MNI DAILY TECHNICAL ANALYSIS - GBP Extends Bullish Backdrop

Price Signal Summary – GBP Extends Bullish Backdrop

• S&P E-Minis maintains a bullish tone and the contract is holding the bulk of its recent gains. This week’s climb has resulted in a break of the 3820.00 hurdle, Oct 5 high. Furthermore, price is trading above the 50-day EMA, at 3831.76. EUROSTOXX 50 futures maintain a firmer tone and the contract traded higher Wednesday. A number of key resistance levels have recently been cleared. Price is through trendline resistance drawn from the Aug 17 high and is trading above the 50-day EMA.
• GBPUSD bullish conditions have strengthened following the break of resistance at 1.1495. The move higher marks an extension of the reversal from 1.0350, the Sep 26 low and this has confirmed a bullish price sequence of higher highs and higher lows on the daily chart. EURUSD is holding on to this week’s gains and a bullish theme remains intact. The pair has cleared an important hurdle at 0.9856 - the top of the bear channel drawn from the Feb 10 high. USDJPY is weaker and today’s move lower has resulted in a print below support at 145.56, Monday’s low. The breach of this support signals scope for an extension lower and this means that the pair remains in a short-term bearish corrective cycle.
• Gold remains in a downtrend and recent gains are considered corrective. This follows the reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4. The WTI futures outlook has improved for bulls following yesterday’s gains. The contract has defined a key short-term support at $81.30, the Oct 18 low and sights are on resistance at $88.66, the Oct 12 high.
• Bund futures traded higher again Wednesday, extending the recovery from the Oct 21 low of 134.02. Short-term gains are considered corrective. This bullish cycle remains in play and the break of 138.52 signals scope for a continuation higher near-term. Gilt futures are trading at its recent highs and the current bull cycle remains intact. Price has recently cleared the 20-day EMA and the continuation higher this week has resulted in a break of key resistance at 100.92.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Channel Breakout

• RES 4: 1.0327 High Aug 12
• RES 3: 1.0273 1.382 proj of the Sep 28 - Oct 4 - 13 price swing
• RES 2: 1.0198 High Sep 12 and a key resistance
• RES 1: 1.0094 Intraday high
• PRICE: 1.0065 @ 05:46 BST Oct 27
• SUP 1: 0.9922 50-day EMA
• SUP 2: 0.9856 Former channel resistance-now-support
• SUP 3: 0.9807 Low Oct 24
• SUP 4: 0.9705 Low Oct 21

EURUSD is holding on to this week’s gains and a bullish theme remains intact. The pair has cleared an important hurdle at 0.9856 - the top of the bear channel drawn from the Feb 10 high. The confirmed channel breakout highlights a stronger reversal and signals scope for an extension higher. The focus is on 1.0198 next, the Sep 12 high. On the downside, support to watch is 0.9856, the former bear channel resistance.

GBPUSD TECHS: Bullish Price Sequence

• RES 4: 1.1834 76.4% Fib retracement for the Aug - Sep downleg
• RES 3: 1.1799 0.7645 proj of the Sep 26 - Oct 5 - 12 price swing
• RES 2: 1.1738 High Sep 13 and a key resistance
• RES 1: 1.1671 1.1665 3.0% 10-dma envelope
• PRICE: 1.1627 @ 06:15 BST Oct 27
• SUP 1: 1.1430 50-day EMA
• SUP 2: 1.1234 Low Oct 24
• SUP 3: 1.1061 Low Oct 21
• SUP 4: 1.0924 Low Oct 12 and a key support

GBPUSD bullish conditions have strengthened following the break of resistance at 1.1495. The move higher marks an extension of the reversal from 1.0350, the Sep 26 low and this has confirmed a bullish price sequence of higher highs and higher lows on the daily chart. The current cycle highlights scope for 1.1738, the Sep 13 high and the next key short-term resistance. Initial support is seen at 1.1430, the 50-day EMA.

