Daily Global Macro Technical Trend Bias/Key Levels (Tues 05 Jun)

Mix bag in FX space with USD/JPY remains on solid footing due to improved risk appetite.

FX –  Mix bag with AUD/USD at major resistance

  • EUR/USD – Trend bias: Short-term recovery scenario remains intact.  A slight push up higher was seen in yesterday, 04 Jun European session where it printed a minor higher high of 1.1744 before it pull-backed by 67 pips in the U.S. session to hit a low of 1.1677.  No changemaintain bullish bias in any dips with 1.1600/1590 remains at the key short-term support for a further potential push up towards the next intermediate resistances at 1.1760 (former minor swing low areas of 21 Nov/12 Dec 2017) follow by 1.1880/1940 (38.2% Fibonacci retracement of the decline from 16 Feb 2018 high to 29 May 2018 low + former minor swing low area of 09/10 Jan 2018 that was rejected on 14 May 2018). On the other hand, failure to hold at 1.1590 negates the recovery process for a slide to retest last week’s low of 1.1510 and a below it exposes the lower limit of the key major support zone at 1.1430 (the former resistance of a basing configuration that occurred in  May 2015/Jun 2016 + 50% Fibonacci of the multi-year up move from Jan 2017 low to 16 Feb 2018 high of 1.2555).
  • GBP/USD – Trend bias: Short-term mean reversion rebound in progress. Inched higher as expected, it printed a high of 1.3398 in yesterday, 04 Jun European session before it pull-backed by 103 pips in the U.S session to print a low of 1.3295. In addition, the 4 hour Stochastic oscillator is now back at its oversold region with the pair still holding at the predefined 1.3295 key short-term support as per highlighted in yesterday report. No change, maintain bullish bias as long as 1.3295 support holds for a further potential residual push up to target the next intermediate resistance at 1.3480 (former minor range congestion support from 04/18 May 2018 + 23.6% Fibonacci retracement of the on-going down move from 17 Apr 2018 high to 29 May low of 1.3205). However, a break below 1.3295 invalidates the short-term rebound scenario for a continuation of the medium-term down move to target the next support at 1.3200/3160 (29 May 2018 swing low area + 50% Fibonacci retracement of the multi-year up move from Oct 2016 low to 17 Apr 2018 high of 1.4377).
  • AUD/USD – Trend bias: At risk of resuming its medium-term down move.  The pair had hit the short-term rebound target/resistance of 0.7625/7655 as expected (refer to yesterday report). Elliot Wave/fractal analysis suggests that the risk of a bearish impulsive downleg sequence at this juncture where the pair is now right below a major graphical resistance zone of 0.7655/7690 (the pull-back resistance of the former major bearish “Ascending Wedge” support from Jan 2016 + former medium-term swing low area of 20 Mar 2018). In addition, the 4 hour Stochastic oscillator has exited from its overbought region. Flip to a bearish bias in any bounce below key resistance at 0.7690 for a potential push down to target the intermediate support at 0.7600/7585 (the former minor high areas of 22/31 May 2018) and breaking below 0.7585 opens up scope for a further potential push down to target the next intermediate resistance at 0.7515 (the minor swing low of 01 Jun 2018 & the lower boundary of the minor ascending channel from 09 May 2018 low). On the other hand, a clearance above 0.7690 invalidates the bearish scenario for a further squeeze up towards the next resistance at 0.7800 (medium-term swing high of 13/19 Apr 2018 & close to 50% Fibonacci retracement of the entire down move from 26 Jan 2018 high to  09 May 2018 low).
  • NZD/USD - Trend bias: Sideways. Pushed up as expected and hit the intermediate resistance/target of 0.7050/60 (refer to yesterday report) as it printed a high of 0.7048 in yesterday, 04 Jun European session. Mix elements now, prefer to turn neutral first between 0.7060 (former minor swing high area of 04 May 2018 + Fibonacci projection/retracement cluster) and 0.7015 (the former minor swing high areas of 31 May/01 Jun 2018 + minor steep ascending trendline from 30 May 2018 low). A clearance (an hourly close) above 0.7060 triggers a potential squeeze up to retest a significant medium-term resistance at 0.7190 (the former range support from 08 Feb/20 Mar 2018 before the recent bearish breakdown that led to a decline of 330 pips + 61.8% Fibonacci retracement of the decline from 13 Apr 2018 high to 16 May 2018 low). On the flipside, failure to hold at 0.7015 opens up scope for a decline towards the intermediate support of 0.6960 (the former minor swing low area of 01 Jun 2018) and below exposes the next support of 0.6900 (psychological + minor ascending trendline from 15 May 2018/the start of the current short-term rebound).
  • USD/JPY - Trend bias: Short-term mean reversion rebound remains in progress. Continued to push up higher as expected (printed a current intraday high of 109.99 in today, 05 Jun Asian session). No change, maintain bullish bias in any dips with adjusted key short-term support now at 109.60 (the lower boundary of a minor ascending channel from 31 May 2018 low + close to the former minor swing high areas of 01/04 Jun 2018) for a further potential push up to target the intermediate resistance at 110.10/30 (minor swing high of 24 May 2018 + 61.8% Fibonacci retracement of the decline from 21 May high to 29 May 2018 low) and above it opens up scope for a further rally towards 110.60 next (upper boundary of the aforementioned minor ascending channel + Fibonacci retracement/projection cluster). However, failure to hold at 109.60 negates the bullish tone for a deeper pull-back to retest the next intermediate support at 109.35 (the minor swing low of 04 Jun 2018) and below it triggers a further extension towards 109.10/109.00 support next (psychological + former minor range resistance from 29/30 May 2018).

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