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US TSY OPTIONS

Range in Underlying Spurring Vol Sales

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Extends gains against the Pound and EUR

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Bobl put ladder

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Price Signal Summary - ESU1 Find Support at the 50-Day EMA

  • In the equity space, conditions have improved for bulls, for now at least. S&P E-minis started the week on a bearish note but found support at Monday's low. The contract has tested the 50-day EMA at 4239.07 and the average has so far also provided support. A key pivot level has been defined at 4224.00, Monday's low. EUROSTOXX 50 futures are extending the recovery from Monday's low of 3895.00, low Jul 19 and marks a pivotal short-term support. Gains are considered corrective, 4039.00 marks initial resistance, the 20-day EMA.
  • In FX, the USD outlook remains bullish. EURUSD maintains the bearish sequence of lower lows and lower highs. The focus is on 1.1704, Mar 31 low and key support. GBPUSD took out key support at 1.3669, Apr 12 low as well as the 200-dma at 1.3700. The breach of 1.3669 reinforces bearish conditions and paves the way for an extension of the bear cycle towards 1.3520 next, Jan 18 low. USDJPY is trading above Monday's low but remains vulnerable. This week's low print of 109.07 confirms a resumption of the downtrend paving the way for an extension lower. The focus is on 108.47, 76.4% of the Apr 23 - Jul 2 rally. Resistance is at 110.34, Jul 16 high.
  • On the commodity front, Gold maintains a bullish tone and the recent pullback is considered corrective. Price needs to clear last week's high print to confirm a resumption of the recent upleg. Key short-term support is at $1791.7, Jul 12 low. Brent futures gains are considered corrective. The focus is on $67.43, a Fibonacci retracement. Initial resistance is at $70.54, 50.0% of Monday's range. WTI (U1) sights are on $64.60, 76.4% of the May 21 - Jul 6 rally.
  • Within FI, Bund futures remain firm following this week's break of 174.77, Jul 8 high. Sights are on 176.30, 76.4% retracement of the Dec '20 - May sell-off (cont). Gilts remain in a bullish condition despite the current pullback. The break of 129.92, Jul 8 high confirms a resumption of the uptrend and opens 130.72 2.236 projection of the May 13 - 26 - Jun 3 price swing.

FOREIGN EXCHANGE

EURUSD TECHS: Gains Considered Corrective

  • RES 4: 1.2006 High Jun 29 / Jun 17
  • RES 3: 1.1943/75 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: 1.1799 @ 16:51 BST Jul 21
  • SUP 1: 1.1752 Low Jul 21
  • 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 remains bearish despite the recovery from yesterday's fresh low print. This week's move lower extends the bearish price sequence of lower lows and lows and lower highs and cements the bearish outlook. The focus is on 1.1704, Mar 31 low. With the imminent formation of a death cross (50- breaking below the 200-dma), the focus remains lower. A break of 1.1704 would strengthen the bearish case. Initial firm resistance is at 1.1851.

GBPUSD TECHS: Corrective Recovery

  • RES 4: 1.4074 Low Jun 10
  • RES 3: 1.4001 High Jun 23 and key resistance
  • RES 2: 1.3817/3898 20-day EMA / 50-day EMA
  • RES 1: 1.3733 Low Jul 2
  • PRICE: 1.3717 @ 06:04 BST Jul 22
  • SUP 1: 1.3572 Low Jul 20
  • SUP 2: 1.3520/10 Low Jan 18 / 2.0%10-dma envelope
  • SUP 3: 1.3452 Low Jan 11
  • SUP 4: 1.3430 Low Dec 28, 2020

GBPUSD traded higher yesterday. Gains are likely a correction and a bearish structurel dominates. The recent break of 1.3669, Apr 12 low reinforces the current bearish theme and with MA studies continuing to point south, further weakness is likely. The pair has tested 1.3579, 38.2% of the Mar '20 - Jun rally. An extension lower would open 1.3520, Jan 18 low. The 2.0% 10-dma envelope intersects at 1.3510. Initial resistance is at the Jul 2 high of 1.3733.

