MNI DAILY TECHNICAL ANALYSIS - Bull Trend Extension In USDJPY

Price Signal Summary - Path Of Least Resistance In USDJPY Remains Up

• In the equity space, a volatile session last Thursday in S&P E-Minis resulted in a strong bounce from the day low as well as the trend low of 3502.00. The recovery suggests the contract has entered a corrective phase and if correct, this will allow an oversold trend condition to unwind. Attention is on 3724.56, the 20-day EMA. A break would reinforce a bullish theme. Key support and the bear trigger lies at 3502.00.The EUROSTOXX 50 futures also traded in a volatile manner last Thursday, rebounding sharply from the day low of 3251.00. The focus is on the 50-day EMA at 3473.30 and resistance at 3492.00, the Oct 6 high. Clearance of these two hurdles would highlight a short-term reversal. On the downside, the key support zone to watch is at 3251.00-3236.00, the Oct 13 / 3 lows.
• In FX, EURUSD traded to a fresh weekly low last Thursday. Gains are considered corrective and trend remains in a bear mode position. The pair remains inside the bear channel drawn from the Feb 10 high. The focus is on 0.9536, the Sep 28 low. GBPUSD is holding on to the bulk of its recent gains. A continuation would signal scope for a test and possible breach of 1.1495, the Oct 5 high and bull trigger. The pair has traded above the 20-day EMA and this has improved short-term conditions for bulls. A resumption of weakness would instead expose 1.0922 and 1.0787, the 50.0% and 61.8% retracement of Sep 26 - Oct 5 bull cycle. USDJPY maintains a bullish tone and the path of least resistance is up. Last week's climb resulted in a break of 145.90, Sep 22 high and 147.66, the Aug 1998 high. This has opened 149.22 next, 3.382 projection of the Aug 2 - 8 - 11 price swing.
• On the commodity front, the recent strong reversal in Gold signals the end of the recovery between Sep 28 - Oct 4 and note that price has moved below the trendline resistance drawn from the Mar 8 high. The focus is on $1615.0, the Sep 28 low. In the Oil space, WTI futures traded lower Friday to register a fresh low for the week. This reinstates a short-term bearish theme and opens $84.94 and $82.89, 50.0% and 61.8% retracement points of the Sep 26 - Oct 10 rally.
• In the FI space, the broader bearish theme in Bund futures remains intact. The focus is on 135.52, the Sep 28 low and key support. This level was probed on Oct 12, a clear break would confirm a resumption of the downtrend and open the 135.00 handle. Resistance is at 138.91, the 20-day EMA. Gilt futures remain bearish following the reversal from last week’s high. The focus is on 90.99, Sep 28 low and bear trigger. This level has been pierced, a clear break would open the psychological 90.00 handle. Short-term gains are considered corrective. First resistance is at 98.24, Friday’s high.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Needle Still Points South

• RES 4: 1.0198 High Sep 12 and a key resistance
• RES 3: 1.0051 High Sep 20
• RES 2: 0.9927/9999 Bear channel top from Feb 10 high / High Oct 4
• RES 1: 0.9803 20-day EMA
• PRICE: 0.9740 @ 05:49 BST Oct 17
• SUP 1: 0.9633 Low Oct 13
• SUP 2: 0.9536 Low Sep 28 and key support
• SUP 3: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 4: 0.9389 Bear channel base drawn from the Feb 10 high

EURUSD traded to a fresh weekly low on Thursday, before recovering. Gains are considered corrective and the pair remains in a bear mode condition. The reversal from 0.9999 on Oct 4 marked a failure at the top of the bear channel drawn from the Feb 10 high and this strengthens a bearish theme. The focus is on 0.9536, the Sep 28 low. 0.9999 is a key resistance. The channel top is at 0.9927 and represents a key hurdle for bulls ahead of 0.9999.

