EM CEEMEA CREDIT: Dubai Aerospace Enterprise: FV $ 5Y Sukuk

• RES 4: 6600.00 Round number resistance
• RES 3: 6585.83 2.0% 10-dma envelope
• RES 2: 6543.75 2.00 proj of the Apr 7 - 10 - 21 price swing  
• RES 1: 6541.75 High Sep 5  
• PRICE: 6499.75 @ 07:26 BST Sep 8
• SUP 1: 6451.12/6371.75 20-day EMA / Low Sep 2 
• SUP 2: 6353.11 50-day EMA 
• SUP 3: 6313.25 Low Aug 6 
• SUP 4: 6239.50 Low Aug 1 and a key support

A bull cycle in S&P E-Minis remains intact and the latest pullback has once again proved to be a shallow correction. The contract traded to a fresh cycle high last week, breaching the Aug 28 high of 6523.00. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 6543.75 next, a Fibonacci projection. Initial support to watch is 6447.06, the 20-day EMA.

•  RES 4: $77.85 - 2.794 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $75.65 - 2.500 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $74.25 - High Jun 23 and a bull trigger 
• RES 1: $66.56/69.36 - High Aug 4 / High Jul 30 and key resistance   
• PRICE: $62.99 @ 07:25 BST Sep 8
• SUP 1: $61.29 - Low Aug 13 and the bear trigger 
• SUP 2: $57.71 - Low May 30
• SUP 3: $54.80 - Low May 5
• SUP 4: $54.03 - Low Apr 9 and a key support

A bear cycle in WTI futures remains intact and the latest bull phase appears to have been a correction. The pullback from last Tuesday’s high highlights a possible reversal and the end of the corrective phase. Initial resistance to watch is $66.56, the Aug 4 high. Key short-term resistance has been defined at $69.36, the Jul 30 high. A stronger resumption of weakness would pave the way for a move towards $57.71, the May 30 low.

JPY remains weaker against all others early Monday; for much of last week, markets were speculating over the chances of Ishiba in a potential LDP vote to bring forward a party leadership election, but the PM has gotten ahead of any further uncertainty by announcing his resignation. This triggers an immediate leadership race in the LDP, with the next steps being MPs looking to garner 20 supporters within the party in order to put their name forward for nomination.

• So why is JPY weaker? Thatcherite MP Sanae Takaichi is a front-runner among many opinion polls - and also ran against Ishiba in the last leadership race, triggering JPY vol. While politically conservative, she's made clear her preference for easy monetary policy and a bigger role for fiscal spending - reminiscent of the Abenomics policy set from 2012 - 2020.
• Other potential candidates include Koizumi, Hayashi, Kobayashi and Kato - all of which would likely prove JPY-positive if they look a more favourable candidate vs. Takaichi.
• EUR/JPY rallied to 173.91 overnight, but has stalled since. 173.97 remains the bull trigger here, clearance of which puts the rate at the best levels since last year. AUD, NZD extend their recent spell of strength, with NZD/USD just below Friday's highs of 0.5918. A rally through here and 0.5927 would break downtrendline resistance drawn off the early July highs.