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Price Signal Summary - Corrective Bounce In The Equity Space

MARKET INSIGHT
  • In the equity space, S&P E-Minis remain vulnerable and short-term gains are considered corrective. Last week’s sharp reversal from 4303.00, the May 4 high, reinforced bearish conditions, and Monday’s move lower resulted in a break of support at 4056.00, the May 2 low. This confirms a resumption of the broader downtrend and opens 3958.00 next, the 2.00 projection of the Mar 29 - Apr 18 - 21 price swing. Key resistance has been defined at 4303.50, the Apr 26/28 high. EUROSTOXX 50 futures remain in a bear mode and the current bounce is 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 3678.10, the 20-day EMA.
  • In FX, EURUSD continues to consolidate. This pause in the downtrend has taken on the appearance of a bear flag - a bearish continuation pattern. A resumption of the downtrend would open 1.0454, the Jan 1 2017 low. Resistance is at 1.0657, the 20-day EMA. GBPUSD continues to trade closer to its recent lows. The pair remains vulnerable and the focus is on 1.2252 next, the Jun 29 2020 low. The USDJPY primary uptrend remains intact and resistance at 131.25, the Apr 28 high, was probed Monday. Attention is on 131.96, the 1.00 projection of the Feb 24 - Mar 28 - 31 price swing.
  • On the commodity front, Gold remains vulnerable and yesterday’s move lower confirms a resumption of the current downtrend. The break of $1848.8, 76.4% of the Jan 28 - Mar 8 rally, paves the way for a move towards $1821.1 next, the Feb 11 low. Sights are also set on $1780.4, the Jan 28 low. In the Oil space, WTI futures reversed course Monday and traded lower on Tuesday. Last week’s break of triangle resistance, drawn from the Mar 15 low, highlighted a bullish development. However the recent sell-off suggests the bullish break was a false one. This threatens the recent recovery and exposes support at $95.28, Apr 25 low.
  • The trend direction in the FI space remains down. The current recovery in Bund futures is considered corrective. Recent cycle lows - 150.49 on Monday - reinforces bearish conditions and signals scope for weakness towards 150.15 next, the 0.764 projection of the Mar 7 - 29 - Apr 4 price swing. The broader trend condition in Gilts remains bearish and short-terms gains are also considered corrective. Key resistance to watch is at 119.79, Apr 26 high. A resumption of weakness would open 116.35, the Dec 30 2015 low (cont).
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  • In the equity space, S&P E-Minis remain vulnerable and short-term gains are considered corrective. Last week’s sharp reversal from 4303.00, the May 4 high, reinforced bearish conditions, and Monday’s move lower resulted in a break of support at 4056.00, the May 2 low. This confirms a resumption of the broader downtrend and opens 3958.00 next, the 2.00 projection of the Mar 29 - Apr 18 - 21 price swing. Key resistance has been defined at 4303.50, the Apr 26/28 high. EUROSTOXX 50 futures remain in a bear mode and the current bounce is 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 3678.10, the 20-day EMA.
  • In FX, EURUSD continues to consolidate. This pause in the downtrend has taken on the appearance of a bear flag - a bearish continuation pattern. A resumption of the downtrend would open 1.0454, the Jan 1 2017 low. Resistance is at 1.0657, the 20-day EMA. GBPUSD continues to trade closer to its recent lows. The pair remains vulnerable and the focus is on 1.2252 next, the Jun 29 2020 low. The USDJPY primary uptrend remains intact and resistance at 131.25, the Apr 28 high, was probed Monday. Attention is on 131.96, the 1.00 projection of the Feb 24 - Mar 28 - 31 price swing.
  • On the commodity front, Gold remains vulnerable and yesterday’s move lower confirms a resumption of the current downtrend. The break of $1848.8, 76.4% of the Jan 28 - Mar 8 rally, paves the way for a move towards $1821.1 next, the Feb 11 low. Sights are also set on $1780.4, the Jan 28 low. In the Oil space, WTI futures reversed course Monday and traded lower on Tuesday. Last week’s break of triangle resistance, drawn from the Mar 15 low, highlighted a bullish development. However the recent sell-off suggests the bullish break was a false one. This threatens the recent recovery and exposes support at $95.28, Apr 25 low.
  • The trend direction in the FI space remains down. The current recovery in Bund futures is considered corrective. Recent cycle lows - 150.49 on Monday - reinforces bearish conditions and signals scope for weakness towards 150.15 next, the 0.764 projection of the Mar 7 - 29 - Apr 4 price swing. The broader trend condition in Gilts remains bearish and short-terms gains are also considered corrective. Key resistance to watch is at 119.79, Apr 26 high. A resumption of weakness would open 116.35, the Dec 30 2015 low (cont).