MNI DAILY TECHNICAL ANALYSIS - Gold Downtrend Still Valid Despite Friday Bounce

Price Signal Summary – Gold Downtrend Still Valid Despite Friday Bounce

• S&P E-Minis maintain a firmer short-term tone. A bullish theme follows the reversal from 3502.00, the Oct 13 low. The recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. EUROSTOXX 50 futures maintain a firmer tone following the recent recovery from 3251.00, Oct 13 low. The move higher has resulted in a break of the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger.
• EURUSD key resistance intersects at 0.9883. This level marks the top of the bear channel drawn from the Feb 10 high. Gains overnight resulted in a print above the channel line. Friday price action showed that USDJPY’s erratic uptrend can be matched by acute intraday volatility, with prices touching new cycle highs of 151.95 before correcting back sharply. AUDUSD gains are considered corrective. A bearish theme remains intact and moving average studies continue to highlight bearish sentiment. Price has recently cleared 0.6363, Sep 28 low and a bear trigger.
• Despite Friday’s gains, Gold remains in a downtrend. This follows the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4 and note that price remains below the trendline resistance drawn from the Mar 8 high. The WTI futures outlook remains bearish and this is highlighted by the current moving average set-up. A stronger reversal would open $79.63, a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low.
• Bund futures traded lower again Friday. The contract has cleared support at 135.14, the Oct 12 low. This confirms a resumption of the primary downtrend and with 135.00 pierced, scope is seen for a continuation lower. The primary trend direction in Gilt futures is down. However, the current corrective cycle remains in play. Price last week cleared traded above the 20-day EMA.

FOREIGN EXCHANGE

EURUSD TECHS: Pierces Bear Channel Resistance

• RES 4: 1.0198 High Sep 12 and a key resistance
• RES 3: 1.0051 High Sep 20
• RES 2: 0.9999 High Oct 4 and a reversal trigger
• RES 1: 0.9883/99 Bear channel top from Feb 10 high / Intraday high
• PRICE: 0.9844 @ 06:19 BST Oct 22
• SUP 1: 0.9811 220-day EMA
• SUP 2: 0.9705/9633 Low Oct 21 / 13
• SUP 3: 0.9536 Low Sep 28 and key support
• SUP 4: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing

EURUSD key resistance intersects at 0.9883. This level marks the top of the bear channel drawn from the Feb 10 high. Gains overnight resulted in a print above the channel line. A clear break of it would highlight an important technical breach and signal a stronger bullish reversal. For now, the trend remains down and recent gains are still considered corrective. A reversal lower would open support at 0.9633, the Oct 13 low.

GBPUSD TECHS: Key Resistance Remains Exposed

• RES 4: 1.1738 High Sep 13 and a key resistance
• RES 3: 1.1590 High Sep 14
• RES 2: 1.1495 High Oct 5 and the bull trigger
• RES 1: 1.1425 50-day EMA
• PRICE: 1.1344 @ 06:27 BST Oct 24
• SUP 1: 1.1061/1058 Low Oct 21 / 13
• SUP 2: 1.0924/22 Low Oct 12 / 50.0% of Sep 26 - Oct 5 bull cycle
• SUP 3: 1.0787 61.8% retracement of Sep 26 - Oct 5 bull cycle
• SUP 4: 1.0541/0350 Low Sep 28 / All Time Low

Short-term conditions in GBPUSD remain bullish and the bounce from Friday’s low reinforces this. An extension higher would signal scope for a test of 1.1495, the Oct 5 high and the bull trigger. A break of this level would strengthen bullish conditions plus highlight scope for a stronger reversal. On the downside, key near-term support is unchanged at 1.0924, the Oct 12 low. Clearance of this level would instead reinstate a bearish theme.

EURGBP TECHS: Starts The Week On A Bearish Note

• 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: 0.8678 @ 06:35 BST Oct 24
• SUP 1: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 2: 0.8522 Low Aug 30
• SUP 3: 0.8471 Low Aug 28
• SUP 4: 0.8408 Low Aug 24

EURGBP continues to trade above its recent lows. However, a short-term bear threat remains present and the cross has started the week on a weaker note. 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 towards 0.8559, a Fibonacci retracement. Key short-term resistance has been defined at 0.8867, Oct 12 high, where a break would reinstate a bullish theme.

