FX – At risk of a minor corrective rebound for USD within medium-term downtrend
- EUR/USD – Drifted lower and tested the key short-term support zone of 1.2340/2320 in yesterday, 29 Jan U.S. session. Short-term momentum indicators (4 & 1 hour RSI oscillators) are not supporting the initial preferred residual push up scenario towards the upper limit of the major resistance at 1.2560 (Fibonacci cluster + exit potential of the “Double Bottom” bullish breakout configuration formed in Mar 2015 to July 2017) at this juncture. Thus prefer to turn neutral now between 1.2320 & 1.2430. Failure to hold 1.2320 is likely to trigger the start of a minor corrective decline towards 1.2225 in the first step (minor swing low areas of 20/23 Jan 2018 + 38.2% Fibonacci retracement of the up move from 12 Dec 2017 low to 25 Jan 2018 high).
- GBP/USD – Broke below 1.4100/4080 key short-term support that invalidated the residual push up scenario towards 1.4500/4570. Potential minor corrective decline/phase in play, turn bearish now to fade any strength below 1.4160 key short-term resistance (minor descending trendline from 25 Jan 2018 high + 50% Fibonacci retracement of the on-going slide from 26 Jan 2018 European session high) for a further potential push down to target the next near-term support at 1.3930 in the first step (the former minor swing high areas of 18/19 Jan 2018). Below 1.3930 exposes 1.3830/3800 support next (50% Fibonacci retracement of the up move from 18 Dec 2017 to 25 Jan 2018 high + major swing low areas of Jan 2009 + Jun 2001 that has been reintegrated above on 17 Jan 2018). On the flipside, a break above 1.4160 should reinstate the bullish tone for another round of potential upleg to retest the recent high of 1.4345 before targeting 1.4500/4570 (Fibonacci cluster + major congestion zone of Feb/May 2016 before Brexit vote).
- AUD/USD – Similar configuration as the EUR/USD. No conviction now for the initial preferred residual push up scenario towards the upper limit of the major resistance zone at 0.8170 holding above 0.8070 support. The 4 hour Stochastic oscillator has traced out a bearish divergence signal. Turn bearish now below 0.8130 key short-term resistance with 0.8070 as downside trigger for a potential push down to target the 0.8000/7985 support (minor swing low of 26 Jan 2018 + lower boundary of the ascending channel from 11 Dec 2017 low). However, a clearance above 0.8130 should reinstate the bullish tone for a potential upleg to target the 0.8170 major resistance.
- NZD/USD - Inched lower and the daily RSI oscillator has started to exit below its overbought region after a prior bearish divergence signal. Downside momentum of price action has started to surface. Turn bearish below 0.7380 key short-term resistance with 0.7270 as downside trigger level for a potential push down to target the next near-term support at 0.7200/0.7190 (former medium-term swing of 13 Oct 2017 + 38.2% Fibonacci retracement of the up move from 08 Dec 2017 to 24 Jan 2018). However, a clearance above 0.7380 should reinstate the bullish tone for a potential upleg to retest the recent high of 0.7438 before targeting the major resistance of 0.7485/7520 (swing high areas of 27 Jul 2017/06 Sep 2016).
- USD/JPY- Mix elements, maintain neutral stance between 108.00 & 109.60 (minor swing high of 26 Jan 2018 + 23.6% Fibonacci retracement of the down move from 12 Dec 2017 high to last Fri low). A clearance above 109.60 is likely to kick-start of potential corrective rebound towards 110.30/45 (descending trendline from 08 Jan 2018 high + former swing low area of 17 Jan 2018).
Stock Indices (CFD) - Short-term weakness across the board
- US SP 500 – Drifted down as expected where we have turn cautious as it has almost reached the 2880 upper limit of the key medium-term resistance. Yesterday’ price action has shaped a daily bearish “Harami” candlestick pattern with reinforced the risk of a multi-week corrective decline scenario (see latest weekly technical outlook). Based on Elliot Wave/fractal analysis coupled with the bullish divergence signal seen in the hourly Stochastic oscillator, current price action may see a minor intraday rebound to retrace yesterday’s slide from the all-time high of 2876 first before another potential downleg materialises. Turn bearish to fade any strength below 2868 key short-term resistance (61.8% Fibonacci retracement of the on-going slide from the 2876 high + minor congestion zone seen yesterday) for a further potential push down to target the 2845 medium-term downside trigger level in the first step (see latest weekly technical outlook). On the flipside, a break above 2868 should see a squeeze up towards the 2880 key medium-term resistance.
- Japan 225 – Drop in progress as expected. Maintain bearish bias below tightened key short-term resistance now at 23610 (pull-back resistance of former trendline support from 26 Jan 2018 minor low) for a further potential push down to test 23325 medium-term downside trigger level. A break below 233325 is likely to trigger a minor corrective decline to target 23080/22970 support next (Fibonacci cluster + former range top of 01/11/28 Dec 2017). On the flipside, a break above 23610 should negate the bearish tone for a push up to retest the recent minor range top of 23800.
- Hong Kong 50 – Yesterday, 29 Jan Asian session push up had managed to stall right at the 33430/530 key medium-term resistance as expected with a daily bearish “Dark Cloud Cover” candlestick pattern that indicates a slow-down in the recent upside momentum of price action after a steep rally from 15 Dec 2017 low. Turn bearish below 33170 key short-term resistance for a further potential push down to test the 32615 medium-term downside trigger level (see latest weekly technical outlook) and below 32615 is likely to kick start a minor corrective decline towards the next near-term support at 32000 in the first step (minor swing low area of 22 Jan 2018 + close to the 23.6% Fibonacci retracement of the up move from 07 Dec 2017 low to 29 Jan 2018 high). However, a clearance above 33170 should invalidate the corrective decline scenario for a squeeze up towards to retest 33430/530.
- Australia 200 - No conviction for the push up to retest 6109 (medium-term upper neutrality zone) as due to the technical weakness seen in other major stock indices. Prefer turn neutral now between 6109 & 6018.
- Germany 30 – Drop in progress as expected. Maintain bearish bias below tightened key short-term resistance now at 13370 for a further potential pushd down to test the 13130 medium-term downside trigger level (see latest weekly technical outlook). However, a clearance above 13370 should negate the bearish tone to see a choppy move to retest the 13450 resistance (minor descending trendline from 23 Jan 2018).
Commodities – Gold broke minor support at 1342
- Gold – Residual push up scenario invalidated through the bearish break of 1342. Current price movement is tracking a firmer USD rather that soft equities. Potential minor corrective decline at play within a medium-term uptrend in place since 12 Dec 2017 low, turn bearish below 1347 key short-term resistance for a further potential push down towards the near-term support of 1327/1325 in the first step. (minor swing low area of 18 Jan 2018 + 38.2% Fibonacci retracement of the up move from 12 Dec 2017 low to 25 Jan 2018 high. However, a clearance above 1347 should invalidate the minor corrective decline scenario for a recovery to retest the recent high of 1366.
- WTI Crude (Mar 2018) – Broke below the tightened key short-term support at 65.70. Mix elements, turn neutral now between 66.50 & 64.80 (ascending channel support from 14 Dec 2017 low + former minor swing high area of 16 Jan 2018). A break below 64.80 is likely to open scope for a minor corrective decline towards next near-term support of 63.00/62.85 (minor swing low area of 19 Jan 2018).
*Levels are obtained from City Index Advantage TraderPro platform
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