MNI DAILY TECHNICAL ANALYSIS - AUD Reversal Signals Confirmed

Price Signal Summary - Bund Support Remains Exposed

In the equity space, S&P E-minis remain bullish. On Wednesday, Initial resistance at 3978.50, Mar 18 high, gave way, opening all time highs at 3,988.75 and the 4,000 handle. EUROSTOXX 50 traded to a fresh trend high this week. This reinforces the underlying bullish theme and opens 3987.14, 2.00 projection of the Dec 21 - Jan 8 rally from the Jan 28 low.

In the FX space, EURUSD maintains a weaker tone. The focus is on 1.1695 next, 38.2% retracement of the Mar 2020 - Jan rally. The GBPUSD outlook remains bearish. The focus is on 1.3641, 38.2% of the Sep 23 - Feb 24 bull cycle. Resistance is at 1.3873, the former bull channel base drawn off the Nov 2 low. USDJPY continues to defy gravity. The focus is on 111.30 next, Mar 26, 2020 high.

On the commodity front, Gold is heavy and has cleared near-term supports. This has exposed $1676.9, Mar 8 low and the bear trigger. Brent (K1) earlier this week probed resistance at $65.12, Mar 22 high. An extension higher would signal scope for a move towards $68.15, Mar 18 high. WTI (K1) has also probed resistance at $62.04, Mar 22 high. This signals scope for a climb towards $64.88, Mar 18 high

In the FI space, Bunds (M1) remain vulnerable. Key support to watch is at 170.52, Mar 18 low. The key support and bear trigger in Gilts (M1) is at 126.79, Mar 18 low. Treasuries traded to fresh trend lows this week. The focus is on 130-07, Feb 2, 2020 low and the psychological 130-00 handle.

The USD is in a clear uptrend. The AUDUSD technical picture reflects this theme and recent price developments suggest the Aussie is likely to depreciate near-term. The key technical features are:

• On Feb 26, the pair confirmed a break of a trendline support that had been in place since Mar 19, 2020. This highlighted the first reversal threat of the 11 1/2 - month uptrend.
• Selling pressure on Mar 23 highlighted a second reversal signal. This time price breached what appears to be a neckline of a head and shoulders (H&S) reversal pattern. The neckline is the trendline that connects the two price points (lows) that represent the left and right shoulders of the pattern. Furthermore, price action since the break has remained below the neckline and the neckline is providing resistance.
• Momentum studies have also recently highlighted a reversal threat - a condition known as bearish divergence between price and momentum started mid-December. The recent trendline break and the H&S reversal confirms this threat and it appears that momentum as highlighted by the 14 day RSI, is trending down. This reinforces bearish conditions.
• The H&S pattern also provides a price projection based on the height of the pattern. In this instance it is 0.7200. Ahead of this level there are a number of possible support levels / objectives:

0.7418 - 23.6% retracement of the Mar 2020 - Feb rally.
0.7272 - 1.50 projection of the Jan 25 - Mar 5 - Mar 18 downleg.

• Key resistance has been defined at 0.7849, Mar 18 high. This also represents the top of the right shoulder, where a break is required to negate the reversal pattern. Initial resistance levels are:

0.7664 - High Mar 30 and resistance highlighted by the neckline.
0.7750 - Mar 23 high .

FOREIGN EXCHANGE

EURUSD TECHS: Bears Still In Charge

• RES 4: 1.1968 50-day EMA
• RES 3: 1.1947 High Mar 22
• RES 2: 1.1805/53 High Mar 26 / High Mar 24
• RES 1: 1.1774 High Mar 30
• PRICE: 1.1719 @ 05:49 GMT Apr 1
• SUP 1: 1.1695 38.2% retracement of the Mar 2020 - Jan rally
• SUP 2: 1.1647 1.50 proj of the Jan 6 - Feb 5 - Feb 25 price swing
• SUP 3: 1.1603 Low Nov 4 and a key support
• SUP 4: 1.1543 1.764 proj of the Jan 6 - Feb 5 - Feb 25 price swing

EURUSD is trading closer to recent lows and maintains a bearish theme. This week's move lower has resulted in a break of support at 1.1752, 1.236 projection of the Jan 6 - Feb 5 - Feb 25 price swing. The move lower reinforces current bearish conditions and paves the way for an extension lower towards 1.1694, a Fibonacci projection. On the upside, initial firm resistance is seen at 1.1805, the Mar 26 high.

