MNI DAILY TECHNICAL ANALYSIS - Bond Gains Considered Corrective

Price Signal Summary - Bond Gains Considered Corrective

• In the equity space, S&P E-minis has recovered but remains below recent highs. The contract has yet to confirm a clear break of the 50-day EMA. This highlights a bearish risk and attention is on the key support and bear trigger at 4260.00, Oct 1 low. EUROSTOXX 50 futures have recovered. Price action is testing the 50-day EMA, currently at 4089.80. A clear breach of the average is required to ease recent bearish pressure and allow for a stronger recovery.
• In FX, EURUSD remains in range and is consolidating. A bearish theme remains intact with recent price action appearing to be a bear flag. If correct, this pattern reinforces current trending conditions. GBPUSD traded higher yesterday but remains within its recent range. A bearish risk is still 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 is holding onto recent gains. This week, the pair formalized a breach 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 rallied sharply higher yesterday. The yellow metal has breached the 50-day EMA and resistance at $1787.4, the Sep 22 high. The focus is on $1808.7 next, Sep 14 high. WTI trend conditions remain bullish and the contract is holding onto recent gains. Monday's fresh high 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 yesterday's gains are considered corrective. Recent weakness has maintained the bearish price sequence of lower lows and lower highs that defines a downtrend. Gilt futures remain above recent highs and the contract rallied yesterday. Despite this week's positive price action, the move is considered corrective and is allowing an oversold condition to unwind.

FOREIGN EXCHANGE

EURUSD TECHS: In A Range

• RES 4: 1.1762 Bear channel top drawn from the Jun 1 high
• RES 3: 1.1717/55 50-day EMA / High Sep 22
• RES 2: 1.1633/1640 / 20-day EMA / High Oct 4
• RES 1: 1.1605 High Oct 6
• PRICE: 1.1590 @ 06:11 BST Oct 14
• SUP 1: 1.1524 Low Oct 12 and the bear trigger
• 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: 1.1422 Bear channel base drawn from the Jun 1 high

EURUSD remains in range and is consolidating. A bearish theme remains intact with recent price action appearing to be a bear flag. If correct, this pattern reinforces current trending conditions. A bearish price sequence of lower lows and lower highs remains intact and moving average conditions are in a bear mode. The focus is on 1.1493 next, a Fibonacci projection. Firm resistance is unchanged at 1.1640.

GBPUSD TECHS: Corrective Cycle Still In Play

• RES 4: 1.3854 High Sep 15
• RES 3: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 2: 1.3709 50-day EMA
• RES 1: 1.3674 High Oct 11
• PRICE: 1.3663 @ 06:16 BST Oct 14
• 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: 1.3320 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD traded higher yesterday but remains within its recent range. A bearish risk is still 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 allow for an extension towards 1.3709, the 50-day EMA.

EURGBP TECHS: Consolidation Mode

• 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: 0.8547 50-day EMA
• PRICE: 0.8482 @ 06:20 BST Oct 14
• 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 continues to consolidate near recent lows. A bearish theme dominates following the recent 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 opens 0.8450, Oct 8 low. The cross needs to breach 0.8658, Sep 29 high to reinstate a bull theme. Firm resistance is at 0.8547, the 50-day EMA.

USDJPY TECHS: Holding Onto Recent Gains

• 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: 114.26 2.0% 10-dma envelope
• RES 1: 113.80 High Oct 13
• PRICE: 113.58 @ 06:29 BST Oct 14
• SUP 1: 112.08 High Sep 30 and a recent breakout level
• SUP 2: 111.51 Low Oct 8
• SUP 3: 110.82/80 Low Oct 4 / High Aug 11
• SUP 4: 110.75 50-day EMA

USDJPY is holding onto recent gains. This week, the pair formalized a breach 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 114.26 and the 114.50, 114.99 Fibonacci projection levels. On the downside, initial firm support is seen at 112.08, Sep 30 high.

EURJPY TECHS: Holding Onto Recent Gains

• RES 4: 133.68 High Jun 15
• RES 3: 132.67 76.4% retracement of the Jun - Sep downleg
• RES 2: 132.43 High Jul 2
• RES 1: 131.76 61.8% retracement of the Jun - Sep downleg
• PRICE: 131.63 @ 06:38 BST Oct 14
• SUP 1: 130.75/26 Sep 3 high / 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 continues to appreciate. The reversal higher from 128.33, Oct 6 low has reinstated a near-term bullish focus and the cross has recently cleared a key resistance at 130.75, Sep 3 high and a bull trigger. This has strengthened the case for bulls and opens 131.76, 61.8% of the Jun - Sep downleg. Initial firm support is at 130.75.

AUDUSD TECHS: Still Climbing

• RES 4: 0.7534 High Jul 7
• RES 3: 0.7503 High Jul 13
• RES 2: 0.7478 High Sep 3 and the bull trigger
• RES 1: 0.7405 76.4% retracement of the Sep 3 - 29 downleg
• PRICE: 0.7387 @ 06:43 BST Oct 14
• SUP 1: 0.7304 20-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 continues to climb. The pair remains above the 20- and 50-day EMAs. Although the recent recovery is considered corrective, the break above these averages does suggest 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 are 0.7226, Oct 6 low and 0.7170, Sep 29 low. The latter is a bear trigger.

