MNI DAILY TECHNICAL ANALYSIS - EURGBP Overbought Setup Unwinds
MNI (LONDON) - Price Signal Summary – EURGBP Overbought Condition Unwinds
- S&P E-Minis traded higher yesterday and the contract maintains a firmer tone. The rally this week has resulted in a break of the 50-day EMA. This highlights a stronger reversal and signals the end of the corrective cycle between Jul 16 - Aug 5. Eurostoxx 50 futures traded sharply higher Thursday, extending the recovery that started Aug 5. The contract has traded through the 20-day EMA and attention is on resistance at the 50-day EMA, at 4866.79.
- A bullish theme in EURUSD remains intact despite Thursday’s move lower. The pair traded higher Tuesday and Wednesday, extending this week’s bull phase. Resistance at 1.1008, the Aug 5 high, has been cleared and this confirms a resumption of the uptrend. EURGBP has traded lower this week, marking an extension on the current corrective cycle. A retracement is allowing an overbought condition to unwind. First support to watch is 0.8516, the 20-day EMA. A firmer support lies at the 50-day EMA, at 0.8494.AUDUSD continues to trade at its recent highs. From a short-term perspective, the latest recovery still appears to be a correction, however, price has traded through both the 20- and 50-day EMAs.
- Gold is unchanged and the metal is holding on to its latest gains. Recent weakness appears to be corrective and the trend structure remains bullish. Note that price recently pierced support at the 50-day EMA - currently at $2391.6.WTI futures rallied sharply higher Monday. The move undermines a recent bearish theme and price has traded through both the 20- and 50-day EMAs. A resumption of gains would signal scope for a climb towards $80.77, a Fibonacci retracement.
- A bullish trend condition in Bund futures remains intact and recent gains reinforce this theme. 133.21, Jun 14 high, was cleared on Jul 29, confirming a resumption of the uptrend. Note that MA studies are in a bull-mode position too. The trend condition in Gilt futures remains bullish and the latest pullback appears to have been a correction. Note that the move lower has allowed an overbought trend reading to unwind. A resumption of gains would signal scope for a climb towards 101.78.
FOREIGN EXCHANGE
EURUSD TECHS: Trend Structure Remains Bullish
- RES 4: 1.1229 High Jul 20 2023
- RES 3: 1.1150 High Jul 27 2023
- RES 2: 1.1139 High Dec 29 2023 and a key resistance
- RES 1: 1.1047/1084 High Aug 14 / High Dec 29 2023
- PRICE: 1.0982 @ 06:03 BST Aug 16
- SUP 1: 1.0909 20-day EMA
- SUP 2: 1.0861 50-day EMA
- SUP 3: 1.0778 Low Aug 1 and a key support
- SUP 4: 1.0736 Low Jul 3
A bullish theme in EURUSD remains intact despite Thursday’s move lower. The pair traded higher Tuesday and Wednesday, extending this week’s bull phase. Resistance at 1.1008, the Aug 5 high, has been cleared and this confirms a resumption of the uptrend. Sights are on 1.1084, the Dec 29 ‘23 high. Note MA studies remain in a bull-mode set-up, highlighting a rising trend condition. Initial support to watch lies at 1.0909, the 20-day EMA.
GBPUSD TECHS: Recovery Extends
- RES 4: 1.3114 - 2.00 proj of the Apr 22 - May 3 - 9 price swing
- RES 3: 1.3044 High Jul 17 and the bull trigger
- RES 2: 1.2955 76.4% retracement of the Jul 17 - Aug 8 bear leg
- RES 1: 1.2899 61.8% retracement of the Jul 17 - Aug 8 bear leg
- PRICE: 1.2875 @ 06:13 BST Aug 16
- SUP 1:1.2787/2665 50-day EMA / 8 and the bear trigger
- SUP 2: 1.2613 Low Jun 27 and a key support
- SUP 3: 1.2584 61.8% retracement of the Apr 22 - Jul 17 bull cycle
- SUP 4: 1.2510 Low May 14
GBPUSD is holding on to this week’s gains. The move higher that started Aug 8, undermines the recent bearish theme. Price has traded above the 20-day EMA - at 1.2811. A continuation higher would highlight a stronger reversal and signal scope for 1.2955, a Fibonacci retracement. Key support has been defined at 1.2665, the Aug 8 low, where a break is required to once again resume recent bearish activity.
