Daily Global Macro Technicals Trend/Bias Key Levels (Tues 27 Feb)

USD sandwiched as Fed Chair Powell testimony to Senate looms, major stock indices still holding above supports for further potential upside. Watch the 1326 support for Gold.

FX – USD sandwiched as Fed Chair Powell maiden Senate testimony looms

  • EUR/USD – Managed to hover above the 1.2276/2260 key short-term support with the daily RSI oscillator that is inching up above the 50% level (a sign of a revival in upside momentum of price action).  No change, maintain bullish bias above 1.2276/2260 support with 1.2370 as the upside trigger (former minor swing low area of 19 Feb 2018 that was rejected on 21 Feb U.S. session now also close to the neckline resistance of a minor impending “Double Bottom” that is forming since 22 Feb 2018 low as seen in the hourly chart) to reinforce a potential push up towards the recent range resistance of 1.2506/2555 in the first step. On the flipside, failure to hold above 1.2260 should invalidate the push scenario for a slide to test the key 1.2200 neckline support of an impending “Double Top” that is forming since 01 Feb 2018 high.
  • GBP/USD – Reacted below the 1.4080 upper limit of the short-term neutrality zone before the decline stalled right above last Fri, 23 Feb low of 1.3905 as traders toggle between hawkish comments from BoE officials and Brexit speeches from key UK politicians.  No change, maintain neutrality stance between 1.3857 ( 22 Feb 2018 minor swing low) & 1.4080 (descending trendline resistance from 25 Jan 2018). Only,  a break above 1.4080 is likely to reinforce the start of another potential upleg to target the recent Jan medium-term swing high of 1.4345. Below 1.3857 sees the risk of a minor corrective downleg towards the 1.3615/3530 key medium-term support (former medium-term swing high area of 15/18 Sep 2018 + ascending trendline support from 13 Mar 2017 low).
  • AUD/USD – Pushed up as expected and almost hit the short-term resistance/target of 0.7900 (printed a high of 0.7893 in yesterday, 28 Feb European session before it staged a decline of 67 pips without any related data releases or speeches from central bank/govt officials. Mix elements now, prefer to turn neutral between 0.7810 (minor swing low area of 23 Feb 2018 + minor ascending trendline from 22 Feb 2018) & 0.7900. Only a clearance above 0.7900 is likely to trigger a further push up to retest the 0.7965/7988 (recent swing high area of 16 Feb 2018).  On the other hand, a break below 0.7810 may see a further slide to retest 0.7775/7760 (the swing low areas of 09/22 Feb 2018).
  • NZD/USD – Technical elements have started to turn negative again after yesterday, 26 Feb initial pushed up fail to hit the short-term resistance/target of 0.7370 (printed a high of 0.7345 in the European session before it fizzled out)Yesterday, pushed up was stall right at a minor descending trendline from 16 Feb 2018 now acting as a resistance at  0.7335. Prefer to turn neutral first between 0.7270 (23 Feb 2018 minor low) & 0.7335. Failure to hold above 0.7270 is likely to see a further slide to retest 0.7240 follow by 0.7190 (neckline support of an impending “Double Top” that is forming since 25 Jan 2018.
  •  USD/JPY – Traded sideways below the 107.26 key short-term resistance. No change, maintain bearish bias below 107.26 resistance for a further potential push down to retest  the recent 105.55 swing low of 16 Feb 2018. A break below 105.55 is likely to open up scope for a further downleg to target the next support at 104.25/104.00 (Fibonacci projection cluster + lower boundary of a medium-term descending channel from 08 Jan 2018 high). On the flipside, a clearance above 107.26 should invalidate the bearish scenario for a squeeze up towards the 108.30/50 resistance (upper boundary of a descending channel in place since 08 Jan 2018 + former minor range support from 27 Jan 2018 low + the 0.382% Fibonacci retracement of the decline from 08 Jan 2018 high to 16 Feb 2018 low).