GBPUSD TECHS: Holding On To The Bulk Of Its Latest Gains

• RES 4: 1.1738 High Sep 13 and a key resistance
• RES 3: 1.1590 High Sep 14
• RES 2: 1.1456/1495 50-day EMA / High Oct 5 and the bull trigger
• RES 1: 1.1380 High Oct 13
• PRICE: 1.1227 @ 05:53 BST Oct 17
• SUP 1: 1.1058 Low Oct 13
• SUP 2: 1.0924/22 Low Oct 12 / 50.0% of Sep 26 - Oct 5 bull cycle
• SUP 3: 1.0787 61.8% retracement of Sep 26 - Oct 5 bull cycle
• SUP 4: 1.0541/0350 Low Sep 28 / All Time Low

GBPUSD is holding on to the bulk of its latest gains following the bounce from last Wednesday's 1.0924 low. The recent move lower between Oct 5 - 12 appears to be a correction. A continuation higher would signal scope for a test and possible breach of 1.1495, the Oct 5 high and bull trigger. On the downside, a resumption of weakness would instead expose 1.0922 and 1.0787, Fibonacci retracement levels.

EURGBP TECHS: Bear Threat Still Present

• RES 4: 0.9292 High Sep 11 2020
• RES 3: 0.9066/9266 High Sep 28 / High Sep 26 and key resistance
• RES 2: 0.8980 High Sep 29
• RES 1: 0.8746/8867 20-day EMA / High Oct 12
• PRICE: 0.8661 @ 06:19 BST Oct 17
• SUP 1: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 2: 0.8522 Low Aug 30
• SUP 3: 0.8471 Low Aug 28
• SUP 4: 0.8408 Low Aug 24

EURGBP traded lower last Thursday as the cross extended the pullback from 0.8867, the Oct 12 high. The sell-off has resulted in a break of support at 0.8649 and a move below the 50-day EMA, at 0.8677. This signals scope for an extension and has opened 0.8559, a Fibonacci retracement level. Key short-term resistance has been defined at 0.8867 where a break is required to reinstate a bullish theme.

USDJPY TECHS: Northbound

• RES 4: 150.45 3.618 proj of the Aug 2 - 8 - 11 price swing
• RES 3: 150.00 Psychological round number
• RES 2: 149.22 3.382 proj of the Aug 2 - 8 - 11 price swing
• RES 1: 148.86 High Oct 14
• PRICE: 148.74 @ 06:23 BST Oct 17
• SUP 1: 147.06 Low Oct 14
• SUP 2: 145.73/144.99 / Low Oct 12 / 20-day EMA
• SUP 3: 143.53 Low Oct 5
• SUP 4: 141.98 50-day EMA

USDJPY maintains a bullish tone and the pair traded higher Friday. Last week's climb resulted in a break of 145.90, the Sep 22 high, confirming a resumption of the primary uptrend. It also marks an extension of the price sequence of higher highs and higher lows. 147.66, the Aug 1998 high, has also been cleared. The break reinforces bullish conditions and opens 149.22, a Fibonacci projection. Firm trend support lies at 144.99, the 20-day EMA.

EURJPY TECHS: Approaching Key Resistance

• RES 4: 148.45 High Dec 15 2014
• RES 3: 147.76 1.236 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 2: 145.64 High Sep 12 and the bull trigger
• RES 1: 145.13 High Sep 13
• PRICE: 144.96 @ 06:34 BST Oct 17
• SUP 1: 142.14/140.98 20-day EMA / 50-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 has started the week on a firm note, extending its recovery from 140.90, Oct 10 high. The cross last week managed to remain above the 50-day EMA at 140.98 and this level marks a key support. Moving average studies highlight a broader uptrend and the continuation higher signals scope for further gains near-term. Sights are on 145.64, the Sep 12 high. On the downside, a clear break of the 50-day EMA would highlight a bearish threat.

AUDUSD TECHS: Heading South

• RES 4: 0.6632 50-day EMA
• RES 3: 0.6656 High Sep 23
• RES 2: 0.6547 High Oct 4 and key resistance
• RES 1: 0.6363/6445 Low Sep 28 / 20-day EMA
• PRICE: 0.6238 @ 06:39 BST Oct 17
• SUP 1: 0.6170 Low Oct 13
• SUP 2: 0.6133 1.382 proj of the Apr 5 - May 12 - Jun 3 price swing
• SUP 3: 0.6099 76.4% retracement of the 2020 - 2021 bull cycle
• SUP 4: 0.6035 1.50 proj of the Apr 5 - May 12 - Jun 3 price swing

AUDUSD traded lower last Thursday before rebounding from the day low. A bearish theme remains intact and short-term gains are considered corrective. The pair has recently cleared 0.6363, the Sep 28 low and bear trigger. The break confirms a resumption of the primary downtrend and the print below 0.6200 exposes 0.6133 next, a Fibonacci projection. On the upside, initial firm resistance to watch is 0.6445, the 20-day EMA.

