MNI DAILY TECHNICAL ANALYSIS - Bund Futures Remain Bought on Dips

Price Signal Summary – Bund Futures Remain Bought on Dips

• S&P E-Minis extended the recovery into the Thursday close, touching 4004.75 in the process and nearing first key resistance at 4017.94. EUROSTOXX 50 futures extended gains early Wednesday before fading into the close. Nonetheless, this week’s price action means prices have taken out resistance at both 3504.00, the Jul 8 high, the 50-day EMA at 3553.60 as well as 3584.00, the Jun 27 high. This suggests scope for a stronger short-term recovery.
• EURUSD’s brief post-ECB rally stalled and fully reversed into the Thursday close, putting the pair flat through the London fix. The 20-day EMA resistance at 1.0258 was pierced, but the lack of a clear break higher keeps the technical picture unchanged for now. GBPUSD remains above the week’s lowest levels, but traded weaker Thursday. recovered from last week’s lows. This price action retains the sell-on-rallies theme, which keeps short-term gains considered corrective. EURJPY rallied to new weekly highs of 142.32 Thursday, but faltered ahead of the close, erasing the entirety of the move higher to finish flat. This keeps the outlook bearish, with focus on the downside trigger of 136.87.
• Gold bounced solidly off the Thursday low of 1680.99, keeping prices inside the recent range, with buy-on-dips clearly the dominant strategy. For now, the outlook is bearish and the yellow metal remains in a downtrend. WTI futures traded under pressure into the Thursday close, briefly putting prices below the $95/bbl handle and nearing first support of the Jul 15 low at $91.64.
• Bund futures came under initial pressure on the ECB rate decision, touching 149.69 before rebounding sharply. This reinforces the current buy-on-dips theme, with key support unchallenged. This keeps the broader theme positive following the recent break of 152.92, Jul 6 high. The short-term outlook in Gilt futures remains bullish, with pullbacks proven corrective into the Thursday close. Recent gains confirmed a resumption of the bull cycle that started Jun 16 - price cleared resistance at 114.55, the Jun 24 high.

FOREIGN EXCHANGE

EURUSD TECHS: Looks Through ECB to Finish Flat

• RES 4: 1.0494 Bull channel resistance drawn from the Feb 10 high
• RES 3: 1.0449 High Jul 5
• RES 2: 1.0359 Low Jun 15
• RES 1: 1.0258 20-day EMA
• PRICE: 1.0161 @ 09:36 BST Jul 22
• SUP 1: 1.0120 Low Jul 19
• SUP 2: 1.0064/0.9952 Low Jul 18 / 14
• SUP 3: 0.9944 1.618 projection of the Jun 9 - 15 - 27 price swing
• SUP 4: 0.9883 1.764 projection of the Jun 9 - 15 - 27 price swing

EURUSD’s brief post-ECB rally stalled and fully reversed into the Thursday close, putting the pair flat through the London fix. The 20-day EMA resistance at 1.0258 was pierced, but the lack of a clear break higher keeps the technical picture unchanged for now. This keeps attention on 1.0258, the 20-day EMA. A clear breach here strengthens bullish conditions and signal scope for an extension within the bear channel. The channel is drawn from the Feb 10 high. Initial support is at 1.0120, Tuesday’s intraday low.

GBPUSD TECHS: Inside Range

• RES 4: 1.2332 High Jun 27
• RES 3: 1.2213 High Jun 29
• RES 2: 1.2125 High Jul 5
• RES 1: 1.2040 20-day EMA / High Jul 19
• PRICE: 1.1963 @ 16:08 BST Jul 21
• SUP 1: 1.1760 Low Jul 14 and the bear trigger
• 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 remains above the week’s lowest levels, but traded weaker Thursday. recovered from last week’s lows. This price action retains the sell-on-rallies theme, which keeps short-term gains considered corrective. Recent weakness confirmed a resumption of the current downtrend and this maintains the bearish price sequence of lower lows and lower highs. The focus is on 1.1673 next, a Fibonacci projection. Firm resistance is seen at 1.2040, marking the 20-day EMA as well as the July 19 high. A break would signal scope for a stronger short-term correction.

