MNI DAILY TECHNICAL ANALYSIS - EURUSD Key Support Under Pressure

Price Signal Summary - EUR/USD Key Support Under Pressure

• In the FX space, EURUSD resumed its bearish theme yesterday, enhancing the vulnerability of key support at 1.1704 - the 2021 low printed in March. A clear break of this level and the horizontal support at the 1.17 mark, would leave rates at the lowest levels since November 2020. AUDUSD traded sharply lower Tuesday clearing support at 0.7290, Jul 21 low and has fallen to the lowest levels of the year. The breach of 0.7290 confirms an extension of the bearish price sequence of lower lows and lower highs, reinforcing the current downward cycle.
• On the commodity front, Gold remains firm and is holding onto recent gains. The yellow metal has traded through the 20-day EMA and sights are set on the 50-day EMA that intersects at $1798.2 today. WTI futures remain in a broad corrective bearish cycle. Attention is on the key support at $65.01, Jul 20 low. A break of this bear trigger is required to strengthen a bearish case and this would signal scope for a deeper retracement.
• On the equity front, S&P E-minis outlook is bullish and short-term dips are still considered corrective. Recent gains have confirmed a resumption of the uptrend and signal scope for further strength as the contract maintains a bullish price sequence of higher highs and higher lows. EUROSTOXX 50 has pulled back but appears to have found support at yesterday's low of 4167.50. The trend condition remains bullish with a price sequence of higher highs and higher lows still dominant and moving average studies maintaining a bull mode condition.
• In FI, Bund futures remain in a consolidation mode. From a trend perspective, the outlook is bullish with moving average studies still in a bull mode. Momentum studies have been in overbought territory recently however this does not appear to be a concern for bulls at this stage of the uptrend.

FOREIGN EXCHANGE

EURUSD TECHS: Key Support Under Pressure

• RES 4: 1.1975 High Jun 25
• RES 3: 1.1909 High Jul 30
• RES 2: 1.1862 50-day EMA
• RES 1: 1.1791/1805 20-day EMA / High Aug 13
• PRICE: 1.1716 @ 05:55 BST Aug 18
• SUP 1: 1.1704/02 Low Mar 31 and a key support / Intraday low
• SUP 2: 1.1695 38.2% retracement of the 2020 - 2021 Rally
• SUP 3: 1.1621 1.00 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1603 Low Nov 4, 2020

EURUSD resumed its bearish theme yesterday, enhancing the vulnerability of key support at 1.1704 - the 2021 low printed in March. A clear break of this level and the horizontal support at the 1.17 mark, would leave rates at the lowest levels since November 2020. This would open 1.1603, the Nov 4, 2020 low. Below here, the immediate post pandemic highs at 1.1495 would likely act as strong psychological and pivot support. Resistance is at 1.1805.

GBPUSD TECHS: Bearish Pressure Extends

• RES 4: 1.4001 High Jun 23
• RES 3: 1.3983/90 High Jul 30 / 61.8% of the Jun 1 - Jul 20 sell-off
• RES 2: 1.3916 High Aug 9
• RES 1: 1.3850/76 High Aug 17 / 50-day EMA
• PRICE: 1.3742 @ 06:05 BST Aug 18
• SUP 1: 1.3726 Low Aug 17
• SUP 2: 1.3691 Low Jul 22
• SUP 3: 1.3572 Low Jul 20 and the bear trigger
• SUP 4: 1.3520 Low Jan 18

GBPUSD traded lower Tuesday, resuming the pullback from 1.3983, the Jul 30 high. The move lower reinforces a bearish condition and the end of the corrective bounce in late July. Price is also back below the 50-day EMA. Further weakness would expose support at 1.3691, Jul 22 low with key support located at 1.3572, Jul 20 low. A convincing recovery back above the 50-day EMA at 1.3876 would ease the current bearish pressure.

EURGBP TECHS: Holding Onto Recent Gains

• RES 4: 0.8610 High Jul 22
• RES 3: 0.8585 High Jul 23
• RES 2: 0.8558 High Aug 2 and a key S/T resistance
• RES 1: 0.8537/49 High Aug 17 / 50-day EMA
• PRICE: 0.8525 @ 06:18 BST Aug 18
• SUP 1: 0.8484/50 Low Aug 16 / Low Aug 10 and the bear trigger
• SUP 2: 0.8430 Low Feb 27, 2020
• SUP 3: 0.8409 1.0% 10-dma envelope
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP is holding onto recent gains and the cross is testing the 20-day EMA. Further gains would open the 50-day EMA at 0.8549. From a trend perspective, the outlook remains bearish. The recent print down at 0.8450 marks the lowest level since February last year and flags scope for losses toward vol band support at 0.8408 and the Feb 27, 2020 low at 0.8430. Key near-term resistance is 0.8558, Aug 2 high.

