MNI DAILY TECHNICAL ANALYSIS - Oil Shifts to Clear Bearish Cycle

Price Signal Summary - Oil Confirms a Top, Shifts to Clear Bearish Cycle

• In the equity space, prices slipped further off highs Monday and are staging only a modest bounce this morning. S&P E-minis started the week on a softer note and the contract has extended the pullback from 4384.50 Jul 14 high. Yesterday's sell-off resulted in a break of support at 4279.25, Jul 8 low. This highlights a short-term trend top and suggests scope for a deeper corrective pullback. EUROSTOXX 50 futures last week failed to challenge resistance at 4101.50, Jul 1 high and the subsequent sell-off has resulted in a resumption of the bear cycle that started Jun 17. Yesterday's break of 3951.50, Jul 8 low signals scope for weakness towards 3871.00, May 19 low.
• In FX, the USD outlook remains bullish. EURUSD traded lower Monday but recovered off the session low. Yesterday's move resulted in a print below support at 1.1772, Jul 13, 14 low. A clear break would again confirm a resumption of the downtrend. GBPUSD took out key support at 1.3669, Apr 12 low as well as the 200-dma at 1.3700. A clear breach of 1.3669 would reinforce bearish conditions and pave the way for an extension of the bear cycle. USDJPY sold off sharply yesterday resulting in a break of support at 109.53, Jul 8 low. This confirms a resumption of the reversal that occurred early July and paves the way for an extension lower.
• On the commodity front, the yellow metal maintains a bullish tone and the pullback is considered corrective. Price however needs to clear last week's high print to confirm a resumption of the recent upleg. Brent futures have confirmed a top with momentum in a clear bearish cycle as the current corrective pullback extends. Price yesterday also confirmed a clear break of the 50-day EMA paving the way for further downside. The focus is on $67.43, a Fibonacci retracement. WTI (Q1) focus is on $65.56, a Fibonacci retracement where a break would open $63.10, the May 24 low.
• Within FI, Bund futures remain firm, trading above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthens a bullish case and highlights a bullish breakout of a rising channel drawn off the May 19 low. The move in Gilts resulted in a probe of key short-term resistance at 129.92, the Jul 8 high. A clear breach of this level would confirm a resumption of the uptrend that started mid-May and maintain a bullish price sequence of higher highs and higher lows.

FOREIGN EXCHANGE

EURUSD TECHS: Vulnerable

• RES 4: 1.2006 High Jun 29 / Jun 17
• RES 3: 1.1955/75 50-day EMA / High Jun 25
• RES 2: 1.1930 High Jun 29
• RES 1: 1.1851/1881 High Jul 15 / High Jul 9
• PRICE: 1.1791 @ 05:31 BST Jul 20
• SUP 1: 1.1764 Low Jul 19
• SUP 2: 1.1738 Low Apr 5
• SUP 3: 1.1704 Low Mar 31 and a key support
• SUP 4: 1.1603 Low Nov 4, 2020

EURUSD traded lower Monday but recovered off the session low. The outlook remains bearish. Yesterday's move lower resulted in a print below support at 1.1772, Jul 13, 14 low. A clear break would again confirm a resumption of the downtrend and maintain the current bearish price sequence of lower lows and lower highs. The focus is on 1.1704, Mar 31 low. Initial firm resistance is at 1.1851, the July 15 high.

GBPUSD TECHS: Key Support Buckles

• RES 4: 1.4074 Low Jun 10
• RES 3: 1.4001 High Jun 23 and key resistance
• RES 2: 1.3849/3917 20-day EMA / 50-day EMA
• RES 1: 1.3723/90 Low Jul 2 / High Jul 19
• PRICE: 1.3669 @ 05:44 BST Jul 20
• SUP 1: 1.3655 Low Jul 19
• SUP 2: 1.3579 23.6% Mar'20 - Jun'21 Rally
• SUP 3: 1.3567 Low Apr 2
• SUP 4: 1.3520 Low Jan 18

GBPUSD traded sharply lower Monday, taking out key support at 1.3669, Apr 12 low as well as the 200-dma at 1.3700. The outlook remains bearish with moving average studies pointing south. A clear breach of 1.3669 would reinforce bearish conditions and pave the way for an extension of the bear cycle. This would open 1.3579, a Fibonacci retracement. On the upside, firm resistance is at yesterday's 1.3790 high.