EURGBP TECHS: Bearish Focus

• RES 4: 0.8762 1.00 proj of the Apr 14 - May 12 - 17 price swing
• RES 3: 0.8721 High May 26 2021 and Jun 15 / bull trigger
• RES 2: 0.8627/79 High Jul 4 / High Jul 1
• RES 1: 0.8585 High Jul 21
• PRICE: 0.8529 @ 16:11 BST Jul 21
• SUP 1: 0.8403 Low Jul 13
• SUP 2: 0.8393 Low May 17 and a key support
• SUP 3: 0.8367 Low May 2
• SUP 4: 0.8313 Low Apr 22

EURGBP conditions still appear bearish, with the cross’ failure to hold an intraday rally the latest sign of the negative outlook. The cross holds below the 50-day EMA and scope is seen for a deeper retracement with attention on support at 0.8393, the May 17 low. Clearance of this level would strengthen a bearish case. On the upside, initial resistance is seen at 0.8627, the May 26 2021 and Jun 15 high. A clear breach here is required to signal a possible reversal.

USDJPY TECHS: Stalls, But Bias Remains Higher

• RES 4: 141.47 1.382 proj of the Jun 16 - 22 - 23 price swing
• RES 3: 140.71 1.236 proj of the Jun 16 - 22 - 23 price swing
• RES 2: 140.00 Psychological round number
• RES 1: 139.48 1.00 proj of the Jun 16 - 22 - 23 price swing
• PRICE: 137.86 @ 16:14 BST Jul 21
• SUP 1: 137.28 Low Jul 14
• SUP 2: 136.33 20-day EMA
• SUP 3: 135.34/134.27 Low Jul 8 / Low Jun 23
• SUP 4: 134.10 Bull channel base drawn from the Mar 4 low

Price action faltered into the Thursday close, but gains last week confirmed a resumption of the primary uptrend to keep the bias pointed higher. Moving average studies are in bull mode condition, clearly highlighting current market sentiment. The focus is on 139.48, a Fibonacci projection ahead of the psychological 140.00 handle. On the downside, the 20-day EMA, at 136.33, marks initial firm support.

EURJPY TECHS: Fails to Sustain Rally

• RES 4: 144.28 High Jun 28 and key resistance
• RES 3: 142.53 76.4% June Downleg
• RES 2: 142.37 High Jul 5
• RES 1: 142.16 2.0% 10-dma envelope
• PRICE: 140.66 @ 16:20 BST Jul 21
• SUP 1: 137.99/36.87 Low Jul 14 / Low Jul 8 and the bear trigger
• SUP 2: 136.25 Low May 30
• SUP 3: 135.40 76.4% retracement of the May 12 - Jun 28 climb
• SUP 4: 134.56 3.0% 10-dma envelope

EURJPY rallied to new weekly highs of 142.32 Thursday, but faltered ahead of the close, erasing the entirety of the move higher to finish flat. This keeps the outlook bearish, with focus on the downside trigger of 136.87. To initiate a short-term recovery, markets need to take out 142.37 and 142.53 - the 76.4% retracement for the June downtick.

AUDUSD TECHS: Clears The 20-Day EMA

• RES 4: 0.7141 76.4% retracement of the Jun 3 - Jul 14 downleg
• RES 3: 0.7069 High Jun 16
• RES 2: 0.6964 50-day EMA
• RES 1: 0.6912 38.2% retracement of the Jun 3 - Jul 14 downleg
• PRICE: 0.6888 @ 16:25 BST Jul 21
• SUP 1: 0.6786/6682 Low Jul 18 / 14 and the bear trigger
• SUP 2: 0.6647 0.764 proj of the Apr 5 - May 12 - Jun 3 price swing
• SUP 3: 0.6588 Low May 28 2020
• SUP 4: 0.6538 Low May 26 2020

AUDUSD was broadly flat into the Thursday close after extending the bounce from 0.6682, the Jul 14 low. Tuesday’s gains also resulted in a break of the 20-day EMA and this exposes resistance at the 50-day EMA, at 0.6964. Short-term gains are considered corrective and the primary bear trend remains intact. A reversal lower would refocus attention on the 0.6682 bear trigger where a break would confirm a resumption of the downtrend.

