Daily Global Macro Technicals Trend Bias/Key Levels (Mon 26 Feb)

USD at risk of shaping another potential downleg while recovery process remains intact for major stock indices. Gold & WTI Crude are showing positive elements for a potential short-term push up.

FX – At risk of shaping another USD downleg

  • EUR/USD – Pull-backed last Fri, 24 Feb but still held above the predefined 1.2276/2260 key short-term support. No change, maintain bullish bias above 1.2276/2260 support with 1.2370 as the upside trigger (former minor swing low area of 19 Feb 2018 that was rejected on 21 Feb U.S. session) to reinforce a potential push up towards the recent range resistance of 1.2506/2555 in the first step. On the flipside, failure to hold above 1.2260 should invalidate the push scenario for a slide to test the key 1.2200 neckline support of an impending “Double Top” that is forming since 01 Feb 2018 high.
  • GBP/USD – Maintain neutrality stance between 1.3857 ( 22 Feb 2018 minor swing low) & 1.4080 (descending trendline resistance from 25 Jan 2018). A break above 1.4080 is likely to reinforce the start of another potential upleg to target the recent Jan medium-term swing high of 1.4345.
  • AUD/USD –  Inched higher above the 0.7790/7770 key short-term support as expected. Maintain bullish bias above 0.7790 key short-term support with  0.7860 as upside trigger to reinforce a potential push up towards 0.7900 near-term resistance (former minor range support from 15 Feb/20 Feb 2018) follow by the recent 16 Feb swing high area of 0.7970. However,  a break below 0.7790 is likely to trigger another downleg to target the  next near-term support at 0.7650 (76.4% Fibonacci retracement of the previous up move from 08 Dec 2017 to 26 Jan 2018 + congestion area of 27 Oct/05 Dec 2017).
  • NZD/USD – Continued its downward drift as expected in last Fri,23 Feb early U.S. session (printed a low of 0.7271) which is just 31 pips away from the short-term support/target of 0.7240 (14 Feb 2018 minor swing low). In addition, bearish exhaustion sign has emerged; the 4 hour Stochastic oscillator has traced out a bullish divergence signal at its oversold region. Thus, conviction has been reduced for the pair to see a further slide to retest 0.7240. Flip back to a bullish bias above 0.7270  key short-term support (23 Feb 2018 minor low) for a potential push up to at least target   0.7370/7375 near-term resistance in the first step (former minor swing low area of 15/17 Feb 2018 + 61.8% Fibonacci retracement of the recent slide from 16 Feb 2018 high to 23 Feb 2018 low). On the other hand, failure to hold above 0.7270 should invalidate the recovery scenario for a further slide towards the next support at 0.7190/7175 (08 Feb 2018 swing low area).
  • USD/JPY – Turned down right below the tightened 107.26 key short-term resistance (former minor swing low of 22 Feb 2018 + 50% Fibonacci retracement of the decline from 21 Feb U.S. session high to 22 Feb 2018 U.S. session low) as it printed a high of 107.20 in today, early Asian session before it reversed down.  No change, maintain bearish bias below 107.26 resistance for a further potential push down to retest  the recent 105.55 swing low of 16 Feb 2018. A break below 105.55 is likely to open up scope for a further downleg to target the next support at 104.25/104.00 (Fibonacci projection cluster + lower boundary of a medium-term descending channel from 08 Jan 2018 high). On the flipside, a clearance above 107.26 should invalidate the bearish scenario for a squeeze up towards the 108.30/50 resistance (upper boundary of a descending channel in place since 08 Jan 2018 + former minor range support from 27 Jan 2018 low + the 0.382% Fibonacci retracement of the decline from 08 Jan 2018 high to 16 Feb 2018 low).

