MNI DAILY TECHNICAL ANALYSIS - Oil Price Action Reinforces Downtrend in WTI Futures

Price Signal Summary – Oil price action reinforces downtrend in WTI futures

• S&P E-Minis maintains a firmer tone as the contract extends last week’s reversal from 3502.00, the Oct 13 low. The latest recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. EUROSTOXX 50 futures are firmer as price extends the recovery from 3251.00, Oct 13 low. Recent gains have resulted in a break of the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger.
• EURUSD is trading closer to its recent highs and remains above the 20-day EMA. Attention is on the first key resistance at 0.9910 - the top of the bear channel drawn from the Feb 10 high. EURGBP maintains a bearish tone following the reversal from 0.9266, the Sep 26 high. The move lower has resulted in a break of support at 0.8649 and a move below the 50-day EMA at 0.8678. AUDUSD is trading above its recent lows but maintains a bearish theme and short-term gains are considered corrective. The pair has recently cleared 0.6363, the Sep 28 low and bear trigger.
• Gold is unchanged. The yellow metal maintains a softer tone following the recent reversal from $1729.5, the 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. WTI futures traded lower again Tuesday. This reinforces the current bearish theme and highlights potential for a continuation lower. An extension would open $80.35, a Fibonacci retracement level and potentially $76.25 further out.
• Bund futures are unchanged and remain in a downtrend - recent gains are considered corrective. The reversal from 142.87, Oct 4 high, marked the end of the correction between Sep 28 - Oct 4 and confirmed a resumption of the primary downtrend. The primary trend direction in Gilt futures is down and short-term gains are considered corrective with moving average studies remaining in a bear mode position. Initial resistance to watch is at 97.33, the 20-day EMA.

FOREIGN EXCHANGE

EURUSD TECHS: Channel Resistance Remains 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: 0.9910 Bear channel top from Feb 10 high
• PRICE: 0.9839 @ 05:47 BST Oct 19
• 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: 0.9371 Bear channel base drawn from the Feb 10 high

EURUSD is trading closer to its recent highs and remains above the 20-day EMA. Attention is on the first key resistance at 0.9910 - the top of the bear channel drawn from the Feb 10 high. A clear break of this hurdle would highlight a channel breakout and a stronger bullish reversal. For now, the trend remains down and recent gains are considered corrective. Key short-term support is 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: 1.1447/1495 50-day EMA / High Oct 5 and the bull trigger
• RES 1: 1.1439 High Oct 17
• PRICE: 1.1327 @ 05:56 BST Oct 19
• 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

GBPUSD maintains a short-term bullish tone and is trading closer to its recent highs. Key short-term support has been defined at 1.0924, the Oct 12 low. A continuation higher would signal scope for a test and possible breach of 1.1495, the Oct 5 high and bull trigger. Clearance of this level would strengthen bullish conditions. On the downside, a break of 1.0924 would reinstate a bearish theme.

EURGBP TECHS: Bearish Theme

• 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: 0.8738/8867 20-day EMA / High Oct 12
• PRICE: 0.8689 @ 06:11 BST Oct 19
• 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 maintains a bearish tone following the reversal from 0.9266, the Sep 26 high. The move lower has resulted in a break of support at 0.8649 and a move below the 50-day EMA at 0.8678. This suggests scope for an extension lower and has opened 0.8559, a Fibonacci retracement level. Key short-term resistance has been defined at 0.8867, the Oct 12 high, where a break is required to reinstate a bullish theme.

USDJPY TECHS: Approaching 150.00

• RES 4: 150.45 3.618 proj of the Aug 2 - 8 - 11 price swing
• RES 3: 150.00 Psychological round number
• RES 2: 149.83 3.50 proj of the Aug 2 - 8 - 11 price swing
• RES 1: 149.38 High Oct 18
• PRICE: 149.32 @ 06:32 BST Oct 19
• SUP 1: 148.19/147.06 Low Oct 18 / 14
• SUP 2: 145.74 20-day EMA
• SUP 3: 144.72/143.53 Low Oct 7 / 5
• SUP 4: 142.53 50-day EMA

USDJPY is holding on to this week’s gains and the uptrend remains intact. Last week's gains resulted in a break of 145.90, the Sep 22 high, confirming a resumption of the primary uptrend. Note too that 147.66, the Aug 1998 high, has been cleared, reinforcing bullish conditions. This has opened 149.83, a Fibonacci projection, ahead of the psychological 150.00 handle. Firm trend support lies at 145.37.

