MNI DAILY TECHNICAL ANALYSIS - USD/JPY Strength Accelerates

Price Signal Summary – USD/JPY Strength Accelerates

• In FX, this week USD/JPY confirmed a clear break of a long-term trendline (at 113.41) drawn off the December 1975 high. This reinforces the current bull condition and marks a potentially significant break from both a short and medium-term perspective. Attention is on a vol band resistance at 114.50 that also represents a Fibonacci projection level. EURUSD is holding onto recent gains and attention is on the 20-day EMA that intersects at 1.1629. GBPUSD traded higher again Thursday and moved above the 50-day EMA at 1.3708. A clear break of this average is required to suggest scope for a stronger short-term rally that would open 1.3795 initially, a Fibonacci retracement.
• In the equity space, S&P E-minis have recovered and yesterday's price action resulted in a move above the 50-day EMA - at 4385.86 today. EUROSTOXX 50 futures continue to climb. Price action has this week cleared the 50-day EMA. The clear breach of this average and a break of a number of short-term resistance points, has opened 4200.50, the Sep 24 high.
• On the commodity front, Gold rallied sharply higher Wednesday. The yellow metal has breached the 50-day EMA and resistance at $1787.4, the Sep 22 high. The resumption of strength reinforces short-term bullish conditions and the bullish engulfing candle pattern that signalled a potential reversal on Sep 3. WTI trend conditions remain bullish and the contract is holding onto recent gains. Monday's fresh high confirmed an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend.
• In the FI space, the primary trend is unchanged and remains down. Short-term gains are considered corrective. Initial resistance for Bund futures is seen at 170.02, the 20-day EMA where a break would signal scope for a stronger short-term recovery, towards 170.55, Oct 4 high. Gilt futures remain above recent highs. Attention is on the 20-day EMA that intersects at 125.47.

FOREIGN EXCHANGE

EURUSD TECHS: Eyeing The 20-Day EMA

• RES 4: 1.1821 High Sep 16
• RES 3: 1.1755/57 High Sep 22 / Bear channel from Jun 1 high
• RES 2: 1.1712 50-day EMA
• RES 1: 1.1629/40 20-day EMA / High Oct 4
• PRICE: 1.1609 @ 06:15 BST Oct 15
• SUP 1: 1.1524 Low Oct 12 and the bear trigger
• SUP 2: 1.1493 50.0% retracement of the Mar '20 - Jan '21 bull phase
• SUP 3: 1.1469 1.236 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1417 Bear channel base drawn from the Jun 1 high

EURUSD is holding onto recent gains and attention is on the 20-day EMA that intersects at 1.1629. A break would signal scope for a stronger recovery however, short-term gains would be considered corrective with a broader bearish trend condition still intact. A price sequence of lower lows and lower highs and bearish moving average conditions both highlight a downtrend. The bear trigger is 1.1524, Oct 12 low.

GBPUSD TECHS: Monitoring The 50-Day EMA

• RES 4: 1.3913 High Sep 14
• RES 3: 1.3854 High Sep 15
• RES 2: 1.3795 76.4% retracement of the Sep 14 -29 downleg
• RES 1: 1.3734 High Oct 14
• PRICE: 1.3687 @ 06:18 BST Oct 15
• SUP 1: 1.3544/3412 Low Oct 6 / Low Sep 29 and the bear trigger
• SUP 2: 1.3354 Low Dec 23, 2020
• SUP 3: 1.3320 2.0% 10-dma envelope
• SUP 4: 1.3277 61.8% retracement of the Sep '20 - Jan bull phase

GBPUSD traded higher again Thursday and moved above the 50-day EMA at 1.3708. A clear break of this average is required to suggest scope for a stronger short-term rally that would open 1.3795 initially, a Fibonacci retracement. On the downside, a firm short-term support has been defined at 1.3544, Oct 6 low. A break of this level would reinstate a bearish focus and open 1.3412, Sep 29 low.

EURGBP TECHS: Attention Is On Key Support

• RES 4: 0.8703 1.236 proj of the Aug 10 - Sep 7 - Sep 16 rally
• RES 3: 0.8670 High Jul 20 and key resistance
• RES 2: 0.8624/58 High Oct 1 / High Sep 29
• RES 1: 0.8544 50-day EMA
• PRICE: 0.8482 @ 06:25 BST Oct 15
• SUP 1: 0.8455/50 Low Oct 14 Low Oct 10 and key support
• SUP 2: 0.8430 Low Feb 27, 2020
• SUP 3: 0.8420 1.0% 10-dma envelope
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP traded in minor negative territory Thursday and continues to consolidate near recent lows. A bearish theme still dominates following the recent reversal from 0.8658, Sep 29 high. Support at 0.8526, Sep 28 low and 0.8501, Sep 16 low have been cleared and this has opened 0.8450, Oct 8 low. The cross needs to breach 0.8658, Sep 29 high to reinstate a bull theme. Firm resistance is at 0.8544, the 50-day EMA.

