MNI DAILY TECHNICAL ANALYSIS - USDCAD Shooting Star Reversal

Price Signal Summary -

• On the equity front, S&P E-minis have extended their recovery and traded at fresh all-time highs this week. This confirms a resumption of the underlying uptrend and attention turns to the 4500.00 handle. EUROSTOXX 50 key support has been defined at 4078.00, Aug 19 low.
• In the FX space, the USD remains in an uptrend and this week's weakness is considered corrective. EURUSD last week cleared 1.1704, Mar 31 low. This signals scope for a move to 1.1621 next, 1.00 projection of the Jan 6 - Mar 31 - May 25 price swing. Firm resistance to watch is 1.1805, Aug 13 high. GBPUSD remains vulnerable despite Monday's strong bounce. The focus is on the bear trigger at 1.3572, Jul 20 low. Resistance is at 1.3786, Aug 18 high. Friday's price pattern in USDCAD is a bearish shooting star candle and Monday's weak close reinforces the bearish pattern. An extension would expose 1.2512, the 50-day EMA.
• On the commodity front, Gold has cleared its 50-day EMA at $1796.50. The break signals scope for a climb towards $1834.1, Jul 15 high and a bull trigger. WTI futures support has been defined at $61.74, Aug 23 low. Note, Monday's price action appears to be a bullish engulfing reversal. Further gains would open $68.13, the 50-day EMA.
• In FI, Bunds support to watch is unchanged at 176.21, Aug 11 low. Trend conditions remain bullish. The bull trigger is 177.61, Aug 05 high. The Gilt futures outlook is bullish too and attention is on 130.72, Aug 4 high and the bull trigger. The support to watch is at 129.16, the 50-day EMA.

FOREIGN EXCHANGE

EURUSD TECHS: Holding Onto Recent Gains

• RES 4: 1.1909 High Jul 30
• RES 3: 1.1836 50-day EMA
• RES 2: 1.1805 High Aug 13 and key short-term resistance
• RES 1: 1.1765 High Aug 24
• PRICE: 1.1742 @ 06:07 BST Aug 25
• SUP 1: 1.1664 Low Aug 20 and the bear trigger
• 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 is holding onto the bulk of recent gains. The recent bounce is still considered corrective and trend conditions remain bearish. Last week saw the pair clear 1.1704, Mar 31 low. This confirms a resumption of the downtrend and opens 1.1603 next, the Nov 4, 2020 low. Below here, the immediate post pandemic highs at 1.1495 would attract. It also represents a strong psychological and pivot support. Key S/T resistance is at 1.1805.

GBPUSD TECHS: Holding Onto Recent Gains

• 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: 1.3843 50-day EMA
• RES 1: 1.3786 High Aug 18
• PRICE: 1.3722 @ 06:12 BST Aug 25
• SUP 1: 1.3602 Low Aug 20
• 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 traded sharply higher Monday and is holding onto its gains. A bearish theme still dominates though. This follows last week's sell-off that reinforces a bearish condition. Price is trading below the 50-day EMA and attention is on key support at 1.3572, Jul 20 low. For bulls, a convincing recovery back above the 50-day EMA at 1.3843 is required to ease the current bearish pressure. Initial resistance is at 1.3786, Aug 18 high.

EURGBP TECHS: Corrective Cycle

• 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: 0.8593/94 100-dma / High Aug 23
• PRICE: 0.8557 @ 06:20 BST Aug 25
• SUP 1: 0.8533/06 20-day EMA / Low Jul 19
• SUP 2: 0.8484/50 Low Aug 16 / Low Aug 10 and the bear trigger
• SUP 3: 0.8443 1.0% 10-dma envelope
• SUP 4: 0.8430 Low Feb 27, 2020

EURGBP is consolidating close to recent highs. Last week the cross traded back through both the 20- and 50-day EMAs. This signals scope for further gains near-term. Attention is on the 100-dma next at 0.8593 that was briefly probed Monday. Gains are still considered corrective though and from a trend perspective, the outlook is bearish. A return lower and a break of initial firm support at 0.8506, Aug 19 low would signal a resumption of bearish pressure.

USDJPY TECHS: Trading In A Tight Range

• 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: 109.73 @ 06:23 BST Aug 25
• SUP 1: 109.41 Low Aug 24
• 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 76.4% of the Apr 23 - Jul 2 rally

USDJPY is stuck in a range. 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: Needle Still Points 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 / High Aug 23
• PRICE: 128.86 @ 06:28 BST Aug 25
• 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 trend conditions remain bearish. Last week's key technical development was the break of 128.60, Jul 20 low. This confirmed a resumption of the current downtrend paving the way for an extension of the bearish cycle. Note too that the move lower also confirmed a clear breach of the 200-dma. Attention is on 127.88, 38.2% of the Oct '20 - Jun rally. Initial firm resistance is at 129.71.

