MNI DAILY TECHNICAL ANALYSIS - Holding Patterns Pre-Payrolls

Price Signal Summary – Holding Patterns Pre-Payrolls

• S&P E-Minis traded higher again Wednesday, extending Monday’s reversal from 3571.75. Prices have been in a holding pattern since, with the bounce allowing for the oversold trend reading to unwind. EUROSTOXX 50 futures have established a bullish short-term tone following this week’s strong reversal. A corrective cycle has been established and this is allowing a recent oversold trend condition to unwind.
• EURUSD has faded further off the bear channel top into Friday morning trade, erasing the entirety of the mid-week rally. Initial support at 0.9806, Tuesday’s low, has given way. EURGBP bounced ahead of a test of the 50-day EMA Tuesday, although the outlook remains negative for now. Monday’s bearish extension put prices below the 20-day EMA and reinforces short-term bearish conditions. EURJPY hit reverse Wednesday and extended losses through the Thursday close. The price action has put prices back below 143.70 resistance - the 76.4% retracement for the Sep 12 - 26 downleg.
• Gold has traded sharply higher earlier this week and has held the bulk of the week’s gains through to Friday morning. The rally has resulted in a break of the 20-day EMA. Note that the yellow metal has cleared a trendline resistance drawn from the Mar 8 high. WTI futures printed new weekly highs of 89.37 through the Thursday close, extending gains above both the 20- and 50-day EMAs. This signals scope for a stronger reversal and opens the $90.00 handle in the interim.
• The corrective cycle higher in Bund futures has concluded, retaining the sell-on-rallies theme across core fixed income markets. Prices remain in a broader downtrend for now. The short-term bounce in Gilt futures has reversed, with prices returning toward the bottom-end of the weekly range. The mid-week bounce failed to top the 20-day EMA resistance which remains a key level at 100.00 today.

FOREIGN EXCHANGE

EURUSD TECHS: Fades Off Bear Channel Top

• RES 4: 1.0198 High Sep 12 and a key resistance
• RES 3: 1.0051 High Sep 20
• RES 2: 1.0033 Bear channel top drawn from the Feb 10 high
• RES 1: 0.9985 50-day EMA
• PRICE: 0.9815 @ 09:27 BST Oct 7
• SUP 1: 0.9766/9735 Low Oct 7 / Low Sep 30
• SUP 2: 0.9636/9536 Low Sep 29 / 28 and key support
• SUP 3: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 4: 0.9469 Bear channel base drawn from the Feb 10 high

EURUSD has faded further off the bear channel top into Friday morning trade, erasing the entirety of the mid-week rally. Initial support at 0.9806, Tuesday’s low, has given way, opening losses toward Sep30’s 0.9735. Key short-term resistance remains at 1.0033 the bear channel drawn from the Feb 10 high. Note too that the 50-day EMA intersects just above, at 0.9985.

GBPUSD TECHS: Reverses Hard Off Recovery Highs

• RES 4: 1.1783 High Aug 29
• RES 3: 1.1738 High Sep 13 and a key resistance
• RES 2: 1.1572 50-day EMA
• RES 1: 1.1489 High Oct 4
• PRICE: 1.1178 @ 16:41 BST Oct 6
• SUP 1: 1.1025 Low Sep 30
• SUP 2: 1.0763 Low Sep 29
• SUP 3: 1.0541/0350 Low Sep 28 / All Time Low
• SUP 4: 1.0203 3.236 proj of the Jun 16 - Jul 14 - Aug 1 price swing

GBPUSD slipped sharply Thursday, putting prices through Wednesday lows as well as 20-day EMA support. This marks an extension of the pullback and works against the week’s early bullish tone. Initial firm support is seen at 1.1025, the Sep 30 low. For now, prices remain comfortably off the recent multi-decade low at 1.0350, Sep 26 low. Any resumption of strength would see the 50-day EMA at 1.1572 - a key resistance - as primary resistance.

EURGBP TECHS: 50-Day EMA Remains Exposed

• RES 4: 0.9388 High Mar 23 2020
• RES 3: 0.9292 High Sep 11 2020
• RES 2: 0.9066/9266 High Sep 28 / High Sep 26 and key resistance
• RES 1: 0.8850 High Sep 30
• PRICE: 0.8751 @ 09:39 BST Oct 7
• SUP 1: 0.8663/49 50-day EMA / Low Oct 4
• SUP 2: 0.8626 Low Sep 1
• SUP 3: 0.8559 76.4% retracement of the Aug 2 - Sep 26 rally
• SUP 4: 0.8522 Low Aug 30

EURGBP bounced ahead of a test of the 50-day EMA Tuesday, although the outlook remains negative for now. Monday’s bearish extension put prices below the 20-day EMA and reinforces short-term bearish conditions. Attention remains on the 50-day EMA, at 0.8652 today and represents a key near-term support. A clear break would signal scope for a deeper retracement. On the upside, initial firm resistance is seen at 0.8850, the Sep 30 high.

