MNI DAILY TECHNICAL ANALYSIS - USDJPY Remains Bullish Despite Corrective Dip

Price Signal Summary – USDJPY Remains Bullish Despite Corrective Dip

• In the equity space, S&P E-minis rallied again yesterday, registering fresh all-time highs. This confirms a resumption of the uptrend and paves the way for an extension. The focus is on 4591.25, a Fibonacci projection. EUROSTOXX 50 futures rallied yesterday and traded just short of the key resistance at 4223.00, the Sep 6 high and a key bull trigger. This week's recovery reinforces a bullish theme and confirms an extension of the bull phase since Oct 6.
• In FX, EURUSD remains below recent highs however so far, the pullback is a shallow one and appears to be a correction. A short-term corrective bull tone remains intact and recent gains still suggest scope for an extension higher. The focus is on 1.1687, the 50-day EMA. GBPUSD is consolidating and trading near recent highs. The recent pullback appears to be a shallow correction and this reinforces a bullish theme. The rally from late September remains intact and the recent breach of the 50-day EMA and last week's extension signals scope for further gains.
• On the commodity front, Gold maintains a positive short-term tone despite yesterday's pullback and remains above the 50-day EMA. The yellow metal recently cleared resistance at $1800.6, Oct 14 high and this highlights a short-term bullish theme. WTI trend conditions remain bullish and futures started the week on a firm note. Fresh trend highs Monday maintain the bullish price sequence of higher highs and higher lows, reinforcing the uptrend.
• In the FI space, trend conditions remain bearish and short-term gains are considered corrective. Bund futures remain in a downtrend and the break last week of 168.21, Oct 12 low marks a resumption of the bear trend. This opens 167.79 next, a Fibonacci projection and 167.52, the Mar 19, 2020 low (cont). Gilt futures remain in a downtrend and this week's bounce is considered corrective. Last week's fresh trend low of 123.43, on Oct 21, confirmed a resumption of the downtrend.

FOREIGN EXCHANGE

EURUSD TECHS: Short-Term Bull Cycle Remains Intact

• RES 4: 1.1821 High Sep 16
• RES 3: 1.1716/55 Bear channel from Jun 1 high / High Sep 22
• RES 2: 1.1687 50-day EMA
• RES 1: 1.1669 High Oct 19
• PRICE: 1.1603 @ 06:04 BST Oct 27
• SUP 1: 1.1572/24 Low Oct 18 / 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: 1.1376 Bear channel base drawn from the Jun 1 high

EURUSD remains below recent highs however so far, the pullback is a shallow one and appears to be a correction. A short-term corrective bull tone remains intact and recent gains still suggest scope for an extension higher. The focus is on 1.1687, the 50-day EMA. There is a key resistance at 1.1716, the top of a bear channel drawn from the Jun 1 high. Broader trend conditions remain bearish below channel resistance. Key support to watch is 1.1524.

GBPUSD TECHS: Consolidation Mode

• RES 4: 1.3983 High Jul 30
• RES 3: 1.3958 High Aug 4
• RES 2: 1.3913 High Sep 14 and a key resistance
• RES 1: 1.3835 High Oct 20
• PRICE: 1.3772 @ 06:10 BST Oct 27
• SUP 1: 1.3713 20-day EMA
• SUP 2: 1.3655 Low Oct 14
• SUP 3: 1.3544 Low Oct 6
• SUP 4: 1.3476/12 2.0% 10-dma env / Low Sep 29 and bear trigger

GBPUSD is consolidating and trading near recent highs. The recent pullback appears to be a shallow correction and this reinforces a bullish theme. The rally from late September remains intact and the recent breach of the 50-day EMA and last week's extension signals scope for further gains. Price has traded above 1.3795, 76.4% of the Sep 14 -29 downleg. The focus is on 1.3913, Sep 14 high. A firm S/T support is at 1.3713, the 20-day EMA.

EURGBP TECHS: Remains Vulnerable

• RES 4: 0.8624/58 High Oct 1 / High Sep 29
• RES 3: 0.8515 50-day EMA
• RES 2: 0.8518 High Oct 12 and a firm resistance
• RES 1: 0.8478 20-day EMA
• PRICE: 0.8427 @ 06:24 BST Oct 27
• SUP 1: 0.8400 Round number support
• SUP 2: 0.8363 1.0% 10-dma envelope
• SUP 3: 0.8356 Low Feb 26, 2020
• SUP 4: 0.8339 Low Feb 25, 2020

EURGBP traded under pressure Tuesday and remains vulnerable. The cross has breached support at 0.8422, Oct 21/22 low and this has confirmed a resumption of the current downtrend. The break lower paves the way for weakness below 0.8400 towards 0.8363, a vol based support and 0.8356, the Feb 26, 2020 low. Note that the cross is also approaching the base of a broad multi-year range at 0.8300. Initial firm resistance is 0.8483, the 20-day EMA.

