Daily Key Short Term Technical Levels Fri 20 Oct 2017

FX – Mix bag prevails & no clear signs of USD recovery yet despite U.S. Senate approval of fiscal 2018 budget resolution that can pave the way for President Trump’s tax cuts proposal

• EUR/USD – Pushed up as expected above the 1.1750/30 predefined key short-term support to print a high of 1.1857 in yesterday (19 Oct) U.S. session before it traded sideways. Right now, it is pulling back right below the 1.1870 upside trigger level as per highlighted yesterday (the minor swing high area of 13 Oct 2017 + close to the minor descending trendline from 12 Oct 2017 high). Mix elements now, prefer to turn neutral now between  1.1785 (minor ascending trendline from 18 Oct 2017 low) & 1.1870. Only a break above 1.1870 is likely to reinstate a more pronounce bullish tone towards the next intermediate resistance of 1.1940 (minor swing high area of 25 Sep 2017 + Fibonacci cluster) in the first step.
•  GBP/USD – Drifted lower in today (20 Oct) Asian session and tested the 1.3120/3100  lower neutrality range as per highlighted yesterday. The hourly Stochastic oscillator has flashed an impending bullish divergence signal at it oversold region which suggests a potential short-term rebound above 1.3120/3100 key short-term support for today with intermediate resistance coming in at  1.3230/3245 (former minor swing low area of 17 Oct 2017 + former minor ascending trendline from 06 Oct 2017 low + 19 Oct 2017 minor swing high).
• AUD/USD – Drifted lower in today (20 Oct) Asian trading session after inched higher yesterday to print a high of  0.7883. No change, maintain bullish bias above 0.7825/7819 key short-term support for a further potential push up to target last Fri, 13 Oct 2017 high of 0.7897 before the next resistance at 0.7925 (former swing low area of 22 Sep 2017 + descending trendline from 08 Sep 2017 high + Fibonacci cluster).
• NZD/USD – Continued to drop lower after the formation of a New Zealand coalition government that consists of the opposition Labour Party and NZ First Party that are in favour of the New Zealand central bank, RBNZ to adopt a growth oriented mandate on top its current inflation targeting regime. Thus, it can create a more dovish RBNZ which is deemed as negative for the NZD. Technically, the pair is now  challenging a long-term key support of 0.6990 (lower boundary of ascending channel from Aug 2015 low + Fibonacci cluster). Prefer to turn neutral first and only a daily close below 0.6990 will validate a further potential decline towards the next intermediate support at 0.6818 in first step. Upper neutrality level for today will be at 0.7060 (former minor swing low areas of  06/10 Oct 2017).
• USD/JPY – Rallied up to the 11325/30 predefined upper neutrality range as per highlighted yesterday. The hourly Stochastic oscillator has reached an extreme overbought level coupled with an hourly bearish “Shooting Star “candlestick pattern that has emerged in today (20 Oct) Asian session@11am. These observations suggest the risk of a minor decline below the 113.44 key short-term resistance (06 Oct 2017 high + upper boundary of the medium-term descending range configuration in place since 10 Mar 2017 high) towards the 112.45/30 intermediate support. A break below 112.30 may see a further slide to retest 111.77 (minor swing low area of 13/16 Oct 2017).

 Commodities – Recent corrective decline from 16 Oct 2017 high may ended for Gold

• Gold – Yesterday (19 Oct) European session, it broke above the 1284 key short-term resistance that invalidated the last push down scenario. It rallied to print a high of 1291 at the close of yesterday (19 Oct) U.S. session before it dropped by 0.6% in today (20 Oct) Asian session after U.S. senate approved a fiscal 2018 budget resolution that will give momentum for President Trump’s tax cuts to be passed. Interestingly, the slide has managed to stall at the 1282 short-term support which is defined by the minor ascending trendline from  19 Oct 2017 low & the 61.8% Fibonacci retracement of yesterday’s rally from 19 Oct 2017 low) for a potential recovery to retest 1291 and above 1291 may see a further potential push up towards 1306 (16 Oct 2017 high)
• WTI Crude (Dec 2017) - No change, maintain bullish bias  above 51.35/22 key short-term support (former minor swing high of 05/11 Oct 2017) for a further potential push up to retest the 52.75 resistance(swing high area of 28 Sep 2017).

Stock Indices (CFD) – Medium-term uptrend remains intact despite yesterday’s European session sell off

• US SP 500 – Broke below the 2558 tightened short-term support but the sell-off managed to stall right above the key 2540 medium-term pivotal support as per highlighted at the start of the week (see weekly technical outlook report for details) and rebounded to close higher at 2562 in yesterday (19 Oct) U.S. session. Today (20 Oct) Asian session, it has pushed up higher and almost met the short-term resistance/target of 2575 (printed a current intraday high of 2574 in today Asian session). Risk of a minor pull-back at this juncture (below 2575) as hourly Stochastic oscillator has reached an extreme overbought region but  short-term uptrend from 25 Sep 2017 low remains intact.  Key short-term support will be at 2559 (50% Fibonacci retracement of the current rally from yesterday (19 Oct 2017 low + minor ascending trendline from 19 Oct 2017 low) for a further potential push up towards the next resistance at  2590 (Fibonacci projection cluster).
• Japan 225 – Yesterday’s break of the 21375 tightened key short-term support in the European session is considered as “noise” as the decline stalled right above the lower boundary of a medium-term ascending channel from 08 Sep 2017 low . Maintain bullish bias above 21200 key short-term support for a further potential push up towards the next resistance at  21630/21690 (Fibonacci projection cluster) and above may open up scope for 21900/22000 next (Fibonacci projection cluster + upper boundary of the medium-term ascending channel from 08 Sep 2017 low).
• Hong Kong 50 – A 2% sell-off was seen in yesterday (19 Oct) last hour of the Hang Seng’s cash market session that broke below the 28500 short-term support to print a low of 28073 but it managed to have a daily close back above the 28240 key medium-term pivotal support in yesterday (19 Oct) U.S. session (see weekly technical outlook report for details). Maintain bullish bias above 28240 for a potential recovery to retest 28800 (16 Oct 2017 swing high) follow by the next resistance at 29100 (Fibonacci projection cluster).
• Australia 200 –  Maintain bullish bias and tolerate the excess to 5858 (key short-term support) for a further potential push up towards the intermediate resistance at 5950 (swing high areas of 12 Apr/01 May 2017) in the first step.
• Germany 30 – Considered yesterday’s break below the 13020/13000 tightened key short-term support as “noise”. Maintain bulish bias above 12980 key short-term support (minor swing high of 19 Oct 2017 + minor ascending trendline from 19 Oct 2017 low) for a further potential push up towards the next intermediateresistance at 13150.

*Levels are obtained from City Index Advantage TraderPro platform

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