MNI DAILY TECHNICAL ANALYSIS - EUR/GBP Cracks Key Support

Price Signal Summary - EUR/GBP Cracks Key Support

• In FX, EURUSD extended lower still Tuesday, touching new monthly and weekly lows at 1.1710. This narrows the gap with key support at the 2021 low printed back in March at 1.1704. EURGBP showed below key support Friday, worsening the outlook which had already tilted bearish. Moving average studies remain in a bear mode highlighting a downside theme, with losses toward the 1.0% 10-dma envelope at 0.8435 now the focus. USDJPY initially extended lower mid-last week, but has rallied since, rising back above the 110.00 handle. This works against the previously bearish theme, with markets now focusing on the Jul 14 high at 110.70.
• Brent futures are extending the recovery off the Monday $67.70 low, rising back above the Friday close in the latest bout of volatility for oil. Nonetheless, the move below the 50-day EMA last week looks convincing, with support now exposed at $66.91. Fragile and illiquid conditions in precious metals markets saw Gold prices spiral lower in early Asia-Pac trade Monday, with markets taking out all nearby support levels to print multi-month lows of $1690.6. The pull lower found some support at the 61.8% retracement of the 2020 range, but the recovery off the low will have emboldened bulls.
• S&P E-minis outlook is bullish as evidence of dip buying remains solid on intraday pullbacks. Recent gains have confirmed a resumption of the uptrend and signal scope for a continuation near-term. EUROSTOXX 50 futures continue to press onwards, extending the winning streak to six consecutive sessions of higher highs. This follows the break above previous resistance at 4101.50, Jul 1 high. The breach of this level places on hold the previously bearish outlook and instead signals scope for a stronger move higher.
• The winning streak in Bund futures concluded Friday, with bond markets globally edging lower. This ends the winning streak of 8 consecutive sessions of higher highs, although the outlook holds bullish. Any return higher targets 177.69, a Fibonacci extension.

FOREIGN EXCHANGE

EURUSD TECHS: Nearing Key Support

• RES 4: 1.2006 High Jun 29 / Jun 17
• RES 3: 1.1948/75 38.2% of the May 25 - Jul 21 sell-off / High Jun 25
• RES 2: 1.1930 High Jun 29
• RES 1: 1.1899 50-day EMA
• PRICE: 1.1721 @ 17:32 BST Aug 10
• SUP 1: 1.1710 Low Aug 10
• SUP 2: 1.1704 Low Mar 31 and a key support
• SUP 3: 1.1695 38.2% Fib 2020 - 2021 Rally
• SUP 4: 1.1603 Low Nov 04, 2020

EURUSD extended lower still Tuesday, touching new monthly and weekly lows at 1.1710. This narrows the gap with key support at the 2021 low printed back in March at 1.1704. Stiff support is expected here ahead of the 1.1685 mark, at which the 38.2% Fib crosses for the 2020 - 2021 rally. A further decline would be bearish indeed. For bulls to regain control, markets need to test the 50-day EMA at 1.1899. This average represents a key short-term resistance.

GBPUSD TECHS: Edging Lower

• RES 4: 1.4133 High Jun 16
• RES 3: 1.4088 76.4% retracement of the Jun 1 - Jul 20 sell-off
• RES 2: 1.4001 High Jun 23
• RES 1: 1.3990 61.8% retracement of the Jun 1 - Jul 20 sell-off
• PRICE: 1.3833 @ 17:37 BST Aug 10
• SUP 1: 1.3767 Low Jul 27
• SUP 2: 1.3691 Low Jul 22
• SUP 3: 1.3572 Low Jul 20 and the bear trigger
• SUP 4: 1.3520/10 Low Jan 18 / 2.0%10-dma envelope

GBPUSD traded lower into the Friday close, fading off key resistance. This puts the pair further off the 50-day EMA at 1.3890 which represents the key upside level. A close back above here signals scope for gains towards 1.3990 next, a Fibonacci retracement. Support undercuts at the Jul 27 low of 1.3767. Should this give way, the outlook deteriorates, opening scope toward the bear trigger of 1.3572.

