Daily Key Short Term Technical Levels Wed 22 Nov 2017

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By :  ,  Financial Analyst

FX – Showing signs of a potential short to medium-term USD weakness cycle

  • EUR/USD - Pushed down and managed to hold right at the 1.1725/1705 key medium-term support as expected. No change, maintain bullish bias and a break above 1.1810 shall increase the conviction for a potential start of another minor degree bullish wave sequence to target the next intermediate resistance of 1.1880 in the first step before 1.2000 next.
  • GBP/USD – Traded sideways above 1.3185 tightened key short-term support.  No change, maintain bullish bias above adjusted key short-term support now at 1.3210 (yesterday, 21 Nov low + minor ascending trendline from 13 Nov 2017 low) to a further potential push up towards the 1.3300/3325 range upper limit/resistance of the minor range consolidation in place since 06 Oct 2017 low.
  • AUD/USD Recall that we turned neutral yesterday as the pair has almost reach the downside target/medium-term support of 0.7520/0.7500 and faces the risk of a medium-term corrective rebound/consolidation to retrace the on-going multi-month decline since 08 Sep 2017. Right now, the recent downside momentum of price action has started to show signs of easing as depicted by the bullish divergence signal seen in the 4 hour Stochastic oscillator. Turn bullish above 0.7532 key short-term support for a potential push up towards the next intermediate resistance at 0.7625 (former minor swing low areas of 27 Oct/08 Nov 2017 + minor descending trendline from 02 Nov 2017 high) in the first step.
  • NZD/USD -  Whipsawed around the 0.6838 key short-term resistance but conviction has been reduced to see another downleg at this juncture due to impending USD weakness seen in other major pairs. Prefer to turn neutral now between 0.6855 (current intraday high) & 0.6780 (17 Nov 2017 low).
  • USD/JPY – Continued to inch lower below the 112.65/72 (excess) key short-term resistance as expected. No change, maintain bearish bias for a retest on the recent low of 111.89 and below it opens up scope for a further decline towards  the next intermediate support at 111.35/20 (Fibonacci projection cluster + exit target of minor “Head & Shoulders” configuration from 25 Oct 2017 bearish breakout).

Commodities – WTI squeezed back up to challenge the long-term range resistance of 56.90 as OPEC meeting looms on 30 Nov

  • Gold – No change, still evolving within a choppy range configuration. Maintain to neutral stance between 1265 (lower limit of the range) & 1290.
  • WTI Crude (Jan 2018) Broke above the 56.91 resistance that invalidated the minor push down scenario. Mix elements now, prefer to turn neutral first between 58.14 (09 Nov 2017 high) & 56.90  

Stock Indices (CFD) – Mix bag with low conviction on the S&P 500 to shape another potential downleg below 2565

  • US SP 500 –  Broke above the 2588/90 short-term resistance and squeezed up to probe the 2597 key medium-term resistance. The cash market closed yesterday (20 Nov) above 2597 by a whisker at 2599 with a lower volume versus its previous 3 day average volume. In addition, the two major cyclical sectors; Industrials & Financials have continued to underperform against the S&P 500 based on their relative strength analysis charts. Thus, a bull trap is still possible for it to stage a potential push down to retest the significant minor support of 2565. However, a break below 2565 seems remote now as the other major cyclical sectors; Technology & Consumer Discretionary have continued to exhibit outperformance elements against the S&P 500. Thus, prefer to turn neutral now between 2601 (yesterday high) & 2587 (previous minor range top of 10/14/17 Nov 2017).    
  • Japan 225 – Pushed up but “less specular” versus the price actions of S&P 500 & Hang Seng due to its direct correlation with the USD/JPY that is still exhibiting signs of further potential weakness. 22800 remains the key short-term resistance with 22410 as the downside trigger level (21 Nov 2017 minor swing low + minor ascending trendline from 15 Nov 2017 low). An hourly close below 22410 is required to increase the bearish conviction for a potential push down to retest the 21840 support.
  • Hong Kong 50 – Rise in progress without any minor pull-back/consolidation as it surpassed the intermediate resistance/target of 29850 as per highlighted in previous report. No signs of bullish exhaustion, maintain bullish bias above tightened key short-term support now at  29800 (yesterday, 21 Nov cash market last trading hour low + 38.28% Fibonacci retracement of the on-going rally from this Mon, 20 Nov low to today current intraday high seen in Asian session) for a further potential push up towards the next intermediate resistance at 30780 (minor degree bullish impulsive wave 3 potential target in place since Mon, 20 Nov low based on Elliot Wave/fractal analysis + Fibonacci projection cluster).  
  • Australia 200 – Challenging the 5990 key medium-term resistance but conviction has been reduced for another downleg scenario as the daily RSI oscillator has started to show upside momentum revival in price action (inched back up above 57% level/a previous corresponding support level). Thus, prefer to turn neutral now between 5990 & 5970 (minor ascending trendline from 20 Nov 2017 low). A daily close above 5990 shall validate the start of another potential upleg to target the 6065 intermediate resistance in the first step.
  • Germany 30 –  Broke above the  13110 short-term resistance and floated up to test the 13220 key medium-term resistance as per highlighted in our latest weekly technical outlook. Mix elements at this juncture. Prefer to turn neutral now between 13080 (pull-back support of the previous minor swing high areas of 17/20 Nov 2017) & 13220/13300 (excess derived from 61.8% Fibonacci retracement of recent decline from 07 Nov high to 15 Nov 2017 low + previous supply area of 09/10 Nov 2017). Only an hourly close back below 13080 shall reinstate the bearish tone for a retest on the 12860 recent minor swing low.      

*Levels are obtained from City Index Advantage TraderPro platform


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