Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 01 Mar)

Pull-back in major stock indices have reached/coming close to inflection zones for potential recovery, Watch 2690/83 key medium-term support for the S&P 500. USD still strong in the short-term except against the JPY.

FX – Further short-term USD strength except against the JPY

  • EUR/USD – Drop in progress as expected with the breakdown of the 1.220 downside trigger level (neckline support of the  “Double Top” that in place since 01 Feb 2018 high. Maintain bearish bias in any bounce below tightened key short-term resistance now at 1.2265 (former minor swing low of 22 Feb 2018 + minor descending trendline from 16 Feb 2018 + 50% Fibonacci retracement of the recent slide from 27 Feb 2018 high to today Asian session current intraday low of 1.2183) for a further potential corrective decline to target the 1.2070/2040 support  (former medium-term swing high area of 29 Aug/08 Sep 2017 + 61.8% Fibonacci retracement of the up move from 12 Dec 2017 low to 16 Feb 2018 high) within a medium-term uptrend in place since 07 Nov 2017 low. However, a push up back above 1.2265 should invalidate the bearish bias for a squeeze up towards the 1.2355/2377 resistance again (former minor swing low area of 19 Feb 2018 that was rejected on 21/26 Feb 2018.
  • GBP/USD – Broke below the 1.3857 short-term lower neutrality zone as per highlighted in yesterday report which validated a bearish move. Turn bearish in any bounce below  1.3860 key short-term resistance (former swing low areas of 22/27 Feb 2018 + 38.2% Fibonacci retracement of the on-going slide from 26 Feb 2018 high to today Asian session current intraday low of 1.3743) for a further potential push down to target the  1.3615/3530 key medium-term support (former medium-term swing high area of 15/18 Sep 2018 + ascending trendline support from 13 Mar 2017 low). On the flipside, a clearance above 1.3860 should negate the bearish tone for a squeeze up to retest the descending trendline from 25 Jan 2018 high that has capped prior rallies now acting as resistance at 1.4000.
  • AUD/USD – Drop in progress as expected. Maintain bearish bias in any bounce below tightened key short-term resistance now at 0.7800 (former minor swing low of 22 Feb 2018 + former minor range support from 09 Feb 2018 + 50% Fibonacci retracement of the on-going slide from 26 Feb 2018 high to today Asian session current intraday low of 0.7717) for a further potential push down to target the next support at 0.7655  former swing high areas of 27 Nov/05 Dec 2017 + 76.4% Fibonacci retracement of the up move from 08 Dec 2017 low to 26 Jan 2018 high) On the flipside, a break back above 0.7800 should negate the bearish tone for a squeeze up to retest the 0.7900 resistance (minor swing high area of 26 Feb 2018 + former minor support of 16 Feb/20 Feb 2018 + descending trendline from 27 Jan 2018 high).
  • NZD/USD – Inched lower as expected and it is now hovering just above the 0.7180 neckline support of an impending “Double Top” that is forming since 25 Jan 2018.  Maintain bearish bias below 0.7280 key short-term resistance with 0.7180 as downside trigger to reinforce a further potential corrective decline to target the next support at 0.7060/7030 (former medium-term swing high areas of 21 Mar/19 Apr 2017 + 61.8% Fibonacci retracement of the previous up move from 17 Nov 2017 low to 16 Feb 2018 high) within a long-term sideways range configuration in place since Sep 2016. However, a break above 0.7280 should negate the bearish tone for a squeeze up to retest the minor descending trendline from 16 Feb 2018 high now acting as a resistance at 0.7300.
  • USD/JPY – Drop in progress as expected. Maintain bearish bias in any bounce below tightened key short-term resistance now at 107.25 (former minor swing high of 25 Feb 2018 U.S. session that was rejected in yesterday, 28 Feb European session + 61.8% Fibonacci retracement of the on-going slide from 27 Feb 2018 high to today Asian session current intraday low of 106.55) for a further potential push down to retest the recent 105.55 swing low of 16 Feb 2018 in the first step. On the flipside, a break above 107.25 should negate the bearish tone for a push up to retest the 107.70 resistance (the upper boundary of a medium-term descending channel from 08 Jan 2018 high + 27 Feb 2018 swing high).

Stock Indices (CFD) -  Extension of the pull-back but almost reached inflection zones for a potential recovery