USDJPY TECHS: Remains Vulnerable

• RES 4: 111.66 High Jul 2 and the bull trigger
• RES 3: 110.82 High Jul 7
• RES 2: 110.80 High Aug 11 and a key resistance
• RES 1: 109.92 20-day EMA
• PRICE: 109.64 @ 06:24 BST Aug 18
• SUP 1: 109.11/108.72 Low Aug 16 / Low Aug 04 and the bear trigger
• 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 has recovered from recent lows. The pair however still appears vulnerable and attention is on the key support at 108.72, Aug 4 low. A breach of this level would strengthen a bearish case and expose the 108.47 Fibonacci retracement. For bulls, key near-term resistance is unchanged at 110.80, Aug 11 high where a break would instead set the scene for a climb towards key resistance at 111.66, the Jul 2 high.

EURJPY TECHS: Clears Key Support

• RES 4: 131.09 High Jul 13
• RES 3: 130.56 High Jul 29
• RES 2: 129.71/130.01 High Aug 16 / High Aug 5
• RES 1: 129.14 Low Aug 8
• PRICE: 128.44 @ 06:30 BST Aug 18
• SUP 1: 128.22 Intraday low
• SUP 2: 127.88 38.2% retracement of the Oct '20 - Jun rally
• SUP 3: 127.31 Low Feb 17
• SUP 4: 126.44 Low Feb 9

EURJPY remains weak. This week's key technical break has been the move through former support at 128.60, Jul 20 low. The break confirms a resumption of the current downtrend paving the way for an extension of the current bearish phase. Note too that the move lower has also confirmed a clear breach of the 200-dma. Potential for a move to 127.88, 38.2% of the Oct '20 - Jun rally. Initial firm resistance is at 129.71, Monday's high.

AUDUSD TECHS: Resumes Its Downtrend

• RES 4: 0.7453/87 50-day EMA / High Jul 15
• RES 3: 0.7427 High Aug 4 and the reversal trigger
• RES 2: 0.7389 High Aug 11
• RES 1: 0.7341 High Aug 17
• PRICE: 0.7263 @ 06:40 BST Aug 18
• SUP 1: 0.7235 1.382 proj of Feb 25 - Apr 1 - May 10 price swing
• SUP 2: 0.7222 Low Nov 13, 2020
• SUP 3: 0.7202 2.0% 10-dma envelope
• SUP 4: 0.7178 1.500 proj of Feb 25 - Apr 1 - May 10 price swing

AUDUSD traded sharply lower Tuesday clearing support at 0.7290, Jul 21 low and has fallen to the lowest levels of the year. The breach of 0.7290 confirms an extension of the bearish price sequence of lower lows and lower highs, reinforcing the current downward cycle. The focus is on 0.7235, a Fibonacci projection and the November 2020 lows at 0.7222. Key near-term resistance has been defined at 0.7427, Aug 4 high.

USDCAD TECHS: Extends This Week's Gains

• 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: 1.2649 High Aug 17
• PRICE: 1.2615 @ 06:47 BST Aug 18
• SUP 1: 1.2536 20-day EMA
• SUP 2: 1.2469 50-day EMA
• SUP 3: 1.2422/07 Jul 30 low / 50.0% of the Jun 1 - Jul 19 rally
• SUP 4: 1.2313 61.8% retracement of the Jun 1 - Jul 19 rally

USDCAD traded higher yesterday to a fresh monthly high of 1.2649 and has cleared previous resistance at 1.2607. The move higher strengthens a bullish case and signals scope for a climb towards 1.2700 and potentially the key resistance at 1.2807, Jul 19 high. Moving average studies remain in a bull mode suggesting an uptrend remains intact. On the downside, key support has been defined at 1.2422, Jul 30 low.

FIXED INCOME

BUND TECHS: (U1) Still In Consolidation Mode

• RES 4: 178.37 High Jan 4 (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 and the bull trigger
• PRICE: 176.76 @ 05:00 BST Aug 18
• SUP 1: 176.21 Low Aug 11
• SUP 2: 175.82/24 Low Jul 27 / Low Jul 22
• SUP 3: 174.98 50-day EMA
• SUP 4: 174.77/45 High Jul 8 / Low Jul 15

Bund futures remain in a consolidation mode. From a trend perspective, the outlook is bullish with moving average studies still in a bull mode. Momentum studies have been in overbought territory recently however this does not appear to be a concern for bulls at this stage of the uptrend. Initial support is seen at 176.21, Aug 11 low. The bull trigger is 177.61, Aug 5 high where a break would confirm a resumption of the uptrend.

