MNI DAILY TECHNICAL ANALYSIS - USDJPY Trend Points South

MNI (LONDON) - Price Signal Summary - JPY Bulls Remain In The Driver’s Seat     

• In the equity space, recent weakness in S&P E-Minis highlighted the start of a corrective cycle. The contract remains in a bear-mode condition, despite this week’s gains, and scope is seen for a deeper retracement near-term. An extension lower would open 5330.00, 61.8% retracement of the Aug 5 - Sep 3 bull leg. Initial firm resistance to watch is 5535.19, the 20-day EMA. EUROSTOXX 50 futures traded lower last week and a bearish tone - a correction - remains intact for now. Last Friday’s sharp sell-off signals scope for an extension lower and sights are on 4686.53, 61.8% of the Aug 5 - Sep 3 bull cycle. First resistance is at 4872.22, the 50-day EMA.                                                                                                      
• In FX, the move lower this week in EURUSD resulted in a breach of the 20-day EMA and a move through support at 1.1026, the Sep 3 low. A clear break of 1.1026 would signal scope for a deeper correction towards the 50-day EMA, at 1.0979. Clearance of the 50-day EMA would undermine the bullish theme. Key short-term resistance has been defined at 1.1155, the Sep 6 high. GBPUSD traded lower Tuesday, extending the bear cycle that started Aug 27. The move down is considered corrective and this is allowing a recent overbought condition to unwind. Support at the 20-day EMA, at 1.3075, has been pierced. A clear break would signal scope for a deeper retracement, potentially towards the 50-day EMA, at 1.2961. For bulls, a reversal higher would refocus attention on key short-term resistance at 1.3266, Aug 27 high. USDJPY bears remain in the driver’s seat. The move down today has resulted in a break of key support and the bear trigger at 141.70, the Aug 5 low. The breach confirms a resumption of the downtrend and sights are on 140.25, the Dec 28 ‘23 low. Initial firm resistance is seen at 145.24, the 20-day EMA.        
• On the commodity front, Gold continues to trade inside a range but remains closer to its recent highs. The trend direction remains up. Sights are on $2536.4 next, a 1.50 projection of the Jul 25 - Aug 2 - Aug 5 price swing. The 20-day EMA has recently been pierced. The next firm support to watch is $2451.0, the 50-day EMA. Short-term weakness is considered corrective. In the oil space, WTI futures remain in a bearish condition. Tuesday’s strong sell-off reinforces current conditions and confirms an extension of the bear cycle. A continuation lower would open $63.93 next,  1.618 projection of the Apr 12 - Jun 4 - Jul 5 price swing. Short-term gains would be considered corrective. Firm resistance is at $72.01, the 20-day EMA.                                                                                                                                                                                                 
• In the FI space, Bund futures have traded higher today and this confirms a resumption of the bull cycle that started Sep 2. The contract has breached 134.95, 76.4% of the Aug 5 - Sep 2 bear leg, and this exposes the key resistance and bull trigger at 135.66, the Aug 5 high. On the downside, initial firm support lies at 133.87, the 20-day EMA. Gilt futures traded higher Tuesday and the contract remains firm, as it rallies today and, this confirms an extension of the current bull cycle. The climb has resulted in a break of 100.30, the Aug 14 high. This resumes the uptrend and maintains the price sequence of higher highs and higher lows. 101.78 marks the next objective, 1.00 projection of the Sep 2 - 6 - 9 price swing. On the downside, firm short-term support has been defined 99.29, the Sep 9 low.

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