Daily Global Macro Technicals Trend Bias/Key Levels (Wed 23 May)

Mix bag in FX with AUD/USD still holding above key short-term support. Stock indices are still holding at/above supports despite U.S. President Trump's remarks on U.S/North Korea Summit & U.S/China trade relation.

FX –  Mix bag

  • EUR/USD – Trend bias: Sideways with risk of a mean reversion rebound. The pair had staged an push up by 75pips in yesterday, 22 May European session to test the upper limit of the predefined short-term neutrality zone at  1.1830 (former minor swing low areas of 09/15 May 2018 + minor descending trendline from 19 Apr 2018 high) as it printed a high of 1.1830. Thereafter it staged a retreat to print a low of 1.1770 in the U.S. session, a sideways movement within the neutrality zone. No change, maintain neutrality stance between 1.1700 (the swing lows area of 21 Nov/12 Dec 2017 + 38.2% Fibonacci retracement of the 1 year of up move from 03 Jan 2017 low to 16 Feb 2018 high) and 1.1830.  A break above 1.1830 (an hourly close above it) is required to open up scope for a potential short-term rebound to retest the next intermediate resistance at 1.1935/1970  (minor swing high area of 15 May 2018 + pull-back resistance of former minor ascending trendline from 09 May 2018 low). On the other hand, failure to hold at 1.1700 sees an extension of the down move to target the key medium-term support zone at 1.1570/1480 (former medium-term range resistance from 15 May 2015/02 May 2016 + medium-term ascending channel support from 03 Jan 2017 low + close to 50% Fibonacci retracement of the 1 year of up move from 03 Jan 2017 low to 16 Feb 2018 high).
  • GBP/USD – Trend bias: Down move from 17 Apr 2018 high remains intact.  The pair had staged a push up in yesterday, 22 May European session to challenge the 1.3470 key short-term resistance (printed an intraday high of 1.3491) before it staged a retreat without a clear hourly close above 1.3470. No change, maintain bearish bias with 1.3470/91 (excess) remains as the key short-term resistance (former minor swing low areas of 10/15/16 May 2018) for a further potential push down to target the next supports at 1.3280 follow by 1.3200 (former congestion area of 13 Oct/01 Nov 2017 + 50% Fibonacci retracement of the 1 year of up move from 16 Jan 2017 low to 17 Apr 2018 high). However, a reintegration back above 1.3470 negates the bearish tone for a squeeze back up to retest the minor range resistance of 1.3590/3607 (swing high areas of 09/14 May 2018 + close to 23.6% Fibonacci retracement of the on-going decline from 17 Apr high to 21 May 2018 low).
  • AUD/USD - Trend bias: Short-term mean reversion rebound phase remains intact. The pair had staged a slide of 60 pips from yesterday, 22 May high of 0.7605 to print a current intraday low of 0.7545 in today, 23 May Asian session.  The current slide in price action has led the pair to hover just above the 0.7540 key short-term support (see yesterday report). Maintain bullish bias with key short-term support remains at 0.7540 (former minor swing high area of 17 May 2018 + Fibonacci projection/retracement cluster) for a further potential push up to target the 0.7625/7655 resistance zone (pull-back resistance of the former major “Ascending Wedge” support from Jan 2016 low + 50%/61.8% Fibonacci retracement of the down move from 19 Apr high to 09 May 2018 low). However, a break below 0.7540 negates the bullish tone for a deeper pull-back to retest the minor ascending trendline from 09 May 2018 now acting as a support at 0.7500 in the first step.
  • NZD/USD – Trend bias: Sideways. The pair staged the expected push up to print a high of 0.6975 in yesterday, 22 May European session which was closed to the first intermediate resistance/target of 0.6980 before it retreated to print a low of 0.6920 in the U.S. session. It continued to extend its slide in today, 23 May Asian session to test the 0.6900 key short-term support (minor ascending trendline from 16 May 2018 low + 61.8% Fibonacci retracement of the up move from 16 May low to 22 May 2018 high) with mix elements as it ended yesterday U.S session with a daily “Spinning Top”. Prefer to turn neutral now between 0.6980 and 0.6900. A break (an hourly close) below 0.6900 opens up scope for an extension of the down move to towards the next support at 0..6800 (the medium-term swing low areas of 11 May/17 Nov 2017 + psychological). On the flipside, bulls need to break above 0.6980 (an hourly close above it) to reinstate the mean reversion rebound scenario towards 0.7045/7060 intermediate resistance (minor swing high area of 03/07 May 2018 + 38.2% Fibonacci retracement of the down move from 13 Apr high to 16 May 2018 low). 
  • USD/JPY – Trend bias: Minor pull-back within medium-term uptrend. Broke below the 110.60 adjusted key short-term support which invalidated the direct rise scenario towards the lower limit of the 112.00 major resistance zone. Right now, the pair is likely to be undergoing a minor pull-back to retrace the  recent up move from 04 May 2018 low with key short-term resistance at 110.85 (former minor swing low area of 22 May 2018 + minor descending trendline from the 21 May 2018 minor swing high of 111.40) for a further potential residual slide towards the 110.20/110.00 support (former minor swing high areas of 02/10 May 2018 + medium-term ascending channel support from 24 Mar 2018 low + Fibonacci retracement/projection cluster) before another a round of potential upleg materialises. On the other hand, a clearance above 110.85 reinstates the bullish tone to retest 111.40 before targeting 112.00.