GBPUSD TECHS: Bearish Theme Intact

• RES 4: 1.3959 High Mar 19
• RES 3: 1.3877 High Mar 22
• RES 2: 1.3883 Former bull channel base drawn off the Nov 2 low
• RES 1: 1.3847 High Mar 29
• PRICE: 1.3767 @ 06:01 GMT Apr 1
• SUP 1: 1.3670/63 Low Mar 25 / Low Feb 5
• SUP 2: 1.3641 38.2% retracement of the Sep 23 - Feb 24 bull cycle
• SUP 3: 1.3567 Low Feb 4
• SUP 4: 1.3520 Low Jan 18

GBPUSD maintains a bearish tone. This follows the recent breach of the bull channel base from the Nov 2, 2020 low. Furthermore, price has also traded through the 50-day EMA and a former key support at 1.3779, Mar 5 low, triggering an important short-term reversal. The focus is on 1.3663 next, Feb 5 low. On the upside, the former channel base at 1.3883 provides an initial firm resistance.

EURGBP TECHS: Fresh Trend Lows

• RES 4: 0.8731 High Feb 26 and key resistance
• RES 3: 0.8668 High Mar 3
• RES 2: 0.8646 High Mar 24 and the S/T reversal trigger
• RES 1: 0.8585 20-day EMA
• PRICE: 0.8511 @ 06:10 GMT Apr 1
• SUP 1: 0.8503 Low Mar 31 and intraday low
• SUP 2: 0.8486 3.0% Lower Bollinger Band
• SUP 3: 0.8430 Low Feb 27, 2020
• SUP 4: 0.8356 Low Feb 26

EURGBP remains bearish and continues to register fresh trend lows. This maintains the current bearish price sequence of lower lows and lower highs, reinforcing a bearish theme. The cross has breached the 38.2% retracement of the 2015 - 2020 rally at 0.8521. An extension lower would open 0.8486, a volatility based support. Firm resistance is seen at 0.8646, Mar 24 high where a break is needed to signal a short-term reversal.

USDJPY TECHS: Holding Onto Gains

• RES 4: 112.23 High Feb 20, 2020
• RES 3: 111.71 High Mar 24
• RES 2: 111.30 High Mar 26, 2020
• RES 1: 110.97 High Mar 31
• PRICE: 110.73 @ 06:16 GMT Apr 1
• SUP 1: 109.75 Low Mar 30
• SUP 2: 109.13 Low Mar 26
• SUP 3: 108.84/41 20-day EMA / Low Mar 23 and key support
• SUP 4: 107.82 Low Mar 5

USDJPY is holding onto recent gains and remains bullish. The climb on Mar 26 above 109.36, the Mar 15 high confirmed a resumption of the uptrend and note, 109.56 has been breached, a key retracement - 76.4% of the Mar 2020 - Jan downleg. This sets the scene for a climb towards 111.30 next, Mar 26, 2020 high. Overbought conditions are still not impacting this trend and instead continues to reinforce current sentiment. 108.41 is key support.

