MNI DAILY TECHNICAL ANALYSIS - Gilts Gap Lower

Price Signal Summary – Gilts Gap Lower

• In the equity space, S&P E-minis are holding onto most of the recent gains. Attention is on the 50-day EMA that intersects at 4390.56 today. This is an important short-term pivot resistance and a clear break is required to signal scope for a stronger recovery. EUROSTOXX 50 futures are holding onto the bulk of recent gains following the rebound from 3949.50, Oct 6 low. Despite this bounce, a bearish risk remains present. The contract recently traded below 3974.00, Sep 20 low. A clear break of this support would strengthen a bearish case and open 3882.00, Jul 19 low.
• In FX, EURUSD outlook remains bearish and the move lower Oct 6 reinforces this set-up. The break of 1.1563, Sep 30 and Oct 1 low, confirms a resumption of the current downtrend and has opened 1.1493 next, a Fibonacci projection. GBPUSD inched higher Friday, briefly showing above 1.3648, Oct 10 high Despite recent gains, a bearish theme remains intact. This follows weakness on Sep 28 and 29 and the breach of a triangle base drawn from the Jul 20 low. USDJPY has accelerated higher today following a resumption of its uptrend Friday - the pair cleared former resistance at 112.08, Sep 30 high. The break paves the way for further gains and has opened 113.41, a multi-year trendline resistance drawn from the December 1975 high.
• On the commodity front, Gold traded higher Friday but failed to hold onto gains, ending the day largely unchanged. Near-term attention is on the 50-day EMA at $1777.9 and $1787.4, Sep 22 high and a key resistance. WTI trend conditions remain bullish and the contract has started the week on a firm note. Today's gains confirm an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also been cleared.
• In the FI space, Gilt futures remain heavy and the contract has gapped lower this morning. Moving average studies continue to point south, reinforcing current conditions. The focus is on 123.16 next, the Feb 27, 2019 low (cont). Firm resistance is seen at 125.19, Oct 7 high. Bund futures remain bearish and have started the week on a soft note, resuming the downtrend. A bearish price sequence of lower lows and lower highs remains in place and this defines a downtrend.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Conditions Remain Bearish

• RES 4: 1.1846 High Sep 14
• RES 3: 1.1777 Bear channel top drawn from the Jun 1 high
• RES 2: 1.1737/55 50-day EMA / High Sep 22
• RES 1: 1.1640/1658 High Oct 4 / 20-day EMA
• PRICE: 1.1573 @ 06:23 BST Oct 11
• SUP 1: 1.1529 Low Oct 6 and the bear trigger
• SUP 2: 1.1493 50.0% retracement of the Mar '20 - Jan '21 bull phase
• SUP 3: 1.1469 1.236 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1371 Low Jul 16

EURUSD outlook remains bearish and the move lower Oct 6 reinforces this set-up. The break of 1.1563, Sep 30 and Oct 1 low, confirms a resumption of the current downtrend and has opened 1.1493 next, a Fibonacci projection. The extension also maintains a bearish price sequence of lower lows and lower highs with moving average conditions in a bear mode. Firm resistance is unchanged at 1.1640.

GBPUSD TECHS: Gains Still Considered Corrective

• RES 4: 1.3854 High Sep 15
• RES 3: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 2: 1.3721 50-day EMA
• RES 1: 1.3657 High Oct 8
• PRICE: 1.3641 @ 06:28 BST Oct 11
• SUP 1: 1.3544/3412 Low Oct 6 / Low Sep 29 and the bear trigger
• SUP 2: 1.3354 Low Dec 23, 2020
• SUP 3: 1.3302 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD inched higher Friday, briefly showing above 1.3648, Oct 10 high Despite recent gains, a bearish theme remains intact. This follows weakness on Sep 28 and 29 and the breach of a triangle base drawn from the Jul 20 low. MA studies are in a bear mode too, suggesting recent gains have been corrective. A resumption of weakness would open 1.3354, the Dec 23, 2020 low. INitial resistance is at 12.3658, Friday's high.