Stock Indices (CFD) – Still holding at/above supports despite U.S. President Trump’s remarks on U.S/North Korea Summit & U.S/China trade relation

  • US SP 500 – Trend bias: Sideways with price action right at support. A strong start in yesterday, 22 May U.S opening session as the Index staged a push up to test the 2741 upside trigger level but no hourly close above it. Interestingly, it started to retreat and the pull-back intensified in the closing hour of the U.S. session reinforced by U.S. President Trump remarks on the upcoming Jun U.S./North Korea Summit where he stated that U.S. “is not ready to attend” and added that he “is not happy” with the recent U.S./China trade talks and he may reconsider imposing penalties on China’s telecom, ZTE.  The Index continued its slide in today, 23 May Asian session to print a current intraday low of 2716 (a loss of 0.9%) with its price action now testing the 2720 adjusted key short-term support (minor ascending trendline from 16 May 2018 low + Mon, 21 May Asian session  gapped up).  The 4 hour Stochastic oscillator has dipped into its oversold region accompanied by an impending bullish divergence signal seen in the shorter-term hourly Stochastic oscillator at its oversold region. These observations suggest a slowdown in the recent downside momentum of price action. Maintain bullish bias with key short-term support remains at 2720/2716 (excess) for a potential push up to retest 2726 before the 2741 minor range resistance/upside trigger level.  On the other hand, failure to hold at 2720/2716 opens up scope for a deeper slide towards the 2700/2690 support (pull-back support area of the former medium-term “Symmetrical Triangle” range resistance from 29 Jan 2018).
  • Japan 225 – Trend bias: Minor pull-back within medium-term uptrend. The Index recorded a steep sell-off of 1.3% from today, 23 May Asian opening session high of 22953 to print a current intraday low of 22645 where it had broken below the 22930 adjusted key short-term support. Current price action suggest that it is undergoing a deeper minor pull-back within its medium-term uptrend in place since 24 Mar 2018 low and it is now hovering just above the key medium-term support of 22550 (former swing high areas of 27 Feb/02 May 2018 & close to the 23.6% Fibonacci retracement of the on-going up move from 24 Mar low to 21 May 2018 high) with a hourly long-legged “Doji” candlestick that has just formed coupled with the 4 hour Stochastic oscillator that has dipped into its oversold region and an impending bullish divergence signal seen in the shorter-term hourly Stochastic oscillator at its oversold region. These observations suggest a slowdown in the recent downside momentum of price action. Maintain bullish bias as long as the 22550 key medium-term support holds for a potential recovery to retest the intermediate resistances at 22950 follow by 23050 (minor swing high area of 21 May 2018) in the first step. Failure to hold at 22550 sees a deeper slide/retracement towards the next support at 22155/22000.
  • Hong Kong 50 – Trend bias: Push up within minor range configuration. Reopened after yesterday, 22 May closure due to a public holiday in HK. The Index gapped down from 21 May U.S. session close of 31244 and recorded a slide of 1.2% to print a current intraday low of 30864. Current price action is hovering right at the 30860 key short-term support and just formed an hourly “Doji” candlestick pattern with the hourly Stochastic oscillator at its oversold region. These observations suggest that the recent downside momentum of price action may see a pause at this juncture. Maintain bullish bias with 30860 remains as the key short-term support for a potential push up to retest 31170/220 (gap resistance formed today). However, failure to hold at 30860 sees a deeper pull-back towards the next intermediate support at 30500/400 (61.8% Fibonacci retracement of the up move from 04 May low to 14 May 2018 high).
  • Australia 200 – Trend bias: Deeper minor pull-back remains in progress. No change, maintain bearish bias with 6064 remains as the key short-term resistance for a further potential push down to target the 5980 support (pull-back of the former “Symmetrical Triangle” range resistance from 09 Jan 2018 high + 38.2% Fibonacci retracement of the on-going medium-term up move from 04 Apr low to 10 May 2018 high) before a potential new upleg materialises.  On the other hand, a clearance above 6064 reinstates the bullish tone for a retest on 6098 (18 May 2018 minor swing high) before the range resistance of 6150 in place since 10 May 2018.  
  • Germany 30 – Trend bias: Up move remains intact. The Index had continued to push higher as expected and printed a new minor higher high of 13206 in yesterday, 22 May U.S. opening session. No change, maintain bullish bias in any dips with adjusted key short-term support now at 13060 (yesterday, 22 May low + ascending channel support from 04 Apr 2018 low) for a further potential push up to target the next intermediate resistance at 13245/75 (Fibonacci projection cluster + minor swing high area of 01 Feb 2018 before the previous steep decline of 12% occurred). On the other hand, a break below 13060 negates the bullish tone for a deeper pull-back to retest the 12900/850 support (minor range support from 10/15 May 2018 + 23.6% Fibonacci retracement of the on-going up move from 26 Mar low to 22 May 2018 high of 13206).
*Levels are obtained from City Index Advantage TraderPro platform




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