MNI DAILY TECHNICAL ANALYSIS - Gilts Bear Leg Extends

Price Signal Summary - Sell-Off In Gilts Exposes Key Support      

• In the equity space, a bull cycle in S&P E-Minis remains in play and last week’s gains reinforce the current bullish condition. The contract has traded through a key and major resistance at 5785.00, the Jul 16 high and a bull trigger. A clear break of this hurdle would confirm a resumption of the long-term uptrend. Sights are on the 5800.00 handle next. Initial support lies at 5668.73, the 20-day EMA. EUROSTOXX 50 futures traded higher last week as the contract extended the recovery from the Sep 10 low. It is still possible that recent gains are corrective. MA studies are in a bear-mode position and this highlights a downtrend. A reversal lower would refocus attention on key support at 4757.00, the Sep 6 / 10 lows. Key resistance is 5024.00, the Sep 3 high. A break would cancel a bearish theme and strengthen bullish conditions.                                                                                                          
• In FX, the short-term outlook in EURUSD remains bullish despite Monday’s pullback. Support to watch is the 20-day EMA, at 1.1091, it has been pierced but remains intact. A  resumption of gains would open 1.1202, the Aug 26 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend. On the downside, a clear break of the 20-day EMA is required to signal scope for a deeper retracement. GBPUSD continues to climb reinforcing current bullish conditions. Last week’s move higher resulted in a print above key resistance at 1.3266, the Aug 27 high. This breach confirms a resumption of the medium-term uptrend. Sights are on 1.3425 next, 1.764 proj of the Jun 27 - Jul 17 - Aug 8 price swing. Initial firm support is 1.3165, the 20-day EMA. USDJPY traded higher last week and remains above its most recent low. However, short-term gains appear corrective. Trend signals remain bearish and the pair traded to a fresh cycle low last week. The recent breach of key support at 141.70, the Aug 5 low, confirms a resumption of the downtrend. Sights are on 139.00 next, 1.382 projection of the Aug 15 - 26 - Sep 3 price swing. The 20-day EMA has been breached, the next key resistance is 146.86, the 50-day EMA.         
• On the commodity front, a bullish structure in Gold remains intact and the metal has traded, once again, to a fresh all-time high. The move higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull-mode set-up, highlighting a clear uptrend and positive market sentiment. The focus is on $2642.7 next, a 2.236 projection of the Jul 25 - Aug 2 - Aug 5 price swing. Firm support lies at $2547.5, the 20-day EMA. In the oil space, WTI futures are holding on to their recent gains. The recovery since Sep 9, appears - for now - to be a correction. The 20-day EMA, at $70.28, has been pierced. The next key resistance to watch is $72.38, the 50-day EMA. A break would undermine a bear theme. Note that moving average studies are in a bear-mode set-up, highlighting a dominant downtrend. A reversal lower would refocus attention on $64.61, the Sep 10 low and bear trigger.  
• In the FI space, Bund futures continue to trade below their recent highs. The latest move down - a correction - has resulted in a breach of the 20-day EMA. This continues to signal scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.63. Clearance of this average would undermine a bullish theme. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high. A bull cycle in Gilt futures remains intact, however, the sell-off that started Sep 7, highlights a corrective phase and this week’s move lower suggests potential for a continuation near-term. Support at 98.92, 76.4% of the Sep 2 - 17 bull leg, has been cleared and this strengthens the current bearish theme. The break exposes the key support at 98.11, the Sep 2 low. For bulls, a reversal higher would refocus sights on 101.54, Sep 17 high. Initial resistance is at 99.88, the 20-day EMA. 

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