EURGBP TECHS: Remains Vulnerable

• RES 4: 0.8703 1.236 proj of the Aug 10 - Sep 7 - Sep 16 rally
• RES 3: 0.8670 High Jul 20 and key resistance
• RES 2: 0.8624/58 High Oct 1 / High Sep 29
• RES 1: 0.8554 50-day EMA
• PRICE: 0.8483 @ 06:32 BST Oct 8
• SUP 1: 0.8475/64 Low Oct 7 / 1.0% 10-dma envelope
• SUP 2: 0.8450 Low Aug 10
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP remains vulnerable following last week's move lower and extension of the reversal from 0.8658, Sep 29 high. The move lower has resulted in a break of 0.8526, Sep 28 low and 0.8501, the Sep 16 low. This strengthens the bearish case and sets the scene for a deeper retracement towards 0.8450, Oct 8 low. The cross needs to breach 0.8658, Sep 29 high to reinstate a bull theme. Initial firm resistance is at 0.8554, the 50-day EMA.

USDJPY TECHS: Approaching A Multi-Year Trendline Resistance

• RES 4: 113.89 1.236 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 113.68 2.0% 10-dma envelope
• RES 2: 113.41 Multi-year trendline drawn from the Dec 1975 high
• RES 1: 112.90 1.00 proj of Apr 23 - Jul 2 - Aug 4 price swing
• PRICE: 111.91 @ 15:20 BST Oct 8
• SUP 1: 111.51 Low Oct 8
• SUP 2: 110.82/80 Low Oct 4 / High Aug 11
• SUP 3: 110.34 50-day EMA
• SUP 4: 109.76 Low Sep 23

USDJPY has accelerated higher today following a resumption of its uptrend Friday - the pair cleared former resistance at 112.08, Sep 30 high. The break paves the way for further gains and has opened 113.41, a multi-year trendline resistance drawn from the December 1975 high. Ahead of this level, 112.90 is a Fibonacci projection. On the downside, key support has been defined at 110.82, Oct 4 low.

EURJPY TECHS: Bulls Return

• RES 4: 131.76 61.8% retracement of the Jun - Sep downleg
• RES 3: 131.09 High Jul 13
• RES 2: 130.75 High Sep 3 bull trigger
• RES 1: 130.48 High Sep 29
• PRICE: 130.41 @ 06:40 BST Oct 11
• SUP 1: 129.28 Intraday low
• SUP 2: 128.33/31 Low Oct 6 / Low Sep 23
• SUP 3: 127.94/93 Low Aug 19 / Low Sep 22 the bear trigger
• SUP 4: 127.88 50.0% retracement of the Oct '20 - Jan rally

EURJPY is firmer and gains appear to be accelerating. The reversal higher from last week's low of 128.33, low Oct 6 has reinstated a near-term bullish focus as the cross trades within a broad range. Price is approaching resistance at 130.48, Sep 29 high where a break would open 130.75, the Sep 3 high and a bull trigger. Clearance of this level would strengthen the case for bulls. Initial support is at today's intraday low of 129.28.

AUDUSD TECHS: Testing The 50-Day EMA

• RES 4: 0.7503 High Jul 13
• RES 3: 0.7478 High Sep 3 and the bull trigger
• RES 2: 0.7410 High Sep 10
• RES 1: 0.7338/60 High Oct 8 / 61.8% of the Sep 3 - Sep 29 downleg
• PRICE: 0.7327 @ 06:47 BST Oct 11
• SUP 1: 0.7226/7170 Low Oct 6 / Low Sep 29
• SUP 2: 0.7120/06 / 2.0% 10-dma envelope / Low Aug 20 bear trigger
• SUP 3: 0.7053 38.2% retracement of the Mar '20 - Feb uptrend
• SUP 4: 0.6991 Low Nov 2, 2020

AUDUSD is holding onto recent gains. The outlook remains bearish though, following recent weakness in September. 0.7194 has been cleared, 76.4% of the Aug 20 - Sep 3 rally and this opens 0.7106, Aug 20 low and a bear trigger. A break would confirm a resumption of the broader downtrend from late February. The Aussie is testing its 50-day EMA, at 0.7325. A clear breach would suggest scope for an extension of the correction.