USDCAD TECHS: Flirting With 50-Day EMA Support

• RES 4: 1.3300 High Nov 4 2020
• RES 3: 1.3272 2.0% 10-dma envelope
• RES 2: 1.3224 High Jul 14
• RES 1: 1.3166 3.0% Upper Bollinger Band
• PRICE: 1.2902 @ 16:26 BST Jul 21
• SUP 1: 1.2859 50-DMA
• SUP 2: 1.2855 Low Jul 20
• SUP 3: 1.2819 Low Jun 28 and key support
• SUP 4: 1.2763 Low Jun 13

USDCAD remains below last week’s high. The pair has traded below the 20-day EMA as well as the 50-day EMA now, which represents an important support and a clear break is required to suggest scope for a deeper pullback. The trend condition is bullish and a resumption of gains would refocus attention on 1.3224, the Jul 14 high and the bull trigger.

FIXED INCOME

BUND TECHS: (U2) Bought on Dips

• RES 4: 155.01 1.236 projection of the Jun 16 - 24 - 28 price swing
• RES 3: 154.65 High May 27
• RES 2: 154.00 Round number
• RES 1: 153.80 High Jul 15
• PRICE: 151.84 @ 16:28 BST Jul 21
• SUP 1: 149.69 Low Jul 21
• SUP 2: 148.24 Low Jul 1
• SUP 3: 146.50 Low Jun 30
• SUP 4: 144.72 Low Jun 28 and a key support

Bund futures came under initial pressure on the ECB rate decision, touching 149.69 before rebounding sharply. This reinforces the current buy-on-dips theme, with key support unchallenged. This keeps the broader theme positive following the recent break of 152.92, Jul 6 high. This confirmed a resumption of the bull cycle. Attention is on the 154.00 handle next ahead of 154.65, the May 27 high. Key short-term support has been defined at 148.24, the July 1 low.

BOBL TECHS: (U2) Bounces Off Low

• RES 4: 127.160 High May 12
• RES 3: 126.879 1.236 projection of the Jun 16 -24 - 28 price swing
• RES 2: 126.710 High May 26
• RES 1: 126.560 High Jul 6 and the bull trigger
• PRICE: 125.010 @ 16:31 BST Jul 21
• SUP 1: 124.030 Low Jul 21
• SUP 2: 123.010 Low Jun 30
• SUP 3: 121.910 Low Jun 28 and a key near-term support
• SUP 4: 120.990 Low Jun 21

Bobl futures were sold to a new weekly low of 124.03 before bouncing into the close, defying the development of any bearish theme. A bull cycle remains in play and the focus is on resistance at 126.560, Jul 6 high and the next bull trigger. The recent breach of 123.960, the Jun 24 high, confirmed a resumption of the current uptrend and price has established a positive sequence of higher highs and higher lows. Scope is seen for a climb towards 126.710, the May 26 high. Key short-term support has been defined at 121.190, Jun 28 low.

SCHATZ TECHS: (U2) Trims Losses into Close

• RES 4: 110.412 1.382 proj of the May 16 - 24 - 28 price swing
• RES 3: 110.256 1.382 proj of the May 16 - 24 - 28 price swing
• RES 2: 110.063 1.236 proj of the May 16 - 24 - 28 price swing
• RES 1: 110.005 High Jul 6 and the bull trigger
• PRICE: 109.290 @ 16:33 BST Jul 21
• SUP 1: 108.95 Low Jul 21
• SUP 2: 108.760/425 Low Jun 30 / Low Jun 28 and a key support
• SUP 3: 108.025 Low Jun 21
• SUP 4: 107.705 Low Jun 16 and the bear trigger

Schatz futures dipped to a new weekly low of 108.95 Thursday following post-ECB volatility, but bounced to trim losses into the close. Despite the pullback, the short-term trend needle still points north. The contract has recently cleared 109.030, the Jun 24 high. This marked an extension of a corrective cycle and price has established a bullish sequence of higher highs and higher lows. Scope is seen for a climb towards 110.063, a Fibonacci projection. Key short-term support has been defined at 108.425, Jun 28 low.

