MNI DAILY TECHNICAL ANALYSIS - Signs of Momentum Shift in German Short-End

Price Signal Summary – Signs of Momentum Shift in German Short-End

• A bear cycle in S&P E-minis remains in play, despite Friday’s sharp corrective rally and the follow through this morning. The contract traded lower last Wednesday, confirming a resumption of the bear leg once again. Eurostoxx 50 futures trend conditions remain bearish, with Friday’s rally and the follow through this morning deemed corrective in nature. The contract has traded below 4128.00, the Sep 27 low.
• GBPUSD bears remain in the driver’s seat despite the recovery off Friday’s pullback low. Last week’s fresh cycle lows have reinforced bearish conditions. The extension lower maintains the price sequence of lower lows and lower highs and moving average studies are in a bear-mode position. USDJPY support at Tuesday’s low of 147.43, remains intact despite the Monday weakness. The recovery from this level last week is bullish and - for now - the uptrend remains intact. A clear break of the 150.00 handle would reinforce bullish conditions. AUDUSD remains bearish following last week’s breach of support at 0.6331, the Sep 27 low and a bear trigger. The break confirmed a range breakout and a resumption of the downtrend that started early February.
• A bearish theme in Gold was put on pause Monday after a second session of gains. Monday’s bounce put prices back above $1850. Nonetheless, the recent sell-off resulted in a break of support at $1901.1 and this was followed by a breach of $1884.9, the Aug 21 low. WTI futures traded lower last week, but started the week on a stronger footing. The recent bearish price action resulted in a break of support at $88.19, the Sep 26 low.
• Bund futures broke convincingly higher on Monday, erasing a large part of the late September pull lower. The moves narrow the gap with the key upside resistance at the 50-dma of 130.40, a break above which would shift the balance in favour of bulls. Gilt futures rallied sharply Monday, working further against the previously bearish condition. For the corrective recovery off last Wednesday’s low to take hold, prices need to break and close above the 94.08 20-day EMA, a move which would confirm a short-term shift in momentum.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Outlook Remains Bearish

• RES 4: 1.0769 High Sep 12
• RES 3: 1.0732 50-day EMA
• RES 2: 1.0674 High Sep 21
• RES 1: 1.0611 20-day EMA
• PRICE: 1.0550 @ 15:28 BST Oct 9
• SUP 1: 1.0448 Low Oct 03 and the bear trigger
• SUP 2: 1.0406 50.0% retracement of the Sep ‘22 - Jul ‘23 bull leg
• SUP 3: 1.0335 2.0% 10-dma envelope
• SUP 4: 1.0291 Low Nov 30 2022

Post-Nonfarm payrolls USD strength faded swiftly, with EUR/USD trading inside Friday’s range for the duration of Monday trade. EURUSD remains in a downtrend and recent cycle lows confirmed a resumption of the trend, with moving average studies still in bear mode position. This has opened 1.0406, a Fibonacci retracement. Initial firm resistance is at 1.0611, the 20-day EMA. A break would signal the start of a correction. Gains are considered corrective - for now.

GBPUSD TECHS: Resistance Remains Intact

• RES 4: 1.2452 50-day EMA
• RES 3: 1.2351 High Sep 21
• RES 2: 1.2279 20-day EMA
• RES 1: 1.2261 High Oct 6
• PRICE: 1.2209 @ 15:34 Oct 9
• SUP 1: 1.2037 Low Oct 04 and the bear trigger
• SUP 2: 1.2028 Low Mar 16
• SUP 3: 1.2011 Low Mar 15 and a key support
• SUP 4: 1.1964 3.00 proj of the Jul 14 - 24 - 27 price swing

GBPUSD bears remain in the driver’s seat despite the recovery off Friday’s pullback low. Last week’s fresh cycle lows have reinforced bearish conditions. The extension lower maintains the price sequence of lower lows and lower highs and moving average studies are in a bear-mode position, reflecting the markets bearish sentiment. The focus is on 1.2028, the Mar 16 low. Initial firm resistance is seen at 1.2279, the 20-day EMA. Short-term gains are considered corrective.