BOBL TECHS: (U1) Pullback Considered Corrective

• RES 4: 136.686 1.0% 10-dma envelope
• RES 4: 136.041 61.8% retracement of the March 2020 downleg
• RES 3: 135.700 High Dec 11, 2020 (cont)
• RES 2: 135.640 High Aug 05
• PRICE: 135.290 @ 05:05 BST Aug 18
• SUP 1: 135.140/134.900 Low Aug 13 / Low Jul 22
• SUP 2: 134.868/710 50-day EMA / High Jul 8
• SUP 3: 134.570 Low Jul 15
• SUP 4: 134.410 Low Jul 13 and a key support

Bobl futures remain below recent highs but the pullback hasn't altered the bullish trend and the move lower is considered corrective. Moving average studies remain in a bull mode and a price sequence of higher highs and higher lows continues to dominate. The focus is on the Dec 11 2020 highs of 135.700 and the 136.041 Fibonacci retracement. Initial support is at 135.140, Aug 13 low. The bull trigger is 135.640, Aug 5 high.

SCHATZ TECHS: (U1) Probes The 20-Day EMA

• RES 4: 112.450 High Dec 11, 2020 (cont)
• RES 3: 112.425 2.618 proj of the Jun 22 - Jul 8 - Jul 13 price swing
• RES 2: 112.415 High Aug 05 and the bull trigger
• RES 1: 112.360 HIgh Aug 9
• PRICE: 112.315 @ 05:15 BST Aug 18
• SUP 1: 112.295/285 Low Aug 13 and 16 / Low Jul 26
• SUP 2: 112.270 50-day EMA
• SUP 3: 112.245 Low Jul 21
• SUP 4: 112.210 Low Jul 20

Schatz futures are trading closer to recent lows and remain below this month's high. The contract has probed the 20-day EMA and further weakness would open the 50-day EMA at 112.270. The broader uptrend remains intact though with moving average studies holding a bullish position and a price sequence of higher highs and higher lows still intact. A resumption of strength would open the bull trigger at 112.415, Aug 8 high.

GILT TECHS: (U1) Outlook Remains Bullish

• 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: 130.72 High Aug 3 / 2.236 of the May 13-26-Jun 3 price swing
• RES 1: 130.55 200-dma (cont)
• PRICE: 129.86 @ Close Aug 17
• SUP 1: 129.22/129.04 Low Aug 6 / 50-day EMA
• SUP 2: 128.54/39 Low Jul 14 / High Jun 11
• SUP 3: 128.03 Jul 6
• SUP 4: 127.87 Low Jul 1

Recent gains in Gilt futures stalled ahead of the 200-dma - the contract achieved a high watermark of 130.72 on Aug 4. The pullback from this high is considered corrective with key support seen at the 50-day EMA, currently at 129.04. A clear break of the 50-day EMA would suggest scope for a deeper pullback. The bull trigger is 130.72 with the 200 dma at 130.55 (cont) also marking a key hurdle for bulls.

BTP TECHS: (U1) Needle Still Points North

• RES 4: 156.73 1.236 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 3: 156.36 3.0% Upper Bollinger Band
• RES 2: 156.00 Round number resistance
• RES 1: 155.71 High Aug 5 and the bull trigger
• PRICE: 154.91 @ Close Aug 17
• SUP 1: 154.54 Low Aug 11
• SUP 2: 153.99 Bull channel base drawn off the May 19 low
• SUP 3: 153.27 50-day EMA
• SUP 4: 151.93 High Jul 8

BTPs are unchanged and continue to trade broadly horizontally. The uptrend remains up though with moving average studies holding a bull position. Furthermore, price action remains within a positive price sequence of higher highs and higher lows. The recent high of 155.71 on Aug 5 marks the bull trigger. A break would open 156.36, a Bollinger band ceiling. Initial support lies at 154.54, the Aug 11 low.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Finds Support

• RES 4: 4636.70 76.4% retracement of the 2000 - 2009 bear phase
• RES 3: 4294.20 1.236 proj of the May 13 - Jun 17 - Jul 19 price swing
• RES 2: 4270.23 2.0% 10-dma envelope
• RES 1: 4238.50 High Aug 12
• PRICE: 4202.50 @ 05:39 BST Aug 18
• SUP 1: 4167.50/53.00 Low Aug 17 / High Jun 17
• SUP 2: 4083.70 50-day EMA
• SUP 3: 4047.50 Low Jul 27
• SUP 4: 3944.00 Low Jul 21

EUROSTOXX 50 has pulled back this week but appears to have found support at yesterday's low of 4167.50. The trend condition remains bullish with a price sequence of higher highs and higher lows still dominant and moving average studies maintaining a bull mode condition. Attention is on the 4270.23 2.0% 10-dma envelope. 4167.50 and 4153.00, the recent key breakout level represents initial support.