EURGBP TECHS: Approaching Support
- RES 4: 0.8715 High Dec 28
- RES 3: 0.8677 76.4% retracement of the Nov 20 ‘23 - Jul 17 bear leg
- RES 2: 0.8645 High Apr 23 and a key resistance
- RES 1: 0.8591/8625 High Aug 14 / 8 and the bull trigger
- PRICE: 0.8531 @ 06:47 BST Aug 16
- SUP 1: 0.8516 20-day EMA
- SUP 2: 0.8494 50-day EMA
- SUP 3: 0.8454 Low Aug 2
- SUP 4: 0.8418 Low Aug 1
EURGBP has traded lower this week, marking an extension on the current corrective cycle. A retracement is allowing an overbought condition to unwind. First support to watch is 0.8516, the 20-day EMA. A firmer support lies at the 50-day EMA, at 0.8494. For bulls, recent impulsive gains highlight potential for 0.8645, the Apr 23 high and a key resistance. Note that moving average studies are in bull-mode set-up, highlighting an uptrend.
USDJPY TECHS: Corrective Phase Extends
- RES 4: 155.22 High Jul 30
- RES 3: 153.25 50-day EMA
- RES 2: 149.99 20-day EMA
- RES 1: 149.32 High Aug 15
- PRICE: 149.03 @ 06:35 BST Aug 16
- SUP 1: 145.44 Low Aug 8
- SUP 2: 141.70/140.82 Low Aug 5 and the bear trigger / Low Jan 2
- SUP 3: 140.25 Low Dec 28 ‘23 and a key support
- SUP 4: 138.07 Low Dec 28
USDJPY rallied Thursday and the pair is holding on to its latest gains. Overall, the bearish condition remains intact, leaving the latest recovery as corrective in nature. Note that the downtrend remains oversold, and the latest recovery is allowing this set-up to unwind. Resistance to watch is 149.99, the 20-day EMA. A reversal lower would refocus attention on key support at 141.70, the Aug 5 low.
EURJPY TECHS: Cracks Resistance At The 20-Day EMA
- RES 4: 167.53 Low Jun 14
- RES 3: 166.41 50-day EMA
- RES 2: 164.12 200 DMA
- RES 1: 163.89 High Aug 15
- PRICE: 163.64 @ 07:03 BST Aug 16
- SUP 1: 159.79 Low Aug 12
- SUP 2: 157.30/154.42 Low Aug 6 / 5 and the bear trigger
- SUP 3: 153.87 Low Dec 14 ‘23
- SUP 4: 153.23 Low Dec 7 ‘23 and a key support
The outlook in EURJPY is overall bearish, however, a corrective cycle remains in play and the cross is holding on to its recent gains. Note that the latest move higher is allowing an oversold condition to unwind. The cross has taken out firm resistance at the 163.61, the 20-day EMA. A continuation higher would expose the 50-day EMA, at 166.41. For bears, a reversal lower would signal the end of the correction and open 154.42, the Aug 5 low.
AUDUSD TECHS: Has Breached Moving Average Resistance
- RES 4: 0.6799 High Jul 11 and key resistance
- RES 3: 0.6744 High Jul 18
- RES 2: 0.6693 76.4% retracement of the Jul 11 - Aug 5 bear leg
- RES 1: 0.6643 High Aug 14
- PRICE: 0.6634 @ 07:57 BST Aug 16
- SUP 1: 0.6565 Low Aug 12
- SUP 2: 0.6508/6350 Low Aug 8/ 5 and the bear trigger
- SUP 3: 0.6339 Low Nov 10’23
- SUP 4: 0.6315 Low Oct 31 ‘23
AUDUSD continues to trade at its recent highs. From a short-term perspective, the latest recovery still appears to be a correction, however, price has traded through both the 20- and 50-day EMAs. A continuation higher would undermine a bearish theme and signal scope for stronger gains, towards 0.6693, a Fibonacci retracement. For bears, a reversal would refocus attention on 0.6530, the Aug 5 low.
