 support on the S&P 500. Gold may see a minor rebound above 13330 support.

FX –  Short-term USD strength overextended, risk of a retracement  except in JPY

  • EUR/USD – Trend bias: Push up within “triangle range”   Last Fri, 20 Apr, the pair had breached below the 1.2340/2336 key short-term support that invalidated the push up scenario towards its medium-term “triangle range” resistance at 1.2420/2420 (recalled that we are not convince of the aforementioned scenario due to USD strength seen in other major pairs-refer to previous report).  The break below 1.2340/2336 had triggered a slide for the pair towards the medium-term “triangle range” support now at 1.2245 (printed a low of 1.2250 in last Fri, 20 Apr U.S. session). Last Fri low of 1.2250 also confluences with a Fibonacci retracement/projection cluster coupled with the 4 hour Stochastic oscillator that has just exited from its oversold region. These observations suggest that the pair may see a bounce at this juncture after an overextended minor corrective decline. Key support will be at 1.2245 to see a potential rebound towards 1.2340/2350 intermediate resistance in the first step (the former minor swing low areas of 17/18 Apr 2018 + 61.8% Fibonacci retracement of the slide from 17 Apr high to last Fri, 20 Apr 2018 low). However, failure to hold above 1.2245 shall see a further decline to test 1.2150 (01 Mar 2018 minor swing low) and even the key medium-term support of 1.2065/2030 (median line of a medium-term ascending channel in place since 03 Jan 2017 + former medium-term swing high areas of 29 Aug/08 Sep 2017 + 23.6% Fibonacci retracement of the on-going medium-term uptrend from 03 Jan 2017 low to 16 Feb 2018 high.
  • GBP/USD - Trend bias: Corrective rebound to retrace last week steep decline. Short-term downside target/support met at 1.3990/3960 as expected (printed a current intraday low of 1.3994 in today, 23 Apr Asian session). The recent decline from its 1.4362 high printed on 17 Apr 2018 has been overextended where a potential corrective rebound is likely to materialises at this juncture supported by a bullish divergence signal seen in the 4 hour Stochastic oscillator coupled with Elliot Wave/fractal analysis where the pair has traced out a 5-wave minor degree down move from its 17 Apr 2018 high with Fibonacci projection cluster that coincides with the 1.3990/3960 support zone that has indicated a potential end of this 5-wave minor degree down move. Flip to a bullish bias with 1.3990/3960 as the key short-term support (05 Apr 2018 minor swing low + Fibonacci cluster) for a potential rebound to test the intermediate resistance of 1.4100/4140 (the former minor ascending trendline support from 01 Mar 2018 + 38.2% Fibonacci retracement of slide from 17 Apr high to today, 23 Apr Asian session current intraday low of 1.3994). On the other hand, failure to hold at 1.3960 triggers  the continuation of the down move to target the 1.3765/3590 key medium-term support zone (medium-term ascending channel support from 14 Mar 2017 low + swing low areas of 09 Feb/01 Mar 2018).