EURGBP TECHS: Signs of a Top

• RES 4: 0.8768 High May 5
• RES 3: 0.8736 50.0% retracement of the Feb 3 - Aug 23 downleg
• RES 2: 0.8719 High May 23
• RES 1: 0.8706 High Sep 26 and the bull trigger
• PRICE: 0.8637 @ 15:36 BST Oct 9
• SUP 1: 0.8634 Low Oct 9
• SUP 2: 0.8620/8569 50-day EMA / Low Sep 15 and a key support
• SUP 3: 0.8558 Low Sep 11
• SUP 4: 0.8524 Low Sep 06

EURGBP drifted lower into the Monday close, defying the bull cycle that had remained in play about the 20-day EMA. A close below this level at 0.8642 would be a bearish development and could signal a near-term top. Further losses expose 0.8630 initially ahead of 0.8569, the Sep 15 low and key support. Prices need to rise north of 0.8706 to re-initiate any bull cycle.

USDJPY TECHS: Trading Above Support

• RES 4: 151.95 High Oct 21 and a major resistance
• RES 3: 151.09 2.764 proj of the Jan 16 - Mar 8 - Mar 24 price swing
• RES 2: 150.40 2.618 proj of the Jan 16 - Mar 8 - Mar 24 price swing
• RES 1: 150.16 High Oct 3 and the bull trigger
• PRICE: 148.55 @ 16:11 BST Oct 9
• SUP 1: 147.43 Low Oct 3
• SUP 2: 146.45 50-day EMA
• SUP 3: 145.91 Low Sep 11
• SUP 4: 144.45 Low Sep 1

USDJPY support at Tuesday’s low of 147.43, remains intact despite the Monday weakness. The recovery from this level last week is bullish and - for now - the uptrend remains intact. A clear break of the 150.00 handle would reinforce bullish conditions. The bull trigger is 150.16, the Oct 3 high and a break would open 150.40, a Fibonacci projection. On the downside, clearance of 147.43 would be a bearish development and signal scope for a deeper retracement.

EURJPY TECHS: Bear Threat Still Present

• RES 4: 160.00 Psychological handle
• RES 3: 159.76 High Aug 30 and the bull trigger
• RES 2: 158.65 High Sep 13
• RES 1: 158.26 High Oct 6
• PRICE: 156.74 @ 16:12 BST Oct 9
• SUP 1: 154.46 Low Oct 3
• SUP 2: 154.10 2.0% 10-dma envelope
• SUP 3: 153.39 76.4% of the Jul 28 - Aug 30 bull run
• SUP 4: 151.42 Late July Low and Bear Trigger

EURJPY traded sharply lower last Tuesday and rallies continue to be sold in the cross. As such, a bearish threat remains present. The cross has cleared support at the 50-day EMA and breached 156.59, the Sep 11 low. The break lower highlights a possible short-term reversal. Tuesday’s low of 154.46 represents a key short-term support where a breach would signal scope for a deeper retracement. Initial resistance was cleared at the 50-day EMA of 157.13, ahead of 158.65.

AUDUSD TECHS: Trend Outlook Remains Bearish

• RES 4: 0.6630 High Aug 2
• RES 3: 0.6616 High Aug 16
• RES 2: 0.6522 High Aug 30 and Sep 1, and the key resistance
• RES 1: 0.6399/6501 20-day EMA / High Sep 29
• PRICE: 0.6376 @ 15:56 BST Oct 9
• SUP 1: 0.6287 2.00 proj of the Jun 16 - Jun 29 - Jul 13 price swing
• SUP 2: 0.6272 Low Nov 3 2022 and a key support
• SUP 3: 0.6215 2.236 proj of the Jun 16 - Jun 29 - Jul 13 price swing
• SUP 4: 0.6170 Low Oct 13 2022 and a key support

AUDUSD remains bearish following last week’s breach of support at 0.6331, the Sep 27 low and a bear trigger. The break confirmed a range breakout and a resumption of the downtrend that started early February. This signals scope for 0.6215 next, a Fibonacci projection. On the upside, key trend resistance is at 0.6522, the Aug 30 and Sep 1 high. Initial resistance is at 0.6399, the 20-day EMA. Short-term gains are considered corrective.

