MNI DAILY TECHNICAL ANALYSIS - EURUSD Resistance Is At The Top Of Its Bear Channel

Price Signal Summary - EURUSD Key Resistance Is At The Top Of Its Bear Channel

• In the equity space, S&P E-Minis traded higher Tuesday. Monday’s candle pattern is a bullish engulfing line and this highlights an important short-term reversal. It signals scope for a stronger corrective bounce and attention is on the 20-day EMA at 3815.27. A break would open the 50-day EMA at 3931.31. Key support has been defined at Monday’s low of 3571.75. EUROSTOXX 50 futures have established a bullish short-term tone. The strong recovery this week suggests the contract has entered a corrective cycle. The 20-day EMA has been cleared and the break exposes 3510.30, the 50-day EMA. Key support is at 3236.00, the Oct 3 low.
• In FX, EURUSD traded higher again Tuesday. The pair has arrived at a key short-term resistance - 0.9998 marks the top of a bear channel drawn from the Feb 10 high. Note too that the 50-day EMA intersects at 1.0004. A break of these resistance points would strengthen bullish conditions and highlight a more significant reversal. Initial support to watch is 0.9806, yesterday’s low. GBPUSD traded higher Tuesday, extending the latest recovery from 1.0350, Sep 26 low. The 20-day EMA has been cleared and this signals scope for an extension towards the 50-day EMA at 1.1572 - a key resistance. Initial firm support is seen at 1.1025, the Sep 30 low. USDJPY key support is 140.36, the Sep 22 low. Attention is on the bull trigger at 145.90, the Sep 22 high. A break would confirm a resumption of the uptrend and open 146.03, 2.764 projection of the Aug 2 - 8 - 11 price swing. Initial support is 143.20, the 20-day EMA.
• On the commodity front, Gold has traded sharply higher this week. The rally has resulted in a break of the 20-day EMA. Note that the yellow metal has cleared a trendline resistance drawn from the Mar 8 high. The trendline intersects at $1695.2. Sights are on $1735.1, the Sep 12 high and a key short-term resistance. Initial support is at $1695.2, the former trendline resistance-now-support. In the Oil space, WTI futures are trading closer to recent highs. The latest move higher has resulted in a break above the 20-day EMA. Attention is on the key resistance at the 50-day EMA, which intersects at $87.09. A break is required to signal scope for a stronger reversal. This would open the $90.00 handle. Initial firm support is at $79.14, the Sep 30 low.
• In the FI space, Bund futures remain in a downtrend, however, the contract has entered a short-term bullish corrective cycle. Price has cleared the 20-day EMA. This opens 143.68, 38.2% retracement of the Aug 2 - Sep 28 bear leg. A strong rally on Sep 28 in Gilt futures led to a short-term reversal. In pattern terms, the Sep 28 session was an engulfing candle and signals scope for a continuation higher near-term. Attention is on resistance at the 20-day EMA, at 101.29.

FOREIGN EXCHANGE

EURUSD TECHS: Trading At The Top Of Its Bear Channel

• RES 4: 1.0198 High Sep 12 and a key resistance
• RES 3: 1.0051 High Sep 20
• RES 2: 1.0004 50-day EMA
• RES 1: 0.9998 Bear channel top drawn from the Feb 10 high
• PRICE: 0.9962 @ 05:46 BST Oct 5
• SUP 1: 0.9806/9735 Low Oct 4 / Low Sep 30
• SUP 2: 0.9636/9536 Low Sep 29 / 28 and key support
• SUP 3: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 4: 0.9469 Bear channel base drawn from the Feb 10 high

EURUSD traded higher again Tuesday as the short-term correction extends. The pair has arrived at a key short-term resistance - 0.9998 marks the top of a bear channel drawn from the Feb 10 high. Note too that the 50-day EMA intersects just above, at 1.0004. A break of these resistance points would strengthen bullish conditions and highlight a more significant reversal. Initial support to watch is 0.9806, yesterday’s low.

