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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

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  • In FX, EURUSD extended lower still Tuesday, touching new monthly and weekly lows at 1.1710. This narrows the gap with key support at the 2021 low printed back in March at 1.1704. EURGBP showed below key support Friday, worsening the outlook which had already tilted bearish. Moving average studies remain in a bear mode highlighting a downside theme, with losses toward the 1.0% 10-dma envelope at 0.8435 now the focus. USDJPY initially extended lower mid-last week, but has rallied since, rising back above the 110.00 handle. This works against the previously bearish theme, with markets now focusing on the Jul 14 high at 110.70.
  • Fragile and illiquid conditions in precious metals markets saw Gold prices spiral lower in early Asia-Pac trade Monday, with markets taking out all nearby support levels to print multi-month lows of $1690.6. The pull lower found some support at the 61.8% retracement of the 2020 range, but the recovery off the low will have emboldened bulls.
  • S&P E-minis outlook is bullish as evidence of dip buying remains solid on intraday pullbacks. Recent gains have confirmed a resumption of the uptrend and signal scope for a continuation near-term. EUROSTOXX 50 futures continue to press onwards, extending the winning streak to six consecutive sessions of higher highs. This follows the break above previous resistance at 4101.50, Jul 1 high. The breach of this level places on hold the previously bearish outlook and instead signals scope for a stronger move higher.
  • The winning streak in Bund futures concluded Friday, with bond markets globally edging lower. This ends the winning streak of 8 consecutive sessions of higher highs, although the outlook holds bullish. Any return higher targets 177.69, a Fibonacci extension.