USDCAD TECHS: Northbound

• RES 4: 1.3862 High Mar 10 and a key resistance
• RES 3: 1.3857 2.0% 10-dma envelope
• RES 2: 1.3805 High Mar 24
• RES 1: 1.3786 High Oct 5
• PRICE: 1.3628 @ 15:58 BST Oct 9
• SUP 1: 1.3580 20-day EMA
• SUP 2: 1.3514 50-day EMA
• SUP 3: 1.3417 Low Sep 29
• SUP 4: 1.3381 Low Sep 19 and a key support

USDCAD traded higher last week, but has faded since, putting the pair lower into the Monday close. Last week, price breached key resistance at 1.3695, the Sep 7 high. This highlights a bullish theme and a reversal of the recent bearish phase. The break also confirms a resumption of the uptrend that started mid-July. Trendline resistance - at 1.3699 and drawn from the Oct 13 ‘22 high, has also been cleared and is a bullish development. Support is at 1.3580, the 20-day EMA.

FIXED INCOME

BUND TECHS: (Z3) Solid Signs of Bullish Reversal

• RES 4: 130.19 High Sep 22 and key resistance
• RES 3: 130.40 50-dma
• RES 2: 129.70 50% Sep - Oct Downleg
• RES 1: 129.42 High Oct 9
• PRICE: 129.36 @ 16:39 BST Oct 9
• SUP 1: 126.54 1.764 proj of the Jul 19 - Aug 4 - Aug 8 price swing
• SUP 2: 126.00 Round number support
• SUP 3: 125.69 2.00 proj of the Jul 19 - Aug 4 - Aug 8 price swing
• SUP 4: 124.84 2.236 proj of the Jul 19 - Aug 4 - Aug 8 price swing

Bund futures broke convincingly higher on Monday, erasing a large part of the late September pull lower. The moves narrow the gap with the key upside resistance at the 50-dma of 130.40, a break above which would shift the balance in favour of bulls. To weaken the outlook and resume the medium-term downtrend, prices need to slip back below the 128.00 handle, targeting pullback lows of 126.62.

BOBL TECHS: (Z3) Corrective Bounce Takes Hold

• RES 4: 116.908 100-dma
• RES 3: 116.740 High Sep 14
• RES 2: 116.570 61.8% Sep - Oct Downleg
• RES 1: 115.460 High Oct 9
• PRICE: 116.440 @ 16:45 BST Oct 9
• SUP 1: 115.310 Low Oct 4
• SUP 2: 114.880 Low Sep 28 and the bear trigger
• SUP 3: 114.817 2.236 proj of the Sep 8 - 13 - 14 price swing
• SUP 4: 115.691 2.382 proj of the Sep 8 - 13 - 14 price swing

The downtrend in Bobl futures hit reverse Monday, with prices rallying smartly through several consecutive resistance levels. Most notably, firm S/T resistance at 116.150, the Sep 22 high gave way, making for a short-term momentum shift and opening 116.570 as the next upside level. The bear trigger remains 114.880, the Sep 28 low. A resumption of the downtrend would open 114.817, a Fibonacci projection.

SCHATZ TECHS: (Z3) Short-Term Momentum Shifts Positive

• RES 4: 105.310 High Sep 8 / Oct 9
• RES 3: 105.560 High Sep 1
• RES 2: 105.372 76.4% Fib retracement Sep - Oct downleg
• RES 1: 105.170 High Sep 14 and a key short-term resistance
• PRICE: 105.295 @ 16:50 BST Oct 9
• SUP 1: 104.905 Low Oct 4
• SUP 2: 104.830/765 Low Sep 29 / 21 and the bear trigger
• SUP 3: 104.720 2.00 proj of the Aug 24 - 30 - Sep 1 price swing
• SUP 4: 104.645 Low Jul 12 (cont)

Schatz futures made light work of resistance at both the 50- and 100-dmas Monday, shifting short-term momentum higher. Bulls eye 105.372 for direction, the 76.4% retracement for the Sep - Oct downleg. With key near-term resistance at 105.170, the Sep 14 high, giving way, the downtrend has now concluded. On the downside, watch support at 104.905, the Oct 4 low. A break of this level would signal a resumption of the trend and expose key support at 104.765, the Sep 21 low and bear trigger.

