Daily Global Macro Technicals Trend Bias Key Levels Tues 08 May

FX –  Recent USD strength at risk of a minor setback

• EUR/USD – Trend bias: Holding above short-term support, risk of mean reversion rebound/consolidation. The pair has continued to hover above the 1.1890 key short-term support (former medium-term swing high areas of 24 Nov/01 Dec 2017 that was tested & held on 10 Jan 2018 + Fibonacci projection cluster) as it printed a low of 1.1898 in yesterday, 07 May European session before it traded sideways through out the U.S. session. The risk of a short-term mean reversion rebound still lingers round the corner (refer to yesterday report).  Maintain bullish bias with 1.1890 key short-term support and 1.2030 remains as the upside trigger level (minor swing high areas of 02/03 May 2018) and an hourly close above 1.2030 is likely to reinforce a further push up to target the next intermediate resistance at 1.2130/2180 (former minor swing low areas of 18 Jan/02 Mar 2018 + minor swing high area of 28 Apr 2018 + close to 50% Fibonacci retracement of the decline from 17 Apr high to 04 May 2018 low). However, failure to hold at 1.1890 sees an extension of the down move towards 1.1730/1700 next (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).
• GBP/USD - Trend bias:  Holding above short-term support, risk of mean reversion rebound/consolidation. The pair had managed to inch higher from the 1.3430 predefined key short-term support. No change, maintain bullish bias with 1.3430 remains as the key short-term support (swing low area of 11 Jan 2018 + 38.2% Fibonacci retracement of the 16-month up move from 16 Jan 2017 high to 17 Apr 2018 high) for a potential push up to target the next intermediate resistance at 1.3700/3760 (pull-back resistance of the former medium-term ascending channel support from 14 Mar 2017 low + former swing low areas of 09 Feb/01 Mar 2018 + 23.6% Fibonacci retracement of the on-going slide from 17 Apr high to 04 May 2018 low). On the other hand, failure to hold at 1.3430 sees an extension of the down move towards 1.3280/3200 next (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).
• AUD/USD - Trend bias: Unclear. Recalled that we had turned neutral yesterday due to mix elements despite the pair was still trading below the 0.7550 key short-term resistance. In yesterday, 07 May European session, the pair had tried to stage a push down but stalled slightly below  the lower limit of the short-term neutrality zone at 0.7500 (printed a low of 0.7493 before it staged a bounce). Tolerate the excess and maintain the neutrality stance between 0.7490 and 0.7550.  A break below 0.7490 (an hourly close below it) resumes the down move to target 0.7370/0.7330 next (the swing low areas of 08 May/01 Jun 2017 + 61.8% Fibonacci retracement of the up move from 15 Jan 2016 low to 26 Jan 2018 high). On  the flipside, an hourly close above 0.7550 is likely to see the start of a potential mean reversion rebound towards the next intermediate resistance at 0.7600/7640 (the former swing low areas of 29 Mar/09 Apr 2018 + 38.2%/50% Fibonacci retracement of the down move from 19 Apr high to 01 May 2018 low).
• NZD/USD - Trend bias: Unclear. Maintain neutrality stance between 0.7000/6985 and 0.7095. Only a clear break below 0.6985 (an hourly close below) is likely to see an extension of the down move to target  the next support at 0.6930/6910 in first step (former swing high area of 09 Nov 2017 + 76.4% Fibonacci retracement of the up move from 17 Nov 2017 low to 16 Feb 2018 high).

• USD/JPY - Trend bias: Sideways within medium-term uptrend in place since 26 Mar 2018 low. A “tug of war” between two forces, one within the FX space where the recent USD strength faces the risk of short-term setback; on the other hand, major stock indices have continued to hold above their respective supports where a risk-off scenario is now at the backburner which should support further USD/JPY strength. No change, neutrality stance between 108.70 and 109.40. Only a clear break above 109.40 (an hour close above it) reinstates the bullish tone for another round of potential upleg to target the 110.85/111.00 resistance (the former medium-term swing low area of 27 Nov 2017 & the 61.8% Fibonacci retracement of the multi-month decline from 06 Nov 2017 high to 26 Mar 2018 low).  On the flipside, failure to hold at 108.70 sees a deeper slide towards the key medium-term support zone of 107.80/40 (former medium-term swing high area of 21 Feb 2018 + 50% Fibonacci retracement of the on-going up move from 26 Mar low to 02 May 2018 high).  

