MNI DAILY TECHNICAL ANALYSIS - Equities Remain Fragile

Price Signal Summary – Equities Remain Fragile, Near Support

• In the equity space, S&P E-minis maintains a bearish theme. This follows Friday's break of key support 4293.75, Sep 20 low. The break strengthens a bearish case and confirms a resumption of the bear cycle that started Sep 3, opening 4214.50, Jul 19 low. EUROSTOXX 50 futures remain in a bear mode. The contract sold off sharply last week. This resulted in a breach on Friday of 3974.00, Sep 20 low. A clear break of this former support would strengthen a bearish case and open 3951.50 and below, a Fibonacci extension.
• In FX, EURUSD is trading near recent lows and recent price action appears to be a bear flag, reinforcing current bearish conditions. Last week's move lower confirmed a resumption of the downtrend following the break of 1.1664, Aug 20 low. GBPUSD traded higher again yesterday. Despite recent gains, Cable maintains a bearish theme. This follows last week's move lower and the breach of a triangle base drawn from the Jul 20 low. The USDJPY uptrend remains intact following last week's break of 111.66, Jul 2 high. This has confirmed a resumption of the bull cycle that started Jan 6 and opens 112.23 next, Feb 20, 2020 high. Near-term, the risk of a corrective pullback remains and is highlighted by a bearish engulfing candle on Sep 30.
• On the commodity front, from a trend perspective, the Gold outlook is bearish following last week's move lower and extension of the bear phase that has been in place since Sep 3. A break of $1721.7, Sep 29 low would confirm a resumption of weakness and open key support at $1690.6, Aug 9 low. WTI resumed its uptrend yesterday, breaking through the $76.67 resistance, Sep 28 high and a bull trigger. Attention turns to $79.53, a Fibonacci projection and the $80.00 psychological hurdle.
• In the FI space, Bund futures remain in a downtrend and short-term gains are considered corrective. This theme follows recent weakness that confirmed an extension of the price sequence of lower lows and lower highs. Gilt futures remain in a bear cycle. The move lower maintains a bearish price sequence of lower lows and lower highs and has opened 124.64 next, a Fibonacci projection.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Flag Formation

• RES 4: 1.1909 High Jul 30 / Sep 03 and a key resistance
• RES 3: 1.1781/1846 1.0% 10-dma envelope / High Sep 14
• RES 2: 1.1755/66 High Sep 22 / 50-day EMA
• RES 1: 1.1664/1703 Low Aug 20 / 20-day EMA
• PRICE: 1.1596 @ 06:07 BST Oct 5
• SUP 1: 1.1563 Low Sep 30 and low Oct 1
• 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: 1.1371 Low Jul 16

EURUSD is trading near recent lows and recent price action appears to be a bear flag, reinforcing current bearish conditions. Last week's move lower confirmed a resumption of the downtrend following the break of 1.1664, Aug 20 low. This maintains a bearish price sequence of lower lows and lower highs with moving average conditions in a bear mode. The focus is on 1.1493 next, a Fibonacci retracement. Firm resistance is at 1.1755, Sep 22 high.

GBPUSD TECHS: Corrective Bounce Extends

• RES 4: 1.3854 High Sep 15
• RES 3: 1.3740 50-day EMA
• RES 2: 1.3657 20-day EMA
• RES 1: 1.3640 High Oct 04
• PRICE: 1.3593 @ 06:14 BST Oct 5
• SUP 1: 1.3532/3412 Low Oct 4 / Low Sep 29 and the bear trigger
• SUP 2: 1.3354 Low Dec 23, 2020
• SUP 3: 1.3325 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD traded higher again yesterday. Despite recent gains, Cable maintains a bearish theme. This follows last week's move lower and the breach of a triangle base drawn from the Jul 20 low. Note too that moving average studies are in a bear mode reinforcing current conditions and this exposes levels not seen since late December last year - 1.3354 marks the next target, Dec 23, 2020 low. Initial resistance is seen at 1.3640.

