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Daily Technical Round-up: Chinese virus outbreak impacting markets?

Michael Baker, Thursday, 23 January 2020

Technical Analysis

GBPUSD

Pivot: 1.3109

Scenario 1: Cable pushes to the upside and overcomes trend resistance. Activity has topped at 1.3153 which is just below the 61.8% fib at 1.3159. The next level to focus on is the 6/7/8-Jan highs between 1.3170/.3212. End of 2019 and start of 2020 high at 1.3284 is the next target, this area is also a 61.8% retracement from the post election high to 23-Dec low.

Scenario 2: 1.3118/.3086 is a previous resistance which has broke and we are now seeing this area as support. Daily low at 1.3047 is the next possible support followed by the trend support at 1.3000. Any further then there is multiple daily lows between 1.2826/.2768 followed by the 50% fib at 1.2737.

Chart: Daily chart showing break out higher, market skewing to the positive side.

23 GBP

EURUSD

Pivot: 1.1087

Scenario 1: Trading below the trend line with yesterday's high testing the break. Hard to to gauge where this is heading as we have not continued the momentum. A move above 1.100 then its the weekly pivot at 1.1116 which held the high on the 20 Jan. 1.1165/99 is the level buyers will want to beat and sustain a hold above. Dec-'19 highs at 1.1238, if we break here then it's the 23.6% fib at 1.1278. Above 1.1286/1311 then it's the six-month highs at 1.14.

Scenario 2: 20-Dec low and 50% between 1.1066/60 has provided solid support. 1.1000 is a daily support which has held since the 11 October. Below here then we could be looking at last year's low at 1.0879.

Chart: Daily chart showing the trend line break and the activity trading below but close to the line.

23 EUR

Germany 30

Pivot: 13,515

Scenario 1: Upper trend channel line does the job as we see fear grip stocks worldwide due to the virus outbreak in China. In the short-term markets do seem under pressure but not too much damage done so far. 13,437/361 has held seven daily lows since 9 Jan. If this area fails to hold then there are a multiple weekly pivots between 13,319/235. Major daily support can located between 12,987/884, buyers will not want this to drop much further then there.

Scenario 2: Trend channel upper line is the area to beat as technically it was a great area to attempt a short which has paid off. Line currently sits at 13,640.

Chart: Daily trend channel shows recent push higher and touch of upper trend channel line. 

23 DAX

Wall Street

Pivot: 29,205

Scenario 1: Pullback looks like it may threaten to test the 29,000 level Currently testing 23.61% fib at 29,105. the next fib come sin at 28,917. If we go lower then we have seen support between 28,783/737. There are a period of weekly pivots between 28,661/604. 28,203 a November-'19 high turned support.

Scenario 2: Pullbacks have attract buyers in the equities, so far we have not seen anything too drastic. Battling with weekly pivot currently, back above 29,160 then we may be on track for another push at all-time highs.

Chart: Four-hour chart showing fib retracement from 8-Jan low to 17-Jan high. Equities on alert for any further push south.

23 Dow

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