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EMERGING MARKETS

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US TSY OPTIONS

Range in Underlying Spurring Vol Sales

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Extends gains against the Pound and EUR

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Price Signal Summary – GBP Clears Support, Enters Bearish Cycle

  • In the equity space, prices extended the recovery off the Monday low to trade at new weekly highs this morning. Recent weakness in the e-mini S&P may have highlighted a short-term trend top and suggests scope for a deeper corrective pullback. Note that the contact has tested the 50-day EMA at 4239.07. If the average holds and price remains above 4224.00, this would represent a bullish signal. EUROSTOXX 50 futures remain bearish despite the recovery from Monday's low. The contract last week failed to challenge resistance at 4101.50, Jul 1 high and the subsequent sell-off has resulted in a resumption of the bear cycle from Jun 17.
  • In FX, the USD outlook remains bullish. The fresh low print in EURUSD this week extends the bearish price sequence of lower lows and lows and lower highs. The focus is on 1.1704, Mar 31 low. With the imminent formation of a death cross (50- breaking below the 200-dma), the focus remains lower. GBPUSD cleared support at 1.3669, Apr 12 low. The break lower reinforces the current bearish theme with further weakness likely. An extension lower would open 1.3520, the Jan 18 low. USDJPY remains vulnerable. This week's low print of 109.07 confirmed a break of support at 109.53, Jul 8 low. This resumes the reversal that occurred early July and paves the way for an extension lower.
  • On the commodity front, Gold outlook remains bullish and the recent pullback is considered corrective. Price needs to clear last week's high print to confirm a resumption of the bull cycle. Brent futures remain vulnerable and have confirmed a top with momentum still in a clear bearish cycle. The focus is on $67.43, a Fibonacci retracement where a break would open $66.11, the May 24 low. WTI (Q1) focus is on $65.56, a Fibonacci retracement where a break would open $63.10, the May 24 low.
  • Within FI, Bund futures continue to trend higher and remain firm. Price is also holding above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthened a bullish case, confirmed a resumption of the uptrend. Gilt futures traded higher again yesterday but did find resistance at the session high. Gains this week have resulted in a break of key short-term resistance at 129.92, Jul 8 high.

FOREIGN EXCHANGE

EURUSD TECHS: Bearish Price Sequence Extends

  • RES 4: 1.2006 High Jun 29 / Jun 17
  • RES 3: 1.1949/75 50-day EMA / High Jun 25
  • RES 2: 1.1930 High Jun 29
  • RES 1: 1.1851/1881 High Jul 15 / High Jul 9
  • PRICE: 1.1773 @ 05:57 BST Jul 21
  • SUP 1: 1.1756 Low Jul 20
  • SUP 2: 1.1738 Low Apr 5
  • SUP 3: 1.1704 Low Mar 31 and a key support
  • SUP 4: 1.1603 Low Nov 4, 2020

EURUSD maintains a bearish theme and is trading near recent lows. The fresh low print Tuesday extends the bearish price sequence of lower lows and lows and lower highs and this cements the bearish outlook. The focus is on 1.1704, Mar 31 low. With the imminent formation of a death cross (50- breaking below the 200-dma), the focus remains lower. A break of 1.1704 would strengthen the bullish case. Initial firm resistance is at 1.1851.

GBPUSD TECHS: Clears Key Support

  • RES 4: 1.4074 Low Jun 10
  • RES 3: 1.4001 High Jun 23 and key resistance
  • RES 2: 1.3828/3906 20-day EMA / 50-day EMA
  • RES 1: 1.3690/3733 High Jul 20 / Low Jul 2
  • PRICE: 1.3615 @ 06:10 BST Jul 21
  • SUP 1: 1.3572 Low Jul 20
  • SUP 2: 1.3520/19 Low Jan 18 / 2.0%10-dma envelope
  • SUP 3: 1.3452 Low Jan 11
  • SUP 4: 1.3430 Low Dec 28, 2020

GBPUSD extended losses Tuesday and has cleared support at 1.3669, Apr 12 low. The break lower reinforces the current bearish theme and with moving average studies continuing to point south, further weakness is likely. The pair has tested 1.3579, 38.2% of the Mar '20 - Jun rally. An extension lower would open 1.3520, the Jan 18 low. The 2.0% 10-dma envelope intersects at 1.3519. Initial resistance is at yesterday's 1.3690 high.

