MNI DAILY TECHNICAL ANALYSIS - USDJPY Gains Appear Corrective

Price Signal Summary - USDJPY Bear Threat Remains Present And Gains Appear Corrective

• In the equity space, S&P E-Minis traded lower late last week and the contract started this week on a bearish note - Monday’s move lower marks an extension of the bear cycle. The move down has resulted in a print below 5185.50, 76.4% of the Apr 19 - Jul 16 bear leg. A clear break of this level would open 5092.00 next, the May 2 low. Monday’s intraday high of 5345.50 marks initial resistance. Gains are considered corrective - for now. A bear threat in EUROSTOXX 50 futures remains present and the contract traded lower Monday having started the week on a bearish note. Last week’s sell-off resulted in a break of 4846.00, the Apr 19 low. The breach highlights a stronger reversal and signals scope for an extension towards 4478.81 next, the 2.236 projection of the Jun 6 - 14 - Jul 12 price swing. First resistance is 4720.53, 38.2% of the Jul 12 - Aug 5 bear leg.
• In FX, EURUSD maintains a positive tone following recent gains and the break of key short-term resistance and bull trigger at 1.0948, the Jul 17 high. The move higher confirms a resumption of the uptrend and opens 1.1012 next, 76.4% of the Dec 28 ‘23 - Apr 16 downleg. Initial support to watch lies at 1.0860, the 20-day EMA. A pullback is considered corrective. GBPUSD traded lower Tuesday and remains in bear-mode condition. Last week’s move down resulted in a break of the 50-day EMA - at 1.2786 - and a breach of a trendline at 1.2777, drawn from the Apr 22 low. The clear break of the EMA and the trendline, suggests scope for an extension towards 1.2672 next, 50.0% of the Apr 22 - Jul 17 bull cycle.. A break would confirm a resumption of the bear leg. On the upside, initial resistance to watch is at 1.2824, the 20-day EMA. USDJPY remains bearish and last week’s sell-off, plus Monday’s impulsive move lower, reinforces this condition. This paves the way for an extension towards the next key support at 140.25, the Dec 28 ‘23 low. Note that the pair is in an extreme oversold condition, and the latest recovery - a correction - is allowing this condition to unwind. Initial resistance is seen at 149.77, the Aug 2 high.
• On the commodity front, recent weakness in Gold appears to be a correction - for now. However, note that the yellow metal has managed to pierce support at the 50-day EMA - at $2375.3. A clear break of this average would signal scope for a deeper retracement towards $2277.4, the May 3 low and a key support. For bulls, a resumption of gains would open $2483.7, the Jul 17 high and a bull trigger. Clearance of this hurdle would resume the uptrend. In the oil space, a bear threat in WTI futures remains present and the contract traded lower Monday, extending the current downtrend. Sights are on the next key support at $72.23, the Jun 4 low. It has been pierced, a clear break would reinforce bearish conditions and pave the way for an extension towards $70.73, the Feb 5 low. Key resistance is seen at $78.88, the Aug 1 high. Short-term gains would allow an oversold condition to unwind.
• In the FI space, a bull cycle in Bund futures remains in play and the latest rally reinforces current conditions. 133.21, the Jun 14 high, was cleared last week, confirming a resumption of the uptrend. MA studies are in a bull-mode position, highlighting a rising trend. Sights are on 136.45, 76.4% of the Dec 27 - May 31 downleg (cont). The contract is off Monday’s high, an extension lower would allow an overbought condition to unwind. Firm support is 133.07, 20-day EMA. Gilt futures traded higher last week, marking a confirmation of the uptrend that started May 29. Monday's high print reinforces current conditions. Note that 99.23, the Jun 21 high, has been cleared. Scope is seen for a climb towards 101.78, the 2.236 projection of the May 29 - Jun 4 - 10 price swing. Initial key support lies at 99.23, the Jun 21 high. The latest pullback is considered corrective and is allowing an overbought trend condition to unwind.

Equity Technical Focus: Correction Or Reversal In The S&P 500 And NASDAQ 100?

A steep and impulsive bear cycle has dominated price action in the equity space. This has confirmed a bearish short-term trend condition. A look at longer-term charts highlight some important technical considerations.