EURJPY TECHS: Northbound

• 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: 147.26 High Oct 18
• PRICE: 146.89 @ 06:47 BST Oct 19
• SUP 1: 144.09 High Oct 5
• SUP 2: 143.00/141.43 20-day EMA / 50-day EMA
• SUP 3: 139.44/137.40 Low Sep 29 / 26 and key support
• SUP 4: 136.02 Low Aug 25

EURJPY remains bullish and the contract extended gains into the Tuesday close, briefly topping the Y147.00 handle. 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 clears the way for a climb towards 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: Bears Pause For Breath

• RES 4: 0.6607 50-day EMA
• RES 3: 0.6656 High Sep 23
• RES 2: 0.6547 High Oct 4 and key resistance
• RES 1: 0.6363/6418 Low Sep 28 / 20-day EMA
• PRICE: 0.6292 @ 08:02 BST Oct 19
• 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 trading above its recent lows but maintains a bearish theme and short-term gains are considered corrective. The pair 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 0.6418, the 20-day EMA.

USDCAD TECHS: Corrective Pullback

• 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: 1.3767 @ 08:08 BST Oct 19
• SUP 1: 1.3649 20-day EMA
• SUP 2: 1.3503 Low Oct 4 and a key support
• SUP 3: 1.3401 50-day EMA
• SUP 4: 1.3358 Low Sep 21

USDCAD continues to trade below last week’s high of 1.3977 (Oct 13). Despite the pullback, the uptrend remains intact. The latest recovery from 1.3503, Oct 10 high, reinforces bullish conditions and this low represents a key short-term support. Moving average studies still highlight an uptrend and 1.3838, the Sep 30 high and key resistance has been cleared, strengthening bullish conditions. First support to watch is 1.3649, the 20-day EMA.

FIXED INCOME

BUND TECHS: (Z2) Bearish Outlook

• RES 4: 144.56 High Sep 12
• RES 3: 143.68 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 2: 140.13/42.87 High Oct 6 / 4
• RES 1: 138.58 20-day EMA
• PRICE: 137.12 @ 05:26 BST Oct 19
• SUP 1: 135.14 Low Oct 12 and the bear trigger
• SUP 2: 135.00 Round number support
• SUP 3: 134.76 4.382 proj of the Aug 2 - 12 - 15 price swing
• SUP 4: 134.24 4.50 proj of the Aug 2 - 12 - 15 price swing

Bund futures are unchanged and remain in a downtrend - recent gains are considered corrective. The reversal from 142.87, Oct 4 high, marked the end of the correction between Sep 28 - Oct 4 and confirmed a resumption of the primary downtrend. This has reinforced a broader bearish theme and moving average studies remain in a bear mode position. Key resistance is at 142.87. The 20-day EMA, at 138.58, is the first resistance to watch.

BOBL TECHS: (Z2) Trend Direction Remains Down

• RES 4: 122.510 High Sep 12
• RES 3: 121.950 High Oct 4 and the bull trigger
• RES 2: 121.330 High Oct 5
• RES 1: 119.773 20-day EMA
• PRICE: 119.150 @ 05:35 BST Oct 19
• SUP 1: 118.550 Low Oct 13
• 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

Bobl futures continue to consolidate and trade closer to recent lows. The primary trend is down. The reversal from 121.950, Oct 4 high confirmed the end of the corrective cycle between Sep 28 and Oct 4. Attention is on the key support and bear trigger at 118.020, the Sep 28 low. A break of this level would confirm a resumption of the primary downtrend. 121.950 marks key resistance. The 20-day EMA, at 119.773, is the first resistance.

SCHATZ TECHS: (Z2) Bearish Trend Outlook

• RES 4: 108.010 High Sep 13
• RES 3: 107.770 High Oct 4 and key resistance
• RES 2: 107.360 High Oct 6
• RES 1: 107.109 20-day EMA
• PRICE: 106.835 @ 05:45 BST Oct 19
• SUP 1: 106.730 Low Oct 18
• 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 Schatz futures primary trend direction is down. The recent reversal from 107.770, Oct 4 high, signals a resumption of the broader downtrend and attention is on key support and the bear trigger at 106.535, the Sep 26 low. A break would confirm a resumption of the trend. On the upside, key resistance has been defined at 107.770, where a break would highlight a stronger reversal.

GILT TECHS: (Z2) Watching The 20-Day EMA

• 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: 97.33/98.29 20-day EMA / High Oct 18
• PRICE: 97.89 @ Close Oct 18
• SUP 1: 92.66 Low Oct 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 and short-term gains are considered corrective with moving average studies remaining in a bear mode position. Initial resistance to watch is at 97.33, the 20-day EMA. The average has been pierced and the contract did close above the average yesterday. A clear break would suggest scope for a stronger corrective bounce towards 100.92, Oct 4 high and key resistance. 90.38, Oct 12 low, is the bear trigger.

