MNI DAILY TECHNICAL ANALYSIS - Watching The Double Bottom In Gilts

Price Signal Summary - Watching The Double Bottom In Gilts

• In the equity space, S&P E-minis continue to defy gravity and have registered another all-time high. The focus is on 4687.32 next, 1.382 projection of Jul 19 - Aug 16 - Aug 19 price swing. EUROSTOXX 50 futures maintain a bullish tone. Attention is on 4371.00, 1.236 projection of Jul 19-Sep 6-Oct 6 2020 swing (cont)
• In FX, EURUSD remains below recent highs and the outlook is bearish. The move lower on Oct 29 - a bearish engulfing candle - highlights a failure to clear the 50-day EMA and means the bear channel top at 1.1686 today, remains intact. The channel is drawn off the Jun 1 high. The focus is on 1.1524, Oct 12 low and bear trigger. GBPUSD is softer. A deeper pullback would open 1.3544, the Oct 6 low and highlight a potential resumption of the downtrend. USDJPY remains below recent highs but above support at 113.42-00, the 20-day EMA and Oct 12 low respectively. A break would signal scope for a deeper pullback. The trend for now remains up.
• On the commodity front, Gold traded lower yesterday and breached $1772.0, the Oct 29 low. The break lower highlights a developing bearish risk and exposes support at $1760.4, Oct 18 low that was also probed. A clear break of this level would signal scope for a pullback towards $1721.7, Sep 29 low. Yesterday's sell-off in WTI resulted in a breach of $80.58, Oct 28 low and the contract cleared the 20-day EMA. This has opened the 50-day EMA at $77.10. Key resistance has been defined at $85.41, the Oct 25 high.
• In the FI space, short-term gains in Bund futures are considered corrective, however watch resistance at 169.83, Oct 27 high. A break would alter the picture and suggest scope for a stronger recovery. The focus in Gilts is on the potential double bottom reversal following last week's breach of 125.27, Oct 14 high. If correct, the pattern signals scope for a climb towards 126.39, 50.0% retracement of the Aug - Oct downleg. Support is at 124.25, Nov 1 low. Key support has been defined at 123.43, Oct 21 low.

FOREIGN EXCHANGE

EURUSD TECHS: Bearish Threat

• RES 4: 1.1821 High Sep 16
• RES 3: 1.17155 / High Sep 22
• RES 2: 1.1686 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1617/92 Intraday high / High Oct 28
• PRICE: 1.1582 @ 06:06 GMT Nov 4
• SUP 1: 1.1535/24 Low Oct 29 / 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: 1.1346 Bear channel base drawn from the Jun 1 high

EURUSD is unchanged and is consolidating. A bearish risk remains present following the Oct 29 sharp sell-off that highlighted a failure to clear the 50-day EMA and more importantly, means the bear channel top - a key resistance - at 1.1686 today, remains intact. A channel breakout is required to signal a trend reversal. The focus is on 1.1524, Oct 12 low and the bear trigger. A break of this level would confirm a resumption of the downtrend.

GBPUSD TECHS: Remains Vulnerable

• 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: 1.3719/3835 50-day EMA / High Oct 20
• PRICE: 1.3655 @ 06:12 GMT Nov 4
• SUP 1: 1.3574 61.8% retracement of the Sep 29 - Oct 20 rally
• SUP 2: 1.3544 Low Oct 6
• SUP 3: 1.3512/3452 76.4% of Sep 29-Oct 20 rally / 2.0% 10-dma env
• SUP 4: 1.3412 / Low Sep 29 and bear trigger

GBPUSD recovered Wednesday however the near-term outlook is bearish. Recent weakness has resulted in a move back below both the 20- and 50-day EMAs. A continued pullback would open 1.3544, Oct 16 low and highlight a likely resumption of the broader downtrend. Key S/T resistance has been defined at 1.3835, Oct 20 high where a break would instead confirm a resumption of the recent upleg and open 1.3913 once again, Sep 14 high.

EURGBP TECHS: Eyeing The 50-Day EMA

• RES 4: 0.8624/58 High Oct 1 / High Sep 29
• RES 3: 0.8599 76.4% retracement of the Sep 29 - Oct 26 sell-off
• RES 2: 0.8561 61.8% retracement of the Sep 29 - Oct 26 sell-off
• RES 1: 0.8507/14 50-day EMA / High Nov 2
• PRICE: 0.8481 @ 06:22 GMT Nov 4
• SUP 1: 0.8441/8403 Low Nov 1 / Low Oct 26 and the bear trigger
• SUP 2: 0.8375/56 1.0% 10-dma envelope / Low Feb 26, 2020
• SUP 3: 0.8339 Low Feb 25, 2020
• SUP 4: 0.8282 Feb 2020 low and a major support

Recent gains in EURGBP resulted in a move above the 20-day EMA and attention is on the 50-day EMA at 0.8507. This EMA has been probed. A clear break of it would improve short-term conditions for bulls and signal scope for a stronger near-term recovery. This would open 0.8561, 61.8% of the Sep 29 - Oct 26 sell-off. The trigger for a resumption of weakness is unchanged at 0.8403.

