Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 15 Feb)

Further potential USD downleg except in USD/JPY as it is now testing the 106.50 support. Stock Indices remain firm with a potential bullish breakout looms for S&P 500 while Gold now en routes to its 1378 major upside trigger level.

FX – Further potential USD downleg except in USD/JPY

  • EUR/USD – Bullish reaction from the predefined 1.2290 key short-term support as expected (see yesterday report) as it staged the initial pull-back after the release of the better than expected U.S. CPI for Jan (core CPI 1.8% y/y versus consensus of 1.7% y/y) & weaker Retails Sales for Jan (0% m/m versus consensus of 0.4% m/m). The initial USD rally was considered as a “noise” (a narrative that built on the fear of stagflation) as the pair did not have an hourly close below the 1.2290 support (printed a low of 1.2276 before it reversed up and closed above 1.2290 before the U.S. session opened). No change, maintain bullish bias in any dips above tightened key short-term at 1.2385 (former minor swing high of 14 Feb 2019 before yesterday’s pull-back and broken to the upside thereafter+ 23.6% Fibonacci retracement of the on-going up move from 10 Feb 2018 low to today Asian session current intraday high of 1.2473) for a further potential push up to retest the recent 1.2520/30 range resistance printed on 25Jan/02 Feb 2017. A break above 1.2530 opens up scope for a further potential rally to target the next near-term resistance at 1.2575 (1.618 Fibonacci projection of the up move from 10 Feb 2018 low to 14 Feb 2018 minor swing high projected from yesterday’s pull-back low of 1.2276 – the extended 5th wave target/residual up move of the minor degree bullish impulsive cycle in place since 10 Feb 2018 low before a potential minor correction occurs based on Elliot Wave/fractal analysis). Above 1.2575 sees an extension of the up move towards the significant resistance at 1.2635 (long-term primary descending channel resistance from Jul 2008 + Fibonacci cluster). However, a break below the 1.2385 should negated the bullish tone for a slide to retest yesterday low of 1.2276.
  • GBP/USD – Yesterday’s pull-back/slide has managed to hold right above the 1.3800/3764 key short-term support before it reversed up as expected.  Right now , it is attempting to break above the 1.4000 upside trigger level (former swing low of 30 Jan 2018 in today Asian session). No change, maintain bullish bias above 1.3800/3764 support for a further potential push up to 1.4270/4310 range resistance in place since 25 Jan 2018 in the first step.  A break above (hourly close) 1.4000 will tightened the keys short-term support to 1.3870 (former minor swing high of 12 Feb 2018 + pull-back support of the former minor descending trendline from 02 Feb 2018 high). On the flipside, failure to hold above 1.3800/3764 should invalidate the recovery scenario for an extension of the minor corrective decline towards the 1.3620/3590 key medium-term support.
  • AUD/USD – Reversed up and it is now coming close to the short-term resistance/target of 0.7950 (printed a current intraday high of 0.7946 in today Asian session. No clear bullish exhaustion yet except for extreme overbought reading seen in the 4 hour Stochastic oscillator, risk of a pull-back. Maintain bullish bias in any dips above tightened key short-term support now at  0.7870 (former minor swing high areas of 13/14 Feb 2018) for a further potential push up to target the next near-term resistance at 0.7980/7990 (former minor swing low of 01 Feb 2018 + Fibonacci cluster). However, failure to hold above 0.7870 should negate the bullish tone for a slide to yesterday low at 0.7790.
  • NZD/USD – Reversed up as expected right above the 0.7235 adjusted key short-term support and hit the 0.7380 resistance/target.  No clear signs of bullish exhaustion yet except for extreme overbought reading seen in the 4 hour Stochastic oscillator, risk of a pull-back. Maintain bullish bias in any dips above tightened key short-term support now at  0.7330 (23.6% Fibonacci retracement of the on-going up move from 08 Feb 2018 low to today Asian session current intraday high of 0.7395 +  former minor swing high area of 14 Feb 2018) for a further potential push up to target the major resistance of 0.7485/7500 (multi-month range top in place since Sep 2016 + 1.618 Fibonacci projection of the  08 Feb 2018 low to 14 Feb 2018 minor high projected from yesterday low of 0.7240). On the flipside a break below 0.7330 should negate the bullish tone for a slide back to retest 0.7240/35.
  • USD/JPY – Dropped as expected towards the 106.50 support/target (former  medium-term swing high of Jul 2016 + Fibonacci cluster). Mix elements now as the daily RSI has reached an extreme oversold level of around 24% (last seen in 09 Feb 2016-before Brexit vote) coupled with an impending bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region. Prefer to turn neutral and only a clear break below 106.50 (hourly close) is likely to open up scope for an extension of the drop to target the next near-term support of 105.55 in the first step (former medium-term swing high area of  28 Oct 2016 + 0.764 Fibonacci projection of the decline from  06 Nov 2017 high to 26 Jan 2018 low projected from 02 Feb 2018 high).

