Daily Global Macro Technicals Trend Bias Key/Levels (Wed 21 Mar)
Kelvin Wong March 21, 2018 4:47 AM
FX mix ahead of FOMC & GBP/USD remains on support. S&P 500 is still undergoing a potential minor corrective rebound phase with further out performance that is expected in Hong Kong's Hang Seng Index. Gold remains under pressure for potential residual push down below 1320.
FX – Mix bag with GBP/USD holding above support ahead of FOMC
- EUR/USD – Broke below the lower limit of yesterday’s short-term neutrality range at 1.2290 that has validated a push down scenario towards the 1.2220/2200 range support (the former swing low area of 08/10 Mar 2018; a failure bearish breakdown that occurred on 01 Mar 2018 + Fibonacci projection cluster). It printed a low of 1.2240 at the last hour of yesterday, 20 Mar U.S. session before it recovered slightly by 20 pips to print a current intraday of 1.2260 in today, 21 Mar Asian session. The 4 hour Stochastic oscillator is now at an extreme overbought level of 3% which indicates the decline seen yesterday has been “overstretched” where the pair may see a minor rebound towards 1.2280/1.2300 to retrace some of its losses at this juncture. Maintain the short-term bearish bias in any bounce below key short-term resistance at 1.2300 (the former minor swing high area of 19 Mar 2018 + 50% Fibonacci retracement of yesterday’s minor steep decline from 20 Mar high of 1.2355 to yesterday, 20 Mar U.S. session) for another leg of push down to target the 1.2220/2200 range support. However, a break above 1.2300 shall see a squeeze up to retest triangle range resistance at 1.2360/2380 (descending trendline from 16 Feb 2018 high).
- GBP/USD – Pull-backed after the release of U.K. core CPI for Feb that came in slightly below expectation (2.4% y/y versus consensus of 2.5% y/y). The pair is still holding above the adjusted key short-term support of 1.3970 (former minor swing high of 16 Mar 2018 + 61.8% Fibonacci retracement of the on-going up move from 19 Mar 2018 Asia session low to 19 Mar, European session high). In addition, the 4 hour Stochastic oscillator has dipped into its oversold region. Maintain bullish bias above 1.3970 support for another round of potential upleg to target the next intermediate resistance at 1.4145 in the first step (minor swing high of 16 Feb 2018). However, failure to hold above 1.3970 shall negate the bullish tone for a deeper slide back to retest 1.3945/3910 (19 Mar swing low area + minor ascending channel support from 02 Mar 2018 low).
- AUD/USD – Traded a lower in yesterday, 20 Mar U.S. session and printed a lower minor low of 0.7679. Maintain bearish with an adjusted key short-term resistance at 0.7730 (minor range resistance formed on 20 Mar 2018 + 23.6% Fibonacci retracement of the on-going decline from 14 Mar high to yesterday, 20 Mar U.S. session low) for a potential residual push down to target the next near-term support at 0.7655/7640 (former minor range resistance of 27 Nov/05 Dec 2017 + Fibonacci projection cluster) before consolidation sets in as the on-going minor degree decline from 14 Mar 2018 high is now “overstretched” (the 4 hour Stochastic oscillator has now traced an impending bullish divergence signal at its oversold region). On the flipside, a break above 0.7730 should invalidate the bearish bias for a potential corrective rebound towards the next intermediate resistance at 0.7820/7840 (former minor range resistance from 06/08 Mar 2018 + 61.8% Fibonacci retracement of the slide from 14 Mar high to 19 Mar 2018 low).
- NZD/USD – Broke below the 0.7200/7180 lower neutrality zone that has validated a continuation of its prior down move since 14 Mar 2018 high (medium-term bearish “Double Top” breakdown in shape since 24 Jan 2018 high). Flip back to a bearish bias in any bounce below 0.7210 key short-term resistance (former minor swing low area of 16 Mar 2018 + Fibonacci retracement cluster) for a further potential push down to target the next intermediate support at 0.7100 (Fibonacci cluster). However, a break above 0.7210 should invalidate the bearish breakdown for a squeeze back up towards 0.7260 resistance (20 Mar 2018 minor swing high + descending trendline from 13 Mar 2018).
- USD/JPY - Pushed up as expected to print a high of 106.60 in yesterday, 20 Mar European session. The pair is now approaching the upper limit of the minor bearish “descending triangle” range configuration in shape since 21 Feb 2018 high now acting as a resistance at 107.00. In addition, the 4 hour Stochastic oscillator is now coming close to an extreme overbought level of 95% which indicates limited upside potential. Flip back to a bearish bias within its “descending triangle” below the short-term key resistance of 107.30 (13 Mar minor swing high + close to the “descending triangle” resistance) for a potential push down to retest 105.50/25 key medium-term support (the descending triangle support + the major ascending trendline from Jun 2016 low). On the other hand, a clearance above 107.30 should trigger a corrective rebound towards 107.80 intermediate resistance (swing high of 21 Feb 2018 + former medium-term range support from 17 Apr/08 Sep 2017).