GILT TECHS: (Z3) Further Gains Would Signal Shift in S/T Momentum

• RES 4: 95.67 High Sep 26
• RES 3: 94.74 High Sep 28
• RES 2: 94.08 20-day EMA
• RES 1: 93.58 High Oct 9
• PRICE: 93.57 @ 17:08 BST Oct 9
• SUP 1: 91.47 Low Aug 17 and key support
• SUP 2: 91.00 Round number support
• SUP 3: 90.06 1.00 proj of the Jul 19 - Aug 17 - Sep 20 price swing
• SUP 4: 90.00 Psychological round number

Gilt futures rallied sharply Monday, working further against the previously bearish condition. For the corrective recovery off last Wednesday’s low to take hold, prices need to break and close above the 94.08 20-day EMA, a move which would confirm a short-term shift in momentum. To the downside, the contract recently breached 93.36, the Sep 6 low and a key support. Furthermore, 92.71, 76.4% of Aug 17 - Sep 20 bull run, has been breached. Sights are on 91.47, the Aug 17 low, and the next key support.

BTP TECHS: (Z3) Breaches Key Support

• RES 4: 113.84 High Sep 14
• RES 3: 112.52 High Sep 20
• RES 2: 110.66 20-day EMA
• RES 1: 109.98 High Sep 29
• PRICE: 109.09 @ 17:13 Oct 9
• SUP 1: 107.62 Low Oct 4
• SUP 2: 107.08 2.236 proj of the Jun 26 - Jul 11 - 19 price swing (cont)
• SUP 3: 106.40 2.382 proj of the Jun 26 - Jul 11 - 19 price swing (cont)
• SUP 4: 105.85 2.50 proj of the Jun 26 - Jul 11 - 19 price swing (cont)

BTP futures traded lower last week and breached support at 108.08, the Sep 28 low. This confirms a clear break of the Sep 28 ‘22 low of 108.13 - a major support. The move lower reinforces bearish conditions and opens 107.08 next, a Fibonacci projection on the continuation chart. On the upside, resistance is at 109.98, the Sep 29 high. Short-term gains would be considered corrective.

EQUITIES

EUROSTOXX50 TECHS: (Z3) Trend Needle Continues To Point South

• RES 4: 4388.00 High Aug 30 and reversal trigger
• RES 3: 4359.00 High Sep 15 and key resistance
• RES 2: 4270.80 50-day EMA
• RES 1: 4207.30 20-day EMA
• PRICE: 4186.0 @ 08:25 BST Oct 10
• SUP 1: 4082.00 Low Oct 4
• SUP 2: 4055.40 76.4% retracement of the Mar 20 - Jul 31 bull cycle
• SUP 3: 4034.00 Low Mar 24 (cont)
• SUP 4: 4000.00 Psychological round number

Eurostoxx 50 futures trend conditions remain bearish, with Friday’s rally and the follow through this morning deemed corrective in nature. The contract has traded below 4128.00, the Sep 27 low. This confirms a resumption of the downtrend that started late July and signals scope for a move towards 4055.40, a Fibonacci retracement point. Initial firm resistance is at 4207.30, the 20-day EMA. A break of this average would signal a possible short-term base.

E-MINI S&P TECHS: (Z3) Bear Cycle Still In Play

• RES 4: 4566.00 High Sep 15 and a key resistance
• RES 3: 4514.50 High Sep 18
• RES 2: 4441.61 50-day EMA
• RES 1: 4381.68 20-day EMA
• PRICE: 4372.25 @ 08:28 BST Oct 10
• SUP 1: 4235.50 Low Oct 4
• SUP 2: 4194.75 Low May 24
• SUP 3: 4166.25 1.50 proj of the Jul 27 - Aug 18 - Sep 1 price swing
• SUP 4: 4134.00 Low May 4

A bear cycle in S&P E-minis remains in play, despite Friday’s sharp corrective rally and the follow through this morning. The contract traded lower last Wednesday, confirming a resumption of the bear leg once again. This maintains the price sequence of lower lows and lower highs and signals scope for weakness towards 4194.75, the May 24 low. Pivot resistance is 4441.61, the 50-day EMA. Ahead of the 50-day average is resistance at 4381.68, the 20-day EMA.

