Daily Global Macro Technicals Trend Bias/Key Levels (Tues 02 May)

USD strength extends. S&P 500 needs to break above 2663 to get out of its short-term choppy formation. Watch 1300 medium-term range support on Gold.

FX – USD strength extends

  • EUR/USD – Trend bias: Downtrend extends. Recalled that we had turned neutral on last Fri, 27 Apr between 1.2030 & 1.2160 due to the risk of a short-term mean reversion rebound. Yesterday, 01 May price action has put such scenario on the backburner as the pair had a daily close below 1.2030. Flip back to a bearish bias in any bounce below 1.2080 key short-term resistance (minor descending trendline from 17 Apr 2018 high + former minor swing low of 27 Apr 2018 + 23.6% Fibonacci retracement of the on-going decline from 17 Apr high to 01 May low of 1.1981) for a further potential down move to target the next intermediate support at 1.1930/1890 (former medium-term swing high areas of 24 Nov/01 Dec 2017 that was tested & held on 10 Jan 2018 + Fibonacci projection cluster). However, a clearance above 1.2080 negates the bearish tone for a squeeze back up to retest the 1.2160/2190 resistance  (former swing low areas of 18 Jan/01 Mar 2018).
  • GBP/USD – Trend bias: Downtrend extends.  Continued to inch lower as expected and broke below the upper limit of the key medium-term support zone of 1.3790/3590. Yesterday’s price action has reduced the probability  of a short-term mean reversion rebound at this juncture as the pair has broken below the medium-term ascending channel support from 14 Mar 2017 low despite holding at 1.3590 (the lower limit of the key medium-term support zone, printed a low of 1.3588 in yesterday, 01 May U.S. session). Maintain bearish bias in any bounce below adjusted key short-term resistance now at 1.3780 (former minor swing low areas of 10 Feb/02 Mar 2018 + minor descending trendline from 17 Apr 2018 high + 23.6% Fibonacci retracement of the on-going decline from 17 Apr high to 01 May low of 1.3588) for a further potential down move to target the next intermediate support at 1.3470/3430 (swing low area of 11 Jan 2018 + 38.2% Fibonacci retracement of the 16-month up move from 16 Jan 2017 high to 17 Apr 2018 high). However, a clearance above 1.3780 negates the bearish tone for a squeeze back up to retest the 1.4000 resistance (former minor swing low area of 05 Apr 2018 + close to 50% Fibonacci retracement of the on-going decline from 17 Apr high to 01 May low of 1.3588).
  • AUD/USD – Trend bias: Downtrend extends. Broke below the 0.7500 lower limit neutrality zone as per highlighted on last Fri, 27 Apr report has reduced the probability of a short-term mean reversion rebound at this  juncture. Flip back to a bearish bias in any bounce below 0.7550 key short-term resistance (former minor swing low areas of 25/27 Apr 2018 + 23.6% Fibonacci retracement of the on-going decline from 19 Apr 2018 high to 01 May 2018 low of 0.7472) for a further potential down move to target the next support at 0.7370/0.7330 (the swing low areas of 08 May/01 Jun 2017 + 61.8% Fibonacci retracement of the up move from 15 Jan 2016 low to 26 Jan 2018 high). However, a clearance above 0.7550 negates the bearish tone for a squeeze back up to retest the 0.7660 resistance (the former minor range support from 29 Mar/09 Apr 2018).
  • NZD/USD - Trend bias: Unclear. The decline has managed to test and staged a bounce at the 0.7000 lower limit of the neutrality zone as per highlighted in last Fri, 27 Apr report. Mix elements, prefer to maintain neutrality stance between 0.7000 and 0.7095 (minor swing high area of 26/28 Apr 2018 + 23.6% Fibonacci retracement of the on-going decline from 13 Apr high to 01 May low of 0.6990). Only a clear break below 0.7000 (an hourly close below) is likely to see an extension of the down move to target  the next support at 0.6930 (former swing high area of 09 Nov 2017 + 76.4% Fibonacci retracement of the up move from 17 Nov 2017 low to 16 Feb 2018 high).
  • USD/JPY - Trend bias: Uptrend extends.  Broke above the 109.65 key short-term resistance has invalidated the short-term mean reversion decline scenario. Flip back to a bullish bias above key short-term support now at 109.40 (former minor range resistance from 26/30 Apr 2018 + minor ascending trendline from 30 Apr 2018 low) for a further potential up move to target the next resistance at 110.85/111.00 (the former medium-term swing low area of 27 Nov 2017 & the 61.8% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low). On the other hand, failure to hold at 109.40 negates the bullish tone for a deeper pull-back to the minor range support of 108.95/90 (swing low areas of 26/27 Apr 2018 + 23.6% Fibonacci retracement of the on-going up move from 26 Mar low to 01 May 2018 high).

