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MNI DAILY TECHNICAL ANALYSIS - Gilts Secure First Close Above Key Level Since April

Price Signal Summary – Gilt Futures Secure First Close Above Key Level Since April

  • The rally in e-mini S&P futures accelerated further still Wednesday, with prices surging through the top-end of the bull channel drawn off the March 13th low at 4608.50. This marks another positive shift for S/T momentum and clears the way for a test of the March 29th 2022 high at 4631.00 and - ultimately - all time highs. Eurostoxx 50 futures traded higher last week. The rally resulted in a move above the 50-day EMA at 4335.00 and price is through 4371.00, the Jul 6 high. Clearance of this latter level highlights a potentially stronger bull cycle.
  • The recovery in EURGBP accelerated Wednesday with the break of the 50-dma and bull trigger, helping prompt a fourth consecutive session of higher highs. Momentum is pointed higher for now, bringing the next key upside levels at the 100-dma. GBPUSD traded materially weaker into the Wednesday close, marking four consecutive sessions of losses and a partial retracement of the late June rally. Markets are on watch for a potential reversal pattern in the pair - which would gather strength on a break below 1.2866 - the 50% retracement of the late June upleg. Rallies in USDCAD were sold Friday, again confirming that recent short bouts of strength are likely corrective in nature and the onus remains lower for now. Subsequent weakness into the Wednesday close keeps the medium-term trend pointed lower for now.
  • Gold shows at a new cycle high early Thursday, adding to recent gains and topping key resistance at 1985.3, the May 24 high. A close above here could presage a stronger reversal higher. WTI crude futures bounced off the Monday lows and added to gains Wednesday, although a mid-session bounce wasn’t sustained, putting markets flat into the close. The current bull cycle remains intact for now after the recent breach of $72.72, the Jun 21 high. Last Wednesday’s move higher resulted in a break of key resistance at $75.70.
  • Bund futures spiked higher on a soft UK CPI print Wednesday, but swiftly reversed course into the close to finish softer on the day. Moves put prices back within range of the 50- and 100-dmas, however momentum remains clearly in favour of bulls at these levels. Gilt futures blew through several key resistance levels in response to a lower-than-expected inflation release, tipping prices to their best levels since early June. The 50-dma had guided prices lower across the past three months and the close above the mark is a bullish signal - the first such close since early April.

FOREIGN EXCHANGE

EURUSD TECHS: Bull Wave Falters

  • RES 4: 1.1396 High Feb 16 2022
  • RES 3: 1.1355 1.382 proj of the May 31 - Jun 22 - Jul 7 price swing:
  • RES 2: 1.1313 High Feb 24 2022
  • RES 1: 1.1274 61.8% retracement of the Jan ‘21 - Sep ‘22 bear leg
  • PRICE: 1.1215 @ 08:08 BST Jul 20
  • SUP 1: 1.1095 High Apr 26 and recent breakout level
  • SUP 2: 1.1012 High Jun 22
  • SUP 3: 1.1004 Low Jul 12
  • SUP 4: 1.0930 20-day EMA

EURUSD faded into the Wednesday close as the recent bull wave faltered. Prices showed below the Monday and Tuesday lows to chew through a small part of the sharp gains posted after US CPI. The pullback follows the failed break of first key resistance at the 1.1274 level, however, moving average studies remain in bull-mode, reinforcing current upward trend conditions. On the downside, initial firm support lies at 1.1095.

GBPUSD TECHS: Pull Lower Prompts Reassessment of S/T Outlook

  • RES 4: 1.3391 1.236 proj of the Mar 8 - May 10 - May 25 price swing
  • RES 3: 1.3328 76.4% retracement of the Jun ‘21 - Sep ‘22 downleg
  • RES 2: 1.3258 1.236 proj of the May 25 - Jun 16 - Jun 29 price swing
  • RES 1: 1.3174 Bull channel top drawn from the Mar 8 low
  • PRICE: 1.2916 @ 08:11 BST Jul 20
  • SUP 1: 1.2870 Low Jul 20
  • SUP 2: 1.2868 20-day EMA
  • SUP 3: 1.2848 High Jun 16 and a recent breakout level
  • SUP 4: 1.2674 Low Jul 6

GBPUSD traded materially weaker into the Wednesday close, marking four consecutive sessions of losses and a partial retracement of the late June rally. Markets are on watch for a potential reversal pattern in the pair - which would gather strength on a break below 1.2866 - the 50% retracement of the late June upleg. Support at 1.2932, the 38.2% Fib level, broke. More broadly, the medium-term uptrend remains intact, with moving average studies in bull-mode position. The focus is on 1.3174, the top of a bull channel drawn from the Mar 8 low. Initial firm support lies at 1.2868, the 20-day EMA.

