MNI DAILY TECHNICAL ANALYSIS - USD Rallies, Equities Under Pressure

Price Signal Summary - USD Rallies, Equities Under Pressure

• In the FX space, the USD is firm and the uptrend has accelerated with DXY touching a fresh 2021 high of 93.50. EURUSD is weaker and has cleared 1.1704, Mar 31 low. This signals scope for a move to 1.1621, 1.00 projection of the Jan 6 - Mar 31 - May 25 price swing. GBPUSD is lower too and attention turns to the key support at 1.3572, Jul 20 low and the bear trigger. EURJPY has resumed the downtrend with the focus on 127.88, 38.2% retracement of the Oct '20 - Jun rally. AUDUSD has cleared the 0.7200 handle. This paves the way for a move towards0.7053, 38.2% retracement of the Mar '20 - Feb uptrend.
• On the commodity front, Gold remains firm with the focus on the next important resistance at $1797.1, the 50-day EMA. A break would strengthen bullish conditions. WTI futures support at $64.49, Jul 20 low has been cleared. This strengthens the bearish theme and opens $60.81 - 1.236 projection of the Jul 6 - 20 - 30 price swing
• On the equity front, a short-term corrective cycle has established itself following the extension lower. S&P E-minis are approaching a key support area at 4341.81, the 50-day EMA. EUROSTOXX 50 though has probed its 50-day EMA. A deeper pullback would expose 4047.50 next, the Jul 27 low.
• In FI, support to watch in Bunds is at 176.21, the Aug 11 low. Trend conditions remain bullish. Gilt futures outlook is bullish too and attention is on 130.72, Aug 4 high and the bull trigger. The support to watch is unchanged at 129.07, the 50-day EMA.

FOREIGN EXCHANGE

EURUSD TECHS: Bear Theme Still Dominates

• RES 4: 1.1909 High Jul 30
• RES 3: 1.1849 50-day EMA
• RES 2: 1.1773/1805 20-day EMA / High Aug 13
• RES 1: 1.1742 High Mar 18
• PRICE: 1.1684 @ 06:09 BST Aug 20
• SUP 1: 1.1666 Low Aug 19
• SUP 2: 1.1621 1.00 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 3: 1.1603 Low Nov 4, 2020
• SUP 4: 1.1495 High Mar 9, 2020

EURUSD remains bearish and traded lower again Thursday. This week has seen the pair slip through support at 1.1704, Mar 31 low and the 1.1700 handle. The break lower confirms a resumption of the downtrend, reinforcing the prevailing bearish theme. The move opens 1.1603 next, the Nov 4, 2020 low. Below here, the immediate post pandemic highs at 1.1495 would likely act as strong psychological and pivot support. Resistance is at 1.1742.

GBPUSD TECHS: Approaching Key Support

• RES 4: 1.3983/90 High Jul 30 / 61.8% of the Jun 1 - Jul 20 sell-off
• RES 3: 1.3916 High Aug 9
• RES 2: 1.3850/62 High Aug 17 / 50-day EMA
• RES 1: 1.3786 High AUg 18
• PRICE: 1.3622 @ 06:20 BST Aug 20
• SUP 1: 1.3591 Low Jul 21
• SUP 2: 1.3572 Low Jul 20 and the bear trigger
• SUP 3: 1.3520 Low Jan 18
• SUP 4: 1.3452 Low Jan 11

GBPUSD yesterday resumed the pullback from 1.3983, Jul 30 high. The move lower reinforces a bearish condition and confirms the end of the corrective bounce in late July. Price remains below the 50-day EMA and has breached a minor support at 1.3691, Jul 22 low. The next key support is located at 1.3572, Jul 20 low. A convincing recovery back above the 50-day EMA at 1.3862 is required to ease the current bearish pressure.