USDCAD TECHS: Corrective Cycle
- RES 4: 1.4048 High May 22 2020
- RES 3: 1.3977 High Oct 13, 2022
- RES 2: 1.3856/3946 High Aug 6 / 5 and bull trigger
- RES 1: 1.3755 20-day EMA
- PRICE: 1.3720@ 08:01 BST Aug 16
- SUP 1: 1.3689/57 Low Aug 14 / Low Jul 17
- SUP 2: 1.3589 Low Jun 11 and a key support
- SUP 3: 1.3547 Low Apr 9
- SUP 4: 1.3478 Low Apr 4
The trend condition in USDCAD remains bullish and the latest pullback still appears to be a correction. However, note that price has breached an important support at 1.3730, the 50-day EMA. An extension lower would undermine the bull theme and highlight scope for a deeper retracement towards 1.3657, the Jul 17 low. On the upside, a confirmed reversal higher would refocus attention on 1.3946, the Aug 5 high and key resistance.
FIXED INCOME
BUND TECHS: (U4) Support Remains Intact
- RES 4: 137.26 3.50 projection of the May 31 - Jun 5 - 1 price swing
- RES 3: 136.99 3.382 projection of the May 31 - Jun 5 - 1 price swing
- RES 2: 136.45 76.4% of the Dec 27 - May 31 downleg (cont)
- RES 1: 135.17/136.28 High Aug 14 / 5 and the bull trigger
- PRICE: 134.37 @ 05:37 BST Aug 16
- SUP 1: 133.99 20-day EMA
- SUP 2: 132.96 50-day EMA
- SUP 3: 131.62 Low Jul 22 and a key support
- SUP 4: 131.39 Low Jul 15
A bullish trend condition in Bund futures remains intact and recent gains reinforce this theme. 133.21, Jun 14 high, was cleared on Jul 29, confirming a resumption of the uptrend. Note that MA studies are in a bull-mode position too. A resumption of the trend would open 136.45, a Fibonacci retracement. The contract remains below the Aug 5 high, a pullback is allowing an overbought condition to unwind. Support to watch is 133.90, the 20-day EMA.
BOBL TECHS: (U4) Corrective Cycle Remains In Play
- RES 4: 120.000 Psychological round number
- RES 3: 119.730 2.00 proj of the May 31 - Jun 14 - Jul 5 price swing
- RES 2: 119.234 1.764 proj of the May 31 - Jun 14 - Jul 5 price swing
- RES 1: 118.300/119.090 High Aug 14 / 5 and the bull trigger
- PRICE: 117.760 @ 05:50 BST Aug 16
- SUP 1: 117.621 20-day EMA
- SUP 2: 117.095/116.320 50-day EMA / Low Jul 22
- SUP 3: 115.980 Low Jul 10 / 11
- SUP 4: 115.530 Low Jul and the key short-term support
The uptrend in Bobl futures remains intact and the pullback from the Aug 5 high appears to be a correction. This move down is allowing an overbought condition to unwind. Recent gains resulted in a breach of a key resistance at 117.160, the Jun 14 high. This break, together with the subsequent impulsive rally, reinforces current conditions. Sights are on 119.234, a Fibonacci projection. Initial firm support to watch is 117.621, the 20-day EMA.
SCHATZ TECHS: (U4) Monitoring Support At The 20-Day EMA
- RES 4: 107.120 2.00 proj of the May 24 - Jun 14 - Jul 5 price swing
- RES 3: 107.000 Round number resistance
- RES 2: 106.916 1.764 proj of the May 24 - Jun 14 - Jul 5 price swing
- RES 1: 106.500/106.810 High Aug 6 / 5 and the bull trigger
- PRICE: 106.180@ 06:03 BST Aug 15
- SUP 1: 106.150 20-day EMA
- SUP 2: 105.941/630 50-day EMA / Low Jul 22
- SUP 3: 105.495 Low Jul 11
- SUP 4: 105.390 Low Jul 5 and a key support
An uptrend in Schatz futures remains intact and the latest pullback still appears to be a correction. Note that for now, the contract remains above an initial firm support at 106.150, the 20-day EMA. It has been pierced, a clear break of it would be seen as an early bearish threat. Support at the 50-day EMA, lies at 105.941. For bulls, a resumption of gains would signal the end of the corrective cycle and open 106.916, a Fibonacci projection.
