May 13, 2022 10:03 GMT
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- In the equity space, S&P E-Minis remain vulnerable and short-term gains are considered corrective. This week’s continuation lower, delivering fresh cycle lows, reinforces the primary bearish trend condition and signals scope for a continuation lower. The next objective is 3843.25, the Mar 25 2021 low (cont). In terms of resistance, the key short-term level is at 4303.50, the Apr 26/28 high. Initial resistance is at 4099.00, the May 9 high. EUROSTOXX 50 futures outlook remains bearish and short-term gains are also considered corrective. Recent weakness has resulted in a breach of support at 3608.00, Apr 27 low and of 3551.60, 61.8% retracement of the Mar 7 - 29 rally. This has exposed 3458.90 next, the 76.4% retracement. Initial resistance is at 3664.80, the 20-day EMA.
- In FX, EURUSD traded lower Thursday and cleared support at 1.0472, Apr 28 low. The break lower confirms a bear flag breakout and a resumption of the primary downtrend. The focus is on 1.0341, the Jan 3 2017 low and a key support. GBPUSD remains weak following this week’s extension of the downtrend. The focus is on 1.2162 next, the May 22 2020 low. The USDJPY primary uptrend remains intact and this week’s move lower is likely a correction. Initial support has been defined at 127.52, yesterday’s low. A resumption of gains would refocus attention on the bull trigger at 131.35, May 9 high. A break would open 131.96, the 1.00 projection of the Feb 24 - Mar 28 - 31 price swing.
- On the commodity front, Gold remains vulnerable following this week’s resumption of the downtrend. Further weakness is likely and attention is on the $1800.0 handle next ahead of $1780.4, the Jan 28 low. In the Oil space, a bearish threat in WTI futures remains present, despite the recovery from Wednesday’s low of $98.20. Key short-term resistance is at $111.37, the May 5 high. $98.20 and $111.37 are viewed as important short-term directional triggers.
- In the FI, Bund futures remain in a downtrend. This week’s gains are considered corrective. A fresh cycle low on Monday reinforced the bearish condition and confirmed, once again, an extension of the bearish price sequence of lower lows and lower highs. A resumption of weakness would refocus attention on 150.15, the 0.764 projection of the Mar 7 - 29 - Apr 4 price swing. Firm trend resistance to watch is 156.00, Apr 28 high. The broader trend condition in Gilts remains down. However, yesterday’s move higher resulted in a break of resistance at 119.79, the Apr 25 high. This signals potential for a stronger short-term corrective phase and opens 121.84 next, 50.0% of the Mar 1 - May 9 bear leg. On the downside, key support has been defined at 116.87, the May 9 low. This is also the bear trigger.