EURGBP TECHS: Bearish Outlook

• RES 4: 0.9292 High Sep 11 2020
• RES 3: 0.9066/9266 High Sep 28 / High Sep 26 and key resistance
• RES 2: 0.8980 High Sep 29
• RES 1: 0.8781/8867 High Oct 21 / 12
• PRICE: 0.8668 @ 06:22 BST Oct 27
• SUP 1: 0.8646 Low Oct 26
• SUP 2: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 3: 0.8522 Low Aug 30
• SUP 4: 0.8471 Low Aug 28

EURGBP is trading at this week’s highs, keeping the short-term bear threat present. The strong reversal from 0.9266, Sep 26 high and the breach of support at 0.8649, the Oct 4 low, suggests scope for an extension lower near-term with sights on 0.8559 next, a Fibonacci retracement. Key short-term resistance has been defined at 0.8867, the Oct 12 high, where a break would reinstate a bullish theme.

USDJPY TECHS: Trades Below Key Support

• RES 4: 153.39 3.764 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 3: 152.30 High Jul 1990
• RES 2: 151.95 High Oct 21
• RES 1: 148.41/149.71 High Oct 26 / 24
• PRICE: 145.33 @ 06:31 BST Oct 27
• SUP 1: 145.17 Low Oct 10
• SUP 2: 143.79 50-day EMA
• SUP 3: 143.53 Low Oct 5
• SUP 4: 141.77 Low Sep 23

USDJPY is weaker and today’s move lower has resulted in a print below support at 145.56, Monday’s low. The breach of this support signals scope for an extension lower and this means that the pair remains in a short-term bearish corrective cycle. Momentum studies are trending down as a recent overbought condition unwinds. The focus is on the 50-day EMA at 143.79 - a key support. Key resistance is at the trend high of 151.95 (Oct 21).

EURJPY TECHS: Uptrend Remains Intact

• RES 4: 149.46 1.382 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 3: 148.88 High Dec 9 2014
• RES 2: 148.40/45 High Oct 21 and the bull trigger / High Dec 15 2014
• RES 1: 147.72 High Oct 26
• PRICE: 147.25 @ 15:48 BST Oct 26
• SUP 1: 145.64 / 143.80 High Sep 12 / Low Oct 24 and key support
• SUP 2: 142.60 50-day EMA
• SUP 3: 141.78 Low Oct 13
• SUP 4: 140.90 Low Oct 10

The EURJPY uptrend remains intact despite the move lower overnight - a pullback is considered corrective. The cross has recently found strong support at 143.80, Monday’s low and this was just below the 20-day EMA. A continuation higher would open 148.40, the Oct 21 high. This is the bull trigger and a break would confirm a resumption of the uptrend. Moving average studies continue to highlight a bullish backdrop.

AUDUSD TECHS: Approaching The 50-Day EMA

• RES 4: 0.6682 Low Jul 14 and a recent breakout level
• RES 3: 0.6656 High Sep 23
• RES 2: 0.6563 50-day EMA
• RES 1: 0.6547 High Oct 4 and key resistance
• PRICE: 0.6489 @ 08:09 BST Oct 27
• SUP 1: 0.6395/03 20-day EMA / Low Oct 25
• SUP 2: 0.6210/6170 Low Oct 21 / 13 and the bear trigger
• SUP 3: 0.6133 1.382 proj of the Apr 5 - May 12 - Jun 3 price swing
• SUP 4: 0.6099 76.4% retracement of the 2020 - 2021 bull cycle

AUDUSD has traded higher again today, cementing the current bullish theme following the reversal from 0.6170, the Oct 13 low. Attention is on 0.6547, Oct 4 high and the 50-day EMA - a key short-term hurdle. The average intersects at 0.6554 where a break would suggest scope for a continuation higher. Note that gains are considered corrective and the broader trend direction remains down. Initial support lies at 0.6395, the 20-day EMA.

USDCAD TECHS: Approaching A Key Support Zone

• RES 4: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 3: 1.4000 Psychological round number
• RES 2: 1.3855/3977 High Oct 21 / 13 and the bull trigger
• RES 1: 1.3748 High Oct 25
• PRICE: 1.3583 @ 08:19 BST Oct 27
• SUP 1: 1.3503 Low Oct 4 and a key support
• SUP 2: 1.345850-day EMA
• SUP 3: 1.3358 Low Sep 21
• SUP 4: 1.3227 Low Sep 20

USDCAD has cleared the 20-day EMA and maintains a bearish tone as the reversal from 1.3977, Oct 13 high, extends. The move lower exposes support at 1.3503, the Oct 4 low. Note that the 50-day EMA intersects at 1.3458. Clearance of these two chart points (a key support zone) would signal scope for a deeper pullback. The broader trend direction is up and the latest pullback is likely corrective. Initial firm resistance is 1.3855, the Oct 21 high.

