MNI DAILY TECHNICAL ANALYSIS - Sterling Remains Vulnerable As The Downtrend Accelerates

Price Signal Summary - Sterling Downtrend Extends, Gains Considered Corrective

• In the equity space, S&P E-Minis trend conditions remain bearish following last week’s extension lower - the trend has accelerated following the break of the July support. This strengthens bearish conditions and attention is on key support at 3657.00, Jun 17 low and an important medium-term bear trigger. A break would confirm a resumption of the broader downtrend. EUROSTOXX 50 futures remain soft following the reversal on Sep 13, from 3678.00, the Jun 13 high and last week’s follow through. Key short-term support at 3423.00, the Sep 5 low has been cleared, the break strengthens bearish conditions and has led to a breach of 3341.00, the Jul 5 low. The focus is on 3300.00.
• In FX, the EURUSD is vulnerable. The break lower last week and today, confirms a resumption of the primary downtrend - reinforced too by last week’s breach of 0.9864, the Sep 6 low. The move lower maintains the bearish price sequence of lower lows and lower highs. Price is also trending down inside a bear channel drawn from the Feb 10 high. The channel base intersects at 0.9522. GBPUSD remains vulnerable. Short-term gains are considered corrective and any resumption of weakness would highlight the start, once again, of the primary downtrend that signals scope for a move to parity. The bear trigger is today’s low of 1.0350. USDJPY traded in a volatile manner late last week. The pullback on Sep 22 resulted in a print below 141.90, the 20-day EMA. The trend structure remains bullish - for now - and recent weakness is considered corrective. A continuation higher would expose 145.90, the Sep 22 high and the next bull trigger. Key short-term support has been defined at 140.36, Sep 22 low.
• On the commodity front, Gold traded lower Friday, breaking out of its recent range and in the process confirmed the bear flag formation evident on the daily chart. The break confirms a resumption of the downtrend and opens $1610.5, the 1.00 projection of the Jun 13 - Jul 21 - Aug 10 swing. Initial firm resistance is at $1688.0. In the Oil space, a bearish threat in WTI futures remains present. The recent break of support at $84.25, the Jul 14 low, confirmed a resumption of the downtrend that started Jun 8 and marks the end of a broad sideways move that has been in place since mid-July. Attention is on $76.11, 1.618 projection of the Jul 29 - Aug 16 - 30 price swing.
• In the FI space, Bund futures remain in a clear downtrend and the extension lower last week again confirmed a resumption of the bear leg that started early August. The major support at 140.67, the Jun 16 low (cont), has been cleared. This has opened 138.16, the 3.618 projection of the Aug 2 - 12 - 15 price swing. Gilts have resumed bearish activity today and gapped lower, as the downtrend accelerates. The bearish extension maintains the price sequence of lower lows and lower highs. The psychological 100.00 handle has been pierced, attention turns to 94.72, the Sep 1992 low (cont).

FOREIGN EXCHANGE

EURUSD TECHS: Approaching The Base Of Its Bear Channel

• RES 4: 1.0060 Bear channel top drawn from the Feb 10 high
• RES 3: 0.9956 20-day EMA
• RES 2: 0.9852 High Sep 23
• RES 1: 0.9710 Intraday high
• PRICE: 0.9634 @ 06:11 BST Sep 26
• SUP 1: 0.9554 Intraday low
• SUP 2: 0.9522 Bear channel base drawn from the Feb 10 high
• 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 vulnerable and has started this week’s session on a bearish note. The break lower confirms a resumption of the primary downtrend - reinforced too by last week’s breach of 0.9864, the Sep 6 low. The move lower maintains the bearish price sequence of lower lows and lower highs. Price is also trending lower inside a bear channel drawn from the Feb 10 high. The channel base intersects at 0.9522.

GBPUSD TECHS: Downtrend Accelerates And Parity Beckons

• RES 4: 1.1465 20-day EMA
• RES 3: 1.1274 High Sep 23
• RES 2: 1.1000 Round number resistance
• RES 1: 1.0846 Intraday high
• PRICE: 1.0536 @ 05:32 BST Sep 26
• SUP 1: 1.0350 Intraday low
• SUP 2: 1.0203 3.236 proj of the Jun 16 - Jul 14 - Aug 1 price swing
• SUP 3: 1.0108 3.382 proj of the Jun 16 - Jul 14 - Aug 1 price swing
• SUP 4: 1.0032 3.50 proj of the Jun 16 - Jul 14 - Aug 1 price swing

Bearish trend conditions in GBPUSD remain intact and the pair continues to weaken - today’s move lower has again reinforced current bearish sentiment as the downtrend extends. The sell-off maintains the bearish price sequence of lower lows and lower highs, signalling scope for a continuation. The focus is on a potential test of parity, possibly in the near-term, given the current impulsive move lower.