EURGBP TECHS: Extends This Week's Gains

• RES 4: 0.8670 High Jul 20 and key resistance
• RES 3: 0.8659 High Jul 21
• RES 2: 0.8618 76.4% retracement of the Jul 20 - Aug 10 sell-off
• RES 1: 0.8592 100-dma
• PRICE: 0.8577 @ 06:31 BST Aug 20
• SUP 1: 0.8506 Low Jul 19
• SUP 2: 0.8484/50 Low Aug 16 / Low Aug 10 and the bear trigger
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8414 1.0% 10-dma envelope

EURGBP continues to push higher and this week the cross has moved back above both the 20- and 50-day EMAs. The move higher signals scope for further gains near-term with the focus on the 100-dma next at 0.8592. Current gains are still considered corrective and from a trend perspective, the outlook remains bearish. A return lower and break of initial firm support at 0.8506, Aug 19 low would signal a resumption of bearish pressure.

USDJPY TECHS: Holding Above Recent Lows

• RES 4: 111.66 High Jul 2 and the bull trigger
• RES 3: 110.82 High Jul 7
• RES 2: 110.80 High Aug 11 and a key resistance
• RES 1: 110.46 High Aug 13
• PRICE: 109.65 @ 06:35 BST Aug 20
• SUP 1: 109.48 Low Aug 18 / 19
• SUP 2: 109.11/108.72 Low Aug 16 / Low Aug 04 and the bear trigger
• SUP 3: 108.56 Low May 25
• SUP 4: 108.47/34 76.4% of the Apr 23 - Jul 2 rally / Low May 7

USDJPY remains above recent lows Despite recent gains, the pair still appears vulnerable and attention is on the key support at 108.72, Aug 4 low. A breach of this level would strengthen a bearish case and expose the 108.47 Fibonacci retracement. For bulls, key near-term resistance is unchanged at 110.80, Aug 11 high. A break would ease bearish concerns and instead open key resistance at 111.66, Jul 2 high.

EURJPY TECHS: Heading South

• RES 4: 131.09 High Jul 13
• RES 3: 130.56 High Jul 29
• RES 2: 129.71/130.01 High Aug 16 / High Aug 5
• RES 1: 129.14 Low Aug 8
• PRICE: 128.16 @ 06:42 BST Aug 20
• SUP 1: 127.94 Low Aug 19
• SUP 2: 127.88 38.2% retracement of the Oct '20 - Jun rally
• SUP 3: 127.31 Low Feb 17
• SUP 4: 126.44 Low Feb 9

EURJPY remains weak and traded lower again yesterday. This week's key technical development has been the break of 128.60, Jul 20 low. The break confirms a resumption of the current downtrend paving the way for an extension of the bearish cycle. Note too that the move lower has also confirmed a clear breach of the 200-dma. Potential for a move to 127.88, 38.2% of the Oct '20 - Jun rally. Initial firm resistance is at 129.71.

AUDUSD TECHS: Under Pressure

• RES 4: 0.7389 High Aug 11
• RES 3: 0.7341 High Aug 17
• RES 2: 0.7290 Low Jul 21 and a recent breakout level
• RES 1: 0.7250 High Aug 19
• PRICE: 0.7118 @ 09:43 BST Aug 20
• SUP 1: 0.7106 Intraday low
• SUP 2: 0.7053 38.2% retracement of the Mar '20 - Feb uptrend
• SUP 3: 0.6991 Low Nov 2, 2020
• SUP 4: 0.6921 Low Jul 14, 2020

AUDUSD has traded to fresh trend lows once again today as bearish conditions strengthen. The breach of 0.7290 earlier in the week confirmed an extension of the bearish price sequence of lower lows and lower highs, reinforcing the current downward cycle. Price has also cleared 0.7200 and this opens 0.7053 further out, a Fibonacci retracement. Initial firm resistance is at 0.7290, low Jul 21.

