Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 03 May)

Recent USD strength remains above support. Mix bag for stock indices with outperformance expected in ASX 200 & German DAX. Gold may shape short-term rebound above 1303/1300 key medium-term range support.

FX –  USD strength remains above support

  • EUR/USD – Trend bias: Downtrend remains intact. Continued to push dower lower as expected and almost hit the upper limit of the short-term support/downside target at 1.1930/1890, refer to yesterday report (printed a low of 1.1938 in yesterday, 02 May U.S. session post FOMC). The Fed left key policy Fed Fund rate unchanged at 1.5% to 1.75% and set the tone for the next, 2nd rate hike in the June meeting.  Maintain bearish bias in any bounce with an adjusted key short-term resistance now at 1.2065 (former minor swing low areas of 27/30 Apr 2018 + upper boundary of the minor descending channel in place since 19 Apr 2018 high + close to the 23.6% Fibonacci retracement of the on-going decline from 19 Apr high to yesterday, 02 May U.S. session low) for a  further potential push down to target the lower limit of the short-term support zone of 1.1890 (former medium-term swing high areas of 24 Nov/01 Dec 2017 that was tested & held on 10 Jan 2018 + Fibonacci projection cluster) before the risk of a consolidation sets in. On the other hand, a clearance above 1.2065 sees the start of a potential minor mean reversion rebound to retest the 1.2160/2190 resistance  (former swing low areas of 18 Jan/01 Mar 2018).
  • GBP/USD - Trend bias: Downtrend remains intact. Continued to inch lower as expected and printed a low of 1.3555 in yesterday, 02 May U.S. session. No change maintain bearish bias in any bounce with an adjusted key short-term resistance now at 1.3745 (the former minor swing low area of 01 Mar 2018 + minor descending channel resistance from 17 Apr 2018 high) for a further potential down move to target the next intermediate support at 1.3470/3430 (swing low area of 11 Jan 2018 + 38.2% Fibonacci retracement of the 16-month up move from 16 Jan 2017 high to 17 Apr 2018 high). However, a clearance above 1.3745 negates the bearish tone for a squeeze back up to retest the 1.4000 resistance (former minor swing low area of 05 Apr 2018 + close to 50% Fibonacci retracement of the on-going decline from 17 Apr high to 01 May low of 1.3588).
  • AUD/USD – Trend bias: Downtrend remains intact. Continued to inch lower as expected and printed a low of 0.7473 in yesterday, 02 May U.S. session. No change, maintain bearish bias in any bounce below 0.7550 key short-term resistance (former minor swing low areas of 25/27 Apr 2018 + 23.6% Fibonacci retracement of the on-going decline from 19 Apr 2018 high to 01 May 2018 low of 0.7472) for a further potential down move to target the next support at 0.7370/0.7330 (the swing low areas of 08 May/01 Jun 2017 + 61.8% Fibonacci retracement of the up move from 15 Jan 2016 low to 26 Jan 2018 high). However, a clearance above 0.7550 negates the bearish tone for a squeeze back up to retest the 0.7660 resistance (the former minor range support from 29 Mar/09 Apr 2018).
  • NZD/USD - Trend bias: Unclear. Whipsawed around the 0.7000 lower limit of the short-term neutrality zone, printed a low of 0.6985 in yesterday, 02 May U.S. session post FOCM before it drifted back up to hover around the 0.7000 level. Mix elements, prefer to maintain neutrality stance between 0.7000/6985 and 0.7095. Only a clear break below 0.6985 (an hourly close below) is likely to see an extension of the down move to target  the next support at 0.6930/6910 in first step (former swing high area of 09 Nov 2017 + 76.4% Fibonacci retracement of the up move from 17 Nov 2017 low to 16 Feb 2018 high).
  • USD/JPY - Trend bias: Uptrend remains intact. Inched up and printed a new minor higher high of 110.04 in yesterday, 02 May U.S. session before it pull-backed post FOMC to an current intraday low of 109.57 in today, 03 May Asian session. No change, maintain bullish bias with 109.40 remains the key short-term support (former minor range resistance from 26/30 Apr 2018 + minor ascending trendline from 30 Apr 2018 low) for another round of potential upleg to target the next resistance at 110.85/111.00 (the former medium-term swing low area of 27 Nov 2017 & the 61.8% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low). On the other hand, failure to hold at 109.40 negates the bullish tone for a deeper pull-back to the minor range support of 108.95/70 (swing low areas of 26/27 Apr 2018 + 23.6% Fibonacci retracement of the on-going up move from 26 Mar low to 02 May 2018 high).