USDJPY TECHS: Bullish Outlook

• RES 4: 146.52 1.236 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 3: 146.03 2.764 proj of the Aug 2 - 8 - 11 price swing
• RES 2: 145.90 High Sep 22 and the bull trigger
• RES 1: 145.30 High Oct 3
• PRICE: 144.82 @ 09:42 BST Oct 7
• SUP 1: 143.20/141.77 20-day EMA / Low Sep 23
• SUP 2: 140.36 Low Sep 22, 50-day EMA and key short-term support
• SUP 3: 139.39 High Jul 14 and a former key resistance
• SUP 4: 137.37 Low Aug 29

USDJPY remains in consolidation mode. The pair is holding on to the bulk of its recent gains from 140.36, the Sep 22 low and the key short-term support. The primary uptrend remains intact and sights are on the bull trigger at 145.90, Sep 22 high. A break would confirm a resumption of the trend and open 146.03, a Fibonacci projection. Clearance of 140.36 is required to highlight a top.

EURJPY TECHS: Moderated Into Weds Close

• RES 4: 147.76 1.236 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 3: 145.64 High Sep 12 and the bull trigger
• RES 2: 144.48 High Sep 14
• RES 1: 144.08 High Oct 4
• PRICE: 142.08 @ 09:44 BST Oct 7
• SUP 1: 141.37 20-day EMA
• SUP 2: 139.44/137.40 Low Sep 29 / 26 and key support
• SUP 3: 136.02 Low Aug 25
• SUP 4: 135.52 Low Aug 24

EURJPY hit reverse Wednesday and extended losses through the Thursday close. The price action has put prices back below 143.70 resistance - the 76.4% retracement for the Sep 12 - 26 downleg. Nonetheless, the latest recovery signals the end of the correction between Sep 12 - 26 and attention is on key resistance at 145.64, the Sep 12 high. A break of this level would confirm a resumption of the broader uptrend. Key support lies at 137.40.

AUDUSD TECHS: Bear Flag Formation

• RES 4: 0.6750 50-day EMA
• RES 3: 0.6671 High Sep 22
• RES 2: 0.6610 20-day EMA
• RES 1: 0.6550 High Sep 26
• PRICE: 0.6418 @ 09:45 BST Oct 7
• SUP 1: 0.6363 Low Sep 28 and the bear trigger
• SUP 2: 0.6337 Low Apr 24 2020
• SUP 3: 0.6283 Low Apr 23 2020
• SUP 4: 0.6255 1.236 proj of the Apr 5 - May 12 - Jun 3 price swing

AUDUSD continues to consolidate and this pause in the downtrend appears to be a bear flag, reinforcing bearish trend conditions. The recent break of support at 0.6682, Jul 14 low and a bear trigger strengthened a bearish case and this maintains the broader downward price sequence of lower lows and lower highs. The focus is on 0.6337 next, the Apr 24 2020 low. Initial firm resistance has been defined at 0.6610, the 20-day EMA.

USDCAD TECHS: Bounce Mode

• RES 4: 1.4000 Psychological round number
• RES 3: 1.3970 3.236 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.3896 3.00 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 1: 1.3838 High Sep 30 and the bull trigger
• PRICE: 1.3720 @ 09:46 BST Oct 7
• SUP 1: 1.3449 20-day EMA
• SUP 2: 1.3358 Low Sep 21
• SUP 3: 1.3224 50-day EMA
• SUP 4: 1.3139 Low Sep 14

Having traded lower Tuesday, USD/CAD bounced into the Wednesday close, with gains extending through to Thursday. Key resistance and the bull trigger, has been defined at 1.3838, the Sep 30 high. Nonetheless, the recent pullback highlights a short-term reversal and potential for a deeper retracement. This is seen as a long overdue correction and is allowing an overbought reading in the trend to unwind. Attention is on the next firm support at 1.3449, the 20-day EMA. A break would strengthen bearish conditions.

FIXED INCOME

BUND TECHS: (Z2) Sell-on-Rallies Theme Persists

• RES 4: 145.37 High Sep 8
• RES 3: 144.56 High Sep 12
• RES 2: 143.68 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 1: 142.87 High Oct 4
• PRICE: 138.46 @ 08:25 BST Oct 7
• SUP 1: 138.05 Low Oct 3
• SUP 2: 135.52 Sep 28 low and key support
• SUP 3: 135.27 Low Mar 2012 (cont)
• SUP 4: 134.76 4.382 proj of the Aug 2 - 12 - 15 price swing

The corrective cycle higher in Bund futures has concluded, retaining the sell-on-rallies theme across core fixed income markets. Prices remain in a broader downtrend for now. This week’s early gains have wholly reversed, turning focus to first support at 138.05, the Oct 3 low. Key support and the bear trigger has been defined at 135.52, the Sep 28 low. The 20-day EMA returns as resistance at 140.79.