USDJPY TECHS: Still In Consolidation Mode

• 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: 114.17 @ 06:26 GMT Nov 4
• SUP 1: 113.42/00 20-day EMA / Low Oct 12
• 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 consolidation mode. Attention is on 113.42, the 20-day EMA and 113.00, the Oct 12 low. A break of this support zone would signal scope for a deeper pullback and open 112.08, Sep 30 high and a recent breakout level. Any deeper short-term sell-off though would be considered corrective. Primary trend conditions remain bullish and the trigger for a resumption of the uptrend is 114.70, Oct 20 high.

EURJPY TECHS: Hovering Ahead Of The 20-Day EMA

• 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: 132.92/133.48 High Oct 29 / High Oct 20
• PRICE: 132.26 @ 06:29 GMT Nov 4
• SUP 1: 131.48 Low Nov 2
• SUP 2: 130.92/75 50-day EMA / Sep 3 high
• SUP 3: 129.28 Low Oct 11
• SUP 4: 128.94 Low Oct 8

EURJPY continues to trade just above its 20-day EMA. Attention is on this EMA that intersects at 131.74 and was probed Tuesday. A clear break of it would suggest scope for a deeper corrective pullback and expose 130.75, Sep3 high and a recent key breakout level. Note that 130.92 is where the 50-day EMA intersects - a key short-term support. Broader trend signals continue to point north, the trigger for a resumption of gains is 133.48.

AUDUSD TECHS: Trading Near This Week's Lows

• 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: 0.7555/57 200-dma / 50.0% of the Feb - Aug sell-off
• PRICE: 0.7437 @ 06:33 GMT Nov 4
• SUP 1: 0.7412 Low Nov 3
• SUP 2: 0.7324/7397 Low Oct 13 / 50-day EMA
• SUP 3: 0.7288 Low Oct 8
• SUP 4: 0.7226/7170 Low Oct 6 / Low Sep 29

AUDUSD TECHS: Trading Near This Week's Lows

• 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: 0.7555/57 200-dma / 50.0% of the Feb - Aug sell-off
• PRICE: 0.7437 @ 06:33 GMT Nov 4
• SUP 1: 0.7412 Low Nov 3
• SUP 2: 0.7324/7397 Low Oct 13 / 50-day EMA
• SUP 3: 0.7288 Low Oct 8
• SUP 4: 0.7226/7170 Low Oct 6 / Low Sep 29

AUDUSD traded lower again yesterday the pair appears vulnerable for now. Dips though are considered corrective. Last week's breach of 0.7546, Oct 21 high confirmed a resumption of the uptrend and opens the 200-dma at 0.7555. Clearance of this average would strengthen bullish conditions and extend the positive price sequence of higher highs and higher lows. Firm support to watch is seen at 0.7397, the 50-day EMA.

USDCAD TECHS: Bear Flag Formation

• RES 4: 1.2648 High Oct 6
• RES 3: 1.2562 High Oct 8
• RES 2: 1.2494 Low Sep 3 and recent breakout level and 50-day EMA
• RES 1: 1.2457 High Nov 3
• PRICE: 1.2405 @ 06:35 GMT Nov 4
• SUP 1: 1.2288 Low Oct 21 and the bear trigger
• 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, following a failure to hold Wednesday's gains. Recent activity still appears to be a bear flag. If correct, it reinforces current bearish conditions and signals scope for a break lower near-term. A bearish theme follows the recent break of the Jul 30 low of 1.2422 that has opened 1.2253 next, Jun 23 low. Moving average conditions remain in a bear mode. Initial firm resistance is seen at 1.2494, Sep 3 low.

FIXED INCOME

BUND TECHS: (Z1) Remains Below Resistance

• RES 4: 170.55 High Oct 4
• RES 3: 170.05 50-day EMA
• RES 2: 169.83 High Oct 27 and key resistance
• RES 1: 169.70 High Nov 3
• PRICE: 169.17 @ 05:22 GMT Nov 4
• SUP 1: 167.69 Low Nov 1
• SUP 2: 167.52 Low Mar 19 2020 (cont)
• SUP 3: 166.33 Low May 21 2019 (cont)
• SUP 4: 166.16 2.50 proj of the Oct 14 - 22 - 27 price swing

Bund futures remain below recent highs and despite this week's gains, the trend condition remains bearish. The contract registered a fresh trend low of 167.69 Monday. This maintains the bearish price sequence of lower lows and lower highs. With momentum and moving average signals in a bear mode, scope is seen for weakness towards 167.52 next, Mar 19 2020 low (cont). Key short-term resistance has been defined at 169.83, Oct 27 high.