Stock Indices (CFD) – Potential minor corrective rebound scenario remains intact in S&P 500 & further outperformance in Hong Kong
- US SP 500 – No change, maintain the minor corrective rebound scenario to retrace the previous down move from 13 Mar 2018 high to 19 Mar 2018 U.S. session low. Adjust the key short-term support to 2709 (yesterday, 20 Mar U.S. session low + 50% Fibonacci retracement of the minor rebound from 19 Mar U.S. session low of 2693 to yesterday, 20 Mar European session high of 2725) for another potential upleg to complete the on-going minor corrective rebound at the 2740/60 resistance zone (minor congestion zone formed from 15/16 Mar 2018 + 61.8% Fibonacci retracement of the decline from 13 Mar high to 19 Mar 2018 U.S. session low) before another downleg materialises towards the medium-term “ “Symmetrical Triangle” range support (refer to latest weekly technical outlook). However, failure to hold above 2709 shall trigger the start of another downleg to retest 2693 before targeting the next near-term support at 2660 (minor swing low area of 02 Mar 2018).
- Japan 225 – Mix elements in short-term. Prefer to stay neutral between 21100 (19 Mar U.S. session low) & 21700 (minor descending trendline in place since 13 Mar 2018 high). Only a break above 21700 is likely to see a minor rebound towards the next near-term range resistance of 21870 (minor swing high areas of 14/16 Mar 2018 + 76.4% Fibonacci retracement of the slide seen from 13 Mar high to yesterday, 19 Mar U.S. session low).
- Hong Kong 50 – Rise in progress and surpassed the short-term target of 31800 (also the medium-term upside trigger level - refer to latest weekly technical outlook). Today’s price action has validated a bullish breakout from its “Double Bottom” configuration in shape since 09 Feb 2018 U.S. session low). Maintain bullish bias in any dips above adjusted key short-term support now at 31600 (former minor range resistance from 13 Mar 2018 + close to today’s gapped up) for a further potential push up to target the next intermediate resistance at 32500 (upper boundary of the minor ascending channel from 05 Mar 2018 low +1 .00 Fibonacci projection of the up move from 09 Feb 2018 low to 27 Feb 2018 high projected from 05 Mar 2018 low). On the flipside, failure to hold above 31600 should invalidate the “Double Bottom” bullish breakout to see a choppy decline back towards 31060 range support in place since 15 Mar 2018.
- Australia 200 – Mix elements still prevail. Prefer to maintain neutrality stance between 5880 (key medium-term support) & 5980 (minor descending trendline from 12 Mar 2018 high. A break above 5980 is likely to see a push up towards 6030 (the upper limit of a potential triangle range configuration in place since 09 Jan 2018 high).
- Germany 30 – Rise in progress as expected within the impending medium-term “Double Bottom” configuration in shape since 06 Feb 2018 low. No change, maintain bullish bias in any dips above adjusted short-term support now at 12270 (former minor swing high of 20 Mar 2018 + minor ascending trendline from 20 Mar 2018 low) for a further potential push up to target 12450/550 (neckline resistance of the “Double Bottom”. However, a break below 12270 should see another round of choppy decline to retest the 12160/115 minor range support in place since 14 Mar 2018 low.
Commodities – Gold remains under pressure below 1320
- Gold – Continued to inch lower as expected. No change, maintain bearish bias below 1320 key short-term resistance for a potential push down to test the 1303/1300 medium-term range support (lower limit of an impending bullish “Descending Wedge” configuration that is taking shape since 16 Feb 2018 high). On the flipside, a break above 1320 should see a squeeze up to retest minor range resistance of 1327/30 (swing high areas of 08/14 Mar 2018) follow by 1340 (swing high areas of 26 Feb/07 Mar 2018).
- WTI Crude (May 2018) – Pushed up as expected and it is now coming close to the 64.00/64.20 range resistance/target with the 4 hour Stochastic oscillator now at an extreme overbought level. Prefer to turn neutral now between 64.20 & 63.30 (yesterday, 20 Mar U.S. session low). A break below 63.30 is likely to trigger a minor setback to retest the 62.45/62.20 intermediate support (former range resistance from 08/17 Mar 2018.
*Levels are obtained from City Index Advantage TraderPro platform
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