Daily Global Macro Technicals Trend Bias/Key Levels (Thurs 25 Jan)
Kelvin Wong January 25, 2018 12:01 AM
FX - USD weakness in extension phase , minor corrective rebound on hold for now
- EUR/USD – Rallied as expected and hit the short-term resistance/target of 1.2375/2390 (printed a high of 1.2415 in yesterday, 24 Jan U.S. session) reinforced by a remark made by U.S. Treasury Secretary that stated the economic benefits of a weak USD on the WEF in Davos. The short to medium-term bullish trend is still intact, maintain bullish bias in any dips (ECB event risk later where Draghi may attempt to talk down the recent strength of the EUR during the press conference) above a tightened key short-term support at 1.2340/2320 (former minor swing high of 17 Jan 2018 + lower boundary of minor ascending channel from 23 Jan 2018 low + 50% Fibonacci retracement of the recent burst up from 23 Jan 2018 low to yesterday high) for a further potential upleg to target the next near-term resistance at 1.2475 (upper boundary of the aforementioned minor ascending channel + 2.00 Fibonacci projection from 18 Jan 2018 low) and above 1.2475 opens up a further rally towards a major resistance of 1.2520/2560 (Fibonacci cluster + exit potential of the “Double Bottom” bullish breakout configuration formed in Mar 2015 to July 2017). However, failure to hold above 1.2320 should negate the bullish tone for a deeper slide towards the 1.2270 support (former minor range top of 22 Jan/23 Jan + minor ascending trendline from 18 Jan 2018 low).
- GBP/USD – Broke above 1.4130 upper neutrality zone that has validated an extension of the up move from 11 Jan 2018 minor swing low. Flip back to bullish bias in any dips above key short-term support at 1.4100 (median line of the minor ascending channel from 11 Jan 2018 low + 38.2% Fibonacci retracement of the on-going rally from 20 Jan 2018 low) for a further potential push up towards the next resistance at 1.4500/4570 (Fibonacci cluster + major congestion zone of Feb/May 2016 before Brexit vote). On the other hand, a break below 1.4100 should negate the bullish tone to see a deeper pull-back towards the next support at 1.4000/3930 (lower boundary of the minor ascending channel from 11 Jan 2018 low + former minor swing high areas of 18/19 Jan 2018).
- AUD/USD – Broke above 0.8040 that invalidated the minor corrective decline scenario. Up move from 09 Jan 2018 low is likely in an extension phase, flip back to bullish bias in any dips above 0.8040/20 key short-term support for a further potential push up towards the next resistance at 0.8130/8170 (Fibonacci cluster + swing high of 08 Sep 2017 + major pull-back resistance of a former ascending trendline from Apr 2001 low). On the flipside, failure to hold above 0.8020 should negate the bullish tone for a deeper slide towards the next support at 0.7960 (23 Jan 2018 low + ascending channel support from 09 Dec 2017 low).
- NZD/USD – Minor decline scenario has been invalidated through the bullish break of 0.7360. Flip back to bullish bias above key short-term support now at 0.7310 (former minor range tops of 16/18/19 Jan 2018 + close to 23.6% Fibonacci retracement of the up move from 08 Dec 2017 low to yesterday high) for a further potential push up towards the next resistance at 0.7530 (medium-term swing high area of 26 July 2017). However, a break below 0.7310 should negate the bullish tone for a slide back to retest the 0.7270/50 support (19/22 minor swing low areas + ascending channel support from 08 Dec 2017 low).
- USD/JPY – Broke below 1110.00/109.90 has validated a further down move. Turn bearish below key short-term resistance at 109.50/80 (today current intraday high + 38.2% Fibonacci retracement of the recent decline from 23 Jan 2018 high to yesterday low) for a further potential push down to target a major support zone at 108.40/108.00 (Fibonacci projection cluster + major ascending trendline from Jun 2016 low). However, a push up above 109.80 should trigger a minor corrective rebound to retest 110.25 (former swing low areas of 16/17 Jan 2018 + descending trendline from 08 Jan 2018 high).
Stock Indices (CFD) – Still holding above supports
- US SP 500 – Pushed up as expected and hit the first resistance/target of 2853 before it pull-backed in the yesterday, 24 Jan mid-U.S. session. The pull-back managed to stall at the predefined 2825 tightened key short-term support (printed an intraday low of 2823 but no hourly close below 2825). No change, maintain bullish bias above 2825/23 key short-term support (also the ascending channel support from 30 Dec 2017 low) for another potential upleg to target 2860 next (lower limit of the 2nd medium-term resistance-see latest weekly technical outlook). On the flipside, failure to hold above 2825/23 should negate the bullish tone for a deeper pull-back to test the next support at 2814/10 (former minor range top from 16 Jan/20 Jan 2018).
- Japan 225 – Broke below the tightened 23900/850 key short-term support that invalidated the direct rise scenario. This weakness was triggered by a weaker USD/JPY. The Index is now back at the 23650 minor range support in place since 10 Jan 2018. Mix elements, prefer to turn neutral now between 23650 & 23900 (also a minor descending trendline from 23 Jan 2018 high). An hourly close above 23900 is required to see a potential revival of the bulls.
- Hong Kong 50 – Still holding above 32350 key short-term support. No change, maintain bullish bias above 32350 for another round of potential upleg to target 33330 next (lower limit of medium-term resistance zone-see latest weekly technical outlook). However, failure to hold above 32350 should negate the bullish tone for a deeper pull-back towards the 32000/31850 support.
- Australia 200 – Pull-backed in yesterday, 24 Jan U.S. session and managed to hold above the 6030 key short-term support (printed an intraday low of 6018 but no hourly close below 6030). Maintain bullish bias above 6030/18 for at least a potential push up to test 6109 (the medium-term upper neutrality range -see latest weekly technical outlook). However, failure to hold above 6030/18 should negate the short-term bullish tone to see another slide to retest the 6000/5986 key medium-term support.
- Germany 30 – Pull-backed in the last hour of yesterday, 24 Jan European session but managed to hold at the 13400 key short-term support (printed an intraday low of 13372 before an hourly close back above 13400). Maintain bullish bias above 13400/13340 support for another potential upleg to retest the recent swing high of 13600 before targeting the next near-term resistance at 13670 close to the upper boundary of the minor ascending channel from 17 Jan 2018 low + 3.618 Fibonacci projection from 17 Jan 2018 low). However, failure to hold above 13400/13340 should negate the bullish tone for a deeper slide back towards the 13130 medium-term support (see latest weekly technical outlook).
Commodities – WTI broke above 65.20 & Gold validated further potential upside
- Gold – Bullish break above the 1340 upper limit neutrality zone. Flip back to bullish bias above 1350 key short-term support (minor swing low of 25 Jan 2018 + former swing high area of 08 Sep 201) for further potential push up target the significant resistance of 1375/1378 (major upside trigger level for a potential multi-month up move). On the flipside, failure to hold above 1350 should negate the bullish tone for a deeper pull-back to retest 1340.
- WTI Crude (Mar 2018) – Rallied as expected and surpassed the 62.20 medium-term resistance. Maintain bullish bias in any dips above 64.90 key short-term support (former minor swing high areas of 16/24 Jan 2018) for another round of potential upleg towards the next near-term resistance of 67.60/68.40 (Fibonacci projection cluster + upper boundary of medium-term ascending channel from 14 Dec 2017 low). Below 64.90 should negate the bullish tone for a deeper slide to retest the minor range support of 63.00/62.80 in place since 12 Jan 2018.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.