EURGBP TECHS: Reverses Recent Downleg

• RES 4: 0.8701/21 High May 7 / High Apr 26 and the bull trigger
• RES 3: 0.8666/72 23.6% Sep'20 - Apr'21 Sell-Off / High May 25
• RES 2: 0.8646 High Jun 1
• RES 1: 0.8642 High Jul 19
• PRICE: 0.8624 @ 05:57 BST Jul 20
• SUP 1: 0.8561 Low Jul 19
• SUP 2: 0.8504 Low Jul 14 and key short-term support
• SUP 3: 0.8475/72 1% 10-dma envelope / Low Apr 5
• SUP 4: 0.8430 Low Feb 27, 2020

EURGBP traded sharply higher Monday. The move has resulted in a break of resistance at 0.8618, the Jul 8 high. This highlights a stronger reversal of the recent downleg and suggests scope for short-term gains. An extension higher would open 0.8672 next, the May 25 high where a break, if seen, would expose 0.8721, the Apr 26 high. Key support has been defined at 0.8504, Jul 14 low. Initial support is at 0.8561, yesterday's low.

USDJPY TECHS: Clears Supports

• RES 4: 111.71 High Mar 24, 2020
• RES 3: 111.66 High Jul 2 and the bull trigger
• RES 2: 110.70/82 High Jul 14/ High Jul 7
• RES 1: 110.34 High Jul 16
• PRICE: 109.48 @ 06:06 BST Jul 20
• SUP 1: 109.07 Low Jul 19
• SUP 2: 108.56 Low May 25
• SUP 3: 108.47/34 76.4% of the Apr 23 - Jul 2 rally / Low May 7
• SUP 4: 108.08 Low Apr 27

USDJPY remains vulnerable. The pair sold off sharply yesterday resulting in a break of support at 109.53, Jul 8 low. This confirms a resumption of the reversal that occurred early July and paves the way for an extension lower. Note too that support at 109.19 has been breached. The focus is on 108.47, a Fibonacci retracement. On the upside, firm resistance has been defined at 110.34, Jul 16 high and 110.70, Jul 14 high.

EURJPY TECHS: Bearish Cycle Still In Play

• RES 4: 132.70 High Jun 23
• RES 3: 132.43 High Jul 1 and a key resistance
• RES 2: 131.09/41 High Jul 13 / 50-day EMA
• RES 1: 130.28/43 High Jul 16 / High Jul 14
• PRICE: 129.07 @ 06:14 BST Jul 20
• SUP 1: 128.89 Low Jul 19
• SUP 2: 128.39 200-dma
• SUP 3: 128.29 Low Mar 24 and key support
• SUP 4: 127.77 Low Feb 24

EURJPY traded through recent lows Monday, accelerating losses and has confirmed a resumption of the downtrend. This paves the way for weakness toward the key downside support at 128.39, the 200-dma. Momentum studies remain in a bearish cycle and this reinforces the current trend condition. Moving average studies are in bear mode too. On the upside, 130.28, Jul 16 high marks initial firm resistance.

AUDUSD TECHS: Trades Through Its Bear Channel Base

• RES 4: 0.7645 High Jun 17
• RES 3: 0.7617 High Jun 25 and key resistance
• RES 2: 0.7534/99 High Jul 7 / High Jul 6
• RES 1: 0.7443/7503 High Jul 16 / High Jul 13
• PRICE: 0.7327 @ 06:24 BST Jul 20
• SUP 2: 0.7304 1.236 proj of Feb 25 - Apr 1 - May 10 price swing
• SUP 3: 0.7298 2.0% 10-dma envelope
• SUP 3: 0.7284 Low Nov 24, 2020
• SUP 4: 0.7235 1.382 proj of Feb 25 - Apr 1 - May 10 price swing

AUDUSD traded lower Monday and the near-term outlook remains bearish following yesterday's sell-off that prompted new multi-month lows and a breach of the channel base at 0.7360. The break of the channel base marks an important short-term technical break and opens 0.7304 next, the 1.236 projection of the Feb 25 - Apr 1 - May 10 price swing. On the upside, initial resistance is seen at 0.7443, Jul 16 high.

