MNI DAILY TECHNICAL ANALYSIS - Equity Corrective Cycle Remains in Play

Price Signal Summary – Equity Corrective Cycle Remains in Play

• The S&P E-Minis outlook remains bullish, however, a corrective cycle remains in play, signalling scope for a deeper pullback near-term. This is allowing an overbought reading in momentum studies to unwind. EUROSTOXX 50 futures remain in a bearish corrective phase. The move lower Friday and yesterday, marks an extension of the pullback from last week’s 3822.00 high. The 20-day EMA, at 3709.50, has been breached.
• EURUSD started the week on a bearish note and the pair has cleared key support and the bear trigger at 0.9952, the Jul 14 low. This confirms an extension lower inside the bear channel and more importantly confirms a resumption of the primary downtrend. USDJPY started the week on a firm note. The pair last week traded above resistance at 135.58, the Aug 8 high and this strengthened a short-term bullish condition. 137.27, 76.4% of the Jul 14 - Aug 2 downleg, was cleared Monday reinforcing current conditions. AUDUSD remains soft as the pair extends the retracement from 0.7137, the Aug 11 high. The move lower last week resulted in a print below 0.6870, the Aug 5 low. Clearance of this level would undermine the recent bull theme and signal scope for a deeper pullback.
• Gold remains weak, having extended the pullback from $1807.9, the Aug 10 high. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break highlighted a potential reversal of the 5-month downtrend. WTI futures remain vulnerable, despite having bounced from last Wednesday's low. Last week’s move down resulted in a print below support at $86.06, the Aug 5 low.
• Bund futures traded lower again Monday, extending the pullback from the Aug 2 high of 159.70. The 50-day EMA has been cleared. This marked a key support area and the clear break has strengthened bearish conditions. Gilt futures remain vulnerable and last week’s sharp sell-off reinforces the current bearish climate. Monday’s sessions marked a bearish start to the week and recent weakness has also resulted in the break of trendline support drawn from the Jun 16 low.

FOREIGN EXCHANGE

EURUSD TECHS: Clears Key Support

• RES 4: 1.0449 High Jul 5
• RES 3: 1.0273/68 Channel top from Feb 10 high / High Aug 10
• RES 2: 1.0097/0166 Low Jul 27 / 20-day EMA
• RES 1: 1.0047 High Aug 22
• PRICE: 0.9933 @ 06:13 BST Aug 23
• SUP 1: 0.9883 1.764 projection of the Jun 9 - 15 - 27 price swing
• SUP 2: 0.9800 Round number support
• SUP 3: 0.9785 2.00 projection of the Jun 9 - 15 - 27 price swing
• SUP 4: 0.9734 Channel base drawn from the Feb 10 high

EURUSD started the week on a bearish note and the pair has cleared key support and the bear trigger at 0.9952, the Jul 14 low. This confirms an extension lower inside the bear channel and more importantly confirms a resumption of the primary downtrend. The focus is on 0.9883 next, a Fibonacci projection while further out, scope is seen for a move towards the channel base at 0.9734. Initial resistance is at 1.0047, Monday’s high.

GBPUSD TECHS: Trades Through The Bear Trigger

• RES 4: 1.2217 High Aug 12
• RES 3: 1.2137 50-day EMA
• RES 2: 1.2004/1.2035 Low Aug 5 / 20-day EMA
• RES 1: 1.1860/1938 High Aug 22 / 19
• PRICE: 1.1758 @ 06:17 BST Aug 23
• SUP 1: 1.1742/1700 Low Aug 22 / Round number support
• 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 has remained soft and the pair started the week on a bearish note, extending the recent sell-off and in the process, has breached support at 1.1760, the Jul 14 low and bear trigger. The break of 1.1760 confirms a resumption of the downtrend and paves the way for weakness towards 1.1673, a Fibonacci projection. On the upside, firm short-term resistance is seen at 1.2004, the Aug 5 low.