USDJPY TECHS: Volatile Price Action But The Trend Remains Up

• 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: 149.71 Intraday high
• PRICE: 148.92 @ 06:64 BST Oct 24
• SUP 1: 145.56 Intraday low
• SUP 2: 145.17 Low Oct 10
• SUP 3: 143.29 50-day EMA
• SUP 4: 141.77 Low Sep 23

Friday price action showed that USDJPY’s erratic uptrend can be matched by acute intraday volatility, with prices touching new cycle highs of 151.95 before correcting back sharply. The USD has touched a low of 145.56, just below the 20-day EMA at 146.63. Price has rebounded today. The primary trend direction remains up and attention is on 150.00 once again. A break of this level would open 151.95, the bull trigger. Key support is at 145.56.

EURJPY TECHS: Finds Support Below The 20-Day EMA

• RES 4: 149.49 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 / High Dec 15 2014
• RES 1: 147.39 Intraday high
• PRICE: 146.62 @ 06:55 BST Oct 24
• SUP 1: 143.80 Intraday low
• SUP 2: 141.99 50-day EMA
• SUP 3: 140.90 Low Oct 10
• SUP 4: 139.44/137.40 Low Sep 29 / 26 and key support

EURJPY maintained a bullish tone into a new cycle high Friday, printing 148.40 before reversing sharply. This underpins the theme that while the broader outlook is bullish, sharp near-term reversals will still occur while the Japanese authorities warn of intervention. The cross has found strong support below 143.87, the 20-day EMA. Key support lies at 143.80, today’s low and 148.40 is the bull trigger.

AUDUSD TECHS: Watching The 20-Day EMA

• RES 4: 0.6656 High Sep 23
• RES 3: 0.6573 50-day EMA
• RES 2: 0.6547 High Oct 4 and key resistance
• RES 1: 0.6391/6411 20-day EMA / Intraday high
• PRICE: 0.6328 @ 08:10 BST Oct 24
• SUP 1: 0.6210/6170 Low Oct 21 / 13
• SUP 2: 0.6133 1.382 proj of the Apr 5 - May 12 - Jun 3 price swing
• SUP 3: 0.6099 76.4% retracement of the 2020 - 2021 bull cycle
• SUP 4: 0.6035 1.50 proj of the Apr 5 - May 12 - Jun 3 price swing

AUDUSD gains are considered corrective. A bearish theme remains intact and moving average studies continue to highlight bearish sentiment. Price has recently cleared 0.6363, Sep 28 low and a bear trigger. This confirmed a resumption of the primary downtrend and exposes 0.6133 next, a Fibonacci projection. On the upside, initial firm resistance to watch is 0.6391, the 20-day EMA. It has been pierced although the price is below the EMA once again.

USDCAD TECHS: Finds Support Just Below The 20-Day EMA

• RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
• RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.4000 Psychological round number
• RES 1: 1.3855/3977 High Oct 21 / 13 and the bull trigger
• PRICE: 1.3690 @ 08:17 BST Oct 24
• SUP 1: 1.3667/3607 20-day EMA / Intraday low
• SUP 2: 1.3503 Low Oct 4 and a key support
• SUP 3: 1.3437 50-day EMA
• SUP 4: 1.3358 Low Sep 21

USDCAD has traded briefly below the 20-day EMA. This average, at 1.3667, is an important S/T support. The uptrend is intact and the recent pullback is considered corrective. The recovery from 1.3503, Oct 10 high, reinforced bullish conditions. Furthermore, MA studies still highlight an uptrend and 1.3838, Sep 30 high has been cleared. A clear break of the 20-day EMA would suggest scope for a deeper and open 1.3503, Oct 4 low.

FIXED INCOME

BUND TECHS: (Z2) Trend Direction Remains Down

• RES 4: 143.68 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 3: 140.13/42.87 High Oct 6 / 4 and a reversal trigger
• RES 2: 137.81/52 20-day EMA / High Oct 14 and key resistance
• RES 1: 136.15 High Oct 20
• PRICE: 135.90 @ 05:15 BST Oct 24
• SUP 1: 134.02 Low Oct 21
• 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 lower again Friday. The contract has cleared support at 135.14, the Oct 12 low. This confirms a resumption of the primary downtrend and with 135.00 pierced, scope is seen for a continuation lower. The extension maintains the bearish price sequence of lower lows and lower highs and opens 133.74 next, a Fibonacci extension. On the upside, key short-term resistance has been defined at 138.52, the Oct 14 high.