EURGBP TECHS: Focus Is On Support

• RES 4: 0.8721 High Apr 26
• RES 3: 0.8703 1.236 proj of the Aug 10 - Sep 7 - Sep 16 rally
• RES 2: 0.8670 High Jul 20 and key resistance
• RES 1: 0.8624/58 High Oct 1 / High Sep 29
• PRICE: 0.8532 @ 06:19 BST Oct 5
• SUP 1: 0.8526 Low Sep 28
• SUP 2: 0.8501 Low Sep 16
• SUP 3: 0.8493/84 1.0% 10-dma envelope / Low Aug 16
• SUP 4: 0.8450 Low Aug 10

EURGBP remains volatile and remains soft. This follows last week's sharp reversal lower. The move lower refocuses attention on support at 0.8526, Sep 28 low and 0.8501 Sep 16 low. A break of the latter support would strengthen a bearish case and set the scene for a deeper retracement towards 0.8450, Oct 8 low. On the upside, the cross needs to breach 0.8658, Sep 29 high to resume its recent upleg.

USDJPY TECHS: Corrective Cycle

• RES 4: 113.00 2.0% 10-dma envelope
• RES 3: 112.40 High Apr 24, 2019
• RES 2: 112.23 High Feb 20, 2020
• RES 1: 111.49/112.08 High Oct 1 / High Sep 30
• PRICE: 111.18 @ 06:23 BST Oct 5
• SUP 1: 110.80 High Aug 11
• SUP 2: 110.19/109.11 50-day EMA / Low Aug 16 and Sep 15
• SUP 3: 108.72 Low Aug 04 and the bear trigger
• SUP 4: 108.56 Low May 25

The USDJPY uptrend remains intact following last week's break of 111.66, Jul 2 high. This has confirmed a resumption of the bull cycle that started Jan 6 and opens 112.23 next, Feb 20, 2020 high. Near-term, the risk of a corrective pullback remains and is highlighted by a bearish engulfing candle on Sep 30. Key short-term support is at 109.11, Aug 16 / Sep 15 low. Initial firm support is seen at 110.19, the 50-day EMA.

EURJPY TECHS: Support Remains Exposed

• RES 4: 131.76 61.8% retracement of the Jun - Sep downleg
• RES 3: 131.09 High Jul 13
• RES 2: 130.75 High Sep 3 bull trigger
• RES 1: 129.64/130.48 50-day EMA / High Sep 29
• PRICE: 128.90@ 06:30 BST Oct 5
• SUP 1: 128.31 Low Sep 23
• SUP 2: 127.94/93 Low Aug 19 / Low Sep 22 the bear trigger
• SUP 3: 127.88 50.0% retracement of the Oct '20 - Jan rally
• SUP 4: 127.50 Low Feb 22

EURJPY is unchanged and is trading near recent lows. Last week's pullback from 130.48, Sep 29 high highlights a bearish risk once again. A continuation lower would expose key support at 127.94/93, Aug 19 and Sep 22 low where a break would resume the downtrend. For bulls, key resistance is unchanged at 130.75, Sep 3 high and represents the bull trigger.

AUDUSD TECHS: Bearish Focus Despite The Recent Bounce

• RES 4: 0.7478 High Sep 3 and the bull trigger
• RES 3: 0.7410 High Sep 10
• RES 2: 0.7330 50-day EMA
• RES 1: 0.7304 High Oct 4
• PRICE: 0.7256 @ 06:37 BST Oct 5
• SUP 1: 0.7170 Low Sep 29
• SUP 2: 0.7106/05 Low Aug 20 bear trigger / 2.0% 10-dma envelope
• SUP 3: 0.7053 38.2% retracement of the Mar '20 - Feb uptrend
• SUP 4: 0.6991 Low Nov 2, 2020

Despite its recent recovery, the AUDUSD outlook remains fragile following last week's move lower. 0.7194 has been cleared, 76.4% of the Aug 20 - Sep 3 rally and this signals a resumption of the near-term downtrend paving the way for a move towards 0.7106, the Aug 20 low and bear trigger. A break would confirm a resumption of the broader downtrend that started late February. Firm resistance is seen at 0.7330, the 50-day EMA.