EURGBP TECHS: Bullish Focus Despite Pullback

• RES 4: 0.8627 High Jul 4
• RES 3: 0.8585 High Jul 21 and a key resistance
• RES 2: 0.8525 High Jul 25
• RES 1: 0.8512 High Aug 19
• PRICE: 0.8446 @ 06:20 BST Aug 23
• SUP 1: 0.8435 Low Aug 22
• SUP 2: 0.8388/40 Low Aug 17 / 2 and the bear trigger
• SUP 3: 0.8313 Low Apr 22
• SUP 4: 0.8278 2.0% 10-dma envelope and low Apr 14

EURGBP rallied Friday and the move higher resulted in a break of 0.8493, the Aug 12 high. This threatens the recent bearish theme and signals scope for an extension higher, despite yesterday’s pullback. The cross has traded above the 20- and 50-day EMAs, reinforcing a developing bullish theme. A continuation higher would open 0.8525, Jul 25 high. Initial key support is at 0.8388, the Aug 17 low. A break would reinstate a bearish theme.

USDJPY TECHS: Northbound

• RES 4: 139.39 High Jul 14 and key resistance
• RES 3: 138.88 High Jul 21
• RES 2: 137.96 High Jul 22
• RES 1: 137.65 High Aug 22
• PRICE: 137.24 @ 06:28 BST Aug 23
• SUP 1: 135.72 Low Aug 19
• SUP 2: 135.09/134.36 20- and 50-day EMA
• SUP 3: 132.56 Low Aug 15
• SUP 4: 131.74 Low Aug 11

USDJPY started the week on a firm note. The pair last week traded above resistance at 135.58, the Aug 8 high and this strengthened a short-term bullish condition. 137.27, 76.4% of the Jul 14 - Aug 2 downleg, was cleared Monday reinforcing current conditions. This signals scope for a continuation higher towards 137.96, the Jul 22 high. On the downside, initial firm support is seen at the 50-day EMA which intersects at 134.36.

EURJPY TECHS: Remains Below Resistance

• RES 4: 139.67 Trendline resistance drawn from the Jun 28 high
• RES 3: 139.41 High Jul 28
• RES 2: 138.40 High Aug 10
• RES 1: 138.02 50-day EMA
• PRICE: 136.17 @ 06:32 BST Aug 23
• SUP 1: 134.95 Low Aug 16
• SUP 2: 133.40 Low Aug 2 and a bear trigger
• SUP 3: 132.66 Low May 12 and a key support
• SUP 4: 131.99 61.8% retracement of the Mar 7 - Jun 28 bull leg

EURJPY traded lower Monday. The short-term outlook remains bearish. Moving average studies highlight a downtrend and the 50-day EMA, at 138.02, marks a firm resistance. A strong resumption of weakness would open the 133.40 bear trigger. On the upside, clearance of resistance at the 50-day EMA would alter the picture and instead open the 139.67 trendline resistance.

AUDUSD TECHS: Bearish Threat

• RES 4: 0.7246 High Jun 7
• RES 3: 0.7176 3.0% Upper Bollinger Band
• RES 2: 0.7137 High Aug 11
• RES 1: 0.6968/7040 50-day EMA / High Aug 16
• PRICE: 0.6882 @ 06:35 BST Aug 23
• SUP 1: 0.6859 Low Aug 19
• SUP 2: 0.6789 76.4% retracement of the Jul 14 - Aug 11 upleg
• SUP 3: 0.6719 Low Jul 15
• SUP 4: 0.6682 14 and the bear trigger

AUDUSD remains soft as the pair extends the retracement from 0.7137, the Aug 11 high. The move lower last week resulted in a print below 0.6870, the Aug 5 low. Clearance of this level would undermine the recent bull theme and signal scope for a deeper pullback. Initial firm resistance has been defined at 0.7040, the Aug 16 high where a break is required to ease the current bearish pressure.

USDCAD TECHS: Bullish Price Action

• RES 4: 1.3224 High Jul 14 and key resistance
• RES 3: 1.3135 High Jul 15
• RES 2: 1.3107 76.4% retracement of the Jul 14 - Aug 11 downleg
• RES 1: 1.3061 High Aug 22
• PRICE: 1.3040 @ 06:38 BST Aug 23
• SUP 1: 1.2972/2913 Low Aug 22 / 20-day EMA
• SUP 2: 1.2828/2759 Low Aug 17 / 200-dma
• SUP 3: 1.2728 Low Aug 11 and key support
• SUP 4: 1.2685 76.4% retracement of the Jun 8 - Jul 14 upleg

USDCAD started the week on a bullish note. The pair has confirmed a clear break of resistance at 1.2985, the Aug 5 high and a key short-term hurdle for bulls. This break strengthens bullish conditions and attention is on 1.3107 next, a Fibonacci retracement. On the downside, key support has been defined at 1.2728, the Aug 11 low. Initial firm support is at 1.2913, the 20-day EMA.