GBPUSD TECHS: Maintains A Bullish Tone

• RES 4: 1.1783 High Aug 29
• RES 3: 1.1738 High Sep 13 and a key resistance
• RES 2: 1.1572 50-day EMA
• RES 1: 1.1489 High Oct 4
• PRICE: 1.1448@ 06:28 BST Oct 5
• SUP 1: 1.1287/1025 20-day EMA / Low Sep 30
• SUP 2: 1.0763 Low Sep 29
• SUP 3: 1.0541/0350 Low Sep 28 / All Time Low
• SUP 4: 1.0203 3.236 proj of the Jun 16 - Jul 14 - Aug 1 price swing

GBPUSD traded higher again Tuesday and maintains this week’s bullish tone, as it extends the latest recovery from 1.0350, Sep 26 low. The pair has cleared resistance at the 20-day EMA and this signals scope for a continuation higher near-term. Potential is seen for a climb towards the 50-day EMA at 1.1572 - a key resistance. Initial firm support is seen at 1.1025, the Sep 30 low.

EURGBP TECHS: 50-Day EMA Remains Exposed

• RES 4: 0.9388 High Mar 23 2020
• RES 3: 0.9292 High Sep 11 2020
• RES 2: 0.9066/9266 High Sep 28 / High Sep 26 and key resistance
• RES 1: 0.8850 High Sep 30
• PRICE: 0.8715 @ 06:40 BST Oct 5
• SUP 1: 0.8652/49 50-day EMA / Low Oct 4
• SUP 2: 0.8626 Low Sep 1
• SUP 3: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 4: 0.8522 Low Aug 30

EURGBP bounced ahead of a test of the 50-day EMA Tuesday, although the outlook remains negative for now. Monday’s bearish extension put prices below the 20-day EMA and reinforces short-term bearish conditions. Attention remains on the 50-day EMA, at 0.8652 today and represents a key near-term support. A clear break would signal scope for a deeper retracement. On the upside, initial firm resistance is seen at 0.8850, the Sep 30 high.

USDJPY TECHS: Bullish Outlook

• RES 4: 146.52 1.236 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 3: 146.03 2.764 proj of the Aug 2 - 8 - 11 price swing
• RES 2: 145.90 High Sep 22 and the bull trigger
• RES 1: 145.30 High Oct 3
• PRICE: 144.06 @ 06:47 BST Oct 5
• SUP 1: 143.20/141.77 20-day EMA / Low Sep 23
• SUP 2: 140.36 Low Sep 22, 50-day EMA and key short-term support
• SUP 3: 139.39 High Jul 14 and a former key resistance
• SUP 4: 137.37 Low Aug 29

USDJPY remains in consolidation mode. The pair is holding on to the bulk of its recent gains from 140.36, the Sep 22 low and the key short-term support. The primary uptrend remains intact and sights are on the bull trigger at 145.90, Sep 22 high. A break would confirm a resumption of the trend and open 146.03, a Fibonacci projection. Clearance of 140.36 is required to highlight a top.

EURJPY TECHS: Clears resistance

• RES 4: 147.76 1.236 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 3: 145.64 High Sep 12 and the bull trigger
• RES 2: 144.48 High Sep 14
• RES 1: 144.08 High Oct 4
• PRICE: 143.70 @ 06:53 BST Oct 5
• SUP 1: 141.37 20-day EMA
• SUP 2: 139.44/137.40 Low Sep 29 / 26 and key support
• SUP 3: 136.02 Low Aug 25
• SUP 4: 135.52 Low Aug 24

EURJPY traded higher Tuesday and this has put prices north of the 143.70 resistance - the 76.4% retracement for the Sep 12 - 26 downleg. The climb maintains the bull cycle that started Sep 26. The latest recovery signals the end of the correction between Sep 12 - 26 and attention is on key resistance at 145.64, the Sep 12 high. A break of this level would confirm a resumption of the broader uptrend. Key support lies at 137.40.

AUDUSD TECHS: Bear Flag Formation

• RES 4: 0.6750 50-day EMA
• RES 3: 0.6671 High Sep 22
• RES 2: 0.6610 20-day EMA
• RES 1: 0.6550 High Sep 26
• PRICE: 0.6491 @ 06:56 BST Oct 5
• SUP 1: 0.6363 Low Sep 28 and the bear trigger
• SUP 2: 0.6337 Low Apr 24 2020
• SUP 3: 0.6283 Low Apr 23 2020
• SUP 4: 0.6255 1.236 proj of the Apr 5 - May 12 - Jun 3 price swing

AUDUSD continues to consolidate and this pause in the downtrend appears to be a bear flag, reinforcing bearish trend conditions. The recent break of support at 0.6682, Jul 14 low and a bear trigger strengthened a bearish case and this maintains the broader downward price sequence of lower lows and lower highs. The focus is on 0.6337 next, the Apr 24 2020 low. Initial firm resistance has been defined at 0.6610, the 20-day EMA.