EURGBP TECHS: Cracks Key Support

• RES 4: 0.8701/21 High May 7 / High Apr 26 and the bull trigger
• RES 3: 0.8672 High May 25
• RES 2: 0.8610/70 High Jul 22 / High Jul 20 and a key resistance
• RES 1: 0.8580 50-day EMA
• PRICE: 0.8471 @ 17:39 BST Aug 10
• SUP 1: 0.8450 Low Aug 10
• SUP 2: 0.8435 1.0% 10-dma envelope
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8277 Low Dec 13

EURGBP showed below key support Friday, worsening the outlook which had already tilted bearish. Moving average studies remain in a bear mode highlighting a downside theme, with losses toward the 1.0% 10-dma envelope at 0.8435 now the focus. On the upside, key resistance is unchanged at 0.8670, the Jul 20 high.

USDJPY TECHS: Reverts Further Off Lows

• RES 4: 111.71 High Mar 24, 2020
• RES 3: 111.66 High Jul 2 and the bull trigger
• RES 2: 110.70/82 High Jul 14/ High Jul 7
• RES 1: 110.60 High Aug 10
• PRICE: 110.55 @ 17:43 BST Aug 10
• SUP 1: 108.72 Low Aug 04
• SUP 2: 108.56 Low May 25
• SUP 3: 108.47/34 76.4% of the Apr 23 - Jul 2 rally / Low May 7
• SUP 4: 108.08 Low Apr 27

USDJPY initially extended lower mid-last week, but has rallied since, rising back above the 110.00 handle. This works against the previously bearish theme, with markets now focusing on the Jul 14 high at 110.70 initially ahead of 110.82. To the downside, attention is on 108.47, a Fibonacci retracement.

EURJPY TECHS: Support Intact

• RES 4: 132.43 High Jul 1
• RES 3: 131.86 Jul 6 high
• RES 2: 131.01/09 50-day EMA / High Jul 13
• RES 1: 130.56 High Jul 29
• PRICE: 129.62 @ 17:47 BST Aug 10
• SUP 1: 129.14 Low Aug 04
• SUP 2: 128.72/60 200-dma / Low Jul 20 and the bear trigger
• SUP 3: 128.29 Low Mar 24 and key support
• SUP 4: 127.88 38.2% retracement of the Oct '20 - Jun rally

EURJPY edged lower at the beginning of last week, exposing next key support at the 128.72 200-dma. This keeps the outlook bearish and recent gains are still considered corrective. A clear break of the average would reinforce the current bearish theme and signal scope for an extension of the downtrend. Note, moving average studies remain bearish. Potential is for a move to 127.88, 38.2% of the Oct '20 - Jun rally. 131.01 marks resistance, the 50-day EMA.

AUDUSD TECHS: Bearish Focus

• RES 4: 0.7523 50-day EMA
• RES 3: 0.7503 High Jul 13
• RES 2: 0.7487 High Jul 15
• RES 1: 0.7429 High Jul 19
• PRICE: 0.7347 @ 17:49 BST Aug 10
• SUP 1: 0.7290 Low Jul 21 and the bear trigger
• SUP 2: 0.7284 Low Nov 24, 2020
• SUP 3: 0.7235 1.382 proj of Feb 25 - Apr 1 - May 10 price swing
• SUP 4: 0.7222 Low Nov 13, 2020

AUDUSD remains in a range, but edged lower into the Friday close. The trend outlook is unchanged and bearish. This follows the recent breach of a channel base drawn from the Feb 25 high. Despite the fact that price has moved back inside the channel area, the move lower marks an important technical break, signalling potential for 0.7235 next, a 1.236 projection of the Feb 25 - Apr 1 - May 10 price swing. On the upside, initial resistance is at 0.7429, Jul 19 high.

