MNI DAILY TECHNICAL ANALYSIS - Equity Recovery Suggests Corrective Phase Underway

Price Signal Summary – Equity recovery suggests corrective phase underway

• S&P E-Minis maintains a bullish tone and is trading at its recent highs. A bullish theme follows the reversal from 3502.00, the Oct 13 low. The recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. EUROSTOXX 50 futures maintain a firmer tone and the contract is holding on to its recent gains. The recent move higher has resulted in a break of both the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger.
• EURUSD is trading at its recent highs. Price is also trading above a key resistance at 0.9874, the top of the bear channel drawn from the Feb 10 high. A clear channel breakout would highlight an important technical breach and a stronger bullish reversal. EURGBP is unchanged and continues to trade above its recent lows. A short-term bear threat remains present. The strong reversal from 0.9266, Sep 26 high and the breach of support at 0.8649, the Oct 4 low, suggests scope for an extension lower. AUDUSD gains are considered corrective. A bearish theme remains intact and moving average studies continue to highlight a downtrend. Price has recently cleared 0.6363, Sep 28 low and a bear trigger.
• Despite the latest bounce, Gold remains in a downtrend. This follows the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4 and note that price remains below the trendline resistance drawn from the Mar 8 high. The WTI futures outlook is unchanged and remains bearish. This is highlighted by the current moving average set-up. A resumption of weakness would open $79.63, a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low.
• Bund futures remain in a downtrend and short-term gains are considered corrective. The contract recently cleared support at 135.14, Oct 12 low. This confirms a resumption of the primary downtrend and with 135.00 pierced, scope is seen for a continuation lower. Gilt futures traded higher Monday and started the week on a bullish note. The current corrective bull cycle remains in play. Price has cleared the 20-day EMA and a continuation higher would signal scope for a test of key resistance at 100.92.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Channel Breakout?

• RES 4: 1.0198 High Sep 12 and a key resistance
• RES 3: 1.0051 High Sep 20
• RES 2: 0.9999 High Oct 4 and a reversal trigger
• RES 1: 0.9913 50-day EMA
• PRICE: 0.9882 @ 05:40 BST Oct 25
• SUP 1: 0.9817 20-day EMA
• SUP 2: 0.9705/9633 Low Oct 21 / 13
• SUP 3: 0.9536 Low Sep 28 and key support
• SUP 4: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing

EURUSD is trading at its recent highs. Price is also trading above a key resistance at 0.9874, the top of the bear channel drawn from the Feb 10 high. A clear channel breakout would highlight an important technical breach and a stronger bullish reversal. This would open 0.9999, the Oct 4 high. On the downside, a failure to hold on to recent gains and remain above the channel top would expose firm support at 0.9705, the Oct 21 low.

GBPUSD TECHS: Bullish Outlook

• RES 4: 1.1738 High Sep 13 and a key resistance
• RES 3: 1.1590 High Sep 14
• RES 2: 1.1495 High Oct 5 and the bull trigger
• RES 1: 1.1420 50-day EMA
• PRICE: 1.1297 @ 05:53 BST Oct 25
• SUP 1: 1.1061/1058 Low Oct 21 / 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 unchanged and continues to trade inside its recent range. The short-term outlook is bullish and a resumption of gains would signal scope for a climb towards 1.1495, the Oct 5 high and a bull trigger. Clearance of this level would strengthen a bull cycle plus highlight scope for a stronger reversal. On the downside, key near-term support is unchanged at 1.0924, the Oct 12 low. A break of this level would instead reinstate a bearish theme.

EURGBP TECHS: Resistance Remains Intact

• 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: 0.8781/8867 High Oct 21 / 12
• PRICE: 0.8742 @ 06:07 BST Oct 25
• SUP 1: 0.8660 Low Oct 24
• SUP 2: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 3: 0.8522 Low Aug 30
• SUP 4: 0.8471 Low Aug 28

EURGBP is unchanged and continues to trade above its recent lows. A short-term bear threat remains present. The strong reversal from 0.9266, Sep 26 high and the breach of support at 0.8649, the Oct 4 low, suggests scope for an extension lower near-term with sights on 0.8559 next, a Fibonacci retracement. Key short-term resistance has been defined at 0.8867, the Oct 12 high, where a break would reinstate a bullish theme.

