MNI DAILY TECHNICAL ANALYSIS - Equity Outlook Turns Constructive

Price Signal Summary – Equity Outlook Turns Constructive

• In the equity space, EUROSTOXX 50 futures continue to appreciate and the contract has cleared the 50-day EMA. The focus is on 4200.50, Sep 24 high. S&P E-minis continue to trade higher. Futures have cleared the 50-day EMA and the follow through is encouraging for bulls. The focus is on resistance at 4472.00, Sep 27 high. It's an important short-term resistance and a break would signal potential for stronger gains near-term.
• In FX, attention is on resistance in EURUSD at the 20-day EMA that intersects at 1.1627. A break is required to signal scope for a stronger recovery however, short-term gains would be considered corrective with a broader bearish trend condition still intact. GBPUSD traded higher once again Friday and the rally that started late September remains intact. The 50-day EMA has been cleared, this suggests scope for a stronger short-term rally that has opened 1.3795 next, a Fibonacci retracement. USDJPY remains firm. A strong bullish theme follows last week's gains that confirmed a clear break of a long-term trendline (at 113.41) drawn off the December 1975 high.
• On the commodity front, Gold has failed to hold onto recent highs and Friday's sharp reversal lower highlights a developing bearish threat. Kery short-term resistance has been defined at $1800.6, the Oct 14 high. WTI trend conditions remain bullish and the contract has confirmed an extension once again today. The move to fresh highs maintains the bullish price sequence of higher highs and higher lows, reinforcing the uptrend.
• In the FI space, Bund futures have entered a corrective phase last week following the strong bounce from 168.21, Oct 12 low. Initial resistance is seen at 169.97, the 20-day EMA where a break would signal scope for a stronger short-term recovery, towards 170.55, Oct 4 high. Gilt futures remain above recent lows. Short-term gains are considered corrective and last week's gains have allowed a recent oversold condition to unwind. Resistance is seen at the 20-day EMA that intersects at 125.40.

FOREIGN EXCHANGE

EURUSD TECHS: Remains Below The 20-Day EMA

• RES 4: 1.1821 High Sep 16
• RES 3: 1.1752/55 Bear channel from Jun 1 high / High Sep 22
• RES 2: 1.1708 50-day EMA
• RES 1: 1.1627/40 20-day EMA / High Oct 4
• PRICE: 1.1579 @ 06:06 BST Oct 18
• 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: 1.1412 Bear channel base drawn from the Jun 1 high

EURUSD is trading above recent lows. Attention is on resistance at the 20-day EMA that intersects at 1.1627 today. A break is required to signal scope for a stronger recovery however, short-term gains would be considered corrective with a broader bearish trend condition still intact. A price sequence of lower lows and lower highs and bearish moving average conditions both highlight a downtrend. The bear trigger is unchanged at 1.1524, Oct 12 low.

GBPUSD TECHS: Eyeing The Next Fibonacci Retracement

• RES 4: 1.3913 High Sep 14
• RES 3: 1.3854 High Sep 15
• RES 2: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 1: 1.3773 High Oct 15
• PRICE: 1.3731 @ 06:14 BST Oct 18
• SUP 1: 1.3650 20-day EMA
• SUP 2: 1.3544/3412 Low Oct 6 / Low Sep 29 and the bear trigger
• SUP 3: 1.3354 Low Dec 23, 2020
• SUP 4: 1.3359 2.0% 10-dma envelope

GBPUSD traded higher once again Friday and the rally that started late September remains intact. The 50-day EMA has been cleared, this suggests scope for a stronger short-term rally that has opened 1.3795 next, a Fibonacci retracement. On the downside, a firm short-term support has been defined at 1.3544, Oct 6 low. A break of this level would reinstate a bearish focus and open 1.3412, Sep 29 low and the bear trigger.