USDCAD TECHS: Shallow Bounce

• RES 4: 1.2881 High Jan 28
• RES 3: 1.2807/46 High Jul 19 / 1.236 proj of Jun 1 - 21- 23 swing
• RES 2: 1.2730 High Jul 20
• RES 1: 1.2607 High Jul 23
• PRICE: 1.2531 @ 17:51 BST Aug 10
• SUP 1: 1.2421 50-day EMA
• SUP 2: 1.2407 50.0% retracement of the Jun 1 - Jul 19 rally
• SUP 3: 1.2313 61.8% retracement of the Jun 1 - Jul 19 rally
• SUP 4: 1.2253 Low Jun 23

USDCAD bounced Friday, but the rally was insufficient to alter the outlook. This follows weakness that pressed the price through support at the 1.2500 handle, but managed to steer clear of key levels down at the 1.2421 50-day EMA. This reverses the positivity evident in the rise up toward recent highs at 1.2605, which markets need to top to initiate any further rally. A rise through here opens initial resistance at 1.2607, Jul 23 high. A break of this level would signal the resumption of bullish activity. To the downside, attention is on the 50-day EMA that intersects at 1.2421.

FIXED INCOME

BUND TECHS: (U1) Off Highs

• RES 4: 178.32 High Jan 27 (cont)
• RES 3: 178.12 High Jan 27
• RES 2: 177.69 1.764 proj of the May 19 - Jun 11 - Jun 22 price swing
• RES 1: 177.61 High Aug 05
• PRICE: 176.55 @ 17:05 BST Aug 10
• SUP 1: 175.82/24 Low Jul 27 / Low Jul 22
• SUP 2: 174.77/45 High Jul 8 / Low Jul 15
• SUP 3: 173.79 50-day EMA
• SUP 4: 173.70 Low Jul 13 and 14

The winning streak in Bund futures concluded Friday, with bond markets globally edging lower. This ends the winning streak of 8 consecutive sessions of higher highs, although the outlook holds bullish. Any return higher targets 177.69, a Fibonacci extension. Moving average conditions remain in bull mode, reinforcing the current positive trend structure. Any pullback would initially target the late July lows of 175.62/24.

BOBL TECHS: (U1) Rally Pauses

• RES 4: 136.583 1.0% 10-dma envelope
• RES 4: 136.041 61.8% March Downtick
• RES 3: 135.700 High Dec 11 (cont)
• RES 2: 135.640 High Aug 05
• PRICE: 135.240 @ 17:09 BST Aug 10
• SUP 1: 135.030/134.900 Low Jul 26 / Low Jul 22
• SUP 2: 134.834/710 20-day EMA / High Jul 8
• SUP 3: 134.562 50-day EMA
• SUP 4: 134.410 Low Jul 13 and a key support

Bobl futures edged off recent highs, but the pullback hasn't altered the bullish trend. This opens gains toward the Dec 11 2020 highs of 135.700 and a key Fib level at 136.041. Current support remains untroubled at 134.900, Jul 22 low. A break through here opens losses toward 135.030.

SCHATZ TECHS: (U1) Coming Under Pressure

• RES 4: 112.505 High November 2020
• RES 3: 112.450 High Dec 11, 2020 (cont)
• RES 2: 112.415 High Aug 05
• RES 1: 112.412 2.50 proj of the Jun 22 - Jul 8 - Jul 13 price swing
• PRICE: 112.325 @ 17:11 BST Aug 10
• SUP 1: 112.285 Low Jul 26
• SUP 2: 112.245 Low Jul 21
• SUP 3: 112.210 Low Jul 20
• SUP 4: 112.180/150 Low Jul 16 / Low Jul 13

Schatz futures are off the highs, but remain bullish despite the Friday pullback. The clear break on Jul 20 of resistance at 112.210, Jun 11 high established an uptrend. Further gains are favoured after the print of 112.390, with the focus on 112.412 next, a Fibonacci projection. Recent gains have also established a bullish price sequence of higher highs and higher lows, the definition of an uptrend. Initial firm support is seen at 112.285, Jul 26 low.

