Two Important Breakout Retests In The FICC Space

First, let's start with the Euro/Rupee pair, which we discussed on August 24th, 2020 and again during this week's conference call. Here's the weekly chart of prices retesting the breakout level of a nearly 7-year base near 86. The thesis was that as long as prices were above 86 then this breakout was intact and the pair had begun its march towards 101.50.

Click on chart to enlarge view. 

And this week prices are retesting those former highs, successfully so far. Now we want to see follow-through next week to confirm that buyers are truly in control. Otherwise, if we see prices breaking below 86.00-86.50 and momentum getting oversold, then we'll have a "failed breakout" on our hands and need to get the hell out of the way.

The next thesis we're revisiting is Natural Gas, which has had a rough last few weeks. Our original thesis on August 6th was initiated by prices breaking above resistance at 145. and after a great initial run, prices are retesting that breakout level.

So either this is a standard retest before prices continue their long-term reversal and head up towards 350 in the coming quarters and years...or this is a failed breakout and the choppy price action it's had historically continues.

And here's a closer look at the daily chart. A break below 145 and momentum reaching oversold territory would put an end to this bullish thesis and shift our focus to other assets that are trending well.

The next few days will be important for both of these assets, so keep them on your radar.

We certainly will.

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Thanks for reading and please let us know if you have any questions!

Allstarcharts Team