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Market News & Analysis
Daily FX Technical Trend Bias/Key Levels (Thurs 06 Dec)
Kelvin Wong December 6, 2018 1:42 PM
FX – Mix bag with AUD & NZD weakness triggered by risk aversion
- EUR/USD – Trend bias: Sideways. Pushed up as expected but it only printed a high of 1.1419 on 04 Dec European session which fell short of the target/resistance of 1.1470/1500 as per highlighted in our previous report. Mix elements now as the pair has formed 2 consecutive days of “Dojis-liked” candlesticks since 04 Dec 2018 which indicates indecisiveness have started to creep in for the short-term bullish force that triggered the rebound from 28 Nov 2018 low of 1.1267. Prefer to turn neutral now between 1.1300 (the lower limit of a potential “triangle range” consolidation structure that is taking form since the 13 Nov 2018 low of 1.1214) & 1.1420. Only a break above 1.1420 sees a further potential push up to test the 1.1470/1500 resistance.
- GBP/USD – Trend bias: Push up within range configuration. The pair has managed to survive on the 1.2700 “Descending Triangle” range support in place since 15 Aug 2018 low as it challenged it for 2 consecutive days since 04 Dec where it printed an intraday low of 1.2659 but managed to have a daily close back above 1.2700. In addition, daily candlestick patterns have started to form two “Dojis” since 04 Dec right at the 1.2700 support. Maintain bullish bias and added an upside trigger level at 1.2845 (the minor swing high areas of 28 Nov/04 Dec 2018 + close to a minor descending trendline from 07 Nov 2018 high that has been capping the recent rallies). An hourly close above 1.2845 is likely to reinforce the push up scenario towards 1.3000/3050 resistance (upper limit of the “Descending Triangle” + Fibonacci retracement/projection cluster). However, a daily close below 1.2700 triggers a bearish breakdown from the “Descending Triangle” range configuration to open up scope for a fresh impulsive downleg to target the next support at 1.2135 (the 09/14 Mar 2017 swing low + exit target of the “Descending Triangle” bearish breakdown).
- USD/JPY USD – Trend bias: Push down within range. Inching down lower as expected towards the target/support of 112.30 as per highlighted in our previous report. No change, maintain bearish bias in any bounces below tightened key short-term resistance at 113.25 (yesterday, 06 Dec U.S. session high + minor descending trendline from 03 Dec 2018 high) for a further potential push down to towards the 20 Nov 2018 swing low area of 112.30 before targeting the medium-term range support at 111.60/40 (the swing low areas of 15/26 Oct 2018 + pull-back support of a major former descending resistance from Jun 2015 high). However, a clearance above 113.25 negates the bearish tone for a squeeze up towards the 114.55 major range resistance.
- AUD/USD – Trend bias: Down. The bearish break of the 0.7335 key short-term support as per highlighted in our previous report has put the on-going corrective rebound in place since 26 Oct 2018 low of 0.7021 at risk. Flip to a bearish bias in the short-term in any bounces with key short-term resistance now at 0.7280 (close to the pull-back resistance of the former ascending trendline from 26 Oct 2018 low + 38.2% Fibonacci retracement of the on-going slide from 04 Dec 2018 high to today, 06 Dec Asian session current intraday low of 0.7218.) for a further potential push down to target the next near-term support at 0.7170/7140 (the former swing high area of 17 Oct 2018 that was tested and held on 12 Nov 2018). However, a clearance above 0.7280 put the corrective rebound scenario back in shape for a push up to retest 0.7380/7390 swing high area of 03/04 Dec 2018.
- NZD/USD – Trend bias: Down. The bearish break of the 0.6910 key short-term support as per highlighted in our previous report has put the on-going corrective rebound in place since 08 Oct 2018 low of 0.6424 at risk. In addition, the daily RSI oscillator has shaped a bearish divergence signal at its overbought region which indicates a slow-down in the medium-term upside momentum of price action since 08 Oct 2018 low. Flip to a bearish bias in any bounces below key short-term resistance at 0.6915 (the minor descending trendline from 04 Dec 2018 high + 50% Fibonacci retracement of the on-going slide from 04 Dec 2018 high to today, 06 Dec Asian session intraday low of 0.6855) with 0.6850 as the downside trigger level (the ascending trendline support in place since 26 Oct 2018 low). An hourly close below 0.6850 reinforces the a further potential slide to target the next near-term support at 0.6710 (the former congestion area of 02 Jul/21 Sep 2018). However, a clearance above 0.6915 put the corrective rebound scenario back in shape for a push up to retest 0.6969 swing high area of 04 Dec 2018 and even the medium-term resistance of 0.7050 (07 Jun 2018 swing high + former major ascending range support from 24 Aug 2015 low + 61.8% Fibonacci retracement of the downtrend from 16 Feb 2018 high to 08 Oct 2018 low).
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