EURGBP TECHS: Support At The 50-day EMA Remains Exposed

• RES 4: 5568.00 High Mar 6
• RES 3: 5526.00 High Mar 19 / 20 (cont) 
• RES 2: 5445.00/5522.00 High Aug 26 / 22
• RES 1: 5378.06 20-day EMA 
• PRICE: 5343.00 @ 06:18 BST Sep 8
• SUP 1: 5292.00 Low Sep 2 
• SUP 2: 5280.00 Low Aug 7  
• SUP 3: 5250.02 76.4% retracement of the Aug 1 - 22 rally  
• SUP 4: 5166.00 Low Aug 1 and key support  

A corrective bear cycle in Eurostoxx 50 futures remains in play. Recent weakness resulted in a breach of 5368.74, the 50-day EMA. The clear break of this average strengthens a short-term bearish threat and signals scope for a deeper retracement towards 5166.00, the Aug 1 low and a key support. On the upside, initial resistance to watch is 5378.06, the 20-day EMA. A clear break of it would be a bullish development.

Market Summary: Shenzhen's announcement that it will join Beijing and Shanghai in easing home-buying rules has given China's building shares a boost in Monday's trading.  China's key bourses are all higher, with the exception of the CSI 300 which is flat. The Hang Seng is up +0.35%, Shanghai up +0.17% and Shenzhen up +0.45%. The Yuan Reference Rate at 7.1029 Per USD; Estimate 7.1323 and CGB 10-Yr is a touch higher at 1.78%. 

• China's August exports missed expectations with growth of +4.4%, down from +7.2% in July.  Imports were lower also, expanding just +1.3% following +4.1% in July.  The export result was the weakest in six months with exports to the US cratering by over 30%.  Shipments to the EU rose 10% and African 26%.  With the monthly surplus at $102bn China's annual surplus could touch $1tn if this path is maintained (source MNI)
• The China Securities Journal reports that the likelihood of the PBOC resuming bond purchases is increasing. 

• RES 4: 107.360 High Jul 22 and 23 (cont)  
• RES 3: 107.240 High Aug 4  
• RES 2: 107.225 High Aug 27 and the bull trigger
• RES 1: 107.190 High Sep 5 
• PRICE: 107.140 @ 06:11 BST Sep 8
• SUP 1: 107.050 Low Aug 25 and Sep 2 and a bear trigger  
• SUP 2: 107.000 Round number support  
• SUP 3: 106.983 138.2% retracement proj of the Aug 25 - 27 rally 
• SUP 4: 106.963 150.0% retracement proj of the Aug 25 - 27 rally

The trend outlook in Schatz futures remains bearish and - for now - recent short-term gains appear corrective. Attention is on the next important support at 107.050, the Aug 25 and Sep 2 low. A break of this level would confirm a resumption of the downtrend and open the 107.00 handle. Key short-term resistance to watch is 107.225, the Aug 27 high. Clearance of this hurdle would highlight a stronger bullish theme.