MNI DAILY TECHNICAL ANALYSIS - JPY Weakness Extends

Price Signal Summary – JPY Weakness Extends

• Despite the latest pullback, S&P E-Minis maintains a firmer short-term tone. A bullish theme follows last week’s 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.
• Short-term conditions in GBPUSD remain bullish despite the pullback from Monday’s high. Key near-term support is unchanged at 1.0924, the Oct 12 low. An extension higher would signal scope for a test of 1.1495, the Oct 5 high and the bull trigger. USDCAD traded briefly below the 20-day EMA yesterday. This average, at 13670, is an important S/T support. The uptrend remains intact and the latest pullback is considered corrective. EURJPY maintains a bullish tone and the cross is consolidating at its recent highs. A continuation higher appears likely. The recent break of 145.64, the Sep 12 high and bull trigger, confirmed a resumption of the broader uptrend.
• Gold is trading lower. The yellow metal maintains a bearish tone following the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4. WTI futures failed to hold on to yesterday’s gains. The outlook remains bearish and a resumption of weakness would open $79.63 a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low.
• Bund futures are trading lower again today. 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, a corrective cycle remains in play and yesterday’s move higher once again reinforced the short-term bullish theme.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Channel Resistance Intact

• 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: 0.9892 Bear channel top from Feb 10 high
• PRICE: 0.9766 @ 07:09 BST Oct 21
• SUP 1: 0.9711/9633 Low Oct 17 / 13
• SUP 2: 0.9536 Low Sep 28 and key support
• SUP 3: 0.9501 1.382 projection of the Aug 10 - Sep 6 - 12 price swing
• SUP 4: 0.9442 1.50 projection of the Aug 10 - Sep 6 - 12 price swing

EURUSD remains below Tuesday’s high. Key resistance intersects at 0.9892 today. This is the top of the bear channel drawn from the Feb 10 high. A clear break of this chart point would highlight a channel breakout and a stronger bullish reversal. For now, with price trading inside the channel, the trend remains down and recent gains are considered corrective. A stronger move lower would open support at 0.9633, the Oct 13 low.

GBPUSD TECHS: Bullish Focus

• 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: 1.1430 50-day EMA
• PRICE: 1.1187 @ 07:16 BST Oct 21
• SUP 1: 1.1148/1058 Low Oct 17 / 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 despite the pullback from Monday’s high. Key near-term support is unchanged at 1.0924, the Oct 12 low. An extension higher would signal scope for a test of 1.1495, the Oct 5 high and the bull trigger. Clearance of this level would strengthen bullish conditions plus highlight scope for a stronger reversal. On the downside, a clearance of 1.0924 would instead reinstate a bearish theme.

EURGBP TECHS: Bear Threat Remains Present

• 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: 0.8767/8867 High Oct 13 / 12
• PRICE: 0.8730 @ 06:25 BST Oct 21
• 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. A short-term bearish threat remains present. This follows the strong reversal from 0.9266, the Sep 26 high. Support at 0.8649, the Oct 4 low, has been cleared. This 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 is required to reinstate a bullish theme.

USDJPY TECHS: Conquers 150.00

• RES 4: 152.00 Round number resistance
• RES 3: 151.49 1.618 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 2: 151.20 3.764 proj of the Aug 2 - 8 - 11 price swing
• RES 1: 150.45 3.618 proj of the Aug 2 - 8 - 11 price swing
• PRICE: 150.36 @ 06:44 BST Oct 21
• SUP 1: 148.19/147.06 Low Oct 18 / 14
• SUP 2: 146.52 20-day EMA
• SUP 3: 144.72/143.53 Low Oct 7 / 5
• SUP 4: 143.11 50-day EMA

USDJPY continues to appreciate and this week’s break of the 150.00 handle has reinforced bullish conditions. The climb maintains the positive price sequence of higher highs and higher lows and the focus now turns to projection levels at 150.45 and 151.20. Note that the trend is in overbought territory but this is clearly not a concern for bulls at this stage. Firm trend support lies at 146.52, the 20-day EMA.