S&P 500 Index (SPX)

• Looking at MA studies, the medium and long-term trend remains up. In the chart attached, the 200-day EMA - a long-term trend identifier - maintains a positive slope and for now at least, price continues to trade above this average.
• Furthermore, the 20- and 50-day EMAs are in a bull-mode set-up - 20 day EMA above the 50-day EMA. This relationship highlights the medium-term trend structure.
• The chart also highlights an important support - the Apr 19 low of 4953.56.
• A clear break of the 200-day EMA and support at 4956.56, would be regarded as an important bearish development.
• The last time price tested support at the 200-day EMA, was Oct-Nov 2023. This example illustrates an additional key technical feature - if price is unable to remain below the EMA once breached, a false break is likely to lead to a resumption of the uptrend.
• While support holds, there is a strong likelihood that the recent steep drop in price is part of a fast correction.

NASDAQ 100 Index (NDX)

• The MA structure is very similar in the Nasdaq index.
• MA studies are in a bull-mode set-up, however, the Aug 5 sell-off has resulted in a break of the 200-day EMA. A clear break is still required and price will need to remain below EMA and extend lower to highlight a more important medium-term reversal threat.
• The 200-day EMA currently lies at 17919.38. A key support has also been defined at 16973.94, the Apr 19 low. The area between these two price points represents a key support zone.

Short-Term Considerations

• Both Indices are oversold and a recovery would allow this condition to unwind.
• Key resistance is seen at:
  • SPX: 5425.40 - the 50-day EMA
  • NDX: 19298.07 - the 50-day EMA
• The 50-day EMA is an important resistance where a break would highlight a bullish development and a potential resumption of the primary uptrend.

EURUSD TECHS: Corrective Pullback

• RES 4: 1.1139 High Dec 29 ‘ 23 and a key resistance
• RES 3: 1.1084 High Dec 29
• RES 2: 1.1046 High Jan 2
• RES 1: 1.1012 76.4% retracement of the Dec 28 ‘23 - Apr 16 downleg
• PRICE: 1.0912 @ 06:11 BST Aug 7
• SUP 1: 1.0893 Low Aug 5
• SUP 2: 1.0860 20-day EMA
• SUP 3: 1.0830 50-day EMA
• SUP 4: 1.0778 Low Aug 1 and a key support

EURUSD maintains a positive tone following recent gains and the break of key short-term resistance and bull trigger at 1.0948, the Jul 17 high. The move higher confirms a resumption of the uptrend and opens 1.1012 next, a Fibonacci retracement. Key short-term support has been defined at 1.0778, last Thursday’s low. A pullback would be considered corrective. Initial support to watch lies at 1.0860, the 20-day EMA.

GBPUSD TECHS: Bear Leg Extends

• RES 4: 1.3044 High Jul 17 and the bull trigger
• RES 3: 1.2968 High Jul 19
• RES 2: 1.2938 High Jul 24
• RES 1: 1.2824 20-day EMA
• PRICE: 1.2705 @ 06:25 BST Aug 7
• SUP 1:1.2672 50.0 retracement of the Apr 22 - Jul 17 bull cycle
• SUP 2: 1.2613 Low Jun 27 and a key support
• SUP 3: 1.2584 50.0 retracement of the Apr 22 - Jul 17 bull cycle
• SUP 4: 1.2510 Low May 14

GBPUSD traded lower Tuesday and remains in a bear-mode condition. Last week’s move down resulted in a break of the 50-day EMA - at 1.2786 - and a breach of a trendline at 1.2777, drawn from the Apr 22 low. The clear break of the EMA and the trendline, suggests scope for an extension towards 1.2672 next, a Fibonacci projection. A break would confirm a resumption of the bear leg. On the upside, initial resistance to watch is at 1.2824, the 20-day EMA.

