MNI DAILY TECHNICAL ANALYSIS - Sterling Bears Return

Price Signal Summary - Sterling Bears Return

• In the equity space, the trend condition in S&P E-Minis remains up and short-term pullbacks are considered corrective. A deeper pullback though would allow an overbought condition to unwind. The support to watch is at the 20-day EMA which intersects at 4157.93. A resumption of gains would open 4345.75 next, 2.00 projection of the Jun 17 - 28 - Jul 14 price swing. The short-term uptrend in EUROSTOXX 50 futures remains intact and the current pullback is considered corrective. Attention is on resistance at 3840.00, the Jun 6 high. A break of this hurdle would strengthen bullish conditions. On the downside, initial firm support to watch is seen at the 20-day EMA which intersects at 3708.00.
• In FX, EURUSD remains below last week’s 1.0368 high (Aug 10), and continues to trade lower. The recent move down means that the pair has failed to clear channel resistance. The bear channel is drawn from the Feb 10 high and intersects at 1.0290. Attention is on 1.0007, the Jul 15 low. Initial resistance is at 1.0205, the 20-day EMA. GBPUSD is weaker, having breached support at 1.2004, the Aug 5 low. The break lower signals scope for an extension and has opened 1.1760, the Jul 14 low and bear trigger. USDJPY continues to appreciate. The pair has traded above resistance at 135.58, the Aug 8 high. This strengthens a short-term bullish condition and signals scope for a climb towards 137.27, 76.4% retracement of the Jul 14 - Aug 2 downleg.
• On the commodity front, Gold is trading lower, extending the pullback from last week’s high of $1807.9 (Aug 10). The yellow metal has failed to confirm a clear break of the 5-month downtrend and the break of support at $1754.4 Aug 3 low, signals scope for a deeper pullback towards $1711.7 next. Key resistance is $1807.9.In the Oil space, WTI futures remain vulnerable. This week’s move down has resulted in a print below support at $87.01, the Aug 5 low. This reinforces bearish conditions and a clear break of $87.01 would confirm a resumption of the downtrend. Attention is on $85.37, the Mar 15 low.
• In the FI space, Bund futures continue to weaken and a bearish theme suggests scope for a continuation lower. The focus is on 152.43 next, 38.2% retracement of the Jun 16 - Aug 2 rally. Gilts remain vulnerable and have gapped lower today. The next objective is 112.24, 76.4% retracement of the Jun 16 - Aug 2 upleg.

FOREIGN EXCHANGE

EURUSD TECHS: Bearish Extension

• RES 4: 1.0488 High Jun 30
• RES 3: 1.0449 High Jul 5
• RES 2: 1.0290/68 Channel top from Feb 10 high / High Aug 10
• RES 1: 1.0205 20-day EMA
• PRICE: 1.0077 @ 06:06 BST Aug 19
• SUP 1: 1.0064 Low Jul 18
• SUP 2: 1.0007 Low Jul 15
• SUP 3: 0.9952 Low Jul 14 and the bear trigger
• SUP 4: 0.9944 1.618 projection of the Jun 9 - 15 - 27 price swing

EURUSD traded lower Thursday to extend the recent pullback from last week’s 1.0368 high (Aug 10). The recent move down appears to be a short-term reversal and means that the pair has failed to clear channel resistance. The bear channel is drawn from the Feb 10 high and intersects at 1.0290. Support at 1.0123, Aug 3 low has been cleared, this opens 1.0007 next. Key resistance is unchanged at 1.0368.

GBPUSD TECHS: Trades Through Support

• RES 4: 1.2406 High Jun 16 and a key resistance
• RES 3: 1.2332 High Jun 27
• RES 2: 1.2166/2293 50-day EMA / High Aug 01
• RES 1: 1.2004/1.2088 Low Aug 5 / 20-day EMA
• PRICE: 1.1873 @ 10:33 BST Aug 19
• SUP 1: 1.1805 Low Jul 15
• SUP 2: 1.1760 Low Jul 14 and the bear trigger
• SUP 3: 1.1673 1.00 proj of the May 27 - Jun 14 - 16 price swing
• SUP 4: 1.1600 round number support

GBPUSD traded lower Thursday and has moved below support at 1.2004, the Aug 5 low. The break lower strengthens a short-term bearish condition and the focus is on the key support at 1.1760, the Jul 14 low. A break would confirm a resumption of the broader downtrend. Key short-term resistance is unchanged at 1.2293, Aug 1 high. A break is required to reinstate a bullish theme.

