Daily Global Macro Technicals Trend/Bias Key Levels (Wed 28 Feb)

USD strength has emerged except against GBP & JPY while major stock indices pull-backed within medium-term uptrend configurations. Further short-term weakness expected in Gold & WTI Crude within range configurations.

FX – USD strength has emerged except against the GBP & JPY

  • EUR/USD – Broke below the 1.2276/2260 key short-term support that invalidated the minor upleg scenario reinforced by Fed Chair Powell comments on his optimistic future economic projection on the U.S. economy during his Senate testimony. Based on the CME FedWatch Tool, the probability  of a 4th interest rate hike increased to 33.1% from 24.4% seen on Mon, 26 Feb. Right now, the EUR/USD is at risk of shaping a bearish breakdown below the 1.2200 neckline support of a  an impending “Double Top” that is forming since 01 Feb 2018 high. The daily RSI oscillator has flashed a bearish pre-signal as it has broken below a corresponding support at the 49% level. Turn bearish in any bounce below key short-term resistance at 1.2290 (former minor range support from 22/26 Feb 2018 + pull-back resistance of the former ascending trendline from 12 Dec 2017 low) with 1.2200 as downside trigger to open up scope for potential corrective decline to target the next support at 1.2070/2040 (former medium-term swing high area of 29 Aug/08 Sep 2017 + 61.8% Fibonacci retracement of the up move from 12 Dec 2017 low to 16 Feb 2018 high). However, a push up back above 1.2290 should invalidate the bearish bias for a squeeze up towards the 1.2370  resistance again (former minor swing low area of 19 Feb 2018 that was rejected on 21 Feb 2018 U.S. session).
  • GBP/USD – Still trapped in a range configuration. Maintain neutrality stance between 1.3857 ( 22 Feb 2018 minor swing low + yesterday, 27 Feb low) & 1.4050 (descending trendline resistance from 25 Jan 2018). Only, a break above 1.4050 is likely to reinforce the start of another potential upleg to target the recent Jan medium-term swing high of 1.4345. Below 1.3857 sees the risk of a minor corrective downleg towards the 1.3615/3530 key medium-term support (former medium-term swing high area of 15/18 Sep 2018 + ascending trendline support from 13 Mar 2017 low).
  • AUD/USD - Broke below the 0.7810 lower limit of the short-term neutrality zone as per highlighted in yesterday report. Turn bearish now in any bounce below 0.7830/7840 key short-term resistance (pull-back resistance of the former minor ascending support from 22 Feb 2018 low + former minor swing low of 26 Feb 2018) with 0.7760 as downside trigger to reinforce a potential corrective decline to target the next support at 0.7655 ( former swing high areas of 27 Nov/05 Dec 2017 + 76.4% Fibonacci retracement of the up move from 08 Dec 2017 low to 26 Jan 2018 high). On the flipside, a break back above 0.7840 should invalidate the bearish bias for a squeeze up to retest the 0.7900 resistance (minor swing high area of 26 Feb 2018 + former minor support of 16 Feb/20 Feb 2018).
  • NZD/USD - Broke below the 0.7270  lower limit of the short-term neutrality zone as per highlighted in  yesterday report. Turn bearish now in any bounce below 0.7280 key short-term resistance (former minor swing low areas of 23 Feb/27 Feb 2018 + close to 50% Fibonacci retracement of yesterday decline from 26 Feb 2018 high to today current intraday Asian session low of 0.72205) for a further potential push down to target the 0.7180 neckline support of an impending “Double Top” that is forming since 25 Jan 2018. However, a break above 0.7280 should negate the bearish tone for a squeeze up to retest the minor descending trendline from 16 Feb 2018 high now acting as a resistance at 0.7315.
  • USD/JPY – Pushed up above the 107.26 short-term resistance after Fed Chair Powell rosy comments on further U.S. economic growth. Interestingly, yesterday’s up move has stalled at the upper boundary of a medium-term descending channel from 08 Jan 2018 high now acting as resistance at 107.70 which also confluences closely with the 76.4% Fibonacci retracement of recent slide from 22 Feb high to 26 Feb 2018 low. In addition, the 4 hour Stochastic oscillator has flashed a bearish divergence signal at its overbought region which suggests that upside momentum of price action has started to abate. Tolerate the excess and maintain the bearish bias below 107.70 resistance  with 107.05 as downside trigger (former minor swing high areas of 23 Feb/27 Feb 2018) to reinforce the start of another potential downleg to retest the recent 105.55 swing low of 16 Feb 2018 in the first step. On the flipside, a clearance above 107.70 should invalidate the bearish bias for a mean reversion rebound towards 110.20/30 resistance (swing high area of 02 Feb 2018 + 50% Fibonacci retracement of the medium-term decline from 06 Nov 2017 high to 16 Feb 2018 low).

