MNI DAILY TECHNICAL ANALYSIS - JPY Tipping Over Multi-Decade Trendline

Price Signal Summary - Yen Tipping Over Multi-Decade Trendline

• In the equity space, S&P E-minis have pulled away from recent highs. Recent attention has been on the 50-day EMA that intersects at 4389.01 today. This marks an important short-term pivot resistance and a clear break is required to signal scope for a stronger recovery that would open 4472.00, Sep 27 high. EUROSTOXX 50 futures have pulled away from recent highs and price action has failed to challenge resistance around the 50-day EMA. A bearish risk remains present. The contract recently traded below 3974.00, Sep 20 low.
• In FX, EURUSD is consolidating and recent price action appears to be a bear flag. The outlook is bearish. The recent break of 1.1563, Sep 30 and Oct 1 low, confirmed a resumption of the current downtrend and this has opened 1.1493 next, a Fibonacci projection. GBPUSD inched higher Monday to 1.3674 before giving back the day's gains and the pair closed at the low end of its range. A bearish risk is present despite the recent climb. USDJPY has cleared former resistance at 112.08, Sep 30 high and yesterday's strong bullish session resulted in a test of 113.41, a multi-year trendline resistance drawn from the December 1975 high.
• On the commodity front, Gold traded higher Friday but failed to hold onto gains and continues to consolidate. Near-term attention is on the 50-day EMA at $1777.0 and $1787.4, Sep 22 high and a key resistance. WTI trend conditions remain bullish and the contract started the week on a firm note. Yesterday's gains confirm an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend.
• In the FI space, the primary trend is unchanged and remains down. Bund futures remain bearish and started the week on a soft note, trading lower yesterday. A bearish price sequence of lower lows and lower highs remains in place, highlighting bearish conditions. Note moving average studies are in a bear mode too, reinforcing current trend direction. Gilt futures remain heavy and the contract gapped lower yesterday. The break to fresh lows confirms a resumption of the bear trend and an extension of the current bearish price sequence of lower lows and lower highs.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Flag

• RES 4: 1.1846 High Sep 14
• RES 3: 1.1772 Bear channel top drawn from the Jun 1 high
• RES 2: 1.1729/55 50-day EMA / High Sep 22
• RES 1: 1.1640/1648 High Oct 4 / 20-day EMA
• PRICE: 1.1558 @ 06:01 BST Oct 12
• SUP 1: 1.1529 Low Oct 6 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: 1.1432 Bear channel base drawn from the Jun 1 high

EURUSD is consolidating and recent price action appears to be a bear flag. The outlook is bearish. The recent break of 1.1563, Sep 30 and Oct 1 low, confirmed a resumption of the current downtrend and this has opened 1.1493 next, a Fibonacci projection. A bearish price sequence of lower lows and lower highs remains intact and moving average conditions are in a bear mode. Firm resistance is unchanged at 1.1640.

GBPUSD TECHS: Still Looking For Weakness

• RES 4: 1.3854 High Sep 15
• RES 3: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 2: 1.3716 50-day EMA
• RES 1: 1.3674 High Oct 11
• PRICE: 1.3603 @ 06:17 BST Oct 12
• SUP 1: 1.3544/3412 Low Oct 6 / Low Sep 29 and the bear trigger
• SUP 2: 1.3354 Low Dec 23, 2020
• SUP 3: 1.3292 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD inched higher Monday to 1.3674 before giving back the day's gains and the pair closed at the low end of its range. A bearish risk is present despite the recent climb. This follows weakness on Sep 28 and 29 and the breach of a triangle base drawn from the Jul 20 low. Moving average studies are in a bear mode too. The focus is on 1.3354, the Dec 23, 2020 low. Initial resistance is at 1.3674 and the bear trigger is 1.3412.

EURGBP TECHS: Needle Still Points South

• RES 4: 0.8703 1.236 proj of the Aug 10 - Sep 7 - Sep 16 rally
• RES 3: 0.8670 High Jul 20 and key resistance
• RES 2: 0.8624/58 High Oct 1 / High Sep 29
• RES 1: 0.8552 50-day EMA
• PRICE: 0.8500 @ 06:23 BST Oct 12
• SUP 1: 0.8472/60 Low Oct 11 / 1.0% 10-dma envelope
• SUP 2: 0.8450 Low Aug 10
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP is consolidating and remains vulnerable following last week's move lower and extension of the reversal from 0.8658, Sep 29 high. Supports at 0.8526, Sep 28 low and 0.8501, the Sep 16 low have been cleared. This strengthens a bearish case and sets the scene for a deeper retracement towards 0.8450, Oct 8 low. The cross needs to breach 0.8658, Sep 29 high to reinstate a bull theme. Firm resistance is at 0.8552, the 50-day EMA.