EURGBP TECHS: Maintains A Weaker Tone

• RES 4: 0.8624/58 High Oct 1 / High Sep 29
• RES 3: 0.8540 50-day EMA
• RES 2: 0.8518 High Oct 12 and a firm resistance
• RES 1: 0.8487 High Oct 15
• PRICE: 0.8437 @ 06:20 BST Oct 18
• SUP 1: 0.8424 Low Oct 15
• SUP 2: 0.8408 1.0% 10-dma envelope
• SUP 3: 0.8356 Low Feb 26, 2020
• SUP 4: 0.8339 Low Feb 25, 2020

EURGBP weakness extended further Friday and a bearish theme remains intact. The cross has cleared 0.8450, the Oct 10 low and a key support. This reinforces a bearish theme and paves the way for an extension lower, opening 0.8408, a vol based support. Further out, there is scope too for an extension below 0.8400. Firm resistance has been defined at 0.8518, Oct 12 high.

USDJPY TECHS: Remains Firm

• RES 4: 116.09 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.48 1.618 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 114.50/83 2.0% 1.382 Fibonacci proj / 10-dma envelope
• PRICE: 114.34 @ 06:31 BST Oct 18
• SUP 1: 113.00 Low Oct 12
• SUP 2: 112.08 High Sep 30 and a recent breakout level
• SUP 3: 111.51 Low Oct 8
• SUP 4: 110.82/80 Low Oct 4 / High Aug 11

USDJPY remains firm. A strong bullish theme follows last week's gains that confirmed a clear break of a long-term trendline (at 113.41) drawn off the December 1975 high. This marks a potentially significant break from both a short and medium-term perspective and signals scope for further gains. Attention is on a vol band resistance at 114.83. On the downside, initial firm support is seen at 112.08, Sep 30 high and a recent breakout level.

EURJPY TECHS: Bull Rally Remains In Place

• RES 4: 134.40 2.382 proj of the Sep 22 - 29 - Oct 6 price swing
• RES 3: 134.13 High Jun 1 and a key resistance
• RES 2: 133.68 High Jun 15
• RES 1: 132.78 High Oct 15
• PRICE: 132.41 @ 06:43 BST Oct 18
• SUP 1: 131.81/27 Low Oct 15 / Low Oct 14
• SUP 2: 130.75 Sep 3 high
• SUP 3: 129.93 50-day EMA
• SUP 4: 129.28 Low Oct 11

EURJPY closed last week's session on a firm note. The reversal higher from 128.33, Oct 6 low has reinstated a near-term bullish theme and the cross has cleared 130.75, Sep 3 high and a recent bull trigger. This has strengthened the case for bulls and the breach of a number of key short-term resistance points above 130.75 reinforces the current positive outlook. The focus is on 133.68 next, the Jun 15 high. Initial firm support is at 130.75.

AUDUSD TECHS: Eyeing Key Resistance

• 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: 0.7440 High Oct 15
• PRICE: 0.7404 @ 06:46 BST Oct 18
• SUP 1: 0.7336 50-day EMA
• SUP 2: 0.7288 Low Oct 8
• SUP 3: 0.7226/7170 Low Oct 6 / Low Sep 29
• SUP 4: 0.7106 Low Aug 20 key support

AUDUSD maintains a firmer short-term tone with the pair continuing to trade above the 20- and 50-day EMAs. The recent break above these averages suggests scope for further gains. The focus is on 0.7478, Sep 3 high and a key short-term resistance. A breach of this hurdle would strengthen a bullish case and remove recent bearish considerations. Initial firm support is seen at 0.7336, the 50-day EMA.

USDCAD TECHS: Trading Near Recent Lows

• RES 4: 1.2648 High Oct 6
• RES 3: 1.2576 50-day EMA
• RES 2: 1.2494 Low Sep 3 and a recent breakout level
• RES 1: 1.2449 High Oct 14
• PRICE: 1.2397 @ 06:52 BST Oct 18
• SUP 1: 1.2303 Low Jul 6
• SUP 2: 1.2269/53 2.0% 10-dma envelope / Lo Jun 23
• SUP 3: 1.2229 76.4% retracement of the Jun - Aug rally
• SUP 4: 1.2157 Low Jun 16

The USDCAD bear cycle that started Sep 20 remains in place. Key support at the Jul 30 low of 1.2422 has been cleared reinforcing bearish conditions and signalling scope for an extension of the downleg. This has opened 1.2303, Jul 6 low. Note too that moving average conditions appear to be turning bearish, reinforcing the current sentiment. Initial firm resistance is seen at 1.2494, Sep 3 low. A break would ease the bearish threat.