GILT TECHS: (U2) Rallies Into the Close

• RES 4: 118.63 High May 24
• RES 3: 118.16 1.382 proj of the Jun 16 - 24- 29 price swing
• RES 2: 117.48 1.236 proj of the Jun 16 - 24- 29 price swing
• RES 1: 117.09 High Jul 6 and the bull trigger
• PRICE: 116.14 @ 16:37 Jul 21
• SUP 1: 114.08/113.03 Low Jul 8 / Low Jun 30
• SUP 2: 111.72 Low Jun 29 and key near-term support
• SUP 3: 110.57 Low Jun 21
• SUP 4: 109.89 Low Jun 16 and the bear trigger

The short-term outlook in Gilt futures remains bullish, with pullbacks proven corrective into the Thursday close. Recent gains confirmed a resumption of the bull cycle that started Jun 16 - price cleared resistance at 114.55, the Jun 24 high. A resumption of strength would open 117.48 next, a Fibonacci projection. On the downside, key short-term support has been defined at 111.72, the Jun 29 low. Initial support to watch is 114.08, Jul 8 low.

BTP TECHS: (U2) Softer, But Off the Lows

• RES 4: 130.00 Round number resistance
• RES 3: 129.00 High May 12
• RES 2: 127.79 High May 26
• RES 1: 126.41 High Jul 1 and the bull trigger
• PRICE: 120.87 @ 16:56 BST Jul 21
• SUP 1: 119.57 Low Jul 21
• SUP 2: 118.60 Low Jun 22
• SUP 3: 115.72 Low Jun 16
• SUP 4: 113.78 Contract Low

BTP futures traded lower again Thursday, but recovered off the low into the close. Following Wednesday’s bearish close, focus remains on the downside, with 119.57, the Jul 21 low a key focus. This rebuffs the formation of a bull flag and dents the bullish short-term trend condition. Further weakness opens 118.60 and 115.72 below.

EQUITIES

EUROSTOXX50 TECHS: (U2) Trading Closer To Its Recent Highs

• RES 4: 3774.00 High Jun 9
• RES 3: 3689.00 High Jun 10
• RES 2: 3626.27 4.0% 10-dma envelope
• RES 1: 3613.00 High Jul 19
• PRICE: 3600.00 @ 09:40 BST Jul 22
• SUP 1: 3343.00 Low Jul 5 and the bear trigger
• SUP 2: 3321.30 50.0% retracement the major 2020 - 2021 upleg
• SUP 3: 3300.00 Round number support
• SUP 4: 3241.70 1.382 proj of the Mar 29 - May 10 - Jun 6 price swing

EUROSTOXX 50 futures extended gains early Wednesday before fading into the close. Nonetheless, this week’s price action means prices have taken out resistance at both 3504.00, the Jul 8 high, the 50-day EMA at 3553.60 as well as 3584.00, the Jun 27 high. This suggests scope for a stronger short-term recovery and eyes 3689.00 - the Jun 10 high. On the downside, the key support and bear trigger is unchanged at 3343.00, the Jul 5 low.

E-MINI S&P (U2): Recovery Extends, Nears Resistance

• RES 4: 4308.50 High Apr 28
• RES 3: 4204.75 High May 31 and a key resistance
• RES 2: 4017.94 38.2% Mar - Jun Downleg
• RES 1: 4004.75 High Jul 21
• PRICE: 3991.00 @ 09:41 BST Jul 22
• SUP 1: 3723.75/3639.00 Low Jul 14 / Low Jun 17 and a bear trigger
• SUP 2: 3578.27 0.618 proj of the Mar 29 - May 20 - 31 price swing
• SUP 3: 3500.00 Round number support
• SUP 4: 3384.75 0.764 proj of the Mar 29 - May 20 - 31 price swing

S&P E-Minis extended the recovery into the Thursday close, touching 4004.75 in the process and nearing first key resistance at 4017.94. The moves mark a clear break of the 55-day EMA and this week’s strength narrows the gap with 4204.75, the May 31 high. On the downside, a resumption of weakness and a break of 3923.75 low, would instead open key support at 3639.00, Jun 17 low.