USDJPY TECHS: Bull Rally Accelerates

• RES 4: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 114.50 1.382 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 113.91 2.0% 10-dma envelope
• RES 1: 113.41/49 Trendline drawn from Dec 1975 high / Intraday high
• PRICE: 113.30 @ 06:32 BST Oct 12
• SUP 1: 112.08/111.51 Low Oct 11 / Low Oct 8
• SUP 2: 110.82/80 Low Oct 4 / High Aug 11
• SUP 3: 110.52 50-day EMA
• SUP 4: 109.76 Low Sep 23

USDJPY accelerated higher Monday following a resumption of its uptrend Friday. The pair has cleared former resistance at 112.08, Sep 30 high and yesterday's strong bullish session resulted in a test of 113.41, a multi-year trendline resistance drawn from the December 1975 high. A clear break of this hurdle would reinforce the current trend condition. On the downside, key support has been defined at 110.82, Oct 4 low.

EURJPY TECHS: Trades Above Key Resistance

• RES 4: 132.67 76.4% retracement of the Jun - Sep downleg
• RES 3: 132.23 High Jul 2
• RES 2: 131.76 61.8% retracement of the Jun - Sep downleg
• RES 1: 131.23 High Oct 11
• PRICE: 131.01 @ 06:37 BST Oct 12
• SUP 1: 130.26 50.0% of the Oct 11 range
• SUP 2: 129.28 Low Oct 11
• SUP 3: 128.33/31 Low Oct 6 / Low Sep 23
• SUP 4: 127.94/93 Low Aug 19 / Low Sep 22 the bear trigger

EURJPY rallied Monday. The reversal higher from last week's low of 128.33, low Oct 6 has reinstated a near-term bullish focus. The cross has now topped resistance at 130.75, the Sep 3 high and a bull trigger. A clear break of this level would strengthen the case for bulls and open 131.76, the 61.8% retracement of the Jun - Sep downleg. Initial firm support is at Monday's intraday low of 129.28.

AUDUSD TECHS: Topping The 50-Day EMA

• RES 4: 0.7503 High Jul 13
• RES 3: 0.7478 High Sep 3 and the bull trigger
• RES 2: 0.7405 76.4% retracement of the Sep 3 - 29 downleg
• RES 1: 0.7373 High Oct 11
• PRICE: 0.7357 @ 06:44 BST Oct 12
• SUP 1: 0.7226/7170 Low Oct 6 / Low Sep 29
• SUP 2: 0.7126/06 / 2.0% 10-dma envelope / Low Aug 20 key support
• SUP 3: 0.7053 38.2% retracement of the Mar '20 - Feb uptrend
• SUP 4: 0.6991 Low Nov 2, 2020

AUDUSD added to its gains Monday. The pair has recently cleared both the 20- and 50-day EMAs and although the recovery is considered corrective, the break higher suggests scope for an extension. The focus is on 0.7405 next, a Fibonacci retracement. A break would expose 0.7478, Sep 3 high and a key short-term resistance. Support levels to watch lie at 0.7226, Oct 6 low and 0.7170, Sep 29 low. The latter is a bear trigger.

USDCAD TECHS: Trading At Recent Lows

• RES 4: 1.2957 High Dec 21, 2020
• RES 3: 1.2949 High Aug 20 and the bull trigger
• RES 2: 1.2775/2896 High Sep 29 / High Sep 20
• RES 1: 1.2562/2648 High Oct 8 / High Oct 4
• PRICE: 1.2475 @ 06:49 BST Oct 12
• SUP 1: 1.2422 Jul 30 low and a key support
• SUP 2: 1.2367 61.8% retracement of the Jun - Aug rally
• SUP 3: 1.2303 Low Jul 6
• SUP 4: 1.2253 Low Jun 23

USDCAD is trading at recent lows and remains bearish following the move lower last week. The break of support at 1.2494, Sep 3 low signals scope for a deeper pullback towards 1.2422, the Jul 30 low. Clearance of this support would strengthen the case for bears. On the upside, a breach of 1.2775, Sep 29 high would represent a bullish development instead. Initial firm resistance is at 1.2648, Oct 6 high.

FIXED INCOME

BUND TECHS: (Z1) Needle Still Points South

• RES 4: 171.96 High Sep 21 and key near-term resistance
• RES 3: 170.81 Low Sep 17 and recent breakout level
• RES 2: 170.55 High Oct 4 and key near-term resistance
• RES 1: 170.00 High Oct 7
• PRICE: 168.85 @ 05:16 BST Oct 12
• SUP 1: 168.57 Low Oct 11
• SUP 2: 168.29 Low May 19 (cont) and a key support
• SUP 3: 167.98 2.382 proj of the Sep 9 - 17 - 21 price swing
• SUP 4: 167.79 2.50 proj of the Sep 9 - 17 - 21 price swing

Bund futures remain bearish and started the week on a soft note, trading lower yesterday. A bearish price sequence of lower lows and lower highs remains in place, highlighting bearish conditions. Note moving average studies are in a bear mode too, reinforcing current trend direction. The focus is on 168.29 next, the May 19 low (cont) and beyond. Key short-term resistance has been defined at 170.00.