Stock Indices (CFD) – Recovery process intact

  • US SP 500 –  Pushed up as expected and cleared above 2745 upside trigger level with a daily and weekly close above it (closed at 2747 on last Fri, 23 Feb U.S. session) supported by an outperformance seen in the high beta growth Technology sector. The S&P Technology sector ETF (XLK) recorded a gain of 2.09% on last Fri versus a gain of 1.60% seen in the S&P 500. Maintain bullish bias in any dips above 2725 (former minor swing high of 23 Feb 2018 + minor ascending channel support from 22 Feb 2018 low) for a further potential up move to target the next near-term resistance at 2775 (1.618 Fibonacci retracement of the up move from 22 Feb low to 22 Feb 2018 minor high projected from 22 Feb 2018 U.S. session low) follow by 2800/2810 (former minor swing low area of 01 Feb 2018). On the other hand, a break below 2725 should negate the bullish tone to see a choppy slide back to retest 2687/83 (22 Feb 2018 swing low area).
  • Japan 225 – Inched higher as expected and hit the short-term resistance/target of 22185/22250.  Maintain bullish bias with tightened key short-term support now at 21850 (former minor swing high of 23 Feb 2018 + minor ascending channel support from 09 Feb 2018 U.S. session low) for a further potential push up to target the next resistance zone of 22810/980 (upper boundary of minor ascending channel from 09 Feb 2018 U.S. session low + 61.8% Fibonacci retracement of the slide from 23 Jan high to 09 Feb 2018 U.S. session low). However, a break below 21850 should negate the bullish tone for a slide back to retest the 21587/570 support (last Thurs, 22 Feb swing low area).
  • Hong Kong 50 – Rise in progress as expected.  Maintain bullish bias and tightened key short-term support now at 31150 (last Fri, 23 Feb low) for a further potential up move to target 31800/32000 (gapped down formed on 06 Feb 2018 + 61.8%  Fibonacci retracement of the decline from 29 Jan high to 09 Feb 2018 U.S. session low) and above opens up scope for a further potential rally towards next near-term resistance zone of 32300/470 (76.4% Fibonacci retracement of the recent decline from 29 Jan high to 09 Feb 2018 2018 U.S. session low).  However, failure to hold above 31150 should negate the bullish tone for a deeper slide to retest the 30700/500 support (the pull-back support of the former descending trendline from 29 Jan 2018 high & minor swing low area of 20 Feb 2018).
  • Australia 200 –  Rise in progress as expected. Maintain bullish bias above tightened key short-term support now at 5970 (last Fri, 23 Feb low + minor ascending channel support from 09 Feb 2018 U.S. session low) for a further potential upleg to target the next near-term resistance at 6100/6130 (aforementioned minor ascending channel resistance + Fibonacci projection cluster). On the flipside, a break below 5970 should negate the bullish tone for a deeper slide to retest the 5870 former minor swing high area of 13 Feb 2018.
  • Germany 30 – Inched higher as expected and it is now coming close to the lower limit of the short-term resistance/target zone of 12650/12845 (neckline of the minor “Double Bottom” in place since 06 Feb 2018 low + 61.8% Fibonacci retracement of the steep decline from 23 Jan 2018 high). Maintain bullish bias above tightened key short-term support now at 12430 (last Fri, 23 Feb low + close to the minor ascending channel support from 22 Feb 2018 low) for a further potential push up to target the upper limit of the short-term resistance zone at 12845 next. However, a break below 12430 should negate the bullish tone for a slide back to retest 12330/280 range support in place since 16 Feb 2018 low).

Commodities – Further potential push up in Gold & WTI Crude

  • Gold – Breaking above 1336 upper limit of the short-term neutrality zone (refer to last Fri, 23 Feb report for details). Flip back to bullish bias above 1326 key short-term support (last Fri, 23 Feb low) for a further potential push up to retest 1362/65 range resistance. On the hand, a break below 1326 should invalidate the push  up scenario for a slide back to retest the 14 Feb 2018 minor swing low of 1317.
  •  WTI (Apr 2018) – Broke above the 63.15 upper limit of the short-term neutrality zone (refer to last Fri, 23 Feb report for details). Turn bullish in any dips above key short-term support at 62.88 (former minor swing high area of 23 Feb 2018) for a further potential push up to test the 64.40/65.00 near-term resistance (76.4% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 10 Feb 2018 low + descending trendline from 25 Jan 2018 high). On the flipside, failure to hold above 62.88 should negate the bullish tone for another round of choppy slide towards the 61.70 support (former minor swing high of 21 Feb 2018 + minor ascending channel support from 14 Feb 2018 low).

*Levels are obtained from City Index Advantage TraderPro platform


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