USDCAD TECHS: Heading North

• RES 4: 1.2973 1.500 2proj of Jun 1 - 21- 23 price swing
• RES 3: 1.2916 1.382 proj of Jun 1 - 21- 23 price swing
• RES 2: 1.2881 High Jan 28
• RES 1: 1.2807/46 High Jul 19 / 1.236 proj of Jun 1 - 21- 23 swing
• PRICE: 1.2766 @ 06:29 BST Jul 20
• SUP 1: 1.2605 Low Jul 19
• SUP 2: 1.2502/2428 Low Jul 15 / Low Jul 14
• SUP 3: 1.2303/2253 Low Jul 6 / Low Jun 23 and a key support
• SUP 4: 1.2157 Low Jun 16

USDCAD remains firm following yesterday's strong gains. The pair last week breached resistance at 1.2590, Jul 8 high. The break confirmed a resumption of the uptrend. Monday's strong rally has reinforced the current bullish conditions and confirms an extension of the uptrend that started Jun 1. The focus is on a climb towards 1.2846 next, a Fibonacci projection and 1.2881, the Jan 28 high. On the downside, initial support is at 1.2605, Monday's low.

FIXED INCOME

BUND TECHS: (U1) Firm Above The Bull Channel Top

• RES 4: 176.38 1.382 proj of the May 19 - Jun 11 - Jun 22 price swing
• RES 3: 176.30 76.4% retracement of the Dec '20 - May sell-off (cont)
• RES 2: 175.88 1.236 proj of the May 19 - Jun 11 - Jun 22 price swing
• RES 1: 175.72 High Jul 19
• PRICE: 175.54 @ 04:36 BST Jul 20
• SUP 1: 174.45 Low Jul 15
• SUP 2: 173.70 LowJul 13 and 14
• SUP 3: 173.16 High Jun 11 and recent breakout level
• SUP 4: 172.82 Channel base from May 19 low

Bund futures remain firm having started the week on a firm note with price trading above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthens a bullish case, confirms a resumption of the uptrend and highlights a bullish breakout of a rising channel drawn off the May 19 low. With 175.00 cleared, attention is on 175.88, a Fibonacci projection. Initial support is at 174.45, the Jul 15 low.

BOBL TECHS: (U1) Approaching Its Bull Channel Top

• RES 4: 135.313 2.00 proj of the May 20 - 26 - 31 price swing
• RES 3: 135.007 1.764 proj of the May 20 - 26 - 31 price swing
• RES 2: 134.950 Bull channel top drawn off the May 20 low
• RES 1: 134.880 High Jul 19
• PRICE: 134.860 @ 04:37 BST Jul 20
• SUP 1: 134.700/570 Low Jul 19 / Low Jul 15
• SUP 2: 134.410 Low Jul 13 and a key support
• SUP 3: 134.338 50-day EMA
• SUP 4: 134.151 Bull channel base drawn off the May 20 low

Bobl futures are trading close to yesterday's high following a strong start to the week. The contract on Jul 8 confirmed a break of a key S/T resistance at 134.510, Jun 11 high and a Fibonacci projection. This confirmed a resumption of the uptrend from May 20 and the climb Friday and yesterday reinforces the current bullish trend structure. The focus is on 134.950, a bull channel drawn from the May 20 low. Key support lies at 134.410, Jul 13 low.

SCHATZ TECHS: (U1) Trading Above Resistance

• RES 4: 112.290 High Feb 11 (cont)
• RES 3: 112.280 High Feb 12 (cont)
• RES 2: 112.250 High Mar 1 and 2 (cont)
• RES 1: 112.225 High Jul 19
• PRICE: 112.220 @ 04:42 BST Jul 20
• SUP 1: 112.180/150 Low Jul 16 / Low Jul 13
• SUP 2: 112.140 Low Jul 5 and 6
• SUP 3: 112.120 Low Jun 30
• SUP 4: 112.110 Congestion lows Apr 20, Jun 22, 23, 25 and 28

The Schatz futures outlook is bullish. Resistance at 112.210, Jun 11 high was probed Jul 8 and yesterday's gains saw the contract trade breach this level. A clear break would strengthen a bullish case and open 112.250, the Mar 1 and 2 high (cont). A move higher would also establish a bullish price sequence of higher highs and higher lows. On the downside, sub 112.150 levels, Jul 13 low is required to reinstate a bearish theme. Initial firm support is at 112.180.

