Daily Global Macro Technicals Trend Bias/Key Levels (Wed 07 Feb)

Stock Indices (CFD) – Potential recovery in progress

  • US SP 500 – Rallied as expected from the major support zone of 2540/30 and hit the short-term resistance/target of 2668/94 (printed a high of 2702 in yesterday, 06 Feb 2018 U.S session ).  Right now, it is approaching a minor risk zone of 2713/35 (upper boundary of  the short-term ascending channel in place since  yesterday low + 0.618/0.76.4 Fibonacci projection from yesterday low-a potential 5th wave end target of the minor degree bullish impulsive wave from yesterday low based on Elliot Wave/fractal analysis). Thus, risk of a minor pull-back below 2713/35 coupled with the 4 hour Stochastic oscillator that is coming close to an extreme overbought level. Maintain bullish bias in any potential setback above 2574 key short-term support (close to 61.8% Fibonacci retracement of the on-going recovery from yesterday low + lower boundary of the short-term ascending channel from yesterday low) for another potential upleg of the recovery phase to retest the next resistance at 2740/60 (61.8% Fibonacci retracement of the decline from 29 Jan 2018 high to yesterday low,  05 Jan U.S. session former swing low area & the minor descending trendline from 296 Jan 2018 high) in the first step. On the flipside, failure to hold above 2574 should negate the bullish tone for a further setback to retest the 2540/30 major support.
  • Japan 225 – Pushed up as expected from the significant long-term support at 20800/20600.  Turn bullish above 21840 key short-term support (yesterday, 06 Feb European session former minor swing high) for a further potential push up to target the next near-term resistance at 22800/925  (1.618 Fibonacci projection from yesterday low + upper boundary of the short-term ascending channel from 06 Feb 2018 low + pull-back resistance of the former range support from  15 Nov 2017 low). However, a break below 21840 should negate the bullish tone for a deeper pull-back to retest yesterday’s reversal low of 21070.
  • Hong Kong 50 –  Turn bullish above 30940/800 key short-term support (today, 07 Feb Asian session open gapped up) for a further potential push up to target the near-term resistance of 32000 (yesterday’s gapped down + 50% Fibonacci retracement of the decline from 29 Jan 2018  high to yesterday, U.S. session low of 30457).  On the other, a break below 30940 should invalidate the recovery scenario for a slide towards the 30457/30140 support (former medium-term swing high area of 21 Nov 2017 + 61.8% Fibonacci retracement of the up move from 06 Dec 2017 low to 26 Jan 2018 high).
  • Australia 200 – Managed to hold the 5800/780 major support. Watch the 5910 minor range top formed yesterday and a break above it is likely to trigger a potential recovery to retest 5986 (former swing low areas of 17/30 Jan 2018) next in the first step.
  • Germany 30 –  Managed to hold the 11800/700 major support as expected and shaped a V-shaped recovery of close to 7% in yesterday, 06 Feb European session. Turn bullish in any dips above 12100/12070 key short-term support (yesterday, 06 Feb Asian opening level + 61.8% Fibonacci retracement of the rally from yesterday low of 11695) for a further potential push up to retest 12845 (former range support from 15 Nov 2017) & above it opens up scope for a further potential up move to target the next resistance at 13150 (76.4% Fibonacci retracement of the decline from 23 Jan 2018 high to 06 Feb 2018 low + minor descending trendline from 23 Jan 2018 high).  However, a break below 12070 should negate the bullish tone for a deeper pull-back to retest the 11800/700 major support.

 FX – Mix bag with USD weakness lurking round the corner

  • EUR/USD – Dropped towards the 1.2320 minor range support (downside trigger level) as expected (printed a low of 1.2314 in yesterday, 06 Feb U.S. session before it rebounded without an hourly close below 1.2320). It ended the U.S session with a daily “Doji-liked” candlestick pattern which indicates the lack of downside momentum. Therefore, the conviction to see a minor corrective decline towards the 1.2225 support has been reduced (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). Prefer to turn neutral now between 1.2428 & 1.2320. A break above 1.2428 is likely to see a squeeze back up to retest the 1.2520 range resistance.
  • GBP/USD – Declined as expected and met the support/target of 1.3830/3800 (printed a low of 1.3836 in yesterday, 06 Feb U.S. session). It ended with a daily bullish “Dragonfly Doji” candlestick pattern coupled with the daily RSI oscillator that managed to hold at the 50% level. These observations suggest a potential change in sentiment from negative to positive. Turn bullish above 1.3830/3800 key short-term support with 1.4000 as upside trigger level (former minor swing low area of 30 Jan 2018 + minor descending trendline from 02 Feb 2018 high) to reinforce a potential recovery to target the 1.4270/4310 range resistance in  place since 25 Jan 2018 in the first step. On the flipside, failure to hold above 1.3800 should invalidate the recovery scenario for an extension of the minor corrective decline towards the 1.3620/3590 key medium-term support.
  • AUD/USD – Ended yesterday with a daily bullish “Hammer” candlestick pattern above the medium-term support of 0.7800 (swing low area of 09/10 Jan 2018 + Fibonacci cluster). Turn bullish above yesterday low of  0.7835 for a potential push up to retest the near-term resistance of 0.7950 (minor swing high area of 05 Feb 2018 + 38.2% Fibonacci retracement of the decline from 27 Jan 2018 high to yesterday low) and above it may see a further recovery towards 0.7980/95 resistance next. However, failure to hold above 0.7835 should negate the recovery scenario for a further slide to test the 0.7800 medium-term support.
  • NZD/USD – Pushed up and tested the 0.7340 tightened key short-term resistance without an hourly close above it. But, ended yesterday, 06 Feb U.S. session with a daily bullish  “One White Soldier” candlestick pattern coupled with a bullish divergence signal seen in the 4 hour Stochastic oscillator at its oversold region. These observations suggest that the recent downside momentum of price action has started to abate. Prefer to turn neutral now between 0.7340 & 0.7260. Only  a break below 0.7260 is likely to reinstate the bears for a slide 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).
  • USD/JPY - Traded sideways. No change, maintain neutrality stance between 108.30 & 109.75 (former minor pull-back support from 26 Jan/01 Feb 2018) A break above 109.75 may reinstate the bulls for a potential up move towards 110.80/111.00 in the first step.

Commodities – Gold broke below minor range support, further potential downside

  • Gold – Broke below the 1325 lower limit of the short-term neutrality range zone. Flip back to bearish bias for another downleg of the minor corrective decline phase below the key short-term resistance at 1336 (61.8% Fibonacci retracement of the slide from 06 Feb 2018 high of 1346 to yesterday’s U.S. session low of 1320) for a further potential push down to target the next support at 1310 follow by 1305 (swing low area of 09 Jan 2018 + Fibonacci cluster). However, a clearance above 1336 may invalidate the bearish scenario for a push up to retest the range resistance of 1346/50 (minor descending trendline resistance from 25 Jan 2018 high).
  • WTI Crude (Mar 2018) –  No change, maintain bearish bias below key short-term resistance at 64.50 (former minor swing low of 03 Jan 2018 + pull-back resistance of former minor ascending trendline from 31 Jan 2018 low) for a further potential push down towards the 62.25/61.60 support zone (former medium-term swing high area of May/Jun 2015).  However, a clearance above 64.50 should see another choppy movement  for a push up to retest the 66.30 range top.

*Levels are obtained from City Index Advantage TraderPro platform


 


 

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