MNI DAILY TECHNICAL ANALYSIS - Impulsive Bearish Cycle In Gilts Still In Play

Price Signal Summary - Gilts Downtrend Accelerates With 100.00 Cleared

• In the equity space, S&P E-Minis remain soft. Continued weakness confirms a resumption of the bear cycle that started mid-August. The break paves the way for a move towards 3741.75, the Jul 14 low. The key support at 3657.00, Jun 17 low, has also been exposed. This is an important bear trigger. EUROSTOXX 50 remain soft following the reversal last week from 3678.00, the Jun 13 high and this week’s follow through. Key short-term support at 3423.00, the Sep 5 low has been cleared, the break strengthens bearish conditions and opens 3360.00 next, the Jul 14 low.
• In FX, the EURUSD remains vulnerable and has resumed its downtrend today. The break lower this week confirmed a resumption of the primary downtrend - support at 0.9864, Sep 6 low, was cleared. The focus is on 0.9694, 1.00 projection of the Aug 10 - Sep 6 - 12 price swing. The GBPUSD downtrend remains intact and the pair continues to weaken. The move lower maintains the bearish price sequence of lower lows and lower highs, signalling scope for a continuation. The focus is on the 1.1100 handle next. USDJPY traded in a volatile manner Thursday. The pullback resulted in a print below 141.75, the 20-day EMA. The trend structure remains bullish and it is too early to tell whether yesterday’s price action is a key reversal day. A daily close below the 20-day EMA and below 140.00 would strengthen a bearish threat. A resumption of gains would refocus attention on 145.00 and beyond. Support is at yesterday’s low of 140.36.
• On the commodity front, Gold is consolidating and the recent pause in the downtrend appears to be a bear flag formation. This pattern reinforces a bearish theme. The recent break of support at $1681.0, the Jul 21 low, confirmed a resumption of the downtrend that started early March. Attention is on $1640.9 next, the Aug 8 2020 low. In the Oil space, a bearish threat in WTI futures remains present. The recent break of support at $84.25, the Jul 14 low, confirmed a resumption of the downtrend that started Jun 8 and marks the end of a broad sideways move that has been in place since mid-July. A continuation lower would open $79.31 next, the Feb 18 low. Key short-term resistance is unchanged at $89.35, the 50-day EMA.
• In the FI space, Bund futures remain in a clear downtrend and the extension lower this week has again confirmed a resumption of the bear leg that started early August. The major support at 140.67, the Jun 16 low (cont), has been cleared. The break strengthens the broader bearish outlook. With 140.00 pierced, attention turns to 97.44 the September 1994 low (cont). Gilts have resumed bearish activity today as the downtrend accelerates. The break lower maintains the bearish price sequence of lower lows and lower highs. The psychological 100.00 handle has been pierced, attention turns to 97.44 Low Sep 1994 (cont).

FOREIGN EXCHANGE

EURUSD TECHS: Downtrend Resumed

• RES 4: 1.0198/0249 High Sep 12 / 76.4% of Aug 10 - Sep 6 downleg
• RES 3: 1.0069 Bear channel top drawn from the Feb 10 high
• RES 2: 0.9985 20-day EMA
• RES 1: 0.9852/9945 Intraday high / Low Sep 16
• PRICE: 0.9761 @ 09:42 BST Sep 23
• SUP 1: 0.9694 1.00 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 2: 0.9613 Low Sep 2002
• SUP 3: 0.9575 1.236 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 4: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing

EURUSD remains vulnerable and has resumed its downtrend today. The break lower this week confirmed a resumption of the primary downtrend - support at 0.9864, Sep 6 low, was cleared. The move lower maintains the bearish price sequence of lower lows and lower highs. Price is also trending lower inside the bear channel drawn from the Feb 10 high. The focus is on 0.9694, a Fibonacci projection. Resistance is seen at 0.9945, the Sep 16 low.