EURGBP TECHS: Correcting And Remains Above Support

  • RES 4: 0.8745 2.0% 10-dma envelope
  • RES 3: 0.8701/21 High May 7 / High Apr 26 and the bull trigger
  • RES 2: 0.8672 High May 25
  • RES 1: 0.8670 High Jul 20 and 76.4% of the Apr - Jul bearish phase
  • PRICE: 0.8602 @ 06:12 BST Jul 22
  • SUP 1: 0.8593/61 50-day EMA / Low Jul 19
  • SUP 2: 0.8504 Low Jul 14 and key short-term support
  • SUP 3: 0.8482/72 1% 10-dma envelope / Low Apr 5
  • SUP 4: 0.8430 Low Feb 27, 2020

EURGBP is retracing part of its recent rally. Despite the pullback, the short-term outlook remains bullish. The cross earlier has recently breached a number of important resistance levels and Fibonacci retracements. The rally this week also highlights a stronger reversal of the Apr - Jul bearish phase and suggests scope for gains toward the bull trigger of 0.8721, Apr 26 high. Key support has been defined at 0.8504, Jul 14 low. Initial support is 0.8593.

USDJPY TECHS: Bearish Focus Despite Bounce

  • 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: 110.39 High Jul 21
  • PRICE: 110.14 @ 06:24 BST Jul 22
  • 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 gains are considered corrective and the pair remains vulnerable. This follows Tuesday's low print of 109.07 following a break of support at 109.53, Jul 8 low. The move lower resumes the reversal that occurred early July and paves the way for an extension lower. Note that support at 109.19 has also been breached, Jun 7 low. The focus is on 108.47, a Fibonacci retracement. Firm resistance has been defined at 110.70, Jul 14 high.

EURJPY TECHS: Trend Signals Remain Bearish

  • RES 4: 132.70 High Jun 23
  • RES 3: 132.43 High Jul 1 and a key resistance
  • RES 2: 131.09/28 High Jul 13 / 50-day EMA
  • RES 1: 130.28/43 High Jul 16 / High Jul 14
  • PRICE: 129.92 @ 06:30 BST Jul 22
  • SUP 1: 128.60 Low Jul 20
  • SUP 2: 128.45 200-dma
  • SUP 3: 128.29 Low Mar 24 and key support
  • SUP 4: 127.88 38.2% retracement of the Oct '20 - Jun rally

EURJPY traded firmer Wednesday. Nonetheless, the trend remains bearish with attention on the 200-dma at 128.45. A clear break of this average would strengthen the current bearish theme. Momentum and moving average studies remain bearish too. Further out, potential is seen for a move towards 127.88, a Fibonacci retracement. On the upside, 130.28, Jul 16 high marks initial firm resistance.

AUDUSD TECHS: Bearish Price Structure

  • RES 4: 0.7534 High Jul 7
  • RES 3: 0.7503 High Ju13
  • RES 2: 0.7464 20-day EMA
  • RES 1: 0.7429 High Jul 19
  • PRICE: 0.7361 @ 06:36 BST Jul 22
  • SUP 2: 0.7290 Low Jul 21
  • SUP 3: 0.7284/69 Low Nov 24, 2020 / 2.0% 10-dma envelope
  • SUP 3: 0.7235 1.382 proj of Feb 25 - Apr 1 - May 10 price swing
  • SUP 4: 0.7222 Low Nov 13, 2020

AUDUSD outlook remains bearish. This follows the recent sell-off that prompted new multi-month lows and a breach of the channel base at 0.7360. The channel is drawn from the Feb 25 high and the move lower marks an important short-term technical break. Scope is for weakness towards 0.7235 next, the 1.236 projection of the Feb 25 - Apr 1 - May 10 price swing. On the upside, initial resistance is seen at 0.7429, Jul 19 high.

USDCAD TECHS: Corrective Cycle

  • RES 4: 1.2916 1.382 proj of Jun 1 - 21- 23 price swing
  • RES 3: 1.2881 High Jan 28
  • RES 2: 1.2807/46 High Jul 19 / 1.236 proj of Jun 1 - 21- 23 swing
  • RES 1: 1.2730 High Jul 20
  • PRICE: 1.2585 @ 06:42 BST Jul 22
  • SUP 1: 1.2526 Low Jul 21
  • 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

Despite the strong move lower Tuesday and Wednesday, USDCAD remains bullish. On Jul 8, the pair breached resistance at 1.2590, Jul 8 high. This confirmed a resumption of the uptrend and Monday's strong rally has reinforced bullish conditions, confirming an extension of the bull cycle that started Jun 1. The focus is on 1.2846 next, a Fibonacci projection and 1.2881, the Jan 28 high. On the downside, watch support is at 1.2502.

