Daily Global Macro Technical Trend/Bias Key Levels (Mon 02 Jul)
Kelvin Wong July 2, 2018 12:27 AM
FX – JPY & NZD remains weak against USD
- EUR/USD – Trend bias: Sideways. Whipsawed as it broke below the 1.1630 predefined key short-term support as per highlighted in our previous report dated Wed, 27 Jun but ended the week backed above 1.1630 on last Fri, 29 Jun with a U.S. session close of 1.1684. In addition, it ended last week with a weekly bullish "Hammer" candlestick, the second since its prior week of 18 Jun 2018 formed right at the medium-term ascending channel support in place since 02 Jan 2017 low. These observations suggest that downside momentum of the multi-month down move since 27 Mar 2018 has started to abate. Prefer to turn neutral first between 1.1740 (the descending trendline from 17 Apr 2018 + 23.6% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low) and 1.1510 (the range support that was formed since 29 May 2018). An hourly close above 1.1740 is likely to open up scope for a mean reversion rebound towards the next intermediate resistance at 1.1930/1995 (the congestion area of 08 Sep/28 Nov 2017 & 09 Jan/14 May 2018 + 50% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low). On the flipside, a break below 1.1510 sees a test on the lower limit of the key long-term support at 1.1470/50 (the former resistance of the major basing configuration from Mar 2015 to Mar 2017).
- GBP/USD - Trend bias: Mean reversion rebound. Broke below the 1.3210 key short-term support and almost met the 1.3020/3000 support (minor swing low areas of 05 Oct/03 Nov 2017 + psychological) as it printed a low of 1.3050 on last Thurs, 1.3050. Interestingly, it ended the week with a bullish weekly “Hammer” candlestick right above the 1.3020/3000 support coupled with a bullish divergence signal seen in the daily RSI oscillator. These observations suggest that the downside momentum of the multi-month down move since 17 Apr 2018 high of 1.14377 has started to abate. Thus, a mean reversion rebound scenario cannot be ruled out at this juncture. Watch the key short-term support at 1.3100 (the former minor swing low 21 Jun 2018 that has been surpassed above + close to the 61.8% Fibonacci retracement of the recent push up from last Thurs, 28 Jun 2018 low to 29 Jun 2018 high of 1.3214) for a potential push up to test 1.3230 (minor swing high area of 27 Jun 2018) and an hourly close above it is likely to see a further potential corrective mean reversion rebound towards the 1.3360 resistance in the first step (descending trendline from 10 May 2018 + 23.6% Fibonacci retracement of the multi-month down move since 17 Apr 2018 high to 28 Jun 2018 low). However, failure to hold at 1.3100 sees another slide to test the 1.3020/3000 support.
- AUD/USD - Trend bias: Sideways. The first 0.7330/7300 downside target/support/target has been met and the pair ended the week with a bullish “Hammer” candlestick right above the 0.7330/7300 support (it printed a low of 0.7323 on last Wed, 27 Jun). Prefer to turn neutral first between 0.7450 (the former medium-term swing low area of 09 May 2018) and 0.7300. An hourly close above 0.7450 is likely to open up scope for a potential mean reversion rebound towards the 0.7580 resistance (the upper boundary of the medium-term descending channel from 26 Jan 2018 high). On the flipside, an hourly close below 0.7300 sees a further downleg to target the next intermediate support at 0.7240/7220 (lower boundary of a medium-term descending channel from 26 Jan 2018 high + Fibonacci projection cluster).
- NZD/USD - Trend bias: Bearish breakdown from major support. The pair broke below (a daily close below it) the neckline support of a major bearish “Double Top” configuration in place since late July 2017 on last Thurs, 28 Jun. Maintain bearish bias in any bounces below the 0.6830 key short-term resistance (former minor swing low area of 21 Jun 2018 + upper boundary of the minor descending channel from 14 Jun 2018 high) for a further potential down leg to target the next intermediate support at 0.6675/50 in the first step (30 May 2016 medium-term swing low + 1.00 Fibonacci projection of the down move from 27 Jul 2017 high to 17 Nov 2017 low projected from 16 Feb 2018 high). However, a clearance above 0.6830 negates the bearish tone for a squeeze up towards the 0.6920 resistance (the minor swing high area of 23/25 Jun 2018 + descending trendline from 13 Apr 2018 high).
- USD/JPY - Trend bias: Bullish breakout from minor range. Pushed up as expected and met the 110.40/55 intermediate resistance on last Thurs, 28 Jun. It broke above the 110.40/55 level (minor swing high of 21 Jun 2018 + minor descending trendline from 15 Jun 2018 + Fibonacci retracement/projection cluster) on last Fri, 29 Jun which suggests another potential upleg has materialised for the on-going medium uptrend in place since 26 Mar 2018 low. Maintain bullish bias in any dips with adjusted key short-term support now at 110.45 (the pull-back support of the former minor descending trendline from 15 Jun 2018 + minor ascending trendline in place since 26 Jun 2018 low) for a further potential push up to retest the 21 May 2018 high of 111.39 before targeting the lower limit of the major resistance at 112.00 (the upper boundary of a major descending resistance in place since Jun 2015 high + Fibonacci projection/retracement cluster). On the other hand, failure to hold at 110.45 implies a failure bullish breakout for another round of choppy slide back to retest the 109.35/25 medium-term range support in place since 08 Jun 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.