USDCAD TECHS: Dips Still Considered Corrective

• RES 4: 1.2976 1.00 proj of the Jun 23 - Jul 19 - 30 price swing
• RES 3: 1.2957 High Dec 21, 2020
• RES 2: 1.2949 High Aug 20 and the bull trigger
• RES 1: 1.2775/2896 High Sep 29 / High Sep 20
• PRICE: 1.2623 @ 06:54 BST Oct 5
• SUP 1: 1.2558 Low Oct 04
• SUP 2: 1.2494 Low Sep 3 and the bear trigger
• SUP 3: 1.2422 Jul 30 low and a key support
• SUP 4: 1.2367 61.8% retracement of the Jun - Aug rally

USDCAD traded lower yesterday but did find support at the session low of 1.2558. A bullish trend structure remains intact despite the recent pullback that is likely a correction. A clear break of the 50-day EMA at 1.2620 would signal scope for a deeper pullback and expose 1.2494, Sep 3 low. For bulls, a stronger resumption of gains would again expose key resistance at 1.2949, Aug 20 high. This marks the bull trigger.

FIXED INCOME

BUND TECHS: (Z1) Needle Still Points South

• RES 4: 172.12 High Sep 14
• RES 3: 171.96 High Sep 21 and key near-term resistance
• RES 2: 170.81 Low Sep 17 and recent breakout level
• RES 1: 170.68 High Sep 27
• PRICE: 170.06 @ 05:16 BST Oct 5
• SUP 1: 169.46 1.50 proj of the Sep 9 - 17 - 21 price swing
• SUP 2: 168.75 Low May 21 (cont)
• SUP 3: 168.29 Low May 19 (cont)
• SUP 4: 167.98 2.382 proj of the Sep 9 - 17 - 21 price swing

Bund futures remain in a downtrend and short-term gains are considered corrective. This theme follows recent weakness that confirmed an extension of the price sequence of lower lows and lower highs. Note moving average studies are in a bear mode reinforcing current conditions. The focus is on 169.46 next, a Fibonacci projection and beyond. Key short-term resistance has been defined at 171.96, Sep 21 high. Initial resistance is at 170.68.

BOBL TECHS: (Z1) Corrective Recovery

• RES 4: 135.660 High Sep 7 / 9
• RES 4: 135.540 High Sep 21 and key near-term resistance
• RES 3: 135.264/380 20-day EMA / High Sep 23
• RES 2: 135.200 Low Sep 17 and recent breakout level / High Oct 4
• PRICE: 135.050 @ 05:31 BST Oct 5
• SUP 1: 134.960/770 Low Oct 1 / Low Sep 28
• SUP 2: 134.736 3.236 proj of the Aug 20 - 27 - 31 price swing
• SUP 3: 134.660 Low Sep 7 and 8 (cont)
• SUP 4: 134.548 61.8% retracement of the Jun - Sep rally

Bobl futures outlook remains bearish despite recent gains. This follows the recent resumption of its downtrend. The move lower maintains the current bearish price sequence of lower lows and lower highs and signals scope for an extension lower. The focus is on 134.736 next, a Fibonacci projection. On the upside, key short-term resistance is unchanged at 135.540, Sep 21 high. Initial resistance is at 135.200.

SCHATZ TECHS: (Z1) Correction Still In Play

• RES 4: 112.340 High Aug 31
• RES 3: 112.305 High Sep 3
• RES 2: 112.290 High Sep 20 and key near-term resistance
• RES 1: 112.255 High Sep 23
• PRICE: 112.235 @ 05:32 BST Oct 5
• SUP 1: 112.210 Low Oct 1
• SUP 2: 112.174 2.764 proj of the Aug 20 - 26 - 31 price swing
• SUP 3: 112.159 61.8% retracement of the May - Aug rally (cont)
• SUP 4: 112.140 Low Jul 5 / 6 (cont)

Schatz futures gains are considered corrective and the contract remains in a downtrend. The recent breach of former support at 112.215, Sep 9 low 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 112.174 next, a Fibonacci projection. On the upside, key short-term resistance has been defined at 112.290, Sep 20 high.

