MNI DAILY TECHNICAL ANALYSIS - Gilts Signal Possible Short-Term Reversal

Price Signal Summary – Gilts Signal Possible Short-Term Reversal

• In the equity space, S&P E-minis remain bullish and yesterday's pullback is considered corrective. Futures rallied again Wednesday and registered a fresh all-time high. The focus is on 4591.25, a Fibonacci projection. EUROSTOXX 50 futures are holding onto recent gains and sights are on 4223.00, the Sep 6 high and the key bull trigger. This week's recovery reinforces a bullish theme and confirms an extension of the bull phase that started Oct 6.
• In FX, EURUSD is consolidating and remains below recent highs. The pullback from 1.1669, Oct 19 high appears to be a correction. A short-term bull tone remains intact and recent activity suggests scope for an extension higher. GBPUSD has edged away from recent highs although the recent pullback still appears to be a shallow correction and suggests the uptrend from late September remains intact. USDJPY yesterday briefly breached last week's 113.41 low. The initial target of a sustained breach would be the 113.00 mark, a recent low which coincides with the 20-day EMA (113.09 today). However, more significant support lies at 112.08, Sep 30 high and a recent breakout level.
• On the commodity front, Gold maintains a positive short-term tone despite Tuesday's pullback and the yellow metal remains above the 50-day EMA. Price recently cleared resistance at $1800.6, Oct 14 high and this highlights a short-term bullish theme. WTI futures faced resistance yesterday and the contract has traded lower again today. Attention is on the 20-day EMA that intersects at $80.34. A clear breach of this average would signal scope for a deeper pullback and open $78.78, Oct 13 low.
• In the FI space, trend conditions remain bearish and short-term gains are considered corrective. Bund futures traded higher yesterday. The break last week of 168.21, Oct 12 low marked a resumption of the bear trend and opens 167.79 next, a Fibonacci projection and 167.52, the Mar 19, 2020 low (cont). Gilt futures rallied yesterday and have signalled a possible short-term reversal. In pattern terms, yesterday's breach of 125.27, Oct 14 high highlights a double bottom reversal.

FOREIGN EXCHANGE

EURUSD TECHS: Short-Term Outlook Remains Bullish

• RES 4: 1.1821 High Sep 16
• RES 3: 1.1711/55 Bear channel from Jun 1 high / High Sep 22
• RES 2: 1.1684 50-day EMA
• RES 1: 1.1669 High Oct 19
• PRICE: 1.1607 @ 05:58 BST Oct 28
• SUP 1: 1.1572/24 Low Oct 18 / Low Oct 12 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 Bear channel base drawn from the Jun 1 high

EURUSD is consolidating and remains below recent highs. The pullback from 1.1669, Oct 19 high appears to be a correction. A short-term bull tone remains intact and recent activity suggests scope for an extension higher. The focus is on 1.1684, the 50-day EMA. There is a key resistance at 1.1711, the top of a bear channel drawn from the Jun 1 high. Broader trend conditions remain bearish below this channel resistance. Key support is 1.1524.

GBPUSD TECHS: Pullback Considered Corrective

• RES 4: 1.3983 High Jul 30
• RES 3: 1.3958 High Aug 4
• RES 2: 1.3913 High Sep 14 and a key resistance
• RES 1: 1.3835 High Oct 20
• PRICE: 1.3743 @ 06:07 BST Oct 28
• SUP 1: 1.3710 Low Oct 27
• SUP 2: 1.3655 Low Oct 14
• SUP 3: 1.3544 Low Oct 6
• SUP 4: 1.3485/12 2.0% 10-dma env / Low Sep 29 and bear trigger

GBPUSD has edged away from recent highs although the recent pullback still appears to be a shallow correction and suggests the uptrend from late September remains intact. The recent breach of the 50-day EMA and last week's extension signals scope for further gains. Price has traded above 1.3795, 76.4% of the Sep 14 -29 downleg and attention is on key resistance at 1.3913, Sep 14 high. 1.3710 is the initial support, yesterday's low.

