MNI DAILY TECHNICAL ANALYSIS - EUR/USD Fails to Clear Channel Resistance

Price Signal Summary – EUR/USD Fails to Clear Channel Resistance

• S&P E-Minis traded higher Tuesday and the outlook remains bullish. The move higher extends the positive price sequence of higher highs and higher lows. Moving average conditions are in a bull mode set-up too. Continued gains in EUROSTOXX 50 confirm a resumption of the current uptrend. The move higher maintains the bullish price sequence of higher highs and higher lows and attention is on resistance at 3840.00, the Jun 6 high.
• EURUSD remains below last week’s 1.0368 high (Aug 10). The recent move down appears to be a short-term reversal and means that the pair has failed to clear channel resistance. USDJPY traded higher Tuesday. Firm short-term resistance has been defined at 135.58, the Aug 8 high. The Aug 10 sell-off continues to highlight a reversal of the recent Aug 2 - 8 correction. The recent AUDUSD pullback is considered corrective - for now. The Aug 10 breach of 0.7047, Aug 1 high, confirmed a resumption of the uptrend that started Jul 14 and signals scope for a continuation higher.
• Gold is unchanged and the yellow metal maintains a bullish tone despite the latest retracement. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. WTI futures traded lower again Tuesday. This week’s move down has resulted in a print below support at $87.01, the Aug 5 low. The weakness reinforces bearish conditions and the break of $87.01 confirms a resumption of the downtrend.
• The recent retracement in Bund futures is still considered corrective and the short-term trend direction is up. Moving average studies are in a bull mode condition and the bullish price sequence of higher highs and higher lows is intact. Gilt futures still appear vulnerable. Last week’s extension lower resulted in a break of trendline support drawn from the Jun 16 low. The pullback this month is still considered corrective and the trend outlook remains bullish.

Figure 1: EUR/USD fails to clear downtrend channel resistance

FOREIGN EXCHANGE

EURUSD TECHS: Still Trading Inside The Bear Channel

• RES 4: 1.0488 High Jun 30
• RES 3: 1.0449 High Jul 5
• RES 2: 1.0308/68 Channel top from Feb 10 high / High Aug 10
• RES 1: 1.0221 20-day EMA
• PRICE: 1.0184 @ 06:04 BST Aug 17
• SUP 1: 1.0123 Low Aug 3 & 16
• SUP 2: 1.0097 Low Jul 27 and key short-term support
• SUP 3: 1.0007/0.9952 Low Jul 15 / 14 and the bear trigger
• SUP 4: 0.9944 1.618 projection of the Jun 9 - 15 - 27 price swing

EURUSD remains below last week’s 1.0368 high (Aug 10). The recent move down appears to be a short-term reversal and means that the pair has failed to clear channel resistance. The bear channel is drawn from the Feb 10 high and intersects at 1.0308. Attention is on support at 1.0123, Aug 3 low - a level traded on Tuesday. A break would strengthen the bearish theme. Key resistance is at 1.0368.

GBPUSD TECHS: Directional Triggers Defined

• RES 4: 1.2518 High Jun 6
• RES 3: 1.2406 High Jun 16 and a key resistance
• RES 2: 1.2332 High Jun 27
• RES 1: 1.2293 High Aug 01
• PRICE: 1.2120 @ 06:12 BST Aug 17
• SUP 1: 1.2004 Low Aug 5
• SUP 2: 1.1961 Low Jul 25
• SUP 3: 1.1890/1760 Low Jul 21 / Low Jul 14 and the bear trigger
• SUP 4: 1.1673 1.00 proj of the May 27 - Jun 14 - 16 price swing

Recent price action in GBPUSD highlights two important short-term directional triggers; resistance at 1.2293, the Aug 1 high and support at 1.2004, the Aug 5 low. The short-term trend outlook is bullish but a break of 1.2293 is required to reinforce this and signal a resumption of the bull cycle. A break would open 1.2406, the Jun 16 high. On the downside, clearance of support at 1.2004 would instead expose 1.1890, the Jul 21 low.