BOBL TECHS: (Z2) Dips Back Below 20-Day EMA

• RES 4: 123.730 High Sep 6 and a key resistance
• RES 3: 123.270 High Sep 7
• RES 2: 122.510 High Sep 12
• RES 1: 120.810/122.010 20-day EMA / High Sep 14
• PRICE: 119.540 @ 08:29 BST Oct 7
• SUP 1: 119.280 Low Oct 7
• SUP 2: 118.020 Low Sep 28 and the bear trigger
• SUP 3: 117.918 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 117.630 2.50 proj of the Aug 25 - Sep 1 - Sep 6 price swing

The corrective bounce is fading fast for Bobl futures, keeping the over-arching trend unchanged and pointed lower. Price has returned back below the 20-day EMA, which remains short-term resistance for now at 120.560. Initial support at Monday’s low of 119.440 has given way, opening 118.020, the bear trigger. The focus for rallies is on 122.010, the Sep 14 high.

SCHATZ TECHS: (Z2) 20-day EMA Returns as Resistance

• RES 4: 108.845 High Aug 25
• RES 3: 108.570 High Sep 6 and a key resistance
• RES 2: 108.010 High Sep 13
• RES 1: 107.344 / 107.770 20-day EMA / High Oct 4
• PRICE: 107.035 @ 08:33 BST Oct 7
• SUP 1: 106.945 Low Oct 7
• SUP 2: 106.535 Low Sep 26 and key support
• SUP 3: 106.379 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 105.800 Low Nov 2008 (cont)

The primary trend direction in Schatz futures remains down, with the corrective bump higher for core fixed income fading through the end of the week. The return back below the 20-day EMA signals the corrective phase has faltered, with initial firm support at 106.960, the Sep 30 low, already being tested. Any return higher needs to top 107.414 ahead of 108.010, the Sep 13 high.

GILT TECHS: (Z2) Bearish Below 20-day EMA

• RES 4: 105.34 High Sep 22
• RES 3: 102.45 High Sep 23
• RES 2: 101.29 20-day EMA
• RES 1: 100.92 High Oct 4
• PRICE: 95.72 @ 08.35 BST Oct 7
• SUP 1: 94.92 Low Sep 29
• SUP 2: 90.99 Low Sep 28 and the bear trigger
• SUP 3: 90.57 2.618 proj of the May 12 - Jun 16 - Aug 2 swing (cont)
• SUP 4: 90.00 Psychological round number

The short-term bounce in Gilt futures has reversed, with prices returning toward the bottom-end of the weekly range. The mid-week bounce failed to top the 20-day EMA resistance which remains a key level at 100.00 today. Prices remain bearish below this mark, but solid support is expected into 94.92, the Sep 29 low. Any return higher needs to top 101.29 before 102.45 can be considered.

BTP TECHS: (Z2) Outlook Deteriorating

• RES 4: 119.06 High Sep 8 and a key resistance
• RES 3: 118.51 High Sep 13
• RES 2: 117.05 High Sep 22
• RES 1: 116.71 High Oct 4
• PRICE: 111.98 @ 08.42 BST Oct 7
• SUP 1: 110.65 Low Sep 30
• 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

BTP futures trend conditions deteriorated into the Thursday close, keeping the outlook bearish for now. The week’s early strength has fully reversed, with the recent oversold condition now fully unwound. The 20-day EMA returns as resistance while key support has been established at 108.13, the Sep 28 low. A break would resume the primary downtrend. Any return higher eyes 117.05, the Sep 22 high.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Holding Bulk of Recent Gains

• RES 4: 3692.00 High Aug 26
• RES 3: 3678.00 High Sep 13 and bull trigger
• RES 2: 3810.00 Trendline resistance drawn from the Aug 17 high
• RES 1: 3492.00/3510.30 High Oct 6 / 50-day EMA
• PRICE: 3416.00 @ 08:45 BST Oct 7
• SUP 1: 3355.00 Low Oct 4
• SUP 2: 3236.00/3229.00 Low Oct 3 / Low Nov 9 2020 (cont)
• SUP 3: 3163.00 Low Nov 6 2020
• SUP 4: 3143.20 1.382 proj of the Aug 17 - Sep 5 - 13 price swing

EUROSTOXX 50 futures have established a bullish short-term tone following this week’s strong reversal. A corrective cycle has been established and this is allowing a recent oversold trend condition to unwind. The 20-day EMA, at 3431.10 has been cleared, the break signals scope for an extension and this opens 3510.30, the 50-day EMA - a key resistance. Key support has been defined at 3236.00, the Oct 3 low.