USDCAD TECHS: Resumes Its Uptrend

• RES 4: 1.3029 High Nov 25, 2020
• RES 3: 1.2976 1.00 proj of the Jun 23 - Jul 19 - 30 price swing
• RES 2: 1.2957 High Dec 21, 2020
• RES 1: 1.2927 Intraday high
• PRICE: 1.2865 @ 07:03 BST Aug 21
• SUP 1: 1.2814 Intraday low
• SUP 2: 1.2649/2574 Low Aug 19 / 20-day EMA
• SUP 3: 1.2490 50-day EMA
• SUP 4: 1.2422 Jul 30 low

USDCAD traded higher Thursday, extending the recovery from the Jul 30 low and triggering the 1.2807 bull trigger in the process. This confirmed a resumption of the uptrend and opens gains toward 1.2976, a Fibonacci projection. Moving average studies remain in a bull mode reinforcing current conditions. On the downside, yesterday's low of 1.2649 marks a firm support. Key trend support lies at 1.2422, Jul 30 low.

FIXED INCOME

BUND TECHS: (U1) Holding Above Support

• RES 4: 178.37 High Jan 4 (cont)
• RES 3: 178.12 High Jan 27
• RES 2: 177.69 1.764 proj of the May 19 - Jun 11 - Jun 22 price swing
• RES 1: 177.61 High Aug 05 and the bull trigger
• PRICE: 177.04 @ 05:07 BST Aug 20
• SUP 1: 176.21 Low Aug 11
• SUP 2: 175.82/24 Low Jul 27 / Low Jul 22
• SUP 3: 175.14 50-day EMA
• SUP 4: 174.77/45 High Jul 8 / Low Jul 15

Bund futures remain slightly firmer. From a trend perspective, the outlook is bullish with moving average studies still in a bull mode. Momentum studies have been in overbought territory recently however this does not appear to be a concern for bulls at this stage of the uptrend. Support is located at 176.21, Aug 11 low and a break would be bearish. The bull trigger is 177.61, Aug 5 high. Clearance of this level confirms a resumption of the uptrend.

BOBL TECHS: (U1) Outlook Remains Bullish

• RES 4: 136.632 1.0% 10-dma envelope
• RES 4: 136.041 61.8% retracement of the March 2020 downleg
• RES 3: 135.700 High Dec 11, 2020 (cont)
• RES 2: 135.640 High Aug 05
• PRICE: 135.350 @ 05:21 BST Aug 20
• SUP 1: 135.140/134.900 Low Aug 13 / Low Jul 22
• SUP 2: 134.905/710 50-day EMA / High Jul 8
• SUP 3: 134.570 Low Jul 15
• SUP 4: 134.410 Low Jul 13 and a key support

Bobl futures are unchanged and continue to trade below recent highs. The recent pullback is considered corrective. Moving average studies remain in a bull mode and a price sequence of higher highs and higher lows continues to dominate. Attention is on the Dec 11 2020 highs of 135.700 and the 136.041 Fibonacci retracement. Initial support is at 135.140, Aug 13 low. The bull trigger is unchanged 135.640, Aug 5 high.

SCHATZ TECHS: (U1) Consolidation Mode

• RES 4: 112.450 High Dec 11, 2020 (cont)
• RES 3: 112.425 2.618 proj of the Jun 22 - Jul 8 - Jul 13 price swing
• RES 2: 112.415 High Aug 05 and the bull trigger
• RES 1: 112.360 High Aug 9
• PRICE: 112.330 @ 05:29 BST Aug 20
• SUP 1: 112.295 Low Aug 13 and 16
• SUP 2: 112.274 50-day EMA
• SUP 3: 112.245 Low Jul 21
• SUP 4: 112.210 Low Jul 20

Schatz futures are consolidating and still trading closer to recent lows. The contract has recently probed the 20-day EMA and further weakness would open the 50-day EMA at 112.272. The broader uptrend remains intact though with moving average studies holding a bullish position and a price sequence of higher highs and higher lows intact. A resumption of strength would open the bull trigger at 112.415, Aug 8 high.