EURGBP TECHS: Bearish Outlook

• RES 4: 0.8627 High Jul 4
• RES 3: 0.8585 High Jul 21 and a key resistance
• RES 2: 0.8525 High Jul 25
• RES 1: 0.8493 High Aug 12
• PRICE: 0.8461 @ 06:19 BST Aug 19
• SUP 1: 0.8388/40 Low Aug 17 / 2 and the bear trigger
• SUP 2: 0.8313 Low Apr 22
• SUP 3: 0.8273 2.0% 10-dma envelope and low Apr 14
• SUP 4: 0.8250 Low Apr 14

EURGBP traded higher again Thursday but the cross remains below 0.8493 - for now, the Aug 12 high. The broader outlook is bearish. Price action since mid-June has established a sequence of lower lows and lower highs and MA studies are in a bear mode set-up, reinforcing a bearish theme. A resumption of weakness would open 0.8313, Apr 22 low. The bear trigger is 0.8340, Aug 2 low. 0.8493, the Aug 12 high, is the first key short-term resistance.

USDJPY TECHS: Still Climbing

• RES 4: 138.88 High Jul 21
• RES 3: 137.96 High Jul 22
• RES 2: 137.27 76.4% retracement of the Jul 14 - Aug 2 downleg
• RES 1: 136.76 Intraday high
• PRICE: 136.55 @ 10:35 BST Aug 19
• SUP 1: 134.62/12 20- and 50-day EMA
• SUP 2: 132.56/31.74 Low Aug 15 / Low Aug 11
• SUP 3: 130.41/130.00 Low Aug 2 / Round number support
• SUP 4: 129.51 Low Jun 2

USDJPY is holding on to this week's gains and is firmer again today. The pair has traded above resistance at 135.58, the Aug 8 high. This strengthens a short-term bullish condition and signals scope for a climb towards 137.27, a Fibonacci retracement. A breach of this level would signal scope for a continuation higher. On the downside, initial firm support is seen at the 50-day EMA which intersects at 134.12, the Aug 18 low.

EURJPY TECHS: Resistance At The 50-Day EMA Remains Intact

• RES 4: 139.90 Trendline resistance drawn from the Jun 28 high
• RES 3: 139.41 High Jul 28
• RES 2: 138.09/40 50-day EMA / High Aug 10
• RES 1: 137.88 High Aug 17
• PRICE: 137.29 @ 06:33 BST Aug 19
• SUP 1: 136.27/134.95 Low Aug 17 / 16
• SUP 2: 133.40 Low Aug 2 and a bear trigger
• SUP 3: 132.66 Low May 12 and a key support
• SUP 4: 131.99 61.8% retracement of the Mar 7 - Jun 28 bull leg

Despite the climb this week, the short-term outlook in EURJPY remains bearish. Moving average studies highlight a downtrend and the 50-day EMA, at 138.13, marks a firm resistance. A resumption of weakness would open the 133.40 bear trigger. Clearance of resistance at the 50-day EMA would alter the picture and instead signal scope for a climb towards the 139.90 trendline resistance.

AUDUSD TECHS: Bearish Extension

• RES 4: 0.7246 High Jun 7
• RES 3: 0.7168 3.0% Upper Bollinger Band
• RES 2: 0.7137 High Aug 11
• RES 1: 0.6975/7040 50-day EMA / High Aug 16
• PRICE: 0.6912 @ 06:48 BST Aug 19
• SUP 1: 0.6870 Low Aug 5 and key support
• SUP 2: 0.6789 76.4% retracement of the Jul 14 - Aug 11 upleg
• SUP 3: 0.6719 Low Jul 15
• SUP 4: 0.6682 14 and the bear trigger

AUDUSD traded lower again Thursday and remains soft as the pair extends the retracement from last week’s high of 0.7137 (Aug 11). The move lower this week has exposed support at 0.6870, the Aug 5 low. Clearance of this level would undermine the recent bull theme and signal scope for a deeper pullback. Initial firm resistance has been defined at 0.7040, the Aug 16 high where a break is required to ease the current bearish pressure.