  • AUD/USD – Trend bias: Corrective rebound to retrace last week steep decline. The pair had broken the 0.7690 lower limit of the short-term neutrality zone and tumbled straight towards the key major support zone of 0.7650/7600 (swing low areas of 29 Mar/09 Apr 2018 + long-term “Ascending Wedge” support from Jan 2016 low). The current decline from 19 Apr 2018 high of 0.7813 has been overextended where a potential mean reversion rebound may materialise at this juncture coupled with a bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region that indicates a slowdown on its downside momentum. Flip to a bullish bias with 0.7650/0.7600 as key support for a potential rebound to target the intermediate resistance of 0.7730/7740 (the former minor swing low areas of 12/18 Apr 2018 + 50% Fibonaccu retracement of the decline from 19 Apr high to 20 Apr 2018 low of 0.7655). On the other hand, failure to hold at 0.7600 opens up scope for a  steeper decline to target 0.7510 support next in the first step (the medium-term swing low of 08 Dec 2017).
  • NZD/USD – Trend bias: Corrective rebound to retrace last week steep decline. The pair had broken the 0.7230 lower limit of the short-term neutrality zone and tumbled straight towards the medium-term range support zone of 0.7190/7170 (printed a current intraday low of 0.7199 in today, 23 Apr Asian session). The 4 hour Stochastic oscillator has started to flash a bullish divergence signal at this oversold region which indicates a slowdown in downside momentum where the pair may shape a mean reversion rebound to retrace last week steep decline. Flip to a bullish bias with 0.7190/0.7170 as key support for a potential rebound to target the intermediate resistance of 0.7280/0.7300 (the minor descending decline from 13 Apr 2018 high + 50% Fibonacci retracement of the decline from 13 Apr high to 23 Apr Asian session current intraday low of 0.7199). On the other hand, failure to hold at 0.7170 opens up scope for a  steeper decline to target the next intermediate support at 0.7020/6970 (former range resistance of 08/27 Nov 2017 + 61.8% Fibonacci retracement of the up move from 17 Nov 2017 low to 15 Feb 2018 high).
  • USD/JPY - Trend bias: Push up within range.  Continued to push up as expected and tested the 107.80 upside trigger level again on last Fri, 20 Apr U.S. session (printed a high of 107.85 but no hourly close above 107.80). No change, maintain bullish bias with adjusted key short-term support now at 107.50 (last Fri, 20 Apr low + minor ascending trendline from 17 Apr 2018 low) with 107.80 remains as the upside trigger level (former medium-term swing low area of 08 Sep 2017 that was tested & retreated on last Fri, 13 Apr) and a clear break (an hourly close) above 107.80 reinforces a further potential up move to target the next intermediate resistance at 108.45 (former medium-term swing low area of 26 Jan 2018 + 38.2% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low). However, failure to hold at 107.50 negates the bullish tone to see a deeper pull-back to test the 106.90/80 support (17 Apr 2018 swing low + former range resistance from 09/28 Mar 2018).