USDJPY TECHS: Remains Above Monday’s Low

• RES 4: 153.39 3.764 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 3: 152.30 High Jul 1990
• RES 2: 151.95 High Oct 21
• RES 1: 149.71/150.44 High Oct 24 / 76.4% of the Oct 21 - 24 pullback
• PRICE: 148.93 @ 06:23 BST Oct 25
• SUP 1: 146.84/145.56 20-day EMA / Low Oct 24
• SUP 2: 145.17 Low Oct 10
• SUP 3: 143.51 50-day EMA
• SUP 4: 141.77 Low Sep 23

USDJPY managed to find support Monday at 145.56 and just below the 20-day EMA currently at 146.84. The volatile pullback is likely a correction and the primary uptrend remains intact. Moving average studies continue to highlight a positive trend cycle. Attention is on 150.00. A break of this level would reinforce the bullish theme and signal scope for a climb towards the 151.95, the bull trigger and last week’s high (Oct 21). Key support is 145.56.

EURJPY TECHS: Holding On To Monday’s Gains

• RES 4: 149.46 1.382 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 3: 148.88 High Dec 9 2014
• RES 2: 148.40/45 High Oct 21 and the bull trigger / High Dec 15 2014
• RES 1: 147.42 Intraday high
• PRICE: 147.06 @ 06:47 BST Oct 25
• SUP 1: 145.64 / 143.80 High Sep 12 / Low Oct 24 and key support
• SUP 2: 141.99 50-day EMA
• SUP 3: 140.90 Low Oct 10
• SUP 4: 139.44/137.40 Low Sep 29 / 26 and key support

The EURJPY uptrend remains intact and the latest sharp pullback appears to be a correction. The cross has found strong support below 144.18, the 20-day EMA and key support has been defined at 143.80, Monday’s low. A continuation higher would open last Friday’s high of 148.40. This is the bull trigger and a break would confirm a resumption of the uptrend. Moving average studies continue to highlight a bullish backdrop.

AUDUSD TECHS: Trend Needle Still Points South

• RES 4: 0.6656 High Sep 23
• RES 3: 0.6563 50-day EMA
• RES 2: 0.6547 High Oct 4 and key resistance
• RES 1: 0.6384/6411 20-day EMA / High Oct 24
• PRICE: 0.6319 @ 08:24 BST Oct 25
• SUP 1: 0.6210/6170 Low Oct 21 / 13 and the bear trigger
• 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 gains are considered corrective. A bearish theme remains intact and moving average studies continue to highlight a downtrend. Price has recently cleared 0.6363, Sep 28 low and a bear trigger. This confirmed a resumption of the primary downtrend and exposes 0.6133 next, a Fibonacci projection. On the upside, initial firm resistance to watch is 0.6391, the 20-day EMA. It has been pierced although the price is below the EMA once again.

USDCAD TECHS: Watching Support At The 20-Day EMA

• 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: 1.3855/3977 High Oct 21 / 13 and the bull trigger
• PRICE: 1.3712 @ 08:09 BST Oct 25
• SUP 1: 1.3671/3607 20-day EMA / Low Oct 24
• SUP 2: 1.3503 Low Oct 4 and a key support
• SUP 3: 1.3448 50-day EMA
• SUP 4: 1.3358 Low Sep 21

USDCAD has for now, found support below the 20-day EMA. This average, at 1.3671, is an important S/T support. The broader uptrend remains intact and the recent pullback is considered corrective. The recovery from 1.3503, Oct 10 high, reinforced bullish conditions. Moving average studies also highlight an uptrend and 1.3838, Sep 30 high has been cleared. A clear break of the 20-day EMA would suggest scope for a pullback towards 1.3503, Oct 4 low.

FIXED INCOME

BUND TECHS: (Z2) Short-Term Gains Considered Corrective

• RES 4: 141.23 50-day EMA
• RES 3: 140.13 High Oct 6
• RES 2: 138.52 High Oct 14 and key resistance
• RES 1: 137.65 20-day EMA
• PRICE: 136.59 @ 05:15 BST Oct 25
• SUP 1: 134.02 Low Oct 21
• SUP 2: 133.74 0.618 proj of the Aug 2 - 12 - 15 price swing
• SUP 3: 132.89 Low Oct 28 2011
• SUP 4: 132.61 0.764 proj of the Aug 2 - 12 - 15 price swing

Bund futures remain in a downtrend and short-term gains are considered corrective. The contract recently cleared support at 135.14, Oct 12 low. This confirms a resumption of the primary downtrend and with 135.00 pierced, scope is seen for a continuation lower. The extension maintains the bearish price sequence of lower lows and lower highs and opens 133.74 next, a Fibonacci extension. Key short-term resistance is at 138.52, the Oct 14 high.

