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Price Signal Summary - Bond Market Bears Pause For Breath

  • In the equity space, S&P E-Minis remain vulnerable and the trend direction is down. Last week’s fresh cycle lows and breach of support at 3810.00, May 20 low, reinforces the current bearish theme. The focus is on 3600.00 next. EUROSTOXX 50 futures remain vulnerable following recent weakness. The move lower has resulted in a breach of key support at 3456.00, May 10 low. This reinforces bearish conditions and signals potential for weakness towards the 3300.00 handle.
  • In FX, EURUSD is trading above last week’s low. Short-term gains are still considered corrective and a bearish theme remains intact. The focus is on 1.0350, the May 13 low and bear trigger. Initial firm resistance is at 1.0601, the Jun 16 high. GBPUSD continues to trade above last week’s low. Short-term gains are considered corrective - the trend remains bearish. A resumption of weakness would refocus attention on 1.1934, Jun 14 low and the short-term bear trigger. Resistance is at 1.2406, the Jun 16 high. USDJPY traded higher Friday and a short-term key support has been defined at 131.50, Jun 16 low. The bull trigger is 135.59, Jun 15 high where a break would confirm a resumption of the uptrend and open 136.04, 1.382 projection of the Feb 24 - Mar 28 - 31 price swing.
  • On the commodity front, Gold remains vulnerable following the sharp sell-off on Jun 13 and the recent inability to remain above the 50-day EMA. The focus is on $1787.0, May 16 low. A break would resume the downtrend. Key trendline resistance is at $1886.6. The trendline is drawn from the Mar 8 high. In the Oil space, WTI futures traded sharply lower Friday, resulting in a break of the 20-day EMA. The move lower also resulted in a print below the 50-day EMA - currently at $109.50. Friday’s low of $108.25 represents a key short-term support where a break would signal scope for a deeper pullback this week. For bulls, the broader trend remains up and the bull trigger is at 123.68, the Jun 14 high.
  • In the FI space, conditions remain bearish although futures are consolidating for now, as bears pause for breath. Bund futures traded in a volatile manner last Thursday. The primary direction remains down though and the focus is on the 140.00 psychological handle. Gilts remain bearish despite the bounce from last Thursday’s low. A resumption of weakness would refocus attention 109.89, Thursday’s low and the bear trigger.

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