GILT TECHS: (U1) Fades Off Bull Trigger

• RES 4: 131.72 38.2% retracement of the Mar'20 - Jun'21 sell-off
• RES 3: 131.37 38.2% retracement of the Aug '20 - Jun sell-off
• RES 2: 130.88 200-dma (cont)
• RES 1: 130.72 High Aug 3 / 2.236 proj of the May 13 - 26 - Jun 3 price swing / bull trigger
• PRICE: 129.57 @ 17:11 BST Aug 10
• SUP 1: 129.10 Low Jul 22
• SUP 2: 128.54/39 Low Jul 14 / High Jun 11 and recent breakout level
• SUP 3: 128.03 Jul 6
• SUP 4: 127.25 Low Jun 10

Gilt futures saw decent intraday buying mid-last week, pushing the high watermark up to 130.72 before prices faded, with markets ensuring a bearish weekly close. Nonetheless, there remains a bullish outlook which has dominated since the break of 129.92, Jul 8 high. The move above this level confirmed a resumption of the uptrend from mid-May and maintains a bullish price sequence of higher highs and higher lows. The focus shifts to the 130.88 200-dma. Watch support at 128.54, low Jul 14.

BTP TECHS: (U1) Just Off Contract Highs

• RES 4: 156.73 1.236 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 3: 156.48 3.0% Upper Bollinger Band
• RES 2: 155.76 1.0% 10-dma envelope
• RES 1: 155.71 High Aug 04
• PRICE: 155.19 @ 17:24 BST Aug 10
• SUP 1: 153.16/152.65 20-day EMA / Low Jul 14
• SUP 2: 152.59 Bull channel base drawn off the May 19 low
• SUP 3: 151.93/54 Low Jul 8 / Low Jul 6
• SUP 4: 151.19 High Jul 1

BTPs further cemented the uptrend mid-last week, extending the gains to hit fresh alltime highs. Friday's price action was less constructive, but a bullish outlook remains intact. A positive outlook follows the recent resumption of the uptrend that started May 19 - gains on Jul 6 and 7 resulted in a breach of a former key resistance at 152.47, Jun 14 high and established a bullish price sequence of higher highs and higher lows. Subsequent gains reinforce the positive theme and attention is on vol band resistance layered between 155.76 - 156.73.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Extends Streak of Higher Highs

• RES 4: 4218.10 2.0% 10-dma envelope
• RES 3: 4218.00 1.00 proj of the May 13 - Jun 17 - Jul 19 price swing
• RES 2: 4198.51 2.0% Upper Bollinger Band
• RES 1: 4192.00 High Aug 10
• PRICE: 4188.50 @ 17:26 BST Aug 10
• SUP 1: 4029.50 Low Jul 22
• SUP 2: 3944.00/3895.00 Low Jul 21 / Low Jul 19
• SUP 3: 3871.00 Low Jul 21 / Low May 19
• SUP 4: 3830.00 Low May 13 and a key support

EUROSTOXX 50 futures continue to press onwards, extending the winning streak to six consecutive sessions of higher highs. This follows the break above previous resistance at 4101.50, Jul 1 high. The breach of this level places on hold the previously bearish outlook and instead signals scope for a stronger move higher. Attention shifts to the 4218.00 Fibonacci projection. Key support has been defined at 3895.00.

E-MINI S&P (U1): Bullish Weekly Close

• RES 4: 4542.58 1.236 proj of Jun 21 - Jul 14 - 19 price swing
• RES 3: 4500.00 Round number resistance
• RES 2: 4481 75.1.00 proj of Jun 21 - Jul 14 - 19 price swing
• RES 1: 4438.25 High Aug 10
• PRICE: 4433.75 @ 17:30 BST Aug 10
• SUP 1: 4348.92 20-day EMA
• SUP 2: 4276.18/4224.00 50-day EMA / Low Jul 19 and key support
• SUP 3: 4126.75 Low Jun 21
• SUP 4: 4046.00 Low May 19

S&P E-minis outlook is bullish as evidence of dip buying remains solid on intraday pullbacks. Recent gains have confirmed a resumption of the uptrend and signal scope for a continuation near-term. The sell-off Jul 14 - 19 resulted in a break of 4279.25, Jul 8 low. However the contract found support at the 50-day EMA - this EMA represents an important support and the bounce from it is bullish. The focus is on 4481.75 next, a Fibonacci projection. Key support is 4224.00, Jul 19 low.