GILT TECHS: (U4) Corrective Phase Remains In Play
- RES 4: 102.15 2.382 proj of the May 29 - Jun 4 - 10 price swing
- RES 3: 102.00 Round number resistance
- RES 2: 101.78 2.236 proj of the May 29 - Jun 4 - 10 price swing
- RES 1: 100.80/101.46 High Aug 14 / High Aug 5 and the bull trigger
- PRICE: 99.83 @ Close Aug 15
- SUP 1: 99.44 20-day EMA
- SUP 2: 98.74/97.46 50-day EMA / Low Jul 26 and a key support
- SUP 3: 96.96 Low Jul 3
- SUP 4: 96.57 Low Jul 1
The trend condition in Gilt futures remains bullish and the latest pullback appears to have been a correction. Note that the move lower has allowed an overbought trend reading to unwind. A resumption of gains would signal scope for a climb towards 101.78, a Fibonacci projection point. Initial key support lies at 99.44, the 20-day EMA. Moving average studies remain in a bull-mode set-up, highlighting an uptrend.
BTP TECHS: (U4) Trend Needle Points North
- RES 4: 121.25 2.382 proj of the Jun 11 - 21 - Jul 2 price swing
- RES 3: 120.85 2.236 proj of the Jun 11 - 21 - Jul 2 price swing
- RES 2: 120.20 2.00 proj of the Jun 11 - 21 - Jul 2 price swing
- RES 1: 120.00 Psychological round number
- PRICE: 119.14 @ Close Aug 15
- SUP 1: 118.71/117.95 20- and 50-day EMA values
- SUP 2: 116.07 Low Jul 8
- SUP 3: 114.72 Low Jul 2
- SUP 4: 114.35 Low Jun 11 and key support
The medium-term trend in BTP futures remains bullish and Wednesday’s fresh cycle high reinforces this theme. The contract has breached resistance at 119.57, Aug 2 high, confirming a resumption of the bull cycle. The break opens the 120.00 handle next. Price remains above initial firm support at 118.71, the 20-day EMA. The 50-day EMA lies at 117.95. A clear breach of both EMAs would instead highlight a bearish threat and a potential reversal.
EQUITIES
EUROSTOXX50 TECHS: (U4) Approaching Key Near-Term Resistance
- RES 4: 5132.00 High Jun 6
- RES 3: 5087.00 High Jul 12
- RES 2: 4951.00 High Jul 31
- RES 1: 4866.79 50-day EMA
- PRICE: 4843.00 @ 06:11 BST Aug 16
- SUP 1: 4665.00/4494.00 Low Aug 9 / 5 and the bear trigger
- SUP 2: 4478.81 2.236 proj of the Jun 6 - 14 - Jul 12 price swing
- SUP 3: 4424.64 61.8% of the Oct 27 ‘23 - May 16 bull cycle (cont)
- SUP 4: 4502.00 Low Jan 24 (cont)
Eurostoxx 50 futures traded sharply higher Thursday, extending the recovery that started Aug 5. The contract has traded through the 20-day EMA and attention is on resistance at the 50-day EMA, at 4866.79. A clear break of this average would undermine the recent bearish theme and highlight a stronger reversal. This would open 4951.00, the Jul 31 high. For bears, a reversal lower would refocus attention on the bear trigger at 4494.00, the Aug 5 low.
E-MINI S&P: (U4) Reversal Extends
- RES 4: 5721.25 High Jul 16 and Key resistance
- RES 3: 5664.00 High Jul 18
- RES 2: 5629.75 High Jul 23
- RES 1: 5600.75 High Aug 1
- PRICE: 5581.000 @ 07:21 BST Aug 16
- SUP 1: 5438.75/5319.50 Low Aug 14 / 9
- SUP 2: 5182.0 Low Aug 8
- SUP 3: 5120.00 Low Aug 5 and the bear trigger
- SUP 4: 5092.00 Low May 2
S&P E-Minis traded higher yesterday and the contract maintains a firmer tone. The rally this week has resulted in a break of the 50-day EMA. This highlights a stronger reversal and signals the end of the corrective cycle between Jul 16 - Aug 5. Sights are on 5600.75, Aug 1 high. A break would set the scene for an extension towards key resistance and the bull trigger at 5721.25, the Jul 16 high. Initial support lies at 5367.50, the Aug 13 low.
