04 February 2018 TECHFX TRADERS WEEKLY FX TECHNICAL REPORT
Contents FX: AUDUSD Medium Term Page 3 AUDUSD Short Term Page 4 AUDUSD VS Interest Rates Page 5 AUDNZD Medium Term Page 6 AUDNZD Short Term Page 7 AUDNZD Short Term/Trade idea Page 8 EURUSD Medium Term Page 9 EURUSD Short Term Page 10 EURAUD Medium Term Page 11 EURAUD Short Term /Trade idea Page 12 GBPUSD Medium Term Page 13 GBPUSD Short Term Page 14 RATES: US 10yr Notes Short Term Page 15 EQUITIES: S&P 500 Medium Term Page 16 S&P 500 Short Term Page 17 DAX Medium Term Page 18 DAX Short Term Page 19 ASX200 Medium Term Page 20 ASX200 Short Term Page 21 COMMODITIES: CRUDE OIL Medium Term Page 22 CRUDE OIL Short Term Page 23 GOLD Medium Term Page 24 GOLD Short Term Page 25 CYRPTO: BITCOIN Short Term Page 26 WEEKLY FX TECHNICAL REPORT 2
AUDUSD Medium Term View: The AUDUSD s correction has now extended into its 24 th month. Last weeks rejection from the.8125/35 resistance zone, should see the focus return to the downside and the bottom of the trend channel.7550/00. More so if the 50% fibo support at.7815 fails to hold. 3
AUDUSD Short Term View: The break of the 80c support provided initial confirmation a short term high was in place. A return to the bottom of the range.7500/50 is now likely. However before that expect support in the.7830/10 area and then.7745/25 to be sticky. Only a break and close above.8125/35 would change the view. Resistance:.7950/60,.8000c,.8040 Support:.7900,.7870,.7820 4
AUDUSD VS IRON ORE VS RATES AUDUSD VS IRON ORE: Even after last weeks decline the AUDUSD is still above the level, indicated by the price of Iron Ore. AUDUSD VS RATES: The interest rate differentials between AU and US 10yr bonds continue to weight on the AUDUSD. 5
AUDNZD Medium Term View: A break and close below support 1.0845/25 would confirm that AUDNZD has commenced a Wave V lower, targeting a retest of 1.0000. 6
AUDNZD Short Term View: The failure to hold the 1.1000 support earlier this week suggested a retest of range lows 1.0845/25 would be forthcoming. A break of the aforementioned support zone triggers a head and shoulders topping pattern as well as a bearish Elliott Wave count, targeting a move towards 1.0500 and the towards parity. Before I do move on an talk about a trade idea around this technical set up it is a very heavy week for data releases in both Australia and NZ, including the RBA Interest Rate decision on the 6 th of February, a speech from the RBA Governor on the 8 th of Feb and the Quarterly Statement of Monetary Policy on 9 th of Feb. In terms of the fundamental backdrop, the Australian economy has just seen its fifth consecutive quarter of weak CPI, credit growth is at 4yr lows, another decline in house prices, subdued wage growth and a higher AUD is likely to offset solid global and local growth. Therefore we see the risk as being for a neutral to dovish tone overall and that the market further unwinds the 15bp of interest rates priced in for 2018. In New Zealand there is Employment data on the 7 th of February before the RBNZ meeting on the 8 th of Feb. Trade idea: Hence, its going to be a particularly volatile week for AUDNZD. However as a trade, I am looking to get short AUDNZD on a break (and ideally a close) below 1.0815/10. I intend to keep my position size small and to start with the stop loss will be placed at 1.0950. I will trail the stop lower down to 1.0850 at the earliest feasible opportunity and the target is a move to 1.0500. This is a trade that is likely to involve some active management within the framework outlined above. 7
AUDNZD Resistance: 1.0910/30, 1.1000/10, 1.1055/75 Support: 1.0845/25, 1.0770/60, 1.0710/00 8
EURUSD Medium Term View: Expect 1.2800/20 to cap the current rally before a pullback and before the next leg higher to 1.4000/1.5000 begins. 9
EURUSD Short Term View: After reaching our 1.2500/20 target the EURUSD has entered a period of consolidation/correction. The first level of support is 1.2340/20 though the preference is for the correction to trade a towards 1.2250 before the next leg higher commences. Should the pullback occur in a corrective manner, I will be looking for opportunities to set longs ahead of 1.2250 in anticipation of the next leg higher towards 1.2750/1.2800. Resistance: 1.2520/40, 1.2610, 1.2660 Support: 1.2350/30, 1.2300, 1.2250 10
EURAUD Medium Term View: EURAUD targets 1.6500 and beyond. 11
EURAUD Short Term View/Trade Update: In recent weeks the possible inverted head and shoulders pattern and bullish Elliott Wave count in EURAUD have been highlighted. And as a trade we were running a core long EURAUD trade at 1.5294. If you added to the position either on the weaker than expected Australian CPI data or on the break of the neckline, well done. With the Dec high of 1.5770 close by, I would recommend taking profits on 1/3 or even half of the trade. Stops on the balance should be raised to just under 1.5530 and the ultimate target for the trade is 1.5950 ish. Resistance: 1.5750/70, 1.5830, 1.5900 Support: 1.5570, 1.5530, 1.5490/80, 12