USDJPY TECHS: Trend Conditions Remain Bullish

• RES 4: 116.08 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.51 High Mar 10, 2017
• RES 2: 114.99 1.50 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 114.70/73 High Oct 20 / High Nov 6, 2017
• PRICE: 114.04 @ 06:30 BST Oct 27
• SUP 1: 113.01 20-day EMA
• 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 remains in an uptrend and dips are considered corrective. The pair recently cleared a long-term trendline (at 113.41) drawn off the Dec 1975 high. This represents an important technical break and momentum and moving average studies continue to point north. Attention is on 114.99 next, a Fibonacci projection. Initial firm support is seen at 112.08, Sep 30 high and a recent breakout level.

EURJPY TECHS: Pullback Considered Corrective

• 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: 133.76 High Jun 10
• RES 1: 133.48 High Oct 20
• PRICE: 132.31 @ 06:39 BST Oct 27
• SUP 1: 131.81/131.37 Low Oct 15 / 20-day EMA
• SUP 2: 130.75 Sep 3 high
• SUP 3: 130.50 50-day EMA
• SUP 4: 129.28 Low Oct 11

EURJPY is off recent highs. Recent weakness is still considered corrective. And last week's climb confirmed an extension of the upleg from Oct 6. The cross has also recently cleared 130.75, the Sep 3 high and a bull trigger strengthening bullish conditions. The focus is on 133.76 next, Jun 10 high and key resistance at 134.13, Jun 1 high. Initial support is at 131.81, Oct 15 low. The 20-day EMA, as support, intersects at 131.37.

AUDUSD TECHS: Eyeing Resistance

• RES 4: 0.7716 High Jun 16
• RES 3: 0.7630 1.236 proj of the Aug 20 - Sep 3 - Sep 29 price swing
• RES 2: 0.7599 High Jul 6
• RES 1: 0.7546/57 High Oct 21 / 50.0% of the Feb - Aug sell-off
• PRICE: 0.7515 @ 06:46 BST Oct 27
• SUP 1: 0.7454 Low Oct 22
• SUP 2: 0.7402/7370 20-day EMA / 50-day EMA
• SUP 3: 0.7288 Low Oct 8
• SUP 4: 0.7226/7170 Low Oct 6 / Low Sep 29

AUDUSD is firmer this week but remains below recent highs. 0.7478, the Sep 3 high and an important short-term bull trigger was cleared last week. The breach of this hurdle strengthens a bullish case and confirms a positive price sequence of higher highs and higher lows - the current bull phase started August 20. This has opened 0.7599 next, the Jul 6 high. Firm support is seen at 0.7370, the 50-day EMA.

USDCAD TECHS: Bear Flag Formation

• RES 4: 1.2648 High Oct 6
• RES 3: 1.2525 50-day EMA
• RES 2: 1.2494 Low Sep 3 and a recent breakout level
• RES 1: 1.2410 High Oct 18
• PRICE: 1.2391 @ 06:51 BST Oct 27
• SUP 1: 1.2288 Low Oct 21
• SUP 2: 1.2253 Low Jun 23
• SUP 3: 1.2229 76.4% retracement of the Jun - Aug rally
• SUP 4: 1.2157 Low Jun 16

USDCAD continues to consolidate and recent price action still appears to be a bear flag. This reinforces current bearish conditions. A bear theme follows the recent break of the Jul 30 low of 1.2422 that has opened 1.2253 next, the Jun 23 low. Note too that moving average conditions remain in a bear mode, reinforcing current trend conditions. Initial firm resistance is seen at 1.2494, Sep 3 low. A break would ease bearish pressure.

FIXED INCOME

BUND TECHS: (Z1) Corrective Cycle

• RES 4: 171.72 High Sep 23
• RES 3: 170.36 50-day EMA
• RES 2: 170.55 High Oct 4
• RES 1: 169.27/92 20-day EMA / High Oct 14 and key resistance
• PRICE: 168.68 @ 05:16 BST Oct 27
• SUP 1: 167.79 2.50 proj of the Sep 9 - 17 - 21 price swing
• SUP 2: 167.52 Low Mar 19 2020
• SUP 3: 166.33 Low May 21 2019
• SUP 4: 165.94 Low May 10 2019

Bund futures gains are considered corrective. The contract remains in a downtrend and the break last week of 168.21, Oct 12 low marks a resumption of the bear trend. This opens 167.79 next, a Fibonacci projection and 167.52, the Mar 19, 2020 low (cont). Moving average signals continue to point south, reinforcing current trend conditions. Key trend resistance is seen at 169.92, the Oct 14 high. A break would signal a reversal.