EURJPY TECHS: Bulls Pause For Breath

• RES 4: 148.88 High Dec 9 2014
• RES 3: 148.45 High Dec 15 2014
• RES 2: 147.76 1.236 proj of the May 12 - Jun 28 - Aug 2 price swing
• RES 1: 147.30 High Oct 20
• PRICE: 147.00 @ 06:55 BST Oct 21
• SUP 1: 144.09 High Oct 5
• SUP 2: 143.68/141.84 20-day EMA / 50-day EMA
• SUP 3: 140.90 Low Oct 10
• SUP 4: 139.44/137.40 Low Sep 29 / 26 and key support

EURJPY maintains a bullish tone and the cross is consolidating at its recent highs. A continuation higher appears likely. The recent break of 145.64, the Sep 12 high and bull trigger, confirmed a resumption of the broader uptrend that started in May 2020. This opens 147.76 next, a Fibonacci projection. Moving average studies are in a bull mode position, highlighting a broader uptrend. Initial support lies at 144.09, the Oct 5 high.

AUDUSD TECHS: Bear Flag

• RES 4: 0.6581 50-day EMA
• RES 3: 0.6656 High Sep 23
• RES 2: 0.6547 High Oct 4 and key resistance
• RES 1: 0.6363/6393 Low Sep 28 / 20-day EMA
• PRICE: 0.6260 @ 07:00 BST Oct 21
• SUP 1: 0.6170 Low Oct 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 is consolidating and this pause in the trend appears to be a bear flag. A bearish theme remains intact and short-term gains are considered corrective. Price has recently cleared 0.6363, the Sep 28 low and bear trigger. This confirmed a resumption of the primary downtrend and the print below 0.6200 exposes 0.6133 next, a Fibonacci projection. On the upside, initial firm resistance to watch is 0.6393, the 20-day EMA.

USDCAD TECHS: Finds Support At 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: 1.3898/3977 High Oct 14 / 13 and the bull trigger
• PRICE: 1.3793 @ 08:05 BST Oct 21
• SUP 1: 1.3670 20-day EMA
• SUP 2: 1.3503 Low Oct 4 and a key support
• SUP 3: 1.3429 50-day EMA
• SUP 4: 1.3358 Low Sep 21

USDCAD traded briefly below the 20-day EMA yesterday. This average, at 13670, is an important S/T support. The uptrend remains intact and the latest pullback is considered corrective. The recovery from 1.3503, Oct 10 high, reinforces bullish conditions. MA studies still highlight an uptrend and 1.3838, Sep 30 high has been cleared. Should markets close below the 20-day EMA, a deeper correction toward 1.3503, Oct 4 low, would be on the cards.

FIXED INCOME

US 10YR FUTURE TECHS: (Z2) Bear Trend Extension

• RES 4: 113-30 High Oct 4 and the bull trigger
• RES 3: 112-22+ High Oct 6
• RES 2: 111-30 20-day EMA /
• RES 1: 111-28+ High Oct 12 and key near-term resistance
• PRICE: 109-31 @ 15:28 BST Oct 20
• SUP 1: 109-19+ Low Oct 20
• SUP 2: 109-12+ 0.764 projection of the Oct 4 - 10 - 13 price swing
• SUP 3: 108-20 1.00 projection of the Oct 4 - 10 - 13 price swing
• SUP 4: 107.22+ 3.0% 10-dma envelope

Treasuries have traded lower and this has resulted in a break of support at 110.02, the Oct 13 low and the psychological 110.00 handle. The break lower confirms a resumption of the primary downtrend and marks an extension of the bearish price sequence of lower lows and lower highs. Sights are set on a move lower towards 109-12+. A Fibonacci projection. Initial firm resistance has been defined at 111-28+, high Oct 13.

BUND TECHS: (Z2) Downtrend Extends

• 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 key resistance
• RES 2: 138.09/52 20-day EMA / High Oct 14
• RES 1: 136.15 High Oct 20
• PRICE: 134.50 @ 05:16 BST Oct 21
• SUP 1: 134.00 Round number support
• 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 are trading lower again today. 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) Clears The Bear Trigger

• RES 4: 121.950 High Oct 4 and the bull trigger
• RES 3: 121.330 High Oct 5
• RES 2: 119.533/960 20-day EMA / High Oct 14
• RES 1: 118.540 High Oct 20
• PRICE: 117.890 @ 06:41 BST Oct 21
• 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 continue to weaken. Yesterday’s move lower cleared support and the bear trigger at 118.020, the 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 paves the way for a move towards 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) Bear Trend Resumes

• 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 / 6 and key resistance
• RES 1: 106.630/107.017 High Oct 20 / 20-day EMA
• PRICE: 106.470 @ 05:34 BST Oct 21
• SUP 1: 106.430 Low Oct 20
• SUP 2: 106.379 2.382 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. Yesterday’s extension lower resulted in a break of support at 106.535, the 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 106.379 next, a Fibonacci extension. Key short-term resistance has been defined at 107.180, the Oct 13 high.