EURGBP TECHS: Heading South

• 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: 0.8441/8493 20-day EMA / High Aug 12
• PRICE: 0.8399 @ 06:19 BST Aug 17
• SUP 1: 0.8340 Low Aug 2 and the bear trigger
• SUP 2: 0.8313 Low Apr 22
• SUP 3: 0.8262 2.0% 10-dma envelope and low Apr 14
• SUP 4: 0.8203 Low Mar 7 and a key support

EURGBP is trading lower and the cross remains below Friday’s high. The broader outlook is bearish. Price action since mid-June has established a sequence of lower lows and lower highs and moving average studies are in a bear mode set-up too, reinforcing a bearish theme A continuation lower would open 0.8313, Apr 22 low. The bear trigger is 0.8340, Aug 2 low. Last Friday’s high of 0.8493 is the first resistance.

USDJPY TECHS: Bearish Focus

• RES 4: 137.27 76.4% retracement of the Jul 14 - Aug 2 downleg
• RES 3: 136.58 High Jul 28
• RES 2: 135.96 61.8% retracement of the Jul 14 - Aug 2 downleg
• RES 1: 134.68 High Aug 16
• PRICE: 134.12 @ 06:26 BST Aug 17
• SUP 1: 132.56/31.74 Low Aug 15 / Low Aug 11
• SUP 2: 130.41/130.00 Low Aug 2 / Round number support
• SUP 3: 129.51 Low Jun 2
• SUP 4: 128.64 Low Jun 1

USDJPY traded higher Tuesday. Firm short-term resistance has been defined at 135.58, the Aug 8 high. The Aug 10 sell-off continues to highlight a reversal of the recent Aug 2 - 8 correction. A broader bearish theme remains in place following the Jul 28 bull channel breakout. The channel is drawn from the Mar 4 low. A resumption of weakness would open 130.41, the Aug 2 low and the bear trigger.

EURJPY TECHS: Bearish Outlook Despite Bounce

• RES 4: 140.07/13 High Jul 25 / Trendline drawn from the Jun 28 high
• RES 3: 139.41 High Jul 28
• RES 2: 138.16/ 50-day EMA / High Aug 10
• RES 1: 137.40 20-day EMA
• PRICE: 136.55 @ 06:36 BST Aug 17
• SUP 1: 134.84 Low Aug 3
• 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 higher Tuesday. Despite these gains, the short-term outlook remains bearish. Moving average studies highlight a downtrend and the 50-day EMA, at 138.16, marks a firm resistance. A continuation lower would open the 133.40 bear trigger. Clearance of resistance at the 50-day EMA would alter the picture and signal scope for a climb towards the 140.13 trendline resistance.

AUDUSD TECHS: Recent Pullback Considered Corrective

• RES 4: 0.7283 High Jun 3 and a key resistance
• RES 3: 0.7246 High Jun 7
• RES 2: 0.7172 3.0% Upper Bollinger Band
• RES 1: 0.7141 76.4% retracement of the Jun 3 - Jul 14 downleg
• PRICE: 0.7024 @ 07:01 BST Aug 17
• SUP 1: 0.6988/6870 20-day EMA / Low Aug 5 and a key support
• SUP 2: 0.6786 Low Jul 18
• SUP 3: 0.6682 14 and the bear trigger
• SUP 4: 0.6647 0.764 proj of the Apr 5 - May 12 - Jun 3 price swing

The recent AUDUSD pullback is considered corrective - for now. The Aug 10 breach of 0.7047, Aug 1 high, confirmed a resumption of the uptrend that started Jul 14 and signals scope for a continuation higher. The break has also established a bullish price sequence of higher highs and higher lows on the daily chart and this has opened 0.7141, a Fibonacci retracement. Key support to watch is at 0.6870, Aug 5 low. A break would alter the picture.