GILT TECHS: (U1) Trend Conditions Remain Bullish

• RES 4: 131.72 38.2% retracement of the Mar'20 - Jun'21 sell-off
• RES 3: 131.37 38.2% retracement of the Aug '20 - Jun sell-off
• RES 2: 130.72 High Aug 3 / 2.236 of the May 13-26-Jun 3 price swing
• RES 1: 130.50 200-dma (cont)
• PRICE: 130.08 @ Close Aug 19
• SUP 1: 129.22/129.07 Low Aug 6 / 50-day EMA
• SUP 2: 128.54/39 Low Jul 14 / High Jun 11
• SUP 3: 128.03 Jul 6
• SUP 4: 127.87 Low Jul 1

Recent gains in Gilt futures stalled ahead of the 200-dma - the contract achieved a high print of 130.72 on Aug 4. The pullback that followed from 130.72 is considered corrective with key support seen at the 50-day EMA, currently at 129.11. A clear break of the 50-day EMA would suggest scope for a deeper pullback. The trend remains up and the bull trigger is 130.72 with the 200 dma at 130.50 (cont) also marking a key hurdle for bulls.

BTP TECHS: (U1) Needle Still Points North

• RES 4: 156.73 1.236 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 3: 156.11 3.0% Upper Bollinger Band
• RES 2: 156.00 Round number resistance
• RES 1: 155.71 High Aug 5 and the bull trigger
• PRICE: 155.06 @ Close Aug 19
• SUP 1: 154.54 Low Aug 11
• SUP 2: 154.20 Bull channel base drawn off the May 19 low
• SUP 3: 153.41 50-day EMA
• SUP 4: 151.93 High Jul 8

BTP futures are unchanged and are in a consolidation mode. The trend remains up though with moving average studies holding a bull position. Furthermore, a positive price sequence of higher highs and higher lows still dominates. The recent high of 155.71 on Aug 5 marks the bull trigger. A break would confirm a resumption of the uptrend and open 156.19, a Bollinger band ceiling. Initial support lies at 154.54, the Aug 11 low.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Corrective Cycle

• RES 4: 4294.20 1.236 proj of the May 13 - Jun 17 - Jul 19 price swing
• RES 3: 4271.30 2.0% 10-dma envelope
• RES 2: 4238.50 High Aug 12 and the bull trigger
• RES 1: 4169.50 High Aug 19
• PRICE: 4115.00 @ 06:05 BST Aug 20
• SUP 1: 4078.00 Low Aug 19
• SUP 2: 4026.20 76.4% retracement of the Jul 19 - Aug 13 rally
• SUP 3: 3944.00 Low Jul 21
• SUP 4: 3895.00 Low Jul 19

EUROSTOXX 50 continued to retrace yesterday and futures have cleared the 20-day EMA. The breach of this EMA signals scope for a deeper pullback and note price has also probed the 50-day EMA at 4096.90. The broader uptrend remains intact with moving average studies continuing to highlight a bullish structure. A clear breach of the 50-day EMA though would concern bulls. The trigger for a resumption of the uptrend is 4238.50.

E-MINI S&P (U1): Key Support Lies At The 50-Day EMA

• RES 4: 4542.58 1.236 proj of Jun 21 - Jul 14 - 19 price swing
• RES 3: 4500.00 Round number resistance
• RES 2: 4481 75.1.00 proj of Jun 21 - Jul 14 - 19 price swing
• RES 1: 4476.50 High Aug 16 and the bull trigger
• PRICE: 4390.75 @ 07:07 BST Aug 20
• SUP 1: 4347.75 Low Aug 19
• SUP 2: 4343.81 50-day EMA
• SUP 3: 4320.46 61.8% retracement of the Jul 19 - Aug 16 rally
• SUP 4: 4224.00 Low Jul 19 and key support

S&P E-minis outlook is bullish however a corrective cycle appears to be dominating for now. If correct it suggests the contract will weaken near-term following this week's move lower. Price has traded below the 20-day EMA reinforcing a short-term bearish theme and this opens the 50-day EMA that intersects at 4343.81 and is a key support. A break of the 50-EMA would strengthen a bearish case. Key resistance is at 4476.50, Aug 16 high.

