EURGBP TECHS: Trend Needle Points North

• RES 4: 180.44 Top of a bull channel drawn from the Feb 28 low  
• RES 3: 180.00 Psychological round number
• RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 177.94 High Oct 10 and the bull trigger   
• PRICE: 176.10 @ 15:44 BST Oct 21
• SUP 1: 175.22 20-day EMA
• SUP 2: 173.92 Low Oct 6 and a gap high on the daily chart 
• SUP 3: 173.24 High Oct 3 and a gap low on the daily chart   
• SUP 4: 172.27 Low Oct 2 and a key medium-term support  

The trend structure in EURJPY is bullish and moving average studies continue to highlight a dominant uptrend. Recent strength above resistance at 175.13, the Sep 29 high, confirms a resumption of the uptrend. A continuation higher would open 178.94, a Fibonacci projection. First key support to watch lies at 175.22, the 20-day EMA - a level pierced last Friday. A clear breach of it would signal scope for a deeper retracement. 

• Precious metals sold off sharply on Tuesday, with spot gold currently down by 5.6% at $4,113/oz and silver down by 7.7% at $48.4/oz, albeit off session lows. Platinum and palladium have also fallen by 5-6%.
• There was no obvious trigger for today’s weakness, which has allowed an overbought condition to swiftly unwind.
• As noted earlier, the moves have been largely isolated to precious metals, supporting the idea that they have been flow/momentum driven, with profit-taking at play after an extremely strong rally since August.
• For gold, today’s losses have rapidly narrowed the gap to key support at $4,030.4, the 20-day EMA. A break of this would open $3,819.6, the Oct 2 low.
• For silver, the move unwinds some of the recent liquidity squeeze, with price piercing initial support at $49.037, the 20-day EMA. A clear break of this level would open the next support at $45.135, the 50-day EMA.
• Elsewhere, WTI has risen today, having recovered from earlier losses. Geopolitical developments weighed against the supply/demand outlook as seaborne crude in transit continues to rise.
• WTI Nov 25 is up by 0.5% at $57.8/bbl.
• Despite the move, a bearish theme in WTI futures remains intact, with sights still on $54.89 next, the May 5 low. Initial firm resistance is seen at $61.61, the 50-day EMA.

• Stocks remain mixed late Tuesday, the DJIA outperforming after managing to mark a new record high of 47,125.66 in the first half. A couple social media posts by President Trump tempered risk sentiment, however.
• Stocks whipsawed off early session highs after Pres Trump social media post warning retribution "if Hamas continues to act badly, in violation of their agreement with us." Stocks reacted negatively a second half post by President Trump that while he anticipates having "a good deal with Xi" the meeting in S Korea at end of the month may NOT happen.
• While Treasury futures drift near highs (10Y yield fell to 3.9455%), equities have managed to stay off early lows. A noticeable exception: mining stocks underperformed after Gold fell sharply (appr -240.0 at 1050ET to 4115.0, appr -6.3% from session highs).
• Currently, the DJIA trades up 280.59 points (0.6%) at 46,988.65, S&P E-Minis up 6.5 points (0.1%) at 6,781, Nasdaq down 16.9 points (-0.1%) at 22,974.59.
• In addition to Materials and Utility Services sector share underperformed: Newmont Corp -8.97%, Philip Morris Int -5.45%, Albemarle Corp -3.93%, Constellation Energy -3.62% Vistra Corp -3.19% and NRG Energy -2.23.
• On the positive side, Consumer Discretionary and Industrials sector shares outperformed in the first half, General Motors surged +15.5% after reporting better than expected Q3 earnings, Lululemon Athletica +6.08%, Ford Motor +5.30%, CarMax +4.58% and Aptiv +3.86%..
• Supporting the Industrials sector: RTX +8.42%, 3M Co +6.09%, Carrier Global +3.68%, Builders FirstSource +3.44% and Stanley Black & Decker +3.29%.
• Reporting earnings after the close: Netflix, Capital One Financial, Mattel, Western Alliance Bancorp (in the hot seat last week after announcing bad loan losses), Omnicom, EQY and Texas Instruments.