USDCAD TECHS: Watching Key Short-Term Support

• RES 4: 1.3224 High Jul 14 and key resistance
• RES 3: 1.3135 High Jul 15
• RES 2: 1.2989/3038 3.0% Upper Bollinger Band / High Jul 18
• RES 1: 1.2934/85 High Aug 15 / 5
• PRICE: 1.2841 @ 07:22 BST Aug 17
• SUP 1: 1.2770/2750 Low Aug 15 / 200-dma
• SUP 2: 1.2728 Low Aug 11
• SUP 3: 1.2685 76.4% retracement of the Jun 8 - Jul 14 upleg
• SUP 4: 1.2589 2.0% 10-dma envelope

USDCAD reversed course Monday and the rally highlights a possible reversal of the recent bearish cycle. A continuation higher would expose resistance at 1.2985, the Aug 5 high and the next key short-term resistance. Clearance of this level would strengthen bullish conditions. On the downside, key support has been defined at 1.2728, the Aug 11 low where a break would reinstate a bearish threat and also highlight a breach of the 200-dma.

FIXED INCOME

BUND TECHS: (U2) Bullish Outlook Intact

• RES 4: 160.00 Round number resistance
• RES 3: 159.79 High Apr 4 (cont)
• RES 2: 158.33/159.70 High Aug 3 / 2 and the bull trigger
• RES 1: 157.74 High Aug 10
• PRICE: 155.81 @ 05:01 BST Aug 17
• SUP 1: 154.75 Low Jul 28
• SUP 2: 153.84 50-day EMA
• SUP 3: 149.69 Low Jul 21 and key short-term support
• SUP 4: 148.24 Low Jul 1

The recent retracement in Bund futures is still considered corrective and the short-term trend direction is up. Moving average studies are in a bull mode condition and the bullish price sequence of higher highs and higher lows is intact. A resumption of gains would open 159.79, Apr 4 high (cont). Key trend support has been defined at 149.69, Jul 21 low. A break is required to signal a potential top. Initial support is 154.75.

BOBL TECHS: (U2) Pullback Still Considered Corrective

• RES 4: 129.950 2.00 projection of the Jun 16 -24 - 28 price swing
• RES 3: 129.001 1.764 projection of the Jun 16 -24 - 28 price swing
• RES 2: 128.060/128.760 High Aug 3 / 2 and the bull trigger
• RES 1: 127.580 High Aug 10
• PRICE: 126.850 @ 05:05 BST Aug 17
• SUP 1: 126.450 Low Jul 28
• SUP 2: 126.100 50-day EMA
• SUP 3: 125.150 Low Jul 22
• SUP 4: 124.030 Low Jul 21 and a reversal trigger

Bobl futures found support Monday.The short-term trend remains up and the move lower since Aug 2 is still considered corrective. Moving average studies are in a bull mode and the bullish price sequence of higher highs and higher lows remains intact. A resumption of gains would open 129.001 next, a Fibonacci projection. Key support is 124.030, the Jul 21 low. Initial firm support is 126.450, the Jul 28 low.

SCHATZ TECHS: (U2) Bullish Focus

• RES 4: 110.500 High May 26 (cont)
• RES 3: 110.412 1.50 proj of the May 16 - 24 - 28 price swing
• RES 2: 110.100/380 High Aug 3 / Aug 2 and the bull trigger
• RES 1: 109.940 High Aug 10
• PRICE: 109.805 @ 05:14 BST Aug 17
• SUP 1: 109.670 Low Jul 28
• SUP 2: 109.640 50-day EMA
• SUP 3: 109.350 Low Jul 22
• SUP 4: 108.950 Low Jul 21 and a key support

Schatz futures continue to trade below the early August highs. The retracement lower this month is likely a correction and trend conditions still appear bullish. A fresh high on Aug 2, confirmed a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. The focus is on 110.412 next, a Fibonacci projection. Key support is unchanged at 108.950, Jul 21 low. Initial firm support is 109.670, Jul 28 low.

GILT TECHS: (U2) Corrective Pullback Still In Play

• RES 4: 121.07 High May 12 (cont)
• RES 3: 120.00 Round number resistance
• RES 2: 118.88/119.84 High Aug 4 / 2 and the bull trigger
• RES 1: 117.15/118.10 High Aug 15 / 10
• PRICE: 115.86 @ Close Aug 16
• SUP 1: 115.71 Low Aug 12
• SUP 2: 114.86 50.0% retracement of the Jun 16 - Aug 2 upleg
• SUP 3: 114.08 Low Jul 8 and a key support
• SUP 4: 113.69 61.8% retracement of the Jun 16 - Aug 2 upleg

Gilt futures still appear vulnerable. Last week’s extension lower resulted in a break of trendline support drawn from the Jun 16 low. The pullback this month is still considered corrective and the trend outlook remains bullish. However, an extension lower would expose 114.86 next, a Fibonacci retracement. On the upside, initial firm resistance has been defined at 118.10, the Aug 10 high. A break would be a bullish development.