COMMODITIES

BRENT TECHS: (V1) Through Key Support

• RES 4: $75.65 - High Jul 30
• RES 3: $73.55 - High Aug 3
• RES 2: $71.90 - High Aug 12 and a key resistance
• RES 1: $68.14/70.04 - Low Aug 16 / High Aug 18
• PRICE: $66.67 @ 07:04 BST Aug 20
• SUP 1: $65.57 - Low Aug 19
• SUP 2: $63.89 - Low May 21 and a key support
• SUP 3: $63.43 - 1.236 proj of the Jul 6 - 20 - 30 price swing
• SUP 4: $62.71 - Low Apr 22

Brent futures remain weak. The contract has cleared key former support at $66.91, Jul 20 low. The breach of this bear trigger strengthens a bearish case and signals scope for a deeper retracement. Moving average studies remain in bull mode, just though and a switch would highlight a stronger bearish threat. The focus is on $63.89, May 21 low. Initial resistance to watch is $70.04, Aug 18 high.

WTI TECHS: (V1) Remains Vulnerable

• RES 4: $71.29 - High Aug 3
• RES 3: $69.39 - High Aug 12 and key near-term resistance
• RES 2: $68.10 - 20-day EMA
• RES 1: $65.00 - Aug 9 low
• PRICE: $63.87 @ 07:22 BST Aug 20
• SUP 1: $62.41 - Low Aug 19
• SUP 2: $60.81 - 1.236 proj of the Jul 6 - 20 - 30 price swing
• SUP 3: $60.68 - Low May 21
• SUP 4: $59.56 - Low Apr 22

WTI futures remain bearish. The contract has cleared the former key support at $64.49, Jul 20 low. The break of this bear trigger strengthens a bearish case and signals scope for a deeper retracement. Moving average studies remain in bull mode, however a confirmed switch to bearish would reinforce a stronger bearish threat. Key resistance has been defined at $69.39, Aug 12 high. Initial resistance is at $65.00, Aug 9 low.

GOLD TECHS: 50-Day EMA Remains Intact

• RES 4: $1863.3 - High Jun 16
• RES 3: $1853.3 - 61.8% retracement of the Jun 1 - 29 decline
• RES 2: $1834.1 - High Jul 15 and the bull trigger
• RES 1: $1797.1 - 50-day EMA
• PRICE: $1787.2 @ 07:17 BST Aug 20
• SUP 1: $1751.7 - Low Aug 13
• SUP 2: $1717.8 - Low Aug 10
• SUP 3: $1690.6 - Low Aug 08 and the bear trigger
• SUP 4: $1689.9 - 61.8% retracement of the 2020 Range

Gold is consolidating and remains closer to recent highs. The yellow metal has this week traded through the 20-day EMA and sights are set on the 50-day EMA that intersects at $1797.1 today. A breach of this average would strengthen a bullish chase and suggest scope for gains towards the key resistance at $1834.1, the Jul 15 high. On the downside, initial support is seen at $1751.7, the Aug 13 low.

SILVER TECHS: Needle Points South

• RES 4: $26.467 - High Jul 14
• RES 3: $26.002 - High Aug 04 and a key resistance
• RES 2: $25.186 - 50-day EMA
• RES 1: $24.276 - 20-day EMA
• PRICE: $23.303 @ 07:21 BST Aug 20
• SUP 1: $22.626 - Low Aug 09 and the bear trigger
• SUP 2: $21.775 - 3.0% Lower Bollinger Band
• SUP 3: $21.899 - Low Nov 30, 2020
• SUP 4: $20.871 - 50% retracement of the Mar '20 - Jan '21 rally

Silver remains vulnerable. Bearish moving average conditions continue to highlight a bearish theme and note too that recent price action since Aug 9, still appears to be a flag - a bearish formation. A break and close below the Aug 9 low of $22.626 would confirm a resumption of bearish pressure and open a key Fibonacci support at 20.871, 50% of the Mar '20 - Feb '21 range. The 20-day EMA at $24.276 marks resistance.