GILT TECHS: (U1) Testing Levels Above Resistance

• RES 4: 130.72 2.236 proj of the May 13 - 26 - Jun 3 price swing
• RES 3: 130.62 High Feb 22 (cont)
• RES 2: 130.30 2.00 proj of the May 13 - 26 - Jun 3 price swing
• RES 1: 130.29 High Jul 19
• PRICE: 129.95 @ Close Jul 19
• SUP 1: 129.19 Low Jul 19
• SUP 2: 128.54/39 Low Jul 14 / High Jun 11 and recent breakout level
• SUP 3: 128.03 Jul 6
• SUP 4: 127.25 Low Jun 10

Gilt futures started the week on a firm note and rallied yesterday. The move higher resulted in a probe of key short-term resistance at 129.92, the Jul 8 high. A clear breach of this level would confirm a resumption of the uptrend that started mid-May and maintain a bullish price sequence of higher highs and higher lows. MA studies also support a bullish outlook. The focus is on 130.62, the Feb 22 high (cont). Firm support is at 128.54, Jul 14 low.

BTP TECHS: (U1) Fresh Trend High Print

• RES 4: 155.00 Round number resistance
• RES 3: 154.15 0.764 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 2: 153.82 High Feb 12 (cont)
• RES 1: 153.35 0.618 proj of May 19 - Jun 14 - Jun 25 price swing
• PRICE: 153.09 @ Close Jul 19
• SUP 1: 152.50 Low Jul 13
• SUP 2: 151.93/54 Low Jul 8 / Low Jul 6
• SUP 3: 151.19 High Jul 1
• SUP 4: 150.56 Low Jun 30

BTPs maintain a bullish tone following last week's resumption of the uptrend. Gains Jul 6 and 7 resulted in a breach of key resistance at 152.47, Jun 14 high. The break confirmed a resumption of the uptrend that started May 19 and paves the way for a stronger short-term recovery. Last week's extension and yesterday's fresh high print reinforce the bullish theme. Attention is on 153.82, the Feb 12 high. Initial support is at the Jul 13 low of 152.50.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Bear Cycle Extends

• RES 4: 4153.00 High Jun 17 and bull trigger
• RES 3: 4121.00 High Jun 25
• RES 2: 4101.50 High Jul 1 and key near-term resistance
• RES 1: 4006.50 High Jul 19
• PRICE: 3919.00 @ 05:11 BST Jul 20
• SUP 1: 3895.00 Low Jul 19
• SUP 2: 3871.00 Low May 19
• SUP 3: 3830.00 Low May 13 and a key support
• SUP 4: 3779.00 Low Mar 26

EUROSTOXX 50 futures started the week on a softer note with prices falling sharply. The contract last week failed to challenge resistance at 4101.50, Jul 1 high and the subsequent sell-off has resulted in a resumption of the bear cycle that started Jun 17. Yesterday's break of 3951.50, Jul 8 low signals scope for weakness towards 3871.00, May 19 low ahead of key support at 3830.00, May 13 low. Initial resistance is at yesterday's 4006.50 high.

E-MINI S&P (U1): Vulnerable And Testing Its 50-Day EMA

• RES 4: 4415.48 1.00 proj of Mar 25 - May 10 - 13 price swing
• RES 3: 4400.00 Round number resistance
• RES 2: 4384.50 High Jul 14 and the bull trigger
• RES 1: 4320.75 High Jul 19
• PRICE: 4257.00 @ 05:24 BST Jul 20
• SUP 1: 4224.00 Low Jul 19
• SUP 2: 4187.58 61.8% retracement of the Jun 21 - Jul 14 rally
• SUP 3: 4126.75 Low Jun 21
• SUP 4: 4046.00 Low May 19

S&P E-minis started the week on a softer note and the contract has extended the pullback from 4384.50 Jul 14 high. Yesterday's sell-off resulted in a break of support at 4279.25, Jul 8 low. This highlights a short-term trend top and suggests scope for a deeper corrective pullback. Price has tested the 50-day EMA at 4235.95. A clear break of the average would strengthen a bearish case. Initial resistance is at 4320.75, yesterday's high.