EURGBP TECHS: Approaching The Top Of A Multi-Year Range

• RES 4: 0.9501 High Mar 19 2020 and major resistance
• RES 3: 0.9388 High Mar 23 2020
• RES 2: 0.9292 High Sep 11 2020
• RES 1: 0.9266 Intraday high
• PRICE: 0.9130 @ 05:45 BST Sep 26
• SUP 1: 0.0.8926 Intraday low
• SUP 2: 0.8788 High Sep 19
• SUP 3: 0.8692 Low Sep 22
• SUP 4: 0.8595 50-day EMA

EURGBP has rallied sharply higher today as Sterling weakens across the board. This confirms once again a resumption of the broader uptrend. The break reinforces bullish conditions and maintains the positive price sequence of higher highs and lows. Note that the cross is appreciating inside a broad multi-year range - the top is at the 0.9300 handle. The Mar 2020 high of 0.9501 resulted in a brief spike beyond the upper band of this range.

USDJPY TECHS: Sights Set On The 145.90 Bull Trigger

• RES 4: 146.52 1.236 proj of the May 24 - Jul 14 - Aug 2 price swing
• RES 3: 146.03 2.764 proj of the Aug 2 - 8 - 11 price swing
• RES 2: 145.90 High Sep 22
• RES 1: 144.59 76.4% retracement of the Sep 22 range
• PRICE: 144.20 @ 06:27 BST Sep 26
• SUP 1: 141.90 20-day EMA
• SUP 2: 140.36 Low Sep 22
• SUP 3: 139.87 Low Sep 2
• SUP 4: 139.03 50-day EMA

USDJPY traded in a volatile manner late last week. The pullback on Sep 22 resulted in a print below 141.90, the 20-day EMA. The trend structure remains bullish - for now - and recent weakness is considered corrective. A continuation higher would expose 145.90, the Sep 22 high and the next bull trigger. On the downside, key short-term support has been defined at 140.36, Sep 22 low. A break would highlight a short-term top in the trend.

EURJPY TECHS: Corrective Pullback Still In Play

• RES 4: 146.23 2.236 proj of the Aug 2- 10 - 16 price swing
• RES 3: 145.64 High Sep 12 and the bull trigger
• RES 2: 144.04 High Sep 20
• RES 1: 140.27/141.29 High Sep 23 / 20-day EMA
• PRICE: 138.55 @ 06:50 BST Sep 26
• SUP 1: 137.40 Intraday low
• SUP 2: 136.02 Low Aug 25
• SUP 3: 135.52 Low Aug 24
• SUP 4: 134.95 Low Aug 16 and a key support

A sharp volatile reversal lower in EURJPY last week resulted in a break below the 50-day EMA, at 140.05. At this stage, weakness in the cross is considered corrective, despite the deep retracement - technical trend signals continue to highlight a bull cycle. Price action however is likely to remain volatile and the daily close below the 50-day EMA strengthens a bearish threat. Initial firm resistance is at 141.29, the 20-day EMA.

AUDUSD TECHS: Trend Needle Still Points South

• RES 4: 0.6838 50-day EMA
• RES 3: 0.6747 High Sep 20
• RES 2: 0.6656 High Sep 23
• RES 1: 0.6550 Intraday high
• PRICE: 0.6523 @ 10:02 BST Sep 26
• SUP 1: 0.6484 Intraday low
• SUP 2: 0.6464 61.8% retracement of the 2020 - 2021 bull leg
• SUP 3: 0.6402 Low May 15 2020
• SUP 4: 0.6373 Low May 4 2020

AUDUSD has resumed its downtrend today. Last week’s move lower resulted in a break of support at 0.6682, the Jul 14 low and bear trigger. The break strengthens bearish conditions and maintains the broader bearish price sequence of lower lows and lower highs. This has opened 0.6451 next, a Fibonacci projection. Initial firm resistance has been defined at 0.6747, the Sep 20 high.