BTP TECHS: (U2) Bull Flag

• RES 4: 131.61 High Apr 29 (cont)
• RES 3: 131.24 High May 12 (cont)
• RES 2: 130.00 Round number resistance
• RES 1: 129.36 High Aug 11 and the bull trigger
• PRICE: 126.73 @ Close Aug 16
• SUP 1: 126.83/125.62 Low Aug 3 / 50-day EMA
• SUP 2: 122.81 Low Jul 28
• SUP 3: 119.57 Low Jul 21 and key short-term support
• SUP 4: 118.60 Low Jun 22

BTP futures traded lower Tuesday. The pair is still in a consolidation mode and recent activity appears to be a bull flag formation. The trend direction is up. The break on Jul 29 of 126.41, Jul 1 high, established a broader bullish price sequence of higher highs and higher lows - the definition of an uptrend. Moving average studies are in a bull mode set-up too and attention is on the 130.00 handle next. Initial firm support lies at 125.62, 50-day EMA.

US 10YR FUTURE TECHS: (U2) Bounce Falters Ahead of 120-00

• RES 4: 122-29+ High Mar 31
• RES 3: 122-16 2.0% 10-dma envelope
• RES 2: 120-29/122-02 High Aug 4 / High Aug 02
• RES 1: 120-22 High Aug 10
• PRICE: 119-06+ @ 15:25 BST Aug 16
• SUP 1: 118-30+/30 Low Aug 12 / Jul 22
• SUP 2: 118-05 50.0% retracement of the Jun 14 - Aug 2 bull cycle
• SUP 3: 117-14+ Low Jul 21 and key near-term support
• SUP 4: 117-07 61.8% retracement of the Jun 14 - Aug 2 bull cycle

Treasuries bounced through late Monday hours, but sustained losses through the Tuesday open. This sees prices fail to make any headway on the 120-00 handle and the 120-22 post-CPI high. Weakness at the tail-end of last week put the contract through trendline support at 119-16. The trendline is drawn from the Jun 16 low. The recent move lower is still considered corrective, however, the trendline break suggests a deeper retracement is likely near-term. This has opened 118-05, a Fibonacci retracement. Initial resistance to watch is 120-22, the Aug 10 high. A break would signal a possible bullish reversal.

EQUITIES

EUROSTOXX50 TECHS: (U2) Trend Needle Still Points North

• RES 4: 3902.00 High Mar 29 and a key resistance
• RES 3: 3877.30 50.0% of the Nov 18 ‘21 - Jul 5 bear leg (cont)
• RES 2: 3855.00 High Apr 21
• RES 1: 3840.00 High Jun 6 and key resistance
• PRICE: 3818.00 @ 05:25 BST Aug 17
• SUP 1: 3691.00 Low Aug 10
• SUP 2: 3638.10/3553.00 50-day EMA / Low Jul 26
• SUP 3: 3467.00 Low Jul 18 / 19
• SUP 4: 3343.00 Low Jul 5 and the bear trigger

Continued gains in EUROSTOXX 50 confirm a resumption of the current uptrend. The move higher maintains the bullish price sequence of higher highs and higher lows and attention is on resistance at 3840.00, the Jun 6 high. A break of this hurdle would strengthen bullish conditions. On the downside, key support is seen at the 50-day EMA which intersects at 3638.10. A break would signal a possible reversal.