USDCAD TECHS: Approaching Key Short-Term Resistance

• RES 4: 1.3224 High Jul 14 and key resistance
• RES 3: 1.3135 High Jul 15
• RES 2: 1.2995/3012 3.0% Upper Bollinger Band / High Jul 18
• RES 1: 1.2985 High Aug 5 and key near-term resistance
• PRICE: 1.2962 @ 07:23 BST Aug 19
• SUP 1: 1.2828/2754 Low Aug 17 / 200-dma
• SUP 2: 1.2728 Low Aug 11 and key support
• SUP 3: 1.2685 76.4% retracement of the Jun 8 - Jul 14 upleg
• SUP 4: 1.2596 2.0% 10-dma envelope

USDCAD maintains this week’s bullish theme and the pair is trading higher. Attention is on resistance at 1.2985, the Aug 5 high and the next key short-term hurdle for bulls. Clearance of this level would strengthen bullish conditions. On the downside, key support has been defined at 1.2728, the Aug 11 low where a break would reinstate a bearish threat and also highlight a breach of the 200-dma

FIXED INCOME

BUND TECHS: (U2) Pierces The 50-Day EMA

• RES 4: 159.79 High Apr 4 (cont)
• RES 3: 158.33/159.70 High Aug 3 / 2 and the bull trigger
• RES 2: 157.74 High Aug 10
• RES 1: 155.23/156.88 20-day EMA / High Aug 15
• PRICE: 152.80 @ 09:56 BST Aug 19
• SUP 1: 152.43 38.2% retracement of the Jun 16 - Aug 2 rally
• SUP 2: 150.00 Round number support
• SUP 3: 149.69 Low Jul 21 and key short-term support
• SUP 4: 148.24 Low Jul 1

Bund futures traded lower again Thursday, extending the pullback from the Aug 2 high of 159.70. Attention is on the 50-day EMA which intersects at 153.86. This is a key support area and has been breached. A clear break would strengthen bearish conditions and signal scope for a deeper pullback. This would open 152.43 next, a Fibonacci retracement. On the upside, initial firm resistance is at 156.88, Aug 15 high.

BOBL TECHS: (U2) Bearish Outlook

• RES 4: 129.001 1.764 projection of the Jun 16 -24 - 28 price swing
• RES 3: 128.060/128.760 High Aug 3 / 2 and the bull trigger
• RES 2: 127.580 High Aug 10
• RES 1: 126.634/127.290 20-day EMA / High Aug 15
• PRICE: 125.360 @ 09:57 BST Aug 19
• SUP 1: 125.150 Low Jul 22
• SUP 2: 125.000 Round number support
• SUP 3: 124.350 50.0% retracement of the Jun 16 - Aug 2 rally
• SUP 4: 124.030 Low Jul 21 and a reversal trigger

Bobl futures maintain a softer tone and are trading at this week’s lows. The contract has breached the 50-day EMA. The average intersects at 126.087 and a deeper pullback would open the 125.000 handle next. Note that the contract has also breached a trendline support drawn from the Jun 16 low, reinforcing bearish conditions. Initial firm resistance has been defined at 127.290, the Aug 15 high.

SCHATZ TECHS: (U2) Trading At This Week’s Lows

• RES 4: 110.412 1.50 proj of the May 16 - 24 - 28 price swing
• RES 3: 110.380 High Aug 2 and the bull trigger
• RES 2: 110.100 HIgh Aug 3
• RES 1: 109.735/915 20-day EMA / High Aug 16
• PRICE: 109.365 @ 10:03 BST Aug 19
• SUP 1: 109.335 Intraday low
• SUP 2: 109.042 50.0% retracement of the Jun 16 - Aug 2 upleg
• SUP 3: 108.950 Low Jul 21 and a key support
• SUP 4: 108.727 61.8% retracement of the Jun 16 - Aug 2 upleg

Schatz futures continue to trade below the early August highs and price moved lower again Thursday. This week’s sell-off has resulted in a break of the 50-day EMA and suggests scope for an extension lower. The focus is on 109.042, a Fibonacci retracement. On the upside, initial firm resistance has been defined at 109.915, the Aug 16 high. A break of this level is required to ease the current bearish pressure.