BOBL TECHS: (Z2) Corrective Bounce

• RES 4: 121.950 High Oct 4 and the bull trigger
• RES 3: 121.330 High Oct 5
• RES 2: 119.960 High Oct 14 and a key resistance
• RES 1: 119.365 20-day EMA
• PRICE: 118.940 @ 05:30 BST Oct 25
• SUP 1: 117.630 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 2: 117.342 2.618 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 117.000 Round number support
• SUP 4: 116.410 3.00 proj of the Aug 25 - Sep 1 - Sep 6 price swing

Bobl futures traded higher Monday. The trend remains down and gains are considered corrective. Last week’s move lower cleared support and the bear trigger at 118.020, Sep 28 low. The break confirms a resumption of the primary downtrend and marks an extension of the price sequence of lower lows and lower highs. This opens 117.630, a Fibonacci projection. On the upside, key short-term resistance is at 119.960, the Oct 14 high.

SCHATZ TECHS: (Z2) Primary Downtrend Remains Intact

• RES 4: 108.010 High Sep 13
• RES 3: 107.770 High Oct 4 and the reversal trigger
• RES 2: 107.180/360 High Oct 13 and key resistance/ High Oct 6
• RES 1: 106.964 20-day EMA
• PRICE: 106.810 @ 05:43 BST Oct 25
• SUP 1: 106.350 Low Oct 21 and the bear trigger
• SUP 2: 106.270 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 106.00 Round number support
• SUP 4: 105.800 Low Nov 2008 (cont)

The Schatz futures primary trend direction is down and the latest recovery is likely a correction. Last week’s move lower resulted in a break of support at 106.535, Sep 26 low. This has confirmed a resumption of the primary downtrend and maintains the bearish price sequence of lower lows and lower highs. The focus is on 106.270 next, a Fibonacci extension. Key short-term resistance has been defined at 107.180, the Oct 13 high.

GILT TECHS: (Z2) Approaching Key Short-Term Resistance

• 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: 100.72 High Oct 24
• PRICE: 100.23 @ Close Oct 24
• SUP 1: 97.80/95.82 20-day EMA / Low Oct 21
• SUP 2: 94.82/92.66 Low Oct 17 / 14
• SUP 3: 90.99/90.38 Low Sep 28 / Low Oct 12 and the bear trigger
• SUP 4: 90.00 Psychological round number

Gilt futures traded higher Monday and started the week on a bullish note. The current corrective bull cycle remains in play. Price has cleared the 20-day EMA and a continuation higher would signal scope for a test of key resistance at 100.92, the Oct 4 high. A break of this level would strengthen bullish conditions. Initial support has been defined at 95.82, the Oct 21 low. A breach of this support would instead signal a potential bearish reversal.

BTP TECHS: (Z2) Bear Cycle Remains Intact

• RES 4: 116.71 High Oct 4 and key resistance
• RES 3: 115.70 High Oct 5
• RES 2: 113.41 High oct 6
• RES 1: 112.25 High Oct 12
• PRICE: 111.63 @ Close Oct 24
• SUP 1: 108.82 Low Oct 21
• 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 short-term gains are considered corrective. The reversal from 116.71, Oct 4 high, signals the end of the Sep 28 - Oct 4 corrective cycle. A resumption of weakness would open the key support and bear trigger at 108.13, Sep 28 low. Clearance of this level would confirm a resumption of the broader downtrend. 116.71 marks the key resistance.

US 10YR FUTURE TECHS: (Z2) Trend Needle Still Points South

• RES 4: 113-23 50-day EMA
• RES 3: 112-22+ High Oct 6
• RES 2: 111-28+ High Oct 12 and key near-term resistance
• RES 1: 110-16+ 20-day EMA
• PRICE: 109-24 @ 15:07 BST Oct 24
• SUP 1: 108-26+ Low Oct 21
• SUP 2: 108-06+ Low Oct 2007 (cont)
• SUP 3: 107.09 3.0% 10-dma envelope
• SUP 4: 106-20+ Low Aug 2007 (cont)

Despite the recovery from Friday’s low, Treasuries remain in a downtrend. The extension lower last week confirmed a break of support at 110.02, the Oct 13 low and the psychological 110.00 handle. This marks a resumption of the primary downtrend and an extension of the bearish price sequence of lower lows and lower highs. The focus is on 108-20, a Fibonacci projection. Initial firm resistance has been defined at 111-28+, high Oct 13.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Bullish And Has Cleared Trendline Resistance

• RES 4: 3692.00 High Aug 26
• RES 3: 3678.00 High Sep 13 and a key resistance
• RES 2: 3585.00 High Sep 14
• RES 1: 3551.00 High Oct 24
• PRICE: 3533.00 @ 06:40 BST Oct 25
• SUP 1: 3418.00 Low Oct 21
• SUP 2: 3352.00 Low Oct 14
• SUP 3: 3251.00/3236.00 Low Oct 13 / 3 and a key support zone
• SUP 4: 3305.00 Low Oct 11

EUROSTOXX 50 futures maintain a firmer tone and the contract is holding on to its recent gains. The recent move higher has resulted in a break of both the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger. Price has also breached trendline resistance drawn from the Aug 17 high. The trendline intersects at 3469.60 and the breach strengthens bullish conditions. Initial firm support is at 3418.00, the Oct 14 low.

