Daily Global Macro Technicals Trend Bias/Key Levels (Wed 14 Mar)
Kelvin Wong March 14, 2018 4:01 AM
USD weakness has resurfaced except against the JPY. Yesterday's sell-off in the S&P 500 has not alter bullish technical picture as the short-term uptrend in place since 02 Mar 2018 remains intact.
FX – USD weakness has resurfaced except against the JPY
- EUR/USD – Broke above the 1.2365 upper limit of the short-term neutrality range that was defined in yesterday’s report. The bullish breakout above 1.2365 was reinforced by the latest U.S. CPI data for Feb that came in within expectations (1.8% y/y for ex food & energy). The CPI data and lacklustre wage growth (based on last Fri, 02 Mar NFP data) has indicated a “not too hot” inflationary environment that will allow the Fed to go slow & steady in its interest rate hikes. We turn bullish now for the pair in any dips holding above 1.2340 key short-term support (former minor range resistance of 12/13 Mar 2018 + minor ascending trendline from 09 Mar 2018 low) for a push up towards 1.2460 (76.4% Fibonacci retracement level of the recent decline from 16 Feb 2018 high to the 1.2153 low of 01 Mar 2018). A clearance above 1.2460 shall trigger a potential bullish breakout from the “triangle range” configuration in shape since 16 Feb 2018 high to eye the 16 Feb 2018 high of 1.2555 and even the lower limit of the major resistance zone at 1.2630 (Fibonacci projection cluster + secular descending channel resistance from Jul 2008). However, failure to hold above 1.2430 should damage the bullish tone for another round of choppy down move to retest 1.2310 (lower limit of the “triangle range” in place since 01 Mar 2018 low.
- GBP/USD – Clearance above the 1.3930 upper limit of the short-term neutrality range that was defined in yesterday’s report has indicated a bullish breakout from the “Flag” that was in place since 25 Jan 2018 high (a bullish continuation chart configuration). Turn bullish now in any dips above 1.3910 key short-term support (pull-back support of the “Flag” bullish breakout + former minor range resistance of 06/13 Mar 2018) for a further potential push up to retest 1.4140 in the first step (16 Feb 2018 minor swing high + close to 61.8% Fibonacci retracement of the recent decline from 25 Jan high to 01 Mar 2018 low). On the flipside, failure to hold above 1.3910 should indicate a failure bullish breakout for a slide back to retest 1.3780 (minor swing low of 09 Mar 2018).
- AUD/USD – Rise in progress. No change, maintain bullish bias above 0.7840 key short-term support (former minor range resistance of 06/08 Mar 2018) for a further potential push up to target the 0.7920/7935 near-term resistance (minor swing high areas of 16/20 Feb 2018 + descending trendline from 27 Jan 2018 + Fibonacci cluster). However, failure to hold above 0.7870 should negate the bullish tone for a further slide to retest the lower boundary of the minor ascending channel in place since 01 Mar 2018 low now acting as a support at 0.7800.
- NZD/USD – Continued to push up as expected and almost hit the short-term resistance/target of 0.7370/80 (printed a high of 0.7355 in yesterday, 13 Mar U.S. session). Mix elements now as the 4 hour Stochastic has started to trace out a bearish divergence signal at its overbought region which indicates that the short-term upside momentum of price action has started to abate. Prefer to turn neutral now between 0.7380 & 0.7320 (yesterday, 13 Mar U.S. session low). A break below 0.7320 opens up scope for a deeper pull-back to retest the minor ascending channel support at 0.7280 (in place since 01 Mar 2018).
- USD/JPY – Rallied as expected and hit the first short-term resistance/target of 107.00 (printed a high of 107.29 in yesterday, 13 Mar early U.S. session before it staged a pull-back). Current price action is now hovering above the lower limit of the minor ascending channel from 02 Mar 2018 low which also confluences closely with the key short-term support zone of 106.35/20 (50% Fibonacci retracement of the recent up move from 07 Mar 2018 low to yesterday, U.S. session high of 107.29 + former minor swing high area of 06 Mar 2018). Maintain bullish bias above 106.35/20 support for another round of potential upleg (within medium-term corrective rebound phase) to target 107.50/60 next (range resistance area of mid Feb to 27 Feb 2018). On the other hand, a break below 106.20 support should invalidate the corrective rebound scenario for another round of decline to retest the 105.50 support in the first step.
Commodities – Gold further potential upside towards range resistance
- Gold – Broke above 1326 has invalidated the bearish scenario for a retest on the 1303/1300 support reinforced by USD weakness. Flip back to a bullish bias in any dips above 1317 short-term support (minor swing low area of 13 Mar + ascending trendline support from 01 Mar 2018 low) for a potential push up to retest the minor range resistance of 1340 where recent rallies have been capped on 26 Feb/07 Mar 2018. A break below 1317 reinstates the bears for a slide towards 1303/1300.
- WTI Crude (Apr 2018) - Continued to evolve in a choppy range configuration. No change, maintain neutrality stance between 60.15 (minor swing low areas of 02/09 Mar 2018) & 62.60 (descending trendline from 27 Feb 2018 high + minor swing high of 07 Mar 2018). Failure to hold above 60.15 opens up scope for a deeper slide to retest the medium-term support of 58.30/57.90 (swing low areas of 09 Feb/14 Feb 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.