Daily Global Macro Technicals Trend Bias/Key Levels (Wed 14 Feb)

Further potential USD weakness remains intact with major stock indices in recovery process mode.Gold is poised for a potential bullish breakout.

FX – Further potential USD weakness remains intact

  • EUR/USD – Rise in progress and broke above the 1.2335 upside trigger (former minor range support since 30 Jan 2018) as expected. No change, maintain bullish bias in any dips above tightened key short-term support now at 1.2290 (former minor swing high areas of 08/12 Feb 2018 + former descending trendline from 02 Feb 2018 now turns pull-back support + minor ascending trendline from 09 Feb 2018 U.S. session low) for a further potential push up to retest  the recent 1.2520/30 range resistance printed on 25Jan/02 Feb 2017 in the first step. Above 1.2530 opens up scope for a further rally to target the next significant resistance at 1.2635 (long-term primary descending channel resistance from Jul 2008 + Fibonacci cluster). However, failure to hold above 1.2290 should negate the bullish tone to see a retest back towards 1.2200/2180 support.
  • GBP/USD – Pull-backed slightly the release of U.K. inflation data for Jan where core CPI came in within expectations (2.7% y/y). Despite trading sideways, the pair has continued to remain above the 1.3800/3764 key short-term support and formed marginal higher lows. No change, maintain bullish bias above 1.3800/3764 support with 1.4000 as upside trigger level (former swing low of 30 Jan  to reinforce a potential push up to retest the 1.4270/4310 range resistance in place since 25 Jan 2018 in the first step. On the flipside, failure to hold above 1.3800/3764 should invalidate the recovery scenario for an extension of the minor corrective decline towards the 1.3620/3590 key medium-term support.
  • AUD/USD – Yesterday (13 Feb) pull-backed seen in the early U.S. session had managed to hold above the tightened key short-term support at 0.7810 as expected before it staged rebound (printed a low of 0.7828). No change, maintain bullish bias with an adjusted key short-term support now at 0.7828 (yesterday low + minor ascending trendline from 09 Feb low + former minor swing high of 09 Feb 2018) for a further potential push up to target next near-term resistances at 0.7905 follow by 0.7950 next (minor swing high area of 05 Feb 2018 + 50% Fibonacci retracement of the decline from 27 Jan 2018 high to 09 Feb 2018 low) within a minor corrective rebound phase. However, failure to hold above 0.7828 should negate the bullish tone for a slide to retest last Fri, 09 Feb 2018 low of 0.7760.
  • NZD/USD – Rise in progress as expected. No change, maintain bullish bias above adjusted key short-term support now at 0.7235 (minor swing low of 12 Feb 2018 + minor ascending trendline from 08 Feb 2018 low) for a furher potential the next near-term resistance at 0.7340 (minor swing high area of 07 Feb 2018 + 61.8% Fibonacci retracement of the decline from 25 Jan to 08 Feb 2018 low). Above 0.7340 sees 0.7380 next (61.8% Fibonacci retracement of the decline from 25 Jan to 08 Feb 2018 low + descending trendline from the medium-term swing high of 24 Jan 2018). However, a break below 0.7235 should negate the bullish tone for a slide back to retest last Thurs, 08 Feb 2018 swing low area of 0.7190/7176.
  • USD/JPY – Broke below the 108.30/108.05 medium-term support which invalidated the corrective rebound scenario. It plunged straight towards the alternate scenario support/target at 107.40/30 before it staged a minor bounce in the yesterday U.S. session. Bear in mind, the fall in this pair was due to general USD weakness and not triggered by another risk off event as the S&P 500 continued to recover from its major support of 2540/30. Turn bearish below key short-term resistance at 108.30 (former range support) for a further potential push down to target next support at 106.50 (former  medium-term swing high of Jul 2016 + Fibonacci cluster). On the flipside, a clearance above 108.30 should invalidate the bearish scenario for a squeeze back up towards 108.75/109.00 (minor range resistance since 12 Feb 2018 + minor descending channel resistance from 02 Feb 2018)