BOBL TECHS: (Z1) Bearish Trend Sequence

• RES 4: 135.540 High Sep 21 and key near-term resistance
• RES 4: 135.380 High Sep 23
• RES 3: 135.200 Low Sep 17 and recent breakout level / High Oct 4
• RES 2: 135.060 High Oct 7
• PRICE: 134.640 @ 05:28 BST Oct 12
• SUP 1: 134.430 1.00 proj of the Sep 21 - 28 - Oct 4 price swing
• SUP 2: 134.410 Low Jul 13 (cont)
• SUP 3: 134.285 76.4% retracement of the Jun - Sep rally
• SUP 4: 134.136 1.382 proj of the Sep 21 - 28 - Oct 4 price swing

Bobl futures outlook remains bearish and the contract resumed its downtrend yesterday. The continued move lower maintains the current bearish price sequence of lower lows and lower highs that defines a downtrend and signals scope for further weakness. The focus is on 134.430 next, a Fibonacci projection. On the upside, key short-term resistance has been defined at 135.060.

SCHATZ TECHS: (Z1) Resumes Its Downtrend

• RES 4: 112.305 High Sep 3
• RES 3: 112.290 High Sep 20
• RES 2: 112.231 20-day EMA
• RES 1: 112.255 High Sep 23 and Oct 5 and key near-term resistance
• PRICE: 112.190 @ 05:39 BST Oct 12
• SUP 1: 112.165 Low Oct 11
• SUP 2: 112.159 61.8% retracement of the May - Aug rally (cont)
• SUP 3: 112.113 1.236 proj of the Sep 20 - 28 - Oct 5 price swing
• SUP 4: 112.098 76.4% retracement of the May - Aug uptrend

Schatz futures remain in a downtrend and the contract sold off sharply yesterday, breaking former support at 112.175, Sep 28 low. This confirms a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs. Scope is seen for an extension towards 112.140 next, a Fibonacci projection. MA conditions are in a bear mode, reinforcing current conditions. On the upside, key short-term resistance is at 112.255.

GILT TECHS: (Z1) Bear Trend Extension

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.72/75 High Oct 1 / 20-day EMA
• RES 1: 124.05/125.19 Low Oct 6 / High Oct 7
• PRICE: 123.75 @ Close Oct 11
• SUP 1: 123.44 Low Oct 11
• SUP 2: 123.16 Low Feb 27, 2019 (cont)
• SUP 3: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing
• SUP 4: 122.15 Low Jan 18, 2019 (cont)

Gilt futures remain heavy and the contract gapped lower yesterday. The break to fresh lows confirms a resumption of the bear trend and an extension of the current bearish price sequence of lower lows and lower highs. Moving average studies continue to point south, reinforcing current conditions. The focus is on 123.16 next, the Feb 27, 2019 low (cont). Firm resistance is seen at 125.19, Oct 7 high.

BTP TECHS: (Z1) Bearish Focus

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.87 High Oct 1 and key near-term resistance
• PRICE: 151.33 @ Close Oct 11
• SUP 1: 151.00 Low Oct 6 and the bear trigger
• SUP 2: 150.56 Low Jun 30 (cont)
• SUP 3: 150.00/149.97 Round number support / Low Jun 25
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures outlook remains bearish. The contract traded lower Oct 6, confirming a recent bear flag formation and a resumption of the downtrend. A price sequence of lower lows and lower highs that defines a downtrend remains intact and the recent move through 152.94, Sep 9 low, confirmed this price condition. The focus is on the 150.00 psychological round number next. Key near-term resistance has been defined at 152.87, Oct 1 high.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Pulls Away From Recent Highs

• RES 4: 4300.00 Round number resistance
• RES 3: 4234.50 0.764 projection of the Jul 19 - Sep 6 - 20 price swing
• RES 2: 4223.00 High Sep 6 and the bull trigger
• RES 1: 4092.50/4200.50 50-day EMA / High Sep 24
• PRICE: 4024.50 @ 05:55 BST Oct 12
• SUP 1: 3949.50 Low Oct 6 and the bear trigger
• SUP 2: 3902.50 Low Jul 20
• SUP 3: 3882.00 Low Jul 19 and a key support
• SUP 4: 3856.40 1.382 proj of the Sep 6 - Sep 20 - Sep 24 price swing

EUROSTOXX 50 futures have pulled away from recent highs and price action has failed to challenge resistance around the 50-day EMA. A bearish risk remains present. The contract recently traded below 3974.00, Sep 20 low. A clear break of this support would strengthen a bearish case and open 3882.00, Jul 19 low. Price needs to clear 4092.50, the 50-day EMA to ease the current bearish threat. This would open 4200.50, Sep 24 high.

