Daily Global Macro Technical Trend Bias/Key Levels (Thurs 12 Jul)
Kelvin Wong July 12, 2018 2:30 AM
FX – USD strength resurgence while USD/JPY is testing its major resistance at 112.30
- EUR/USD – Trend bias: Push down within range. The break below the 1.1680 key short-term support has reduced the odds of another leg of mean reversion rebound scenario to target the 1.1840/1880 intermediate resistance (swing high areas of 07/14 Jun + 38.2% Fibonacci retracement of the down move from 27 Mar 2018 high to 21 Jun 2018 low). Right, it is likely to be consolidating within a minor “Descending Triangle” range configuration in place since 07 Jun 2018 high of 1.1840 with the risk of shaping a slide to retest the bottom of the range. Turn bearish in any bounce key short-term resistance now at 1.1705 (the former minor swing low areas of 10/11 Jul 2018) for a further potential slide towards 1.1590 before the 1.1530 minor “Descending Triangle” range support. However, a clearance above 1.1705 sees a squeeze up to retest the range resistance at 1.1780/1790.
- GBP/USD - Trend bias: Pull-back scenario to retrace the first wave of mean reversion rebound in progress. The pair staged the bearish breakdown from the minor “Pennant” range support at 1.3225 as expected (refer to yesterday report). No change, maintain bearish bias in any bounce below the adjusted 1.3240 key short-term resistance (former minor swing low of 11 Jul 2018 + minor descending trendline from 09 Jul 2018) for a further potential push down to target the 1.3140/3110 support (minor swing low of 02 Jul 2018 + Fibonacci retracement/projection cluster). However, a clearance above 1.3240 sees a squeeze back up to retest 1.3300 (09 Jul 2018 swing high area + medium-term descending trendline from 10 May 2018 high).
- AUD/USD - Trend bias: Sideways. The break below 0.7400/7380 key short-term support has reduced the odds of the second wave mean reversion rebound scenario to target the 0.7540 intermediate resistance. Mix elements now, prefer to turn neutral between 0.7360 (yesterday, 11 Jul U.S. session low that has managed to stall at the previous hourly minor “Hammer” candlestick low of 05 Jul 2018) and 0.7415 (former minor swing high areas of 02/04 Jul 2018). A break below 0.7360 sees a further slide to retest the 0.7320/7300 swing low of 02 Jul 2018. On the flipside, a reintegration above 0.7415 sees the revival of the mean reversion rebound scenario to retest 0.7484 recent swing high of 09/10 Jul 2018 before targeting the 0.7540 resistance (upper boundary of the medium-term descending channel from 26 Jan 2018 + 38.2% Fibonacci retracement of the decline from 14 Mar 2018 high to 29 Jun 2018 low).
- NZD/USD - Trend bias: Down move resumes. The break below the 0.6810 lower limit of the short-term neutrality zone (refer to yesterday report) has increased the odds of the continuation of the medium-term down move in place since 13 Apr 2018 high. Flip back to a bearish bias in any bounce below the 0.6805 key short-term resistance(former minor swing low of 10 Jul 2018 + 61.8% Fibonacci retracement of the on-going slide from 11 Ju 2018 minor swing high to today, 12 Jul Asian session current intraday low of 0.6748) for a further potential downleg to retest 0.6690 swing low of 03 Jul 2018 before targeting the next support at 0.6600/6575 (the lower boundary of the medium-term descending channel in place since 13 Apr 2018 + swing low areas of 16 Feb/15 Mar 2016). On the other hand, a break above 0.6805 negates the bearish tone for a squeeze up to retest 0.6865 (the pull-back resistance of the former neckline support of the major “Double Top” that broke down on 27 Jun 2018 and the 23.6% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low).
- USD/JPY - Trend bias: Sideways. The pair has staged the expected push up and met the 111.50/60 resistance/target. Right now it is testing the upper limit of major resistance at 112.30 (Fibonacci retracement/projection cluster + major descending resistance in place since Jun 2015 high) Mix elements now as the 4 hour Stochastic oscillator has reached an extreme overbought level of 94 coupled with a bearish divergence signal being flashed at its respective hourly Stochastic oscillator. Prefer to turn neutral first between 112.30/38 (today, 12 Jul Asian session current intraday high) and 111.88 (11 Jul U.S. session minor swing low + 23.6% Fibonacci retracement of the on-going up move from 04 Jul 2018 low to today current intraday high of 112.38). An hourly close below 111.88 opens up scope for a pull-back to retest the 111.40/111.00 (the former swing high of 21 May 2018 + medium-term ascending channel support from 26 Mar 2018 low). On the flipside, a clearance above 112.38 (an hourly close above it) see a bullish breakout to target the next intermediate resistance at 113.30/40 in the first step (Fibonacci projection cluster + swing high areas of 21 Dec 2017/05 Jan 2018).
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