FIXED INCOME

BUND TECHS: (U2) Southbound

• RES 4: 158.33/159.70 High Aug 3 / 2 and the bull trigger
• RES 3: 157.74 High Aug 10
• RES 2: 154.60/156.88 20-day EMA / High Aug 15
• RES 1: 153.70 50-day EMA
• PRICE: 151.31 @ 05:09 BST Aug 23
• SUP 1: 151.03 Low Aug 22
• SUP 2: 150.00 Round number support
• SUP 3: 149.69 Low Jul 21 and key short-term support
• SUP 4: 148.24 Low Jul 1

Bund futures traded lower again Monday, extending the pullback from the Aug 2 high of 159.70. The 50-day EMA has been cleared. This marked a key support area and the clear break has strengthened bearish conditions and signals scope for a continuation lower. This opens the 150.00 handle next. On the upside, initial firm resistance is at 156.88, Aug 15 high. Initial firm resistance is at 153.70, the 50-day EMA.

BOBL TECHS: (U2) Bear Cycle Extension

• RES 4: 128.060/128.760 High Aug 3 / 2 and the bull trigger
• RES 3: 127.580 High Aug 10
• RES 2: 126.323/127.290 20-day EMA / High Aug 15
• RES 1: 125.997 50-day EMA
• PRICE: 124.680 @ 05:16 BST Aug 23
• SUP 1: 124.550 Low Aug 22
• SUP 2: 124.350 50.0% retracement of the Jun 16 - Aug 2 rally
• SUP 3: 124.030 Low Jul 21 and a reversal trigger
• SUP 4: 123.309 61.8% retracement of the Jun 16 - Aug 2 rally

Bobl futures remain bearish and the contract traded lower once again Monday. The 50-day EMA has been breached and the deeper pullback has opened 124.030, the Jul 21 low and a reversal trigger. Note that the contract has also breached a trendline support drawn from the Jun 16 low, reinforcing bearish conditions. Initial firm resistance has been defined at 127.290, the Aug 15 high. The 50-day EMA at 125.997 is first resistance.

SCHATZ TECHS: (U2) Maintains A Bearish Tone

• RES 4: 110.380 High Aug 2 and the bull trigger
• RES 3: 110.100 HIgh Aug 3
• RES 2: 109.649/915 20-day EMA / High Aug 16
• RES 1: 109.600 50-day EMA
• PRICE: 109.225 @ 05:27 BST Aug 23
• SUP 1: 109.175 Low Aug 22
• SUP 2: 109.042 50.0% retracement of the Jun 16 - Aug 2 upleg
• SUP 3: 108.950 Low Jul 21 and a key support
• SUP 4: 108.727 61.8% retracement of the Jun 16 - Aug 2 upleg

Schatz futures continue to trade below the early August highs and price moved lower again Monday. Last week’s sell-off resulted in a break of the 50-day EMA, reinforcing bearish conditions. The focus is on 109.042, a Fibonacci retracement. On the upside, initial firm resistance has been defined at 109.915, the Aug 16 high. A break of this level is required to ease the current bearish pressure. The 50-day EMA, at 109.600, is first resistance.

GILT TECHS: (U2) Heading South

• RES 4: 118.10 High Aug 10
• RES 3: 117.15 High Aug 15 and key short-term resistance
• RES 2: 114.53/115.69 High Aug 18 / 20-day EMA
• RES 1: 113.57 High Aug 22
• PRICE: 112.38 @ Close Aug 22
• SUP 1: 112.13 Low Aug 22
• SUP 2: 111.72 Low Jun 29
• SUP 3: 110.57 Low Jun 21
• SUP 4: 109.89 Low Jun 16 and major support

Gilt futures remain vulnerable and last week’s sharp sell-off reinforces the current bearish climate. Monday’s sessions marked a bearish start to the week and recent weakness has also resulted in the break of trendline support drawn from the Jun 16 low. Attention is on 111.72, the Jun 29 low. Initial resistance is at 113.57, Aug 22 high. A firmer level has been defined at 117.15, Aug 15 high.