USDCAD TECHS: Bear Leg Accelerating

• RES 4: 1.2957 High Dec 21, 2020
• RES 3: 1.2949 High Aug 20 and the bull trigger
• RES 2: 1.2775/2896 High Sep 29 / High Sep 20
• RES 1: 1.2562/2648 High Oct 8 / High Oct 4
• PRICE: 1.2455 @ 06:54 BST Oct 11
• SUP 1: 1.2422 Jul 30 low and a key support
• SUP 2: 1.2367 61.8% retracement of the Jun - Aug rally
• SUP 3: 1.2303 Low Jul 6
• SUP 4: 1.2253 Low Jun 23

USDCAD losses accelerated Friday on the back of a firm Canadian jobs report. This has confirmed a break of support at 1.2494, Sep 3 low and signals scope for a deeper pullback towards 1.2422, the Jul 30 low. Clearance of this support would strengthen the case for bears. On the upside, a break of 1.2775, Sep 29 high would represent a bullish development instead. Initial firm resistance is at 1.2648, Oct 6 high.

FIXED INCOME

BUND TECHS: (Z1) Starting The Week On A Soft Note

• RES 4: 171.96 High Sep 21 and key near-term resistance
• RES 3: 170.81 Low Sep 17 and recent breakout level
• RES 2: 170.55 High Oct 4 and key near-term resistance
• RES 1: 170.00 High Oct 7
• PRICE: 168.93 @ 05:23 BST Oct 11
• SUP 1: 168.75 Low May 21 (cont)
• SUP 2: 168.62 2.00 proj of the Sep 9 - 17 - 21 price swing
• SUP 3: 168.29 Low May 19 (cont) and a key support
• SUP 4: 167.98 2.382 proj of the Sep 9 - 17 - 21 price swing

Bund futures remain bearish and have started the week on a soft note, resuming the downtrend. A bearish price sequence of lower lows and lower highs remains in place and this defines a downtrend. Note moving average studies are in a bear mode too, reinforcing current trend conditions. The focus is on 168.62 next, a Fibonacci projection and beyond. Key short-term resistance has been defined at 170.00.

BOBL TECHS: (Z1) Heading South

• RES 4: 135.540 High Sep 21 and key near-term resistance
• RES 3: 135.380 High Sep 23
• RES 2: 135.200 Low Sep 17 and recent breakout level / High Oct 4
• RES 1: 135.060 High Oct 7
• PRICE: 134.720 @ 05:08 BST Oct 11
• SUP 1: 134.677 3.236 proj of the Aug 20 - 27 - 31 price swing
• SUP 2: 134.660 Low Sep 7 and 8 (cont)
• SUP 3: 134.548 61.8% retracement of the Jun - Sep rally
• SUP 4: 134.410 Low Jul 13 (cont)

Bobl futures outlook remains bearish and the contract has resumed its downtrend.The continued move lower maintains the current bearish price sequence of lower lows and lower highs that defines a downtrend and signals scope for further weakness. The focus is on 134.677 next, a Fibonacci projection. On the upside, key short-term resistance has been defined at 135.060.