GBPUSD TECHS: Bearish Price Sequence Extends

• RES 4: 1.1901 High Aug 26
• RES 3: 1.1768 50-day EMA
• RES 2: 1.1529/1738 20-day EMA / High Sep 13 and key resistance
• RES 1: 1.1274/1385 Intraday high / High Sep 21
• PRICE: 1.1159 @ 09:52 BST Sep 23
• SUP 1: 1.1137 Bear channel base drawn from the Aug 10 high
• SUP 2: 1.1100 Round number support
• SUP 3: 1.1073 0.764 proj of the SAug 10 - Sep 7 - 13 price swing
• SUP 4: 1.1001 2.00 proj of the Jun 16 - Jul 14 - Aug 1 price swing

Bearish trend conditions in GBPUSD remain intact and the pair continues to weaken. The move lower maintains the bearish price sequence of lower lows and lower highs, signalling scope for a continuation. Note that moving average studies are in a bear mode set-up too. The focus is on the 1.1100 handle next. Firm resistance is at 1.1529, the 20-day EMA. Short-term gains would be considered corrective.

EURGBP TECHS: Bulls Remain In The Driver’s Seat

• RES 4: 0.8852 50.0% retracement of the 2020 - 2022 downleg
• RES 3: 0.8840 High Feb 2
• RES 2: 0.8811 1.236 proj of the Apr 14 - Jun 15 - Aug 2 price swing
• RES 1: 0.8788 High Sep 19
• PRICE: 0.8745 @ 06:29 BST Sep 23
• SUP 1: 0.8692 Low Sep 22
• SUP 2: 0.8663 20-day EMA
• SUP 3: 0.8581 50-day EMA
• SUP 4: 0.8522 Low Aug 30

EURGBP is trading closer to its recent highs and the short-term outlook remains bullish. Recent gains confirmed a break of key resistance at 0.8721, the Jun 15 high and an important bull trigger. The climb resumes the bull cycle that started early March and attention is on 0.8811, a Fibonacci projection. On the downside, initial firm support is seen at 0.8663, the 20-day EMA. A short-term pullback would be considered corrective.

USDJPY TECHS: 20-Day EMA Continues To Provide Support

• 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
• RES 1: 143.13 50.0% retracement of today’s range
• PRICE: 142.18 @ 06:36 BST Sep 23
• SUP 1: 141.75 20-day EMA
• SUP 2: 140.36 Low Sep 22
• SUP 3: 139.87 Low Sep 2
• SUP 4: 138.85 50-day EMA

USDJPY traded in a volatile manner Thursday following BOJ intervention. The pullback resulted in a print below 141.75, the 20-day EMA. The trend structure remains bullish and it is too early to tell whether yesterday’s price action is the start of a more meaningful reversal. A daily close below the 20-day EMA and below 140.00 would strengthen a bearish threat. A resumption of gains would refocus attention on 145.00 and beyond.

EURJPY TECHS: Price Is Below The 50-Day EMA

• RES 4: 146.23 2.236 proj of the Aug 2- 10 - 16 price swing
• RES 3: 145.64 High Sep 12 and the bull trigger
• RES 2: 144.04 High Sep 20
• RES 1: 141.53 20-day EMA
• PRICE: 139.69 @ 06:45 BST Sep 23
• SUP 1: 138.71 Low Sep 22
• SUP 2: 138.26 Low Aug 30
• SUP 3: 137.47 76.4% retracement of the Aug 16 - Sep 12 rally
• SUP 4: 136.02 Low Aug 25

A sharp volatile reversal lower in EURJPY Thursday resulted in a break below the 50-day EMA, at 140.09. At this stage, weakness in the cross is considered corrective and despite Thursday’s BOJ intervention, technical trend signals continue to highlight a bull cycle. Price action however is likely to remain volatile. A daily close below the 50-day EMA would strengthen a bearish threat. Initial key resistance is at 144.04, the Sep 20 high.

AUDUSD TECHS: Heading South

• RES 4: 0.6916 High Sep 13 and a key resistance
• RES 3: 0.6851 50-day EMA
• RES 2: 0.6747/66 High Sep 20 / 20-day EMA
• RES 1: 0.6682 Low Jul 14 and a recent breakout level
• PRICE: 0.6619 @ 06:51 BST Sep 23
• SUP 1: 0.6574 Low Sep 22
• SUP 2: 0.6568 Low May 27 2020
• SUP 3: 0.6538 Low May 26 2020
• SUP 4: 0.6464 61.8% retracement of the 2020 - 2021 bull leg

AUDUSD resumed its downtrend this week - the pair has cleared support at 0.6682, the Jul 14 low and bear trigger. The break strengthens bearish conditions and maintains the broader bearish price sequence of lower lows and lower highs. This has opened 0.6538 next, the May 26 2020 low ahead of 0.6464, a Fibonacci retracement. Initial firm resistance has been defined at 0.6747, the Sep 20 high.

