MNI DAILY TECHNICAL ANALYSIS - Bearish Impulsive Run Continues in Gilts

Price Signal Summary – Bearish Impulsive Run Continues in Gilts

• S&P E-Minis traded higher yesterday, extending the bounce from the Aug 24 low. The contract remains vulnerable following recent weakness. The move lower has allowed an overbought reading in momentum studies to unwind. EUROSTOXX 50 futures remain in a bearish corrective cycle, despite the bounce from Tuesday’s low. The initial move lower this week, marks an extension of the pullback from 3822.00, Aug 17 high.
• EURUSD is consolidating and remains above the Aug 23 low. The outlook is bearish following this week’s move lower and breach of 0.9952, Jul 14 low. The break confirmed an extension lower inside the bear channel and a resumption of the primary downtrend. EURGBP is consolidating and remains below last week’s highs. The high print of 0.8512 on Aug 19, is seen as a bullish development and threatens the recent bearish outlook. The short-term outlook in EURJPY remains bearish. Moving average studies are in a bear mode condition highlighting a downtrend and the 50-day EMA, at 137.83, remains intact.
• Gold remains vulnerable despite this week’s recovery from Tuesday’s low. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break highlighted a potential reversal of the 5-month downtrend. WTI futures gains stalled yesterday. This week’s gains however have improved the short-term outlook for bulls. Resistance at $94.17, Aug 11 high, has been breached and the contract has also traded above the 50-day EMA.
• Bund futures remain bearish and the contract is trading closer to its recent lows. Price remains below the 50-day EMA, following the break of it on Aug 19. This average marked a key support area and the clear breach has strengthened bearish conditions. Gilt futures remain vulnerable and the bearish impulsive run has continued this week. The sharp move lower reinforces a bearish theme and attention is on key support at 109.89, the Jun 16 low and a key medium-term bear trigger.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Outlook Remains Bearish

• RES 4: 1.0327 High Aug 12
• RES 3: 1.0246 Channel top drawn from the Feb 10 high
• RES 2: 1.0097/0115 Low Jul 27 / 20-day EMA
• RES 1: 1.0047 High Aug 22
• PRICE: 0.9963 @ 06:07 BST Aug 26
• SUP 1: 0.9883 1.764 projection of the Jun 9 - 15 - 27 price swing
• SUP 2: 0.9800 Round number support
• SUP 3: 0.9785 2.00 projection of the Jun 9 - 15 - 27 price swing
• SUP 4: 0.9708 Channel base drawn from the Feb 10 high

EURUSD is consolidating and remains above the Aug 23 low. The outlook is bearish following this week’s move lower and breach of 0.9952, Jul 14 low. The break confirmed an extension lower inside the bear channel and a resumption of the primary downtrend. The focus is on 0.9883 next, a Fibonacci projection. Further out, scope is seen for a move towards the channel base at 0.9708. Initial resistance is at 1.0047.

GBPUSD TECHS: Trend Needle Still Points South

• RES 4: 1.2217 High Aug 12
• RES 3: 1.2102 50-day EMA
• RES 2: 1.1980/2004/1.2016 20-day EMA / Low Aug 5
• RES 1: 1.1878/1938 High Aug 23 / 19
• PRICE: 1.1806 @ 06:22 BST Aug 26
• SUP 1: 1.1718 Low Aug 23
• SUP 2: 1.1673 1.00 proj of the May 27 - Jun 14 - 16 price swing
• SUP 3: 1.1640 Low Mar 25 2020
• SUP 4: 1.1503 Low Mar 24 2020

GBPUSD is unchanged and still consolidating. The outlook remains bearish. Recent weakness that resulted in the break of support at 1.1760, the Jul 14 low and bear trigger, reinforces bearish conditions and confirmed a resumption of the broader downtrend. This paves the way for a move towards 1.1673, a Fibonacci projection. On the upside, firm short-term resistance is seen at 1.2004, the Aug 5 low.