EURGBP TECHS: Outlook Remains Bearish

• RES 4: 0.8624/58 High Oct 1 / High Sep 29
• RES 3: 0.8573 High Oct 4
• RES 2: 0.8512 50-day EMA
• RES 1: 0.8474 20-day EMA
• PRICE: 0.8443 @ 06:24 BST Oct 28
• SUP 1: 0.8403 Low Oct 26
• SUP 2: 0.8359/56 1.0% 10-dma envelope / Low Feb 26, 2020
• SUP 3: 0.8339 Low Feb 25, 2020
• SUP 4: 0.8282 Feb 2020 low and a major support

EURGBP, traded lower Tuesday but yesterday's recovery places the cross back in its recent consolidative range. The cross has breached 0.8422, Oct 21/22 low and this reinforces bearish conditions and signals scope for weakness below 0.8400 towards 0.8359, a vol based support and 0.8356, the Feb 26, 2020 low. Note that price is also approaching the base of a broad multi-year range at 0.8300. Initial firm resistance is 0.8474, the 20-day EMA.

USDJPY TECHS: Eyeing Near-Term Support

• RES 4: 116.08 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.51 High Mar 10, 2017
• RES 2: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 114.70/73 High Oct 20 / High Nov 6, 2017
• PRICE: 113.56 @ 06:31 BST Oct 28
• SUP 1: 113.09/00 20-day EMA / Low Oct 12
• SUP 2: 112.08 High Sep 30 and a recent breakout level
• SUP 3: 111.51 Low Oct 8
• SUP 4: 110.82/80 Low Oct 4 / High Aug 11

USDJPY yesterday briefly breached last week's 113.41 low. The initial target of a sustained breach would be the 113.00 mark, a recent low which coincides with the 20-day EMA (113.09 today). However, more significant support lies at 112.08, Sep 30 high and a recent breakout level. Any deeper short-term pullback would be considered corrective. Trend conditions remain bullish and the trigger for a resumption of the uptrend is 114.70.

EURJPY TECHS: Corrective Cycle Still In Play

• RES 4: 134.40 2.382 proj of the Sep 22 - 29 - Oct 6 price swing
• RES 3: 134.13 High Jun 1 and a key resistance
• RES 2: 133.76 High Jun 10
• RES 1: 133.48 High Oct 20
• PRICE: 131.77 @ 06:46 BST Oct 28
• SUP 1: 131.43 20-day EMA
• SUP 2: 130.75/63 Sep 3 high / 50-day EMA
• SUP 3: 129.28 Low Oct 11
• SUP 4: 128.94 Low Oct 8

EURJPY is off recent highs and recent weakness is still considered corrective. Attention is on the 20-day EMA that intersects at 131.43 today. A break of this level would suggest scope for a deeper corrective pullback and open 130.75, Sep3 high and a recent breakout level and 130.63, the 50-day EMA. Trend conditions remain bullish though, the trigger for a resumption of gains is at 133.48, the Oct 20 high.

AUDUSD TECHS: Maintains A Bullish Tone

• RES 4: 0.7716 High Jun 16
• RES 3: 0.7630 1.236 proj of the Aug 20 - Sep 3 - Sep 29 price swing
• RES 2: 0.7599 High Jul 6
• RES 1: 0.7546/57 High Oct 21 / 50.0% of the Feb - Aug sell-off
• PRICE: 0.7508 @ 06:52 BST Oct 28
• SUP 1: 0.7454 Low Oct 22
• SUP 2: 0.7413/7376 20-day EMA / 50-day EMA
• SUP 3: 0.7288 Low Oct 8
• SUP 4: 0.7226/7170 Low Oct 6 / Low Sep 29

AUDUSD maintains a firmer tone despite still trading below recent highs. 0.7478, the Sep 3 high and an important short-term bull trigger was cleared last week. The breach of this hurdle has strengthened a bullish case and confirmed a positive price sequence of higher highs and higher lows - the current bull phase started August 20. This has opened 0.7599 next, the Jul 6 high. Firm support is seen at 0.7376, the 50-day EMA.