COMMODITIES

BRENT TECHS: (U2) Corrective Bounce Fades

• RES 4: $118.12 - High Jun 17
• RES 3: $116.24 - High Jun 29 and a key resistance
• RES 2: $107.61/114.75 - High Jul 19 / Jul 5
• RES 1: $107.46 - 50-day EMA
• PRICE: $103.95 @ 09:34 BST Jul 22
• SUP 1: $98.17/94.50 - Low Jul 15 / Low Jul 14
• SUP 2: $90.33 - Low Mar 17
• SUP 3: $89.60 - Low Mar 15 and a key support
• SUP 4: $86.74 - Low Feb 25

Brent futures started the week on a firmer note and traded higher Tuesday before fading through to the Thursday low. This follows a reversal signal on Jul 14 - a long legged doji candle pattern. Nonetheless, fading prices early Wednesday confirm short-term gains are considered corrective and the next resistance to watch is $107.55, the 50-day EMA. A clear break of this average would signal scope for a stronger recovery. For bears, a reversal lower, would refocus attention on the bear trigger at $94.50, the Jul 14 low.

WTI TECHS: (U2) Holding Onto The Bulk Of Its Recent Gains

• RES 4: $113.87 - High Jun 17
• RES 3: $111.14 - High Jun 29 and a key near-term resistance
• RES 2: $102.29/108.28- 50-day EMA / High Jul 5
• RES 1: $100.53 - 20-day EMA
• PRICE: $96.70 @ 09:48 BST Jul 22
• SUP 1: $91.64/88.23 - Low Jul 15 / Low Jul 14 and the bear trigger
• SUP 2: $85.37 - Low Mar 15
• SUP 3: $83.51 - 1.50 projection of the Jun 8 - 22 - 29 price swing
• SUP 4: $81.34 - 1.618 projection of the Jun 8 - 22 - 29 price swing

WTI futures traded under pressure into the Thursday close, briefly putting prices below the $95/bbl handle and nearing first support of the Jul 15 low at $91.64. This keeps the contract in a short-term corrective cycle. A recent reversal signal was confirmed on Jul 14 - a hammer candle formation. Attention is on the next firm resistance at $102.29, the 50-day EMA. A clear break of this average is required to suggest scope for a stronger recovery. On the downside, a reversal lower would refocus attention on $88.23, the Jul 14 low and bear trigger.

GOLD TECHS: Path Of Least Resistance Remains Down

• RES 4: $1834.4 - Trendline resistance drawn from the Mar 8 high
• RES 3: $1809.6 - 50-day EMA
• RES 2: $1787.0 - Low May 16, recent breakout level
• RES 1: $1745.4/64.0 - High Jul 13 / 20-day EMA
• PRICE: $1699.5 @ 09:51 BST Jul 22
• SUP 1: $1697.7 - Low Jul 14
• SUP 2: $1690.6 - Low Aug 9 2021
• SUP 3: $1680.5 - 1.764 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 4: $1676.9 - Low Mar 8 2021

Gold bounced solidly off the Thursday low of 1680.99, keeping prices inside the recent range, with buy-on-dips clearly the dominant strategy. For now, the outlook is bearish and the yellow metal remains in a downtrend. Recent weakness confirmed a continuation of the bear cycle that has resulted in the break of $1787.00, May 16 low. The focus is on $1690.6 next, the Aug 9 2021 low. Moving average studies are in a bear mode condition, highlighting current market sentiment. Initial firm resistance is at $1769.7, the 20-day EMA.

SILVER TECHS: Bearish Trend Condition

• RES 4: $21.967 - High Jun 17
• RES 3: $20.927 - 50-day EMA
• RES 2: $20.464 - Low May 13 and recent breakout level
• RES 1: $19.731 - 20-day EMA
• PRICE: $18.730 @ 09:54 BST Jul 22
• SUP 1: $18.146/18.000 - Low Jul 14 / Round number support
• SUP 2: $17.312 - 3.00 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 3: $16.955 - Low Jun 15 2020
• SUP 4: $16.735 - Low May 22 2020

The Silver outlook remains bearish following a resumption of the downtrend last week. This marks a continuation of the current bear cycle that started Jun 6 and an extension of the broader downtrend that has been in place since early February 2021. Moving average studies remain in a bear mode condition highlighting current sentiment. Sights are on $17.312 next, a Fibonacci projection. The 20-day EMA, at $19.731, is a key S/T resistance.