EURJPY TECHS: Focus Is On The Bull Trigger

• RES 4: 132.36 1.382 proj of the Jun - Sep - Oct 2020 price swing
• RES 3: 131.22 1.236 proj of the Jun - Sep - Oct 2020 price swing
• RES 2: 130.67 High Mar 18 and the bull trigger
• RES 1: 130.05 High Mar 31
• PRICE: 129.75 @ 16:35 GMT Mar 31
• SUP 1: 129.13 Low Mar 30
• SUP 2: 128.37/36 Trendline drawn off Oct 30, 2020 low / 50-day EMA
• SUP 3: 127.50 Low Feb 22
• SUP 4: 127.31 Low Feb 17

EURJPY remains above 128.29, Mar 24 low. The recent recovery from this level leaves the 50-day EMA at 128.36, and trendline support at 128.37 intact. The trendline is drawn off the Oct 30, 2020 low. A break of this support zone is required to suggest scope for a deeper S/T sell-off and this would signal a reversal of the current uptrend. Yesterday's break of 129.94, Mar 22 high open 130.67, Mar 18 high and the bull trigger.

AUDUSD TECHS: Bearish Extension

• RES 4: 0.7744 Trendline resistance drawn off the Feb 25 high
• RES 3: 0.7699 Low Mar 17
• RES 2: 0.7664 High Mar 30
• RES 1: 0.7601 Intraday high
• PRICE: 0.7540 @ 06:38 GMT Apr 1
• SUP 1: 0.7517 Low Dec 22
• SUP 2: 0.7462 Low Dec 21
• SUP 3: 0.7418 23.6% retracement of the Mar 2020 - Feb rally
• SUP 4: 0.7372 1.236 proj of the Feb 25 - Mar 9 - Mar 18 price swing

AUDUSD maintains a bearish tone and has traded lower once again today. The pair has breached support at 0.7563, MAr 25 low and also cleared the Feb 2 low of 0.7564. This reinforces the current bearish theme following the confirmation of a head and shoulders reversal pattern on Mar 23. The move lower opens 0.7517 next, Dec 22 low. On the upside, initial resistance is seen at 0.7664, Mar 30 high.

USDCAD TECHS: Attention Is On The 50-day EMA

• RES 4: 1.2763 High Feb 12
• RES 3: 1.2749 High Feb 26 and the bull trigger
• RES 2: 1.2700 High Mar 8
• RES 1: 1.2637/47 50-day EMA / High Mar 30
• PRICE: 1.2597 @ 06:47 GMT Apr 1
• SUP 1: 1.2516 Low Mar 23
• SUP 2: 1.2462 Low Mar 19
• SUP 3: 1.2365 Low Mar 18 and the bear trigger
• SUP 4: 1.2336 1.00 proj of the Jan 28 - Feb 25 - Feb 26 price swing

The recent USDCAD recovery remains intact despite yesterday's pullback. Although the move higher is considered corrective, the current bullish tone signals scope for an extension of the upleg. The pair has traded above the 20-day EMA and the focus is on the 50-day EMA at 1.2637 which was probed earlier this week. On the downside, initial firm support is seen at 1.2516, Mar 23 low. A break would refocus attention on the key 1.2365 level.

FIXED INCOME

BUND TECHS: (M1) Attention Remains On Support

• RES 4: 172.78 0.764 proj of the Feb 25 - Mar 11 - Mar 18 price swing
• RES 3: 172.66 High Mar 25
• RES 2: 172.34 High Mar 29
• RES 1: 171.56 High Mar 30
• PRICE: 171.20 @ 05:09 GMT Apr 1
• SUP 1: 170.71 Low Mar 30
• SUP 2: 170.52 Low Mar 18 and key support
• SUP 3: 170.00 Round number support
• SUP 4: 169.24 Low Feb 24 and major support

Bund futures are trading closer to recent lows. The recent pullback highlights the importance of support at 170.52, Mar 18 low. A break of this level would strengthen a bearish argument and signal scope for a deeper sell-off. The recent move lower suggests that the entire recovery between Feb 25 - Mar 25 has been a correction and that this correction is possibly over. Key resistance has been defined at 172.66, Mar 25 high.

