Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 18 Jan)

FX – USD minor corrective rebound in progress

  • EUR/USD -  Recalled that we turned neutral yesterday, 17 Jan between 1.2370/80 & 1.2200 due to the risk of an impending minor corrective decline. At the end of yesterday U.S. session, the pair had breached below the 1.2200 lower neutrality range which validated the corrective decline scenario. In addition, the break of 1.2200 was also the trigger for a minor bearish reversal “Head & Shoulders” chart configuration  seen in the hourly chart. Turn bearish now below 1.2305 for a further potential corrective push down towards 1.2125 follow by the 1. 1.2090/2075 support zone (former swing highs area of Sep 2017/04 Jan 2018). On the flipside, a clearance above 1.2305 should see bulls in control for a continuation of the extension upleg towards the 1.2370/80 near-term resistance.
  • GBP/USD – Continued to rally as expected  and hit the lower limit of the short-term resistance zone of 1.3920/3960 (printed a high of 1.3942 in yesterday, 17 Jan U.S. session).  The 4 hour Stochastic oscillator has flashed a bearish divergence signal at its overbought region which indicates a slow-down in the recent upside momentum of price action. At risk of a minor corrective decline to retrace the up move from 15 Dec 2017, turn bearish now below  1.3940 short-term resistance for a further potential push down to target the next near-term supports at 1.3745 (minor swing low area of  16 Jan 2018) follow by 1.3700 next (38.2% Fibonacci retracement of the up move from 16 Dec 2017 low to yesterday high + median line of the medium-term ascending channel from 03 Nov 2017 low). On the other hand, a break above 1.3940 should see a further potential up move towards the next resistance at 1.4130 (swing low area of 03 Apr 2016 + upper boundary of the major ascending channel from 15 Jan 2017 low).
  • AUD/USD – Pushed up and almost hit the short-term resistance/target of 0.8040/60 (printed a high of 0.8023 in yesterday, 18 Jan U.S. session). The 4 hour Stochastic oscillator has flashed a bearish divergence signal at its overbought region, turn bearish now below 0.8000 key short-term resistance with 0.7940 as downside trigger to reinforce the start of a potential minor corrective downleg to target the next near-term support at 0.7900/7885 (former medium-term swing high area of  13/19 Oct 2017 + medium-term ascending channel support from 08 Dec 2017 low + 23.6% Fibonacci retracement of the whole up move from 08 Dec 2017 low to yesterday high). On the flipside, a clearance above 0.8000 should put the bullish back in control for a further potential rally towards the next resistance at 0.8125 (medium-term swing highs at 10 May 2015 & 03 Sep 2017).  
  • NZD/USD – Printed a high  of 0.7331 which is closed to the lower limit of the short-term resistance/target zone of 0.7340/7370. Upside momentum has started to wane as seen by the bearish divergence signal from the 4 hour Stochastic oscillator. Turn bearish below 0.7340 key short-term resistance with 0.7235 as the downside trigger level (medium-term ascending channel from 08 Dec 2017 low) to reinforce a potential minor corrective decline towards the next near-term support of 0.7140 (swing low of 09 Jan 2018 + 38.2% Fibonacci retracement of the up move from 08 Dec 2017 low to yesterday high). However, a clearance above 0.7340 should see the continuation of the rally to target the next resistance at 0.7435 (medium-term swing high of 20 Sep 2017).
  • USD/JPY-  Minor recovery in progress as expected. Maintain bullish  bias above tightened key short-term support now at 110.85 (former minor swing high of 17 Jan 2018 + pull-back support of the former minor descending trendline from 08 Jan 2018 high) for a further potential push up to target the resistance of 111.70/80 with a potential extension towards 112.10 (former medium-term swing low areas of 06 Dec/15 Dec 2017/02 Jan 2018 + Fibonacci cluster). On the other hand, failure to hold above 110.85 shall invalidate the recovery phase to see as slide back towards 110.00 and below it  opens up scope for an extension of the drop towards the next support at  108.15/108.00 (medium-term swing low areas of 17 Apr/29 Aug 2017).

Stock Indices (CFD) – US SP 500 eyeing a potential new all-time high

  • US SP 500 –  Pushed up from the 2780/68 support as expected towards the current all-time high of 2807. No clear signs of bullish exhaustion  yet, maintain bullish bias in any dips above tightened key short-term support at 2791 (former minor swing high of 17 Jan 2018 + minor ascending trendline from 16 Jan 2018, U.S. session low) for a further potential up move towards the first medium-term resistance at 2820 (see latest weekly technical outlook). On the other hand, a break below 2791 should negate the bullish tone to see a slide back to retest the 2780/68 zone.
  • Japan 225 – Rise in progress as expected. Maintain bullish bias and tightened key short-term support to 23890 (minor congestion zone of 16/17 Jan 2018 + minor ascending trendline from 17 Jan 2018 low) for a further potential push up to target 24200 resistance ( Fibonacci projection cluster + exit potential of the recent triangle range bullish breakout). Above 24200 opens up scope for  a potential extension up move towards the medium-term resistance of 24540 (see latest weekly technical outlook). On the other hand, a break below 23890 should negate the bullish tone for a slide to retest 23650/560.
  • Hong Kong 50 – Rallied as expected and hit the 32175 short-term resistance/target (printed a current intraday high of 32192 in today, 18 Jan Asian session). The hourly Stochastic oscillator has started to turn down from its overbought region, risk of a minor  retracement/dip. Prefer to turn neutral now between 32192 & 31660 (minor swing low of 17 Jan 2018 + minor ascending channel support from 21 Dec 2017 low).
  • Australia 200 – Continued to whipsaw around the 6026/5996 key medium-term support/excess as we head into the 2nd half of the AU earnings season in Feb 2018. Mix elements, prefer to maintain neutrality stance between 6026/5996 & 6042. An hourly close above 6042 is likely to revive the bullish tone for a potential push up towards 6109 (the minor swing high of 15 Jan 2018 + medium-term upside trigger)
  • Germany 30 -  Continued to trade sideways above 13130 minor support.  No change, maintain neutrality stance between 13130 & 13350. Only a break above 13350 will increase the odds of another potential push up to target the 13530/560 near-term resistance (07 Nov 2017 swing high area) in the first step.

Commodities – Gold at risk of a minor corrective decline

  • Gold – Started to slide but still above the 1320 key short-term support. However, bullish conviction has been reduced at this juncture due to a further impending USD corrective rebound. Thus, prefer to turn neutral now between 1320 & 1340 (minor swing high of 17 Jan 2018 seen in the U.S. session).  An hourly close above 1340 is likely to shift the focus back to the bulls for another round of potential upleg to target 1357 (swing high of 08 Sep 2017) before the significant resistance of 1375/1378 (major upside trigger level for a potential multi-month up move). On the other hand, failure to hold above 1320 should trigger a corrective slide to retest 1308/1305 support(minor swing low area of 09/10 Jan 2018).
  • WTI Crude (Feb 2018) – Mix elements at this juncture, prefer to maintain neutrality stance between 65.20 & 63.00.  Bears need to have a break below 63.00 to trigger a potential minor corrective pull-back towards the 60.50/59.50 support zone (50%/61.8% Fibonacci retracement of the recent rally from 14 Dec 2017 low to 15 Jan 2018, U.S. session high).

*Levels are obtained from City Index Advantage TraderPro platform


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