EURGBP TECHS: Needle Pointing North

  • RES 4: 0.8739 2.0% 10-dma envelope
  • RES 3: 0.8701/21 High May 7 / High Apr 26 and the bull trigger
  • RES 2: 0.8672 High May 25
  • RES 1: 0.8670 High Jul 20 and 76.4% of the Apr - Jul bearish phase
  • PRICE: 0.8644 @ 06:20 BST Jul 21
  • SUP 1: 0.8593/61 50-day EMA / Low Jul 19
  • SUP 2: 0.8504 Low Jul 14 and key short-term support
  • SUP 3: 0.8482/72 1% 10-dma envelope / Low Apr 5
  • SUP 4: 0.8430 Low Feb 27, 2020

EURGBP remains firm. The cross extended the recovery Tuesday and has this week breached a number of important resistance levels and Fibonacci retracements. The rally this week also highlights a stronger reversal of the Apr - Jul bearish phase and suggests scope for short-term gains toward the bull trigger of 0.8721, the Apr 26 high. Key support has been defined at 0.8504, Jul 14 low. Initial support is at 0.8593, the 50-day EMA.

USDJPY TECHS: Remains Vulnerable

  • 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: 110.34 High Jul 16
  • PRICE: 109.88 @ 06:24 BST Jul 21
  • SUP 1: 109.07 Low Jul 19
  • 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 is trading above Monday's low but remains vulnerable. This week's low print of 109.07 confirmed a break of support at 109.53, Jul 8 low. This resumes the reversal that occurred early July and paves the way for an extension lower. Note too that support at 109.19 has been breached, the Jun 7 low. The focus is on 108.47, a Fibonacci retracement. On the upside, firm resistance has been defined at 110.34, Jul 16 high and 110.70, Jul 14 high.

EURJPY TECHS: Approaching The 200-DMA

  • RES 4: 132.70 High Jun 23
  • RES 3: 132.43 High Jul 1 and a key resistance
  • RES 2: 131.09/33 High Jul 13 / 50-day EMA
  • RES 1: 130.28/43 High Jul 16 / High Jul 14
  • PRICE: 129.41 @ 06:32 BST Jul 21
  • SUP 1: 128.60 Low Jul 20
  • SUP 2: 128.42 200-dma
  • SUP 3: 128.29 Low Mar 24 and key support
  • SUP 4: 127.88 38.2% retracement of the Oct '20 - Jun rally

EURJPY traded lower again Tuesday. The trend remains bearish with attention on the 200-dma at 128.42, the 200-dma. A clear break of this average would strengthen the current bearish theme. Momentum and moving average studies remain bearish too. Further out, potential is seen for weakness towards 127.88, a Fibonacci retracement. On the upside, 130.28, Jul 16 high marks initial firm resistance.

AUDUSD TECHS: Still Heavy!

  • RES 4: 0.7534 High Jul 7
  • RES 3: 0.7503 High Ju13
  • RES 2: 0.7475 20-day EMA
  • RES 1: 0.7429 High Jul 19
  • PRICE: 0.7306 @ 06:43 BST Jul 21
  • SUP 2: 0.7300/04 Low Jul 20 / 1.236 of Feb 25 - Apr 1 - May 10 swing
  • SUP 3: 0.7284/82 Low Nov 24, 2020 / 2.0% 10-dma envelope
  • 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 weak and is trading at recent lows. A bearish theme dominates following the recent sell-off that prompted new multi-month lows and a breach of the channel base at 0.7360. The channel is drawn from the Feb 25 high and the move lower marks an important S/T technical break. This opens 0.7235 next, the 1.236 projection of the Feb 25 - Apr 1 - May 10 price swing. On the upside, initial resistance is seen at 0.7429, Jul 19 high.

