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Price Signal Summary - Equity Space Remains Vulnerable

OUTLOOK
  • In the equity space, S&P E-Minis remain in a downtrend and short-term gains are considered corrective. This week’s extension reinforces the bearish theme and signals scope for a continuation, with attention on 3902.01 next, 61.8% retracement of the Jun 17 - Aug 16. The EUROSTOXX 50 contract remains bearish and yesterday’s move lower confirmed once again a resumption of the downtrend. The contract has pierced 3456.00, the 76.4% retracement of the Jul 5 - Aug 17 rally. A clear break would open 3386.00, the Jul 15 low.
  • In FX, the EURUSD trend direction is unchanged and remains down. A resumption of weakness would open 0.9883 next, 1.764 projection of the Jun 9 - 15 - 27 price swing. 1.0090, the Aug 26 high, marks initial resistance. The GBPUSD trend needle still points south and the pair traded lower again Thursday. The focus is on 1.1495 1.236 projection of the Jun 16 - Jul 14 - Aug 1 price swing. USDJPY bulls remain in the driver’s seat and the pair continues to appreciate. This week’s climb has resulted in the break of 139.39, Jul 14 high, to confirm a resumption of the primary uptrend. Yesterday’s gains resulted in a print above 140.00, further strengthening the bullish condition. The focus is on a move to 140.86 next, 1.764 projection of the Aug 2 - 8 - 11 price swing.
  • On the commodity front, Gold remains in a clear short-term downtrend and this week’s extension reinforces a bearish condition. Support at $1727.8, Aug 22 low has been breached - this confirms a resumption of the bear cycle. The break lower paves the way for a test of $1681.0, the Jul 21 low and a key bear trigger. In the Oil space, WTI remains vulnerable. The contract reversed course Tuesday and a strong reversal pattern was confirmed on the day - a bearish engulfing candle. This pattern suggests potential for a stronger sell-off near-term that exposes key support at $85.37, the Aug 16 low.
  • In the FI space, Bund futures remain in a clear downtrend. The contract has breached 147.94, 61.8% of the Jun 16 - Aug 2 bull leg. The break reinforces bearish conditions and opens 146.50, the Jun 30 low. Gilts have traded to a fresh trend low again today, reinforcing the current bearish theme. The breach on Tuesday of support at 108.94, Aug 24 low, confirmed a resumption of the downtrend and the follow through has resulted in a break of the 107.00 handle. Sights are on 106.54, the 1.236 projection of the Aug 22 - 24 - 26 price swing.
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