EURGBP TECHS: CPI Triggers Topping of 50-dma

  • RES 4: 0.8749 50.0% retracement of the Feb 3 - Jun 19 downleg
  • RES 3: 0.8719 High May 23
  • RES 2: 0.8706 100-dma
  • RES 1: 0.8701 High Jul 19
  • PRICE: 0.8684 @ 08:12 BST Jul 20
  • SUP 1: 0.8504 Low Jul 11
  • SUP 2: 0.8471 1.0% 10-dma envelope
  • SUP 3: 0.8454 76.4% retracement of the Mar - Sep 2022 bull cycle
  • SUP 4: 0.8408 Low Aug 24 2022

The recovery in EUR/GBP accelerated Wednesday with the break of the 50-dma and bull trigger, helping prompt a fourth consecutive session of higher highs. Momentum is pointed higher for now, bringing the next key upside levels at the 100-dma of 0.8707 and congestion resistance at 0.8719 into play. The downside focus for now is on 0.8454, a Fibonacci retracement point, but markets are pointed higher for now.

USDJPY TECHS: Pullback Hits Pause

  • RES 4: 144.20 High Jul 7
  • RES 3: 143.01 High Jul 10
  • RES 2: 141.68 20-day EMA
  • RES 1: 139.99/140.18 High Jul 19 / 50-day EMA
  • PRICE: 139.41 @ 08:13 BST Jul 20
  • SUP 1: 137.25 Low Jul 14
  • SUP 2: 136.57 4.0% 10-dma envelope
  • SUP 3: 136.31 Low May 17
  • SUP 4: 135.53 61.8% retracement of the Mar 24 - Jun 30 bull leg

The pullback in USDJPY paused to begin the week, warding price action away from entering a technically oversold condition. Despite the pause, the bear cycle that started Jun 30 is still underway. The recent sell-off has resulted in a break of both the 20- and 50-day EMAs and price is back inside the bull channel drawn from the Jan 16 low. A continuation lower would open 136.57, the lower band of a moving average envelope. Initial firm resistance is at 140.18, the 50-day EMA. A break of this average would ease bearish pressure.

EURJPY TECHS: Nears Bull Trigger Before Fading

  • RES 4: 159.92 2.236 proj of the May 11 - 29 - 31 price swing
  • RES 3: 158.72 2.00 proj of the May 11 - 29 - 31 price swing
  • RES 2: 158.00 High Jun 28 and the bull trigger
  • RES 1: 157.21 High Jul 19
  • PRICE: 156.37 @ 08:15 BST Jul 20
  • SUP 1: 154.41 Trendline support drawn from the Mar 24 low
  • SUP 2: 153.24 50-day EMA
  • SUP 3: 151.61 Low Jun 15
  • SUP 4: 151.07 High May 29

The current bear cycle in EURJPY remains in play and short-term gains appear corrective for now. Attention is on a trendline support at 154.41 and support at 153.24, the 50-day EMA. The trendline is drawn from the Mar 24 low. A break of this 153.52-152.77 support zone would strengthen bearish conditions and pave the way for a continuation lower. A break above the bull trigger at 158.00 would change the picture, and could signal the beginning of an upside reversal in the cross.

AUDUSD TECHS: Surges Off Lows

  • RES 4: 0.7029 High Feb 14
  • RES 3: 0.6993 76.4% retracement of the Feb 2 - May 31 bear leg
  • RES 2: 0.6936 High Feb 16
  • RES 1: 0.6900 High Jun 16 and key resistance
  • PRICE: 0.6823 @ 08:17 BST Jul 20
  • SUP 1: 0.6754 Low Jul 19
  • SUP 2: 0.6746 20-day EMA
  • SUP 3: 0.6651 Low Jul 11
  • SUP 4: 0.6596 Low Jun 29 and key support

AUDUSD is trading favourably headed through the European open after a solid jobs report overnight. The bounce off the week’s lows has been firm, reinforcing the underlying short-term bullish theme, with price remaining within range of resistance at 0.6900, the Jun 16 high. A break of this level would open 0.6936, the Feb 16 high. Initial support lies at 0.6746, the 20-day EMA. Weakness through here would open potential for losses toward the 0.6712 200-dma.