BOBL TECHS: (Z1) Probes Key S/T Resistance

• 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
• RES 1: 134.740 Intraday high
• PRICE: 134.650 @ 09:46 GMT Nov 4
• SUP 1: 133.900/690 Low Nov 2
• SUP 2: 133.340 Low Mar 19 and key medium-term support (cont)
• SUP 3: 133.308 1.764 proj of the Oct 4 - 13 - 14 price swing
• SUP 4: 133.100 2.00 proj of the Oct 4 - 13 - 14 price swing

Bobl futures remain closer to this week's highs. The recent bounce though is considered corrective. A bearish tone follows last week's move lower and fresh trend low prints. This maintains the price sequence of lower lows and lower highs. Key short-term trend resistance at 134.610, Oct 28 high was probed yesterday. A clear break of this hurdle is required to signal a potential short-term reversal. Key support and the bear trigger is at 133.690.

SCHATZ TECHS: (Z1) Holding Onto This Week's Gains

• RES 4: 112.290 High Sep 20
• RES 3: 112.255 High Sep 23 and Oct 5
• RES 2: 112.220 High Oct 14
• RES 1: 112.210 Intraday high
• PRICE: 112.185 @ 09:48 GMT Nov 4
• SUP 1: 112.050/111.945 Low Nov 2 / Low Oct 28
• SUP 2: 111.925 1.236 proj of the Oct 14 - 19 - 26 price swing
• SUP 3: 111.897 1.382 proj of the Oct 14 - 19 - 26 price swing
• SUP 4: 111.865 Low Jun 5/8 2020 low (cont)

From a trend perspective, Schatz futures remain bearish and this week's bounce is considered corrective. The recent break of 112.030, Oct 19 low confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. This signals scope for weakness towards 111.865, the Jun 5 / 8, 2020 low. Resistance at 112.160, Oct 26 high has been probed, a clear break would alter the short-term picture.

GILT TECHS: (Z1) Reversal Pattern Still In Play

• RES 4: 127.09 61.8% retracement of the Aug - Oct downleg
• RES 3: 126.84 Low Sep 17
• RES 2: 126.39 50.0% retracement of the Aug - Oct downleg
• RES 1: 125.87 High Oct 27
• PRICE: 124.80 @ Close Nov 3
• SUP 1: 124.25 Low Nov 1
• SUP 2: 123.43 Low Oct 21 and the bear trigger
• SUP 3: 123.16 Low Feb 27, 2019 (cont)
• SUP 4: 122.75 2.236 proj of the Aug 31 - Sep 17 - 21 price swing

Gilt futures remain above Monday's 124.25 low. Attention is on last week's breach of 125.27, Oct 14 high. The close above this former resistance highlights a double bottom reversal. If correct, it sets the scene for an extension higher near-term above 126.00 towards 126.39, a retracement level. Key trend support has been defined at 123.43, Oct 21 low. A break would resume the recent downtrend. Initial support is at 124.25.

BTP TECHS: (Z1) Corrective Bounce

• RES 4: 154.64 High Sep 22 / 23
• RES 3: 153.59 High Sep 24
• RES 2: 152.54/87 High Oct 14 / High Oct 1
• RES 1: 150.81/151.89 20-day EMA / High Oct 27 and key resistance
• PRICE: 150.27 @ Close Nov 3
• SUP 1: 148.14/147.12 Low Nov 2 / Low Nov 1 and the bear trigger
• SUP 2: 146.65 1.618 proj of the Sep 23 - Oct 6 - 14 price swing
• SUP 3: 146.12 1.764 proj of the Sep 23 - Oct 6 - 14 price swing
• SUP 4: 145.26 2.00 proj of the Sep 23 - Oct 6 - 14 price swing

BTP futures have found some support this week and again traded higher yesterday. A S/T recovery considered a correction and trend conditions continue to highlight a bearish theme. Lows earlier this week maintain and extend the bearish price sequence of lower lows and lower highs. With moving average studies pointing south, the focus is on 146.65, a Fibonacci projection. Key resistance has been defined at 151.89, Oct 27 high.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Heading North

• RES 4: 4448.00 High Jan 2, 2008 (cont)
• RES 3: 4400.00 Round number resistance
• RES 2: 4385.00 1.236 proj of Mar 19- Jul 21-Oct 30 2020 swing (cont)
• RES 1: 4333.00 Intraday high
• PRICE: 4321.50 @ 06:00 GMT Nov 4
• SUP 1: 4223.50 High Sep 6 and a recent breakout level
• SUP 2: 4178.00/4144.20 Low Oct 29 / 50-day EMA
• SUP 3: 4004.00 / 3949.50 Low Oct 12 / Low Oct 6 and bear trigger
• SUP 4: 3902.50 Low Jul 20

The EUROSTOXX 50 futures uptrend remains firmly intact as price heads north. The contract has recently cleared former key resistance at 4223.00, the Sep 6 high and a key bull trigger. The break of this hurdle confirmed a resumption of the underlying uptrend and attention is on 4385.00 next, a Fibonacci projection. On the downside, the 50-day EMA, at 4144.20, remains a key support. A break would signal a potential short-term top.