USDCAD TECHS: Retracement Extends

• RES 4: 1.4000 Psychological round number
• RES 3: 1.3970 3.236 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.3896 3.00 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 1: 1.3664/3838 High Oct 4 / High Sep 30 and the bull trigger
• PRICE: 1.3509 @ 07:27 BST Oct 5
• SUP 1: 1.3449 20-day EMA
• SUP 2: 1.3358 Low Sep 21
• SUP 3: 1.3224 50-day EMA
• SUP 4: 1.3139 Low Sep 14

USDCAD traded lower yesterday, extending the recent reversal. The pullback highlights a short-term reversal and potential for a deeper retracement. This is seen as a long overdue correction and is allowing an overbought reading in the trend to unwind. Attention is on the next firm support at 1.3449, the 20-day EMA. A break would strengthen bearish conditions. Key resistance and the bull trigger, has been defined at 1.3838, the Sep 30 high.

FIXED INCOME

BUND TECHS: (Z2) Corrective Cycle Extends

• RES 4: 145.37 High Sep 8
• RES 3: 144.56 High Sep 12
• RES 2: 143.68 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 1: 142.87 High Oct 4
• PRICE: 141.42 @ 05:09 BST Oct 5
• SUP 1: 138.05 Low Oct 3
• SUP 2: 135.52 Sep 28 low and key support
• SUP 3: 135.27 Low Mar 2012 (cont)
• SUP 4: 134.76 4.382 proj of the Aug 2 - 12 - 15 price swing

Bund futures remain in a downtrend, however, the contract has entered a short-term bullish corrective cycle. This week’s gains reinforce this bullish theme and price has cleared resistance around the 20-day EMA. The average intersects at 141.62 and the clear break signals scope for a stronger bounce. This opens 143.68, a Fibonacci retracement. Key support and the bear trigger has been defined at 135.52, the Sep 28 low.

BOBL TECHS: (Z2) Has Cleared The 20-Day EMA

• RES 4: 123.730 High Sep 6 and a key resistance
• RES 3: 123.270 High Sep 7
• RES 2: 122.510 High Sep 12
• RES 1: 122.010 High Sep 14
• PRICE: 121.110 @ 05:14 BST Oct 5
• SUP 1: 120.810/119.440 20-day EMA / Low Oct 3
• SUP 2: 118.020 Low Sep 28 and the bear trigger
• SUP 3: 117.918 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 117.630 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing

The primary trend direction in Bobl futures is unchanged and remains down. However, the short-term outlook is bullish following recent strong gains and the contract has entered a corrective cycle. Price has breached the 20-day EMA and this signals scope for a continuation higher near-term. The focus is on 122.010, the Sep 14 high. Initial support is seen at Monday’s low of 119.440.

SCHATZ TECHS: (Z2) Corrective Cycle Still In Play

• RES 4: 108.845 High Aug 25
• RES 3: 108.570 High Sep 6 and a key resistance
• RES 2: 108.010 High Sep 13
• RES 1: 107.770 High Oct 4
• PRICE: 107.515 @ 05:43 BST Oct 5
• SUP 1: 107.414/106.960 20-day EMA / Low Sep 30
• SUP 2: 106.535 Low Sep 26 and key support
• SUP 3: 106.379 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 105.800 Low Nov 2008 (cont)

The primary trend direction in Schatz futures remains down, however, the short-term outlook is bullish and this has been reinforced by this week’s strong rally. The move higher suggests the contract has entered a corrective phase. Price has cleared resistance at the 20-day EMA and this opens 108.010, the Sep 13 high. Initial firm support is seen at 106.960, the Sep 30 low.

