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MNI DAILY TECHNICAL ANALYSIS - EURGBP Retains Bear Condition

Story

Price Signal Summary – EUR/GBP Retains Bear-Mode Condition

  • A bullish theme S&P E-Minis remains intact, however yesterday’s sharp sell-off signals the start of a corrective cycle. Price has traded through the 20-day EMA and pierced support at the 50-day average, at 5519.81. A clear break of the 50-day EMA would signal scope for a deeper retracement. Eurostoxx 50 futures have reversed course and this has resulted in a break of both the 20- and 50-day EMAs. The move lower highlights the start of a corrective cycle, paving the way for a pullback towards 4805.47 initially, a Fibonacci retracement.
  • The latest move down in EURUSD appears corrective and the pair is trading at its recent lows. The 20-day EMA, at 1.1049, has been pierced. A clear break of the average would expose the 50-day EMA, at 1.0960, allowing for a deeper correction. EURGBP is unchanged and remains in a bear-mode condition. Last week’s extension reinforces current conditions and the cross has cleared all key retracement points of the rally between Jul 17 - Aug 8. USDCAD traded higher Tuesday, shaking off the bearish backdrop. However, the latest climb appears to be a correction. The recent impulsive sell-off reinforces a bearish condition and moving average studies are in a bear-mode set-up.
  • The trend in Gold remains bullish and the recent sideways move marks a pause in the uptrend. MA studies are in a bull-mode set-up and this highlights a dominant uptrend. The recent breach of $2483.7, Jul 17 high, confirmed a resumption of the primary uptrend. WTI futures maintain a softer tone. The contract traded sharply lower Tuesday, resulting in a break of key support at $70.88, the Aug 5 low. The clear break of this level confirms a resumption of the downtrend that started Apr 12.
  • Bund futures have recovered from Monday’s low and from levels just below support at the 50-day EMA, at 133.43. Recent short-term weakness still appears to be corrective and this has allowed an overbought condition to unwind.Gilt futures recovered Tuesday. The move signals the end of the recent corrective cycle and highlights an early reversal. The trend outlook is bullish and this is reinforced by a bullish moving average set-up on the continuation chart.

FOREIGN EXCHANGE

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Price Signal Summary – EUR/GBP Retains Bear-Mode Condition

  • A bullish theme S&P E-Minis remains intact, however yesterday’s sharp sell-off signals the start of a corrective cycle. Price has traded through the 20-day EMA and pierced support at the 50-day average, at 5519.81. A clear break of the 50-day EMA would signal scope for a deeper retracement. Eurostoxx 50 futures have reversed course and this has resulted in a break of both the 20- and 50-day EMAs. The move lower highlights the start of a corrective cycle, paving the way for a pullback towards 4805.47 initially, a Fibonacci retracement.
  • The latest move down in EURUSD appears corrective and the pair is trading at its recent lows. The 20-day EMA, at 1.1049, has been pierced. A clear break of the average would expose the 50-day EMA, at 1.0960, allowing for a deeper correction. EURGBP is unchanged and remains in a bear-mode condition. Last week’s extension reinforces current conditions and the cross has cleared all key retracement points of the rally between Jul 17 - Aug 8. USDCAD traded higher Tuesday, shaking off the bearish backdrop. However, the latest climb appears to be a correction. The recent impulsive sell-off reinforces a bearish condition and moving average studies are in a bear-mode set-up.
  • The trend in Gold remains bullish and the recent sideways move marks a pause in the uptrend. MA studies are in a bull-mode set-up and this highlights a dominant uptrend. The recent breach of $2483.7, Jul 17 high, confirmed a resumption of the primary uptrend. WTI futures maintain a softer tone. The contract traded sharply lower Tuesday, resulting in a break of key support at $70.88, the Aug 5 low. The clear break of this level confirms a resumption of the downtrend that started Apr 12.
  • Bund futures have recovered from Monday’s low and from levels just below support at the 50-day EMA, at 133.43. Recent short-term weakness still appears to be corrective and this has allowed an overbought condition to unwind.Gilt futures recovered Tuesday. The move signals the end of the recent corrective cycle and highlights an early reversal. The trend outlook is bullish and this is reinforced by a bullish moving average set-up on the continuation chart.

FOREIGN EXCHANGE

Keep reading...Show less