USDCAD TECHS: Impulsive Rally Extends

• RES 4: 1.3716 High Jun 26 2020
• RES 3: 1.3702 2.382 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.3651 61.8% retracement of the 2020 - 2021 bear leg
• RES 1: 1.3582 2.00 proj of the Aug 25 - Sep 7 - 13 price swing
• PRICE: 1.3481 @ 07:08 BST Sep 23
• SUP 1: 1.3358 Low Sep 21
• SUP 2: 1.3194 20-day EMA
• SUP 3: 1.3058 50-day EMA
• SUP 4: 1.2954 Low Sep 13

USDCAD maintains a clear bullish tone and the pair traded higher again Thursday. The extension reinforces bullish conditions and maintains the positive price sequence of higher highs and higher lows. Moving average studies are in a bull mode position, highlighting current market sentiment. Sights are set on 1.3582 next, a Fibonacci projection. On the downside, initial firm support is at 1.3194, the 20-day EMA.

FIXED INCOME

BUND TECHS: (Z2) Clears Key Support

• RES 4: 146.81 High Sep 5 and a key resistance
• RES 3: 144.10 20-day EMA
• RES 2: 143.87 High Sep 14
• RES 1: 142.58 High Sep 20
• PRICE: 140.84 @ 09:41 BST Sep 23
• SUP 1: 139.72 Intraday low
• SUP 2: 139.20 3.382 proj of the Aug 2 - 12 - 15 price swing
• SUP 3: 138.68 Low Jan 2014
• SUP 4: 138.16 3.6118 proj of the Aug 2 - 12 - 15 price swing

Bund futures remain in a clear downtrend and the extension lower this week has again confirmed a resumption of the bear leg that started early August. The major support at 140.67, the Jun 16 low (cont), has been cleared. The break strengthens the broader bearish outlook and confirms a resumption of the primary downtrend. With 140.00 pierced, attention turns to 139.20, a Fibonacci projection. The 20-day EMA, at 144.10 is a firm resistance.

BOBL TECHS: (Z2) Heading South

• RES 4: 123.160 High Sep 8
• RES 3: 122.040 20-day EMA
• RES 2: 121.570 High Sep 16 / 19
• RES 1: 121.120 High Sep 20
• PRICE: 120.010 @ 09:42 BST Sep 23
• SUP 1: 119.520 Intraday low
• SUP 2: 119.426 1.764 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 119.260 Low Aug 2011
• SUP 4: 118.850 2.000 proj of the Aug 25 - Sep 1 - Sep 6 price swing

The trend needle in Bobl futures still points south and the contract is trading lower once again, reinforcing bearish conditions. A key support at 119.940, the Jun 16 low (cont) and the bear trigger, has been cleared. The break of this level confirms a resumption of the broader downtrend and opens 119.426 next, a Fibonacci projection ahead of 119.260, the Aug 2011 low (cont). Firm resistance is seen at 122.040, the 20-day EMA.

SCHATZ TECHS: (Z2) Bear Trend Extension

• RES 4: 108.045 High Sep 9
• RES 3: 107.801 20-day EMA
• RES 2: 107.585 High Sep 19
• RES 1: 107.380 High Sep 20
• PRICE: 106.865 @ 05:19 BST Sep 23
• SUP 1: 106.790 Low Sep 22
• SUP 2: 106.730 2.00 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 106.513 2.236 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 4: 106.379 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing

The Schatz futures trend direction remains down and the contract traded to a fresh trend low once again on Thursday, confirming an extension of the bear cycle. This also maintains the current bearish price sequence of lower lows and lower highs with moving average studies in a bear mode position. The focus is on 106.730 next, a Fibonacci projection. On the upside, initial firm resistance is seen at 107.801, the 20-day EMA.