GILT TECHS: (Z2) Approaching The 20-Day EMA

• RES 4: 105.34 High Sep 22
• RES 3: 102.45 High Sep 23
• RES 2: 101.29 20-day EMA
• RES 1: 100.92 High Oct 4
• PRICE: 99.40 @ Close Oct 4
• SUP 1: 94.92 Low Sep 29
• SUP 2: 90.99 Low Sep 28 and the bear trigger
• SUP 3: 90.57 2.618 proj of the May 12 - Jun 16 - Aug 2 swing (cont)
• SUP 4: 90.00 Psychological round number

Gilt futures maintain a bullish short-term tone following the strong reversal on Sep 28 - a bullish engulfing candle highlighted the shift in sentiment on this day. Recent gains have reinforced this pattern. The contract traded above 100.00 yesterday and sights are set on the 20-day EMA at 101.29. A break of this average would strengthen a short-term bullish case. Initial support is seen at 94.92, the Sep 29 low.

BTP TECHS: (Z2) Correction Extends

• RES 4: 119.06 High Sep 8 and a key resistance
• RES 3: 118.51 High Sep 13
• RES 2: 117.05 High Sep 22
• RES 1: 116.71 High Oct 4
• PRICE: 115.41 @ Close Oct 4
• SUP 1: 112.59/110.65 High Sep 30 / Low Sep 30
• SUP 2: 108.13 Low Sep 28 and key support
• SUP 3: 107.27 2.382 proj of the Aug 25 - Sep 1 - 8 price swing
• SUP 4: 106.68 2.618 proj of the Aug 25 - Sep 1 - 8 price swing

BTP futures trend conditions remain bearish, however, a short-term bull cycle has been established. This correction is allowing a recent oversold condition to unwind. The 20-day EMA has been cleared. The move higher signals scope for an extension above the 115.00 handle. This would open 117.05, the Sep 22 high. On the downside, key support has been established at 108.13, the Sep 28 low. A break would resume the primary downtrend.

US 10YR FUTURE TECHS: (Z2) Correction Extends

• RES 4: 116-11 50.0% retracement of the Aug 2 - Sep 28 bear leg
• RES 3: 115-26 50-day EMA
• RES 2: 114-31+ 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 1: 113-30 High Oct 4
• PRICE: 113-23+ @ 15:16 BST Oct 4
• SUP 1: 111-20+/110-19 Low Sep 29 / Low Sep 28
• SUP 2: 110-00 Psychological Support
• SUP 3: 109 08 3.0% 10-dma envelope
• SUP 4: 109-23+ Low Nov 30 20074 (cont)

Treasuries traded higher Monday and are holding on to recent gains. The contract has today pierced resistance at the 20-day EMA, which intersects at 113-27+. A clear break would signal scope for an extension of the current correction and open 114-31+, a Fibonacci retracement. The recovery from last week’s lows is considered corrective and is allowing an oversold trend condition to unwind. Initial support is at 111-20+, the Sep 29 low.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Has Cleared The 20-Day EMA

• RES 4: 3692.00 High Aug 26
• RES 3: 3678.00 High Sep 13 and bull trigger
• RES 2: 3810.00 Trendline resistance drawn from the Aug 17 high
• RES 1: 3482.00/3510.30 High Oct 4 / 50-day EMA
• PRICE: 3465.00 @ 06:08 BST Oct 5
• SUP 1: 3355.00 Low Oct 4
• SUP 2: 3236.00/3229.00 Low Oct 3 / Low Nov 9 2020 (cont)
• SUP 3: 3163.00 Low Nov 6 2020
• SUP 4: 3143.20 1.382 proj of the Aug 17 - Sep 5 - 13 price swing

EUROSTOXX 50 futures have established a bullish short-term tone following this week’s strong reversal. A corrective cycle has been established and this is allowing a recent oversold trend condition to unwind. The 20-day EMA, at 3431.10 has been cleared, the break signals scope for an extension and this opens 3510.30, the 50-day EMA - a key resistance. Key support has been defined at 3236.00, the Oct 3 low.

E-MINI S&P (Z2): Bullish Engulfing Candle Still In Play

• RES 4: 4234.25 High Aug 26
• RES 3: 4175.00 High Sep 13 and a key resistance
• RES 2: 3931.31 50-day EMA
• RES 1: 3815.27 20-day EMA
• PRICE: 6786.00 @ 06:52 BST Oct 5
• SUP 1: 3571.75 Low Oct 3 and the bear trigger
• SUP 2: 3558.97 1.382 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 3: 3506.38 1.50 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 4: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis traded higher Tuesday, extending Monday’s reversal from 3571.75. Monday’s candle pattern is a bullish engulfing line and this highlights an important short-term trend reversal. If correct, it signals scope for a stronger corrective bounce and this is allowing an oversold trend reading to unwind. Scope is seen for a climb towards the 20-day EMA next, at 3815.27. Key support has been defined at 3571.75.