BOBL TECHS: (Z1) Needle Still Points South

• RES 4: 135.200 Low Sep 17, high Oct 4 and recent breakout level
• RES 3: 135.060 High Oct 7
• RES 2: 134.860 High Oct 14 and key resistance
• RES 1: 134.579 20-day EMA
• PRICE: 134.140 @ 05:17 BST Oct 27
• SUP 1: 133.800 Low Feb 26 and a key support
• SUP 2: 133.772 1.236 proj of the Oct 4 - 13 - 14 price swing
• SUP 3: 133.340 Low Mar 19 and key medium-term support
• SUP 4: 133.308 1.764 proj of the Oct 4 - 13 - 14 price swing

Bobl futures downtrend remains intact and recent gains are considered corrective. Last week's sell-off confirmed a resumption of the underlying downtrend and reinforces bearish conditions. Key short-term trend resistance has been defined at 134.860, Oct 14 high and a breach of this level is required to signal scope for a short-term reversal. With momentum still pointing south, the focus is on 133.772 next, a Fibonacci projection.

SCHATZ TECHS: (Z1) Trend Signals Remain Bearish

• RES 4: 112.290 High Sep 20
• RES 3: 112.255 High Sep 23 and Oct 5 and key near-term resistance
• RES 2: 112.220 High Oct 14
• RES 1: 112.162 20-day EMA
• PRICE: 112.120 @ 05:12 BST Oct 27
• SUP 1: 112.025 2.00 proj of the Sep 20 - 28 - Oct 5 price swing
• SUP 2: 112.00 Round number support
• SUP 3: 111.990 Low Aug 14 and 26, 2020 (cont)
• SUP 4: 111.967 2.50 proj of the Sep 20 - 28 - Oct 5 price swing

From a trend perspective, the trend in Schatz futures remains down. although recent price action has been volatile and a corrective phase has dominated since Oct 20. Fresh lows last week reinforce the downtrend and confirm a resumption of the downtrend that maintains the bearish price sequence of lower lows and lower highs. The focus is on 112.025 next, a Fibonacci projection. On the upside, initial resistance is at 112.162, the 20-day EMA.

GILT TECHS: (Z1) Remains Below Key Resistance

• RES 4: 126.84 Low Sep 17
• RES 3: 126.44 High Sep 24
• RES 2: 125.72 High Oct 1
• RES 1: 124.74/125.27 20-day EMA / High Oct 14 and key resistance
• PRICE: 124.44 @ Close Oct 26
• SUP 1: 123.43 Low Oct 21 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 in a downtrend and this week's bounce is considered corrective. Last week's fresh trend low of 123.43, on Oct 21, confirmed a resumption of the downtrend. With momentum and MA conditions still pointing south, fresh bearish pressure would open 123.16 next, the Feb 27 2019 low. A break of the 123.00 handle is also likely near-term. Key resistance has been defined at 125.27, the Oct 14 high.

BTP TECHS: (Z1) Bear Cycle Intact

• RES 4: 154.64 High Sep 22 / 23
• RES 3: 153.59 High Sep 24
• RES 2: 152.54/87 High Oct 14 and key resistance / High Oct 1
• RES 1: 151.74 20-day EMA
• PRICE: 151.00 @ Close Oct 26
• SUP 1: 150.38 Low Oct 22 and the bear trigger
• SUP 2: 150.00/149.97 Round number support / Low Jun 25
• SUP 3: 149.76 0.764 proj of the Sep 23 - Oct 6 - 14 price swing
• SUP 4: 148.77 61.8% retracement of the May - Aug rally (cont)

BTP futures outlook remains bearish and futures are trading closer to recent lows. A key short-term resistance has been defined at 152.54, Oct 14 high where a break is required to signal a short-term base. With trend signals such as momentum and moving average studies still pointing south, a resumption of weakness would open the 150.00 handle next. A break of this level is also seen likely further out. 151.81 is resistance.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Approaching Key Resistance

• RES 4: 4400.00 Round number resistance
• RES 3: 4385.00 1.236 proj of Mar 19- Jul 21-Oct 30 2020 swing (cont)
• RES 2: 4290.50 1.00 proj of the Jul 19 - Sep 6 - Oct 6 price swing
• RES 1: 4223.00 High Sep 6 and the bull trigger
• PRICE: 4202.50 @ 05:55 BST Oct 27
• SUP 1: 4113.60 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 rallied yesterday and traded just short of the key resistance at 4223.00, the Sep 6 high and a key bull trigger. This week's recovery reinforces a bullish theme and confirms an extension of the bull phase since Oct 6. A break of 4223.00 would confirm a resumption of the broader uptrend and open 4290.50, a Fibonacci projection. On the downside, the 50-day EMA, at 4113.60 today, marks an initial key support.