COMMODITIES

BRENT TECHS: (V1) Shallow Rebound

• RES 4: $78.03 - High Oct 29, 2018 (cont)
• RES 3: $76.80 - High Jul 6 and the bull trigger
• RES 2: $75.92 - High Jul 14
• RES 1: $75.15 - High Jul 29
• PRICE: $70.96 @ 16:25 BST Aug 10
• SUP 1: $68.83 - 5.0% 10-dma envelope
• SUP 2: $67.60 - Low Aug 05
• SUP 3: $66.91 - Jul 20 low and Bear trigger
• SUP 4: $65.75 - Low May 24

Brent futures are extending the recovery off the Monday $67.70 low, rising back above the Friday close in the latest bout of volatility for oil. Nonetheless, the move below the 50-day EMA last week looks convincing, with support now exposed at $66.91. To resume any incline, bulls need to again take out $74.47, the 76.4% retracement of the Jul 6 - 20 downleg. A break and close back above here opens key resistance at $76.80, Jul 6 high.

WTI TECHS: (U1) More Comfortable Below 50-Day EMA

• RES 4: $76.90 High Oct 3, 2018 (cont)
• RES 3: $76.48 0.764 proj of the May 21 - Jul 6 - Jul 20 price swing
• RES 2: $76.07 - High Jul 6 and the bull trigger
• RES 1: $73.68/74.90 - High Jul 29 / High Jul 13
• PRICE: $68.61 @ 16:35 BST Aug 10
• SUP 1: $65.15 - Low Aug 09
• SUP 2: $65.01/64.60 - Low Jul 20 / 76.4% of the May 21 - Jul 6 rally
• SUP 3: $63.10 - Low May 24
• SUP 4: $61.06 - Low May 21 and key support

WTI futures bounced Tuesday, rising back above the Monday high and erasing the weakness seen at the beginning of the week. Nonetheless, prices hold south of the 50-day EMA at 69.73, which switches from support to resistance. This re-initiates the downside argument, opening $65.01, Jul 20 low and the key support. To resume recent gains, WTI needs to top the 50-dma at 70.96 initially well ahead of Jul30 highs of 74.23.

GOLD TECHS: Turning Lower

• RES 4: $1877.5 - 76.4% retracement of the Jun 1 - 29 decline
• RES 3: $1863.3 - High Jun 16
• RES 2: $1853.3 - 61.8% retracement of the Jun 1 - 29 decline
• RES 1: $1834.1 - High Jul 15 and the bull trigger
• PRICE: $1730.0 @ 16:43 BST Aug 10
• SUP 1: $1690.6 Low Aug 08
• SUP 2: $1689.9 - 61.8% 2020 Range
• SUP 3: $1678.0 - Low Mar 31
• SUP 4: $1676.9 - Low Mar 08

Fragile and illiquid conditions in precious metals markets saw prices spiral lower in early Asia-Pac trade Monday, with markets taking out all nearby support levels to print multi-month lows of $1690.6. The pull lower found some support at the 61.8% retracement of the 2020 range, but the recovery off the low will have emboldened bulls. To reinforce any upside argument, bulls need to regain $1834.1, Jul 15 high, ahead of $1853.3, a Fibonacci retracement.

SILVER TECHS: Imminent Death Cross

• RES 4: $27.831 - High Jun 16
• RES 3: $26.775/27.245 - High Jul 6 and key resistance / High Jun 17
• RES 2: $26.467 - High Jul 14
• RES 1: $26.002 - High Aug 04
• PRICE: $23.409 @ 16:45 BST Aug 10
• SUP 1: $22.684 - 4.0% Lower Bollinger Band
• SUP 2: $22.626 - Low Aug 09
• SUP 3: $21.899 - Low Nov 30, 2020
• SUP 4: $20.751 - 50% 2020 Range

Silver followed gold sharply lower in early Asia-Pac trade Monday, clearing through all nearby support to touch the lowest levels since late 2020. This has accelerated the formation of a death cross in DMA space, with the 50-dma likely to dip This further shows the fragile nature of the price action, although bulls will have taken heart from the swift bounce off $22.626. A break and close below Monday's low would be resolutely bearish, opening key Fib support at 20.751. Bulls need to retake last week's highs at $26.002 to repair the picture.