MNI DAILY TECHNICAL ANALYSIS - Bond Bears Still in Driving Seat

Price Signal Summary - Bond Bears Still In The Driving Seat

• In the equity space, S&P E-minis have failed to confirm a clear break of the 50-day EMA and instead price has pulled away from recent highs. This highlights a bearish risk and attention turns to the key support and bear trigger at 4260.00, Oct 1 low. EUROSTOXX 50 futures remain below recent highs. Price action has recently failed to challenge resistance around the 50-day EMA and a bearish risk remains present.
• In FX, EURUSD is consolidating near recent lows and a bearish theme remains intact with recent price action appearing to be a bear flag. The recent break of 1.1563, Sep 30 and Oct 1 low, confirmed a resumption of the current downtrend and has opened 1.1493 next, a Fibonacci projection. GBPUSD remains within its recent range and the pair is consolidating. A bearish risk remains present despite the recent corrective recovery. This follows weakness on Sep 28 and 29 and the recent breach of a triangle base drawn from the Jul 20 low. USDJPY extended gains Tuesday, formalizing the clearance of the downtrendline drawn off the December 1975 high. This reinforces the current uptrend condition and marks a potentially significant break from both a short and medium-term perspective.
• On the commodity front, Gold remains within its recent range and continues to consolidate. Attention is on the 50-day EMA at $1776.3 and $1787.4, Sep 22 high and a key resistance. WTI trend conditions remain bullish. Monday's gains confirmed an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend.
• In the FI space, the primary trend is unchanged and remains down. Bund futures remain bearish and the contract traded lower again yesterday. This maintains the bearish price sequence of lower lows and lower highs that defines a downtrend. Gilt futures remain vulnerable despite this week's corrective bounce from Monday's low.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Flag

• RES 4: 1.1767 Bear channel top drawn from the Jun 1 high
• RES 3: 1.1722/55 50-day EMA / High Sep 22
• RES 2: 1.1637/1640 / 20-day EMA / High Oct 4
• RES 1: 1.1587 High Oct 11
• PRICE: 1.1550 @ 06:17 BST Oct 13
• SUP 1: 1.1524 Low Oct 12
• SUP 2: 1.1493 50.0% retracement of the Mar '20 - Jan '21 bull phase
• SUP 3: 1.1469 1.236 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1432 Bear channel base drawn from the Jun 1 high

EURUSD is consolidating near recent lows and a bearish theme remains intact with recent price action appearing to be a bear flag. The recent break of 1.1563, Sep 30 and Oct 1 low, confirmed a resumption of the current downtrend and has opened 1.1493 next, a Fibonacci projection. A bearish price sequence of lower lows and lower highs remains intact and MA conditions are in a bear mode. Firm resistance is unchanged at 1.1640.

GBPUSD TECHS: Consolidation Mode

• RES 4: 1.3854 High Sep 15
• RES 3: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 2: 1.3711 50-day EMA
• RES 1: 1.3674 High Oct 11
• PRICE: 1.3611 @ 06:22 BST Oct 13
• SUP 1: 1.3544/3412 Low Oct 6 / Low Sep 29 and the bear trigger
• SUP 2: 1.3354 Low Dec 23, 2020
• SUP 3: 1.3297 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD remains within its recent range and the pair is consolidating. A bearish risk remains present despite the recent corrective recovery. This follows weakness on Sep 28 and 29 and the recent breach of a triangle base drawn from the Jul 20 low. Moving average studies are in a bear mode too. The focus is on 1.3354, Dec 23, 2020 low. Initial resistance is at 1.3674, Oct 11 high. A break would open 1.3711, the 50-day EMA.

EURGBP TECHS: Bearish Risk Still Present

• RES 4: 0.8703 1.236 proj of the Aug 10 - Sep 7 - Sep 16 rally
• RES 3: 0.8670 High Jul 20 and key resistance
• RES 2: 0.8624/58 High Oct 1 / High Sep 29
• RES 1: 0.8549 50-day EMA
• PRICE: 0.8488 @ 06:28 BST Oct 13
• SUP 1: 0.8472 Low Oct 11
• SUP 2: 0.8450/46 Low Aug 10 / 1.0% 10-dma envelope
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP is unchanged and consolidating near recent lows. A bearish theme follows last week's extension of the reversal from 0.8658, Sep 29 high. Support at 0.8526, Sep 28 low and 0.8501, Sep 16 low have been cleared. This strengthens a bearish case and sets the scene for a deeper retracement towards 0.8450, Oct 8 low. The cross needs to breach 0.8658, Sep 29 high to reinstate a bull theme. Firm resistance is at 0.8549, the 50-day EMA.