USDCAD TECHS: Trend Remains Up

  • RES 4: 1.2973 1.500 2proj of Jun 1 - 21- 23 price swing
  • RES 3: 1.2916 1.382 proj of Jun 1 - 21- 23 price swing
  • RES 2: 1.2881 High Jan 28
  • RES 1: 1.2807/46 High Jul 19 / 1.236 proj of Jun 1 - 21- 23 swing
  • PRICE: 1.2711 @ 06:47 BST Jul 21
  • SUP 1: 1.2605 Low Jul 19
  • SUP 2: 1.2502/2428 Low Jul 15 / Low Jul 14
  • SUP 3: 1.2303/2253 Low Jul 6 / Low Jun 23 and a key support
  • SUP 4: 1.2157 Low Jun 16

USDCAD remains firm following Monday's strong gains and despite yesterday's pullback. The pair last week breached resistance at 1.2590, Jul 8 high. The break confirmed a resumption of the uptrend and Monday's strong rally has reinforced bullish conditions, confirming an extension of the bull cycle that started Jun 1. The focus is on 1.2846 next, a Fibonacci projection and 1.2881, the Jan 28 high. On the downside, initial support is at 1.2605.

FIXED INCOME

BUND TECHS: (U1) Trending Higher

  • RES 4: 176.64 High Feb 11 (cont)
  • RES 3: 176.38 1.382 proj of the May 19 - Jun 11 - Jun 22 price swing
  • RES 2: 176.30 76.4% retracement of the Dec '20 - May sell-off (cont)
  • RES 1: 176.28 High Jul 20
  • PRICE: 175.90 @ 05:02 BST Jul 21
  • SUP 1: 174.77/45 High Jul 8 / Low Jul 15
  • SUP 2: 173.70 LowJul 13 and 14
  • SUP 3: 173.06 50-day EMA
  • SUP 4: 172.97 Channel base drawn off the May 19 low

Bund futures continue to trend higher and remain firm. Price is also holding above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthened a bullish case, confirmed a resumption of the uptrend and marked a bullish breakout of the rising channel drawn off the May 19 low. Attention is on 176.38, a Fibonacci projection. Initial support is at 174.77, the recent breakout level.

BOBL TECHS: (U1) Trades Through Its Bull Channel Top

  • RES 4: 135.350 High Apr 8 (cont)
  • RES 3: 135.313 2.236 proj of the May 20 - 26 - 31 price swing
  • RES 2: 135.160 2.00 proj of the May 20 - 26 - 31 price swing
  • RES 1: 135.130 High Jul 20
  • PRICE: 135.040 @ 05:06 BST Jul 21
  • SUP 1: 134.710/570 High Jul 8 / Low Jul 15
  • SUP 2: 134.410 Low Jul 13 and a key support
  • SUP 3: 134.365 50-day EMA
  • SUP 4: 134.167 Bull channel base drawn off the May 20 low

Bobl futures traded higher again yesterday, extending the current rally. The contract on Jul 8 confirmed a break of a key S/T resistance at 134.510, Jun 11 high and a Fibonacci projection. This confirmed a resumption of the uptrend from May 20 and the climb Friday and this week reinforces the current bullish trend structure. The bull channel top drawn from the May 20 low has also been breached. Initial support lies at 134.710, Jul 8 high.

SCHATZ TECHS: (U1) Bullish Price Sequence

  • RES 4: 112.320 1.618 proj of the Jun 22 - Jul 8 - Jul 13 price swing
  • RES 3: 112.307 1.50 proj of the Jun 22 - Jul 8 - Jul 13 price swing
  • RES 2: 112.290 High Feb 11 (cont)
  • RES 1: 112.285 High Jul 20
  • PRICE: 112.255 @ 04:47 BST Jul 21
  • SUP 1: 112.210 Low Jul 20
  • SUP 2: 112.180/150 Low Jul 16 / Low Jul 13
  • SUP 3: 112.140 Low Jul 5 and 6
  • SUP 4: 112.120 Low Jun 30

The Schatz futures outlook is bullish and the contract traded sharply higher yesterday. Resistance at 112.210, Jun 11 high has been cleared. This strengthens a bullish case and opens 112.295 next, a Fibonacci projection. Note too that yesterday's gains have also established a bullish price sequence of higher highs and higher lows, the definition of an uptrend. On the downside, initial support is seen at 112.210, yesterday's low.

