Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 15 Mar)
Kelvin Wong March 15, 2018 5:16 AM
Further USD weakness across the board. Major stock indices are testing/holding above key short-term supports, a break above 2760 on the S&P 500 is likely to trigger a potential recovery. Gold remains bullish in short-term towards its minor range resistance of 1340
FX – Further potential USD weakness
- EUR/USD – Pull-backed towards the predefined 1.2340 key short-term support (former minor range resistance of 12/13 Mar 2018 + minor ascending trendline from 09 Mar 2018 low) from its earlier 1.2412 minor swing high seen on 14 Mar. No change, maintain bullish bias above 1.2340 key short-term support for a push up towards 1.2460 in the first step(76.4% Fibonacci retracement level of the recent decline from 16 Feb 2018 high to the 1.2153 low of 01 Mar 2018). A clearance above 1.2460 shall trigger a potential bullish breakout from the “triangle range” configuration in shape since 16 Feb 2018 high to eye the 16 Feb 2018 high of 1.2555 and even the lower limit of the major resistance zone at 1.2630 (Fibonacci projection cluster + secular descending channel resistance from Jul 2008). However, failure to hold above 1.2430 should damage the bullish tone for another round of choppy down move to retest 1.2310 (lower limit of the “triangle range” in place since 01 Mar 2018 low.
- GBP/USD – Yesterday’s pull-backed stalled right above the predefined 1.3910 key short-term support (pull-back support of the “Flag” bullish breakout + former minor range resistance of 06/13 Mar 2018) with a bullish divergence seen in the hourly Stochastic oscillator at its oversold region. No change, maintain bullish bias above 1.3910 support for a further potential push up to retest 1.4140 in the first step (16 Feb 2018 minor swing high + close to 61.8% Fibonacci retracement of the recent decline from 25 Jan high to 01 Mar 2018 low). On the flipside, failure to hold above 1.3910 should indicate a failure bullish breakout for a slide back to retest 1.3780 (minor swing low of 09 Mar 2018).
- AUD/USD – Pushed up as expected and almost hit the 0.7920/7935 short-term resistance/target (minor swing high areas of 16/20 Feb 2018 + descending trendline from 27 Jan 2018 + Fibonacci cluster). It printed a high of 0.7915 in yesterday, 14 Mar early U.S. session. Mix elements now as the 4 hour Stochastic oscillator has started to trace out a bearish divergence signal at its overbought region. Prefer to turn neutral first between 0.7935 & 0.7840 (former minor range resistance from 06/08 Mar 2018 + minor ascending trendline from 01 Mar 2018). Only a clearance above 0.7935 is likely to see another round of upleg to target the next resistance at 0.7970/7990 (61.8% Fibonacci retracement of the decline from 27 Jan 2018 low to 01 Mar 2018 low + swing high area of 16 Feb 2018).
- NZD/USD – Recalled that we turn neutral yesterday due to mix elements. The pair has indeed shaped a pull-back after the breakdown from the 0.7820 lower limit of short-term neutrality zone (see yesterday report). Interestingly, the decline has managed to stall at the lower boundary of the minor ascending channel from 01 Mar 2018 low now acting as a support at 0.7300 which also confluences with the 23.6% Fibonacci retracement of the on-going up move from 01 Mar 2018 low to 14 Mar 2018 high. Flip back to a bullish bias above 0.7300 key short-term support for another round of potential push up to target the next intermediate resistance at 0.7400 (upper boundary of the aforementioned minor ascending channel) and above 0.7400 opens up scope for a further rally to test 0.7435 (medium-term swing high areas of 24 Jan/16 Feb 2018). On the flipside, failure to hold above 0.7300 should damage the short-term uptrend in place since 01 Mar 2018 low for a deeper slide to retest the 08 Mar 2018 swing low area of 0.7250 which also confluences with the 61.8% Fibonacci retracement of the on-going up move from 01 Mar 2018 low to 14 Mar 2018 high.