USDCAD TECHS: Bear Cycle Extends

• RES 4: 1.2739 High Oct 1
• RES 3: 1.2648 High Oct 6
• RES 2: 1.2587 50-day EMA
• RES 1: 1.2499 High Oct 12
• PRICE: 1.2423 @ 06:52 BST Oct 14
• 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

The USDCAD bear cycle that started Sep 20 remains in place and the pair is weaker again today. The recent break of 1.2494, Sep 3 low signals scope for a deeper pullback and has opened 1.2422, the Jul 30 low. Clearance of this support would strengthen the case for bears, exposing 1.2367, a Fibonacci projection. On the upside, a breach of 1.2775, Sep 29 high would represent a bullish development. Initial firm resistance is at 1.2587, the 50-day EMA.

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: 168.85 @ 05:19 BST Oct 14
• 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 yesterday's gains are considered corrective. Recent weakness has maintained 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. Attention is on 167.98 next, a Fibonacci projection and beyond. Key short-term resistance has been defined at 170.00.

BOBL TECHS: (Z1) Path Of Least Resistance Remains Down

• 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: 134.450 @ 05:15 BST Oct 14
• SUP 1: 134.320 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 recovered yesterday. The outlook remains bearish. 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. Initial resistance is at 134.770.

SCHATZ TECHS: (Z1) Trend Condition Remains Bearish

• 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: 112.218 20-day EMA
• PRICE: 112.160 @ 05:13 BST Oct 14
• SUP 1: 112.135 Low Oct 13
• 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

From a trend perspective, Schatz futures remain in a downtrend and the contract has recently breached 112.175, Sep 28 low. This confirmed 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) Oversold Condition Unwinds

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.72 High Oct 1
• RES 1: 125.29 20-day EMA
• PRICE: 124.84 @ Close Oct 13
• SUP 1: 124.08/123.44 Low Oct 13 / Low Oct 11 and the bear trigger
• 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 above recent highs and the contract rallied yesterday. Despite this week's positive price action, the move is considered corrective and is allowing an oversold condition to unwind. The trend remains bearish and a resumption of weakness would refocus attention on Monday's low of 123.44. This is also the bear trigger. Initial resistance is seen at 125.52, the 20-day EMA.

BTP TECHS: (Z1) Bears Pause For Breath

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.44/87 20-day EMA / High Oct 1
• PRICE: 151.61 @ Close Oct 13
• 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 are unchanged and remain in a range for now. The trend needle still points south. The contract traded lower Oct 6, confirming 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 level next. Key near-term resistance has been defined at 152.87, Oct 1 high.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Testing The 50-Day EMA

• 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: 4104.60/4200.50 61.8% of Sep 24 - Oct 6 rally / High Sep 24
• PRICE: 4087.00 @ 06:04 BST Oct 14
• SUP 1: 4004.00 / 3949.50 Low Oct 12 / Low Oct 6 and 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 have recovered. Price action is testing the 50-day EMA, currently at 4089.80. A clear breach of the average is required to ease recent bearish pressure and allow for a stronger recovery. A failure at levels around the average would maintain the broader bearish risk and refocus attention on the key support at 3949.50, Oct 6 low. A break of this level would resume the downtrend and open 3882.00, Jul 19 low.

E-MINI S&P (Z1): Monitoring The 50-Day EMA

• 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: 4371.25 @ 07:05 BST Oct 14
• SUP 1: 4317.25/4260.00 Low Oct 12 / 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 has recovered but remains below recent highs. The contract has yet to confirm a clear break of the 50-day EMA. This highlights a bearish risk and attention is on 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 breach of the 50-day EMA - at 4385.86 today - is required to signal scope for a stronger bounce.

COMMODITIES

BRENT TECHS: (Z1) Needle Still Points North

• 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: $83.88 @ 07:02 BST Oct 14
• 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 are trading closer to recent highs and maintain a firm tone. Recent gains confirm a resumption of the uptrend and maintain 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 is unchanged 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: $81.05 @ 07:06 BST Oct 14
• 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 is holding onto recent gains. Monday's fresh high 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: Clears Resistance

• 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: $1796.3 - High Oct 13
• PRICE: $1792.7 @ 07:26 BST Oct 14
• SUP 1: $1765.4/1746.0 - Low Oct 13 / 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 rallied sharply higher yesterday. The yellow metal has breached the 50-day EMA and resistance at $1787.4, the Sep 22 high. The resumption of strength reinforces short-term bullish conditions and the bullish engulfing candle pattern that signalled a potential reversal on Sep 3. The focus is on $1808.7 next, Sep 14 high. Initial firm support is at $1746.0, Oct 6 low. A break is required to undermine a bullish tone.

SILVER TECHS: Gains Considered Corrective

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $23.438 - 50-day EMA
• RES 1: $23.249 - High Oct 13
• PRICE: $23.179 @ 07:30 BST Oct 14
• SUP 1: $22.213 - Low Oct 6
• SUP 2: $21.423 - Low Sep 29
• SUP 3 : $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally
• SUP 4: $19.851 - Low Jul 21, 2020

Silver traded higher yesterday but remains in a consolidation mode. A bearish theme remains intact and 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 $23.438, the 50-day EMA.