Stock Indices – Potenital recovery process intact

  • US SP 500 – Inched higher as expected. No change, maintain bullish bias above 2614  tightened key short-term support (former minor swing high of 09 Feb 2018 + close to yesterday, 12 Feb U.S. session low  + 38.2% Fibonacci retracement of the rally from 09 Feb low to yesterday, U.S. session high) for a further potential push up to target the next near-term resistance of 2728/45 in the first step (neckline of the minor  “Double Bottom” in place since last Tues, 06 Feb low + 61.8% Fibonacci retracement of the steep decline from 29 Jan 2018 high to 05 Feb 2018 U.S. session low). However, failure to hold above 2614 should put the bulls on hold to see a slide back to retest the 2540/30 major support.
  • Japan 225 –  Short-term bullish bias has been negated by the USD/JPY weakness due to direct correlation play between the Index & USD/JPY. Now at risk of a drop back to retest the 20800/600 major support (see weekly technical outlook for details. Prefer to turn neutral today between 20800/600 & 21730 (Mon, 12 Feb U.S. session high). Only a clearance above 21730 is likely to offset the on-going weakness for the bulls to get a foothold to stage a potential push up towards 22800/23000 next (61.8% Fibonacci retracement of the steep decline from 23 Jan high to 09 Feb 2018 low + descending trendline from 23 Jan 2018 high).
  • Hong Kong 50 – Pull-backed and staged a rebound in yesterday (13 Feb) U.S. session above the 29400 key short-term support as expected. Right now, it has inched back up to retest yesterday Asian session high of 30157.  No change, maintain bullish bias in any dips above 29400 support for a further potential push up to target the near-term resistances of 3760 follow by 31280/400 next (minor swing high of 07 Feb 2018 + descending trendline from 29 Jan 2018 high + 50% Fibonacci retracement of the decline from 29 Jan high to 09 Feb 2018 U.S. session low). However, failure to hold above 29400 should put the bulls on hold for a slide to retest last Fri, 09 Feb low of 29072.
  • Australia 200 – Traded sideways above support. Maintain bullish bias in any dips above 5780 support (lower limit of the major support zone of 5780/5670 – refer to latest weekly technical outlook) for a potential push up to retest the near-term resistance of 5914 in the first step (minor swing high areas of 07/08 Feb 2018). On the other hand, a break below 5780 should invalidate the recovery process for another choppy move down to retest the lower limit of the major support zone at 5670.
  • Germany 30 – 12110 remains the key short-term support for the bulls to stage a potential push up to target the near-term resistance zone of 12650/12845 (neckline of the minor “Double Bottom” in place since last Tues, 06 Feb low + 61.8% Fibonacci retracement of the steep decline from 23 Jan 2018 high to 09 Feb 2018 low + descending trendline from 23 Jan 2018 high + former range support from 15 Nov 2017). On the flipside, a break below 12110 should negate the bullish tone for a slide back to retest the 11900/800 major support.

Commodities – Potential bullish breakout for Gold

  • Gold – Continued to inch higher as expected from the 1310 key short-term support and right now it is hovering below the 1344 near-term resistance (minor swing high area of 06 Feb 2018 + 61.8% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 08 Feb 2018 low). In addition, medium-term upside momentum of price action has started to built-up as the daily RSI oscillator has broken above its corresponding trendline resistance and the 50% level. Poised for a potential bullish breakout. Maintain bullish bias above tightened key short-term support now at 1320 (former minor swing high area of 09 Feb 2018 + minor ascending trendline from 08 Feb 2018)and a break above 1344 is likely to reinforce the start of another potential upleg to retest the 25 Jan 2018 swing high of 1365 in the first step.  However, failure to hold above 1320 may negate the bullish tone for a slide back to retest 08 Feb 2018 low of 1307.
  • WTI (Mar 2018) – Traded sideways. Maintain neutrality stance between 58.00 & 62.10 (descending trendline from 02 Feb 2018 high + 50% Fibonacci retracement of the decline from 02 Feb 2018 high to last Fri, 09 Feb 2018 U.S. session low). Only a break above 62.10 may see a recovery to retest 64.10/64.30 in the first step (minor congestion zone of  02/06 Feb 2018 + 61.8%/76.4% Fibonacci retracement of the decline from 02 Feb high to 06 Feb 2018 U.S. session low).

*Levels are obtained from City Index Advantage TraderPro platform



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