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Bullish Price Sequence

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  • In the equity space, S&P E-minis have recovered somewhat following yesterday's sell-off. The outlook is bearish however following the clear breach of the 50-day EMA and a key short-term support and bear trigger has been established at yesterday's low of 4293.75. Price needs to trade above yesterday's high of 4418.00 to suggest the tide may have turned, signalling scope for a stronger recovery. Note a break higher would also mean price is once again above the 50-day EMA and this would also represent a positive development. EUROSTOXX 50 futures also started the week on a bearish note and cleared former support at 4060.50, Aug 19 low. This signals scope for weakness towards 3962.50, 76.4% retracement of the Jul 19 - Sep 6 rally. Initial resistance is at 4102.50, yesterday's high.
  • FX, EURUSD outlook remains bearish. Yesterday's weakness resulted in a breach of 1.1722, 76.4% of the Aug 20 - Sep 3 rally. This opens the key support at 1.1664, Aug 20 low and an important bear trigger. GBPUSD traded sharply lower yesterday and cleared support at 1.3727, Sep 8 low. The next key support is at 1.3602, Aug 20 low. Note too that there is a triangle base at 1.3631 that also represents an important support. The triangle is drawn from the July 20 low. Recent USD Index (DXY) gains have exposed the key resistance at 93.73, Aug 20 high and the bull trigger. A break would confirm a resumption of the uptrend that started May 25.
  • On the commodity front, the Gold near-term outlook remains bearish. The focus is on $1724.5, 76.4% retracement of the Aug 9 - Sep 3 rally. WTI futures maintain a bullish outlook despite yesterday's move lower. Initial support is seen at $69.78, the 20-day EMA. Key support has been defined at $67.56, Sep 9 low.
  • In FI, Bund futures remain in a downtrend. Recent weakness signals scope for a move towards 170.52, 3.00 projection of the Aug 5 - 11 - 17 price swing. Gilt futures remain in a bearish cycle too. The focus is on 126.83, 2.00 projection of the Aug 20 - 26 - 31 price swing.