USDCAD TECHS: Uptrend Remains Intact

• RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
• RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.4000 Psychological round number
• RES 1: 1.3977 High Oct 13
• PRICE: 1.3824 @ 06:43 BST Oct 17
• SUP 1: 1.3704 Low Oct 14
• SUP 2: 1.3632/3503 20-day EMA / Low Oct 4
• SUP 3: 1.3358 Low Sep 21
• SUP 4: 1.3374 50-day EMA

USDCAD traded higher Thursday before reversing the day’s gains. Despite the pullback, the uptrend remains intact. The latest recovery from 1.3503, Oct 10 high, reinforces bullish conditions and this low represents a key short-term support. Moving average studies continue to highlight an uptrend and 1.3838, the Sep 30 high and key resistance has been cleared, strengthening bullish conditions. Support to watch is 1.3632, the 20-day EMA.

FIXED INCOME

BUND TECHS: (Z2) Remains Vulnerable

• RES 4: 144.56 High Sep 12
• RES 3: 143.68 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 2: 140.13/42.87 High Oct 6 / 4
• RES 1: 138.91 20-day EMA
• PRICE: 136.21 @ 05:03 BST Oct 17
• SUP 1: 135.14 Low Oct 12 and the bear trigger
• SUP 2: 135.00 Round number support
• SUP 3: 134.76 4.382 proj of the Aug 2 - 12 - 15 price swing
• SUP 4: 134.24 4.50 proj of the Aug 2 - 12 - 15 price swing

Bund futures maintain a softer tone and short-term gains are considered corrective. The reversal from 142.87, Oct 4 high, marked the end of the correction between Sep 28 - Oct 4 and confirmed a resumption of the primary downtrend. This reinforces a broader bearish theme and moving average studies remain in a bear mode position. Key resistance has been defined at 142.87. The 20-day EMA, at 138.91, is the first resistance.

BOBL TECHS: (Z2) Bear Threat Still Present

• RES 4: 122.510 High Sep 12
• RES 3: 121.950 High Oct 4 and the bull trigger
• RES 2: 121.330 High Oct 5
• RES 1: 119.908 20-day EMA
• PRICE: 119.010 @ 05:10 BST Oct 17
• SUP 1: 118.550 Low Oct 13
• 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

Bobl futures continue to consolidate closer to recent lows. A bearish outlook remains intact. The reversal from 121.950, Oct 4 high confirmed the end of the corrective cycle between Sep 28 and Oct 4. Attention is on the key support and bear trigger at 118.020, the Sep 28 low. A break of this level would confirm a resumption of the primary downtrend. 121.950 marks key resistance. The 20-day EMA, at 119.908, is the first resistance.

SCHATZ TECHS: (Z2) Bearish Outlook

• RES 4: 108.010 High Sep 13
• RES 3: 107.770 High Oct 4 and key resistance
• RES 2: 107.610 High Oct 5
• RES 1: 107.166 20-day EMA
• PRICE: 106.870 @ 05:17 BST Oct 17
• SUP 1: 106.775 Low Oct 11
• 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)

Schatz futures continue to consolidate. The primary trend direction is unchanged and remains down. The reversal from 107.770, Oct 4 high, signals a resumption of the broader downtrend and attention is on key support and the bear trigger at 106.535, the Sep 26 low. A break would confirm a resumption of the primary downtrend. Key resistance has been defined at 107.770, where a break would highlight a stronger reversal.