BTP TECHS: (Z2) Trend Needle Still Points South

• 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: 112.22/113.41 20-day EMA / High Oct 6
• PRICE: 111.14 @ Close Oct 18
• 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 though is 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) Bearish Trend Conditions Persist

• RES 4: 115-13+ Low Sep 7
• RES 3: 114-31+ 38.2% retracement of the Aug 2 - Sep 28 bear leg
• RES 2: 112-08+/113-30 20-day EMA / High Oct 4 and the bull trigger
• RES 1: 111-28+ High Oct 12
• PRICE: 111-03 @ 15:06 BST Oct 18
• SUP 1: 110-00 Psychological Support
• SUP 2: 109-23+ Low Nov 30 2007 (cont)
• SUP 3: 108-18+ 1.00 projection of the Oct 4 - 11 - 13 price swing
• SUP 4: 108.14 3.0% 10-dma envelope

Treasuries are broadly unchanged and remain vulnerable. Last week, the contract breached 110-19, the Sep 28 low and bear trigger. This highlights a resumption of the downtrend plus maintains the price sequence of lower lows and lower highs. The focus is on 110.00, a break would strengthen bearish conditions. Initial key resistance is at 112-08+, the 20-day EMA. Gains would be considered corrective.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Clears Key Resistance Points

• RES 4: 3678.00 High Sep 13 and bull trigger
• RES 3: 3585.00 High Sep 14
• RES 2: 3533.00 High Sep 20
• RES 1: 3509.00 High Oct 18
• PRICE: 3490.00 @ 06:45 BST Oct 19
• 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 are firmer as price extends the recovery from 3251.00, Oct 13 low. Recent gains have 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 arrived at a trendline resistance drawn from the Aug 17 high. The trendline intersects at 3497.40 and a clear break of this level would strengthen bullish conditions. Initial firm support is at 3352.00, the Oct 14 low.

E-MINI S&P (Z2): Holding On To Its Recent Gains

• 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: 3849.78 50-day EMA
• RES 1: 3820.00 High Oct 5 and a bull trigger
• PRICE: 3571.50 @ 06:43 BST Oct 19
• 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

S&P E-Minis maintains a firmer tone as the contract extends last week’s reversal from 3502.00, the Oct 13 low. The latest recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. The 20-day EMA has been breached. The break reinforces a bullish theme and opens 3820.00, the Oct 5 high and a bull trigger. Key support is unchanged at 3502.00.

COMMODITIES

BRENT TECHS: (Z2) Bearish Extension

• 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: $90.27 @ 06:59 BST Oct 19
• 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 lower Tuesday, reinforcing a bearish theme and extending the reversal from $98.75, the Oct 10 high. A number of important retracement levels have 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 is seen at $95.17, the Oct 12 high. Clearance of this level would ease the bearish threat.

WTI TECHS: (X2) Bear Cycle Extends

• RES 4: $98.95 - 61.8% retracement of the Jun 8 - Sep 26 downleg
• RES 3: $96.82 - High Aug 31
• RES 2: $90.07/93.64 - High Oct 12 / 10 and key resistance
• RES 1: $87.31 - 50-day EMA
• PRICE: $83.40 @ 07:07 BST Oct 19
• SUP 1: $82.09 - Low Oct 18
• SUP 2: $80.35 - 76.4% retracement points of the Sep 26 - Oct 10 rally
• SUP 3: $79.14 - Low Sep 30
• SUP 4: $76.25 - Low Sep 26 and the bear trigger

WTI futures traded lower again Tuesday. This reinforces the current bearish theme and highlights potential for a continuation lower. An extension would open $80.35, a Fibonacci retracement level and potentially $76.25 further out, the Sep 26 low. On the upside, a reversal higher and a resumption of gains would instead suggest scope for a climb towards the key short-term resistance at $93.64, the Oct 10 high. Initial firm resistance is at $90.07.

GOLD TECHS: Trend Outlook Remains Bearish

• RES 4: $1745.6 - High Sep 29
• RES 3: $1735.1 - High Sep 12 and a key resistance
• RES 2: $1729.5 - High Oct 4 and the bull trigger
• RES 1: $1684.0/1700.3 - High Oct 11 / 50-day EMA
• PRICE: $1646.6 @ 07:12 BST Oct 19
• SUP 1: $1640.2 - Low Oct 14
• 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 is unchanged. The yellow metal maintains a softer tone following the recent reversal from $1729.5, the 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. An extension lower would expose the key support and bear trigger at $1615.0, the Sep 28 low. On the upside, a break of $1729.5 is required to reinstate a bullish theme.

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: $19.393 - 50-day EMA
• PRICE: $18.622 @ 07:24 BST Oct 19
• 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 reinforced the bearish condition. The 50-day EMA has been cleared. This signals scope for a continuation of the current bear leg and has exposed the next support at $17.967, the Sep 28 low. Clearance of this support would open $17.562, the Sep 28 low and the bear trigger. Initial resistance is seen at $19.393, the 50-day EMA.