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- In the equity space, prices slipped further off highs Monday and are staging only a modest bounce. S&P E-minis contract has extended the pullback from 4384.50 Jul 14 high. Yesterday's sell-off resulted in a break of support at 4279.25, Jul 8 low. This highlights a short-term trend top and suggests scope for a deeper corrective pullback. EUROSTOXX 50 futures last week failed to challenge resistance at 4101.50, Jul 1 high and the subsequent sell-off has resulted in a resumption of the bear cycle that started Jun 17. Yesterday's break of 3951.50, Jul 8 low signals scope for weakness towards 3871.00, May 19 low.
- Yesterday's move in EURUSD resulted in a print below support at 1.1772, Jul 13, 14 low. A clear break would again confirm a resumption of the downtrend. GBPUSD took out key support at 1.3669, Apr 12 low as well as the 200-dma at 1.3700. A clear breach of 1.3669 would reinforce bearish conditions and pave the way for an extension of the bear cycle. USDJPY sold off sharply yesterday resulting in a break of support at 109.53, Jul 8 low. This confirms a resumption of the reversal that occurred early July and paves the way for an extension lower.
- On the commodity front, Gold maintains a bullish tone and the pullback is considered corrective. Price however needs to clear last week's high print to confirm a resumption of the recent upleg. Brent futures have confirmed a top with momentum in a clear bearish cycle as the current corrective pullback extends. Price yesterday also confirmed a clear break of the 50-day EMA paving the way for further downside. The focus is on $67.43, a Fibonacci retracement. WTI (Q1) focus is on $65.56, a Fibonacci retracement where a break would open $63.10, the May 24 low.
- Within FI, Bund futures remain firm, trading above the former resistance of 174.77, Jul 8 high. The clear break of this level strengthens a bullish case and highlights a bullish breakout of a rising channel drawn off the May 19 low. The move in Gilts resulted in a probe of key short-term resistance at 129.92, the Jul 8 high. A clear breach of this level would confirm a resumption of the uptrend that started mid-May and maintain a bullish price sequence of higher highs and higher lows.