Stock Indices (CFD) – Bullish breakout seen in ASX 200

  • US SP 500 – Trend bias: Unclear. Another short-term choppy movement as the Index broke below 2655 key short-term support and continued its sell-off in yesterday, 01 May U.S. session led by underperformance seen in the Industrials and Energy sectors to print an intraday low of 2625 before it recovered in the last 2 hours of the U.S. session to close back at 2655 assisted by a rally in Apple which triggered an outperformance in the Technology sector (its ETF, XLK recorded a gain of 1.25% versus a return of 0.25% seen on the S&P 500).  Prefer to turn neutral first between 2663 (former minor swing low of 27 Apr 2018) and  2625. On a clear break above 2663 (an hourly close above) is likely to reinstate the bullish tone for a potential push up to test the 2720/40 “Symmetrical Triangle” range resistance.
  • Japan 225 Trend bias: Sideways.  Cash stock market is close for a public holiday. Pushed up as expected and it is now hovering at the 22510/22710 key medium-term resistance (61.8% Fibonacci retracement of the decline from 23 Jan high to 23 Mar 2018 low). Prefer to turn neutral now between 22710 and 22330 (former minor swing high areas of 19/24 Apr 2018). Only clear break above 22710 (an hourly close above it) validates a further potential push up to target the 23000/23280 resistance next (former range top of 09 Nov/18 Dec 2017 & 76.4% Fibonacci retracement of the recent decline from 23 Jan 2018 high to 24 Mar 2018 low).
  • Hong Kong 50Trend bias: Sideways. Price action has pull-backed from the 30790 upper limit of the short-term neutrality zone after it printed a current intraday high of 30807 in today, 02 May Asian session open.  No change, maintain neutrality stance between 30000/29950 (psychological level +  former swing low areas of 23 Mar/03 Apr 2018 + 61.8% Fibonacci retracement of the up move from 04 Apr 2018 low to 12 Apr 2018 high) and 30800. Only a break above 30800 (an hourly close above it) sees a potential push up towards the 31165 minor range resistance in first step.
  • Australia 200 – Trend bias: Bullish breakout from “Symmetrical Triangle” range. Continued to inch higher as expected as surpassed the previous short-term target of 6030 which was the upper boundary of the “Symmetrical Triangle” range from 09 Jan 2018 high. Maintain bullish bias in any dips above adjusted key short-term support now at 5995 (yesterday, 01 May U.S. session low + pull-back support of the former “Symmetrical Triangle” range resistance) for a further potential push up to target the next intermediate resistance at 6084 (27 Feb 2018  minor swing high) in the first step. On the flipside, failure to hold at 5995 sees a failure bullish breakout for a reintegration back into its  4-month range configuration to test the next intermediate support at 5924 (the minor ascending trendline from 03 Apr 2018 low).
  • Germany 30Trend bias: Sideways. Maintain neutrality stance between 12640 and 12310. Only a clearance above 12640 reinstates the bullish tone for a further potential push up to test the 12750/850 key medium-term upside trigger level in first step (former range support from 15 Nov 2017/02 Jan 2018, 61.8% Fibonacci retracement of the decline from its current all-time high printed on 23 Jan 2018 to 06 Feb 2018 low). On the flipside, a break below 12310 sees the risk of a deeper slide towards the 12120 key medium-term support (ascending trendline from 26 Mar 2018 low + close to the 50% Fibonacci retracement of the up move from 26 Mar low to  24 Apr high of 12649) before a recovery materialises.

Commodities – Watch 1300 medium-term range support on Gold

  • WTI Crude (Jun 2018) - Trend bias: Sideways. Continued to trade within the predefined range as per highlighted in last Fri, 27 Apr report. It rose to a high of 69.34 in yesterday, 01 May Asian session before it gave back its gains to test the minor range support of 67.15 (printed a low of 66.85 in the U.S. session before it inched back above 67.15). No change, maintain neutrality stance between 69.90 and 67.15. A break below 67.15 (an hourly close below it) opens up scope for a deeper pull-back to retest the next intermediate support of 66.50/10 (former medium-term range resistance from 25 Jan/23 Mar 2018).
  • Gold - Trend bias: Unclear. Pushed down as expected and met the downside target of 1310/1303 (medium-term range support in place since 08 Feb 2018 low). Prefer to turn neutral first between 1300 and 1323 (former minor swing low areas of 29 Mar/23 Apr 2018). A break above 1323 (an hourly close above it) sees a potential push up towards the next intermediate resistance at 1334/41 (the minor descending resistance from 11 Apr 2018 high + former minor swing low of 13 Apr 2018) within a major sideways range configuration in place since Jul 2016.

*Levels are obtained from City Index Advantage TraderPro platform




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