FIXED INCOME

BUND TECHS: (Z2) Holding On To This Week’s Gains

• RES 4: 142.87 High Oct 4 and a key reversal point
• RES 3: 141.03 50-day EMA
• RES 2: 140.13 High Oct 6
• RES 1: 139.05 High Oct 26
• PRICE: 138.80 @ 04:57 BST Oct 27
• SUP 1: 136.46/134.02 Low Oct 25 / 21 and the bear trigger
• SUP 2: 133.74 0.618 proj of the Aug 2 - 12 - 15 price swing
• SUP 3: 132.89 Low Oct 28 2011
• SUP 4: 132.61 0.764 proj of the Aug 2 - 12 - 15 price swing

Bund futures traded higher again Wednesday, extending the recovery from the Oct 21 low of 134.02. Short-term gains are considered corrective. This bullish cycle remains in play and the break of 138.52 signals scope for a continuation higher near-term. The focus is on the 50-day EMA, at 141.03. A reversal lower and a break of 134.02 would mark the end of the corrective cycle and confirm a resumption of the primary downtrend.

BOBL TECHS: (Z2) Corrective Bounce Extends

• RES 4: 121.950 High Oct 4 and the bull trigger
• RES 3: 121.330 High Oct 5
• RES 2: 119.960 High Oct 14 and a key resistance
• RES 1: 119.830 High Oct 26
• PRICE: 119.680 @ 05:02 BST Oct 27
• SUP 1: 118.430 Low Oct 24
• SUP 2: 117.630 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 117.342 2.618 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 116.410 3.00 proj of the Aug 25 - Sep 1 - Sep 6 price swing

Bobl futures maintain a short-term bullish tone and a corrective cycle remains in play. The contract has breached the 20-day EMA and attention is on key short-term resistance at 119.960, Oct 14 high. Clearance of this level would strengthen bullish conditions and open 121.330, the Oct 5 high. Key support has been defined at 117.630, the Oct 21 high and a Fibonacci projection. A break of this level would confirm a resumption of the primary downtrend.

SCHATZ TECHS: (Z2) Gains Considered Corrective

• RES 4: 108.010 High Sep 13
• RES 3: 107.770 High Oct 4 and the reversal trigger
• RES 2: 107.180/360 High Oct 13 and key resistance/ High Oct 6
• RES 1: 106.951 20-day EMA
• PRICE: 106.870 @ 05:31 BST Oct 27
• SUP 1: 106.680/350 Low Oct 24 / 21 and the bear trigger
• SUP 2: 106.270 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 106.00 Round number support
• SUP 4: 105.800 Low Nov 2008 (cont)

The Schatz futures primary trend direction is down and the latest recovery is considered corrective. The recent break of 106.535, Sep 26 low, confirmed a resumption of the primary downtrend and maintains the bearish price sequence of lower lows and lower highs. 106.270 is the next objective, a Fibonacci extension. Key short-term resistance has been defined at 107.180, the Oct 13 high. Initial resistance to watch is 106.951, the 20-day EMA.

GILT TECHS: (Z2) Bull Cycle Still In Play

• RES 4: 106.25 High Sep 12
• RES 3: 105.34 High Sep 22
• RES 2: 103.60 Low Sep 20
• RES 1: 102.45 High Sep 23
• PRICE: 101.85 @ Close Oct 27
• SUP 1: 98.49/95.82 20-day EMA / Low Oct 21
• SUP 2: 94.82/92.66 Low Oct 17 / 14
• SUP 3: 90.99/90.38 Low Sep 28 / Low Oct 12 and the bear trigger
• SUP 4: 90.00 Psychological round number

Gilt futures are trading at its recent highs and the current bull cycle remains intact. Price has recently cleared the 20-day EMA and the continuation higher this week has resulted in a break of key resistance at 100.92, the Oct 4 high. The breach strengthens bullish conditions and opens 102.45 next, the Sep 23 high. Initial firm support has been defined at 95.82, the Oct 21 low. A break would be bearish.