E-MINI S&P (Z2): Key Short-Term Resistance Remains Exposed

• 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: 3829.80 50-day EMA
• RES 1: 3820.00/22.00 High Oct 5 and a bull trigger / High Oct 24
• PRICE: 3806.50 @ 06:54 BST Oct 25
• SUP 1: 3641.50 Low Oct 21
• SUP 2: 3590.50/3502.00 Low Oct 17 / 13 and the bear trigger
• SUP 3: 3491.13 50.0% retracement of the 2020 - 2022 bull cycle
• SUP 4: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis maintains a bullish tone and is trading at its recent highs. A bullish theme follows the reversal from 3502.00, the Oct 13 low. The recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. Attention is on resistance at 3820.00, the Oct 5 high and a bull trigger. Key support is unchanged at 3502.00. Initial support is at 3641.50, the Oct 21 low.

COMMODITIES

BRENT TECHS: (Z2) Trading Below Resistance

• 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: $95.17/98.75 - High Oct 12 / 10 and key near-term resistance
• PRICE: $93.47 @ 07:07 BST Oct 25
• SUP 1: $91.00/88.67 - Low Oct 21 / 61.8% of the Sep 26 - Oct 10 rally
• SUP 2: $86.29 - 76.4% 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 are unchanged and trading below last week’s high. A bearish theme remains intact and recent gains are considered corrective. A number of important retracement levels have recently been breached. Attention is on $88.67 next, 61.8% of the Sep 26 - Oct 10 rally. A break would open $86.29, the 76.4% level. On the upside, initial firm resistance to watch is at $95.17, the Oct 12 high. Clearance of this level would ease the bearish threat.

WTI TECHS: (Z2) Outlook Remains Bearish

• RES 4: $97.38 - 61.8% retracement of the Jun 8 - Sep 26 downleg
• RES 3: $95.55 - High Aug 30
• RES 2: $88.66/92.34 - High Oct 12 / 10 and key resistance
• RES 1: $87.14 - High Oct 20
• PRICE: $84.73 @ 07:16 BST Oct 25
• SUP 1: $81.30 - Low Oct 18
• SUP 2: $79.63 - 76.4% retracement points of the Sep 26 - Oct 10 rally
• SUP 3: $78.36 - Low Sep 30
• SUP 4: $75.70 - Low Sep 26 and the bear trigger

The WTI futures outlook is unchanged and remains bearish. This is highlighted by the current moving average set-up. A resumption of weakness would open $79.63, a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low. The bear trigger is $81.30, the Oct 18 low. On the upside, the key short-term resistance to watch is at $92.34, the Oct 10 high. Initial firm resistance is at $88.66, Oct 12 high.

GOLD TECHS: Primary Trend Direction Remains Down

• RES 4: $1735.1 - High Sep 12 and a key resistance
• RES 3: $1729.5 - High Oct 4 and the bull trigger
• RES 2: $1691.7 - 50-day EMA
• RES 1: $1670.5 - High Oct 24
• PRICE: $1650.0 @ 07:21 BST Oct 25
• SUP 1: $1615.0 - Low Sep 28 and the bear trigger
• SUP 2: $1610.5 - 1.00 proj of the Jun 13 - Jul 21 - Aug 10 swing
• SUP 3: $1600.00 - Round number support
• SUP 4: $1569.1 - Low Apr 1 2020

Despite the latest bounce, Gold remains in a downtrend. This follows the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4 and note that price remains below the trendline resistance drawn from the Mar 8 high. Sights are on the key support and bear trigger at $1615.0, the Sep 28 low. On the upside, the next firm resistance is at $1691.7, the 50-day EMA.

SILVER TECHS: Corrective Cycle

• 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: $19.724 - High Oct 11
• PRICE: $19.220 @ 08:17 BST Oct 25
• 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 despite the recovery from last week’s lows. The recent move below the 50-day EMA has reinforced bearish conditions. This signals scope for a continuation of the reversal that started Oct 4 and the focus is on the next firm support at $17.967, the Sep 28 low. Clearance of this level would open $17.562, the Sep 1 low and the bear trigger. Initial resistance is seen at $19.724, the Oct 11 high.