Stock Indices (CFD) – Supports continue to hold while S&P 500 may see a minor pull-back first

• US SP 500 – Trend bias: Risk of a minor pull-back before potential push up continues towards “Symmetrical Triangle” range resistance. Inched higher as expected and printed a high of 2683 in yesterday, 07 May U.S. session which came close with the lower limit of the short-term resistance/target zone of 2685/90 (refer to yesterday report). The 4 hour Stochastic oscillator has exited from its overbought zone and still has room to manoeuvre to the downside before it reaches an extreme oversold level of 10%. Thus, the Index now faces the risk of a pull-back towards 2656/48 zone (the minor ascending trendline from 03 May 2018 low + 38.2%/50% Fibonacci retracement of the on-going up move from 04 May 2018 low to yesterday, 07 May high of 2683). Maintain bullish bias in any dips with 2634 as the key short-term support (former minor swing high area of 04 May 2018, the first rebound from the 03 May2018 low of 2593) for another potential upleg to retest 2685/90 before targeting the 2720 key “Symmetrical Triangle” range resistance. However, failure to hold at 2634 exposes another round of choppy decline to retest 2593/2585 key medium-term support (the lower boundary of the ‘Symmetrical Triangle” range configuration).

• Japan 225 – Trend bias: Push up towards range resistance/key medium-term upside trigger. Managed to  hold the 22340 key short-term support (refer to yesterday report), maintain bullish bias for a further potential push up to target the 22710 range resistance/medium-term upside trigger level (61.8% Fibonacci retracement of the decline from 23 Jan high to 23 Mar 2018 low). However, failure to hold at 22340 see a slide back to retest last week  low of 22088.
• Hong Kong 50 – Trend bias: Pushed up towards range resistance.  No change, maintain bullish bias with 30000/29900 remains as the key short-term support for a potential push up to retest the minor range resistance of 30760/830 follow by 31100 (minor swing high area of 12 Apr 2018). However, a break below 29950 opens up scope for a deeper slide towards the 29360/29070 key medium-term support zone.  

• Australia 200 – Trend bias: Uptrend remains intact. No change, maintain bullish bias with an adjusted key short-term support now at 6078 (07 May 2018 low) for a further potential push up to target the next intermediate resistance at 6150 (09 Jan 2018 swing high area). On the other hand, a break below 6078 negates the bullish tone for a pull-back to retest 6054 (minor range support in place since 03 May 2018 low).
• Germany 30 – Trend bias: Bullish breakout from 3-month range configuration. Daily close above 12850 has further reinforce the strength of the on-going up move in place since 26 Mar 2018 low.  No change, maintain bullish bias in any dips with adjusted key short-term support now at 12808 (07 May 2018 low + 23.6% Fibonacci retracement of the on-going up move from 25 Apr 2018 low to yesterday, 07 May U.S. session high of 12961)   for a further potential push up to target 13020 before the next intermediate resistance at 13140/150 (76.4% Fibonacci retracement of the steep down move from 23 Jan high to 06 Feb 2018 low + upper boundary of a minor ascending channel from 04 Apr 2018 low). However, failure to hold at 12808 negates the bullish tone for a deeper pull-back to retest the 12700/12620 support (minor swing low area of 03 May 2018 + lower boundary of a minor ascending channel from 04 Apr 2018 low).

Commodities – WTI Crude managed the hold at the key short-term support

• WTI Crude (Jun 2018) – Yesterday’s pull-back from its U.S. session high of 70.82 had managed to stall right above the 69.40/30 key short-term support (the former minor swing high areas of 19/24 Apr/01 May 2018) as it printed a low of 69.52 and formed an hourly “long-legged Doji” candlestick pattern. No change, maintain bullish bias with 69.40/30 remains as the key short-term support for a further potential push up to target the next resistance at 73.30/90 (the upper boundary of a major ascending channel from Feb 2016 low + Fibonacci projection cluster). However, failure to hold at 69.30 negates the bullish tone for a slide back to retest the  minor range support of 67.15 (23 Apr/02May swing low areas).
• Gold - Trend bias: Unclear. No change, maintain neutrality stance between 1300 and 1323 (former minor swing low areas of 29 Mar/23 Apr 2018). Only a break above 1323 (an hourly close above it) sees a potential push up towards the next intermediate resistance at 1334/41 (the minor descending resistance from 11 Apr 2018 high + former minor swing low of 13 Apr 2018) within a major sideways range configuration in place since Jul 2016.

*Levels are obtained from City Index Advantage TraderPro platform

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