  • US SP 500 – Extension of the pull-back in place since Tues, 27 Feb 2018 high of 2789 through the bearish break below the 2725 short-term support to print a low of 2712 in yesterday, 28 Feb U.S. session. Yesterday’s slide was only triggered in the last hour of the U.S. session without any key economic data releases which was more likely due to profit-taking of the on-going up move since 09 Feb 2018 low in anticipation of the Fed Chair Powell’s second round of testimony to the Senate due today at 1500GMT. Technically, we still view this on-going decline as a pull-back within a medium-term uptrend in place since 09Feb 2018. In today Asian session, the Index printed a current intraday low of 2703 which is closed to the key medium-term support of 2690/83 set for this week (refer to latest weekly technical outlook for details) coupled with the 4 hour Stochastic oscillator now hovering at an extreme oversold level. In addition, yesterday’s sell-off in the Index was not accompanied by a spike up in the 10-year U.S. Treasury yield and the high beta S&P Technology sector continued its outperformance against the S&P 500 where the Technology sector ETF recorded a lesser decline of 0.71% in yesterday U.S. session  versus a loss of 1.11% seen in the S&P 500. Thus, we maintain the bullish bias in any dips above the 2690/83 key medium-term support with 2742 as the upside trigger level (28 Feb 2018 swing low) to reinforce a potential recovery to retest 2789 before targeting the 2800/810 resistance (former minor swing low area of 01 Feb 2018). However, failure to hold above 2683 jeopardises the medium-term uptrend for a further slide towards 2630 (minor swing low of 12/14 Feb 2018 + 61.8% Fibonacci retracement of the up move from 09 Feb 2018 low to 27 Feb 2018 high).
  • Japan 225 –  Broke below the 22160/22000 short-term support but the on-going pull-back is now coming close to the 21570 key medium-term support set for this week (refer to latest weekly technical outlook for details) coupled with 4 hour Stochastic oscillator that has started to inch up from an extreme oversold level (an indication that yesterday’s downside momentum of price action from the U.S. session has started to abate). Maintain bullish bias in any dips above the 21570 key medium-term support with 22100 as upside trigger to reinforce a potential recovery to retest the recent swing high of 22500 before targeting the next resistance zone of 22800/23000 (61.8% Fibonacci retracement of the slide from 23 Jan high to 09 Feb 2018 U.S. session low). However, failure to hold above 21570 jeopardises the medium-term uptrend for a further slide towards 21000 (swing low areas of 09/14 Feb 2018 + 76.4% Fibonacci retracement of the up move from 09 Feb 2018 low to 27 Feb 2018 high).
  • Hong Kong 50 - Pushed down as expected towards the pull-back support zone of 30400/30070 (50%/61.8% Fibonacci retracement of the recent up move from 09 Feb 2018 low to27 Feb 2018 high + pull-back support of the former descending trendline resistance from 29 Jan 2018 high + key medium-term support set for this week). In today Asian session, it printed a current intraday low of 30378 before it reversed up and flashed a bullish divergence signal in the hourly Stochastic oscillator). These observations suggest that the recent downside momentum of price action has abated and the Index may now resume its up move. Flip back to bullish bias in any dips above 30070 key medium-term support set for this week with 31210 as upside trigger to reinforce a potential recovery to retest the recent high of 31767 before targeting the next near-term resistance zone of 32300/470 (former minor swing low areas of 31 Jan/02 Feb 2018 + 76.4% Fibonacci retracement of the prior decline from 29 Jan 2018 high to 09 Feb 2018 U.S. session low). However, failure to hold above 30070 jeopardises the medium-term uptrend for a further slide to retest the major support of 29070.
  • Australia 200 – Pull-back extended beyond 6020/5990 short-term support. Right now, the on-going slide from 27 Feb 2018 high is coming close to the 5950/30 key medium-term support set for this week (refer to latest weekly technical outlook for details) coupled with an extreme oversold reading seen in the 4 hour Stochastic oscillator. Thus, maintain bullish bias in any dips above 5950/30 key medium-term support with 6035 as upside trigger to reinforce a recovery to retest 6084 before targeting the next near-term resistance at 6100/6130. However, failure to hold above 5950/30 jeopardises the medium-term uptrend for a further slide to towards 5830 (61.8% Fibonacci retracement of the up move from 09 Feb 2018 U.S. session low to 27 Feb 2018 high + minor swing low area of 14 Feb 2018).
  • Germany 30 – Still holding above the lower limit of the 12370/280 short-term support.  Maintain bullish bias above 12280 support with 12430 as upside trigger (former minor swing low area of 23/27 Feb 2018) to reinforce a potential push up  to retest the12650 range resistance of 07/08 Feb 2018. However, failure to hold above 12370/280 should see a deeper slide to towards 12050 (61.8% Fibonacci of the up move from 06 Feb 2018 low to 27 Feb 2018) and even the 11900/800 major support zone.

Commodities – Watch the 1303/1300 support on Gold

  • Gold – Drop in progress as expected. Maintain bearish bias below tightened key short-term resistance now at 1323 (yesterday, 28 Feb U.S. session high) for a further slide towards the 1303/1300 support (former medium-term swing high area of 27 Nov 2017 + Fibonacci cluster) within a major range configuration in place since Jul 2016. On the flipside, a clearance above 1323 negate the short-term bearish tone for a squeeze up to retest the 26 Feb minor swing high of 1340.
  • WTI Crude (Apr 2018) – Declined as expected and almost reached the short-term support/target of 60.95. Mix elements now, prefer to turn neutral first between 60.95 & 62.80 (former minor swing low of 28 Feb 2018 that was rejected in yesterday U.S. session). Only a clearance above 62.80 is likely to see a push up towards the 64.40 resistance (descending trendline from 25 Jan 2018 high). On the flipside, failure to hold above 60.95 opens up scope for a deeper slide to retest the medium-term support of 58.30/57.90 (swing low areas of 09 Feb/14 Feb 2018).

*Levels are obtained from City Index Advantage TraderPro platform





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