USDCAD TECHS: Sell-On-Rallies Remains Dominant Theme

  • RES 4: 1.3387 High Jul 7 and a key resistance
  • RES 3: 1.3361 50-dma
  • RES 2: 1.3304 High Jul 10
  • RES 1: 1.3251 20-day EMA
  • PRICE: 1.3137 @ 08:20 BST Jul 20
  • SUP 1: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
  • SUP 2: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
  • SUP 3: 1.2992 50.0% retracement of the 2021 - 2022 bull leg
  • SUP 4: 1.2949 2.00 proj of the Apr 28 - May 8 - May 26 price swing

Rallies in USDCAD were sold Friday, again confirming that recent short bouts of strength are likely corrective in nature and the onus remains lower for now. Subsequent weakness into the Wednesday close keeps the medium-term trend pointed lower for now. Last week’s move lower resulted in a break of 1.3117, the Jun 27 low. This confirms a resumption of the downtrend that started on Oct 13 2022. The break lower opens 1.3084, and 1.3032, Fibonacci projection points.

FIXED INCOME

BUND TECHS: (U3) Fades Off Highs

  • RES 4: 135.00 High Jun 27 and key resistance
  • RES 3: 134.84 2.0% 10-dma envelope
  • RES 2: 134.78 High Jun 29
  • RES 1: 134.32 High Jul 18
  • PRICE: 133.72 @ 16:16 BST Jul 19
  • SUP 1: 131.92/130.60 Low Jul 13 / Low Jul 10
  • SUP 2: 130.46 1.236 projection of the Jun 1 - 16 - 27 price swing
  • SUP 3: 129.93 1.382 projection of the Jun 1 - 16 - 27 price swing
  • SUP 4: 129.49 1.50 projection of the Jun 1 - 16 - 27 price swing

Bund futures spiked higher on a soft UK CPI print Wednesday, but swiftly reversed course into the close to finish softer on the day. Moves put prices back within range of the 50- and 100-dmas, however momentum remains clearly in favour of bulls at these levels. Any continuation higher would ultimately open 135.00, the Jun 29 high and key resistance. For bears, a reversal lower would refocus attention on key support at 130.60, the Jul 10 low.

BOBL TECHS: (U3) Failed Break Higher

  • RES 4: 117.700 High Jun 01
  • RES 3: 116.860 High Jun 13
  • RES 2: 116.600 High Jul 18
  • RES 1: 116.587 100-dma
  • PRICE: 116.000 @ 16:22 BST Jul 19
  • SUP 1: 115.230/114.550 Low Jul 13 / 6 and the bear trigger
  • SUP 2: 114.432 1.764 projection of the Jun 1 - 8 - 12 price swing
  • SUP 3: 114.130 Low Mar 6 (cont) and a major support
  • SUP 4: 114.090 2.00 projection of the Jun 1 - 8 - 12 price swing

Bobl futures accelerated higher early Wednesday on a soft UK inflation print, putting prices at 116.600. The upside faltered into the Wednesday close, however, with prices fading quickly in US hours. This puts markets on a more neutral footing headed into the second half of the week, with 116.60 the first upside level to watch and key support remaining below at 114.550. This marks the Jul 6 low and this level marks the bear trigger.

SCHATZ TECHS: (U3) Equals Multi-Month High

  • RES 4: 105.495 100-dma
  • RES 3: 105.258 50-dma
  • RES 2: 105.223 50% retracement June-July downleg
  • RES 1: 105.185 High Jul 19 & Jun 15
  • PRICE: 104.995 @ 16:27 BST Jul 19
  • SUP 1: 104.795/104.570 Low Jul 13 / 6 and the bear trigger
  • SUP 2: 104.470 2.00 projection of the Jun 1 - 8 - 12 price swing
  • SUP 3: 104.335 Low Mar 9 (cont) and a major support
  • SUP 4: 104.264 2.382 projection of the Jun 1 - 8 - 12 price swing

Schatz futures were jolted higher by the soft UK CPI release, prompting prices to equal the Jun 15 high at 105.185. Rallies were subsequently sold, putting prices into negative territory ahead of the close. Key support and the bear trigger has been defined at 104.570, the Jul 6 low. A break would confirm a resumption of the downtrend.