GBPUSD Medium Term View: Neutral 13
GBPUSD Short Term View: GBPUSD has remained relatively well contained within the trend channel below, though the rejection from highs has been limited thus far. A break below support 1.3950/30 is initial confirmation a deeper pullback to the 1.3600/1.3500 region has commenced. For the bullish case to regain traction, a move above 1.4350 would open up a move towards 1.4700. Resistance: 1.4275, 1.4350, 1.4400, Support: 1.4080, 1.4000, 1.3950/30 14
US 10 Year Interest Rates Short Term View: The rally in U.S 10yr interest rates intensified last week. As we have highlighted in recent reports, higher bond yields have the capacity to unsettle the stock market and we were able to witness this first hand this week. Unfortunately for equity markets, higher bonds yield is a phenomena likely to continue in coming weeks. Our target for the current impulsive wave higher is the 3.00/3.05% region with dips likely to be very well supported back to 2.65%. Resistance: 2.85%, 2.92% Support: 2.75%, 2.65% 15
S&P 500 Medium Term View: The S&P 500 has commenced a Wave iv of Wave V pullback. Source Saxo. The figures stated are as of 4 February 2018. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation 16
S&P 500 Short Term View: The rally in stocks came to an abrupt end last week with the S&P 500 cracking key support levels at 2850 and then 2820 to finish the week over 4% from all time highs. The decline is likely to go further with 2650 the target from where I would expect to see a bounce develop. Resistance: 2810/20, 2840, 2880 Support: 2750/40, 2710/00, 2660/50. 17
DAX Medium Term View: The break of support at 13000 suggests a WIV pullback has commenced. Source Saxo. The figures stated are as of 4 February 2018. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation 18
DAX Short Term View: The break of the uptrend opens the way for the current correction to extend towards 12000. Resistance: 12800/20, 12950, 13100 Support: 12680, 12500, 12320 19
ASX200 Medium Term View: The ASX200 is tracing out a Wave 5 rally which should retest the 6851 high from 2007. Source Saxo. The figures stated are as of 4 February 2018. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation 20
ASX200 Short Term View: In contrast with the bullish wave count on the longer term chart there is a possible competed 5 wave rally on the daily chart below. To remain bullish the ASX200 should not break the lows for 2018 at 5990. Should this level break on a closing basis, look for a retracement towards 5600. Resistance: 6150/55, 6200, 6240/50 Support: 6030, 6000/90, 5940/20, 21
CRUDE OIL Medium Term View: Bullish, looking for a move towards wave equality at $72.00/50. Should the price extend much above the aforementioned region it would indicate significantly further upside - towards $110.00 as Wave C turns into W III. 22
CRUDE OIL Short Term View: Crude Oil spent the past week consolidating recent gains. Should a pullback develop from current levels back towards $62.90/50, it should provide the support and a buying opportunity for the next leg higher towards $70/72 region. Resistance: 66.70, 67.20, 67.70 Support: 64.90, 64.20, 63.00/90, 23
GOLD Medium Term View: Resistance remains solid in the $1355/75 region. A break and close above $1375 should open up a move towards $1450 (wave equality). Conversely a failure to hold support $1320 would indicate rejection of higher prices and turn the focus back towards $1250. 24
GOLD Short Term View: The retracement from resistance is approaching key support at $1323/20. A break of this level opens up the possibility of a head and shoulders top and also initial confirmation the rally has failed for now. In this instance, I think a move back to $1280 and then $1250 is likely. However should Gold hold $1323/20 and then rally and close above $1375 it would be confirmation the next leg higher towards $1440 has commenced. Resistance: 1335, 1350, 1375, Support: 1323/20, 1300, 1280 25
BITCOIN Btc/Usd Short Term View: Some positive signs of a base currently forming in Bitcoin. As posted on our Twitter feed the recent leg lower held and has bounce from both Cloud and Horizontal support levels. The Elliott Wave count remains constructive and there are loss of momentum/potential reversal candles evident. I will become more confident of this basing scenario should a move and close above 9250/300 occur today. I have used the last leg lower to add to my position and stops on longs should remain below the support region highlighted below which comes in 7700/7500. Resistance: 10,000, 10400, 10750 Support: 8150, 7700/7500, 6150 26
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