EURGBP TECHS: Remains Above Support

• RES 4: 0.8627 High Jul 4
• RES 3: 0.8585 High Jul 21 and a key resistance
• RES 2: 0.8525 High Jul 25
• RES 1: 0.8464/8512 50-day EMA / High Aug 19
• PRICE: 0.8440 @ 06:28 BST Aug 26
• SUP 1: 0.8408 Low Aug 23
• SUP 2: 0.8388/40 Low Aug 17 / 2 and the bear trigger
• SUP 3: 0.8313 Low Apr 22
• SUP 4: 0.8277 2.0% 10-dma envelope and low Apr 14

EURGBP is consolidating and remains below last week’s highs. The high print of 0.8512 on Aug 19, is seen as a bullish development and threatens the recent bearish outlook. The move signals scope for an extension higher. A resumption of gains would open 0.8525 and potentially 0.8585 further out, the Jul 25 and 21 highs respectively. Initial key support to watch is at 0.8388, the Aug 17 low. A break of this level would reinstate a bearish theme.

USDJPY TECHS: Bullish Theme

• RES 4: 139.39 High Jul 14 and key resistance
• RES 3: 138.88 High Jul 21
• RES 2: 137.96 High Jul 22
• RES 1: 137.71 High Aug 22
• PRICE: 136.80 @ 06:37 BST Aug 25
• SUP 1: 135.82 Low Aug 23
• SUP 2: 135.53/134.63 20- and 50-day EMA
• SUP 3: 133.91 Low Aug 17
• SUP 4: 132.56 Low Aug 15

USDJPY short-term conditions remain bullish and the pair is trading closer to its recent highs. The breach above 135.58, Aug 8 high, strengthened a short-term bullish condition. Furthermore, 137.27, 76.4% of the Jul 14 - Aug 2 downleg, has been cleared reinforcing the current uptrend. This signals scope for a continuation higher towards 137.96, the Jul 22 high. Initial firm support is seen at the 50-day EMA, at 134.63.

EURJPY TECHS: Trading Below The 50-Day EMA

• RES 4: 140.07 High Jul 25
• RES 3: 139.32 Trendline resistance drawn from the Jun 28 high
• RES 2: 138.40 High Aug 10
• RES 1: 137.09/83 20- and 50-day EMA values
• PRICE: 136.33 @ 06:51 BST Aug 26
• SUP 1: 134.95 Low Aug 16
• SUP 2: 133.40 Low Aug 2 and a bear trigger
• SUP 3: 132.66 Low May 12 and a key support
• SUP 4: 131.99 61.8% retracement of the Mar 7 - Jun 28 bull leg

The short-term outlook in EURJPY remains bearish. Moving average studies are in a bear mode condition highlighting a downtrend and the 50-day EMA, at 137.83, remains intact. This average is a key resistance. A stronger resumption of weakness would open the 133.40 bear trigger. On the upside, clearance of resistance at the 50-day EMA would instead alter the picture and open the 139.32 trendline resistance drawn from the Jun 28 high.

AUDUSD TECHS: Bearish Threat Still Present

• RES 4: 0.7246 High Jun 7
• RES 3: 0.7184 3.0% Upper Bollinger Band
• RES 2: 0.7137 High Aug 11
• RES 1: 0.6991/7040 High Aug 25 / High Aug 16
• PRICE: 0.6960 @ 16:46 BST Aug 25
• SUP 1: 0.6856 Low Aug 23
• SUP 2: 0.6789 76.4% retracement of the Jul 14 - Aug 11 upleg
• SUP 3: 0.6719 Low Jul 15
• SUP 4: 0.6682 14 and the bear trigger

A bearish threat in AUDUSD remains present following the recent retracement from 0.7137, the Aug 11 high, and despite this week’s recovery. Recent weakness resulted in a print below 0.6870, Aug 5 low. A clear break of this level would signal scope for a deeper pullback. Initial firm resistance has been defined at 0.7040, the Aug 16 high where a break is required to ease the current bearish pressure.