GILT TECHS: (Z2) Bearish Outlook

• RES 4: 105.34 High Sep 22
• RES 3: 102.45 High Sep 23
• RES 2: 100.92 High Oct 4 and a key resistance
• RES 1: 97.28/98.24 20-day EMA / High Oct 14
• PRICE: 93.72 @ Close Oct 14
• SUP 1: 90.99/90.38 Low Sep 28 / Low Oct 12 and the bear trigger
• SUP 2: 90.00 Psychological round number
• SUP 3: 88.94 2.764 proj of the May 12 - Jun 16 - Aug 2 swing (cont)
• SUP 4: 86.30 3.00 proj of the May 12 - Jun 16 - Aug 2 swing (cont)

The trend direction in Gilt futures remains down despite the recovery from 90.38, the Oct 12 low. Short-term gains are considered corrective and moving average studies are in a bear mode position. Initial resistance to watch is at 97.28, the 20-day EMA. The average has been pierce and a clear break would suggest scope for a stronger corrective bounce towards 100.92, the Oct 4 high and key resistance. On the downside, 90.38 is the bear trigger.

BTP TECHS: (Z2) Trend Needle Points South

• 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: 112.50/116.71 20-day EMA / High Oct 4
• PRICE: 109.78 @ Close Oct 14
• SUP 1: 108.85 Low Oct 11
• 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

The BTP futures trend condition remains bearish and last week’s extension reinforces this condition. The reversal from 116.71, the Oct 4 high, signals the end of the corrective phase between Sep 28 - Oct 4. A continuation lower would open the key support and bear trigger at 108.13, the Sep 28 low. A break of this level would confirm a resumption of the broader downtrend. 116.71 marks the key resistance.

US 10YR FUTURE TECHS: (Z2) Remains Vulnerable

• RES 4: 115-13+ Low Sep 7
• RES 3: 114-31+ 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 2: 112-20/113-30 20-day EMA / High Oct 4 and the bull trigger
• RES 1: 111-28+ High Oct 12
• PRICE: 110-15+ @ 17:59 BST Oct 14
• SUP 1: 110-00 Psychological Support
• SUP 2: 109-23+ Low Nov 30 2007 (cont)
• SUP 3: 108.23 3.0% 10-dma envelope
• SUP 4: 108-18+ 1.00 projection of the Oct 4 - 11 - 13 price swing

Treasuries breached 110-19 on Thursday, the Sep 28 low and bear trigger. This resulted in a break out of last week’s consolidative range and confirms a resumption of the downtrend plus maintains the trend sequence of lower and lower highs. The focus is on 110.00 where a break would further reinforce bearish conditions. Initial key resistance is at 112-20, the 20-day EMA.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Bull Cycle?

• RES 4: 3678.00 High Sep 13 and bull trigger
• RES 3: 3585.00 High Sep 14
• RES 2: 3511.30 Trendline resistance drawn from the Aug 17 high
• RES 1:3473.30/3492.00 50-day EMA / High Oct 6
• PRICE: 3368.00 @ 05:26 BST Oct 17
• SUP 1: 3251.00/3236.00 Low Oct 13 / 3 and a key support zone
• SUP 2: 3305.00 Low Oct 11
• SUP 3: 3236.00/3229.00 Low Oct 3 / Low Nov 9 2020 (cont)
• SUP 4: 3163.00 Low Nov 6 2020

EUROSTOXX 50 futures traded in a volatile manner last week, rebounding sharply from 3251.00, the Oct 13 low The strong recovery highlights a potential short-term reversal and if correct, the start of a bull cycle. The focus is on the 50-day EMA at 3473.30 and resistance at 3492.00, the Oct 6 high. A break of this zone would strengthen a bullish case. On the downside, the key support zone to watch is at 3251.00-3236.00.

E-MINI S&P (Z2): Remains Above Last Week’s Low

• RES 4: 4023.44 61.8% retracement of the Aug 16 - Oct 13 downleg
• RES 3: 3923.88 50.0% retracement of the Aug 16 - Oct 13 downleg
• RES 2: 3856.33 50-day EMA
• RES 1: 3724.56/3820.00 20-day EMA / High Oct 5
• PRICE: 3618.25 @ 06:40 BST Oct 17
• SUP 1: 3502.00 Low Oct 13 and the bear trigger
• SUP 2: 3491.13 50.0% retracement of the 2020 - 2022 bull cycle
• SUP 3: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 4: 3388.70 1.764 proj of the Aug 16 - Sep 7 - 13 price swing

A volatile session last Thursday in S&P E-Minis resulted in a strong bounce from the day low as well as the trend low of 3502.00. The recovery suggests that the contract has entered a corrective phase and if correct, this will allow an oversold trend condition to unwind. Attention is on 3724.56, the 20-day EMA. A break would reinforce a bullish theme and open 3820.00, the Oct 5 high. Key support and the bear trigger lies at 3502.00.