FIXED INCOME

BUND TECHS: (U1) Trend Remains Up

  • RES 4: 176.64 High Feb 11 (cont)
  • RES 3: 176.38 1.382 proj of the May 19 - Jun 11 - Jun 22 price swing
  • RES 2: 176.30 76.4% retracement of the Dec '20 - May sell-off (cont)
  • RES 1: 176.28 High Jul 20
  • PRICE: 175.56 @ 04:54 BST Jul 22
  • SUP 1: 174.77/45 High Jul 8 / Low Jul 15
  • SUP 2: 173.70 LowJul 13 and 14
  • SUP 3: 173.15 50-day EMA
  • SUP 4: 173.04 Channel base drawn off the May 19 low

Bund futures maintain a firmer tone. Price is holding above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthened a bullish case, confirmed a resumption of the uptrend and marked a bullish breakout of the rising channel drawn off the May 19 low. Attention is on 176.38, a Fibonacci projection. We do note though that momentum is overbought and this is being monitored. Initial support is at 174.77.

BOBL TECHS: (U1) Holding Onto Its Gains

  • RES 4: 135.350 High Apr 8 (cont)
  • RES 3: 135.313 2.236 proj of the May 20 - 26 - 31 price swing
  • RES 2: 135.160 2.00 proj of the May 20 - 26 - 31 price swing
  • RES 1: 135.130 High Jul 20
  • PRICE: 134.980 @ 04:46 BST Jul 22
  • SUP 1: 134.710/527 High Jul 8 / 20-day EMA
  • SUP 2: 134.410 Low Jul 13 and a key support
  • SUP 3: 134.389 50-day EMA
  • SUP 4: 134.183 Bull channel base drawn off the May 20 low

Bobl futures are holding onto the bulk of recent gains. The contract on Jul 8 confirmed a break of a key short-term resistance at 134.510, Jun 11 high and a Fibonacci projection. This confirmed a resumption of the uptrend that started May 20 and the subsequent climb reinforces the current bullish trend structure. The rising channel top drawn from the May 20 low has also been breached. Initial support lies at 134.710, Jul 8 high.

SCHATZ TECHS: (U1) Bullish Price Sequence Intact

  • RES 4: 112.320 1.618 proj of the Jun 22 - Jul 8 - Jul 13 price swing
  • RES 3: 112.307 1.50 proj of the Jun 22 - Jul 8 - Jul 13 price swing
  • RES 2: 112.290 High Feb 11 (cont)
  • RES 1: 112.285 High Jul 20
  • PRICE: 112.250 @ 04:43 BST Jul 22
  • SUP 1: 112.210 Low Jul 20
  • SUP 2: 112.180/150 Low Jul 16 / Low Jul 13
  • SUP 3: 112.140 Low Jul 5 and 6
  • SUP 4: 112.120 Low Jun 30

The Schatz futures outlook is bullish following Tuesday's strong rally. Resistance at 112.210, Jun 11 high has been cleared. This strengthens a bullish case and opens 112.295 next, a Fibonacci projection. Note too that the rally has also established a bullish price sequence of higher highs and higher lows, the definition of an uptrend. On the downside, initial support is seen at 112.210, Tuesday's low.

GILT TECHS: (U1) Evening Star Reversal?

  • RES 4: 131.37 38.2% retracement of the Aug '20 - Jun sell-off
  • RES 3: 130.72 2.236 proj of the May 13 - 26 - Jun 3 price swing
  • RES 2: 130.62 High Feb 22 (cont)
  • RES 1: 130.48 High Jul 20 and the bull trigger
  • PRICE: 129.37 @ Close Jul 21
  • 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 are below recent highs. A bullish trend condition remains intact following this week's gains and break of resistance at 129.92, Jul 8 high. The break confirms a resumption of the uptrend from mid-May and maintains a bullish price sequence of higher highs and higher lows. The focus is on 130.62, Feb 22 high (cont). Note, yesterday's close highlights an evening star candle pattern, a concern for bulls. Watch support at 128.54, low Jul 14.