E-MINI S&P (U2): Northbound

• RES 4: 4419.15 2.236 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 3: 4400.00 Round number resistance
• RES 2: 4345.75 2.00 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 1: 4327.50 High Aug 16
• PRICE: 4312.00 @ 06:38 BST Aug 17
• SUP 1: 4208.25/4130.46 20-day EMA
• SUP 2: 4054.61/3913.25 50-day EMA / Low Jul 26 and a key support
• SUP 3: 3820.25 Low Jul 18
• SUP 4: 3723.75 Low Jul 14

S&P E-Minis traded higher Tuesday and the outlook remains bullish. The move higher extends the positive price sequence of higher highs and higher lows. Moving average conditions are in a bull mode set-up too. The focus is on 4345.75 next, a Fibonacci projection and potentially 4400.00 further out. On the downside, initial firm support is at 4130.46, the 20-day EMA. The 50-day EMA intersects at 4054.61 - a key support.

COMMODITIES

BRENT TECHS: (V2) Approaching The Bear Trigger

• RES 4: $112.92 - High Jun 29
• RES 3: $110.72 - High Jul 5
• RES 2: $106.50 - High Jul 29 and a key resistance
• RES 1: $100.38/96 - High Aug 12 / 50-day EMA
• PRICE: $92.80 @ 06:30 BST Aug 17
• 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 started the week on a softer note and the contract traded lower again Tuesday. The move lower has defined a key short-term resistance at $100.38, Aug 12 high, ahead of the 50-day EMA which intersects at $100.96. Attention is on support at $91.22, the Jul 14 low. A break would confirm a resumption of the broader downtrend and strengthen bearish conditions. Clearance of $100.38/96 is required to highlight a possible reversal.

WTI TECHS: (U2) Clears The Bear Trigger

• RES 4: $111.14 - High Jun 29
• RES 3: $108.28 - High Jul 5
• RES 2: $101.88 - High Jul 29 and key resistance
• RES 1: $95.05/96.98 - High Aug 11 / 50-day EMA values
• PRICE: $87.63 @ 06:59 BST Aug 17
• SUP 1: $85.73 - Low Aug 16
• SUP 2: $85.37 - Low Mar 15
• SUP 3: $83.51 - 1.50 projection of the Jun 8 - 22 - 29 price swing
• SUP 4: $81.34 - 1.618 projection of the Jun 8 - 22 - 29 price swing

WTI futures traded lower again Tuesday. This week’s move down has resulted in a print below support at $87.01, the Aug 5 low. The weakness reinforces bearish conditions and the break of $87.01 confirms a resumption of the downtrend. This has opened $85.37, the Mar 15 low and also exposes the $85.00 handle. On the upside, key short-term resistance has been defined at $95.05, the Aug 11 high.

GOLD TECHS: Remains Above Support

• RES 4: $1875 7 - 50.0% retracement of the Mar 8 - Jul 21 bear leg
• RES 3: $1857.6 - High Jun 16
• RES 2: $1829.8 - 38.2% retracement of the Mar 8 - Jul 21 bear leg
• RES 1: $1807.9 - High Aug 10 and the bull trigger
• PRICE: $1780.1 @ 07:14 BST Aug 17
• SUP 1: $1772.4/54.4 - 20-day EMA / Low Aug 3 and key S/T support
• SUP 2: $1711.7/1681.0 - Low Jul 27
• SUP 3: $1681.0 - Low Jul 21 and the bear trigger
• SUP 4: $1676.9 - Low Mar 8 2021

Gold is unchanged and the yellow metal maintains a bullish tone despite the latest retracement. Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break represents an important technical breach, highlighting a reversal of the 5-month downtrend. On the downside, a stronger pullback would threaten the bullish theme. Watch support at $1754.4 Aug 3 low. The bull trigger is $1807.9, Aug 10 high.

SILVER TECHS: Holding Above Support

• RES 4: $21.540 - High Jun 27
• RES 3: $21.000 - Round number resistance
• RES 2: $21.540 - High Jun 27
• RES 1: $20.876 - High Aug 15
• PRICE: $20.174 @ 07:59 BST Aug 17
• SUP 1: $19.551/062 - Low Aug 5 / Low Jul 28
• 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 is unchanged and remains bullish for now. Last week’s gains resulted in a break of resistance at $20.508, the Aug 2 high. This confirmed a resumption of the bull leg that started Jul 14 and the metal has established a bullish price sequence of higher highs and higher lows on the daily chart. The focus is on $21.540, Jun 27 high. Initial key support has been defined at $19.551, the Aug 5 low. A break would threaten the bull cycle.