COMMODITY TECHS

BRENT TECHS: (U1) Vulnerable Following Sharp Sell-off

• RES 4: $76.72 - High Jul 14
• RES 3: $74.59 - High Jul 15
• RES 2: $73.34 - High Jul 19
• RES 1: $70.54 - 50.0% of yesterday's range
• PRICE: $68.83 @ 06:22 BST Jul 20
• SUP 1: $67.43 - 76.4% retracement of the May 21 - Jul 6 rally
• SUP 2: $66.11 - Low May 24
• SUP 3: $64.22 - Low May 21
• SUP 4: $63.09 - Low Apr 22

Brent futures faced strong selling pressure Monday. The contact has confirmed a top with momentum in a clear bearish cycle as the current corrective pullback extends. Price yesterday also confirmed a clear break of the 50-day EMA paving the way for further downside. The focus is on $67.43, a Fibonacci retracement where a break would open $66.11, the May 24 low. On the upside, initial resistance is at $70.54, 50% of yesterday's range.

WTI TECHS: (U1) Vulnerable

• RES 4: $74.90 - High Jul 13
• RES 3: $72.48 - High Jul 15
• RES 2: $71.40 - High Jul 19
• RES 1: $68.48 - 50.0% of yesterday's range
• PRICE: $66.59 @ 06:42 BST Jul 20
• SUP 1: $65.56/64.60 - Low Jul 19 / 76.4% of the May 21 - Jul 6 rally
• SUP 2: $63.10 - Low May 24
• SUP 3: $61.06 - Low May 21 and key support
• SUP 4: $59.92 - Low Apr 26

Brent futures faced strong selling pressure yesterday clearing support at $68.86, Jun 17 low and has also breached the 50-day EMA. The sharp sell-off defines a short-term trend top and signals scope for a deeper corrective pullback. The focus is on $65.56, a Fibonacci retracement where a break would open $63.10, the May 24 low. On the upside, initial resistance is at $68.48, 50.0% of yesterday's range.

GOLD TECHS: Remains Above Key Near-Term Support

• RES 4: $1877.5 - 76.4% retracement of the Jun 1 - 29 decline
• RES 3: $1863.3 - High Jun 16
• RES 2: $1853.3 - 61.8% retracement of the Jun 1 - 29 decline
• RES 1: $1834.1 - High Jul 15 and the bull trigger
• PRICE: $1815.6 @ 06:55 BST Jul 20
• SUP 1: $1791.7 Low Jul 12 and key near-term support
• SUP 2: $1774.4/1750.8 - Low Jul 2 / Low Jun 29
• SUP 3: $1733.5 -76.4% retracement of the Mar 8 - Jun 1 rally
• SUP 4: $1723.8 - Low Apr 13

Gold remains below last week's high of $1834.1. The yellow metal maintains a bullish tone though and the pullback is considered corrective. Price however needs to clear last week's high print to confirm a resumption of the recent upleg. Support to watch is at $1791.7, Jul 12 low. A break would be bearish and instead, would signal scope for an extension lower towards the key support at $1750.8, Jun 29 low.

SILVER TECHS: Needle Points South

• RES 4: $27.831 - High Jun 16
• RES 3: $26.775/27.245 - High Jul 6 and key resistance / High Jun 17
• RES 2: $26.467 - High Jul 14
• RES 1: $25.761 - High Jul 19
• PRICE: $25.171 @ 07:01 BST Jul 20
• SUP 1: $24.955 - 76.4% retracement of the Mar 31 - May 18 rally
• SUP 2: $24.686 - Low Apr 13
• SUP 3: $24.257 - Low Apr 1
• SUP 4: $23.781 - Low Mar 31and key support

Silver started the week on a softer note trading lower and breaking support at $25.529, the Jun 29 low and bear trigger. The break lower confirms a resumption of the downleg that started May 18. This has exposed $24.955, a Fibonacci retracement and $24.686, Apr 13 low. Moving average studies are in a bear mode and this reinforces the current bearish theme. On the upside, key resistance has been defined at $26.775, Jul 6 high.