AUDUSD TECHS: Bounce Considered Corrective

• 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: 0.7271 High Aug 24
• PRICE: 0.7245 @ 06:31 BST Aug 25
• SUP 1: 0.7106 Low Aug 20 and the bear trigger
• 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 traded higher again Tuesday, having started the week on a firm note. Gains however are considered corrective. The breach of 0.7290 last 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 seen at 0.7290, low Jul 21.

USDCAD TECHS: Trades Below The 20-Day EMA

• 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: 1.2834/ 2949 High Aug 23 / High Aug 20 and the bull trigger
• PRICE: 1.2612 @ 06:35 BST Aug 25
• SUP 1: 1.2579 Low Aug 24
• SUP 2: 1.2512 50-day EMA
• SUP 3: 1.2422 Jul 30 low
• SUP 4: 1.2303 Low Jul 6

USDCAD traded sharply lower Monday and remained soft yesterday, extending the pullback from Friday's high of 1.2949. From a pattern perspective, Friday's activity is a bearish shooting star candle. Monday's sell-off and particularly the weak close, reinforces this pattern and highlights a short-term reversal. Price has traded below the 20-day EMA and this opens 1.2512, the 50-day EMA. Key resistance has been defined at 1.2949.

FIXED INCOME

BUND TECHS: (U1) Still In Consolidation Mode

• 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: 176.76 @ 05:18 BST Aug 25
• SUP 1: 176.21 Low Aug 11
• SUP 2: 175.82 Low Jul 27
• SUP 3: 175.34/24 50-day EMA / Low Jul 22
• SUP 4: 174.77/45 High Jul 8 / Low Jul 15

Bund futures are consolidating. The outlook remains positive with moving average studies in a bull mode. Momentum has been in overbought territory recently however this does not appear to be a concern for bulls at this stage of the uptrend. Support is unchanged 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 would confirm a resumption of the uptrend.

BOBL TECHS: (U1) Holding Above Support

• RES 4: 136.657 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 and the bull trigger
• PRICE: 135.300 @ 05:25 BST Aug 25
• SUP 1: 135.140 Low Aug 13
• SUP 2: 134.955 50-day EMA
• SUP 3: 134.570 Low Jul 15
• SUP 4: 134.410 Low Jul 13 and a key support

Bobl futures continue to trade sideways. The recent pullback between Aug 5 - 13 is considered corrective. Moving average studies remain in a bull mode and a price sequence of higher highs and higher lows continues to dominate, highlighting a bullish trend condition. 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) Trend Outlook Remains Bullish

• 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: 112.320 @ 05:18 BST Aug 25
• SUP 1: 112.295 Low Aug 13 and 16
• SUP 2: 112.281 50-day EMA
• SUP 3: 112.245 Low Jul 21
• SUP 4: 112.210 Low Jul 20

Schatz futures are unchanged and continue to trade above recent lows. The contract recently probed its 20-day EMA and further weakness would open the 50-day EMA at 112.281. The broader uptrend remains intact however 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) Still Looking For Gains

• 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: 130.44 200-dma (cont)
• PRICE: 130.11 @ Close Aug 24
• SUP 1: 129.23/22 50-day EMA / Low Aug 6
• SUP 2: 128.54/39 Low Jul 14 / High Jun 11
• SUP 3: 128.03 Jul 6
• SUP 4: 127.87 Low Jul 1

The Gilt futures needle continues to point north. Recent gains stalled ahead of the 200-dma and the contract touched a high of 130.72 on Aug 4. The pullback that followed from 130.72 is considered corrective with key support at the 50-day EMA, currently at 129.23. The bull trigger is unchanged at 130.72 with the 200 dma at 130.44 (cont) also representing a key hurdle for bulls. A clear break of the 50-day EMA would alter the picture.

BTP TECHS: (U1) Support Remains Intact

• RES 4: 157.53 1.382 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 3: 156.73 1.236 proj of May 19 - Jun 14 - Jun 25 price swing
• RES 2: 155.93 3.0% Upper Bollinger Band
• RES 1: 155.71 High Aug 5 and the bull trigger
• PRICE: 154.98 @ Close Aug 24
• SUP 1: 154.54 Low Aug 11
• SUP 2: 154.52 Bull channel base drawn off the May 19 low
• SUP 3: 153.59 50-day EMA
• SUP 4: 151.93 High Jul 8

BTP futures remain in its recent range. The trend is up with moving average studies holding a bull position. Furthermore, a positive price sequence of higher highs and higher lows continues to dominate. The recent high of 155.71 on Aug 5 marks the bull trigger. A break would confirm a resumption of the uptrend and open 155.93, a Bollinger band ceiling. Initial support lies at 154.54, Aug 11 low.