BTP TECHS: (U2) Bearish Outlook

• RES 4: 131.24 High May 12 (cont)
• RES 3: 130.00 Round number resistance
• RES 2: 129.36 High Aug 11 and the bull trigger
• RES 1: 125.38/127.15 50-day EMA / High Aug 17
• PRICE: 122.51@ Close Aug 22
• SUP 1: 121.88 76.4% retracement of the Jul 21 - Aug 11 upleg
• SUP 2: 120.85 Low Jul 22
• SUP 3: 119.57 Low Jul 21 and a key support
• SUP 4: 118.60 Low Jun 22

BTP futures bearish conditions have strengthened, following the sharp sell-off last week. The move lower has resulted in a break below both the 20- and 50-day EMAs. Furthermore, the move through 124.07 on Friday, confirmed a break of trendline support drawn from the Jun 14 low. The clear breach has opened 121.88, a Fibonacci retracement. Initial firm resistance is seen at 125.38, the 50-day EMA.

US 10YR FUTURE TECHS: (U2) Bear Cycle Extends

• RES 4: 122-02 High Aug 2 and key resistance
• RES 3: 120-29 High Aug 4
• RES 2: 119-31/120-22 High Aug 15 / 10
• RES 1: 118-14/119-09+ Intraday high / 20-day EMA
• PRICE: 117-22+ @ 19:48 BST Aug 22
• SUP 1: 117-14+ Low Jul 21 and key near-term support
• SUP 2: 117-07 61.8% retracement of the Jun 14 - Aug 2 bull cycle
• SUP 3: 116-26+ Low Jun 29
• SUP 4: 116-11 Low Jun 28

Treasuries maintain a softer tone and the contract has traded lower today. 118-05, 50.0% of the Jun 14 - Aug 2 bull cycle, has been cleared and this signals scope for an extension towards 117-14+ next, the Jul 21 low. Price has recently cleared a trendline support drawn from the Jun 14 low and this reinforces the current bearish theme. Initial firm resistance is at 119-31, the Aug 15 high.

EQUITIES

EUROSTOXX50 TECHS: (U2) Bear Cycle Remains In Play

• RES 4: 3877.30 50.0% of the Nov 18 ‘21 - Jul 5 bear leg (cont)
• RES 3: 3855.00 High Apr 21
• RES 2: 3822/40.00 High Aug 17 / High Jun 6 and key resistance zone
• RES 1: 3782.00 High Aug 18
• PRICE: 3652.00 @ 05:35 BST Aug 23
• SUP 1: 3635.00 Low Aug 22
• SUP 1: 3582.50 50.0% retracement of the Jul 5 - Aug 17 rally
• SUP 3: 3526.00 61.8% retracement of the Jul 5 - Aug 17 rally
• SUP 4: 3467.00 Low Jul 18 / 19

EUROSTOXX 50 futures remain in a bearish corrective phase. The move lower Friday and yesterday, marks an extension of the pullback from last week’s 3822.00 high. The 20-day EMA, at 3709.50, has been breached. The clear break signalled scope for an extension lower and exposed the 50-day EMA at 3650.80, which has been pierced. Key resistance has been defined at 3822.00 ahead of 3840.00 The latter is the Jun 6 high.

E-MINI S&P (U2): Corrective Pullback Extends

• RES 4: 4419.15 2.236 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 3: 4345.75 2.00 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 2: 4288.00/4327.50 High Aug 19 /16 and the bull trigger
• RES 1: 4221.50 High Aug 22
• PRICE: 4135.00 @ 06:48 BST Aug 23
• SUP 1: 4080.86 50-day EMA
• SUP 2: 4000.00 Round number support
• SUP 3: 3994.50 Low Jul 28
• SUP 4: 3913.25 Low Jul 26 and a key support

The S&P E-Minis outlook remains bullish, however, a corrective cycle remains in play, signalling scope for a deeper pullback near-term. This is allowing an overbought reading in momentum studies to unwind. The 20-day EMA has been breached and attention turns to the 50-day EMA, at 4080.86. Key resistance and the bull trigger is at 4327.50, the Aug 16 high. Initial resistance is at 4221.50, Monday’s high.