BOBL TECHS: (M1) Maintains A Softer Tone

• RES 4: 135.544 0.764 proj of the Feb 26 - Mar 3 - Mar 9 price swing
• RES 3: 135.520 High Mar 25
• RES 2: 135.440 High Mar 29
• RES 1: 135.220 High Mar 30
• PRICE: 135.050 @ 05:05 GMT Apr 1
• SUP 1: 134.940 Low Mar 30
• SUP 2: 134.870 Low Mar 19 and key short-term support
• SUP 3: 134.780 Low Mar 8 and 9
• SUP 4: 134.670 61.8% retracement of the Feb 26 - Mar 25 rally

Bobl futures maintain a softer tone and appear likely to extend the recent retracement. Continued weakness would expose support at 134.870, Mar 18 low where a break would strengthen a bearish argument and suggest scope for a deeper pullback. This would open 134.780 and potentially below. On the upside, key resistance has been defined at 135.520, Mar 25 high. A break of this level is required to reinstate the recent bull cycle.

SCHATZ TECHS: (M1) Bearish Risk Remains Present

• RES 4: 112.185 50-day EMA (cont)
• RES 3: 112.174 0.618 proj of the Feb 26 - Mar 2 - Mar 10 price swing
• RES 2: 112.165 High Mar 25 and the bull trigger
• RES 1: 112.130 High Mar 30
• PRICE: 112.100 @ 05:19 GMT Apr 1
• SUP 1: 112.080 Low Mar 31
• SUP 2: 112.070 Low Mar 18 and a key near-term support
• SUP 3: 112.060 Low Mar 10
• SUP 4: 112.026 61.8% retracement of the Feb 26 - Mar 25 rally

Schatz futures have pulled back from recent highs and the contract appears likely to extend its current retracement. This would expose support at 112.070, Mar 18 low where a break would strengthen a bearish argument and suggest scope for a deeper pullback to 112.060 and potentially below. On the upside, key resistance has been defined at 112.165, Mar 25 high. A break above this level is required to reinstate the recent bullish theme.

GILT TECHS: (M1) Bearish Focus

• RES 4: 129.75 High Feb 19
• RES 3: 129.27 High Mar 2 and the reversal trigger
• RES 2: 128.93 High Mar 25
• RES 1: 128.040 Low Mar 29 and gap high on the daily chart
• PRICE: 127.59 @ Close Mar 31
• SUP 1: 127.34 Low Mar 19
• SUP 2: 126.79 Low Mar 18 and the bear trigger
• SUP 3: 126.55 Low Apr 17, 2019 (cont)
• SUP 4: 126.00 Round number support

Gilt futures maintain a softer tone following the recent pullback and attention has turned to key support at 126.79, Mar 18 low. From a trend perspective, the primary direction remains down and further bearish pressure is seen likely near term. The trigger for a resumption of the downtrend is 126.79. On the upside, initial firm resistance has been defined at 128.930, Mar 25 high. A break would expose the key hurdle for bulls at 129.27, Mar 2 high.

BTP TECHS: (M1) Remains Vulnerable

• RES 4: 151.05 1.50 proj of the Feb 26 - Mar 3 - Mar 5 price swing
• RES 3: 150.69 76.4% retracement of the Feb 12 - 26 sell-off
• RES 2: 150.39 High Mar 11
• RES 1: 149.44 High Mar 31
• PRICE: 149.31 @ Close Mar 31
• SUP 1: 148.57 Low Mar 30
• SUP 2: 148.36 Low Mar 18
• SUP 3: 148.20 61.8% retracement of the Feb 26 - Mar 11 rally
• SUP 4: 147.68 76.4% retracement of the Feb 26 - Mar 11 rally

BTP futures started the week on a softer note and the contract maintains a bearish tone. Resistance is at 150.39, Mar 11 high with a pivotal level at 150.69, 76.4% of the Feb 12 - 26 sell-off. While these levels hold, the short-term risk appears skewed to the downside. A breach of 148.36, Mar 18 low would reinforce a bearish argument and signal scope for a deeper pullback. On the upside, clearance of 150.39 would instead be bullish.