USDCAD TECHS: Consolidation Mode

• RES 4: 1.2648 High Oct 6
• RES 3: 1.2518 50-day EMA
• RES 2: 1.2494 Low Sep 3 and a recent breakout level
• RES 1: 1.2448 20-day EMA
• PRICE: 1.2373 @ 06:56 BST Oct 28
• SUP 1: 1.2288 Low Oct 21
• SUP 2: 1.2253 Low Jun 23
• SUP 3: 1.2229 76.4% retracement of the Jun - Aug rally
• SUP 4: 1.2157 Low Jun 16

USDCAD continues to consolidate and recent price action appears to be a bear flag. If correct, this reinforces current bearish conditions. A bearish theme follows the recent break of the Jul 30 low of 1.2422 that has opened 1.2253 next, the Jun 23 low. Note too that moving average conditions remain in a bear mode, reinforcing current trend conditions. Initial firm resistance is seen at 1.2494, Sep 3 low. A break would ease bearish pressure.

FIXED INCOME

BUND TECHS: (Z1) Corrective Cycle Still In Play

• RES 4: 171.72 High Sep 23
• RES 3: 170.55 High Oct 4
• RES 2: 170.32 50-day EMA
• RES 1: 169.92 High Oct 14 and key resistance
• PRICE: 169.57 @ 05:14 BST Oct 28
• SUP 1: 168.51 Low Oct 27
• SUP 2: 167.84/79 Low Oct 22 / 2.50 proj of the Sep 9 - 17 - 21 swing
• SUP 3: 167.52 Low Mar 19 2020
• SUP 4: 166.33 Low May 21 2019

Bund futures traded higher yesterday. Gains are still considered corrective and the contract remains in a downtrend. The break last week of 168.21, Oct 12 low marked a resumption of the bear trend and opens 167.79 next, a Fibonacci projection and 167.52, the Mar 19, 2020 low (cont). MA signals continue to point south, highlighting a bearish trend. Key resistance is seen at 169.92, the Oct 14 high. A break would signal a reversal.

BOBL TECHS: (Z1) Bearish Despite Recent Corrective Gains

• RES 4: 135.200 Low Sep 17, high Oct 4 and recent breakout level
• RES 3: 135.060 High Oct 7
• RES 2: 134.860 High Oct 14 and key resistance
• RES 1: 134.579 20-day EMA
• PRICE: 134.270 @ 05:16 BST Oct 28
• SUP 1: 134.070 Low Oct 27
• SUP 2: 133.830/800 Low Oct 22 / Low Feb 26 and a key support
• SUP 3: 133.772 1.236 proj of the Oct 4 - 13 - 14 price swing
• SUP 4: 133.340 Low Mar 19 and key medium-term support

The Bobl futures downtrend remains intact despite recent corrective gains. Last week's sell-off confirmed a resumption of the underlying downtrend and reinforced bearish conditions. Key short-term trend resistance has been defined at 134.860, Oct 14 high and a breach of this level is required to signal scope for a short-term reversal. With momentum still pointing south, the focus is on 133.772 next, a Fibonacci projection.

SCHATZ TECHS: (Z1) Trend Needle Still Points South

• RES 4: 112.290 High Sep 20
• RES 3: 112.255 High Sep 23 and Oct 5 and key near-term resistance
• RES 2: 112.220 High Oct 14
• RES 1: 112.160 High Oct 26
• PRICE: 112.065 @ 05:27 BST Oct 28
• SUP 1: 112.025 2.00 proj of the Sep 20 - 28 - Oct 5 price swing
• SUP 2: 112.00 Round number support
• SUP 3: 111.990 Low Aug 14 and 26, 2020 (cont)
• SUP 4: 111.967 2.50 proj of the Sep 20 - 28 - Oct 5 price swing

From a trend perspective, the trend in Schatz futures remains down and the contract is off recent highs. Fresh lows last week reinforced the downtrend and confirmed a resumption of the bear leg and the bearish price sequence of lower lows and lower highs. The focus is on 112.025 next, a Fibonacci projection. On the upside, initial resistance is at 112.160, the Oct 26 high where a break is required to signal a short-term base.