USDJPY TECHS: Bull Trend Extension

• RES 4: 116.09 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.48 1.618 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 114.50 2.0% 10-dma envelope and a 1.382 Fibonacci proj
• PRICE: 114.07 @ 06:35 BST Oct 15
• SUP 1: 113.00 Low Oct 12
• SUP 2: 112.08 High Sep 30 and a recent breakout level
• SUP 3: 111.51 Low Oct 8
• SUP 4: 110.82/80 Low Oct 4 / High Aug 11

USDJPY continues to climb. This week the pair confirmed a clear break of a long-term trendline (at 113.41) drawn off the December 1975 high. This reinforces the current bull condition and marks a potentially significant break from both a short and medium-term perspective. Attention is on a vol band resistance at 114.50 that also represents a Fibonacci projection level. On the downside, initial firm support is seen at 112.08, Sep 30 high.

EURJPY TECHS: Bull Rally Accelerates

• RES 4: 134.40 2.382 proj of the Sep 22 - 29 - Oct 6 price swing
• RES 3: 134.13 High Jun 1 and a key resistance
• RES 2: 133.68 High Jun 15
• RES 1: 132.67 76.4% retracement of the Jun - Sep downleg
• PRICE: 132.43 @ 06:44 BST Oct 15
• SUP 1: 131.27 Low Oct 14
• SUP 2: 130.75/26 Sep 3 high / 50.0% of the Oct 11 range
• SUP 3: 129.28 Low Oct 11
• SUP 4: 128.33/31 Low Oct 6 / Low Sep 23

EURJPY continues to appreciate. The reversal higher from 128.33, Oct 6 low has reinstated a near-term bullish theme and the cross has recently cleared a key resistance at 130.75, Sep 3 high and a bull trigger. This has strengthened the case for bulls and the breach of a number of key short-term resistance points above 130.75 reinforces the current positive outlook. The focus is on 132.67 next, a Fibonacci projection. Initial firm support is at 130.75.

AUDUSD TECHS: Heading North

• RES 4: 0.7534 High Jul 7
• RES 3: 0.7503 High Jul 13
• RES 2: 0.7478 High Sep 3 and the bull trigger
• RES 1: 0.7427 High Oct 14
• PRICE: 0.7425 @ 06:51 BST Oct 15
• SUP 1: 0.7332 50-day EMA
• SUP 2: 0.7288 Low Oct 8
• SUP 3: 0.7226/7170 Low Oct 6 / Low Sep 29
• SUP 4: 0.7106 Low Aug 20 key support

AUDUSD maintains a firmer short-term tone with the pair holding above the 20- and 50-day EMAs. The break above these averages suggests scope for an extension of gains. The focus is on 0.7478, Sep 3 high and a key short-term resistance. A breach of this hurdle would strengthen a bullish case and remove recent bearish considerations. Initial firm support is seen at 0.7332, the 50-day EMA.

USDCAD TECHS: Needle Still Points South

• RES 4: 1.2648 High Oct 6
• RES 3: 1.2584 50-day EMA
• RES 2: 1.2494 Low Sep 3 and a recent breakout level
• RES 1: 1.2449 High Oct 14
• PRICE: 1.2352 @ 07:01 BST Oct 15
• SUP 1: 1.2303 Low Jul 6
• SUP 2: 1.2269/53 2.0% 10-dma envelope / Lo Jun 23
• SUP 3: 1.2229 76.4% retracement of the Jun - Aug rally
• SUP 4: 1.2157 Low Jun 16

The USDCAD bear cycle that started Sep 20 remains in place and the pair continues to weaken. Key support at the Jul 30 low of 1.2422 has been cleared reinforcing bearish conditions and paving the way for an extension of the downleg. This has opened 1.2303, Jul 6 low and moving average conditions appear to be turning bearish reinforcing the current sentiment. Initial firm resistance is seen at 1.2494, Sep 3 low.

FIXED INCOME

BUND TECHS: (Z1) Corrective Cycle

• RES 4: 171.72 High Sep 23
• RES 3: 170.98 50-day EMA
• RES 2: 170.55 High Oct 4 and key near-term resistance
• RES 1: 170.02 20-day EMA
• PRICE: 166.69 @ 05:16 BST Oct 15
• SUP 1: 168.64/21 Low Oct 13 / Low Oct 12 and the bear trigger
• SUP 2: 167.98 2.382 proj of the Sep 9 - 17 - 21 price swing
• SUP 3: 167.79 2.50 proj of the Sep 9 - 17 - 21 price swing
• SUP 4: 167.52 Low Mar 19 2020

Bund futures have entered a corrective phase following the strong bounce from Tuesday's low. Initial resistance is seen at 170.02, the 20-day EMA where a break would signal scope for a stronger short-term recovery, towards 170.55, Oct 4 high. The broader trend condition remains bearish and moving average signals continue to point south. A reversal lower would open 168.21, this week's low and the bear trigger.

