MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1316 Mon; -1.56% Y/Y

CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

CBI Retail Sales Fell Faster Than Expected For The Second Month

MNI: UK CBI JUL DIST TRADE REPORTED SALES -43

MNI: UK BOE JUN MORTGAGE APPROVALS 59,976

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Price Signal Summary - Sterling Still Under Pressure

MARKET INSIGHT
  • In the equity space, S&P E-minis continue to defy gravity and have registered another all-time high. The focus is on 4687.32 next, 1.382 projection of Jul 19 - Aug 16 - Aug 19 price swing. {EU} EUROSTOXX 50 futures maintain a bullish tone. Attention is on 4371.00, 1.236 projection of Jul 19-Sep 6-Oct 6 2020 swing (cont)
  • In FX, EURUSD remains below recent highs and the outlook is bearish. The move lower on Oct 29 - a bearish engulfing candle - highlights a failure to clear the 50-day EMA and means the bear channel top at 1.1686 today, remains intact. The channel is drawn off the Jun 1 high. The focus is on 1.1524, Oct 12 low and bear trigger. GBPUSD remains under pressure. The deeper pullback has exposed the next key support at 1.3412, Sep 29 low. Yesterday's strong rally in EURGBP and today's follow through has exposed 0.8598, 76.4% retracement of the Sep 29 - Oct 26 sell-off and 0.8658 further out, Sep 29 high. USDJPY remains below recent highs but above support at 113.45-00, the 20-day EMA and Oct 12 low respectively. A break would signal scope for a deeper pullback. The trend for now remains up.
  • On the commodity front, Gold reversed course yesterday and has rebounded off Wednesday's low of $1759.0. The turnaround reinstates a potential bullish outlook and exposes resistance at $1813.8, Oct 22 high. This week's sell-off in WTI resulted in a breach of $80.58, Oct 28 low and the contract cleared the 20-day EMA. This has opened the 50-day EMA at $77.17. Key resistance has been defined at $85.41, the Oct 25 high.
  • In the FI space, short-term gains in Bund futures traded higher yesterday and breached resistance at 169.83, Oct 27 high. Note too that futures have also probed the 50-day EMA at 170.06. A clear break of both these levels would open 171.14, 50.0% retracement of the Aug - Nov sell-off. Gilts are rallying and the recent double bottom reversal is playing out. The focus is on 127.09 next, 61.8% retracement of the Aug - Oct downleg.
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