E-MINI S&P (Z2): Bullish Engulfing Candle Still In Play

• RES 4: 4234.25 High Aug 26
• RES 3: 4175.00 High Sep 13 and a key resistance
• RES 2: 3912.75 50-day EMA
• RES 1: 3820.00 High Oct 5
• PRICE: 3746.75 @ 08:47 BST Oct 7
• SUP 1: 3571.75 Low Oct 3 and the bear trigger
• SUP 2: 3558.97 1.382 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 3: 3506.38 1.50 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 4: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis traded higher again Wednesday, extending Monday’s reversal from 3571.75. Prices have been in a holding pattern since, with the bounce allowing for the oversold trend reading to unwind. Prices have now topped the 20-day EMA on an intraday basis, turning focus to the the 50-day EMA of 3912.75 for direction. Key support has been defined at 3571.75.

COMMODITIES

BRENT TECHS: (Z2) Holding Pattern Close to Highs

• RES 4: $104.62 - High Jul 5
• RES 3: $101.88 - High Jul 29 and key resistance
• RES 2: $95.54 - High Sep 5
• RES 1: $94.98 - High Oct 7
• PRICE: $94.66 @ 08:56 BST Oct 7
• SUP 1: $85.00/82.44 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 2: $81.97 - 1.618 proj of the Jul 29 - Aug 5 - 30 price swing
• SUP 3: $80.22 - 1.764 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 4: $78.52 - Low Jan 24

Brent futures traded solidly into the Thursday close, and have now entered a holding pattern just below the week’s best levels of 94.98. This week's gains have resulted in a break of both the 20-day and 50-day EMAs. A clear break and a strong weekly close would strengthen the short-term bullish condition and highlight a stronger reversal. This would open $95.54, the Sep 5 high. Initial firm support to watch lies at $85.00, the Sep 30 low. A break would expose the bear trigger at $82.44, the Sep 26 low.

WTI TECHS: (X2) Extends Gains Above Key 20-, 50-Day EMAs

• RES 4: $97.91 - High Jul 29 and a reversal trigger
• RES 3: $92.26/96.82 - High Aug 30 / 31 and key resistance
• RES 2: $89.99 - High Sep 6
• RES 1: $89.37 - High Oct 6
• PRICE: $88.68 @ 09:01 BST Oct 7
• SUP 1: $79.14/76.25 - Low Sep 30 / Low Sep 26 and the bear trigger
• SUP 2: $75.70 - Low Jan 24
• SUP 3: $71.22 - 2.00 proj of the Jul 29 - Aug 16 - 30 price swing
• SUP 4: $68.20 - 2.236 proj of the Jul 29 - Aug 16 - 30 price swing

WTI futures printed new weekly highs of 89.37 through the Thursday close, extending gains above both the 20- and 50-day EMAs.This signals scope for a stronger reversal and opens the $90.00 handle in the interim. Initial firm support is at $79.14, the Sep 30 low. Key support lies at $76.25, the Sep 26 low.

GOLD TECHS: Horizontal at Highs

• RES 4: $1765.5 - High Aug 25
• RES 3: $1745.6 - High Sep 29
• RES 2: $1735.1 - High Sep 12 and a key resistance
• RES 1: $1729.5 - High Oct 4
• PRICE: $1710.8 @ 09:06 BST Oct 7
• SUP 1: $1695.2/1659.7 - Former trendline resistance / Low Oct 3
• SUP 2: $1615.0 - Low Sep 28 and the bear trigger
• SUP 3: $1610.5 - 1.00 proj of the Jun 13 - Jul 21 - Aug 10 swing
• SUP 4: $1569.1 - Low Apr 1 2020

Gold has traded sharply higher earlier this week and has held the bulk of the week’s gains through to Friday morning. The rally has resulted in a break of the 20-day EMA. Note that the yellow metal has cleared a trendline resistance drawn from the Mar 8 high. The trendline intersects at $1695.2. Sights are on $1735.1, the Sep 12 high and a key short-term resistance. Initial support is at $1695.2, the former trendline resistance-now-support.

SILVER TECHS: Heading North

• RES 4: $22.253 - 50.0% retracement of the Mar 8 - Sep 1 bear cycle
• RES 3: $21.967 - High Jun 17
• RES 2: $21.540 - High Jun 27
• RES 1: $21.242 - High Oct 4
• PRICE: $20.732 @ 09:08 BST Oct 7
• SUP 1: $19.443 - 50-day EMA
• 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 bulls have returned and strength posted earlier this week together with Wednesday’s late bounce reinforces a bullish theme. Price has cleared resistance at $20.014, the Sep 12 high. This confirms a short-term bullish price sequence of higher highs and higher lows - the definition of an uptrend. The focus is on $21.540, the Jun 27 high. Initial firm support is at $19.443, the 50-day EMA. A break of this average would be bearish.