Stock Indices (CFD) –Still holding above short-term supports

  • US SP 500 – Trend bias:  Push up within “Symmetrical Triangle” range. Declined and tested the 2680/70 key short-term support as per highlighted in last Fri, 20 Apr report (minor ascending trendline from 04 Apr 2018 + former minor range resistance from 27 Mar/05 Apr 2018 +  23.6% Fibonacci retracement of the up move from 07 Apr 2018 low to 18 Apr 2018 high). The Index has printed a low of 2659 and ended with a daily close of 2670 on last Fri, 20 Apr U.S. session. In addition, it formed an hourly bullish “Hammer” candlestick coupled with a bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region. These observations suggest a slowdown in downside momentum. Maintain bullish bias with 2670/59 remains as key short-term support for a potential push up to target the intermediate resistance of 2695/98 in the first step (minor range resistance of 20 Apr 2018 + 61.8% Fibonacci retracement of the last week slide  from 18 Apr high to 20 Apr 2018 low of 2659).   On the other hand, failure to hold at 2670/59 invalidates the rebound scenario for an extension of the down move towards the 2585 key medium-term support (the lower boundary of the “Symmetrical Triangle” range configuration in place since 06 Feb 2018 low.
  • Japan 225 Trend bias: Pushed up within sideways range. Still holding the lower limit of the 22100/22050 key short-term support. Maintain bullish bias and added  22200 as the upside trigger level (minor descending trendline from 19 Apr 2018 high) to increase the conviction for a further potential push up to target the next intermediate resistance at 22510/600 (upper boundary of the minor ascending channel in place since 26 Mar 2018 low + medium-term swing high area of 27 Feb 2018). On the flipside, failure to hold at 22050 sees a deeper pull-back to retest the 21900 support (former minor range resistance from 05 Apr/16 Apr 2018).
  • Hong Kong 50Trend bias: Sideways.  Broke below the adjusted key short-term support at 30350 in last Fri, 20 Apr U.S. session that invalidated the minor push up scenario to target the 31165 intermediate resistance (former minor range support from 14/20 Mar 2018 that was tested & rejected on 12 Apr 2018). Expect another round of choppy sideways movement between 30000/29950 (psychological level +  former swing low areas of 23 Mar/03 Apr 2018 + 61.8% Fibonacci retracement of the up move from 04 Apr 2018 low to 12 Apr 2018 high) and 30530 (minor descending trendline from 12 Apr 2018 high). Prefer to turn neutral first and only a break above (hourly close above) 30530 is likely to resurrect the bulls for a minor push up towards 31165 in the first step.
  • Australia 200 – Trend bias: Sideways.  Rebounded from the 5850 lower limit of the short-term neutrality zone as per highlighted in last Fri, 20 Apr report. It printed a low of 5844 before an hourly close of 5856 seen at the end of Fri, 20 Apr U.S session. No change, maintain neutrality stance between 5850 and 5910. Only a clear break above 5910 (an hourly close above it) validates a further potential up move to target the next intermediate resistance at 5960 (minor swing high of 21/22 Mar 2018) in the first step.
  •  Germany 30Trend bias: Push up within sideways range. Challenged the 12500 predefined key short-term support on last Fri, 23 Apr U.S. session but managed to have an hourly close back above 12500 after it printed an intraday low of 12489. No change, maintain bullish bias with 12500/489 (excess) remains as the key short-term support (the pull-back support of the former neckline resistance of a  minor “Double Bottom” configuration from 07 Feb 2018 high) for a further potential push up to target the next intermediate resistance at 12750/865 (former range support from 15 Nov 2017/02 Jan 2018 + 61.8% Fibonacci retracement of the decline from its current all-time high printed on 23 Jan 2018 to 06 Feb 2018 low). On the other hand, a break below 12500 negates the bullish tone for a deeper pull-back towards the next intermediate support at 12400 (former minor swing high areas of 16 Mar/10 Apr 2018 + 23.6% Fibonacci retracement of the on-going up move from 26 Mar 2018 low to 18 Apr high of 12640).

Commodities – Gold watch the 1330 minor range support for a potential bounce

  • WTI Crude (Jun 2018) - Trend bias: Sideways.  Breached below the lower limit of the short-term neutrality zone at 68.00 (refer to last Fri, 20 Apr report) before it inched back up in the U.S. session. Elements remain unclear, prefer to maintain neutrality stance between 67.50 (last Fr, 20 Apr low) and 69.90. Only a break below 67.50 (an hourly close below it) opens up scope for a deeper pull-back to retest the next intermediate support of 66.50/10 (former medium-term range resistance from 25 Jan/23 Mar 2018).
  • Gold - Trend bias: Push up within sideways range. Drifted down and tested the 1332 lower limit of the short-term neutrality zone as per highlighted in last Fri, 20 Apr report. It printed a low of 1331 coupled with a bullish divergence signal seen in the short-term hourly Stochastic oscillator. Flip to a bullish bias with 1330 as key short-term support (76.4% Fibonacci retracement of the recent up move from 06 Apr 2018 low to 11 Apr 2018 high) for a potential rebound to retest 1343/45 intermediate resistance (the former minor swing low of 19 Apr 2018 + 50% Fibonacci retracement of the slide from 18 Apr high to 20 Apr 2018 low) follow by 1350 next (the minor descending resistance from 11 Apr 2018 high + 76.4% Fibonacci retracement of the slide from 18 Apr high to 20 Apr 2018 low). However, a break below 1330 sees an extension of the slide towards the 1322/1320  minor swing low area of 06 Apr 2018 and even the medium-term range support of 1310/1303 in place since 08 Feb 2018 low.

*Levels are obtained from City Index Advantage TraderPro platform




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