GILT TECHS: (U2) Bearish Price Activity

• RES 4: 118.88 High Aug 4
• RES 3: 118.10 High Aug 10
• RES 2: 117.15 High Aug 15 and key short-term resistance
• RES 1: 114.53/115.91 High Aug 18 / 17
• PRICE: 114.24 @ Close Aug 18
• SUP 1: 113.03 Low Jun 30
• SUP 2: 112.24 76.4% retracement of the Jun 16 - Aug 2 upleg
• SUP 3: 111.72 Low Jun 29
• SUP 4: 110.57 Low Jun 21

Gilt futures remain vulnerable and this week’s sharp sell-off reinforces the current bearish climate. Recent weakness has resulted in a break of trendline support drawn from the Jun 16 low. Attention is on 113.03, Jun 30 low and 112.24, a Fibonacci retracement. Initial resistance is at 114.53, Aug 18 high. A firmer level has been defined at 117.15, Aug 15 high, where a break is required to ease the current bearish threat.

BTP TECHS: (U2) Challenging Trendline Support

• RES 4: 131.24 High May 12 (cont)
• RES 3: 130.00 Round number resistance
• RES 2: 129.36 High Aug 11 and the bull trigger
• RES 1: 125.58/127.15 50-day EMA / High Aug 17
• PRICE: 125.16 @ Close Aug 18
• SUP 1: 124.07/123.71 Trendline from the Jun 14 low / Intraday low
• SUP 2: 123.31 61.8% retracement of the Jul 21 - Aug 11 upleg
• SUP 3: 121.88 76.4% retracement of the Jul 21 - Aug 11 upleg
• SUP 4: 119.57 Low Jul 21

BTP futures bearish conditions have strengthened following Wednesday’s move lower. The sell-off has resulted in a break below both the 20- and 50-day EMAs and sets the scene for an extension lower near-term. The focus is on the 124.07 trendline support drawn from the Jun 14 low. The line has been pierced, a clear break would open 121.88, a Fibonacci retracement. Initial firm resistance is seen at Wednesday’s high of 127.15.

EQUITIES

EUROSTOXX50 TECHS: (U2) Uptrend Remains Intact

• RES 4: 3902.00 High Mar 29 and a key resistance
• RES 3: 3877.30 50.0% of the Nov 18 ‘21 - Jul 5 bear leg (cont)
• RES 2: 3855.00 High Apr 21
• RES 1: 3840.00 High Jun 6 and key resistance
• PRICE: 3766.00 @ 05:30 BST Aug 19
• SUP 1: 3708.00 20-day EMA
• SUP 2: 3647.90/3553.00 50-day EMA / Low Jul 26
• SUP 3: 3467.00 Low Jul 18 / 19
• SUP 4: 3343.00 Low Jul 5 and the bear trigger

EUROSTOXX 50 futures remain in an uptrend and Wednesday’s pullback is considered corrective. Recent gains have maintained the bullish price sequence of higher highs and higher lows and moving average studies are in a bull mode condition. Attention is on resistance at 3840.00, Jun 6 high. A break of this hurdle would strengthen bullish conditions. On the downside, key support is seen at the 50-day EMA which intersects at 3647.90.

E-MINI S&P (U2): Trend Outlook Remains Bullish

• RES 4: 4419.15 2.236 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 3: 4400.00 Round number resistance
• RES 2: 4345.75 2.00 proj of the Jun 17 - 28 - Jul 14 price swing
• RES 1: 4327.50 High Aug 16
• PRICE: 4274.50 @ 06:34 BST Aug 19
• SUP 1: 4208.25/4157.93 Low Aug 12 / 20-day EMA
• SUP 2: 4072.15/3913.25 50-day EMA / Low Jul 26 and a key support
• SUP 3: 3820.25 Low Jul 18
• SUP 4: 3723.75 Low Jul 14

The S&P E-Minis outlook remains bullish. Recent gains confirmed an extension of the positive price sequence of higher highs and higher lows. Moving average conditions are in a bull mode set-up too and the focus is on 4345.75 next, a Fibonacci projection and potentially 4400.00 further out. On the downside, initial firm support is at 4144.39, the 20-day EMA. The 50-day EMA intersects at 4063.32 - a key support.