COMMODITIES

BRENT TECHS: (Z2) Pierces The 20-Day EMA

• RES 4: $104.62 - High Jul 5
• RES 3: $101.88 - High Jul 29 and key resistance
• RES 2: $95.54 - High Sep 5
• RES 1: $92.40 - High Oct 4
• PRICE: $91.70 @ 07:04 BST Oct 5
• SUP 1: $85.00/82.44 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 2: $81.97 - 1.618 proj of the Jul 29 - Aug 5 - 30 price swing
• SUP 3: $80.22 - 1.764 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 4: $78.52 - Low Jan 24

Brent futures traded higher yesterday. This week's gains have resulted in a break of the 20-day EMA. The 50-day EMA, at $92.09, has been pierced. A clear break would strengthen short-term bullish conditions and highlight a stronger reversal. This would open $95.54, the Sep 5 high. Initial firm support to watch lies at $85.00, the Sep 30 low. A break would expose the bear trigger at $82.44, the Sep 26 low.

WTI TECHS: (X2) Watching The 50-Day EMA

• RES 4: $97.91 - High Jul 29 and a reversal trigger
• RES 3: $92.26/96.82 - High Aug 30 / 31 and key resistance
• RES 2: $89.99 - High Sep 6
• RES 1: $87.09 - 50-day EMA
• PRICE: $86.52 @ 07:54 BST Oct 5
• SUP 1: $79.14/76.25 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 2: $75.70 - Low Jan 24
• SUP 3: $71.22 - 2.00 proj of the Jul 29 - Aug 16 - 30 price swing
• SUP 4: $68.20 - 2.236 proj of the Jul 29 - Aug 16 - 30 price swing

WTI futures are trading closer to recent highs. The latest move higher has resulted in a break above the 20-day EMA. Attention is on the key resistance at the 50-day EMA. The average intersects at $87.09, where a break is required to signal scope for a stronger reversal. This would open the $90.00 handle. Initial firm support is at $79.14, the Sep 30 low. Key support lies at $76.25, the Sep 26 low.

GOLD TECHS: Holding On To Its Recent Gains

• RES 4: $1765.5 - High Aug 25
• RES 3: $1745.6 - High Sep 29
• RES 2: $1735.1 - High Sep 12 and a key resistance
• RES 1: $1729.5 - High Oct 4
• PRICE: $1721.7 @ 07:20 BST Oct 5
• SUP 1: $1695.2/1659.7 - Former trendline resistance / Low Oct 3
• SUP 2: $1615.0 - Low Sep 28 and the bear trigger
• SUP 3: $1610.5 - 1.00 proj of the Jun 13 - Jul 21 - Aug 10 swing
• SUP 4: $1569.1 - Low Apr 1 2020

Gold has traded sharply higher this week reinforcing the current short-term bull cycle. The rally has resulted in a break of the 20-day EMA. Note that the yellow metal has cleared a trendline resistance drawn from the Mar 8 high. The trendline intersects at $1695.2. Sights are on $1735.1, the Sep 12 high and a key short-term resistance. Initial support is at $1695.2, the former trendline resistance-now-support.

SILVER TECHS: Heading North

• RES 4: $22.253 - 50.0% retracement of the Mar 8 - Sep 1 bear cycle
• RES 3: $21.967 - High Jun 17
• RES 2: $21.540 - High Jun 27
• RES 1: $21.242 - High Oct 4
• PRICE: $20.928 @ 08:10 BST Oct 5
• SUP 1: $19.443 - 50-day EMA
• SUP 2: $17.562 - Low Sep 1 and bear trigger
• SUP 3: $16.955 - Low Jun 15 2020
• SUP 4: $16.473 - 1.00 proj of the Jun 6 - Jul 14 - Aug 10 price swing

Silver bulls have returned and Monday’s strong rally together with yesterday’s follow through, reinforces a bullish theme. Price has cleared resistance at $20.014, the Sep 12 high. This confirms a short-term bullish price sequence of higher highs and higher lows - the definition of an uptrend. The focus is on $21.540, the Jun 27 high. Initial firm support is at $19.443, the 50-day EMA. A break of this average would be bearish.