COMMODITIES

BRENT TECHS: (V2) Watching Resistance

• RES 4: $106.50 - High Jul 29 and a key resistance
• RES 3: $102.41 - High Aug 2 / 3
• RES 2: $100.21/38 - 50-day EMA / High Aug 12
• RES 1: $97.88 High Aug 19
• PRICE: $97.15 @ 06:51 BST Aug 23
• SUP 1: $91.22 - Low Jul 14 and the bear trigger
• SUP 2: $90.00 - Round number support
• SUP 3: $88.31 - Low Mar 9 and a key support
• SUP 4: $85.88 - Low Feb 25

Brent futures remain vulnerable and are trading in a volatile manner. A key short-term resistance has been defined at $100.38, Aug 12 high and the 50-day EMA intersects just below at $100.21. Attention is on support at $91.22, Jul 14 low. A break would confirm a resumption of the broader downtrend and strengthen bearish conditions. Clearance of $100.21/38 is required to highlight a reversal.

WTI TECHS: (V2) Bearish Outlook

• RES 4: $105.00 - High Jul 5
• RES 3: $99.75 - High Jul 29 and key resistance
• RES 2: $94.17/34 - High Aug 11 / 50-day EMA values
• RES 1: $91.69 20-day EMA
• PRICE: $90.88 @ 07:01 BST Aug 23
• SUP 1: $85.37 - Low Aug 16
• SUP 2: $84.10/00 - Low Mar 15 / Round number support
• SUP 3: $81.88 - Low Feb 25
• SUP 4: $80.00 - Round number support

WTI futures remain vulnerable, despite having bounced from last Wednesday's low. Last week’s move down resulted in a print below support at $86.06, the Aug 5 low. This reinforces bearish conditions and a clear break of this support would confirm a resumption of the downtrend. Attention is on $84.10, the Mar 15 low and the $84.00 handle. On the upside, key short-term resistance has been defined at $94.17, the Aug 11 high.

GOLD TECHS: Bear Cycle In Play

• RES 4: $1857.6 - High Jun 16
• RES 3: $1829.8 - 38.2% retracement of the Mar 8 - Jul 21 bear leg
• RES 2: $1779.5/1807.9 - 50-day EMA / High Aug 10 and bull trigger
• RES 1: $1764.9 - 20-day EMA
• PRICE: $1737.0 @ 07:15 BST Aug 23
• SUP 1: $1727.8 - Low Aug 22
• SUP 2: $1711.7 - Low Jul 27
• SUP 3: $1681.0 - Low Jul 21 and the bear trigger
• SUP 4: $1676.9 - Low Mar 8 2021

Gold remains weak, having extended the pullback from $1807.9, the Aug 10 high. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break highlighted a potential reversal of the 5-month downtrend. However, the failure to follow through and the breach last week of support at $1754.4 Aug 3 low, signals a failed attempt at clearing the trendline. A deeper pullback would open $1711.7. Key resistance is $1807.9.

SILVER TECHS: Remains Bearish

• RES 4: $21.000 - Round number resistance
• RES 3: $21.540 - High Jun 27
• RES 2: $20.876 - High Aug 15 and the bull trigger
• RES 1: $19.814 - 20-day EMA
• PRICE: $18.889 @ 07:21 BST Aug 23
• SUP 1: $18.723 - Low Aug 22
• SUP 2: $18.146/18.000 - Low Jul 14 / Round number support
• SUP 3: $17.312 - 3.00 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 4: $16.955 - Low Jun 15 2020

Silver remains bearish. The move lower last week resulted in a break of support at $19.551, Aug 5 low. The break of this level undermines the recent bullish theme and has exposed the key support and bear trigger at $18.146. A breach of this level would confirm a resumption of the broader downtrend. Key short-term resistance has been defined at $20.876, the Aug 15 high where a break is required to reinstate a bullish theme.