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Price Signal Summary - Risk Aversion Forces Short-Term Trend Reversals

MARKET INSIGHT
  • In the equity space, S&P E-minis have sold off sharply today. The move lower highlights the S/T importance of Tuesday's price action - a bearish shooting star formation that warned of a short-term top. Support at 4625.25 level, Nov 10 low has been breached to strengthen the case for bears and opens the 50-day EMA at 4562.53. EUROSTOXX 50 futures have also sold off sharply today and cleared the 50-day EMA. This signals scope for a deeper decline and attention is on 4058.10, 76.4% retracement of the Oct - Nov rally.
  • In FX, trend conditions are unchanged in the USD and the uptrend remains firmly intact. EURUSD objectives remain; 1.1185 Jul 1, 2020 low and 1.1128, 1.764 projection of the Jan 6 - Mar 31 - May 25 price swing. Short-term gains are considered corrective. GBPUSD has traded to a fresh short-term trend low today. The next objective is 1.3216, 1.236 projection of the Sep 14 - 29 - Oct 20 price swing. USDJPY has traded sharply lower today. Attention is on the first key short-term support at 113.59, Nov 19 low. A break would open 112.73, the Nov 9 low.
  • On the commodity front, Gold remains vulnerable despite today's bounce. This follows the recent sharp sell-off. The short-term focus is on the bull channel base at $1757.1 today. The channel is drawn off the Aug 9 low. WTI futures have reversed course today and sold off sharply. The break of support at $74.76, Nov 22 low opens $72.30 next, 50.0% of the Aug 23 - Oct 25 rally.
  • In the FI space, Bund futures are recovering from recent lows and importantly, support at 170.06, the Nov 5 low has remained intact. This suggests the recent move lower has been a correction and that a short-term uptrend remains intact. The focus is on resistance at 172.57, Nov 22 high. Gilts have rallied today and the contract gapped higher at the open. This negates recent bearish concerns and with resistance at 125.96, Nov 22 high breached, the key short -term hurdle at 126.23 has been exposed, Nov 9 high. This level has been probed and a clear break would strengthen the near-term outlook for bulls and open the 127.00 handle.
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