E-MINI S&P (U1): Corrective Pullback

• 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: 4476.50 High Aug 16
• PRICE: 4447.25 @ 06:49 BST Aug 18
• SUP 1: 4411.75 Low Aug 17
• SUP 2: 4365.25 Low Aug 3
• SUP 3: 4335.01 50-day EMA
• SUP 4: 4224.00 Low Jul 19 and key support

S&P E-minis outlook is bullish and short-term dips are still considered corrective. Recent gains have confirmed a resumption of the uptrend and signal scope for further strength as the contract maintains a bullish price sequence of higher highs and higher lows. Moving average studies are also pointing north, reinforcing current trend conditions. The focus is on 4481.75 next, a Fibonacci projection. Firm support is 4365.25, Aug 3 low.

COMMODITIES

BRENT TECHS: (V1) Remains Below Resistance

• RES 4: $75.80 - High Jul 6 and key resistance
• RES 3: $75.65 - High Jul 30
• RES 2: $73.55 - High Aug 3
• RES 1: $71.90 - High Aug 12
• PRICE: $69.27 @ 06:44 BST Aug 18
• SUP 1: $67.60 - Low Aug 9
• SUP 2: $66.91 - Jul 20 low and bear trigger
• SUP 3: $65.75 - Low May 24
• SUP 4: $63.89 - Low May 21

Brent futures remain in a broad corrective bearish cycle and attention is on the key support that at $66.91, Jul 20 low. A break of this bear trigger is required to strengthen a bearish case and signal scope for a deeper retracement. Moving average studies remain in bull mode, just though and a switch would highlight a stronger bearish threat. Initial resistance to watch is $71.90, Aug 12 high. A break would be positive.

WTI TECHS: (U1) Eyeing Key Support

• RES 4: $74.90 - High Jul 13
• RES 3: $74.23 - High Jul 30 and a key resistance
• RES 2: $71.96 - High Aug 3
• RES 1: $69.62 - High Aug 12
• PRICE: $66.84 @ 06:47 BST Aug 18
• SUP 1: $65.73 - Low Aug 16
• 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 remain in a broad corrective bearish cycle. Attention is on the key support at $65.01, Jul 20 low. A break of this bear trigger is required to strengthen a bearish case and this would signal scope for a deeper retracement. Moving average studies remain in bull mode, however a switch would highlight a stronger bearish threat. Initial resistance to watch is $69.62, Aug 12 high. A break would be positive.

GOLD TECHS: 50-Day EMA Exposed

• RES 4: $1863.3 - High Jun 16
• RES 3: $1853.3 - 61.8% retracement of the Jun 1 - 29 decline
• RES 2: $1834.1 - High Jul 15 and the bull trigger
• RES 1: $1798.2 - 50-day EMA
• PRICE: $1791.3 @ 07:07 BST Aug 18
• SUP 1: $1751.7 - Low Aug 13
• SUP 2: $1717.8 - Low Aug 10
• SUP 3: $1690.6 - Low Aug 08 and the bear trigger
• SUP 4: $1689.9 - 61.8% retracement of the 2020 Range

Gold remains firm and is holding onto recent gains. The yellow metal has traded through the 20-day EMA and sights are set on the 50-day EMA that intersects at $1798.2 today. A breach of this average would strengthen a bullish chase and suggest scope for gains towards the key resistance at $1834.1, the Jul 15 high. On the downside, initial support is seen at $1751.7, the Aug 13 low.

SILVER TECHS: Gains Considered Corrective

• RES 4: $26.467 - High Jul 14
• RES 3: $26.002 - High Aug 04 and a key resistance
• RES 2: $25.336 - 50-day EMA
• RES 1: $24.475 - 20-day EMA
• PRICE: $23.776 @ 07:13 BST Aug 18
• SUP 1: $22.626 - Low Aug 09 and the bear trigger
• SUP 2: $22.078 - 3.0% Lower Bollinger Band
• SUP 3: $21.899 - Low Nov 30, 2020
• SUP 4: $20.871 - 50% retracement of the Mar '20 - Jan '21 rally

Silver remains bearish. The confirmation of a death cross in the DMA space recently highlights the current bearish theme and note too that recent price action since Aug 9, still appears to be a flag - a bearish formation. A break and close below the Aug 9 low of $22.626 would confirm a resumption of bearish pressure and open a key Fibonacci support at 20.871, 50% of the Mar '20 - Feb '21 range. The 20-day EMA at $24.475 marks resistance.