USDCAD TECHS: Fresh Trend High

• RES 4: 1.3716 High Jun 26 2020
• RES 3: 1.3702 2.382 proj of the Aug 25 - Sep 7 - 13 price swing
• RES 2: 1.3651 61.8% retracement of the 2020 - 2021 bear leg
• RES 1: 1.3638 Intraday high
• PRICE: 1.3593 @ 10:09 BST Sep 26
• SUP 1: 1.3468/3358 Low Sep 23 / 21
• SUP 2: 1.3232 20-day EMA
• SUP 3: 1.3079 50-day EMA
• SUP 4: 1.2954 Low Sep 13

USDCAD maintains a clear bullish tone and the pair has traded higher again today. The extension reinforces bullish conditions and maintains the positive price sequence of higher highs and higher lows. Moving average studies are in a bull mode position, highlighting current market sentiment. Sights are set on 1.3651 next, a Fibonacci retracement. On the downside, initial firm support is at 1.3232, the 20-day EMA.

FIXED INCOME

BUND TECHS: (Z2) Trend Needle Still Points South

• RES 4: 143.66 20-day EMA
• RES 3: 142.58 High Sep 20
• RES 2: 142.02 High Sep 22
• RES 1: 140.99 High Sep 23
• PRICE: 138.79 @ 10:03 BST Sep 26
• SUP 1: 138.21 Intraday low
• SUP 2: 138.16 3.618 proj of the Aug 2 - 12 - 15 price swing
• SUP 3: 137.51 3.764 proj of the Aug 2 - 12 - 15 price swing
• SUP 4: 136.46 4.00 proj of the Aug 2 - 12 - 15 price swing

Bund futures remain in a clear downtrend and the extension lower last week again confirmed a resumption of the bear leg that started early August. The major support at 140.67, the Jun 16 low (cont), has been cleared. The break strengthens the broader bearish outlook and confirms a resumption of the primary downtrend. With 140.00 pierced, attention turns to 138.16, a Fibonacci projection. The 20-day EMA, at 143.66 is a firm resistance.

BOBL TECHS: (Z2) Still Soft

• RES 4: 122.010 High Sep 14
• RES 3: 121.777 20-day EMA
• RES 2: 120.940 High Sep 21
• RES 1: 120.150 High Sep 23
• PRICE: 118.900 @ 10:04 BST Sep 26
• SUP 1: 118.590 Intraday low
• SUP 2: 118.274 2.236 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• 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

The trend needle in Bobl futures still points south and the contract traded lower once again Friday, reinforcing bearish conditions. A key support at 119.940, the Jun 16 low (cont) and the bear trigger, has been cleared. The break of this level confirms a resumption of the broader downtrend and opens 118.274 next, a Fibonacci projection. Firm resistance is seen at 121.777, the 20-day EMA.

SCHATZ TECHS: (Z2) Bear Trend Extends

• RES 4: 107.840 High Sep 14
• RES 3: 107.703 20-day EMA
• RES 2: 107.380 High Sep 20
• RES 1: 107.035 High Sep 22
• PRICE: 106.585 @ 06:02 BST Sep 26
• SUP 1: 106.513 2.236 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 2: 106.379 2.382 proj of the Aug 25 - Sep 1 - Sep 6 price swing
• SUP 3: 106.000 Round number support
• SUP 4: 105.800 Low Nov 2008 (cont)

The Schatz futures trend direction remains down and the contract traded to a fresh trend low once again on Friday, confirming an extension of the bear cycle. This also maintains the current bearish price sequence of lower lows and lower highs with moving average studies in a bear mode position. The focus is on 106.513 next, a Fibonacci projection. On the upside, initial firm resistance is seen at 107.703, the 20-day EMA.

GILT TECHS: (Z2) Downtrend Accelerates

• RES 4: 105.59 20-day EMA
• RES 3: 102.45 High Sep 23
• RES 2: 98.68 Low Sep 23 and gap high on the daily chart
• RES 1: 97.38 Intraday high
• PRICE: 96.16 @ 08:22 BST Sep 26
• SUP 1: 95.11 Intraday low
• SUP 2: 94.72 Low Sep 1992 (cont)
• SUP 3: 93.06 Low Apr 1992 (cont)
• SUP 4: 91.47 76.4% retracement of the 1990 - 2020 major bull cycle

Gilt futures have resumed bearish activity today as the downtrend continues to accelerate. The break lower maintains the bearish price sequence of lower lows and lower highs. Note too that recent corrections have proved to be short-lived and shallow - this clearly highlights the current bearish market sentiment. The psychological 100.00 handle has been cleared, attention turns to 94.72, the September 1992 low.