COMMODITIES
BRENT TECHS: (V4) Bullish Outlook
- RES 4: $88.44 - High Apr 12 and a medium-term bull trigger
- RES 3: $87.05 - High Jul 5
- RES 2: $84.22 - 76.4% retracement of the Jul 5 - Aug 5 low
- RES 1: $82.40 - High Aug 12
- PRICE: $80.86 @ 07:03 BST Aug 16
- SUP 1: $78.77 - Low Aug 9
- SUP 2: $75.05/74.96 - Low Aug 5 and a key support / Low Feb 5
- SUP 3: $73.31 - Low Dec 13 2023 and a key support
- SUP 4: $67.60 - 1.618 proj of the Apr 12 - Jun 4 - Jul 5 price swing
Brent futures continue to trade below their recent highs. A strong rally on Monday highlights a possible short-term reversal and undermines the recent bearish theme. A continuation higher would strengthen a bullish theme and open $84.22, a Fibonacci retracement. On the downside, a reversal lower would instead refocus attention on the key short-term support at $75.05, the Aug 5 low.
WTI TECHS: (U4) Bullish Despite The Latest Pullback
- RES 4: $84.36 - High Apr 12 and a medium-term bull trigger
- RES 3: $83.58 - High Jul 5
- RES 2: $82.27 - High Jul 18
- RES 1: $80.77 - 76.4% retracement of the Jul 5 - Aug 5 low
- PRICE: $77.85 @ 07:11 BST Aug 16
- SUP 1: $74.60/71.67 - Low Aug 8 / 5 and the bear trigger
- SUP 2: $70.73 - Low Feb 5
- SUP 3: $69.16 - Low Dec 13 2023
- SUP 4: $67.37 - 1.382 proj of the Apr 12 - Jun 4 - Jul 5 price swing
WTI futures rallied sharply higher Monday. The move undermines a recent bearish theme and price has traded through both the 20- and 50-day EMAs. A resumption of gains would signal scope for a climb towards $80.77, a Fibonacci retracement. Clearance of this level would open $83.58, the Jul 5 high. On the downside, the contract has pulled back from the recent high. A stronger sell-off would refocus attention on key support at $71.67, Aug 5 low.
GOLD TECHS: Bullish Theme
- RES 4: $2575.4 - 3.236 proj of the Oct 6 - 27 - Nov 13 price swing
- RES 3: $2528.4 - 3.00 proj of the Oct 6 - 27 - Nov 13 price swing
- RES 2: $2500.0 - Round number resistance
- RES 1: $2483.7 - High Jul 17 and the bull trigger
- PRICE: $2455.7 @ 07:17 BST Aug 16
- SUP 1: $2424.7/2353.2 - 20-day EMA / Low Jul 25
- SUP 2: $2286.9 - Low Jun 7
- SUP 3: $2277.4 - Low May 3 and a pivot support
- SUP 4: $2228.6 - Low Apr 1
Gold is unchanged and the metal is holding on to its latest gains. Recent weakness appears to be corrective and the trend structure remains bullish. Note that price recently pierced support at the 50-day EMA - currently at $2391.6. A clear break of it would signal scope for a deeper retracement towards $2277.4, the May 3 low and a key support. Attention is on $2483.7, the Jul 17 high and a bull trigger. A break of this hurdle resumes the uptrend.
SILVER TECHS: Trading Below Resistance
- RES 4: $35.226 - 50.0% of the Apr 2011 - Mar 2020 bear leg
- RES 3: $33.880 - 1.00 proj of the Jan 22 - Apr 12 - May 2 price swing
- RES 2: $32.518 - High May 20 and bull trigger
- RES 1: $28.766/31.754 - 50-day EMA / High Jul 11
- PRICE: $27.200 @ 08:05 BST Aug 16
- SUP 1: $26.451- Low Aug 8
- SUP 2: $26.018 - Low May 2 and a key support
- SUP 3: $24.328 - Low Mar 27
- SUP 4: $22.277 - Low Feb 28
A bearish cycle in Silver remains intact and short-term gains are - for now - considered corrective. The metal on AUg 8, traded to a fresh near-term cycle low and this has exposed the next key support at $26.018, the May 2 low. A clear break of this level would strengthen a bearish theme. Initial firm resistance has been defined at $28.766, the 50-day EMA. A clear break of this average is required to highlight a possible reversal.