USDJPY TECHS: Clears Long-Term Trendline

• RES 4: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 114.50 1.382 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 114.13 2.0% 10-dma envelope
• RES 1: 113.79 High Oct 13
• PRICE: 113.47 @ 06:36 BST Oct 13
• SUP 1: 112.08/111.51 Low Oct 11 / Low Oct 8
• SUP 2: 110.82/80 Low Oct 4 / High Aug 11
• SUP 3: 110.65 50-day EMA
• SUP 4: 109.76 Low Sep 23

USDJPY extended gains Tuesday, formalizing the clearance of the downtrendline drawn off the December 1975 high. This reinforces the current uptrend condition and marks a potentially significant break from both a short and medium-term perspective. The move higher opens gains toward vol band resistance at 114.13 and the 114.50, 114.99 projection levels. On the downside, initial firm support is seen at 112.08, Sep 30 high.

EURJPY TECHS: Holding Onto Recent Gains

• RES 4: 132.67 76.4% retracement of the Jun - Sep downleg
• RES 3: 132.23 High Jul 2
• RES 2: 131.76 61.8% retracement of the Jun - Sep downleg
• RES 1: 131.28 High Oct 12
• PRICE: 131.09 @ 06:40 BST Oct 13
• SUP 1: 130.26 50.0% of the Oct 11 range
• SUP 2: 129.28 Low Oct 11
• SUP 3: 128.33/31 Low Oct 6 / Low Sep 23
• SUP 4: 127.94/93 Low Aug 19 / Low Sep 22 the bear trigger

EURJPY is holding onto this week's gains. The reversal higher from last week's low of 128.33 on Oct 6 has reinstated a near-term bullish focus and the cross has cleared resistance at 130.75, Sep 3 high and a bull trigger. This has strengthened the case for bulls and opens 131.76, the 61.8% retracement of the Jun - Sep downleg. Initial firm support is at Monday's intraday low of 129.28.

AUDUSD TECHS: Corrective Recovery Still In Play

• RES 4: 0.7503 High Jul 13
• RES 3: 0.7478 High Sep 3 and the bull trigger
• RES 2: 0.7405 76.4% retracement of the Sep 3 - 29 downleg
• RES 1: 0.7385 High Oct 12
• PRICE: 0.7335 @ 06:46 BST Oct 13
• SUP 1: 0.7296 50-day EMA
• SUP 2: 0.7226/7170 Low Oct 6 / Low Sep 29
• SUP 3: 0.7137/06 / 2.0% 10-dma envelope / Low Aug 20 key support
• SUP 4: 0.7053 38.2% retracement of the Mar '20 - Feb uptrend

AUDUSD traded higher again Tuesday. The pair remains above the 20- and 50-day EMAs. Although the recent recovery is considered corrective, the break above these averages suggests scope for an extension of gains. The focus is on 0.7405 next, a Fibonacci retracement. A break would expose 0.7478, Sep 3 high and a key short-term resistance. Support levels to watch lie at 0.7226, Oct 6 low and 0.7170, Sep 29 low. The latter is a bear trigger.

USDCAD TECHS: Bearish Theme

• RES 4: 1.2957 High Dec 21, 2020
• RES 3: 1.2949 High Aug 20 and the bull trigger
• RES 2: 1.2775/2896 High Sep 29 / High Sep 20
• RES 1: 1.2562/2648 High Oct 8 / High Oct 4
• PRICE: 1.2452 @ 06:51 BST Oct 13
• SUP 1: 1.2422 Jul 30 low and a key support
• SUP 2: 1.2367 61.8% retracement of the Jun - Aug rally
• SUP 3: 1.2303 Low Jul 6
• SUP 4: 1.2253 Low Jun 23

USDCAD is trading at recent lows and remains bearish following the move lower since the peak on Sep 20. The break of support at 1.2494, Sep 3 low signals scope for a deeper pullback and opens 1.2422, the Jul 30 low. Clearance of this support would strengthen the case for bears. On the upside, a breach of 1.2775, Sep 29 high would represent a bullish development instead. Initial firm resistance is at 1.2648, Oct 6 high.

FIXED INCOME

BUND TECHS: (Z1) Still Heading South

• RES 4: 170.81 Low Sep 17 and recent breakout level
• RES 3: 170.55 High Oct 4 and key near-term resistance
• RES 2: 170.00 High Oct 7
• RES 1: 169.12 Low Oct 6 and recent breakout level
• PRICE: 168.38 @ 05:15 BST Oct 13
• SUP 1: 168.21 Low Oct 12
• SUP 2: 167.98 2.382 proj of the Sep 9 - 17 - 21 price swing
• SUP 3: 167.79 2.50 proj of the Sep 9 - 17 - 21 price swing
• SUP 4: 167.52 Low Mar 19 2020

Bund futures remain bearish and the contract traded lower again yesterday. This maintains the bearish price sequence of lower lows and lower highs that defines a downtrend. Note moving average studies are in a bear mode too, reinforcing the current trend direction. The focus is on 167.98 next, a Fibonacci projection and beyond. Key short-term resistance has been defined at 170.00.