GILT TECHS: (Z1) Consolidating Near Recent Lows

• RES 4: 128.18 High Sep 10, 14
• RES 3: 127.69 High Sep 21 and key near-term resistance
• RES 2: 126.84 Low Sep 17 and recent breakout level
• RES 1: 125.89/126.44 High Sep 29 / High Sep 27
• PRICE: 125.46 @ Close Oct 4
• SUP 1: 124.83 Low Sep 30
• SUP 2: 124.64 1.382 proj of the Aug 31 - Sep 17 - 21 price swing
• SUP 3: 124.19 76.4% retracement of the Oct '18 - Mar '20 upleg
• SUP 4: 123.79 1.764 proj of the Aug 31 - Sep 17 - 21 price swing

Gilt futures are unchanged and the current bear cycle remains intact. This theme follows recent weakness and tne breach of the 126.84 support, Sep 17 low. The move lower maintains a bearish price sequence of lower lows and lower highs and has opened 124.64 next, a Fibonacci projection. MA conditions are bearish, reinforcing the current trend environment. Firm resistance is at 127.69, Sep 21 high. Initial resistance is 125.89, Sep 29 high.

BTP TECHS: (Z1) Bear Flag

• RES 4: 155.68 High Aug 25
• RES 3: 155.14 High Aug 31
• RES 2: 154.64 High Sep 22 / 23 and key near-term resistance
• RES 1: 153.26 20-day EMA
• PRICE: 152.26 @ Close Oct 4
• SUP 1: 151.62 Low Sep 29 and the bear trigger
• SUP 2: 151.32 76.4% retracement of the Jun 25 - Aug 5 rally (cont)
• SUP 3: 150.00 Round number support
• SUP 4: 150.56 Low Jun 30 (cont)

BTP futures are consolidating and recent price action appears to be a bear flag, reinforcing current bearish conditions. A price sequence of lower lows and lower highs that highlights a bearish theme is intact and the recent move below 152.94, Sep 9 low, strengthened this condition. The focus is on 151.32, a Fibonacci retracement. Key near-term resistance is at 154.64, Sep 23 / 24 high. Initial resistance is at 153.26, the 20-day EMA.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Remains In A Bear Mode

• RES 4: 4300.00 Round number resistance
• RES 3: 4234.50 0.764 projection of the Jul 19 - Sep 6 - 20 price swing
• RES 2: 4223.00 High Sep 6 and the bull trigger
• RES 1: 4101.90/4200.50 50-day EMA / High Sep 24
• PRICE: 3993.50 @ 06:00 BST Oct 5
• SUP 1: 3961.50 Low Oct 1
• SUP 2: 3962.50 76.4% retracement of the Jul 19 - Sep 6 rally
• SUP 3: 3951.50 1.00 proj of the Sep 6 - Sep 20 - Sep 24 price swing
• SUP 4: 3892.70 1.236 proj of the Sep 6 - Sep 20 - Sep 24 price swing

EUROSTOXX 50 futures remain in a bear mode. The contract sold off sharply last week. This resulted in a breach on Friday of 3974.00, Sep 20 low. A clear break of this former support would strengthen a bearish case and open 3951.50 and below, a Fibonacci extension. The contract needs to get above 4200.50, Sep 24 high to refocus attention on the Sep 6 key resistance of 4223.00. Initial resistance is at 4101.90, the 50-day EMA.