GILT TECHS: (Z1) Double Bottom Reversal

• RES 4: 127.09 61.8% retracement of the Aug - Oct downleg
• RES 3: 126.84 Low Sep 17
• RES 2: 126.39 50.0% retracement of the Aug - Oct downleg
• RES 1: 125.87 High Oct 27
• PRICE: 125.65 @ Close Oct 27
• SUP 1: 124.55 Low Oct 27
• SUP 2: 123.43 Low Oct 21 and the bear trigger
• SUP 3: 123.16 Low Feb 27, 2019 (cont)
• SUP 4: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing

Gilt futures rallied yesterday and have signalled a possible short-term reversal. In pattern terms, yesterday's breach of 125.27, Oct 14 high highlights a double bottom reversal. The close above 125.27 has confirmed this pattern and suggests the contract has reversed course and that gains are likely near-term. This reversal signals scope for a climb above 126.00 towards 126.39, a retracement level. Initial support is at 124.55.

BTP TECHS: (Z1) Remains Below Resistance

• RES 4: 154.64 High Sep 22 / 23
• RES 3: 153.59 High Sep 24
• RES 2: 152.54/87 High Oct 14 and key resistance / High Oct 1
• RES 1: 151.99 High Oct 19
• PRICE: 151.74 @ Close Oct 27
• SUP 1: 150.38 Low Oct 22 and the bear trigger
• SUP 2: 150.00/149.97 Round number support / Low Jun 25
• SUP 3: 149.76 0.764 proj of the Sep 23 - Oct 6 - 14 price swing
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures outlook remains bearish and short-term gains are considered corrective. A key resistance has been defined at 152.54, Oct 14 high where a break is required to suggest a short-term base. With trend signals such as momentum and moving average studies still pointing south, a resumption of weakness would open the 150.00 handle next. A break of this level is also seen likely further out. 151.99 is the initial resistance.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Eyeing Key Resistance

• RES 4: 4400.00 Round number resistance
• RES 3: 4385.00 1.236 proj of Mar 19- Jul 21-Oct 30 2020 swing (cont)
• RES 2: 4290.50 1.00 proj of the Jul 19 - Sep 6 - Oct 6 price swing
• RES 1: 4223.00 High Sep 6 and the bull trigger
• PRICE: 4206.00 @ 05:47 BST Oct 28
• SUP 1: 4117.30 50-day EMA
• SUP 2: 4004.00 / 3949.50 Low Oct 12 / Low Oct 6 and bear trigger
• SUP 3: 3902.50 Low Jul 20
• SUP 4: 3882.00 Low Jul 19 and a key support

EUROSTOXX 50 futures are holding onto recent gains and sights are on 4223.00, the Sep 6 high and the key bull trigger. This week's recovery reinforces a bullish theme and confirms an extension of the bull phase that started Oct 6. A break of 4223.00 would confirm a resumption of the broader uptrend and open 4290.50, a Fibonacci projection. On the downside, the 50-day EMA, at 4117.30 today, marks an initial key support.

E-MINI S&P (Z1): Corrective Pullback

• RES 4: 4687.32 1.382 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4650.60 1.236 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 3: 4600.00 Round number resistance
• RES 1: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• PRICE: 4550.75 @ 07:03 BST Oct 28
• SUP 1: 4472.00 High Sep 27 and a recent breakout level
• SUP 2: 4430.05 50-day EMA and key near-term support
• SUP 3: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger
• SUP 4: 4243.50 Low Jul 20

S&P E-minis remain bullish and yesterday's pullback is considered corrective. Futures rallied again Wednesday and registered a fresh all-time high. This confirms a resumption of the uptrend. The focus is on 4591.25, a Fibonacci projection. Trend signals such as MA studies remain in a bull mode and this reinforces current trend conditions. A key support is at 4317.25, Oct 12 low. The 50-day EMA at 4430.05 represents the initial firm support handle.