EURGBP TECHS: Vertical Rally

• RES 4: 0.8715 High Dec 28
• RES 3: 0.8677 76.4% retracement of the Nov 20 ‘23 - Jul 17 bear leg
• RES 2: 0.8645 High Apr 23 and a key resistance
• RES 1: 0.8620 High Aug 5
• PRICE: 08587 @ 06:29 BST Aug 7
• SUP 1: 0.8517/0.8499 Low Aug 5 / High Jul 1
• SUP 2: 0.8471 50-day EMA
• SUP 3: 0.8453 20-day EMA
• SUP 4: 0.8418 Low Aug 1

EURGBP traded higher last week and the cross maintains a firmer tone with Monday’s strong gains also reinforcing bullish conditions. The latest rally has resulted in the break of a number of key resistance points. This cancels the recent bearish theme and highlights potential for 0.8645, the Apr 23 high and a key resistance. Initial firm support to watch lies at 0.8471, the 50-day EMA. First support lies at 0.8517, the Aug 5 low.

USDJPY TECHS: Trend Needle Points South

• RES 4: 155.15 50-day EMA
• RES 3: 152.59 20-day EMA
• RES 2: 149.77 High Aug 2
• RES 1: 147.90 Intraday high
• PRICE: 147.14@ 06:50 BST Aug 7
• SUP 1: 141.70/140.82 Low Aug 5 / Low Jan 2
• SUP 2: 140.25 Low Low Dec 28 ‘23 and a key support
• SUP 3: 140.00 Psychological round number
• SUP 4: 138.07 Low Dec 28

USDJPY remains bearish and last week’s sell-off, plus Monday’s impulsive move lower, reinforces this condition. This paves the way for an extension towards the next key support at 140.25, the Dec 28 ‘23 low. Note that the pair is in an extreme oversold condition, and the latest recovery - a correction - is allowing this condition to unwind. Initial resistance is seen at 149.77, the Aug 2 high.

EURJPY TECHS: Corrective Bounce

• RES 4: 168.43 50-day EMA
• RES 3: 166.53 20-day EMA
• RES 2: 162.89 High Aug 1
• RES 1: 161.59 High Aug 2
• PRICE: 160.37 @ 07:07 BST Aug 7
• SUP 1: 154.42 Low Aug 5
• SUP 2: 153.87 Low Dec 14 ‘23
• SUP 3: 153.23 Low Dec 7 ‘23 and a key support
• SUP 4: 151.42 Low Jul 28 ‘23

EURJPY traded sharply lower Monday marking an extension of the current impulsive bear cycle, before recovering from the session low. The move down signals scope for an extension towards the next key support at 153.23, the Dec 7 ‘23 low. A break of this price point would strengthen a bearish theme. Note that the cross is in an extreme oversold position. A recovery would allow this to unwind. Initial resistance is seen at 161.59, the Aug 2 high.

AUDUSD TECHS: Watching Resistance

• RES 4: 0.6702 High Jul 22
• RES 3: 0.6621 50-day EMA
• RES 2: 0.6589 20-day EMA
• RES 1: 0.6565 Intraday high
• PRICE: 0.6546 @ 08:08 BST Aug 7
• SUP 1: 0.6472/6350 Low Aug 6 / 5
• SUP 2: 0.6339 Low Nov 10’23
• SUP 3: 0.6315 Low Oct 31 ‘23
• SUP 4: 0.6270 Low Oct 26 ‘23 and a key support

A bearish theme is AUDUSD remains intact and the pair initially traded sharply lower Monday, before recovering. Price action is volatile and continues to recover from the recent low. Monday’s low print highlights a test of key support at 0.6463, the Apr 19 low. A clear break of this level would reinforce a bearish theme and signal scope for an extension towards 0.6339, the Nov 10 ‘23 low. Initial resistance is at 0.6589, the 20-day EMA.

USDCAD TECHS: Bullish Trend Structure

• RES 4: 1.4048 High May 22 2020
• RES 3: 1.4000 Round number resistance
• RES 2: 1.3977 High Oct 13, 2022
• RES 1: 1.3856/3946 High Aug 6 / 5
• PRICE: 1.3773 @ 08:11 BST Aug 7
• SUP 1: 1.3730 50-day EMA
• SUP 2: 1.3657 Low Jul 17
• SUP 3: 1.3589 Low Jun 11 and a key support
• SUP 4: 1.3547 Low Apr 9

Trend conditions in USDCAD remain bullish and recent gains reinforce this theme. The move higher has resulted in a break of key resistance at 1.3846, the Apr 16 high. This signals scope for a climb towards 1.3977, the Oct 13 ‘22 high. The pair has pulled back from Monday’s intraday high. Note that the trend condition is overbought and a deeper pullback would allow this condition to unwind. First support to watch is 1.3730, the 50-day EMA.