BOBL TECHS: (Z1) Bearish Trend Sequence Extends

• RES 4: 135.380 High Sep 23
• RES 4: 135.200 Low Sep 17 and recent breakout level / High Oct 4
• RES 3: 135.060 High Oct 7
• RES 2: 134.770 Low Sep 28 and a recent breakout level
• PRICE: 134.380 @ 05:27 BST Oct 13
• SUP 1: 134.340 Low Oct 13
• SUP 2: 134.285 76.4% retracement of the Jun - Sep rally
• SUP 3: 134.136 1.382 proj of the Sep 21 - 28 - Oct 4 price swing
• SUP 4: 134.070 Low Jul 6 (cont)

Bobl futures outlook remains bearish and the contract extended its downtrend once again yesterday. The continued move lower maintains the current bearish price sequence of lower lows and lower highs that defines a downtrend and signals scope for further weakness. The focus is on 134.248 next, a Fibonacci projection. On the upside, key short-term resistance has been defined at 135.060.

SCHATZ TECHS: (Z1) Heading South

• RES 4: 112.305 High Sep 3
• RES 3: 112.290 High Sep 20
• RES 2: 112.255 High Sep 23 and Oct 5 and key near-term resistance
• RES 1: 112.223 20-day EMA
• PRICE: 112.140 @ 05:31 BST Oct 13
• SUP 1: 112.140 Low Oct 12 and intraday low
• SUP 2: 112.113 1.236 proj of the Sep 20 - 28 - Oct 5 price swing
• SUP 3: 112.110 Congestion support Jun 22 - 28 (cont)
• SUP 4: 112.098 76.4% retracement of the May - Aug uptrend

Schatz futures remain in a downtrend and the contract has this week breached former support at 112.175, Sep 28 low. This confirms a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs. Scope is seen for an extension towards 112.098 next, a Fibonacci retracement. MA conditions are in a bear mode, reinforcing current conditions. On the upside, key short-term resistance is at 112.255.

GILT TECHS: (Z1) Corrective Bounce

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.59/72 20-day EMA / High Oct 1
• RES 1: 124.60/125.19 High Oct 8 / High Oct 7
• PRICE: 124.07 @ Close Oct 12
• SUP 1: 123.44 Low Oct 11
• SUP 2: 123.16 Low Feb 27, 2019 (cont)
• SUP 3: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing
• SUP 4: 122.15 Low Jan 18, 2019 (cont)

Gilt futures remain vulnerable despite this week's corrective bounce from Monday's low. The recent break to fresh lows confirms a resumption of the bear trend and an extension of the current bearish price sequence of lower lows and lower highs. Moving average studies continue to point south, reinforcing current conditions. The focus is on 123.16 next, Feb 27, 2019 low (cont). Firm resistance is seen at 125.19, Oct 7 high.

BTP TECHS: (Z1) Needle Still Pointing South

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.53/87 20-day EMA / High Oct 1
• PRICE: 151.31 @ Close Oct 12
• SUP 1: 151.00 Low Oct 6 and the bear trigger
• SUP 2: 150.56 Low Jun 30 (cont)
• SUP 3: 150.00/149.97 Round number support / Low Jun 25
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures needle still points south. The contract traded lower Oct 6, confirming a recent bear flag formation and a resumption of the downtrend. A price sequence of lower lows and lower highs that defines a downtrend remains intact and the recent move through 152.94, Sep 9 low, confirmed this price condition. The focus is on the 150.00 psychological round number next. Key near-term resistance has been defined at 152.87, Oct 1 high.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Remains Below Recent Highs

• RES 4: 4234.50 0.764 projection of the Jul 19 - Sep 6 - 20 price swing
• RES 3: 4223.00 High Sep 6 and the bull trigger
• RES 2: 4141.30 76.4% retracement of the Sep 24 - Oct 6 downleg
• RES 1: 4090.50/4200.50 50-day EMA / High Sep 24
• PRICE: 4044.50 @ 05:55 BST Oct 13
• SUP 1: 3949.50 Low Oct 6 and the bear trigger
• SUP 2: 3902.50 Low Jul 20
• SUP 3: 3882.00 Low Jul 19 and a key support
• SUP 4: 3856.40 1.382 proj of the Sep 6 - Sep 20 - Sep 24 price swing

EUROSTOXX 50 futures remain below recent highs. Price action has recently failed to challenge resistance around the 50-day EMA and a bearish risk remains present. The contract recently traded below 3974.00, Sep 20 low. A clear break of this support would strengthen a bearish case and open 3882.00, Jul 19 low. Price needs to clear 4090.50, the 50-day EMA to ease the current bearish threat. This would open 4200.50, Sep 24 high.