GILT TECHS: (Z2) Bear Trend Accelerates

• RES 4: 107.93 High Sep 1
• RES 3: 106.84 High Sep 8 and a key near-term resistance
• RES 2: 106.27 20-day EMA
• RES 1: 105.34/77 High Sep 22 / High Sep 15
• PRICE: 101.90 @ Close Sep 22
• SUP 1: 101.65 Low Sep 22
• SUP 2: 101.20 2.764 proj of the Aug 22 - 24 - 26 price swing
• SUP 3: 100.78 Low Feb 1995 (cont)
• SUP 4: 100.00 Psychological round number

Gilt futures traded sharply lower Thursday and delivered a fresh cycle low once again. The break maintains the bearish price sequence of lower lows and lower highs. Note too that corrections are proving to be short-lived and shallow - this clearly highlights the current bearish market sentiment. The focus is on 101.20, a Fibonacci projection. Initial firm resistance is Thursday’s high of 105.34.

BTP TECHS: (Z2) Trend Needle Still Points South

• RES 4: 122.59 High Aug 19
• RES 3: 121.32 High Aug 25
• RES 2: 120.00 Round number resistance
• RES 1: 117.51/119.06 20-day EMA / High Sep 8 and key resistance
• PRICE: 115.10 @ Close Sep 22
• SUP 1: 114.67 Low Sep 22
• SUP 2: 113.78 Low Jun 14 and key support
• SUP 3: 112.94 1.236 proj of the Aug 25 - Sep 1 - 8 price swing
• SUP 4: 112.22 1.382 proj of the Aug 25 - Sep 1 - 8 price swing

BTP futures remain bearish and Tuesday’s move lower confirmed a resumption of the bear cycle. The contract has traded through recent lows and the break maintains the bearish price sequence of lower lows and lower highs. The focus is on the major support at 113.78, the Jun 14 low (cont). Clearance of this level would strengthen the broader bearish theme. On the upside, initial firm resistance is seen at 119.06, the Sep 8 high.

US 10YR FUTURE TECHS: (Z2) Solid Move Lower

• RES 4: 118-00 High Aug 26
• RES 3: 117-04+ 50 day EMA values
• RES 2: 115-24+/116-26 20-day EMA / High Sep 2
• RES 1: 114.17/115-01 High Sep 20 / 15
• PRICE: 113-03 @ 14:57 BST Sep 22
• SUP 1: 112-21+ Low Sep 23
• SUP 2: 112-00 Round number support
• SUP 3: 111-24+ 3.0% Lower Bollinger Band
• SUP 4: 111-05 3.0% 10-dma envelope

Treasuries remain soft and the contract traded lower still Thursday. Importantly for bears, price has comfortably breached key support at 114-06, the Jun 14 low. This confirms a resumption of the broader downtrend and strengthens the underlying bearish condition. The 113-00 handle has been cleared, the focus is on 112-25+, the Jul 11 2009 low on the continuation contract.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Heading South

• RES 4: 3810.00 High Aug 17 and key resistance zone
• RES 3: 3753.00 High Aug 19
• RES 2: 3692.00 High Aug 26
• RES 1: 3532.30/3678.00 20-day EMA / High Sep 13 and bull trigger
• PRICE: 3395.00 @ 09:46 BST Sep 23
• SUP 1: 3389.00 Intraday low
• SUP 2: 3360.00 Low Jul 16
• SUP 3: 3341.00 Low Jul 5 and a key support
• SUP 4: 3300.00 Round number support

EUROSTOXX 50 futures remain soft following the reversal last week from 3678.00, the Jun 13 high and this week’s follow through. Key short-term support at 3423.00, the Sep 5 low has been cleared, the break strengthens bearish conditions and opens 3360.00, the Jul 14 low. Moving average studies are in a bear mode position, highlighting the current trend direction. Initial resistance is seen at 3532.30, the 20-day EMA.

E-MINI S&P (Z2): Bear Trend Extends

• RES 4: 4313.50 High Aug 18
• RES 3: 4234.25 High Aug 26
• RES 2: 4022.08/4175.00/47 50-day EMA / High Sep 13
• RES 1: 3936.25 High Sep 20
• PRICE: 3750.00 @ 09:54 BST Sep 23
• SUP 1: 3741.75 Low Jul 14
• SUP 2: 3657.00 Low Jun 17 and a major support
• SUP 3: 3600.00 Round number support
• SUP 4: 3558.97 1.382 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis remains soft. Continued weakness confirms a resumption of the bear cycle that started mid-August. The break lower also strengthens bearish conditions and paves the way for a move towards 3741.75, the Jul 14 low. The key support at 3657.00, Jun 17 low, has also been exposed. This is an important bear trigger. On the upside, initial firm resistance has been defined at 3936.25, the Sep 20 high.