GILT TECHS: (U1) Clears Resistance

  • RES 4: 131.37 38.2% retracement of the Aug '20 - Jun sell-off
  • RES 3: 130.72 2.236 proj of the May 13 - 26 - Jun 3 price swing
  • RES 2: 130.62 High Feb 22 (cont)
  • RES 1: 130.48 High Jul 20
  • PRICE: 129.90 @ Close Jul 20
  • SUP 1: 129.19 Low Jul 19
  • 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 traded higher again yesterday but did find resistance at the session high. Gains this week have resulted in a break of key short-term resistance at 129.92, Jul 8 high. The break confirms a resumption of the uptrend that started mid-May and maintains a bullish price sequence of higher highs and higher lows. MA studies also support a bullish outlook. The focus is on 130.62, Feb 22 high (cont). Firm support is at 128.54, Jul 14 low.

BTP TECHS: (U1) Uptrend Extends

  • RES 4: 155.00 Round number resistance
  • RES 3: 154.15 0.764 proj of May 19 - Jun 14 - Jun 25 price swing
  • RES 2: 153.82 High Feb 12 (cont)
  • RES 1: 153.48 High Feb 20
  • PRICE: 153.33 @ Close Jul 20
  • SUP 1: 152.65 Low Jul 14
  • SUP 2: 151.93/54 Low Jul 8 / Low Jul 6
  • SUP 3: 151.19 High Jul 1
  • SUP 4: 150.56 Low Jun 30

BTPs maintain a bullish tone following last week's resumption of the uptrend. Gains Jul 6 and 7 resulted in a breach of key resistance at 152.47, Jun 14 high. The break confirmed a resumption of the uptrend that started May 19 and paves the way for a stronger short-term recovery. Last week's extension and this week's fresh high prints reinforce the bullish theme. Attention is on 153.82, the Feb 12 high. Initial support is at the Jul 14 low of 152.65.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Bear Cycle Still In Play

  • RES 4: 4153.00 High Jun 17 and bull trigger
  • RES 3: 4121.00 High Jun 25
  • RES 2: 4101.50 High Jul 1 and key near-term resistance
  • RES 1: 4006.50 High Jul 19
  • PRICE: 3953.50 @ 05:47 BST Jul 21
  • SUP 1: 3895.00 Low Jul 19
  • SUP 2: 3871.00 Low May 19
  • SUP 3: 3830.00 Low May 13 and a key support
  • SUP 4: 3779.00 Low Mar 26

EUROSTOXX 50 futures remain bearish despite the recovery from Monday's low. The contract last week failed to challenge resistance at 4101.50, Jul 1 high and the subsequent sell-off has resulted in a resumption of the bear cycle from Jun 17. 3951.50, Jul 8 low has been breached. This signals scope for weakness towards 3871.00, May 19 low ahead of key support at 3830.00, May 13 low. Initial resistance is at Monday's 4006.50 high.

E-MINI S&P (U1): 50-Day EMA Provides Support

  • RES 4: 4415.48 1.00 proj of Mar 25 - May 10 - 13 price swing
  • RES 3: 4400.00 Round number resistance
  • RES 2: 4384.50 High Jul 14 and the bull trigger
  • RES 1: 4320.75 High Jul 19
  • PRICE: 4318.00 @ 07:03 BST Jul 21
  • SUP 1: 4224.00 Low Jul 19
  • SUP 2: 4187.58 61.8% retracement of the Jun 21 - Jul 14 rally
  • SUP 3: 4126.75 Low Jun 21
  • SUP 4: 4046.00 Low May 19

S&P E-minis started the week on a softer note but has found support at Monday's low. Recent weakness resulted in a break of 4279.25, Jul 8 low. This highlights a short-term trend top and suggests scope for a deeper corrective pullback. Note that the contact has tested the 50-day EMA at 4239.07 and the average has so far provided support. If the average holds and price remains above 4224.00, this would represent a bullish signal.