USDCAD TECHS: Still Trading Below Tuesday’s High

• RES 4: 1.3224 High Jul 14 and key resistance
• RES 3: 1.3135 High Jul 15
• RES 2: 1.3107 76.4% retracement of the Jul 14 - Aug 11 downleg
• RES 1: 1.2976/3063 High Aug 25 / 23
• PRICE: 1.2953 @ 08:03 BST Aug 26
• SUP 1: 1.2887 50-day EMA values
• SUP 2: 1.2828/2764 Low Aug 17 / 200-dma
• SUP 3: 1.2728 Low Aug 11 and key support
• SUP 4: 1.2685 76.4% retracement of the Jun 8 - Jul 14 upleg

USDCAD found support at yesterday’s low, however, price remains below Tuesday’s 1.3063 short-term trend high. Near-term trend conditions still appear bullish following the recent strong recovery from 1.2728, the Aug 17 low. A resumption of gains and a break of 1.3063 would open 1.3107 next, a Fibonacci retracement. Note that MA studies are in a bull mode condition, highlighting an uptrend. Initial firm support is at 1.2887, the 50-day EMA.

FIXED INCOME

BUND TECHS: (U2) Trend Needle Points South

• RES 4: 157.74 High Aug 10
• RES 3: 156.88 High Aug 5
• RES 2: 153.60/155.96 20-day EMA / High Aug 17
• RES 1: 152.40/53.36 High Aug 23 / 50-day EMA
• PRICE: 151.13 @ 05:13 BST Aug 26
• SUP 1: 150.00 Round number support
• SUP 2: 149.69 Low Jul 21 and key short-term support
• SUP 3: 148.24 Low Jul 1
• SUP 4: 147.94 61.8% of the Jun 16 - Aug 2 bull leg

Bund futures remain bearish and the contract is trading closer to its recent lows. Price remains below the 50-day EMA, following the break of it on Aug 19. This average marked a key support area and the clear breach has strengthened bearish conditions. The focus is on the 150.00 handle next. On the upside, initial firm resistance is at 153.36, the 50-day EMA. A break would ease the bearish threat.

BOBL TECHS: (U2) Remains Soft

• RES 4: 127.580 High Aug 10
• RES 3: 127.290 High Aug 15
• RES 2: 126.930 High Aug 17
• RES 1: 125.100/847 High Aug 23 / 50-day EMA
• PRICE: 124.760 @ 05:18 BST Aug 26
• SUP 1: 124.260 Low Aug 24
• SUP 2: 124.030 Low Jul 21 and a reversal trigger
• SUP 3: 123.309 61.8% retracement of the Jun 16 - Aug 2 rally
• SUP 4: 122.180 Low Jun 29

Bobl futures remain bearish and the contract is trading closer to its recent lows. The 50-day EMA has recently been breached and the deeper pullback has opened 124.030, the Jul 21 low and a reversal trigger. Note that the contract has this month also breached a trendline support drawn from the Jun 16 low, reinforcing bearish conditions. Initial firm resistance is seen at the 50-day EMA at 125.847.

SCHATZ TECHS: (U2) Bearish Outlook Intact

• RES 4: 110.380 High Aug 2 and the bull trigger
• RES 3: 110.100 HIgh Aug 3
• RES 2: 109.830/915 High Aug 17 / 16
• RES 1: 109.355/558 High Aug 23 / 50-day EMA
• PRICE: 109.240 @ 05:17 BST Aug 26
• SUP 1: 109.175 Low Aug 22
• SUP 2: 109.042 50.0% retracement of the Jun 16 - Aug 2 upleg
• SUP 3: 108.950 Low Jul 21 and a key support
• SUP 4: 108.727 61.8% retracement of the Jun 16 - Aug 2 upleg

Schatz futures are consolidating. The contract remains vulnerable following the recent move lower. The 50-day EMA has been cleared, reinforcing bearish conditions. The focus is on 109.042, a Fibonacci retracement. On the upside, initial firm resistance is seen at the 50-day EMA, at 109.558. A break of this level is required to ease the current bearish pressure. Initial resistance is at 109.355, the Aug 23 high.

GILT TECHS: (U2) Key Support Remains Exposed

• RES 4: 117.15 High Aug 15 and key short-term resistance
• RES 3: 115.46 50-day EMA
• RES 2: 114.55 20-day EMA
• RES 1: 112.86/113.57 High Aug 23 / 22
• PRICE: 111.37 @ Close Aug 25
• SUP 1: 110.34 Low Aug 24
• SUP 2: 109.89 Low Jun 16 and major support
• SUP 3: 109.00 Round number support
• SUP 4: 108.66 1.00 proj of May 12 - Jun 16 - Aug 2 price swing (cont)

Gilt futures remain vulnerable and the bearish impulsive run has continued this week. The sharp move lower reinforces a bearish theme and attention is on key support at 109.89, the Jun 16 low and a key medium-term bear trigger. Recent weakness has also resulted in the break of trendline support, drawn from the Jun 16 low. Clearance of 109.89 would confirm a resumption of the broader downtrend. Initial resistance is at 112.86, Aug 23 high.