BTP TECHS: (Z2) Heading South

• RES 4: 119.06 High Sep 8 and a reversal trigger
• RES 3: 117.63 High sep 14
• RES 2: 117.05 High sep 22 and a key short-term support
• RES 1: 114.67 Low Sep 20
• PRICE: 112.68 @ 10:05 BST Sep 26
• SUP 1: 112.20 Intraday low
• SUP 2: 112.00 Round number support
• SUP 3: 111.63 1.50 proj of the Aug 25 - Sep 1 - 8 price swing
• SUP 4: 111.05 1.618 proj of the Aug 25 - Sep 1 - 8 price swing

BTP futures remain bearish and the contract has started the week on a softer note as it extends the current bearish cycle. Last Tuesday’s move lower confirmed a resumption of the bear cycle - the contract traded through the early September lows. Moving averages are in a bear mode condition too, highlighting the current market sentiment. The focus is on weakness towards 111.63 next, a Fibonacci projection. On the upside, initial firm resistance is seen at 117.05, the Sep 22 high.

US 10YR FUTURE TECHS: (Z2) Southbound

• RES 4: 116-31 50 day EMA values
• RES 3: 115-15/116-26 20-day EMA / High Sep 2
• RES 2: 114.17/115-01 High Sep 20 / 15
• RES 1: 114-00 High Sep 22
• PRICE: 112-14+ @ 14:57 BST Sep 23
• SUP 1: 111-25 Low Sep 23
• SUP 2: 111-22 3.0% Lower Bollinger Band
• SUP 3: 111-04+ 3.0% 10-dma envelope
• SUP 4: 111-00 Psychological Support

Treasuries remain soft and the contract extended losses Friday. A bearish price sequence of lower lows and lower highs, bearish moving average studies and a lack of any meaningful correction, clearly highlights the markets current bearish sentiment. Prices have shown below the 112-00 handle, thereby opening 111-22, a lower Bollinger band value. Initial resistance is the Thursday high of 114-00.

EQUITIES

EUROSTOXX50 TECHS: (Z2) Heading South

• RES 4: 3810.00 High Aug 17 and key resistance zone
• RES 3: 3753.00 High Aug 19
• RES 2: 3692.00 High Aug 26
• RES 1: 3514.30/3678.00 20-day EMA / High Sep 13 and bull trigger
• PRICE: 3395.00 @ 09:46 BST Sep 23
• SUP 1: 3314.00 Intraday low
• SUP 2: 3300.00 Round number support
• SUP 3: 3329.00 Low Nov 9 2020 (cont)
• SUP 4: 3163.00 Low Nov 6 2020

EUROSTOXX 50 futures remain soft following the reversal on Sep 13, from 3678.00, the Jun 13 high and last week’s follow through. Key short-term support at 3423.00, the Sep 5 low has been cleared, the break strengthens bearish conditions and has led to a breach of 3341.00, the Jul 5 low. Moving average studies are in a bear mode position too, highlighting the current trend direction. Initial firm resistance is seen at 3514.30, the 20-day EMA.

E-MINI S&P (Z2): Approaching Critical Support

• RES 4: 4313.50 High Aug 18
• RES 3: 4234.25 High Aug 26
• RES 2: 4009.81/4175.00/47 50-day EMA / High Sep 13
• RES 1: 3783.25/3936.25 High Sep 23 / 20
• PRICE: 3676.25 @ 06:29 BST Sep 26
• SUP 1: 3660.25 Low Sep 23
• SUP 2: 3657.00 Low Jun 17 and a key M/T bear trigger
• SUP 3: 3600.00 Round number support
• SUP 4: 3558.97 1.382 proj of the Aug 16 - Sep 7 - 13 price swing

S&P E-Minis trend conditions remain bearish following last week’s extension lower - the trend has accelerated following the break of the July support. The break lower strengthens bearish conditions and attention is on key support at 3657.00, Jun 17 low and an important medium-term bear trigger. A break would confirm a resumption of the bear trigger. On the upside, initial firm resistance has been defined at 3936.25, the Sep 20 high.