Stock Indices (CFD) – Mix bag with outperformance in ASX 200 & DAX

  • US SP 500 – Trend bias: Unclear. The Index had traded within the predefined short-term neutrality zone of 2663 and 2625 as expected, refer to yesterday report. It printed an intraday high of 2661 in yesterday, 02 May U.S. session right after the FOMC announcement before it gave up all its initial gains to see a slide all the way down to retest 2625 (printed a current intraday low of 2626 in today, 03 May Asian session). Another choppy movement as the Index continues to evolve inside the  medium-term “Symmetrical Triangle” range configuration in place since 29 Jan 2018 with underperformance seen in the Financials sectors where its ETF (XLF) shed -1.13% versus a small loss of -0.72% seen in the S&P 500 in yesterday, 02 May U.S. session. No change, maintain neutrality stance between 2663 and 2625. On a clear break above 2663 (an hourly close above) is likely to reinstate the bullish tone for a potential push up to test the 2720/40 “Symmetrical Triangle” range resistance. On the flipside, failure to hold at 2625 sees a further slide towards the 2585 key medium-term support (the lower boundary of the aforementioned “Symmetrical Triangle” range configuration).
  • Japan 225 Trend bias: Push up towards range resistance. Cash stock market remains close for a public holiday. Drifted lower to test the lower boundary of the short-term neutrality zone at  22330 in a lower liquidity environment due to the closure of the Japan cash stock market while the Nikkei 225 futures remain open for trading in CME Globex. Both the 4 & 1 hour Stochastic oscillators are now back at their respective oversold regions which suggests a potential rebound in price action of the Index. Key short-term support at 22330/250 (excess) for a potential push up to retest the range resistance of 22510/710 which is the medium-term  upside trigger level (61.8% Fibonacci retracement of the decline from 23 Jan high to 23 Mar 2018 low). However, failure to hold at 22250 sees a deeper slide towards the 21915 key medium-term support (former range resistance from 05/16 Apr 2018 + close to 23.6% Fibonacci retracement of the on-going up move from 24 Mar low to 30 Apr 2018 high).
  • Hong Kong 50Trend bias: Pushed up towards range resistance. The Index has continued its  slide towards the range support of 3000/29950 in today, 03 May early Asians session in line with the softness seen in the U.S. stock market despite a positive news flow regarding the confirmation of a major China smartphone market, Xiaomi Corp, IPO to be listed on the Hong Kong stock exchange with an expected valuation as high as US$100 billion, ,making it the world’s biggest IPO since 2014.  Technically, both the 4 and 1 hour Stochastic oscillator has reached their respective oversold regions which suggests a potential rebound in price action. Key short-term support will be at 30000/29950 (psychological level +  former swing low areas of 23 Mar/03 Apr 2018 + 61.8% Fibonacci retracement of the up move from 04 Apr 2018 low to 12 Apr 2018 high) for a potential push up to retest the minor range resistance of 30760/830. However, a break below 29950 opens up scope for a deeper slide towards the 29360/29070 key medium-term support zone.  
  • Australia 200 – Trend bias: Uptrend remains intact after bullish breakout. Pushed high as expected and hit the short-term resistance/target of 6084. No change, maintain bullish bias in any dips above adjusted key short-term support now at 6054 (former minor swing high of 02 May 2018 + 23.6% Fibonacci retracement of the most recent on-going up move from 25 Apr low to today, 03 May Asian session current intraday high of 6110) for a further potential push up to target the next intermediate resistance at 6150 (09 Jan 2018 swing high area). On the other hand, a break below 6054 opens up scope for a deeper pull-back to retest the former “Symmetrical Triangle” range resistance now acting as a pull-back support at 5995.
  • Germany 30Trend bias: Imminent bullish breakout from 3-month range configuration. Pushed higher and it is now right below the 12850 medium-upside trigger level (former range support from 15 Nov 2017/02 Jan 2018 + 61.8% Fibonacci retracement of the steep decline seen from its 23 Jan 2018 all-time high to 06 Feb 2018 low) with the daily RSI oscillator that continues to hover above its support at the 55% level without any bearish divergence signal. Key short-term support will be at 12620 (the former minor range resistance from 18 Apr to 02 May 2018) and a break above 12850 (an hourly close above it) advocates for a further potential upleg to target 13020 intermediate resistance (1.618 Fibonacci projection from 25 Apr 2018 minor swing low).  On the flipside, failure to hold at 12620 negates the bullish tone for a deeper pull-back to retest the 01 May 2018 minor swing low area of 12490.

Commodities – Watch the 1300 medium-term range support on Gold

  • WTI Crude (Jun 2018) - Trend bias: Sideways. A retest on 67.15 was seen again in yesterday, 02 May U.S session as it printed a low of 66.93 before an hourly close back at 67.30.  No change, maintain neutrality stance between 69.90 and 67.15. Only a clear break below 67.15 (an hourly close below it) opens up scope for a deeper pull-back to retest the next intermediate support of 66.50/10 (former medium-term range resistance from 25 Jan/23 Mar 2018).
  • Gold - Trend bias: Unclear. Traded sideways above the 1303/1300 medium-term range support in place since 08 Feb 2018 in yesterday, 02 May U.S. session and ended the session with a daily bullish “Inverted Hammer” candlestick pattern that indicates a potential reversal in the recent negative sentiment. Mix elements, maintain neutral stance between 1300 and 1323 (former minor swing low areas of 29 Mar/23 Apr 2018). Only a break above 1323 (an hourly close above it) sees a potential push up towards the next intermediate resistance at 1334/41 (the minor descending resistance from 11 Apr 2018 high + former minor swing low of 13 Apr 2018) within a major sideways range configuration in place since Jul 2016.

*Levels are obtained from City Index Advantage TraderPro platform




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