OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Remains Intact
- In the FI space, yesterday’s extension in Bund futures strengthens the current bear theme. Note that the move down that started on Oct 17 still appears corrective and has allowed an overbought trend condition to unwind. However, price has pierced a key support at 129.14, the 50-day EMA. A clear break of this EMA would signal scope for a deeper retracement. The next support is 128.92, the 61.8% retracement of the Sep 25 - Oct 17 bull leg. First important resistance is 129.73, Oct 28 high.
- The trend structure in Gilt futures is unchanged, conditions remain bullish and short-term weakness is considered corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would refocus attention on 94.00. Clearance of this level would open 94.24, a 1.618 projection of the Sep 3 - 11 - 26 price swing. Note that the contract is overbought, a pullback would allow this condition to unwind. Initial firm support is at 92.91, the 20-day EMA.
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USDJPY TECHS: Pierces Key Resistance
- RES 4: 152.31 High Feb 19
- RES 3: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 151.21 High Mar 28
- RES 1: 151.03 Intraday high
- PRICE: 150.82 @ 14:32 BST Oct 7
- SUP 1: 149.05 Low Oct 6
- SUP 2: 148.10/147.67 20- and 50-day EMA values
- SUP 3: 146.59 Trendline support drawn from the Apr 22 low
- SUP 4: 145.49 Low Sept 17
A bullish theme remains intact in USDJPY following Monday's strong start to the week. The move higher has resulted in a breach of resistance at 149.96, the Sep 26 high and a key short-term resistance. This has exposed the key medium-term resistance at 150.92, the Aug 1 high. It has been pierced, a clear break of it would confirm a resumption of the bull leg that started Apr 22. Monday’s intraday low at 149.05 is first support.
EQUITY TECHS: E-MINI S&P: (Z5) Fresh Cycle High
- RES 4: 6831.38 2.500 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 3: 6819.25 1.500 proj of the Aug 1 - 15 - 20 price swing
- RES 2: 6812.29 2.382 proj of the Aug 20 - 28 - Sep 2 price swing
- RES 1: 6802.75 Intraday high
- PRICE: 6797.00 @ 14:15 BST Oct 7
- SUP 1: 6694.17 20-day EMA
- SUP 2: 6624.25 Low Sep 25
- SUP 3: 6575.48 50-day EMA
- SUP 4: 6506.50 Low Sep 5
A bull cycle in S&P E-Minis remains intact. The contract has again traded to a fresh cycle high to confirm a resumption of the uptrend and maintain the positive price sequence of higher highs and higher lows. Sights are on 6812.29, a Fibonacci projection. Initial support to watch is at the 20-day EMA, at 6694.17. It has recently been pierced, a clear break of it would signal scope for a deeper pullback, potentially towards the 50-day EMA, at 6575.48.
EQUITIES: US Cash Opening Calls - Set for new Record highs
Since Equity Futures, the Emini and the NQZ5 are making new record highs, Cash Opens are expected to see a small gap higher:
- Calls: SPX: 6,759.1 (+0.3%); DJIA: 46,832 (+0.3%/+137pts); NDX: 25,068.4 (+0.4%).