GILT TECHS: (U3) Cracks Several Key Resistance Levels

  • RES 4: 99.27 100-dma (cont)
  • RES 3: 98.00 Round number resistance
  • RES 2: 97.91 38.2% Fib for Mar-Jul Downleg
  • RES 1: 97.84 High Jul 19
  • PRICE: 97.24 @ 16:31 BST Jul 19
  • SUP 1: 92.82/09 Low Jul 12 / Low Jul 7 and the bear trigger
  • SUP 2: 92.00 Round number support
  • SUP 3: 91.80 1.382 proj of the Jun 1 - 20 - 23 price swing (cont)
  • SUP 4: 91.36 1.50 proj of the Jun 1 - 20 - 23 price swing (cont)

Gilt futures blew through several key resistance levels in response to a lower-than-expected inflation release, tipping prices to their best levels since early June. The 50-dma had guided prices lower across the past three months and the close above the mark is a bullish signal - the first such close since early April. Short-term positive momentum has strengthened, and the rally is yet to trigger an overbought condition. As such, round number resistance at 98.00 and the 100-dma are the next key upside levels for bulls.

BTP TECHS: (U3) Gap Higher Fades Into Close

  • RES 4: 118.52 76.4% Nov - Dec Downleg
  • RES 3: 118.12 3.0% 10-dma envelope
  • RES 2: 117.60 High Jun 26 and the bull trigger
  • RES 1: 117.48 High Jul 19
  • PRICE: 116.16 @ 16:38 BST Jul 19
  • SUP 1: 114.26/112.95 Low Jul 13 / 11 and the bear trigger
  • SUP 2: 112.48 Low May 29
  • SUP 3: 111.78 Low May 26 and a key support
  • SUP 4: 111.00 Round number support

Prices gapped higher at the open, hitting new multi-week highs of 117.48 in the process. Prices faded across the session, however, to put BTP futures lower at the close of trade. This reinforces the importance of first resistance at 117.60 - the cycle high - a key level for bulls going forward. Key support has been defined at 112.95, the Jul 11 low. A break would reinstate a bearish threat.

EQUITIES

EUROSTOXX50 TECHS: (U3) Rally Exposes Key Resistance

  • RES 4: 4501.60 1.618 proj of the May 31 - Jun 5 - 7 price swing
  • RES 3: 4472.24 1.382 proj of the May 31 - Jun 5 - 7 price swing
  • RES 2: 4447.00 High Jul 3 and the bull trigger
  • RES 1: 4435.00 High Jul 14
  • PRICE: 4368.00 @ 08:21 BST Jul 20
  • SUP 1: 4335.00/4220.00 50-day EMA / Low Jul 7 and key support
  • SUP 2: 4208.50 50.0% retracement of the Mar 20 - Jul 3 bull cycle
  • SUP 3: 4200.00 Round number support
  • SUP 4: 4152.20 61.8% retracement of the Mar 20 - Jul 3 bull cycle

Eurostoxx 50 futures traded higher last week. The rally resulted in a move above the 50-day EMA at 4335.00 and price is through 4371.00, the Jul 6 high. Clearance of this latter level highlights a potentially stronger bull cycle and attention is on key resistance and the bull trigger at 4447.00, the Jul 3 high. Key support and the bear trigger has been defined at 4220.00, the Jul 7 low. Initial support is at the 50-day EMA.

E-MINI S&P TECHS: (U3) Bull Channel Top Cleared

  • RES 4: 4739.50 High 13 Jan’22
  • RES 3: 4648.60 3.0% 10-dma envelope
  • RES 2: 4631.00 High 29 Mar’22
  • RES 1: 4608.50 High Jul 19
  • PRICE: 4605.00 @ 16:45 BST Jul 19
  • SUP 1: 4482.32 / 4368.50 20-day EMA / Low Jun 26 and a key support
  • SUP 2: 4351.02 50-day EMA
  • SUP 3: 4337.83 Bull channel base drawn from the Mar 13 low
  • SUP 4: 4269.50 Low Jun 2

The rally accelerated further still Wednesday, with prices surging through the top-end of the bull channel drawn off the March 13th low at 4608.50. This marks another positive shift for S/T momentum and clears the way for a test of the March 29th 2022 high at 4631.00 and - ultimately - all time highs. Nonetheless, the RSI has now tipped into overbought territory, signalling a slowing of the uptrend could dominate to alleviate the condition over the coming few sessions. Any corrective pullback would initially target the 20-day EMA at 4482.32 for support.