COMMODITIES

BRENT TECHS: (Z2) Watching Support

• RES 4: $107.41 - 76.4% retracement of the Aug 6 - Sep 26 bear leg
• RES 3: $104.62 - High Jul 5
• RES 2: $101.39 - High Aug 30
• RES 1: $96.46/98.75 - High Oct 11 / 10 and key near-term resistance
• PRICE: $92.52 @ 07:01 BST Oct 17
• SUP 1: $91.08/90.59 - Low Oct 13 / 50.0% of the Sep 26 - Oct 10 rally
• SUP 2: $88.67 - 61.8% retracement of the Sep 26 - Oct 10 rally
• SUP 3: $85.00/82.44 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 4: $81.97 - 1.618 proj of the Jul 29 - Aug 5 - 30 price swing

Brent futures continue to trade at its recent lows. From a short-term perspective, the market's directional bias is unclear. For bears, a break of $91.08, the Oct 13 low would strengthen bearish conditions and signal scope for a move towards $88.67, a Fibonacci retracement. A resumption of gains would instead pave the way for a climb towards the key resistance at $98.75, the Oct 10 high.

WTI TECHS: (X2) Bear Threat Remains Present

• RES 4: $104.31 - 76.4% retracement of the Jun 8 - Sep 26 downleg
• RES 3: $98.95 - 61.8% retracement of the Jun 8 - Sep 26 downleg
• RES 2: $96.82 - High Aug 31
• RES 1: $91.35/93.64 - High Oct 11 / 10 and key resistance
• PRICE: $86.34 @ 07:15 BST Oct 17
• SUP 1: $84.94 - 50.0% retracement points of the Sep 26 - Oct 10 rally
• SUP 2: $82.89 - 61.8% retracement points of the Sep 26 - Oct 10 rally
• SUP 3: $79.14 - Low Sep 30
• SUP 4: $76.25 - Low Sep 26 and the bear trigger

WTI futures traded lower Friday to register a fresh low for the week. This reinstates a near-term bearish theme and highlights potential for a continuation lower. This would open $84.94 and $82.89, Fibonacci retracement levels. On the upside, a resumption of gains would instead suggest scope for a climb towards the key short-term resistance at $93.64, the Oct 10 high. A break of this level would strengthen a bullish theme.

GOLD TECHS: Technical Signal Still Bearish

• 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: $1684.0/1729.5 - High Oct 11 / 4 and the bull trigger
• PRICE: $1652.3 @ 07:17 BST Oct 17
• SUP 1: $1640.2 - Low Oct 14
• 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 maintains a softer tone following the recent reversal from $1729.5, the Oct 4 high. The reversal signals the end of the climb between Sep 28 - Oct 4 and note that price has moved below the trendline resistance drawn from the Mar 8 high. A continuation lower would expose the key support and bear trigger at $1615.0, the Sep 28 low. On the upside, a break of $1729.5 is required to reinstate a bullish theme.

SILVER TECHS: Heading South

• RES 4: $21.967 - High Jun 17
• RES 3: $21.540 - High Jun 27
• RES 2: $20.187/21.242 - High Oct 10 / 4 and key resistance
• RES 1: $19.451 - 50-day EMA
• PRICE: $18.553 @ 08:05 BST Oct 17
• SUP 1: $17.967 - Low Sep 28
• 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 remains vulnerable and Friday’s move lower has reinforced the bearish condition. Last week’s extension lower resulted in a break of the 50-day EMA. This signals scope for a continuation of the current bear leg and has exposed the next support at $17.967, the Sep 28 low. Clearance of this support would open $17.562, the Sep 28 low and the bear trigger. Initial resistance is seen at $19.451, the 50-day EMA.