COMMODITIES

BRENT TECHS: (X2) Outlook Remains Bearish

• RES 4: $107.30 - High Jul 5
• RES 3: $103.86 - High Jul 29 and key resistance
• RES 2: $95.35 - 50-day EMA
• RES 1: $93.50 - High Sep 21
• PRICE: $90.27 @ 07:07 BST Sep 23
• SUP 1: $88.50/87.24 - Low Sep 19 / 8 and the bear trigger
• SUP 2: $86.54 - Low Mar 9 and a key support
• SUP 3: $82.59 - 1.618 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 4: $80.71 - 1.764 proj of the Jul 29 - Aug 17 - 30 price swing

The outlook in Brent futures is unchanged and remains bearish. Short-term gains are considered corrective. The recent break of support at $89.06, Jul 14 low and a bear trigger highlights a continuation of the broader downtrend that started early June. A resumption of weakness would open $86.54, the Mar 9 low. Firm resistance is seen at the 50-day EMA which intersects at $95.35.

WTI TECHS: (X2) Bear Threat Still Present

• RES 4: $97.91 - High Jul 29 and a reversal trigger
• RES 3: $96.82 - High Aug 30 and key resistance
• RES 2: $89.35 - 50-day EMA
• RES 1: $86.68 - High Sep 21
• PRICE: $83.41 @ 07:15 BST Sep 23
• SUP 1: $81.73/80.89 - Low Sep 19/ 8 and the bear trigger
• SUP 2: $79.31 - Low Feb 18
• SUP 3: $77.86 - Low Feb 1
• SUP 4: $75.70 - Low Jan 24

A bearish threat in WTI futures remains present. The recent break of support at $84.25, the Jul 14 low, confirmed a resumption of the downtrend that started Jun 8 and marks the end of a broad sideways move that has been in place since mid-July. This has strengthened bearish conditions and a continuation lower would open $79.31 next, the Feb 18 low. Key short-term resistance is unchanged at $89.35, the 50-day EMA.

GOLD TECHS: Bear Flag Formation

• RES 4: $1783.2 - High Aug 16
• RES 3: $1765.5 - High Aug 25 and a key resistance
• RES 2: $1732.6/35.1 - 50-day EMA / High Sep 12
• RES 1: $1688.9/1707.1 - Low Sep 1 / High Sep 14
• PRICE: $1672.4 @ 07:20 BST Sep 23
• SUP 1: $1654.2 - Low Sep 16
• SUP 2: $1640.9 - Low Aug 8 2020
• 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 is consolidating and the recent pause in the downtrend appears to be a bear flag formation. This pattern reinforces a bearish theme. The recent break of support at $1681.0, the Jul 21 low, confirmed a resumption of the downtrend that started early March. Attention is on $1640.9 next, the Aug 8 2020 low. Key trend resistance has been defined at $1735.1, the Sep 12 high. Initial resistance is at $1688.9, the Sep 1 low.

SILVER TECHS: Watching Resistance

• RES 4: $21.967 - High Jun 17
• RES 3: $21.540 - High Jun 27
• RES 2: $20.876 - High Aug 15 and the bull trigger
• RES 1: $20.014 - High Sep 12
• PRICE: $19.620 @ 07:54 BST Sep 23
• SUP 1: $18.782/17.562 - Low Sep 16 / Low Sep 1 and bear trigger
• SUP 2: $16.955 - Low Jun 15 2020
• SUP 3: $16.473 - 1.00 proj of the Jun 6 - Jul 14 - Aug 10 price swing
• SUP 4: $15.998 - 76.4% retracement of the 2020 - 2021 bull leg

Silver is consolidating and remains below its recent highs. The Jun 16 print below $18.845, Sep 12 low, signals the end of the recent corrective recovery between Sep 1 - 12. A resumption of weakness would pave the way for a move towards the key support and bear trigger at $17.562, the Sep 1 low. Clearance of this level would confirm a resumption of the broader downtrend. A break of $20.014, Sep 12 high, is required to reinstate a bullish theme.