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Price Signal Summary - Bond Market Bear Trend Accelerates

MARKET INSIGHT
  • In the equity space, S&P E-Minis started the week on a clear bearish note. Monday’s sell-off resulted in a print below 3810.00, the May 20 low and bear trigger. The break confirms a resumption of the primary downtrend and opens 3697.99, 0.618 projection of the Mar 29 - May 20 - 31 price swing. EUROSTOXX 50 futures remain vulnerable and the contract appears set to weaken further. The pace of the latest sell-off signals potential for a move towards key support and a bear trigger at 3466.00, May 10 low. Key short-term resistance has been defined at 3857.00, Jun 6 high. Initial resistance is seen at 3729.60, the 50-day EMA.
  • In FX, the short-term EURUSD outlook remains bearish. This follows the reversal lower from the top of a bear channel, currently at 1.0716. The channel is drawn from the Feb 10 high. The move lower has opened 1.0350, the May 13 low and bear trigger. Initial firm resistance is at 1.0632, the 20-day EMA. The latest move lower in GBPUSD has confirmed a resumption of the primary downtrend - support and the bear trigger at 1.2156, May 13 low, has been cleared. This signals scope for weakness towards 1.2081, 76.4% retracement of the Mar ‘20 - Jan ‘21 bull cycle. USDJPY remains in a clear uptrend and Monday tested levels above 135.00. Trend signals still point north and a resumption of gains would open 136.04, 1.382 projection of the Feb 24 - Mar 28 - 31 price swing.
  • On the commodity front, Gold faced resistance Monday and closed at the day low. The yellow metal has failed to remain above the 50-day EMA, signalling the potential end of the recent correction between May 16 - Jun 13. An extension lower would open the key support and bear trigger at $1787.0, May 16 low. A break would resume the downtrend. In the Oil space, WTI futures remain bullish and the uptrend is intact. The focus is on $123.35, 1.236 projection of the May 11 - 17 -19 price swing. Key short-term support is at $115.35, the 20-day EMA
  • In the FI space, Bund futures continue to weaken and the downtrend has accelerated. The focus is on 143.17, 2.236 projection of the Apr 28 - May 9 - 12 price swing. Gilts continue to head south, the focus is on 111.81, 3.382 projection of the May 19 - 24 - 26 price swing
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