GILT TECHS: (Z2) Corrective Cycle Still In Play

• 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: 98.94 @ Close Oct 20
• 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, a corrective cycle remains in play and yesterday’s move higher once again reinforced the short-term bullish theme. Price has cleared and closed above the 20-day EMA. A continuation higher would signal scope for a test of key resistance at 100.92, the Oct 4 high. On the downside, 90.38, the Oct 12 low, marks key support and is the bear trigger.

BTP TECHS: (Z2) Bearish Outlook

• RES 4: 118.51 High Sep 13
• RES 3: 117.05 High Sep 22
• RES 2: 116.71 High Oct 4 and key resistance
• RES 1: 111.89/113.41 20-day EMA / High Oct 6
• PRICE: 110.50 @ Close Oct 20
• SUP 1: 108.85 Low Oct 11
• 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 remain in consolidation mode. The 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.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Trendline Resistance Remains Exposed

• 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: 3509.00 High Oct 18
• PRICE: 3451.00 @ 06:13 BST Oct 21
• SUP 1: 3352.00 Low Oct 14
• SUP 2: 3251.00/3236.00 Low Oct 13 / 3 and a key support zone
• SUP 3: 3305.00 Low Oct 11
• SUP 4: 3236.00/3229.00 Low Oct 3 / Low Nov 9 2020 (cont)

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 tested trendline resistance drawn from the Aug 17 high. The trendline intersects at 3483.50 and a clear break of this hurdle would strengthen bullish conditions. Initial firm support is at 3352.00, the Oct 14 low.

E-MINI S&P (Z2): Corrective Bull Cycle Still In Play Despite Pullback

• 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: 3833.33 50-day EMA
• RES 1: 3820.00 High Oct 5 and a bull trigger
• PRICE: 3663.25 @ 06:56 BST Oct 21
• SUP 1: 3590.50/3502.00 Low Oct 17 / 13 and the bear trigger
• SUP 2: 3491.13 50.0% retracement of the 2020 - 2022 bull cycle
• SUP 3: 3453.78 1.618 proj of the Aug 16 - Sep 7 - 13 price swing
• SUP 4: 3388.70 1.764 proj of the Aug 16 - Sep 7 - 13 price swing

Despite the latest pullback, S&P E-Minis maintains a firmer short-term tone. A bullish theme follows last week’s 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 3590.50, the Oct 17 low.

COMMODITIES

BRENT TECHS: (Z2) Bear Cycle Remains 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: $92.45 @ 07:00 BST Oct 21
• 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 traded higher Thursday before reversing lower. 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) Bounce From Tuesday’s Low Considered Corrective

• 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: $84.53 @ 07:12 BST Oct 21
• 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

WTI futures failed to hold on to yesterday’s gains. The outlook remains bearish and a resumption of weakness would open $79.63 a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low. On the upside, a stronger reversal higher would instead expose the key short-term resistance at $92.34, the Oct 10 high. Initial firm resistance to watch is at $88.66, Oct 12 high.

GOLD TECHS: Closing In On The Bear Trigger

• RES 4: $1735.1 - High Sep 12 and a key resistance
• RES 3: $1729.5 - High Oct 4 and the bull trigger
• RES 2: $1684.0/1694.8 - High Oct 11 / 50-day EMA
• RES 1: $1665.7 - 20-day EMA
• PRICE: $1621.1 @ 07:14 BST Oct 21
• 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

Gold is trading lower. The yellow metal maintains a bearish tone following 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 has moved 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, clearance of $1729.5 is required to reinstate a bullish theme.

SILVER TECHS: Trend Needle Points South

• 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: $19.330 - 50-day EMA
• PRICE: $18.454 @ 08:09 BST Oct 21
• 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 and last week’s move lower has reinforced the bearish condition. The 50-day EMA has been cleared. This signals scope for a continuation of the current bear leg and the focus is on the next support at $17.967, the Sep 28 low. Clearance of this level would open $17.562, the Sep 28 low and the bear trigger. Initial resistance is seen at $19.330, the 50-day EMA.