E-MINI S&P (Z1): Fresh All-Time High

• RES 4: 4717.00 1.50 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4700.00 Round number resistance
• RES 3: 4687.32 1.382 proj of Jul 19 - Aug 16 - Aug 19 price swing
• RES 1: 4662.50 Intraday high
• PRICE: 4654.50 @ 06:52 GMT Nov 4
• SUP 1: 4586.50 Low Nov 1
• SUP 2: 4543.75/4472.00 Low Oct 27 / High Sep 27
• SUP 3: 4463.44 50-day EMA and key near-term support
• SUP 4: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger

S&P E-minis maintain a bullish tone. The contract traded higher again yesterday and a fresh trend high print has also been recorded today. These fresh highs confirm a resumption of the uptrend and the focus is on 4687.32 next, a Fibonacci projection. Trend signals such as moving average studies remain in a bull mode, reinforcing current conditions and market sentiment. The 50-day EMA at 4463.44 represents a firm support handle.

COMMODITIES

BRENT TECHS: (F2) Trades Through Support

• RES 4: $90.00 - Psychological round number
• RES 3: $87.73 - 2.00 proj of the Aug 23 - Sep 3 - Sep 9 price swing
• RES 2: $85.77/87.00 - High Oct 25 / Round number resistance
• RES 1: $ 84.20 - High Nov 3
• PRICE: $81.54 @ 07:00 GMT Nov 4
• SUP 1: $81.07 - Intraday low
• SUP 2: $80.00 - Round number support
• SUP 3: $79.10/78.42 - 50-day EMA / Low Oct 7
• SUP 4: $75.80 - Low Sep 30

Brent futures faced selling pressure yesterday and breached initial support at $81.61, Oct 28 low. The move lower highlights a developing short-term bearish theme as a corrective cycle unfolds. The focus is on the 50-day EMA at $79.10. This is seen as a key short-term support and a clear break would suggest scope for a deeper pullback. Key resistance has been defined at $85.77, the Oct 25 high.

WTI TECHS: (Z1) Clears Its 20-day EMA

• 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: $83.08/85.41 - High Nov 3 / High Oct 25 and the bull trigger
• PRICE: $80.38 @ 07:10 GMT Nov 4
• SUP 1: $79.69 - Low Nov 3
• SUP 2: $78.78 - Low Oct 13
• SUP 3: $77.10 - 50-day EMA
• SUP 4: $74.67 - Low Oct 7 and key near-term support

WTI futures are weaker. Yesterday's sell-off resulted in a breach of support at $80.58, Oct 28 low and note that price has also cleared the 20-day EMA. This suggests scope for a deeper corrective pullback. The move lower has opened the 50-day EMA at $77.10. This EMA is seen as a key short-term support and a clear break would suggest scope for a deeper pullback. Key resistance has been defined at $85.41, the Oct 25 high.

GOLD TECHS: Short-Term Outlook Appears Bearish

• 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: $1796.4/1813.8 - High Nov 2 / High Oct 22 and key resistance
• PRICE: $1775.2 @ 07:24 GMT Nov 4
• SUP 1: $1759.0 - Low Nov 3
• 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 traded lower yesterday and breached initial support at $1772.0, the Oct 29 low. The break lower highlights a developing bearish risk and exposes support at $1760.4, Oct 18 low that was also probed. A clear break of this level would strengthen the case for bears and signal scope for a pullback towards $1721.7, Sep 29 low and a key support. Key resistance is at $1813.8, Oct 22 high. A break would reinstate the recent bull theme.

SILVER TECHS: Bearish Pressure

• 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: $24.094/828 - High Oct 29 / High Oct 22
• PRICE: $23.557 @ 07:28 GMT Nov 4
• 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

Recent Silver weakness extended yesterday and although price bounced off the day low, the move lower has exposed support at $23.015, Oct 18 low. A break of this level would threaten the recent bullish theme and allow for a deeper pullback. This would open $22.213, Oct 6 low and suggest potential for weakness towards $21.423, the Sep 29 low. Key resistance has been defined at $24.828, the Oct 22 high.