COMMODITIES

BRENT TECHS: (Z1) Find Resistance

• RES 4: $90.93 - 2.236 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $90.00 - Psychological round number
• RES 2: $88.74 - 2.00 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $86.70/87.00 - High Oct 25 / Round number resistance
• PRICE: $83.49 @ 07:02 BST Oct 28
• SUP 1: $82.32/20 - Intraday low / Low Oct 13
• SUP 2: $80.00 - Round number support
• SUP 3: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 4: $76.51/75.42 - Low Sep 30 and key support / High Sep 15

Brent futures faced resistance yesterday and the contract has extended the pullback today. Price has traded through support at $83.36, Oct 21 low and probed the 20-day EMA. A resumption of weakness would signal scope for a deeper corrective pullback and expose $80.00, with the 50-day EMA at $78.76. Key resistance and the bull trigger has been defined at $86.70, Oct 25 high. A break would resume the uptrend.

WTI TECHS: (Z1) Approaching The 20-Day EMA

• RES 4: $88.96 - 1.382 proj of the Sep 21 - Oct 6 - 7 price swing
• RES 3: $87.45 - 1.236 proj of the Sep 21 - Oct 6 - 7 price swing
• RES 2: $86.00 - Round number resistance
• RES 1: $85.41 - High Oct 25 and the bull trigger
• PRICE: $81.64 @ 07:08 BST Oct 28
• SUP 1: $80.34 - 20-day EMA
• SUP 2: $78.78 - Low Oct 13
• SUP 3: $75.79 - 50-day EMA
• SUP 4: $74.67 - Low Oct 7 and key near-term support

WTI futures faced resistance yesterday and the contract has traded lower again today. Attention is on the 20-day EMA that intersects at $80.34. A clear breach of this average would signal scope for a deeper pullback and open $78.78, Oct 13 low. The 50-day EMA lies at $75.79. Key resistance and the bull trigger has been defined at $85.41, Oct 25 high. A break would resume the uptrend.

GOLD TECHS: Bullish Focus

• RES 4: $1863.3 - 76.4% retracement of the Jun - Aug sell-off
• RES 3: $1844.9 - Low Jun 14
• RES 2: $1834.0 - High Sep 3 and the bull trigger
• RES 1: $1813.8 - High Oct 22 and key short-term resistance
• PRICE: $1801.9 @ 07:21 BST Oct 28
• SUP 1: $1780.0/1760.4 - 50-day EMA / Low Oct 18
• SUP 2: $1746.0 - Low Oct 6 and key near-term support
• SUP 3: $1721.7 - Low Sep 29 and the bear trigger
• SUP 4: $1717.8 - Low Aug 10

Gold maintains a positive short-term tone despite Tuesday's pullback and the yellow metal remains above the 50-day EMA. Price recently cleared resistance at $1800.6, Oct 14 high and this highlights a short-term bullish theme. Further gains would open $1834.0, Sep 3 high. On the downside, a key short-term support has been defined at $1760.4, the Oct 18 low. A break would alter the picture and instead suggest scope for a deeper pullback.

SILVER TECHS: Trend Needle Still Points North

• RES 4: $26.002 - High Aug 4
• RES 3: $25.206 - High Jun 8
• RES 2: $24.867 - High Sep 3 and the reversal trigger
• RES 1: $24.828 - High Oct 22
• PRICE: $24.075 @ 07:25 BST Oct 28
• SUP 1: $23.015 - Low Oct 18
• SUP 2: $22.213 - Low Oct 6
• SUP 3: $21.423 - Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally

The current bull cycle in Silver remains intact despite the recent pullback. The metal recently cleared both the 20- and 50 day EMAs. The extension higher paves the way for $24.867, the Sep 3 high and a key near-term resistance. Clearance of this hurdle would strengthen the case for bulls and open the $26.00 handle. Initial firm support to watch is at $23.015, Oct 18 low. A break would threaten the current bullish theme.