Stock Indices – Recovery process intact with potential bullish breakout from S&P 500 ‘s “Double Bottom” configuration

  • US SP 500 -  Yesterday’s pull-back/retreat post U.S. CPI data release had managed to hold above the 2614 tightened key short-term support before it rallied as expected to print a marginal higher high of 2702 in yesterday (14 Feb) U.S. session. Right now, it is approaching the near-term resistance/target of 2728/45 (neckline of the minor  “Double Bottom” in place since last Tues, 06 Feb low + 61.8% Fibonacci retracement of the steep decline from 29 Jan 2018 high to 05 Feb 2018 U.S. session low) without any bullish exhaustion signals. Sector rotation analysis advocates for further potential upside as yesterday’s recovery in seen in the S&P 500 after the initial “noise/futures sell-off” had been led by high beta sectors such as the Technology, Financials and even Consumer Discretionary despite weaker than expected Retail Sales data for Jan. Thus, maintain bullish bias above tightened key support at 2662 (former minor swing high area of 13 Feb 2018 + 23.6% Fibonacci retracement of the on-going up move from 09 Feb 2018 U.S. session low to today current Asian session intraday high of 2704) for a further potential push up towards 2728/2745 and above 2745 reinforces a bullish breakout to target the next near-term resistance zone of 2795/2800 (76.4% Fibonacci retracement of the steep decline from 29 Jan 2018 high to 05 Feb 2018 U.S. session low + 1.382 Fibonacci projection of the up move from 09 Feb 2018 U.S. session low to 12 Feb 2018 minor high projected from yesterday, 14 Feb U.S. session low). On the other hand, a break below 2662 should negate the bullish tone for a slide back to retest 2628/2614.
  • Japan 225 –  Short-term bullish bias has been negated by the USD/JPY weakness due to direct correlation play between the Index & USD/JPY. Now at risk of a drop back to retest the 20800/600 major support (see weekly technical outlook for details). Maintain  turn neutrality stance between 20800/600 & 21730 (Mon, 12 Feb U.S. session high). Only a clearance above 21730 is likely to offset the on-going weakness for the bulls to get a foothold to stage a potential push up towards 22800/23000 next (61.8% Fibonacci retracement of the steep decline from 23 Jan high to 09 Feb 2018 low + descending trendline from 23 Jan 2018 high).
  • Hong Kong 50 – Rise in progress as expected. Maintain bullish bias above tightened key short-term support now at 30480 (today Asian session gapped up) for a further potential push up towards the short-term resistance/target of 31280/400 (minor swing high of 07 Feb 2018 + descending trendline from 29 Jan 2018 high + 50% Fibonacci retracement of the decline from 29 Jan high to 09 Feb 2018 U.S. session low). Above 31400 opens up scope for a further potential rally towards the next resistance at 31800/32000 in the first step (the gapped down seen on 06 Feb 2018 + 61.8% Fibonacci retracement of the decline from 29 Jan high to 09 Feb 2018 U.S. session low). However, a break below 30480 should negate the bullish tone for a slide back to retest yesterday swing low area of 30000.
  •  Australia 200 –Maintain bullish bias in any dips above 5780 support (lower limit of the major support zone of 5780/5670 – refer to latest weekly technical outlook) for a potential push up to retest the near-term resistance of 5914 in the first step (minor swing high areas of 07/08 Feb 2018). On the other hand, a break below 5780 should invalidate the recovery process for another choppy move down to retest the lower limit of the major support zone at 5670.
  • Germany 30 – Sharp bullish reversal as expected at the 12110 key short-term support after a test on it upon the release of U.S. CPI data (printed a low of 12070 but without any hourly close below 12110). No change, maintain bullish bias in any dips above tightened key short-term support now at 12355 (former minor range resistance of 12/13 Feb 2018) for a further potential push up  target the near-term resistance zone of 12650/12845 in the first step (neckline of the minor “Double Bottom” in place since last Tues, 06 Feb low + 61.8% Fibonacci retracement of the steep decline from 23 Jan 2018 high to 09 Feb 2018 low + descending trendline from 23 Jan 2018 high + former range support from 15 Nov 2017). However, failure to hold at 12355 should negate the bullish tone for a slide back to retest yesterday swing low area of 12110/12070.

Commodities – Further potential upside in Gold through bullish break of 1344

  • Gold – Minor bullish breakout as expected above 1344. No change, maintain bullish bias above tightened key short-term support at 1336 (former minor swing high area of 14 Feb 2018 + pull-back support of the former descending trendline from 25 Jan 2018) for a  further potential push up to retest the 25 Jan 2018 swing high of 1365 follow by the major upside trigger level of 1378 (the neckline resistance of the “Bottoming” configuration in place since Nov 2015 low). However, a break below 1336 should negate the bullish tone to see a slide back to retest 1320/1317.
  • WTI (Mar 2018) – Potential minor recovery validated through the bullish break of the minor  descending trendline from 02 Feb 2018.  Turn bullish above 60.45/60.00 key short-term support (pull-back support of the former descending trendline from 02 Feb 2018 + former minor swing high area of  12 Feb 2018) for a further potential up move to retest 64.10/64.30 in the first step (minor congestion zone of  02/06 Feb 2018 + 61.8%/76.4% Fibonacci retracement of the decline from 02 Feb high to 06 Feb 2018 U.S. session low). On the flipside, failure to hold above 60.00 should invalidate the recovery scenario for a choppy down move to retest the 58.00 support (also 10 Feb 2018 swing low).

*Levels are obtained from City Index Advantage TraderPro platform


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