COMMODITIES

BRENT TECHS: (Z3) Bear Cycle Remains In Play

• RES 4: $99.73 - 1.236 proj of Jun 23 - Aug 10 - Aug 24 price swing
• RES 3: $96.22 - 1.00 proj of Jun 23 - Aug 10 - Aug 24 price swing
• RES 2: $95.35 - High Sep 28 and the bull trigger
• RES 1: $89.96 - 20-day EMA
• PRICE: $87.95 @ 16:33 BST Oct 9
• SUP 1: $83.84 - Low Oct 5
• SUP 2: $82.80 - 50.0% retracement of the May 4 - Sep 28 bull run
• SUP 3: $81.33 - Low Aug 24
• SUP 4: $79.84 - 61.8% retracement of the May 4 - Sep 28 bull run

A sharp sell-off in Brent futures last week stabilised into the Monday close as uncertainty surrounding the Middle-east spilled over into asset markets. Recent weakness has resulted in a break of support around the 50-day EMA - at $87.43. Note too that a short-term trendline support at $88.32, drawn from the Jun 28 low, has also been cleared. This confirms the current bearish cycle and signals scope for a deeper retracement. A continuation would open $82.80, a Fibonacci retracement. Initial firm resistance is at $90.58, the 20-day EMA.

WTI TECHS: (X3) Remains Vulnerable

• RES 4: $99.42 - 1.382 proj of the Jun 28 - Aug 10 - 24 price swing
• RES 3: $97.08 - 1.236 proj of the Jun 28 - Aug 10 - 24 price swing
• RES 2: $91.88/95.03 - High Oct 2 / High Sep 28 and a bull trigger
• RES 1: $87.71 - 20-day EMA
• PRICE: $86.31 @ 16:32 BST Oct 9
• SUP 1: $81.00 - Low Aug 31
• SUP 2: $79.57 - 50.0% retracement of the May 4 - Sep 28 bull run
• SUP 3: $77.32 - Low Aug 24
• SUP 4: $75.92 - 61.8% retracement of the May 4 - Sep 28 bull run

WTI futures traded lower last week, but started the week on a stronger footing. The recent bearish price action resulted in a break of support at $88.19, the Sep 26 low. The contract has also cleared support at the 50-day EMA, at $84.46. This signals scope for a deeper retracement towards the $80.00 handle and $79.57, a Fibonacci retracement point. Initial firm resistance is at $87.71, the 20-day EMA. A break would signal a possible reversal.

GOLD TECHS: Trend Needle Points South

• RES 4: $1953.0 - High Sep 1 and key resistance
• RES 3: $1905.0 - 50-day EMA
• RES 2: $1878.2 - 20-day EMA
• RES 1: $1855.5 - High Oct 9
• PRICE: $1852.8 @ 16:34 BST Oct 9
• SUP 1: $1813.2 - Low Oct 3
• SUP 2: $1804.9- Low Feb 28 and a key support
• SUP 3: $1786.1 - 61.8% of the Sep 28 ‘22 - May 4 bull leg
• SUP 4: $1774.0 - Low Dec 15 2022

A bearish theme in Gold was put on pause Monday after a second session of gains. Monday’s bounce put prices back above $1850. Nonetheless, the recent sell-off resulted in a break of support at $1901.1 and this was followed by a breach of $1884.9, the Aug 21 low. This confirmed a resumption of the downtrend that started early May. The focus is on $1804.9, the Feb 28 low and a key support. On the upside, firm resistance is at $1878.2, the 20-day EMA.

SILVER TECHS: Bearish Theme

• RES 4: $25.014 - High Aug 30
• RES 3: $24.298 - High Sep 4
• RES 2: $23.774 - High Sep 22 and a key resistance
• RES 1: $22.176/22.398 - High Oct 2 / 20-day EMA
• PRICE: $21.839 @ 16:37 BST Oct 9
• SUP 1: $20.689 - Low Oct 3
• SUP 2: $20.000 - Round number support
• SUP 3: $19.904 - Low Mar 10 and a key support
• SUP 4: $19.585 - 76.4% retracement of the Sep ‘22 - May ‘23 upleg

Silver trend conditions are bearish despite the Monday rally, with Friday’s finish close to the highs possibly signalling a short-term corrective cycle. Last week, the metal breached support at $22.111, the Jun 23 low and a bear trigger. This confirms a resumption of the broader bear cycle that started early May. Sights are on the $20.00 handle next. On the upside, firm resistance has been defined at $23.774, the Sep 22 high.