FIXED INCOME

BUND TECHS: (U4) Pullback Considered Corrective

• RES 4: 137.26 3.50 projection of the May 31 - Jun 5 - 1 price swing
• RES 3: 136.99 3.382 projection of the May 31 - Jun 5 - 1 price swing
• RES 2: 136.45 76.4% of the Dec 27 - May 31 downleg (cont)
• RES 1: 136.28 High Aug 5
• PRICE: 134.56 @ 05:48 BST Aug 7
• SUP 1: 133.77 Low Aug 1
• SUP 2: 133.25 20-day EMA
• SUP 3: 132.45/131.62 50-day EMA / Low Jul 22 and a key support
• SUP 4: 131.39 Low Jul 15

A bull cycle in Bund futures remains in play and the latest rally reinforces current conditions. 133.21, the Jun 14 high, was cleared last week, confirming a resumption of the uptrend. MA studies are in a bull-mode position, highlighting a rising trend. Sights are on 136.45, a Fibonacci retracement. The contract is off Monday’s high, an extension lower would allow an overbought condition to unwind. Firm support is 133.07, 20-day EMA.

BOBL TECHS: (U4) Bull Cycle Remains In Play

• RES 4: 120.000 Psychological round number
• RES 3: 119.730 2.00 proj of the May 31 - Jun 14 - Jul 5 price swing
• RES 2: 119.234 1.764 proj of the May 31 - Jun 14 - Jul 5 price swing
• RES 1: 119.090 High Aug 5
• PRICE: 117.930 @ 06:03 BST Aug 7
• SUP 1: 117.249 20-day EMA
• SUP 2: 116.320 Low Jul 22
• SUP 3: 115.980 Low Jul 10 / 11
• SUP 4: 115.530 Low Jul and the key short-term support

Bobl futures remain in an uptrend and the pullback from Monday’s high is considered corrective, and is allowing an overbought condition to unwind. Recent gains resulted in a break of key resistance at the Jun 14 high of 117.160. This break, together with the subsequent impulsive rally, reinforces current conditions. Sights are on 119.234, a Fibonacci projection. On the downside, initial firm support lies at 117.249, the 20-day EMA.

SCHATZ TECHS: (U4) Support Remains Intact

• RES 4: 107.120 2.00 proj of the May 24 - Jun 14 - Jul 5 price swing
• RES 3: 107.000 Round number resistance
• RES 2: 106.916 1.764 proj of the May 24 - Jun 14 - Jul 5 price swing
• RES 1: 106.810 High Aug 5
• PRICE: 106.285 @ 06:16 BST Aug 7
• SUP 1: 105.994 20-day EMA
• SUP 2: 105.630 Low Jul 22
• SUP 3: 105.495 Low Jul 11
• SUP 4: 105.390 Low Jul 5 and a key support

The current uptrend in Schatz futures remains intact. The contract has recently traded through resistance at 105.975, the Jun 14 high. The clear break of this hurdle confirmed a resumption of the bull cycle that started May 24. Sights are on 106.916, a Fibonacci projection. Firm support to watch lies at 105.994, the 20-day EMA, and 105.630, the Jul 22 low. A clear break of the 20-day EMA would be seen as a bearish development.

GILT TECHS: (U4) Unwinding An Overbought Condition

• RES 4: 102.15 2.382 proj of the May 29 - Jun 4 - 10 price swing
• RES 3: 102.00 Roun number resistance
• RES 2: 101.78 2.236 proj of the May 29 - Jun 4 - 10 price swing
• RES 1: 101.46 High Aug 4
• PRICE: 99.96 @ Close Aug 6
• SUP 1: 99.23 High Jun 21
• SUP 2: 98.84/97.46 20-day EMA / Low Jul 26 and a key support
• SUP 3: 96.96 Low Jul 3
• SUP 4: 96.57 Low Jul 1

Gilt futures traded higher last week, marking a confirmation of the uptrend that started May 29. Monday's high print reinforces current conditions. Note that 99.23, the Jun 21 high, has been cleared. Scope is seen for a climb towards 101.78, a Fibonacci projection point. Initial key support lies at 99.23, the Jun 21 high. The latest pullback is considered corrective and is allowing an overbought trend condition to unwind.