BOBL TECHS: (Z2) Bounce Considered Corrective

• 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: 119.429 20-day EMA
• PRICE: 118.820 @ 05:19 BST Oct 24
• SUP 1: 117.630 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 2: 117.342 2.618 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 117.000 Round number support
• SUP 4: 116.410 3.00 proj of the Aug 25 - Sep 1 - Sep 6 price swing

Bobl futures remain in a downtrend and short-term gains are considered corrective. Last week’s move lower cleared support and the bear trigger at 118.020, Sep 28 low. The break confirms a resumption of the primary downtrend and marks an extension of the price sequence of lower lows and lower highs. This opens 117.630 next, a Fibonacci projection. On the upside, key short-term resistance has been defined at 119.960, the Oct 14 high.

SCHATZ TECHS: (Z2) Remains Below Resistance

• 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: 106.988 20-day EMA
• PRICE: 106.830 @ 05:33 BST Oct 24
• SUP 1: 106.350 Low Oct 21
• 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 likely a correction. Last week’s move lower resulted in a break of support at 106.535, Sep 26 low. This confirms a resumption of the primary downtrend and maintains the bearish price sequence of lower lows and lower highs. The move lower paves the way for 106.270 next, a Fibonacci extension. Key short-term resistance has been defined at 107.180, the Oct 13 high.

GILT TECHS: (Z2) Key Resistance Intact - For Now

• RES 4: 105.34 High Sep 22
• RES 3: 102.45 High Sep 23
• RES 2: 100.92 High Oct 4 and a key resistance
• RES 1: 100.53 High Oct 20
• PRICE: 96.86 @ Close Oct 21
• SUP 1: 94.82/92.66 Low Oct 17 / 14
• SUP 2: 90.99/90.38 Low Sep 28 / Low Oct 12 and the bear trigger
• SUP 3: 90.00 Psychological round number
• SUP 4: 88.94 2.764 proj of the May 12 - Jun 16 - Aug 2 swing (cont)

The primary trend direction in Gilt futures is down. However, the current corrective cycle remains in play. Price last week cleared traded above the 20-day EMA. A continuation higher would signal scope for a test of key resistance at 100.92, the Oct 4 high. The contract has pulled back from last Thursday's high. A move below 94.82, Oct 17 low, would suggest scope for a deeper retracement. 90.38, Oct 12 low, is the key support and bear trigger.

BTP TECHS: (Z2) Outlook Remains Bearish

• RES 4: 117.05 High Sep 22
• RES 3: 116.71 High Oct 4 and key resistance
• RES 2: 113.41 High oct 6
• RES 1: 111.71/112.25 20-day EMA / High Oct 14
• PRICE: 110.03 @ Close Oct 21
• SUP 1: 108.82 Low Oct 21
• SUP 2: 108.13 Low Sep 28 and key support
• SUP 3: 107.27 2.382 proj of the Aug 25 - Sep 1 - 8 price swing
• SUP 4: 106.68 2.618 proj of the Aug 25 - Sep 1 - 8 price swing

The BTP futures trend condition remains bearish. The reversal from 116.71, Oct 4 high, signals the end of the Sep 28 - Oct 4 corrective phase. A continuation lower would open the key support and bear trigger at 108.13, the Sep 28 low. Clearance of this level would confirm a resumption of the broader downtrend and maintain the bearish price sequence of lower lows and lower highs. 116.71 marks the key resistance.

US 10YR FUTURE TECHS: (Z2) Bounce Off Lows

• RES 4: 112-22+ High Oct 6
• RES 3: 111-30 20-day EMA
• RES 2: 111-28+ High Oct 12 and key near-term resistance
• RES 1: 110-02 Low Oct 13 and a recent breakout level
• PRICE: 109-22 @ 15:20 BST Oct 21
• SUP 1: 108-26+ Low Oct 21
• SUP 2: 108-06+ Low Oct 2007 (cont)
• SUP 3: 107.14+ 3.0% 10-dma envelope
• SUP 4: 106-20+ Low Aug 2007 (cont)

Treasuries remained offered early Friday, putting prices at a new low of 108-26+. Markets bounced somewhat through the London close, but did little to change the over-arching bearish trend. The extension lower this week has confirmed a break of support 110.02, the Oct 13 low and the psychological 110.00 handle. This marks a resumption of the primary downtrend and an extension of the bearish price sequence of lower lows and lower highs. Sights are set on a move lower towards 108-20, a Fibonacci projection. Initial firm resistance has been defined at 111-28+, high Oct 13.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Clears Trendline Resistance

