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Daily Global Macro Technical Trend Bias/Key Levels (Mon 18 Jun)

FX – Recent USD strength at risk of a pull-back except against JPY

  • EUR/USD – Trend bias: Risk of minor mean reversion rebound. Last Thurs, 14 Jun, the pair had broken below the 1.1725 lower limit of the short-term neutrality zone and reinforced the bearish move as expected. It hit the intermediate support/downside target of 1.1650/1616 (printed an intraday low of 1.1563 in the U.S session on 14 Jun 2018 post ECB). The single day steep plunged of 300 pips seen on 14 Jun from its intraday high of 1.1851 was the worst performance since the start of the medium-term down trend from 16 Feb 2018, partly fuelled by dovish tone by undertook by ECB to keep its policy interest rates at record low levels till 2019 to balance out its plan to end its quantitative easing programme by 2018.  From a technical analysis perspective, the aforementioned steep decline now faces the risk of a minor mean reversion rebound as the pair action of the pair has reintegrated back above its 4 hour lower Bollinger Band after 4 consecutive periods of trading below the lower Band which indicates an “overstretched”. Interestingly, the swing low of the recent decline at 1.1543 confluences with the medium-term ascending channel support from 03 Jan 2017 low. Flip to a bullish bias with 1.1540 as the key short-term support for a potential minor rebound to retest the 1.1650/1660 intermediate resistance (former minor range support from 31 May/05 Jun 2018 + 38.2% Fibonacci retracement of the recent steep decline from 14 Jun 2018 high to 15 Jun 2018 low) before another potential fresh downleg materialises. However, failure to hold at 1.1540 opens up scope for a continuation of the waterfall slide towards the next support to test 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: Risk of minor mean reversion rebound. The pair had dropped lower as expected and hit the intermediate support/downside target of 1.3260 (printed a low of 1.3211 on last Fri, 15 Jun). Last Fri, 15 Jun low coincides with 29 May 2018 minor swing low of 1.3205 coupled with a daily “Doji-liked” candlestick pattern that was formed at the end of the last Fri, 15 Jun U.S. session. These observations suggest a slowdown in the recent downside momentum. Flip to a bullish bias in any dips with 1.3205 as the key short-term support for a potential minor rebound to retest the 1.3320/3340 intermediate resistance (former minor swing low area of 13 Jun 2018 + 50% Fibonacci retracement of the steep decline from 14 Jun to 15 Jun 2018 low). However, failure to hold at 1.3205 sees another round of downleg to target the next intermediate support at 1.3020/3000 (minor swing low areas of 05 Oct/03 Nov 2017 + psychological).
  • AUD/USD Trend bias: Risk of minor mean reversion rebound. The pair tumbled as expected and hit the intermediate support/downside target of 0.7450/7410 (printed a current intraday low of 0.7425 in today, 18 Jun Asian session. The 4 hour Stochastic oscillator has flashed a bullish divergence signal at its oversold region which indicates an “overstretched” decline with a slow-down seen in downside momentum. Flip to a bullish bias with 0.7410 as the key short-term support (09 May 2018 swing low area) for a potential minor rebound to retest 0.7480/7500 intermediate resistance (the former minor swing low area of 30 May 2018 + 38.2% Fibonacci retracement of the recent steep decline from 12 Jun 2018 high to current intraday low of 0.7425) before another fresh downleg materialises. However, failure to hold at 0.7410 sees another fresh downleg of the on-going medium-term downtrend phase in place since 14 Mar 2018 high to target the next intermediate support at 0.7370/7330 in the first step (09 May 2017 swing low area + 61.8% Fibonacci retracement of the up move from Jan 2016 low to 26 Jan 2018 high).
  • NZD/USD - Trend bias: Coming close to 0.6900 minor support with risk of minor reversion rebound. On last Thurs, 14 Jun U.S. session, the pair had broken below the 0.7000 lower limit of the short-term neutrality zone and tumbled towards the intermediate support/downside target of 0.6900 (printed a current intraday low of 0.6920 in today, 18 Jun Asian session). Mix elements now, prefer to turn neutral between 0.6900 and 0.6960 (last Fri, 15 Jun 2018 high). An hourly close above 0.6960 may see a minor rebound to retest 0.6980/6995 intermediate resistance (minor swing low area of 05 Jun/14 Jun 2018 + 50%/61.8% Fibonacci retracement of the steep decline from 14 Jun 2018 high to today current intraday low of 0.6920). On the flipside, a break below 0.6900 opens up scope for another round of downleg to target the 0.6820 medium-term range support in place since 08 May 2017.
  • USD/JPY - Trend bias: Sideways. Mix elements at this juncture. Prefer to turn neutral between 109.90 (14 Jun 2018 minor swing low) and 110.90 (15 June 2018 minor swing high). An hourly close above 110.90 opens up scope for another round of upleg within the medium-term uptrend phase in place since 26 Jun 2018 low) for a further potential push up to target the 111.40/60 intermediate resistance in the first step (minor swing high area of 21 May 2018) before the major resistance at 122.00/30 (the descending trendline in place since Jun 2015 and Fibonacci retracement/projection cluster). On the flipside, an hourly close below 109.90 sees a deeper pull-back towards the next intermediate supports at 109.60 and 109.20 (former minor swing high of 08 Jun 2018 + minor swing low area of 08 Jun 2018 + lower boundary of the medium-term ascending channel from 26 Mar 2018 low).

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