BTP TECHS: (U4) Bull Trend Remains Intact

• RES 4: 120.85 2.236 proj of the Jun 11 - 21 - Jul 2 price swing
• RES 3: 120.20 2.00 proj of the Jun 11 - 21 - Jul 2 price swing
• RES 2: 120.00 Psychological round number
• RES 1: 119.57 High Aug 2
• PRICE: 119.02 @ Close Aug 6
• SUP 1: 118.22/117.56 20- and 50-day EMA values
• SUP 2: 116.07 Low Jul 8
• SUP 3: 114.72 Low Jul 2
• SUP 4: 114.35 Low Jun 11 and key support

BTP futures traded higher last week and the medium-term trend remains positive with the contract holding on to its recent gains. A continuation higher would signal scope for a climb towards the 120.00 handle next. Initial firm support is seen at 118.22 the 20-day EMA. The 50-day EMA lies at 117.56. A clear break of both averages would instead highlight a bearish threat and a potential reversal.

US 10YR FUTURE TECHS: (U4) Bull Cycle Remains In Play

• RES 4: 116-00 Round number resistance
• RES 3: 115-30+ 2.764 proj of the Apr 25 - May 16 - 29 price swing
• RES 2: 115-17 2.618 proj of the Apr 25 - May 16 - 29 price swing
• RES 1: 115-03+ High Aug 5
• PRICE: 113-16+ @ 16:48 BST Aug 6
• SUP 1: 112-21/01+ Low Aug 2 / 1
• SUP 2: 111-21+/110-27+ 20- and 50-day EMA values
• SUP 3: 109-17+ Low Jul 5
• SUP 4: 109-05 Trendline drawn from the Apr 25 low

Treasuries traded sharply higher last week and remain firm. Monday's gains reinforce the current bullish condition. Note that MA studies are in a bull-mode position too and the recent breach of 111-01, Jun 14 high, confirmed a resumption of the uptrend. Scope is seen for 115-17, a Fibonacci projection. Initial support is 112-21, Friday’s intraday low. The contract has pulled back from yesterday’s high, a move lower is considered corrective.

EQUITIES

EUROSTOXX50 TECHS: (U4) Bearish Threat Remains Present

• RES 4: 4913.13 50-day EMA
• RES 3: 4831.66 20-day EMA
• RES 2: 4770.00 High Aug 2
• RES 1: 4720.53 38.2% retracement of the Jul 12 - Aug 5 bear leg
• PRICE: 4649.00 @ 06:27 BST Aug 7
• SUP 1: 4494.00 Low Aug 5
• SUP 2: 4478.81 2.236 proj of the Jun 6 - 14 - Jul 12 price swing
• SUP 3: 4424.64 61.8% of the Oct 27 ‘23 - May 16 bull cycle (cont)
• SUP 4: 4502.00 Low Jan 24 (cont)

A bear threat in Eurostoxx 50 futures remains present and the contract traded lower Monday having started the week on a bearish note. Last week’s sell-off resulted in a break of 4846.00, the Apr 19 low. The breach highlights a stronger reversal and signals scope for an extension towards 4478.81 next, a Fibonacci projection. Firm resistance is 4913.13, the 50-day EMA. First resistance is 4720.53, a Fibonacci retracement.

E-MINI S&P TECHS: (U4) Bear Threat Remains Present

• RES 4: 5721.25 High Jul 16 and Key resistance
• RES 3: 5600.75 High Aug 1
• RES 2: 5474.83 50-day EMA
• RES 1: 5345.50 High Aug 5
• PRICE: 5290.00 @ 07:22 BST Aug 7
• SUP 1: 5120.00 Low Aug 5
• SUP 2: 5185 50.76.4% retracement of the Apr 19 - Jul 16 bull leg
• SUP 3: 5092.00 Low May 2
• SUP 4: 5020 Low Apr 19 and a key support

S&P E-Minis traded lower late last week and the contract started this week on a bearish note - Monday’s move lower marks an extension of the bear cycle. The move down has resulted in a print below 5185.50, 76.4% of the Apr 19 - Jul 16 bear leg. A clear break of this level would open 5092.00 next, the May 2 low. Monday’s intraday high of 5345.50 marks initial resistance. The 50-day EMA, a firmer level, is at 5474.83. Gains are considered corrective - for now.