BOBL TECHS: (Z1) Approaching The 20-Day EMA

• RES 4: 135.380 High Sep 23
• RES 4: 135.200 Low Sep 17 and recent breakout level / High Oct 4
• RES 3: 135.060 High Oct 7
• RES 2: 134.961 20-day EMA
• PRICE: 134.790 @ 05:15 BST Oct 15
• SUP 1: 134.320 Low Oct 13
• SUP 2: 134.285 76.4% retracement of the Jun - Sep rally
• SUP 3: 134.136 1.382 proj of the Sep 21 - 28 - Oct 4 price swing
• SUP 4: 134.070 Low Jul 6 (cont)

Bobl futures recovered yesterday and the contract appears to have entered a corrective phase. An extension would open 134.961, the 20-day EMA and a breach of this level would signal scope for a stronger bounce towards 135.00, the Oct 7 high. The broader trend condition remains bearish and a resumption of weakness would open 134.320, the Oct 13 low and the bear trigger.

SCHATZ TECHS: (Z1) Gains Considered Corrective

• RES 4: 112.305 High Sep 3
• RES 3: 112.290 High Sep 20
• RES 2: 112.255 High Sep 23 and Oct 5 and key near-term resistance
• RES 1: 112.220 High Oct 14
• PRICE: 112.200 @ 05:17 BST Oct 15
• SUP 1: 112.135 Low Oct 13
• SUP 2: 112.113 1.236 proj of the Sep 20 - 28 - Oct 5 price swing
• SUP 3: 112.110 Congestion support Jun 22 - 28 (cont)
• SUP 4: 112.098 76.4% retracement of the May - Aug uptrend

From a trend perspective, Schatz futures remain in a downtrend. In the short-term however, the contract appears to have entered a corrective phase following the recovery from Wednesday's low. Price has tested the 20-day EMA at 112.215 and a clear break would allow for an extension and open 112.55, a key resistance. On the downside, a resumption of weakness would refocus attention on the bear trigger at 112.135, the Oct 13 low.

GILT TECHS: (Z1) Holding Above Recent Highs

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.72 High Oct 1
• RES 1: 125.47 20-day EMA
• PRICE: 125.07 @ Close Oct 15
• SUP 1: 124.08/123.44 Low Oct 13 / Low Oct 11 and the bear trigger
• SUP 2: 123.16 Low Feb 27, 2019 (cont)
• SUP 3: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing
• SUP 4: 122.15 Low Jan 18, 2019 (cont)

Gilt futures remain above recent highs. Short-term gains are considered corrective and this is allowing a recent oversold condition to unwind. Attention is on the 20-day EMA that intersects at 125.47. A break of this resistance area would signal scope for a stronger recovery. The broader trend direction remains down and a resumption of weakness would refocus attention on Monday's low of 123.44. This is also the bear trigger.

BTP TECHS: (Z1) Short-Term Bounce

• RES 4: 155.14 High Aug 31
• RES 3: 154.64 High Sep 22 / 23
• RES 2: 153.59 High Sep 24
• RES 1: 152.54/87 High Oct 14 / High Oct 1
• PRICE: 152.34 @ Close Oct 14
• SUP 1: 151.00 Low Oct 6 and the bear trigger
• SUP 2: 150.56 Low Jun 30 (cont)
• SUP 3: 150.00/149.97 Round number support / Low Jun 25
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures traded higher yesterday. The trend needle still points south - the contract traded lower Oct 6, confirming a resumption of the downtrend. A price sequence of lower lows and lower highs that defines a downtrend remains intact and the recent move through 152.94, Sep 9 low, confirmed this price condition. Short-term gains would be considered corrective with initial firm resistance at 152.87, Oct 1 high. The bear trigger is 151.00.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Continues To Climb

• RES 4: 4234.50 0.764 projection of the Jul 19 - Sep 6 - 20 price swing
• RES 3: 4223.00 High Sep 6 and the bull trigger
• RES 2: 4200.50 High Sep 24
• RES 1: 4161.50 High Sep 28
• PRICE: 4154.50 @ 06:05 BST Oct 15
• SUP 1: 4091.60 50-day EMA
• SUP 2: 4004.00 / 3949.50 Low Oct 12 / Low Oct 6 and bear trigger
• SUP 3: 3902.50 Low Jul 20
• SUP 4: 3882.00 Low Jul 19 and a key support

EUROSTOXX 50 futures continue to climb. Price action has this week cleared the 50-day EMA. The clear breach of this average and a break of a number of short-term resistance points, has opened 4200.50, the Sep 24 high. Above the level is the major resistance and bull trigger at 4223.00, Sep 6 high. On the downside, the 50-day EMA, at 4091.60 today marks initial support.