BTP TECHS: (U2) Bear Trend Still In Play

• RES 4: 130.00 Round number resistance
• RES 3: 129.36 High Aug 11 and the bull trigger
• RES 2: 125.00/127.15 50-day EMA / High Aug 17
• RES 1: 124.02 High Aug 22
• PRICE: 122.88 @ Close Aug 25
• SUP 1: 120.77 Low Aug 24
• SUP 2: 119.57 Low Jul 21 and a key support
• SUP 3: 118.60 Low Jun 22
• SUP 4: 117.88 Low Jun 17

BTP futures bearish conditions remain intact despite yesterday’s bounce. This week’s move lower has resulted in a break below both the 20- and 50-day EMAs. Furthermore, the move through 124.07 on Aug 19, confirmed a break of trendline support drawn from the Jun 14 low. The clear breach has opened 119.57, the Jul 21 low. Initial firm resistance is seen at 125.00, the 50-day EMA.

US 10YR FUTURE TECHS: (U2) Bearish Price Action

• RES 4: 120-22 High Aug 10 and a key near-term resistance
• RES 3: 119-31 High Aug 15
• RES 2: 119-14+ High Aug 17
• RES 1: 117-29/118-26+ High Aug 24 / 20-day EMA
• PRICE: 117-12+ @ 16:33 BST Aug 25
• SUP 1: 117-03+ Low Aug 24
• SUP 2: 116-26+ Low Jun 29
• SUP 3: 116-11 Low Jun 28
• SUP 4: 116-02+ 76.4% retracement of the Jun 14 - Aug 2 bull run

Treasuries maintain a bearish tone and the contract is trading closer to its recent lows. 117-07, 61.8% of the Jun 14 - Aug 2 bull cycle, has been pierced. A clear break of this area of support would strengthen the bearish case and signal scope for an extension lower towards 116-26+ next, the Jun 29 low. On the upside, initial firm resistance is seen at the 20-day EMA, at 118-26+.

EQUITIES

EUROSTOXX50 TECHS: (U2) Still Vulnerable Despite This Week’s Bounce

• RES 4: 3855.00 High Apr 21
• RES 3: 3822/40.00 High Aug 17 / High Jun 6 and key resistance zone
• RES 2: 3782.00 High Aug 18
• RES 1: 3726.00 High Aug 22
• PRICE: 3692.00 @ 05:31 BST Aug 26
• SUP 1: 3621.00 Low Aug 23
• SUP 2: 3582.50 50.0% retracement of the Jul 5 - Aug 17 rally
• SUP 3: 3526.00 61.8% retracement of the Jul 5 - Aug 17 rally
• SUP 4: 3467.00 Low Jul 18 / 19

EUROSTOXX 50 futures remain in a bearish corrective cycle, despite the bounce from Tuesday’s low. The initial move lower this week, marks an extension of the pullback from 3822.00, Aug 17 high. The 20-day EMA has been breached and the 50-day EMA at 3652.00 has been pierced. A clear break of the EMA would strengthen bearish conditions. Key resistance is at 3822.00 ahead of 3840.00. The latter is the Jun 6 high.

E-MINI S&P (U2): Key Support Lies At The 50-Day EMA

• RES 4: 4419.15 2.236 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 3: 4345.75 2.00 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 2: 4288.00/4327.50 High Aug 19 /16 and the bull trigger
• RES 1: 4221.50 High Aug 22
• PRICE: 4193.75 @ 08:02 BST Aug 26
• SUP 1: 4089.67 50-day EMA
• SUP 2: 4000.00 Round number support
• SUP 3: 3994.50 Low Jul 28
• SUP 4: 3913.25 Low Jul 26 and a key support

S&P E-Minis traded higher yesterday, extending the bounce from the Aug 24 low. The contract remains vulnerable following recent weakness. The move lower has allowed an overbought reading in momentum studies to unwind. Attention is on the 50-day EMA, at 4089.67 - a key pivot support. Key resistance and the bull trigger is at 4327.50, Aug 16 high. Initial resistance to watch is 4221.50, Monday’s high. A break would ease the bearish threat.

