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Daily Global Macro Technical Trend Bias/Key Levels (Wed 11 Jul)

FX – Mix bag with USD/JPY resuming up move

  • EUR/USD – Trend bias: Mean reversion rebound scenario remains intact. The pair had continued to staged the expected pull-back in place since Mon, 09 Jul high of 1.1790 towards the 1.1710 target as per highlighted in yesterday report. Interestingly, the pull-back stalled right above the 1.1680 predefined key short-term support and staged a rebound thereafter in yesterday, 10 Jul U.S. session after it printed a low of 1.1689. In addition, shorter-term (4 hour & hourly) Stochastic oscillators remain in positive configurations and not in extreme overbought levels which indicates short-term upside momentum has resurfaced. No change, maintain bullish bias with key short-term support remains at 1.1680 (former minor swing high area of 30 Jun/02 Jul 2018 + Fibonacci retracement cluster) for another potential mean reversion upleg to retest 1.1790 minor swing high before targeting the next intermediate resistance at 1.1840/1880 (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). On the flipside, a break below 1.1680 reinstates the bears for a slide to retest 1.1590 before 1.1510 in the first step (the range support that was formed since 29 May 2018).
  • GBP/USD - Trend bias: Pull-back scenario to retrace the first wave of mean reversion rebound remains intact. The pair had traded in a tight range of 77 pips in yesterday session holding below the 1.3300 key short-term resistance. No change, maintain bearish bias with 1.3300 remains as the key short-term resistance (61.8% Fibonacci retracement of the pull-back from 09 Jul high of 1.3363 to its U.S. session low of 1.3189) and added 1.3225 as the downside trigger level (the lower boundary of a minor bearish “Pennant” continuation range configuration that is forming since 09 Jul 2018 low). An hourly close below 1.3225 reinforces the potential slide to target the 1.3140/3110 support (minor swing low of 02 Jul 2018 + Fibonacci retracement/projection cluster) before a potential second wave of mean reversion rebound occurs. On the other hand, a clearance above 1.3300 reinstates the bulls for an extension of the first wave of the mean reversion rebound towards the next resistance at 1.3460 (swing high area of 07/14 Jun 2018).
  • AUD/USD - Trend bias: Mean reversion rebound scenario remains intact. Broke below the 0.7440 short-term support to stage the deeper pull-back towards the 0.7400 key medium-term support (former range resistance from 29 Jun/05 Jul 2018 +  lower boundary of ascending channel from 02 Jul 2018 low + Fibonacci retracement/projection cluster). Right now, the pair is hovering just above the 0.7400 level as it printed a current intraday low of 0.7407 in today, 11 Jul Asian session with a bullish divergence signal being flashed out in the hourly Stochastic oscillator at its oversold region. These observations suggest that the recent slide from 09 Jul 2018 high of 0.7483 has started to loss downside momentum. Maintain bullish bias with 0.7400 as support to watch and added 0.7440 as the upside trigger level where an hourly close above it shall reinforce another potential leg of the mean reversion rebound to retest 0.7483 before targeting the next intermediate resistance at 0.7540/0.7600 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). However, failure to hold at 0.7400 invalidates the mean reversion rebound scenario for a continuation of medium-term down move in place since 25 Jan 2018 to target the 0.7360 and the 27 Jun/02 Jul 2018 swing low area of 0.7337 in the first step.
  • NZD/USD - Trend bias: Sideways. Traded within the short-term neutrality range as per highlighted in yesterday report. No change, maintain neutrality stance between 0.6865 and 0.6810 (the minor ascending trendline from 03 Jul 2018 + 23.6% Fibonacci retracement of the on-going up move from 03 Jul 2018 low to yesterday, 09 Jul 2018 high of 0.6858). An hourly close below 0.6810 opens up scope for a deeper pull-back towards 0.6770/6750 (50%/61.8% Fibonacci retracement of the on-going up move from 03 Jul 2018 low to yesterday, 09 Jul 2018 high + minor congestion area of 29 Jun/05 Jul 2018).  On the flipside, a clearance above 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) opens up scope for an extension of the mean reversion rebound  to target the next intermediate resistance at 0.6950/60 (descending trendline from 13 Apr 2018 high + 38.2% Fibonacci retracement of the down move from 16 Feb 2018 high to 03 Jul 2018 low).
  • USD/JPY - Trend bias: Up move resumes with impending medium-term “Ascending Wedge”. The pair had staged the expected pull-back right below the predefined key short-term resistance at 111.40 as per highlighted in yesterday report (printed a high of 111.35 in yesterday, 10 Jul European session) and hit the first support/target of 110.75. In the shorter-term, the pair has started to evolve into a medium-term bearish reversal “Ascending Wedge” configuration in place since 30 May 2018 as the it headed north towards the 112.00/30 key long-term resistance (the upper boundary of a major descending resistance in place since Jun 2015 high + Fibonacci projection/retracement cluster), this is a longer-term potential bearish set up in the making in line the tail-end scenario of the melt-up phase in equities (refer to Q3 2018 Global Markets Outlook presentation slides). In the short-term (1 to 3 days), flip to a bullish bias in any dips with 110.75 as the key short-term support (the former minor swing high area of 05/06 Jul 2018) for another potential upleg to target the next intermediate resistance at 111.50/60 (the upper boundary of the “Ascending Wedge” + Fibonacci projection cluster). However, failure to hold at 110.75 sees a deeper slide towards the next support at 110.30/25 (the minor swing low areas of 04 Jul/05 Jul/09 Jul + lower boundary of the “Ascending Wedge”).

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