SCHATZ TECHS: (Z1) Outlook Remain Bearish

• RES 4: 112.340 High Aug 31
• RES 3: 112.305 High Sep 3
• RES 2: 112.290 High Sep 20 and key near-term resistance
• RES 1: 112.255 High Sep 23 and Oct 5
• PRICE: 112.210 @ 05:08 BST Oct 11
• SUP 1: 112.190 Low Sep 30 and Oct 6
• SUP 2: 112.174 2.764 proj of the Aug 20 - 26 - 31 price swing
• SUP 3: 112.159 61.8% retracement of the May - Aug rally (cont)
• SUP 4: 112.140 Low Jul 5 / 6 (cont)

Schatz futures remain in a downtrend. The recent breach of 112.215, Sep 9 low confirmed a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs. Scope is seen for an extension towards 112.174 next, a Fibonacci projection. MA conditions are in a bear mode, reinforcing current conditions. On the upside, key S/T resistance is unchanged at 112.290, Sep 20 high.

GILT TECHS: (Z1) Gaps Lower

• RES 4: 126.84 Low Sep 17
• RES 3: 125.96 20-day EMA
• RES 2: 125.72 High Oct 1 and key near-term resistance
• RES 1: 124.05/125.19 Low Oct 6 / High Oct 7
• PRICE: 123.57 @ 09:20 BST Oct 11
• SUP 1: 123.44 Intraday low
• SUP 2: 123.16 Low Feb 27, 2019 (cont)
• SUP 3: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing
• SUP 4: 122.15 Low Jan 18, 2019 (cont)

Gilt futures remain heavy and the contract has gapped lower this morning. The break to fresh lows confirms a resumption of the bear trend and an extension of the current bearish price sequence of lower lows and lower highs. Moving average studies continue to point south, reinforcing current conditions. The focus is on 123.16 next, the Feb 27, 2019 low (cont). Firm resistance is seen at 125.19, Oct 7 high.

BTP TECHS: (Z1) Needle Still Points South

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.87 High Oct 1 and key near-term resistance
• PRICE: 151.81 @ Close Oct 11
• SUP 1: 151.00 Low Oct 6 and the bear trigger
• SUP 2: 150.56 Low Jun 30 (cont)
• SUP 3: 150.00/149.97 Round number support / Low Jun 25
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures traded lower Oct 6, confirming a recent bear flag formation and a resumption of the downtrend. A price sequence of lower lows and lower highs that defines a downtrend remains intact and the recent move below 152.94, Sep 9 low, confirmed this price condition. The focus is on the 150.00 psychological round number next. Key near-term resistance has been defined at 152.87, Oct 1 high.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) 50-Day EMA Remains Intact

• RES 4: 4300.00 Round number resistance
• RES 3: 4234.50 0.764 projection of the Jul 19 - Sep 6 - 20 price swing
• RES 2: 4223.00 High Sep 6 and the bull trigger
• RES 1: 4094.00/4200.50 50-day EMA / High Sep 24
• PRICE: 4065.00 @ 06:59 BST Oct 11
• SUP 1: 3949.50 Low Oct 6 and the bear trigger
• SUP 2: 3902.50 Low Jul 20
• SUP 3: 3882.00 Low Jul 19 and a key support
• SUP 4: 3856.40 1.382 proj of the Sep 6 - Sep 20 - Sep 24 price swing

EUROSTOXX 50 futures are holding onto the bulk of recent gains following the rebound from 3949.50, Oct 6 low. Despite this bounce, a bearish risk remains present. The contract recently traded below 3974.00, Sep 20 low. A clear break of this support would strengthen a bearish case and open 3882.00, Jul 19 low. Price needs to clear 4094.00, the 50-day EMA to ease the current bearish threat. This would open 4200.50, Sep 24 high.

E-MINI S&P (Z1):Holding Onto Recent Gains

• RES 4: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4539.50 High Sep 3 and the bull trigger
• RES 3: 4519.75 High Sep 9
• RES 1: 4421.50/4472.00 High Oct 7 / High Sep 27
• PRICE: 4381.75 @ 07:01 BST Oct 11
• SUP 1: 4260.00 Low Oct 1 and the bear trigger
• SUP 2: 4243.50 Low Jul 20
• SUP 3: 4214.50 Low Jul 19 and a key support
• SUP 4: 4117.00 Low Jun 21

S&P E-minis are holding onto most of the recent gains. Attention is on the 50-day EMA that intersects at 4390.56 today. This is an important short-term pivot resistance and a clear break is required to signal scope for a stronger recovery. Note, the contract has probed the 50-day EMA, an extension would open 4472.00, Sep 27 high. Key support to watch is unchanged at 4260.00, the Oct 1 low and the bear trigger.