COMMODITIES

BRENT TECHS: (X2) Bearish Outlook

• RES 4: $107.30 - High Jul 5
• RES 3: $96.99/103.86 - High Sep 5 / High Jul 29 and key resistance
• RES 2: $94.99 - 50-day EMA
• RES 1: $92.13 - 20-day EMA
• PRICE: $85.29 @ 06:57 BST Sep 26
• SUP 1: $84.11 - 1.50 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 2: $82.59 - 1.618 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 3: $80.71 - 1.764 proj of the Jul 29 - Aug 17 - 30 price swing
• SUP 4: $79.12 - Low Jan 24

Brent futures are trading lower again today, as the contract starts the week on a bearish note and again confirms a resumption of the broader downtrend. Price has breached support at $87.24, Sep 18 low and bear trigger. The move lower strengthens bearish conditions and maintains the price sequence of lower lows and lower highs. This paves the way for $84.11 next, a Fibonacci projection. Firm trend resistance is at the 50-day EMA, at $94.99.

WTI TECHS: (X2) Bear Trend Extension

• RES 4: $97.91 - High Jul 29 and a reversal trigger
• RES 3: $92.26/96.82 - High Aug 30 / 31 and key resistance
• RES 2: $88.94 - 50-day EMA
• RES 1: $85.62 - 20-day EMA
• PRICE: $77.78 @ 07:13 BST Sep 26
• SUP 1: $77.21 - Intraday low
• SUP 2: $76.11 - 1.618 proj of the Jul 29 - Aug 16 - 30 price swing
• SUP 3: $75.70 - Low Jan 24
• SUP 4: $71.22 - 2.00 proj of the Jul 29 - Aug 16 - 30 price swing

Bearish conditions in WTI futures were reinforced last week - the contract cleared support at $80.89, the Sep 8 low. This marks a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. The focus is on $76.11 next, a Fibonacci projection. On the upside, key short-term resistance is unchanged at $88.94 the 50-day EMA. Initial resistance is seen at $85.62, the 20-day EMA.

GOLD TECHS: Bear Flag Breakout

• RES 4: $1765.5 - High Aug 25 and a key resistance
• RES 3: $1729.2/35.1 - 50-day EMA / High Sep 12
• RES 2: $1688.9/1707.1 - Low Sep 1 / High Sep 14
• RES 1: $1654.0 - Low Sep 21 and a recent breakout level
• PRICE: $1638.5 @ 07:17 BST Sep 26
• SUP 1: $1626.9 - Intraday low
• SUP 2: $1610.5 - 1.00 proj of the Jun 13 - Jul 21 - Aug 10 swing
• SUP 3: $1569.1 - Low Apr 1 2020
• SUP 4: $1563.9 - 1.236 proj of the Jun 13 - Jul 21 - Aug 10 swing

Gold traded lower Friday, breaking out of its recent range and in the process confirmed the bear flag formation evident on the daily chart. The break confirms a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. Moving average studies are in a bear mode position, clearly highlighting current market sentiment. The focus is on $1610.5, a Fibonacci projection. Initial firm resistance is at $1688.0.

SILVER TECHS: Bearish Threat Remains Present

• RES 4: $21.967 - High Jun 17
• RES 3: $21.540 - High Jun 27
• RES 2: $20.876 - High Aug 15 and the bull trigger
• RES 1: $20.014 - High Sep 12
• PRICE: $18.680 @ 10:25 BST Sep 26
• SUP 1: $18.483/17.562 - Intraday low / Low Sep 1 and bear trigger
• SUP 2: $16.955 - Low Jun 15 2020
• SUP 3: $16.473 - 1.00 proj of the Jun 6 - Jul 14 - Aug 10 price swing
• SUP 4: $15.998 - 76.4% retracement of the 2020 - 2021 bull leg

Silver is weaker following Friday’s sell-off and today’s extension lower. The break of $18.845, Sep 12 low, signals the end of the recent corrective recovery between Sep 1 - 12. A continuation lower would pave the way for a move towards the key support and bear trigger at $17.562, the Sep 1 low. Clearance of this level would confirm a resumption of the broader downtrend. A break of $20.014, Sep 12 high, is required to reinstate a bullish theme.