• RES 4: 3678.00 High Sep 13 and a key resistance
• RES 3: 3585.00 High Sep 14
• RES 2: 3533.00 High Sep 20
• RES 1: 3527.00 Intraday high
• PRICE: 3499.00 @ 05:38 BST Oct 24
• SUP 1: 3418.00 Low Oct 21
• SUP 2: 3352.00 Low Oct 14
• SUP 3: 3251.00/3236.00 Low Oct 13 / 3 and a key support zone
• SUP 4: 3305.00 Low Oct 11

EUROSTOXX 50 futures maintain a firmer tone following the recent recovery from 3251.00, Oct 13 low. The move higher has resulted in a break of the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger. Price has also breached trendline resistance drawn from the Aug 17 high. The trendline intersects at 3476.50 and the break strengthens bullish conditions. Initial firm support is at 3418.00, the Oct 14 low.

E-MINI S&P (Z2): Key Short-Term Resistance Remains Exposed

• RES 4: 4023.44 61.8% retracement of the Aug 16 - Oct 13 downleg
• RES 3: 3923.88 50.0% retracement of the Aug 16 - Oct 13 downleg
• RES 2: 38300.64 50-day EMA
• RES 1: 3820.00 High Oct 5 and a bull trigger
• PRICE: 3765.25 @ 06:54 BST Oct 24
• SUP 1: 3641.50 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 maintain a firmer short-term tone. A bullish theme follows the reversal from 3502.00, the Oct 13 low. The recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. Attention is on resistance at 3820.00, the Oct 5 high and a bull trigger. Key support is unchanged at 3502.00. Initial support is at 3641.50, the Oct 21 low.

COMMODITIES

BRENT TECHS: (Z2) Bear Cycle Intact

• 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: $95.17/98.75 - High Oct 12 / 10 and key near-term resistance
• PRICE: $92.56 @ 07:00 BST Oct 24
• SUP 1: $88.67 - 61.8% retracement of the Sep 26 - Oct 10 rally
• 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 are trading below last week’s high. A bearish theme remains intact and the latest recovery is considered corrective. A number of important retracement levels have recently been breached. Attention is on $88.67 next, 61.8% of the Sep 26 - Oct 10 rally. A break would open $86.29, the 76.4% level. On the upside, initial firm resistance to watch is at $95.17, the Oct 12 high. Clearance of this level would ease the bearish threat.

WTI TECHS: (Z2) Bearish Outlook

• RES 4: $97.38 - 61.8% retracement of the Jun 8 - Sep 26 downleg
• RES 3: $95.55 - High Aug 30
• RES 2: $88.66/92.34 - High Oct 12 / 10 and key resistance
• RES 1: $87.14 - High Oct 20
• PRICE: $84.04 @ 07:15 BST Oct 24
• SUP 1: $81.30 - 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 remains bearish and this is highlighted by the current moving average set-up. A stronger reversal would open $79.63, a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low. The bear trigger is $81.30, the Oct 18 low. On the upside, the key short-term resistance to watch is at $92.34, the Oct 10 high. Initial firm resistance is at $88.66, Oct 12 high.

GOLD TECHS: Primary Trend Direction Remains Down

• RES 4: $1735.1 - High Sep 12 and a key resistance
• RES 3: $1729.5 - High Oct 4 and the bull trigger
• RES 2: $1693.4 - 50-day EMA
• RES 1: $1670.5 - Intraday high
• PRICE: $1655.6 @ 07:19 BST Oct 24
• 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

Despite Friday’s gains, Gold remains in a downtrend. This follows the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4 and note that price remains below the trendline resistance drawn from the Mar 8 high. Sights are on the key support and bear trigger at $1615.0, the Sep 28 low. On the upside, the next firm resistance is at $1693.4, the 50-day EMA.

SILVER TECHS: Bear Threat Remains Present

• RES 4: $21.967 - High Jun 17
• RES 3: $21.540 - High Jun 27
• RES 2: $20.187/21.242 - High Oct 10 / 4 and key resistance
• RES 1: $19.724 - High Oct 11
• PRICE: $19.174 @ 08:22 BST Oct 24
• SUP 1: $17.967 - 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

Silver remains vulnerable despite the recovery from last week’s lows. The recent move below the 50-day EMA has 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. Initial resistance is seen at $19.724, the Oct 11 high.