Daily Global Macro Technicals Trend Bias/Key Levels (Tues 16 Jan)

FX – Further potential downleg in USD

  • EUR/USD – Remained strong and traded sideways. Short-term momentum indicators (houlry RSI & Stochastic) suggest that the pair is likely to be in an extension phase of the short-term (Elliot Wave/fractal analysis-minor degree bullish impulsive wave iii) in palce since 11 Jan 2018 low which implies that the odds of a minor pull-back/consolidation towards 1.2075 support is low at this juncture. Maintain bulllish bias with a tighened kes short-term support now at 1.2200 (close to 23.6% Fibonacci retracement of the on-going up move from 11 Jan 2018 low + minor swing low of 15 Jan 2018) for a  further potential push up to target the next near-term resistance at 1.2370/80 (congestion zone of Nov/Dec 2014 + Fibonacci projection cluster+ upper boundary of minor ascending channel from 1 Jan 2018 ). On the other hand, a break below  1.2200 should invalidate the direct rise scenario for a corrective pull-back towards the 1.2090/2075 support.
  •  GPB/USD – Continued to inch higher but the 4 hour Stochastic oscillator has started to inch lower from its overbought region which indicates that the recent upside momentum of price action has started to slow-down. Still at risk of a minor corrective pull-back at this juncture, this maintain bullish bias in any dips above 1.3600 key short-term support (former swing high areas of 15 Sep 2017/03 Jan 2018) for another potential upleg to target the next resistance at 1.3920/3960 (upper boundary of medium-term ascending channel from 16 Jan 2017 low + Fibonacci projection cluster). However, failure to hold above 1.3600 should negate the bullish tone for a deeper pull-back to retest 1.3460 support (11 Jan 2018 minor swing low area).
  • AUD/USD – Rise in progress as expected and hit 0.7970 first short-term resistance/target (pritned a high of 0.7978 in yesterday, 15 Jan U.S. session before it staged a dip into today’s Asian session). No change, maintain bullish bias above tightend short-term support now at 0.7940 (minor swing low of 15 Jan 2018 + median line of the medium-term ascending channel from 09 Dec 2017 low + close to 23.6% Fibonacci retracement of the recent rally from 12 Jan 2018 low to  yesterday, 15 Jan U.S. session  high) for a further potential push up towards the next resistance at 0.8040/8060 (Fibonacci projection cluster + medium-term swing high areas of 27 Jul/20 Sep 2017). On the other hand, a break below 0.7970 should negate the bullish tone to see a corrective pull-back towards 0.7870 (lower boundary of medium-term ascending channel from 09 Dec 2017 + former minor swing high areas of 05/06 Jan 2018).
  • NZD/USD – Rise in progress as expected. Maintain bullish bias above tightend key short-term support now at 0.7260 (close to the minor ascending trendline from 10 Jan 2018 low + former minor swing high area of 13 Jan 2018) for a further potential push up towards the next  near-term resistance at 0.7340/7370 zone(medium-term ascending channel resistance from 08 Dec 2017 + medium-term swing  high area of  20/22 Sep 2017 + Fibonacci cluster). On the other hand, a break below 0.7260 should kick start a minor corrective pull-back towards 0.7200 support (lower boundary of medium-term ascending channel from 08 Dec 2017 low).
  • USD/JPY – Dropped as expected and hit the first short-term support/target of  110.40 (printed a low of 110.33 in yesterday, 15 Jan U.S. session). In today’s Asian session, price action has started to shaped a rebound but remained below the 110.70 key short-term resistance (coincides closely with the minor descending trendline from 08 Jan 2018 high. Maintain bearish bias below 110.70 for another potential downleg to target the next near-term support of 110.15 (lower boundary of a medium-term descending channel from 06 Nov 2017 high + Fibonacci cluster). However, a clearance above 111.70 should invalidate the bearish scenario for a potential squeeze up to retest 112.00/112.15 (the former swing low areas of 06 /15 Dec 2017 & 02 Jan 2018.

Stock Indices (CFD) – Further potential upside while Germany 30 needs to break above 13350

  • US SP 500 –  No change, maintain bullish bias above in any dips above 2780 tightened key short-term support (the steep minor ascending trendline from 10 Jan 2018 minor swing low + 23.6% Fibonacci retracement of the recent on-going up move from 10 Jan 2018 low to 15 Jan 2018 high) for a further potential push up to target the next resistance at 2820 (Fibonacci projection cluster + upper boundary of the minor ascending channel from 30 Dec 2016 low). On the other hand, a break below 2780 should negate the bullish tone to trigger a corrective pull-back towards the next support at 2766/56 (pull-back support of former ascending channel upper boundary bullish breakout from 15 Nov 2017 low + former minor swing high area of 10 Jan 2018).
  • Japan 225 – Cleared above 23790 upside trigger level as expected. Maintain bullish bias above tightened key short-term support now at 23560 (minor swing  low areas of 10/12 Jan 2018) for a further potential push up  towards next resistance at 24200 ( Fibonacci projection cluster + exit potential of the recent triangle range bullish breakout). On the other hand, a break below 23560 should negate the bullish tone to trigger a corrective pull-back towards the key medium-term support at 23325 (see weekly technical outlook).
  • Hong Kong 50 – Recalled that we had turned neutral yesterday due to the risk of a minor pull-back below 31750, the Index indeed staged a slide towards the lower limit of the predefined neutrality range at 31230 (printed a low of 31300). The 4 hour Stochastic oscillator has just exited from its oversold region which indicates a revival of upside momentum that implies that yesterday’s minor pull-back in price action is likely to have ended. Flip back to bullish bias in any dips above 31300 key short-term support for a further potential push up to target 31960(Oct  2007 high) follow by 32175 next (2.618 Fibonacci projection of the up move from 07 Dec 2017 low to 14 Dec 2017 high projected from 15 Dec 2017 low). On the other hand failure to hold above 31300 shall invalidate the direct rise scenario for a corrective pull-back towards the 30990 support (lower boundary of the minor ascending channel from 15 Dec 2017 low).
  • Australia 200 – Maintain bullish bias above 6026 key medium-term support for a potential push up to retest the 6109 near-term resistance (yesterday high). However, a break below 6026 should see a deeper corrective slide to retest the recent triangle range support of  5940/10.
  • Germany 30 – Traded sideways above the 13000 key medium-term support. No change, maintain neutrality stance between 13150 (11 Jan 2018 low) & 13350. Only a break above 13350 will increase the odds of another potential upleg to target the 13530/560 near-term resistance (07 Nov 2017 swing high area) in the first step.

Commodities – Risk of minor corrective decline in WTI

  • Gold – Maintain bullish bias above key short-term support at 1320 (last Fri, 12 Jan swing low + medium-term ascending channel from 12 Dec 2017 low) for a further potential push up towards 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 negate the bullish tone to see a slide to retest 1308/1305 support next (minor swing low area of 09/10 Jan 2018).
  • WTI Crude (Feb 2018) – Continued  to inch higher as expected and it is now coming close to the 65.20 significant medium-term resistance  (former major swing lows area of Sep 2009/May 20110) with bearish divergences seen in both the 4 hour RSI & Stochastic oscillators. Risk of a minor pull-back at this juncture, prefer to turn neutral now between 65.20 & 63.00.  A break below 63.00 may trigger a 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 yesterday high).

*Levels are obtained from City Index Advantage TraderPro platform


  

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.