E-MINI S&P (Z1): Still Looking For Clear 50-Day EMA Break

• RES 4: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4539.50 High Sep 3 and the bull trigger
• RES 3: 4519.75 High Sep 9
• RES 1: 4421.50/4472.00 High Oct 7 / High Sep 27
• PRICE: 4329.50 @ 07:02 BST Oct 12
• SUP 1: 4260.00 Low Oct 1 and the bear trigger
• SUP 2: 4243.50 Low Jul 20
• SUP 3: 4214.50 Low Jul 19 and a key support
• SUP 4: 4117.00 Low Jun 21

S&P E-minis have pulled away from recent highs. Recent attention has been on the 50-day EMA that intersects at 4389.01 today. This marks an important short-term pivot resistance and a clear break is required to signal scope for a stronger recovery that would open 4472.00, Sep 27 high. Key support to watch is unchanged at 4260.00, the Oct 1 low and the bear trigger. A break would confirm a resumption of the downtrend that started early September.

COMMODITIES

BRENT TECHS: (Z1) Bull Trend Extension

• RES 4: $86.55 - 1.764 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $85.20 - 1.618 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $85.00 - Round number resistance
• RES 1: $84.60 - High Oct 11
• PRICE: $84.08 @ 06:59 BST Oct 12
• SUP 1: $81.96 - Low Oct 10
• SUP 2: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 3: $76.51/75.42 - Low Sep 30 and key support / High Sep 15
• SUP 4: $74.81 - Low Sep 23

Brent futures started the week on a firm note, trading above last week's high of $83.47 on Oct 6. The break confirms a resumption of the uptrend and resumes the bullish price sequence of higher highs and higher lows. Note too that the contract has recently cleared the $80.00 handle, an important psychological hurdle. The focus is on $85.00 next, a Fibonacci projection. Key short-term support has been defined at $79.08, Oct 7 low.

WTI TECHS: (X1) Northbound

• RES 4: $84.97 - 2.00 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 3: $84.00 - Round number resistance
• RES 2: $82.89 - 1.764 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 1: $82.18 - High Oct 11
• PRICE: $80.73 @ 07:04 BST Oct 12
• SUP 1: $78.63 - Low Oct 8
• SUP 2: $74.96 - Low Oct 7 and key near-term support
• SUP 3: $73.14 - Low Sep 30 and key support
• SUP 4: $71.61 - Low Sep 21

WTI trend conditions remain bullish and the contract started the week on a firm note. Yesterday's gains confirm an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also been cleared. The focus is on $82.89, a Fibonacci projection. On the downside, key short-term support has been defined at $74.96, Oct 7.

GOLD TECHS: Support Remains Intact

• RES 4: $1844.9 - Low Jun 14
• RES 3: $1834.1 - High Jul 15 and the bull trigger
• RES 2: $1808.7 - High Sep 14
• RES 1: $1781.4/87.4 - High Oct 8 / High Sep 22 and key resistance
• PRICE: $1761.6 @ 07:21 BST Oct 12
• SUP 1: $1746.0 - Low Oct 6
• SUP 2: $1721.7 - Low Sep 29 and the bear trigger
• SUP 3: $1717.8 - Low Aug 10
• SUP 4: $1690.6 - Low Aug 08 and the bear trigger

Gold traded higher Friday but failed to hold onto gains and continues to consolidate. Near-term attention is on the 50-day EMA at $1777.0 and $1787.4, Sep 22 high and a key resistance. A resumption of strength would reinforce the bullish engulfing candle that signalled a reversal on Sep 30 and a break of $1787.4 would suggest scope for further upside. Initial support is at $1746.0, Oct 6 low. A break is required to undermine a bullish tone.

SILVER TECHS: Bearish Focus

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $23.525 - 50-day EMA
• RES 1: $23.191 - High Oct 8
• PRICE: $22.671 @ 07:30 BST Oct 12
• SUP 1: $21.423 - Low Sep 29
• SUP 2: $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally
• SUP 3 :$20.000 - Psychological round number
• SUP 4: $19.851 - Low Jul 21, 2020

Silver is consolidating. The trend outlook remains bearish though. The metal broke lower Sep 29 and cleared $22.039, Sep 20 low. This confirmed a resumption of the broader downtrend and maintains the bearish price sequence of lower lows and lower highs, paving the way for an extension towards $20.871, a Fibonacci retracement. On the upside, key near-term resistance is at $23.191, Oct 8 high. Gains are considered corrective.