E-MINI S&P (Z1): Heading South

• RES 4: 4539.50 High Sep 3 and the bull trigger
• RES 1: 4519.75 High Sep 9
• RES 3: 4481.50 76.4% retracement of the Sep 3 - 20 downleg
• RES 1: 4394.80/4472.00 50-day EMA / High Sep 27
• PRICE: 4294.00 @ 07:01 BST Oct 5
• SUP 1: 4294.50 Low Oct 5
• 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 maintains a bearish theme. This follows Friday's break of key support 4293.75, Sep 20 low. The break strengthens a bearish case and confirms a resumption of the bear cycle that started Sep 3. The move also establishes a price sequence of lower lows and lower highs and this reinforces bearish conditions, opening 4214.50, Jul 19 low. The 50-day EMA at 4394.80 is resistance. Short-term gains are considered corrective.

COMMODITIES

BRENT TECHS: (Z1) Through $80.00

• RES 4: $85.00 - Round number resistance
• RES 3: $84.10 - 1.50 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $83.01 - 1.382 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $82.00 - High Oct 4
• PRICE: $81.43 @ 07:04 BST Oct 5
• SUP 1: $78.75 - Low Oct 4
• SUP 2: $76.51/75.42 - Low Sep 30 and key support / High Sep 15
• SUP 3: $74.81 - Low Sep 23
• SUP 4: $72.51 - Low Sep 21 and key near-term support

Brent futures rallied yesterday and breached former resistance at $79.95, Sep 28 high. This confirms a resumption of the underlying uptrend and resumes the bullish price sequence of higher highs and higher lows. Note too that the contract has cleared the $80.00 handle. The focus is on $83.01 next, a Fibonacci projection. Key short-term support has been defined at $76.51, Sep 30 low.

WTI TECHS: (X1) Clears Recent Highs

• RES 4: $80.57 - 1.50 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 3: $80.00 - Psychological round number
• RES 2: $79.53 - 1.382 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 1: $78.38 - High Oct 4
• PRICE: $77.65 @ 07:13 BST Oct 5
• SUP 1: $75.32 - Low Oct 4
• SUP 2: $73.14 - Low Sep 30 and key support
• SUP 3: $71.61 - Low Sep 21
• SUP 4: $69.39 - Low Sep 21 and key support

WTI resumed its uptrend yesterday, breaking through the $76.67 resistance, Sep 28 high and a bull trigger. The break higher also confirms an extension of the current bullish price sequence of higher highs and higher lows and attention turns to $79.53, a Fibonacci projection and the $80.00 psychological hurdle. On the downside, key short-term support has been defined at $73.14, Sep 30 low.

GOLD TECHS: Holding Above Recent Lows

• 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: $1781.2/87.4 - 50-day EMA / High Sep 22 and key resistance
• PRICE: $1758.1 @ 07:27 BST Oct 5
• SUP 1: $1721.7 - Low Sep 29 and the bear trigger
• SUP 2: $1717.8 - Low Aug 10
• SUP 3: $1690.6 - Low Aug 08 and the bear trigger
• SUP 4: $1678.00 Low Mar 31

Gold bounced on Sep 30. From a trend perspective, the outlook is bearish following last week's move lower and extension of the bear phase that has been in place since Sep 3. A break of $1721.7, Sep 29 low would confirm a resumption of weakness and open key support at $1690.6, Aug 9 low. Note though that Thursday's price pattern is a bullish engulfing candle. A rally would suggest scope for a stronger bounce, perhaps towards $1787.4.

SILVER TECHS: Trend Condition Remains Bearish

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $23.678 - 50-day EMA
• RES 1: $22.849/23.144 - 20-Day EMA / High Sep 22
• PRICE: $22.471 @ 07:30 BST Oct 5
• 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

The Silver outlook remains bearish. The metal broke lower Sep 29 and cleared former support at $22.039, Sep 20 low. This has ended the recent consolidation, confirms a resumption of the broader downtrend and maintains the bearish price sequence of lower lows and lower highs. The move lower paves the way for an extension towards $20.871, a Fibonacci retracement. On the upside, key near-term resistance is at $23.144, Sep 22 high.