FIXED INCOME

BUND TECHS: (Z1) Resistance Remains Intact

• RES 4: 171.72 High Sep 23
• RES 3: 170.92 50-day EMA
• RES 2: 170.55 High Oct 4 and key near-term resistance
• RES 1: 169.97 20-day EMA
• PRICE: 169.00 @ 05:18 BST Oct 18
• SUP 1: 168.64/21 Low Oct 13 / Low Oct 12 and the bear trigger
• 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 have entered a corrective phase last week following the strong bounce from 168.21, Oct 12 low. Initial resistance is seen at 169.97, the 20-day EMA where a break would signal scope for a stronger short-term recovery, towards 170.55, Oct 4 high. The broader trend condition remains bearish and moving average signals continue to point south. The trigger for a resumption of the downtrend is 168.21.

BOBL TECHS: (Z1) Starting The Week On A Soft Note

• 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: 134.941 20-day EMA
• PRICE: 134.450 @ 05:24 BST Oct 18
• SUP 1: 134.320 Low Oct 13 and the bear trigger
• 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 are starting the week on a softer note. The pullback Friday and this morning suggest the short lived correction last week is over. Resistance is seen at 134.941, the 20-day EMA and a breach of this level is required to signal scope for a stronger bounce towards 135.060, the Oct 7 high. The broader trend condition remains bearish and an extension lower would open 134.320, the Oct 13 low and the bear trigger.

SCHATZ TECHS: (Z1) Correction Appears To Be Over

• 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: 112.220 High Oct 14
• PRICE: 112.140 @ 05:30 BST Oct 18
• SUP 1: 112.135 Low Oct 13 and the bear trigger
• 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 is weaker this morning. Resistance at the 20-day EMA has contained the recent corrective bounce - a probe of the average last week failed to result in a clear break. On the downside, attention is on the bear trigger, at 112.135, the Oct 13 low. Clearance of this level would confirm a resumption of the downtrend and open 112.13, a Fibonacci projection.

GILT TECHS: (Z1) Gains Considered Corrective

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.72 High Oct 1
• RES 1: 125.40 20-day EMA
• PRICE: 125.07 @ Close Oct 15
• 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 lows. Short-term gains are considered corrective and last week's gains have allowed a recent oversold condition to unwind. Resistance is seen at the 20-day EMA that intersects at 125.40. A break of this resistance area would signal scope for a stronger recovery. The broader trend direction remains down and a resumption of weakness would refocus attention on last week's low of 123.44 and the bear trigger.

BTP TECHS: (Z1) Trend needle Still Points South

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.54/87 High Oct 14 / High Oct 1
• PRICE: 151.97 @ Close Oct 15
• 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 traded higher last week. Short-term gains are considered corrective with initial firm resistance at 152.87, Oct 1 high. The trend needle still points south - the contract traded lower Oct 6, confirming a resumption of the downtrend. Furthermore, a price sequence of lower lows and lower highs that defines a downtrend remains intact. The bear trigger is 151.00, Oct 6 low. A break would confirm a resumption of the downtrend.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Holding Onto Last Week's Gains

• 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: 4200.50 High Sep 24
• RES 1: 4175.00 High Oct 15
• PRICE: 4168.50 @ 05:56 BST Oct 18
• SUP 1: 4094.70 50-day EMA
• SUP 2: 4004.00 / 3949.50 Low Oct 12 / Low Oct 6 and bear trigger
• SUP 3: 3902.50 Low Jul 20
• SUP 4: 3882.00 Low Jul 19 and a key support

EUROSTOXX 50 futures are holding onto last week's gains. Price action has cleared the 50-day EMA. The clear breach of this average and the recent break of a number of short-term resistance points, has opened 4200.50, the Sep 24 high. Above the level is the major resistance and bull trigger at 4223.00, Sep 6 high. On the downside, the 50-day EMA, at 4094.70 today marks initial support.