E-MINI S&P (Z1): Bulls Firmly In Control

• RES 4: 4687.32 1.382 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4650.60 1.236 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 3: 4600.00 Round number resistance
• RES 1: 4591.25 1.00 proj of Jul 19 - Aug 16 - Aug 19 price swing
• PRICE: 4571.50 @ 06:57 BST Oct 27
• SUP 1: 4472.00 High Sep 27 and a recent breakout level
• SUP 2: 4409 06 50-day EMA
• SUP 3: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger
• SUP 4: 4243.50 Low Jul 20

S&P E-minis rallies again yesterday, registering fresh all-time highs. This confirms a resumption of the uptrend and paves the way for an extension. The focus is on 4591.25, a Fibonacci projection. Trend signals such as moving average studies remain in a bull mode and this reinforces current trend conditions. A key support is at 4317.25, Oct 12 low. The 50-day EMA at 4425.41 represents an initial firm support handle.

COMMODITIES

BRENT TECHS: (Z1) Bullish Focus

• RES 4: $90.93 - 2.236 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 3: $90.00 - Psychological round number
• RES 2: $88.74 - 2.00 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 1: $86.70/87.00 - High Oct 25 / Round number resistance
• PRICE: $85.74 @ 06:54 BST Oct 27
• SUP 1: $83.36 - Low Oct 21
• SUP 2: $82.92/20 - 20-day EMA / Low Oct 13
• SUP 3: $79.08/78.75 - Low Oct 7 and key support / Low Oct 4
• SUP 4: $76.51/75.42 - Low Sep 30 and key support / High Sep 15

Brent futures are consolidating. The bull trend remains intact and the contract started this week on a firm note. Fresh highs once again Monday confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies remain in a bull mode and the focus is on $87.00 next. Initial firm short-term support is seen at $82.92, the 20-day EMA.

WTI TECHS: (Z1) Holding Onto The Bulk Of Recent Gains

• RES 4: $88.96 - 1.382 proj of the Sep 21 - Oct 6 - 7 price swing
• RES 3: $87.45 - 1.236 proj of the Sep 21 - Oct 6 - 7 price swing
• RES 2: $86.00 - Round number resistance
• RES 1: $85.41 - High Oct 25 and the bull trigger
• PRICE: $83.89 @ 07:00 BST Oct 27
• SUP 1: $80.78 - Low Oct 20
• SUP 2: $80.10/78.78 - 20-day EMA / Low Oct 13
• SUP 3: $74.67 - Low Oct 7 and key near-term support
• SUP 4: $73.92 - Low Oct 1

WTI trend conditions remain bullish and futures started the week on a firm note. Fresh trend highs Monday maintain the bullish price sequence of higher highs and higher lows, reinforcing the uptrend. Note that the $80.00 psychological hurdle has also recently been cleared, an important break. The focus is on $86.00 next. On the downside, a firm short-term support has been defined at $80.78, Oct 20 low and represents a key near-term level.

GOLD TECHS: Positive Short-Term Tone

• RES 4: $1863.3 - 76.4% retracement of the Jun - Aug sell-off
• RES 3: $1844.9 - Low Jun 14
• RES 2: $1834.0 - High Sep 3 and the bull trigger
• RES 1: $1813.8 - High Oct 22 and key short-term resistance
• PRICE: $1788.2 @ 07:19 BST Oct 27
• SUP 1: $1777.7/1760.4 - 50-day EMA / Low Oct 18
• SUP 2: $1746.0 - Low Oct 6 and key near-term support
• SUP 3: $1721.7 - Low Sep 29 and the bear trigger
• SUP 4: $1717.8 - Low Aug 10

Gold maintains a positive short-term tone despite yesterday's pullback and remains above the 50-day EMA. The yellow metal recently cleared resistance at $1800.6, Oct 14 high and this highlights a short-term bullish theme. Further gains would open $1834.0, the Sep 3 high. On the downside, a key short-term support has been defined at $1760.4, the Oct 18 low. A break would alter the picture and instead suggest scope for a deeper pullback.

SILVER TECHS: Pullback Considered Corrective

• RES 4: $26.002 - High Aug 4
• RES 3: $25.206 - High Jun 8
• RES 2: $24.867 - High Sep 3 and the reversal trigger
• RES 1: $24.828 - High Oct 22
• PRICE: $23.983 @ 07:21 BST Oct 27
• SUP 1: $23.015 - Low Oct 18
• SUP 2: $22.213 - Low Oct 6
• SUP 3: $21.423 - Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar '20 - Feb '21 rally

The current bull cycle in Silver remains intact and recent dips are considered corrective. The metal has recently cleared both the 20- and 50 day EMAs. The extension higher paves the way for $24.867, the Sep 3 high and a key near-term resistance. Clearance of this hurdle would strengthen the case for bulls and open the $26.00 handle. Initial firm support to watch is at $23.015, Oct 18 low. A break would threaten the current bullish theme.