FX – USD still holding above minor supports
- EUR/USD – Still hovering below the 1.2305 key short-term resistance. No change, maintain bearish bias below 1.2305 resistance with 1.2165 as downside trigger to reinforce the start of a potential minor corrective downleg towards the next near-term support at 1.2125 follow by the 1.2090/2070 support zone (former swing highs area of Sep 2017/04 Jan 2018). On the flipside, a clearance above 1.2305 should see bulls back in control for a continuation of the extension upleg towards the next resistance zone at 1.2380/2415 (upper boundary of a major ascending channel from 03 Jan 2017).
- GBP/USD – GBP was the strongest performer among the majors yesterday and broke above the 1.3940 resistance key short-term resistance that put the minor corrective decline scenario on hold. Yesterday’s push up came without any key economic data releases other that the positive Brexit news flow that came from French President Macron where he stated that it was possible for UK to have its “own solution” when it came to negotiating a trade agreement with EU. However, the aforementioned news was reported on Sunday while the sudden pushed up in the pair only occurred on yesterday, 22 Jan in the U.S. session where it broke above 1.3940 (a “squeeze’ on the short-sellers?) Technically, it is now coming close to a near-term resistance zone of 1.4025/4130 (upper boundary of the major ascending channel from 15 Jan 2017 low, 03 Apr 2016 swing low area + Fibonacci projection cluster) coupled with an extreme overbought reading seen in the 4 hour Stochastic oscillator. Mix elements, prefer to turn neutral now between 1.4130 & 1.3800 (steep minor ascending trendline from 11 Jan 2018 low + close to the 23.6% Fibonacci retracement of the on-going up move since 03 Nov 2017 low). A break below 1.3800 is likely to trigger the minor corrective decline towards 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)towards.
- AUD/USD – Traded sideways, maintain bearish bias below 0.8040 key short-term resistance a potential push down towards the near-term supports of 0.7940 follow by 0.7900/7885 next (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). However, a clearance above 0.8040 should put the bulls 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 – Pushed up and breached above the 0.7340 key short-term resistance in today Asian session before it traded back below 0.7340. IN addition, the hourly Stochastic oscillator has traced out a bearish divergence signal at its overbought region. Tolerate the excess to 0.7360 and maintain bearish bias below 0.7340/60 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 0.7360 should see the continuation of the extension up move to target the next resistance at 0.7435 (medium-term swing high of 20 Sep 2017).
- USD/JPY – Maintain bullish bias with adjusted key short-term support at 110.20 (the low of a potential minor bullish reversal “Double Bottom” configuration in place since 17 Jan 2018) for a potential push up to test its intermediate neckline resistance at 111.45 and a break above it opens up scope for a further potential corrective rebound to target the 112.00/112.15 resistance (former medium-term swing low areas of 06 Dec/15 Dec 2017/02 Jan 2018 + Fibonacci cluster). However, failure to hold above 110.20 should see a further slide to test the 110.00 psychological level and below it is likely to trigger an extension of the decline towards the major support zone of 109.00/108.70 (the ascending trendline from Jun/Aug 2016 & Fibonacci cluster).
Stock Indices (CFD) – No clear signs of bullish exhaustion & watch 6042 in Australia 200 to trigger upside
- US SP 500 – Rallied as expected and hit the 2820 first medium-term resistance/target (printed a new all-time of 2833 in yesterday, 22 Jan U.S. session). No signs of bullish exhaustion yet, maintain bullish bias in any dips above tightened key short-term support now at 2810 (former minor range top from 16 Jan/20 Jan 2018 + 61.8% Fibonacci retracement of yesterday rally from 19 Jan 2018 minor low + ascending channel support from 30 Dec 2017 low) for a further potential upleg to target the next near-term resistance at 2853 (1.618 Fibonacci projection from 17 Jan 2018 low) follow by 2860 (lower limit of the 2nd medium-term resistance-see latest weekly technical outlook). On the flipside, failure to hold above 2810 should negate the bullish tone for a deeper pull-back to test the next near-term support at 2790/80.
- Japan 225 – Broke above the 23900 short-term upper neutrality range which suggests the revival of upside momentum of price action. Flip back to bullish bias above 23900/850 key short-term support for a further potential push up to test the near-term resistance of 24200 (Fibonacci projection cluster + exit potential of the recent triangle range bullish breakout) and above it sees a further rally towards 24400 (close to the upper boundary of the medium-term ascending channel from 06 Dec 2017 low). However, a reintegration back below 23850 should invalidate the bullish scenario for another round of choppy decline to retest the minor range support of 23650.
- Hong Kong 50 – Rise in progress as expected and hit the short-term resistance/target of 32530. Maintain bullish bias in any dips above tightened key short-term support now at 32350 (yesterday former minor swing high) for a further potential push up towards 33330 (lower limit of medium-term resistance zone-see latest weekly technical outlook). However, failure to hold above 32350 should negate the bullish tone for a deeper pull-back towards the 32000/31850 support.
- Australia 200 – No change, maintain neutrality stance between 5986 & 6042. Only a break above 6042 is likely to trigger a minor push up towards 6109 resistance (the medium-term upper neutrality range – see latest weekly technical outlook).
- Germany 30 – Rise in progress as expected and coming close to the short-term resistance/target of 13530/560. Maintain bullish bias in any dips above tightened key short-term support now at 13390 (lower boundary of a minor ascending channel from 17 Jan 2018 low + 38.2% Fibonacci retracement of the on-going up move from 18 Jan 2018 low) for a further potential push up to target the next near-term resistance at 13670 (close to the upper boundary of the minor ascending channel from 17 Jan 2018 low + 3.618 Fibonacci projection from 17 Jan 2018 low). However, failure to hold above 13390 should negate the bullish tone for a deeper slide back to retest the 13340/300 support.
Commodities – Further potential upside in WTI
- Gold – Still at risk of a minor corrective decline. A break below the 1320 lower neutrality range is likely to trigger a corrective slide to retest 1308/1305 support(minor swing low area of 09/10 Jan 2018). On the other hand, a break above 1340 should shift the focus back to the bulls for another round of potential up move 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).
- WTI Crude (Mar 2018) – Continued to inch higher from the predefined key short-term support. No change, maintain bullish bias above 63.00/62.80 key short-term support (minor ascending trendline from 14 Dec 2018 low + 23.6% Fibonacci retracement of the up move from 14 Dec 2018 low to 16 Jan 2018 high) for a further potential up move to retest 64.82 (16 Jan 2018 high) follow by 65.20 significant medium-term resistance (former major swing lows area of Sep 2009/May 2010). However, a break below 62.80 should invalidated the bullish tone for 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 16 Jan 2018 high).
*Levels are obtained from City Index Advantage TraderPro platform
StoneX Financial Ltd (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.