COMMODITIES

BRENT TECHS: (U3) More Neutral Theme

  • RES 4: $86.20 - High Jan 27
  • RES 3: $85.47 - High Apr 12 / 13 and a key resistance
  • RES 2: $83.77 - High Apr 19
  • RES 1: $82.06 - 76.4% retracement of the Apr 12 - May 4 downleg
  • PRICE: $79.42 @ 07:57 BST Jul 20
  • SUP 1: $77.79 - 20-day EMA
  • SUP 2: $75.03/71.43 - Low May 31
  • SUP 3: $71.00 - Low Jul 6 / May 4
  • SUP 4: $69.95 - Low Mar 20 and a key support

Prices pulled lower into last week’s close and have struck a more consolidative, neutral tone since. Previous strength appears to have paused, rather than reversed, meaning bullish conditions remain intact over the medium-term. Recent gains resulted in a move above resistance at $78.47, the Jun 5 high. The continuation higher signals scope for a climb towards $82.06, a Fibonacci retracement. Key near-term support has been defined at $75.03, the Jul 6 low. A break of this level is required to signal a possible top.

WTI TECHS: (U3) Monday Bounce Keeps Key Fib Within Range

  • RES 4: $82.24 - High Apr 12 and key resistance
  • RES 3: $80.39 - High Apr 19
  • RES 2: $78.62 - High Apr 24
  • RES 1: $78.03 - 76.4% retracement of the Apr 12 - May 4 bear leg
  • PRICE: $75.36 @ 07:51 BST Jul 20
  • SUP 1: $72.31 - 20-day EMA
  • SUP 2: $69.69/66.96 - Low Jul 3 / Low Jun 12 and key support
  • SUP 3: $64.41 - Low May 4 and the bear trigger
  • SUP 4: $62.43 - Low Dec 2 2021 (cont)

Prices bounced off the Monday lows and added to gains Wednesday, although a mid-session bounce wasn’t sustained, putting markets flat into the close. The current bull cycle remains intact for now after the recent breach of $72.72, the Jun 21 high. Last Wednesday’s move higher resulted in a break of key resistance at $75.70, the Jun 5 high as well as the 200-dma. This strengthens current bullish conditions and paves the way for a climb towards $78.03, a Fibonacci retracement point. Key short-term support has been defined at $66.96, the Jun 12 low. Initial support is at $72.31, the 20-day EMA.

GOLD TECHS: Shows Above Key Resistance

  • RES 4: $2063.0 - High May 4
  • RES 3: $2022.6 - High May 12
  • RES 2: $1993.8 - 2.0% 10-dma envelope
  • RES 1: $1987.5 - High Jul 19
  • PRICE: $1980.8 @ 07:59 BST Jul 20
  • SUP 1: $1934.4 - 20-day EMA
  • SUP 2: $1902.8/1893.1 - Low Jul 6 / Jun 29 and the bear trigger
  • SUP 3: $1885.8 - Low Mar 15
  • SUP 4: $1865.8 - 76.4% retracement of the Feb 28 - May 4 bull cycle

Gold shows at a new cycle high early Thursday, adding to recent gains and topping key resistance at 1985.3, the May 24 high. A close above here could presage a stronger reversal higher. Strength follows the break of the 50-day EMA at 1948.3. The break signalled scope for a continuation of the current corrective cycle. This opens $1968.00, the Jun 16 high. Key support and the bear is at $1893.1, the Jun 29 low.

SILVER TECHS: Clears Key Resistance

  • RES 4: $26.222 - High Apr 18 2022 and a key resistance
  • RES 3: $26.135 - High May 5 and bull trigger
  • RES 2: $25.323 - 4.0% 10-dma envelope
  • RES 1: $25.267 - High Jul 20
  • PRICE: $25.033 @ 08:05 BST Jul 20
  • SUP 1: $24.099 - Low Jul 13
  • SUP 2: $23.353 - 20-day EMA
  • SUP 3: $22.527 - Low Jul 6
  • SUP 4: $22.111 - Low Jun 23 and the bear trigger

Silver maintains a firmer short-term tone and the metal traded a new high during Asia-Pac hours Thursday. Resistance at $24.530, the Jun 9 high, has been cleared. The break of this hurdle highlights a stronger short-term reversal and signals scope for further gains above $25.00 towards $26.1350, the May 5 high and a key resistance. On the downside, initial firm support is seen at $23.353, the 20-day EMA.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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