Stock Indices (CFD) – Pull-backed within medium-term uptrend configurations

  • US SP 500 –  Broke below the 2753 tightened key short-term support that invalidated the direct rise scenario to target 2800/2810 near-term resistance. Yesterday’s decline has led the Index to retest the former risk level of 2745 and the 2735/25 pull-back support of the former swing high area of 08/21 Feb 2018). The higher beta S&P Technology sector had managed to outperform the benchmark S&P 500 where the Technology sector ETF (XLK) recorded a loss of 1.01% versus a larger loss of 1.27 seen in the S&P 500 coupled with a lesser loss of 1.01% seen in the Financials sector ETF (XLF). Therefore, yesterday’s movement of the Index seems to be more likely a pull-back within a medium-term uptrend in place since 09 Feb 2018 low. Maintain bullish bias above 2725 support (also the ascending channel support from 06 Feb 2018 low) with 2757 as the upside trigger level to reinforce the start of another potential upleg to target the 2800/2810 resistance (former minor swing low area of 01 Feb 2018). On the hand, a break below 2725 should put the bulls on hold for a further slide towards the 2690/83 key medium-term support set for this week (refer to latest weekly technical outlook).
  • Japan 225 –  Pull-backed towards the 22160 tightened key short-term support (former minor range top of 19/21 Feb 2018 + minor ascending channel support from 09 Feb 2018 U.S. session low). Tolerate the excess and maintain bullish bias above 22160/22000 with 22410 as upside trigger level (yesterday, 27 Feb U.S. session high) to reinforce another potential upleg to target the next resistance zone of 22800/23000 (upper boundary of aforementioned minor ascending channel + 61.8% Fibonacci retracement of the slide from 23 Jan high to 09 Feb 2018 U.S. session low). However, a break below 22000 should negate the bullish tone for a deeper slide back to retest the 21850 support (pull-back support of the former descending trendline resistance from 23 Jan 2018 high + minor swing low area of 22 Feb 2018).
  • Hong Kong 50 – Broke below the 31370 tightened key short-term support which invalidated the direct rise scenario towards 32000/32470 resistance. Right now, the Index is likely undergoing a pull-back/consolidation to retrace its up move from 09 Feb 2018 low to27 Feb 2018 high. Short-term technical elements suggest that the current pull-back may see a further residual push down towards the support zone of 30400/30070 (50%/61.8% Fibonacci retracement of the recent up move from 09 Feb 2018 low to27 Feb 2018 high + pull-back support of the former descending trendline resistance from 29 Jan 2018 high + key medium-term support set for this week) holding below 31210 key short-term resistance (former minor swing low of 27Feb 2018 + minor descending trendline from Tues, 27 Feb high).  
  • Australia 200 – Pull-backed and it is now testing the 6020 tightened key short-term support (minor ascending channel support from 09 Feb 2018 U.S. session swing low area ). In addition, the hourly Stochastic oscillator has flashed a bullish divergence signal coupled with an oversold reading seen in the 4 hour Stochastic oscillator. These observations suggest that yesterday’s downside momentum seen in the U.S. session has started to abate. Tolerate the excess and maintain bullish bias above 6020/5990 (former swing  high area of 22/23 Feb 2018) with 6065 as upside trigger level (yesterday, 27 Feb U.S. session high) to reinforce the start of another potential upleg to target next near-term resistance at 6100/6130. On the flipside, failure to hold above 5990 should put the bulls on hold for a deeper slide to test the 5950/30 key medium-term support set for this week (refer to latest weekly technical outlook).
  • Germany 30 –Pull-backed below the tightened 12480 short-term support but managed to stall at the 12370/280 zone (ascending trendline from 06 Feb 2018 low + swing low areas of 15/22 Feb 2018). In addition, the hourly Stochastic oscillator has flashed a bullish divergence signal coupled with an oversold reading seen in the 4 hour Stochastic oscillator. Tolerate the excess and maintain bullish bias above 1237/280 support with 12480 as upside trigger level for at least a push up to retest the 12650 range resistance of 07/08 Feb 2018. However, failure to hold above 12370/280 should see a deeper slide to retest the  11900/800 major support zone.

Commodities – Further potential short-term weakness in Gold & WTI Crude

  • Gold – Broke below 1326 support that invalidated the push up scenario within its major range configuration in place since Jul 2016. Now at risk of shaping a further slide towards the 1303/1300 support (former medium-term swing high area of 27 Nov 2017 + Fibonacci cluster) holding below the 1326 key short-term resistance (former minor support from 23/26 Feb 2018). On the flipside, a clearance above 1326 negate the short-term bearish tone for a squeeze up to retest the 26 Feb minor swing high of 1340.
  •  WTI Crude (Apr 2018) – Broke below 63.06 tightened key short-term support that invalidate the residual push up scenario towards the 64.40/65.00 near-term resistance (76.4% Fibonacci retracement of the recent decline from 25 Jan 2018 high to 10 Feb 2018 low + descending trendline from 25 Jan 2018 high). Turn bearish below 63.60 key short-term resistance (yesterday, 27 Feb U.S. session high + 61.8% Fibonacci retracement of the recent slide from 27 Feb 2018 high to today current Asian session intraday low of 62.54) for a further potential push down towards 60.95 range support (minor swing low areas of 16/22 Feb 2018). However, a clearance above 63.60 should see another choppy movement upwards to test the 64.40 resistance (descending trendline from 25 Jan 2018 high).

*Levels are obtained from City Index Advantage TraderPro platform


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