BTP TECHS: (Z2) Correction Extends

• RES 4: 119.06 High Sep 8
• RES 3: 117.63 High Sep 14
• RES 2: 116.71 High Oct 4 and key resistance
• RES 1: 115.00 Round number resistance
• PRICE: 114.41 @ Close Oct 26
• SUP 1: 112.14 20-day EMA
• SUP 2: 108.82 Low Oct 21
• SUP 3: 108.13 Low Sep 28 and key support
• SUP 4: 107.27 2.382 proj of the Aug 25 - Sep 1 - 8 price swing

BTP futures traded higher yesterday as the recovery from 108.82, Oct 21 low, extends. The contract has cleared resistance at 112.25, the Oct 14 high and this signals scope for a continuation higher near-term. A break above the 115.00 handle would open 116.71, the Oct 4 high and the next key resistance. On the downside, key support lies at 108.82, Oct 21 low and 108.13, the Sep 28 trend low.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Bullish Outlook

• RES 4: 3810.00 High Aug 17
• RES 3: 3692.00 High Aug 26
• RES 2: 3678.00 High Sep 13 and a key resistance
• RES 1: 3612.00 High Oct 26
• PRICE: 3591.00 @ 05:17 BST Oct 27
• SUP 1: 3483.70 50-day EMA
• SUP 2: 3418.00 Low Oct 21
• SUP 3: 3352.00 Low Oct 14
• SUP 4: 3251.00/3236.00 Low Oct 13 / 3 and a key support zone

EUROSTOXX 50 futures maintain a firmer tone and the contract traded higher Wednesday. A number of key resistance levels have recently been cleared. Price is through trendline resistance drawn from the Aug 17 high and is trading above the 50-day EMA. This signals scope for an extension higher near-term and sights are on 3678.00, Sep 13 high and a key S/T resistance. Firm support is seen at the 50-day EMA. The average intersects at 3483.70.

E-MINI S&P (Z2): Short-Term Trend Needle Points North

• RES 4: 4023.44 61.8% retracement of the Aug 16 - Oct 13 downleg
• RES 3: 3981.25 High Sep 14
• RES 2: 3923.88 50.0% retracement of the Aug 16 - Oct 13 downleg
• RES 1: 3874.25 High Oct 26
• PRICE: 3863.75 @ 06:51 BST Oct 27
• SUP 1: 3752.20/3641.50 20-day EMA / Low Oct 21
• SUP 2: 3590.50/3502.00 Low Oct 17 / 13 and the bear trigger
• SUP 3: 3491.13 50.0% retracement of the 2020 - 2022 bull cycle
• SUP 4: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis maintains a bullish tone and the contract is holding the bulk of its recent gains. This week’s climb has resulted in a break of the 3820.00 hurdle, Oct 5 high. Furthermore, price is trading above the 50-day EMA, at 3831.76. The break higher strengthens the short-term bullish condition and signals scope for a climb towards 3923.88, a Fibonacci retracement. On the downside, key short-term support has been defined at 3641.50.

US 10YR FUTURE TECHS: (Z2) Corrective Bounce

• RES 4: 113-18 50-day EMA
• RES 3: 112-22+ High Oct 6
• RES 2: 111-28+ High Oct 13 and key near-term resistance
• RES 1: 111-11 20-day EMA
• PRICE: 110-30 @ 15:25 BST Oct 26
• SUP 1: 108-26+ Low Oct 21 and the bear trigger
• SUP 2: 108-06+ Low Oct 2007 (cont)
• SUP 3: 107.05 3.0% 10-dma envelope
• SUP 4: 106-20+ Low Aug 2007 (cont)

Treasuries have extended the rally further off the Friday low. Despite the bounce, the primary trend remains lower following the move lower last week. Weakness to 108-26+ confirmed a break of support at 110.02, Oct 13 low and the psychological 110.00 handle. This resumes the price sequence of lower lows and lower highs. The focus is on 108-20, a Fibonacci projection. Initial firm resistance has been defined at 111-28+, the Oct 13 high.