- USD/JPY – Broke below the 106.20 support due to JPY safe haven status as a the narrative of a looming trade war between U.S and China resurfaced. Media reports cited that the U.S White House may impose tariffs on up to USD60 billon of Chinese imports that targets the technology and telecommunications sectors. The corrective rebound scenario is on hold now. Right now, it is at risk of shaping a further slide to retest the 105.50/25 key medium-term support (also the ascending trendline from Jun 2016 low) below the 106.80 key short-term resistance (yesterday, 14 Mar U.S. session high + close to the minor descending trendline from 13 Mar 2018 high). A break above 106.80 should invalidate the residual push down to restart the corrective rebound phase to target the 107.50/60 resistance in the first step (range resistance area of mid Feb to 27 Feb 2018)
Stock Indices (CFD) – Testing/holding at supports
- US SP 500 – Extended its decline into yesterday, 14 Mar U.S. session as the narrative of a looming trade war between U.S. and China resurfaced but still holding at the 2755/40 predefined key short-term support. Interestingly, the high beta S&P Technology sector has managed to outperform the benchmark S&P 500 as its respective ETF (XLK) recorded a smaller loss of 0.09% versus a decline of 0.57% seen in the S&P 500 in yesterday U.S. session. In addition, the 4 hour Stochastic oscillator of the SP 500 has shaped a bullish divergence signal at its oversold region which indicates that the downside momentum of the decline since the start of this week has started to abate. Maintain bullish bias above 2755/40 support with 2760 as an upside trigger (the minor descending trendline from 13 Mar high + yesterday, 14 Mar U.S. session) to reinforce a potential recovery to retest 2802 (13 Mar high) before targeting the next intermediate resistance at 2835 in the first step. (minor range resistance from 31 Jan/02 Feb 2018 + Fibonacci projection cluster). However, failure to hold above 2740 should see a deeper pull-back towards the next support at 2700/2680 (key medium-term support + lower boundary of the medium-term ascending channel from 06 Feb 2018 low).
- Japan 225 – Breached below the 21680 key short-term support as it printed an intraday low of 21548 before it reversed up strongly above 21680 in today, 15 Mar Asian session coupled with a bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region. Tolerate the excess and maintain bullish bias above 21680/548 support for a potential short-term recovery to target the intermediate resistance of 22510 (neckline of “Double Bottom” + upper boundary of the minor ascending channel). On the flipside, a break below 21548 should negate the bullish tone to trigger a deeper pull-back to test the next support at 21200/21180 (minor swing low area of 07 Mar 2018).
- Hong Kong 50 – Today, 15 Mar Asian open gapped down has managed to hold right at the predefined 30880 key short-term support (the minor ascending trendline from 05 Mar 2018 low + 50% Fibonacci retracement of the up move from 07 Mar 2018 low to 13 Mar 2018 high) before it reversed up sharply by 1.3% to recover the losses seen in yesterday, 14 Mar U.S. session. Tightened the key short-term support to 31060 (today, 15 Mar Asian session current intraday low) and maintain bullish bias in any dips to target the 31800 key medium-term upside trigger level in the first step (the gapped down seen on 06 Feb 2018 + 61.8% Fibonacci retracement of the recent decline from 29 Jan high to 09 Feb 2018 U.S. session low). However, failure to hold above 31060 should invalidate the recovery for a deeper slide to retest the 30100/30070 key medium-term support (refer to latest weekly technical outlook for details).
- Australia 200 – Continued to whipsaw around the 5920 key short-term support. Mix elements, prefer to turn neutral now between 5880 (key medium-term support) & 5950 (minor descending trendline from 12 Mar 2018 high. A break above 5950 is likely to see a push up towards 6000/10 (the upper limit of a potential triangle range configuration in place since 27 Feb 2018 high + 76.4% Fibonacci retracement of this week decline from 12 Mar 2018 high to today current intraday low of 5906).
- Germany 30 – No change, maintain neutrality stance between 11900/800 (major support zone) & 12300 (former minor support of 09 Mar 2018 that was broken down yesterday). A clearance above 12300 is likely to see a revival of the bulls to seek a push up towards the 12600/750 intermediate resistance (neckline of the impending “Double Bottom” in shape since 06 Feb 2018 low).
Commodities – Gold remains above range support
- Gold – 1317 remains the key short-term support (minor swing low area of 13 Mar + ascending trendline support from 01 Mar 2018 low) for a potential push up to retest the minor range resistance of 1340 where recent rallies have been capped on 26 Feb/07 Mar 2018. A break below 1317 reinstates the bears for a slide towards 1303/1300.
- WTI Crude (Apr 2018) - Continued to evolve in a choppy range configuration as it tested 60.15 again before a push up occurred in yesterday, 14 Mar U.S. session. No change, maintain neutrality stance between 60.15 (minor swing low areas of 02/09 Mar 2018) & 62.00 (descending trendline from 27 Feb 2018 high + minor swing high of 13 Mar 2018). Failure to hold above 60.15 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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