E-MINI S&P (Z1): Firm Ahead Of Resistance

• 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: 4472.00 High Sep 27
• PRICE: 4456.50 @ 06:58 BST Oct 18
• SUP 1: 4390.54 50-day EMA
• SUP 2: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger
• SUP 3: 4243.50 Low Jul 20
• SUP 4: 4214.50 Low Jul 19 and a key support

S&P E-minis recovered last week and price action on Oct 14 resulted in a move above the 50-day EMA - at 4390.54 today. A clear breach of the average has undermined recent bearish signals and suggests scope for a stronger recovery. Attention is on 4472.00, Oct 7 high and a breach of this hurdle would open 4539.50, the Sep 3 high and bull trigger. Initial key support is at 4317.25, Oct 12 low. A break would instead expose 4260.00, Oct 1 low.

COMMODITIES

BRENT TECHS: (Z1) Fresh Trend High Print

• RES 4: $90.00 - Psychological round number
• RES 3: $88.74 - 2.00 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $86.55 - 1.764 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $86.04 - Intraday high
• PRICE: $85.69 @ 06:56 BST Oct 18
• SUP 1: $82.20/80.30 - Low Oct 13 / 20-day EMA
• 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

The current bull trend in Brent futures remains intact and a fresh high print has been confirmed today. The continuation higher resumes the uptrend again and maintains 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 $86.55 next, a Fibonacci projection. Initial firm short-term support is seen at $82.20, Oct 13 low.

WTI TECHS: (X1) Bull Trend Extension

• RES 4: 487.05 - 2.236 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 3: $84.97 - 2.00 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 2: $84.00 - Round number resistance
• RES 1: $83.73 - Intraday high
• PRICE: $83.41 @ 07:04 BST Oct 18
• SUP 1: $79.42 - Low Oct 13
• SUP 2: $77.27 - 20-day EMA
• SUP 3: $74.96 - Low Oct 7 and key near-term support
• SUP 4: $73.14 - Low Sep 30 and key support

WTI trend conditions remain bullish and the contract has confirmed an extension once again today. The move to fresh highs maintains the 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 $84.97 next, a Fibonacci projection. On the downside, key short-term support has been defined at $79.42, Oct 13 low.

GOLD TECHS: Bearish Reversal Threat

• 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: $1800.6 - High Oct 14 and key short-term resistance
• PRICE: $1762.8 @ 07:21 BST Oct 18
• SUP 1: $1758.3 - Low Oct 13
• SUP 2: $1746.0 - Low Oct 6 and key near-term support
• SUP 3: $1721.7 - Low Sep 29 and the bear trigger
• SUP 4: $1717.8 - Low Aug 10

Gold has failed to hold onto recent highs and Friday's sharp reversal lower highlights a developing bearish threat. Kery short-term resistance has been defined at $1800.6, the Oct 14 high. An extension lower would expose support at $1746.0, Oct 6 low and clearance of this level would reinforce the bearish threat and attention would turn to $1721.7, Sep 29 low. For bulls, a break of $1800.6 is required to reinstate the recent bullish theme.

SILVER TECHS: Trading Near Recent Highs

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $24.411 - High Sep 8
• RES 1: $23.965 - High Sep 16
• PRICE: $23.223 @ 07:29 BST Oct 18
• 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 is trading near recent highs. Last week the metal cleared the 20-day EMA and traded above the 50-day EMA. A continuation higher would pave the way for a stronger short-term recovery and open $23.965 next, the Sep 16 high. Clearance of this level would suggest potential for stronger gains towards $24.867, the Sep 3 high. This also marks a key short-term resistance. Initial firm support to watch is at $22.213, Oct 6 low.