E-MINI S&P (Z1): Bull Rally Extends

• RES 4: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4539.50 High Sep 3 and the bull trigger
• RES 3: 4519.75 High Sep 9
• RES 1: 4472.00 High Sep 27
• PRICE: 4448.00 @ 07:06 BST Oct 15
• SUP 1: 4387.55 50-day EMA
• SUP 2: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger
• SUP 3: 4243.50 Low Jul 20
• SUP 4: 4214.50 Low Jul 19 and a key support

S&P E-minis have recovered and yesterday's price action resulted in a move above the 50-day EMA - at 4385.86 today. A clear breach of the average has undermined recent bearish signals and suggests scope for a stronger recovery. Attention is on 4472.00, Oct 7 high and a breach of this hurdle would open 4539.50, the Sep 3 high and bull trigger. Initial key support is at 4317.25, Oct 12 low. A break would instead expose 4260.00, Oct 1 low.

COMMODITIES:

BRENT TECHS: (Z1) Resumes Its Uptrend

• RES 4: $88.74 - 2.00 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $86.55 - 1.764 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $85.20 - 1.618 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $85.00 - Round number resistance
• PRICE: $84.81 @ 07:06 BST Oct 15
• SUP 1: $82.20 - Low Oct 13
• SUP 2: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 3: $76.51/75.42 - Low Sep 30 and key support / High Sep 15
• SUP 4: $74.81 - Low Sep 23

Brent futures have traded above $84.60, Oct 11 high. The continuation higher confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Note too that the contract has recently cleared the $80.00 handle, an important psychological hurdle. The focus is on $85.00 next, a Fibonacci projection. Initial firm short-term support is seen at $82.20, Oct 13 low.

WTI TECHS: (X1) Bullish Conditions Intact

• RES 4: $84.97 - 2.00 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 3: $84.00 - Round number resistance
• RES 2: $82.89 - 1.764 proj of the Aug 23 - Sep 2 - Sep 9 price swing
• RES 1: $82.18 - High Oct 11
• PRICE: $82.04 @ 07:11 BST Oct 15
• SUP 1: $79.43 - Low Oct 13
• SUP 2: $76.75 - 20-day EMA
• SUP 3: $74.96 - Low Oct 7 and key near-term support
• SUP 4: $73.14 - Low Sep 30 and key support

WTI trend conditions remain bullish and the contract is holding onto recent gains. Monday's fresh high confirmed an extension of the current bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also been cleared. The focus is on $82.89, a Fibonacci projection. On the downside, key short-term support has been defined at $74.96, Oct 7.

GOLD TECHS: Holding Onto Gains

• RES 4: $1844.9 - Low Jun 14
• RES 3: $1834.1 - High Jul 15 and the bull trigger
• RES 2: $1808.7 - High Sep 14
• RES 1: $1800.6 - High Oct 14
• PRICE: $1792.3 @ 07:27 BST Oct 15
• SUP 1: $1768.3 - 20-day EMA
• SUP 2: $1758.3/1746.0 - Low Oct 13 / Low Oct 6
• SUP 3: $1721.7 - Low Sep 29 and the bear trigger
• SUP 4: $1717.8 - Low Aug 10

Gold rallied sharply higher Wednesday. The yellow metal has breached the 50-day EMA and resistance at $1787.4, the Sep 22 high. The resumption of strength reinforces short-term bullish conditions and the bullish engulfing candle pattern that signalled a potential reversal on Sep 3. The focus is on $1808.7 next, Sep 14 high. Initial firm support is at $1746.0, Oct 6 low. A break is required to undermine a bullish tone.

SILVER TECHS: Trading Above Key EMAs

• RES 4: $25.206 - High Jun 8
• RES 3: $24.867 - High Sep 3 and the reversal trigger
• RES 2: $24.411 - High Sep 8
• RES 1: $23.965 - High Sep 16
• PRICE: $23.473 @ 08:09 BST Oct 15
• SUP 1: $22.213 - Low Oct 6
• SUP 2: $21.423 - Low Sep 29
• SUP 3 : $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally
• SUP 4: $19.851 - Low Jul 21, 2020

Silver has continued to trade higher. This week the metal has cleared the 20-day EMA and is currently above the 50-day EMA. A continuation higher would pave the way for a stronger short-term recovery and open $23.965 next, the Sep 16 high. Clearance of this level would suggest potential for a climb towards $24.867, the Sep 3 high. This also marks a key short-term resistance. Initial firm support is at $22.213, Oct 6 low.