COMMODITIES

BRENT TECHS: (V2) Clears Resistance

• RES 4: $110.72 - High Jul 5
• RES 3: $108.55 - 61.8% retracement of the Jun 8 - Jul 14 bear leg
• RES 2: $106.50 - High Jul 29 and a key resistance
• RES 1: $102.47 - High Aug 25
• PRICE: $99.88 @ 06:31 BST Aug 26
• SUP 1: $96.53/91.22 - Low Aug 23 / Low Jul 14 and the bear trigger
• SUP 2: $90.00 - Round number support
• SUP 3: $88.31 - Low Mar 9 and a key support
• SUP 4: $85.88 - Low Feb 25

Brent futures faced resistance on Thursday. This week’s climb however has strengthened short-term conditions for bulls. Price has breached resistance at $100.38, Aug 12 high and traded above the 50-day EMA. The break highlights a stronger short-term reversal and opens $102.41, Aug 2 / 3 high ahead of $106.50, Jul 29 high. On the downside, key support is unchanged at $91.22, Jul 14 low. A break would confirm a resumption of bearish activity.

WTI TECHS: (V2) Short-Term Trend Needle Points North

• RES 4: $108.07 - High Jun 29
• RES 3: $105.00 - High Jul 5
• RES 2: $99.75 - High Jul 29 and key resistance
• RES 1: $96.68 - High Aug 1
• PRICE: $93.37 @ 07:06 BST Aug 26
• SUP 1: $90.42/85.37 - Low Aug 23 / 16 and the bear trigger
• SUP 2: $84.10/00 - Low Mar 15 / Round number support
• SUP 3: $81.88 - Low Feb 25
• SUP 4: $80.00 - Round number support

WTI futures gains stalled yesterday. This week’s gains however have improved the short-term outlook for bulls. Resistance at $94.17, Aug 11 high, has been breached and the contract has also traded above the 50-day EMA. This highlights a short-term reversal and signals scope for a climb towards $99.75, the Jul 29 high. On the downside, key support has been defined at $85.37, the Aug 16 low. This level is the bear trigger.

GOLD TECHS: Corrective Bounce

• RES 4: $1857.6 - High Jun 16
• RES 3: $1829.8 - 38.2% retracement of the Mar 8 - Jul 21 bear leg
• RES 2: $1776.5/1807.9 - 50-day EMA / High Aug 10 and bull trigger
• RES 1: $1765.5 - 20-day EMA
• PRICE: $1757.3 @ 07:13 BST Aug 25
• SUP 1: $1727.8 - Low Aug 22
• SUP 2: $1711.7 - Low Jul 27
• SUP 3: $1681.0 - Low Jul 21 and the bear trigger
• SUP 4: $1676.9 - Low Mar 8 2021

Gold remains vulnerable despite this week’s recovery from Tuesday’s low. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break highlighted a potential reversal of the 5-month downtrend. However, the failure to follow through and the subsequent breach of support at $1754.4 Aug 3 low, means the trendline remains intact. Sights are on $1711.7 next, the Jul 27 low. Key resistance is unchanged at $1807.9.

SILVER TECHS: Bearish Theme Intact

• RES 4: $21.000 - Round number resistance
• RES 3: $21.540 - High Jun 27
• RES 2: $20.876 - High Aug 15 and the bull trigger
• RES 1: $19.645/20.087- 20- and 50-day EMA values
• PRICE: $19.228 @ 08:07 BST Aug 26
• SUP 1: $18.723 - Low Aug 22
• SUP 2: $18.146/18.000 - Low Jul 14 / Round number support
• SUP 3: $17.312 - 3.00 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 4: $16.955 - Low Jun 15 2020

Silver outlook remains bearish despite the latest bounce. The move lower between Aug 15 - 22, resulted in a break of $19.551, Aug 5 low. The breach undermines the recent bullish theme and has exposed the key support and bear trigger at $18.146. A break of this level would confirm a resumption of the broader downtrend. Key S/T resistance has been defined at $20.876, the Aug 15 high where a break is required to reinstate a bullish theme.