BUND TECHS: (H6) Bear Leg Extends

• The firm bounce for risk sentiment late Friday has extended to start the week, with shutdown-related optimism providing a key positive impulse for the major equity benchmarks. This has been emphasised by the Nasdaq rallying 3.5% from Friday’s lows, eroding a solid chunk of last week’s sharp pullback from recent record highs.
• This dynamic has allowed the USD index to consolidate its most recent pull lower. We pointed out that the DXY had recently met its short-term technical objective between 100.25-48, which will remain an area of significant greenback resistance as we head into year-end. The softer dollar backdrop has allowed gold to rally 2% on the session, firmly re-establishing itself back above $4,000, while bitcoin stands around $7,000 above last week’s lows.
• It is not surprising to see AUDJPY outperforming Monday given the equity rally and higher core yields, up 1.15% and now comfortably back above 100.00. Providing additional AUD impetus, analysts have touted RBA Deputy Governor Andrew Hauser’s comments overnight as being on the hawkish side, citing the path to more interest rate cuts could be narrow given elevated levels of capacity utilization and an outlook that includes uncomfortably high inflation well into 2026.
• For AUDUSD (+0.68%), a break above key resistance at 0.6618 (Oct 29 high) would be required to reinstate a bullish theme. For AUDJPY, multiple failures above 101.00 keep this level as a medium-term area of significance. A sustained break would place the focus on the US election related highs at 102.41.

Recent weakness in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that a bullish corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.87, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low. The downleg in Gold that started Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Price remains above a key support area at the 50-day EMA, at $3880.7. Clearance of this EMA would strengthen a short-term bear theme and signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A  stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.

• WTI Crude up $0.64  or +1.07% at $60.38
• Natural Gas up $0.19  or +4.43% at $4.506
• Gold spot up $79.14  or +1.98% at $4080.24
• Copper up $8.7  or +1.76% at $504.45
• Silver up $1.6  or +3.31% at $49.9061
• Platinum up $31.34  or +2.03% at $1577.26

A medium-term bull trend in Eurostoxx 50 futures remains intact and recent weakness is considered corrective. Price has managed to find support below two important price points; the 50-day EMA, at 5576.77, and 5571.50, the base of a bull channel drawn from the Aug 1 low. A clear break of both levels would strengthen a bear theme and highlight a stronger reversal. The bull trigger is 5742.00, the Oct 29 high. The trend condition in S&P E-Minis remains bullish and the pullback since the Oct 30 high appears corrective. The contract has managed to find support below the 50-day EMA, currently at 6710.28 and a key support. Friday’s activity also highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. A continuation higher would signal the end of a correction and open 6953.75, Oct 30 high and bull trigger.

• Japan's NIKKEI closed higher by 635.39 pts or +1.26% at 50911.76 and the TOPIX ended 18.57 pts higher or +0.56% at 3317.42.
• Elsewhere, in China the SHANGHAI closed higher by 21.041 pts or +0.53% at 4018.597 and the HANG SENG ended 407.23 pts higher or +1.55% at 26649.06.
• Across Europe, Germany's DAX trades higher by 410.03 pts or +1.74% at 23978.42, FTSE 100 higher by 83.98 pts or +0.87% at 9766.47, CAC 40 up 110.91 pts or +1.4% at 8061.11 and Euro Stoxx 50 up 94.47 pts or +1.7% at 5661.04.
• Dow Jones mini up 206 pts or +0.44% at 47292, S&P 500 mini up 66 pts or +0.98% at 6820, NASDAQ mini up 387.25 pts or +1.54% at 25555.