COMMODITIES

BRENT TECHS: (Z1) Bull Trend Extends

• RES 4: $85.20 - 1.618 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $85.00 - Round number resistance
• RES 2: $84.10 - 1.50 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $83.80 - Intraday high
• PRICE: $83.56 @ 07:03 BST Oct 11
• SUP 1: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 2: $76.51/75.42 - Low Sep 30 and key support / High Sep 15
• SUP 3: $74.81 - Low Sep 23
• SUP 4: $72.51 - Low Sep 21 and key near-term support

Brent futures have started the week on a firm note, trading above last week's high of $83.47 on Oct 6. The break confirms a resumption of the uptrend and resumes the bullish price sequence of higher highs and higher lows. Note too that the contract has recently cleared the $80.00 handle, an important psychological hurdle. The focus is on $84.10 next, a Fibonacci projection. Key short-term support has been defined at $79.08, Oct 7 low.

WTI TECHS: (X1) Defying Gravity

• RES 4: $84.00 - Round number resistance
• RES 3: $82.89 - 1.746 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 2: $81.60 - 1.618 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 1: $81.04 - Intraday high
• PRICE: $80.85 @ 07:12 BST Oct 11
• SUP 1: $78.63 - Low Oct 8
• SUP 2: $74.96 - Low Oct 7 and key near-term support
• SUP 3: $73.14 - Low Sep 30 and key support
• SUP 4: $71.61 - Low Sep 21

WTI trend conditions remain bullish and the contract has started the week on a firm note. Today's gains confirm an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also been cleared. The focus is on $81.60, a Fibonacci projection. On the downside, key short-term support has been defined at $74.96, Oct 7.

GOLD TECHS: Holding Above Support

• RES 4: $1844.9 - Low Jun 14
• RES 3: $1834.1 - High Jul 15 and the bull trigger
• RES 2: $1808.7 - High Sep 14
• RES 1: $1781.4/87.4 - High Oct 8 / High Sep 22 and key resistance
• PRICE: $1755.9 @ 07:29 BST Oct 11
• SUP 1: $1746.0 - Low Oct 6
• SUP 2: $1721.7 - Low Sep 29 and the bear trigger
• SUP 3: $1717.8 - Low Aug 10
• SUP 4: $1690.6 - Low Aug 08 and the bear trigger

Gold traded higher Friday but failed to hold onto gains, ending the day largely unchanged. Near-term attention is on the 50-day EMA at $1777.9 and $1787.4, Sep 22 high and a key resistance. A resumption of strength would reinforce the bullish engulfing candle that signalled a reversal on Sep 30. A break of $1787.4 would suggest scope for an extension. Initial support is at $1746.0, Oct 6 low. A break is required to undermine the current bullish tone.

SILVER TECHS: Bearish Outlook

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $23.525 - 50-day EMA
• RES 1: $23.191 - High Oct 8
• PRICE: $22.644 @ 07:56 BST Oct 11
• SUP 1: $21.423 - Low Sep 29
• SUP 2: $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally
• SUP 3 :$20.000 - Psychological round number
• SUP 4: $19.851 - Low Jul 21, 2020

The Silver trend outlook remains bearish. The metal broke lower Sep 29 and cleared $22.039, Sep 20 low. This confirmed a resumption of the broader downtrend and maintains the bearish price sequence of lower lows and lower highs. The move lower paves the way for an extension towards $20.871, a Fibonacci retracement. On the upside, key near-term resistance is at $23.191, Oct 8 high. Gains are considered corrective.