COMMODITIES

BRENT TECHS: (V2) Still Appears Vulnerable

• RES 4: $110.72 - High Jul 5
• RES 3: $106.50 - High Jul 29 and a key resistance
• RES 2: $100.38/51 - High Aug 12 / 50-day EMA
• RES 1: $97.56 20-day EMA
• PRICE: $96.11 @ 06:48 BST Aug 19
• SUP 1: $91.22 - Low Jul 14 and the bear trigger
• SUP 2: $90.00 - Round number support
• SUP 3: $88.31 - Low Mar 9 and a key support
• SUP 4: $85.88 - Low Feb 25

Brent futures remain vulnerable, despite the recovery from Wednesday’s low. The move lower this week has defined a key short-term resistance at $100.38, Aug 12 high, ahead of the 50-day EMA which intersects at $100.51. Attention is on support at $91.22, Jul 14 low. A break would confirm a resumption of the broader downtrend and strengthen bearish conditions. Clearance of $100.38/96 is required to highlight a reversal.

WTI TECHS: (U2) Remains Vulnerable

• RES 4: $108.28 - High Jul 5
• RES 3: $101.88 - High Jul 29 and key resistance
• RES 2: $95.05/96.40 - High Aug 11 / 50-day EMA values
• RES 1: $92.37 20-day EMA
• PRICE: $89.98 @ 06:54 BST Aug 19
• SUP 1: $85.73 - Low Aug 16
• SUP 2: $85.37/00 - Low Mar 15 / Round number support
• SUP 3: $83.51 - 1.50 projection of the Jun 8 - 22 - 29 price swing
• SUP 4: $81.34 - 1.618 projection of the Jun 8 - 22 - 29 price swing

WTI futures remain vulnerable, despite having bounced from Wednesday's low. This week’s move down has resulted in a print below support at $87.01, the Aug 5 low. The weakness reinforces bearish conditions and a clear break of $87.01 would confirm a resumption of the downtrend. Attention is on $85.37, the Mar 15 low and the $85.00 handle. On the upside, key short-term resistance has been defined at $95.05, the Aug 11 high.

GOLD TECHS: Trades Below First Support

• RES 4: $1875 7 - 50.0% retracement of the Mar 8 - Jul 21 bear leg
• RES 3: $1857.6 - High Jun 16
• RES 2: $1829.8 - 38.2% retracement of the Mar 8 - Jul 21 bear leg
• RES 1: $1782.6/1807.9 - 50-day EMA / High Aug 10 and bull trigger
• PRICE: $1755.9 @ 07:16 BST Aug 19
• SUP 1: $1751.9 - Intraday low
• SUP 2: $1711.7 - Low Jul 27
• SUP 3: $1681.0 - Low Jul 21 and the bear trigger
• SUP 4: $1676.9 - Low Mar 8 2021

Gold is trading lower, extending the pullback from last week’s high of $1807.9 (Aug 10). Recent gains saw price trade above trendline resistance drawn from the Mar 8 high. The break highlighted a potential reversal of the 5-month downtrend. However, the failure to follow through and the breach of support at $1754.4 Aug 3 low, signals a failed attempt at clearing the trendline. A deeper pullback would open $1711.7. Key resistance is $1807.9.

SILVER TECHS: Heading South

• RES 4: $21.540 - High Jun 27
• RES 3: $21.000 - Round number resistance
• RES 2: $21.540 - High Jun 27
• RES 1: $20.876 - High Aug 15 and the bull trigger
• PRICE: $19.408 @ 07:58 BST Aug 19
• SUP 1: $19.062 - Low Jul 28
• SUP 2: $18.146/18.000 - Low Jul 14 / Round number support
• SUP 3: $17.312 - 3.00 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 4: $16.955 - Low Jun 15 2020

Silver has failed to hold on to its recent highs and is trading lower again today. The move has resulted in a break of support at $19.551, Aug 5 low. The break of this level undermines the recent bullish theme and signals scope for a deeper pullback, exposing $19.062 initially, the Jul 28 low. On the upside, key short-term resistance has been defined at $20.876, the Aug 15 high where a break is required to reinstate a bullish theme.