COMMODITIES

BRENT TECHS: (Z2) Tops Resistance

• RES 4: $107.41 - 76.4% retracement of the Aug 6 - Sep 26 bear leg
• RES 3: $104.62 - High Jul 5
• RES 2: $101.39 - High Aug 30
• RES 1: $98.75 - High Oct 10 and key near-term resistance
• PRICE: $95.82 @ 07:00 BST Oct 27
• SUP 1: $92.58/88.77 - 20-day EMA / Low Oct 18
• SUP 2: $86.29 - 76.4% retracement of the Sep 26 - Oct 10 rally
• SUP 3: $85.00/82.44 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 4: $81.97 - 1.618 proj of the Jul 29 - Aug 5 - 30 price swing

Brent futures traded higher Wednesday and the move has reinstated a short-term bullish theme. Key near-term support has been defined at $88.77, the Oct 18 low, where a break is required to cancel the current positive outlook. The contract has breached resistance at $95.17, Oct 12 high and this signals potential for a climb towards $98.75, the Oct 10 high and a key resistance. A break of $98.75 would further strengthen conditions for bulls.

WTI TECHS: (Z2) Bull Cycle

• RES 4: $97.38 - 61.8% retracement of the Jun 8 - Sep 26 downleg
• RES 3: $95.55 - High Aug 30
• RES 2: $92.34 - High Oct 12 / 10 and key resistance
• RES 1: $88.66 - High Oct 12
• PRICE: $87.78 @ 07:13 BST Oct 27
• SUP 1: $85.25/81.30 - 20-day EMA / Low Oct 18
• SUP 2: $79.63 - 76.4% retracement points of the Sep 26 - Oct 10 rally
• SUP 3: $78.36 - Low Sep 30
• SUP 4: $75.70 - Low Sep 26 and the bear trigger

The WTI futures outlook has improved for bulls following yesterday’s gains. The contract has defined a key short-term support at $81.30, the Oct 18 low and sights are on resistance at $88.66, the Oct 12 high. A break of this hurdle would signal scope for gains towards $92.34, the Oct 10 high and a key resistance. On the downside, a move through support at $81.30 is required to undermine the bull theme.

GOLD TECHS: Watching Resistance At The 50-Day EMA

• RES 4: $1735.1 - High Sep 12 and a key resistance
• RES 3: $1729.5 - High Oct 4 and the bull trigger
• RES 2: $1689.1 - 50-day EMA
• RES 1: $1674.9 - High Oct 26
• PRICE: $1666.1 @ 07:16 BST Oct 27
• SUP 1: $1615.0 - Low Sep 28 and the bear trigger
• SUP 2: $1610.5 - 1.00 proj of the Jun 13 - Jul 21 - Aug 10 swing
• SUP 3: $1600.00 - Round number support
• SUP 4: $1569.1 - Low Apr 1 2020

Gold remains in a downtrend and recent gains are considered corrective. This follows the reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4. A resumption of weakness would refocus attention on key support and the bear trigger at $1615.0, the Sep 28 low. On the upside, the next firm resistance is at $1689.1, the 50-day EMA. A break of the average would signal scope for a stronger correction.

SILVER TECHS: Recent Gains Considered Corrective

• RES 4: $21.540 - High Jun 27
• RES 3: $21.242 - High Oct 4 and key resistance
• RES 2: $20.499 - 76.4% retracement of the Oct 4 - 14 downleg
• RES 1: $20.039 - 61.8% retracement of the Oct 4 - 14 downleg
• PRICE: $19.388 @ 08:26 BST Oct 27
• SUP 1: $18.791/17.967 - Low Oct 25 / Low Sep 28
• SUP 2: $17.562 - Low Sep 1 and bear trigger
• SUP 3: $16.955 - Low Jun 15 2020
• SUP 4: $16.473 - 1.00 proj of the Jun 6 - Jul 14 - Aug 10 price swing

The Silver outlook remains bearish despite the latest gains. The recent move below the 50-day EMA reinforced bearish conditions. This signals scope for a continuation of the reversal that started Oct 4 and the focus is on the next firm support at $17.967, the Sep 28 low. Clearance of this level would open $17.562, the Sep 1 low and the bear trigger. Resistance is seen at $20.039, a Fibonacci retracement.