BTP TECHS: (U1) Needle Points North

  • 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: 153.48 High Jul 20
  • PRICE: 153.25 @ Close Jul 21
  • SUP 1: 152.65 Low Jul 14
  • 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 and futures are holding onto gains. The move higher 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 S/T recovery. This week's fresh high prints reinforce a bullish theme. Attention is on 153.82, Feb 12 high. Initial support is at 152.65, Jul 14 low.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Gains Considered Corrective

  • 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: 4063.00 High Jul 16
  • PRICE: 4034.50 @ 05:44 BST Jul 22
  • 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 maintain a bearish tone despite the recovery from Monday's low. The contract last week failed to challenge 4101.50, Jul 1 high and the subsequent sell-off resulted in a resumption of the bear cycle from Jun 17. 3951.50, Jul 8 low has been breached and this signals scope for weakness towards 3871.00, May 19 low ahead of key support at 3830.00, May 13 low. Key Short-term resistance is at 4101.50, Jul 1 high.

E-MINI S&P (U1): Rebounds From The 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: 4368 High Jul 16
  • PRICE: 4353.50 @ 07:02 BST Jul 22
  • SUP 1: 4224.00 Low Jul 19 and key short-term support
  • 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 but found support at Monday's low and have since recovered. Recent weakness resulted in a break of 4279.25, Jul 8 low. This signals a S/T trend top and suggests scope for a deeper corrective pullback. Note though that the contract has tested the 50-day EMA at 4243.44 and the average has so far provided support. A bullish signal would be confirmed if the EMA and 4224.00 hold.

COMMODITIES

BRENT TECHS: (U1) A Pause In The Bear Cycle

  • RES 4: $77.84 - High Jul 6 and the bull trigger
  • RES 3: $76.72 - High Jul 14
  • RES 2: $74.59 - High Jul 15
  • RES 1: $73.34 - High Jul 19
  • PRICE: $72.10 @ 06:42 BST Jul 22
  • 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 remain vulnerable following Monday's selling pressure and despite yesterday's strong gains. The contact has confirmed a top with momentum still in a clear bear cycle. Price has also confirmed a clear break of the 50-day EMA paving the way for an extension lower. 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 $73.34, Jul 19 high.

WTI TECHS: (U1) Corrective Bounce

  • RES 4: $76.07 - High Jul 6 and the bull trigger
  • RES 3: $74.90 - High Jul 13
  • RES 2: $72.48 - High Jul 15
  • RES 1: $71.40 - High Jul 19
  • PRICE: $70.19 @ 07:02 BST Jul 22
  • SUP 1: $65.01/64.60 - Low Jul 20 / 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 Monday clearing support at $68.86, Jun 17 low and 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 $64.60, a Fibonacci retracement where a break would open $63.10, the May 24 low. Yesterday's string gains are considered corrective. Initial resistance is at $71.40, Jul 19 high.

GOLD TECHS: Watching Short-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: $1798.6 @ 07:14 BST Jul 22
  • 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 is slightly weaker and remains below last week's high of $1834.1. The outlook remains bullish though and the recent pullback is considered corrective. Price however needs to clear last week's high print to confirm a resumption of the bull cycle. Support to watch is at $1791.7, Jul 12 low. A breach would be bearish and instead would signal scope for an extension lower towards the key support at $1750.8, Jun 29 low.

SILVER TECHS: Bears Remain In Charge

  • 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: $25.197 @ 07:18 BST Jul 22
  • SUP 1: $24.758 - Low Jul 21
  • SUP 2: $24.686 - Low Apr 13
  • SUP 3: $24.257 - Low Apr 1
  • SUP 4: $23.781 - Low Mar 31and key support

Silver is trading closer to recent lows and remains bearish. The metal has breached support at $25.529, Jun 29 low and bear trigger. The break confirms a resumption of the downleg that started May 18. Note that $24.955, 76.4% of the Mar 31 - May 18 rally has been breached. This opens $24.686, Apr 13 low. MA studies are in a bear mode reinforcing the current bearish theme. Key resistance has been defined at $26.775, Jul 6 high.