EQUITIES

EUROSTOXX 50 TECHS: (U1) Holding Onto Recent Gains

• RES 4: 4294.20 1.236 proj of the May 13 - Jun 17 - Jul 19 price swing
• RES 3: 4267.43 2.0% 10-dma envelope
• RES 2: 4238.50 High Aug 13 and the bull trigger
• RES 1: 4200.60 76.4% retracement of the Aug 13 - 19 sell-off
• PRICE: 4173.50 @ 06:02 BST Aug 25
• SUP 1: 4078.00 Low Aug 19 and the bear trigger
• 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 futures continue to trade closer to recent highs. Gains since Aug 19 suggest the sell-off between Aug 13 - 19 has been a correction and that this correction is over. A key support has been defined at 4078.00, Aug 19 low. While it holds, scope is seen for an extension of gains and a retest of 4238.50, the Aug 13 high and bull trigger. On the downside, a break of 4078.00 would instead reinstate a bearish theme.

E-MINI S&P (U1): Bullish Trend Conditions

• RES 4: 4580.21 1.382 proj of Jun 21 - Jul 14 - 19 price swing
• RES 3: 4542.58 1.236 proj of Jun 21 - Jul 14 - 19 price swing
• RES 2: 4500.00 Round number resistance
• RES 1: 4492.00 High AUg 24
• PRICE: 4482.00 @ 06:58 BST Aug 25
• SUP 1: 4424.69 20-day EMA
• SUP 2: 4357.58 50-day EMA
• SUP 3: 4347.75 Low Aug 19 and the bear trigger
• SUP 4: 4224.00 Low Jul 19 and key support

S&P E-minis outlook remains bullish and the contract traded to a fresh all-time high Monday of 4485.75. The move higher confirms a resumption of the uptrend. The contract's recent recovery from 4347.75, Aug 19 low means the 50-day EMA remains intact. This average intersects at 4357.58 and represents a key support area. A clear break of the 50-day EMA is required to signal a short-term reversal. Bullish.

COMMODITIES

BRENT TECHS: (V1) Sharp Reversal Extends

• RES 4: $74.50 - Bear channel top drawn off the Jul 6 high.
• RES 3: $73.55 - High Aug 3
• RES 2: $71.90 - High Aug 12 and key near-term resistance
• RES 1: $71.27 - High Aug 24
• PRICE: $70.93 @ 06:40 BST Aug 25
• SUP 1: $68.53 - Low Aug 24
• SUP 2: $64.60 - Low Aug 23
• SUP 3: $63.89 - Low May 21 and a key support
• SUP 4: $63.43 - 1.236 proj of the Jul 6 - 20 - 30 price swing

Brent futures rallied Monday and extended the climb Tuesday. The recovery has defined a key short-term support at $64.60, Aug 23 low where a break is required to reinstate a bearish theme. Short-term, the outlook appears bullish and Monday's price pattern is a bullish engulfing candle. Further gains would open $71.90, the Aug 12 high. A break of this hurdle would strengthen bullish conditions.

WTI TECHS: (V1) Remains Firm

• RES 4: $71.29 - High Aug 3
• RES 3: $69.39 - High Aug 12 and key near-term resistance
• RES 2: $68.13 - 50-day EMA
• RES 1: $67.80 - High Aug 24
• PRICE: $67.40 @ 07:05 BST Aug 25
• SUP 1: $65.41 - Low Aug 24
• SUP 2: $61.74 - Low Aug 23
• SUP 3: $60.81 - 1.236 proj of the Jul 6 - 20 - 30 price swing
• SUP 4:$60.68 - Low May 21

WTI futures have rallied this week and remain firm. The recovery from Monday's low has defined a key short-term support at $61.74, Aug 23 low where a break is required to reinstate a bearish theme. Short-term, the outlook appears bullish and Monday's price pattern is a bullish engulfing candle. Further gains would open the 50-day EMA at $68.13. A break of the average would strengthen bullish conditions.

GOLD TECHS: Bullish Conditions Hold

• 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: $1809.6 - High Aug 23
• PRICE: $1795.9 @ 07:18 BST Aug 25
• SUP 1: $1774.5 - Low Aug 19
• SUP 2: $1751.7 - Low Aug 13
• SUP 3: $1717.8 - Low Aug 10
• SUP 4: $1690.6 - Low Aug 08 and the bear trigger

Gold traded higher Monday and in the process cleared the 50-day EMA at $1796.50. The break confirms a resumption of the upleg that started Aug 9. This signals scope for a climb towards resistance at $1834.1, Jul 15 high and a bull trigger. On the downside, initial support has been defined at $1774.5, Aug 19 low. A move below this support would be bearish and signal a short-term reversal.

SILVER TECHS: Trend Outlook Remains Bearish

• RES 4: $26.467 - High Jul 14
• RES 3: $26.002 - High Aug 04 and a key resistance
• RES 2: $24.997 - 50-day EMA
• RES 1: $24.083 - 20-day EMA
• PRICE: $23.736 @ 07:23 BST Aug 25
• SUP 1: $22.626 - Low Aug 09 and the bear trigger
• SUP 2: $21.899 - Low Nov 30, 2020
• SUP 3: $20.871 - 50% retracement of the Mar '20 - Jan '21 rally
• SUP 4: $20.000 - Psychological round number

Silver traded higher Monday but remains vulnerable. Moving average conditions continue to highlight a bearish theme and note too that 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 $24.083 marks resistance.