Daily Global Macro Technicals Trend Bias/Key Levels (Tues 13 Mar)
Kelvin Wong March 13, 2018 5:07 AM
Mix bag in FX space while USD/JPY has started to stabilise in line with improved risk appetite for risky assets. Recovery remains in progress for stocks & Gold may see further short-term downside within a longer-term range configuration.
FX – Mix bag while USD/JPY stabilises above 106.20 support
- EUR/USD – Failure to have a “clean break” below on the 1.2200 level has invalidated the minor bearish “Double Top” configuration that has taken shape since 25 Jan 2018. The pair printed a low of 1.2153 on 01 Mar before it reversed up sharply to print a high of 1.2446 on 08 Mar 2018 (ECB monetary policy decision day). The high of 1.2446 is only a whisker below the 76.4% Fibonacci retracement level of the recent decline from 16 Feb 2018 high to the 1.2153 low of 01 Mar 2018 which is at 1.2460. The push up from 1.2153 low has stalled below 1.2446/2460 reinforced by mix messages from the recent ECB monetary policy meeting where the ECB has expressed confidence in the current state of economic conditions in Eurozone by dropping the “easing bias - the intention to increase the level of bond purchases (QE) in size & duration if economic conditions changes” in its statement but reiterated that key policy interest rates will remain low for an extended period of time. Technical elements is mixed at this juncture where the pair is expected to trade within a range configuration. Thus, prefer to turn neutral between 1.2365 & 1.2270 (minor swing low areas of 05/09 Mar 2018). A break above 1.2365 may see a push up to retest 1.2446/2460.
- GBP/USD – Recent drop failed to hit the 1.3615/3530 support/target as it only printed a low of 1.3710 on 01 Mar 2018 before it reversed up. Current technical elements suggest that the pair is now consolidating within medium-term “Flag” bullish continuation configuration in shape since 25 Jan 2018 high. Turn neutral first between 1.3930 (upper boundary of the “Flag”) & 1.3795 (09 Mar 2018 minor swing low. Only a break above 1.3930 is likely to trigger a bullish breakout 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).
- AUD/USD – Undergoing a potential corrective rebound to retrace the recent decline from 27 Jan high to 01 Mar 2018 low. Turn bullish in any dips above 0.7840 key short-term support (former minor range resistance of 06/08 Mar 2018) for a further potential push up to target the 0.7920/7935 near-term resistance (minor swing high areas of 16/20 Feb 2018 + descending trendline from 27 Jan 2018 + Fibonacci cluster). However, failure to hold above 0.7870 should negate the bullish tone for a further slide to retest the lower boundary of the minor ascending channel in place since 01 Mar 2018 low now acting as a support at 0.7800.
- NZD/USD – The recent slide from 16 Feb 2018 high has managed to stall right at the crucial 0.7200 support (neckline of an impending “Double Top” configuration in shape since 25 Jan 2018 high. Turn bullish now in any dips above 0.7275 key short-term support (minor ascending channel support from 01 Mar 2018 low) for a further potential push up to test the 0.7370/80 near-term resistance (upper boundary of the minor ascending channel + 76.4% Fibonacci retracement of the recent decline from 16 Feb high to 01 Mar 2018 low). On the flipside, failure to hold above 0.7275 should negate the bullish tone for a slide to retest the 0.7200 support.
- USD/JPY – Reversed up after its retest on the 105.55 support and staged a bullish break out from its medium-term descending channel resistance from 08 Jan 2018 high. Right now, it is likely to be undergoing a potential multi-week corrective rebound to retrace the previous decline seen from late Dec 2017 to 02 Mar 2018 low. Yesterday’s pull-back in price action has reached a key infection zone which is the pull-back of the former descending channel resistance now acting as a support at 106.30 which also confluences with the former minor range resistance of 106.20 from 07/08 Mar 2018). In addition, the hourly Stochastic oscillator has flashed a bullish divergence signal at its oversold region. Turn bullish above 106.20 key short-term support for a further potential push up to retest last Fri, 09 Mar swing high area of 107.00 before targeting 107.60 next (range resistance area of mid Feb to 27 Feb 2018). On the other hand, a break below 106.20 support should invalidate the corrective rebound scenario for another round of decline to retest the 105.50 support in the first step.
Stock Indices (CFD) - Recovery remains intact
- US SP 500 – Maintain bullish bias in any dips above 2755/40 key short-term support (lower boundary of a minor ascending channel from 02 Mar 2018 low + 38.2%/50% Fibonacci retracement of the recent up move from 07 Mar 2018 low to yesterday, 12 Mar Asian session high) for further potential push up to target the next intermediate resistance at 2835 in the first step. (minor range resistance from 31 Jan/02 Feb 2018 + upper boundary of the aforementioned minor ascending channel). 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 – Yesterday, 12 Mar Asian session pull-back has managed to stage right at the lower boundary of a minor ascending channel from 02 Mar 2018 low acting as a support at 21680. Maintain bullish bias above 21680 key short-term support for a further potential push up to target the intermediate resistance of 22510 (neckline of “Double Bottom” + upper boundary of the minor ascending channel). On the flipside, a break below 21680 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 – Continued to push higher and it is now coming close to the 31800 medium-term upside trigger level (61.8% Fibonacci retracement of the prior decline from 29 Jan high to 09 Feb 2018 U.S. session low + gapped down seen on 06 Feb 2018). Mix elements in short-term, prefer to turn neutral first between 31800 & 31290 (gapped up seen in yesterday, 12 Mar Asian session open).
- Australia 200 – Pull-backed from yesterday, 12 Mar Asian session high of 6030 and it has reached the an inflection level for another round of potential upleg. Current price action is now resting at the minor ascending trendline now acting as a support a 5940 which also confluences closely with the former minor swing high area of 08 Mar 2018. In addition, the hourly Stochastic oscillator has just exited from its oversold region. Maintain bullish bias above 5940 key short-term support for a potential push up to retest the previous minor swing high of 6030 in the first step. However, failure to hold above 5930 should negate the bullish tone for a deeper pull-back towards the 5880 key medium-term support (see latest weekly technical outlook).
- Germany 30 – Maintain bullish bias in any dips above 12260 key short-term support (former minor swing high areas of 06/07 Mar 2018 + minor ascending trendline from 05 Mar 2018 low) for a further potential push up to test the 12600/750 intermediate resistance (neckline of the impending “Double Bottom” in shape since 06 Feb 2018 low). On the other hand, a break below 12260 should see another round of choppy decline to retest the 11900/800 major support.
Commodities – Gold remains weak in short-term within a longer-term range configuration
- Gold – Challenged the previous 1323 key short-term resistance (printed a high of 1326 in today, 13 Mar Asian session before it reversed down). Maintain bearish bias with adjusted key short-term resistance at 1326 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 1326 negate the short-term bearish tone for a squeeze up to retest the 26 Feb minor swing high of 1340.
- WTI Crude (Apr 2018) - Continued to evolve in a choppy range configuration. Prefer to maintain neutrality stance between 60.15 (minor swing low areas of 02/09 Mar 2018) & 62.60 (descending trendline from 27 Feb 2018 high + minor swing high of 07 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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