E-MINI S&P (Z1): Bearish Risk

• RES 4: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4539.50 High Sep 3 and the bull trigger
• RES 3: 4519.75 High Sep 9
• RES 1: 4421.50/4472.00 High Oct 7 / High Sep 27
• PRICE: 4332.50 @ 07:01 BST Oct 13
• SUP 1: 4260.00 Low Oct 1 and the bear trigger
• SUP 2: 4243.50 Low Jul 20
• SUP 3: 4214.50 Low Jul 19 and a key support
• SUP 4: 4117.00 Low Jun 21

S&P E-minis have failed to confirm a clear break of the 50-day EMA and instead price has pulled away from recent highs. This highlights a bearish risk and attention turns to the key support and bear trigger at 4260.00, Oct 1 low. A break of this support would confirm a resumption of the downtrend that started Sep 3. On the upside, a clear break of the 50-day EMA - at 4387.11 today - is required to signal scope for a stronger bounce.

COMMODITIES

BRENT TECHS: (Z1) Maintains A Firm Tone

• RES 4: $86.55 - 1.764 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $85.20 - 1.618 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $85.00 - Round number resistance
• RES 1: $84.60 - High Oct 11
• PRICE: $83.46 @ 06:58 BST Oct 13
• SUP 1: $81.96 - Low Oct 10
• SUP 2: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 3: $76.51/75.42 - Low Sep 30 and key support / High Sep 15
• SUP 4: $74.81 - Low Sep 23

Brent futures maintain a firm tone following Monday's break of last week's $83.47 high on Oct 6. The break confirms a resumption of the uptrend and resumes the bullish price sequence of higher highs and higher lows. Note too that the contract has recently cleared the $80.00 handle, an important psychological hurdle. The focus is on $85.00 next, a Fibonacci projection. Key short-term support has been defined at $79.08, Oct 7 low.

WTI TECHS: (X1) Needle Still Points North

• RES 4: $84.97 - 2.00 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 3: $84.00 - Round number resistance
• RES 2: $82.89 - 1.764 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 1: $82.18 - High Oct 11
• PRICE: $80.61 @ 07:05 BST Oct 13
• SUP 1: $78.63 - Low Oct 8
• SUP 2: $74.96 - Low Oct 7 and key near-term support
• SUP 3: $73.14 - Low Sep 30 and key support
• SUP 4: $71.61 - Low Sep 21

WTI trend conditions remain bullish and the contract started this week on a firm note. Monday's gains confirmed an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also been cleared. The focus is on $82.89, a Fibonacci projection. On the downside, key short-term support has been defined at $74.96, Oct 7.

GOLD TECHS: Consolidating

• RES 4: $1844.9 - Low Jun 14
• RES 3: $1834.1 - High Jul 15 and the bull trigger
• RES 2: $1808.7 - High Sep 14
• RES 1: $1781.4/87.4 - High Oct 8 / High Sep 22 and key resistance
• PRICE: $1763.1 @ 07:19 BST Oct 13
• SUP 1: $1746.0 - Low Oct 6
• SUP 2: $1721.7 - Low Sep 29 and the bear trigger
• SUP 3: $1717.8 - Low Aug 10
• SUP 4: $1690.6 - Low Aug 08 and the bear trigger

Gold remains within its recent range and continues to consolidate. Attention is on the 50-day EMA at $1776.3 and $1787.4, Sep 22 high and a key resistance. A resumption of strength would reinforce the bullish engulfing candle that signalled a reversal on Sep 30 and a break of $1787.4 would suggest scope for stronger gains. Initial support is at $1746.0, Oct 6 low. A break is required to undermine a bullish tone.

SILVER TECHS: Still Looking For A Break Lower

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $23.452 - 50-day EMA
• RES 1: $23.191 - High Oct 8
• PRICE: $22.705 @ 07:24 BST Oct 13
• SUP 1: $21.423 - Low Sep 29
• SUP 2: $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally
• SUP 3 :$20.000 - Psychological round number
• SUP 4: $19.851 - Low Jul 21, 2020

Silver is consolidating. A bearish theme remains intact and recent gains are considered corrective. The metal broke lower Sep 29 and cleared $22.039, Sep 20 low. This confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs, paving the way for an extension towards $20.871, a Fibonacci retracement. Key near-term resistance is at $23.191, Oct 8 high.