Stock Indices (CFD) – Further potential upside

  • US SP 500 –  Rise in progress as expected. Sector rotation analysis also advocates for a further potential up move as the high beta S&P Technology sector continues to outperform where its respective ETF (XLK) recorded a daily gain of 1.57% versus a gain of 1.18% in the S&P 500 in yesterday U.S. session. Maintain bullish bias in any dips above 2753 tightened key short-term support (yesterday, 26 Feb U.S. session low + close to the 38.2% Fibonacci retracement of the on-going rally from 22 Feb 2018 U.S. session low to today  Asian session current intraday high of 2786) for a further potential push up to target the 2800/2810 resistance (former minor swing low area of 01 Feb 2018) before risk of a setback/consolidation materialises. However, failure to hold above 2753 should kick-start a pull-back towards the 2747/30 support zone (former swing high areas of 17/22 Feb 2018 + ascending channel support from 06 Feb 2018 low).
  • Japan 225 –  Rise in progress as expected. Maintain bullish bias in any dips above tightened key short-term support now at 22160 (former minor range top of 19/21 Feb 2018) for a further potential push up to target the next resistance zone of 22800/23000 (upper boundary of minor ascending channel from 09 Feb 2018 U.S. session low + 61.8% Fibonacci retracement of the slide from 23 Jan high to 09 Feb 2018 U.S. session low). However, a break below 22160 should negate the bullish tone for a deeper slide back to retest the 21850 support (pull-back support of the former descending trendline resistance from 23 Jan 2018 high + minor swing low area of 22 Feb 2018).
  • Hong Kong 50 – Pushed up and almost hit the lower limit of the first short-term resistance/target zone of 31800/32000 (printed a current intraday high of 31767 in today, 27 Feb Asian session).  Maintain bullish bias above tightened key short-term support now at 31370 (former minor swing high of 23 Feb 2018) for a further potential up move towards 32000 (the gapped down formed on 06 Feb 2018) and above 32000  opens up scope for a further potential rally towards next near-term resistance zone of 32300/470 (76.4% Fibonacci retracement of the recent decline from 29 Jan high to 09 Feb 2018 2018 U.S. session low). On the flipside, failure to hold above 31370 should negate the bullish tone for a deeper slide to retest  30700/560 support (pull-back support of the former descending trendline resistance from 29 Jan 2018 high + former minor swing high of 14 Feb 2018).
  • Australia 200 – Continued to push up as expected. Maintain bullish bias in any dips above 6020 tightened key short-term support (minor ascending channel support from 09 Feb 2018 U.S. session low + yesterday, 26 Feb low) for a further potential push up to target the next near-term resistance at 6100/6130 (aforementioned minor ascending channel resistance + Fibonacci projection cluster). On the flipside, failure to hold above 6020 should negate the bullish tone for a deeper slide retest the 5890 support (former swing high area of 22 Feb 2018 + 23.6% Fibonacci retracement of the on-going up move from 09 Feb 2018 U.S. session low to today Asian session current intraday high of 6084).
  • Germany 30 – No change, maintain bullish bias above tightened key short-term support now at 12480 (yesterday, 26 Feb low + pull-back support of the former minor range resistance from 19 Feb 2018) ) for a further potential push up to target the upper limit of the short-term resistance zone at 12845 next (61.8% Fibonacci retracement of the steep decline from 23 Jan 2018 high to 06 Feb 2018 low + former range support from 15 Nov 2018/02 Jan 2018).

Commodities –Watch the 1326 support on Gold

  • GoldMaintain  bullish bias above 1326 key short-term support (last Fri, 23 Feb low) for a further potential push up to retest 1362/65 range resistance. On the hand, a break below 1326 should invalidate the push  up scenario for a slide back to retest the 14 Feb 2018 minor swing low of 1317. On the hand, a break below 1326 should invalidate the push  up scenario for a slide back to retest the 14 Feb 2018 minor swing low of 1317.
  • WTI Crude (Apr 2018) – Yesterday’s pull-back seen in the U.S. session had managed to stall right above the predefined 62.88 key short-term support (former minor swing high area of 23 Feb 2018) before it reversed up from its intraday low of 63.06. No change, maintain bullish bias in any dips above adjusted key short-term support now at 63.06 for  further potential push up to test the 64.40/65.00 near-term resistance (76.4% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 10 Feb 2018 low + descending trendline from 25 Jan 2018 high). On the flipside, failure to hold above 63.06 should negate the bullish tone for another round of choppy slide towards the 61.70 support (former minor swing high of 21 Feb 2018 + minor ascending channel support from 14 Feb 2018 low).

*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.