COMMODITIES

BRENT TECHS: (U1) Vulnerable Following Monday's Selling Pressure

  • RES 4: $76.72 - High Jul 14
  • RES 3: $74.59 - High Jul 15
  • RES 2: $73.34 - High Jul 19
  • RES 1: $70.54 - 50.0% of Monday's range
  • PRICE: $69.07 @ 06:45 BST Jul 21
  • SUP 1: $67.43 - 76.4% retracement of the May 21 - Jul 6 rally
  • SUP 2: $66.11 - Low May 24
  • SUP 3: $64.22 - Low May 21
  • SUP 4: $63.09 - Low Apr 22

Brent futures remain vulnerable following Monday's selling pressure. The contact has confirmed a top with momentum still in a clear bearish cycle. Price has also confirmed a clear break of the 50-day EMA paving the way for an extension lower. The focus is on $67.43, a Fibonacci retracement where a break would open $66.11, the May 24 low. On the upside, initial resistance is at $70.54, 50% of Monday's range.

WTI TECHS: (U1) Needle Points South

  • RES 4: $74.90 - High Jul 13
  • RES 3: $72.48 - High Jul 15
  • RES 2: $71.40 - High Jul 19
  • RES 1: $68.48 - 50.0% of Monday's range
  • PRICE: $66.90 @ 06:57 BST Jul 21
  • SUP 1: $65.01/64.60 - Low Jul 20 / 76.4% of the May 21 - Jul 6 rally
  • SUP 2: $63.10 - Low May 24
  • SUP 3: $61.06 - Low May 21 and key support
  • SUP 4: $59.92 - Low Apr 26

Brent futures faced strong selling pressure Monday clearing support at $68.86, Jun 17 low and has also breached the 50-day EMA. The sharp sell-off defines a short-term trend top and signals scope for a deeper corrective pullback. The focus is on $64.60, a Fibonacci retracement where a break would open $63.10, the May 24 low. On the upside, initial resistance is at $68.48, 50.0% of Monday's range.

GOLD TECHS: Key Short-Term Support Remains Intact

  • 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: $1811.5 @ 07:10 BST Jul 21
  • SUP 1: $1791.7 Low Jul 12 and key near-term support
  • SUP 2: $1774.4/1750.8 - Low Jul 2 / Low Jun 29
  • SUP 3: $1733.5 -76.4% retracement of the Mar 8 - Jun 1 rally
  • SUP 4: $1723.8 - Low Apr 13

Gold is consolidating and remains below last week's high of $1834.1. The yellow metal outlook remains bullish though and the recent pullback is considered corrective. Price however needs to clear last week's high print to confirm a resumption of the bull cycle. Support to watch is at $1791.7, Jul 12 low. A breach would be bearish and instead signal scope for an extension lower towards the key support at $1750.8, Jun 29 low.

SILVER TECHS: Bears Still In Charge

  • 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: $25.761 - High Jul 19
  • PRICE: $25.187 @ 07:18 BST Jul 21
  • SUP 1: $24.758 - Low Jul 20
  • SUP 2: $24.686 - Low Apr 13
  • SUP 3: $24.257 - Low Apr 1
  • SUP 4: $23.781 - Low Mar 31and key support

Silver started the week on a softer note and remains bearish. The metal has breached support at $25.529, Jun 29 low and bear trigger. The break confirms a resumption of the downleg that started May 18. Note that $24.955, 76.4% of the Mar 31 - May 18 rally has been breached. This opens $24.686, Apr 13 low. MA studies are in a bear mode reinforcing the current bearish theme. Key resistance has been defined at $26.775, Jul 6 high.