COMMODITIES

BRENT TECHS: (V4) Oversold But Bears Remain In The Driver’s Seat

• RES 4: $88.44 - High Apr 12 and the bull trigger
• RES 3: $87.05 - High Jul 5
• RES 2: $84.66 - High Jul 18
• RES 1: $77.95/81.61 - Low Jul 30 / 50-day EMA
• PRICE: $76.60 @ 07:05 BST Aug 7
• SUP 1: $74.96 - Low Feb 5
• SUP 2: $73.31 - Low Dec 13 2023 and a key support
• SUP 3: $70.00 - Psychological round number
• SUP 4: $67.60 - 1.618 proj of the Apr 12 - Jun 4 - Jul 5 price swing

A bear cycle in Brent futures remains in play and last week’s move lower reinforces current conditions. The contract has also traded through a key support this week, at 76.42, the Jun 4 low. This signals scope for a continuation lower with sights on $74.96 next, the Feb 5 low. The contract is oversold, however any short-term bounce would be considered corrective. Initial firm resistance is seen at $81.61, the 50-day EMA.

WTI TECHS: (U4) Pierces Key Support

• RES 4: $84.36 - High Apr 12 and the bull trigger
• RES 3: $83.58 - High Jul 5
• RES 2: $82.27 - High Jul 18
• RES 1: $74.59/78.88 - Low Jul 30 / High Aug 1
• PRICE: $73.23 @ 07:19 BST Aug 7
• SUP 1: $71.67 - Low Aug 5
• SUP 2: $70.73 - Low Feb 5
• SUP 3: $69.16 - Low Dec 13 2023
• SUP 4: $67.37 - 1.382 proj of the Apr 12 - Jun 4 - Jul 5 price swing

A bear threat in WTI futures remains present and the contract traded lower Monday, extending the current downtrend. Sights are on the next key support at $72.23, the Jun 4 low. It has been pierced, a clear break would reinforce bearish conditions and pave the way for an extension towards $70.73, the Feb 5 low. Key resistance is seen at $78.88, the Aug 1 high. Short-term gains would allow an oversold condition to unwind.

GOLD TECHS: Trend Structure Remains Bullish

• RES 4: $2575.4 - 3.236 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 3: $2528.4 - 3.00 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 2: $2500.0 - Round number resistance
• RES 1: $2483.7 - High Jul 17 and the bull trigger
• PRICE: $2392.1 @ 07:20 BST Aug 7
• SUP 1: $2353.2 - Low Jul 25
• SUP 2: $2286.9 - Low Jun 7
• SUP 3: $2277.4 - Low May 3 and a pivot support
• SUP 4: $2228.6 - Low Apr 1

Recent weakness in Gold appears to be a correction - for now. However, note that the yellow metal has managed to pierce support at the 50-day EMA - at $2375.3. A clear break of this average would signal scope for a deeper retracement towards $2277.4, the May 3 low and a key support. For bulls, a resumption of gains would open $2483.7, the Jul 17 high and a bull trigger. Clearance of this hurdle would resume the uptrend.

SILVER TECHS: Approaching A Key Support

• RES 4: $35.226 - 50.0% of the Apr 2011 - Mar 2020 bear leg
• RES 3: $33.880 - 1.00 proj of the Jan 22 - Apr 12 - May 2 price swing
• RES 2: $32.518 - High May 20 and bull trigger
• RES 1: $29.125/31.754 - 50-day EMA / High Jul 11
• PRICE: $26.901 @ 08:19 BST Aug 7
• SUP 1: $26.505 - Low Aug 5
• SUP 2: $26.018 - Low May 2 and a key support
• SUP 3: $24.328 - Low Mar 27
• SUP 4: $22.277 - Low Feb 28

A bearish cycle in Silver remains intact and Monday’s move lower reinforces current conditions. The metal has traded to a fresh short-term cycle low and this has exposed the next key support at $26.018, the May 2 low. A clear break of this level would strengthen a bearish theme. Initial firm resistance has been defined at $29.125, the 50-day EMA. A clear break of this average is required to highlight a possible reversal.