USDCNH is back testing pivotal support at 7.0875. This was the pivot off which the 76.4% pullback took place in July and therefore an acceleration point on a weekly close below.
This after a double top posted in Sept last year and a break below the 55-week MA in July this year.
A weekly close below 7.0875, IF seen, would suggests accelerated losses with the 200 -week MA at 6.8327 the minimum target.
Other things worth watching today
Fixed Income
US 2-year yield has a short-term head and shoulders that targets a move to 3.65%. However, as it was generated by a move to a new 2-year issue the technical development probably needs to be taken with a pinch of salt.
US 2's 5's curve. This remains my Financial Bible, and I continue to look at minus 19 to minus 21 bp's as the most important pivot. A weekly close above here opens up the potential to move notably higher. the first target would be the 200-week MA at minus 4 bp's but ultimately the target (double bottom) would be above +30 bp's.
US 10-year yield remains trapped in a range for now between 3.75% and 3.87%
German Bobl (OE1): Has the possibility of a bullish outside day today on the back of the weak German inflation data on a close today above 117.87
Commodities
Gold: did not manage a bearish outside day yesterday (Although silver did) suggesting that this is likely more a consolidation before higher than a reversal.
Copper: Is in danger of completing a bearish outside week at the high of this bounce on a weekly close under $412.70. Such a development would further support the similarities between today's price action and that seen in May-August 2008 before Copper headed lower again
Natural Gas (NG1) looks to be forming a double bottom off the 76.4% retracement level of the first bounce in March- June and looks to be forming a base at similar levels to that seen in March 2016 and June 2020 before it headed aggressively higher thereafter.
Equities
Es1 posted its second bearish outside day in 5 days yesterday further confirming the loss in momentum in this rally. This along with the 76.4% hold on the NDX suggests increased caution but is not as yet a firm signal of a reversal. IF we saw a weekly close this week below 5,565 (weekly reversal) then these concerns would clearly become more elevated.
FX
NZDUSD is above a very clear double bottom neckline at .6222 that suggests a move as high as .66. (weekly close above) this after turning off the 76.4% pullback level in October last year. An additional inverted head and shoulders neckline is met at .6306 with a weekly close above, if seen, targeting as high as .69+