EQUITIES

EUROSTOXX 50 Techs: Needle Still Points North

• RES 4: 4110.24 High Jan 18, 2008
• RES 3: 4000.00 Psychological round number
• RES 2: 3987.14 2.00 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 1: 3929.49 High Mar 30
• PRICE: 3919.21 @ Close Mar 31
• SUP 1: 3841.46 Low Mar 26
• SUP 2: 3784.09 Low Mar 25 and key support
• SUP 3: 3742.53 High Feb 15 and recent breakout level
• SUP 4: 3733.06 50-day EMA

EUROSTOXX 50 traded higher Tuesday, registering a fresh trend high print of 3929.49. The outlook remains bullish and this week's gains confirm a resumption of the uptrend and extends the bullish price sequence of higher highs and higher lows. This signals scope for a climb to 3987.14 next, a Fibonacci projection. On the downside, key support has been defined at 3784.09, Mar 25 low. A break is required to signal a potential short-term top.

COMMODITIES

BRENT TECHS: (M1) Pulls Away From Recent Highs

• RES 4: $70.67 - High Mar 8 and the key bull trigger
• RES 3: $69.50 - High Mar 15
• RES 2: $67.76- High Mar 18
• RES 1: $65.39 - High Mar 29
• PRICE: $63.20 @ 06:49 Apr 1
• SUP 1: $61.70 - Low Mar 26
• SUP 2: $60.33 - Low Mar 23 and the bear trigger
• SUP 3: $58.27 - 38.2% retracement of the Nov 2 - Mar 8 rally
• SUP 4: $56.80 - High Jan 13

Brent crude futures traded lower again yesterday. The break higher Monday through $64.97, Mar 22 high failed to deliver any bullish follow through despite signalling scope for a short-term recovery. Price would need to trade above $65.39, Mar 30 high to again suggest scope for an extension higher. This would open $67.76, the Mar 18 high. On the downside, key support and the bear trigger lies at $60.33, low Mar 23.

WTI TECHS: (K1) Resistance Defined At $62.27

• RES 4: $67.79 - High Mar 8 and the bull trigger
• RES 3: $66.44 - High Mar 15
• RES 2: $64.88 - High Mar 18 and a key near-term resistance
• RES 1: $62.27 - High Mar 30
• PRICE: $59.61 @ 06:55 Apr 1
• SUP 1: $58.32 - Low Mar 26
• SUP 2: $57.25 - Low Mar 23 and the bear trigger
• SUP 3: $55.65 - 38.2% retracement of the Nov 2 - Mar 8 rally
• SUP 4: $53.68 - High Jan 13

WTI futures Monday probed resistance at $62.04, Mar 22 high. The break higher failed to deliver any bullish follow through despite signalling scope for a short-term recovery. Price would need clear $62.27, Mar 30 high to again suggest scope for gains. This would open $64.88, the Mar 18 high. On the downside, key support and the bear trigger lies at $57.25, Mar 23 low. A break would instead resume bearish pressure.

GOLD TECHS: Bearish Theme Despite Yesterday's Bounce

• RES 4: $1805.7 - High Feb 25
• RES 3: $1765.8 - 50-day EMA
• RES 2: $1755.5 - High Mar 18 and key resistance
• RES 1: $1729.6 - 20-day EMA
• PRICE: $1712.1 @ 07:14 GMT Apr 1
• SUP 1: $1678.0 - Low Mar 31
• SUP 2: $1676.9 - Low Mar 8 and the bear trigger
• SUP 3: $1671.0 - Low Jun 5, 2020
• SUP 4: $1659.6 - Low Apr 21, 2020

Gold has found support and bounced off yesterday's low of $1678.0. Despite these gains, the yellow metal maintains a bearish tone following the recent break of $1719.3, Mar 18 low and $1699.3, Mar 12 low. The breach of $1699.3 marked a key intraday development and reinforces a bearish threat signalling scope for a move towards $1676.9, the Mar 8 low and a bear trigger. Key short-term resistance has been defined at $1755.5, Mar 18 high.

SILVER TECHS: Heading South

• RES 4: $27.081 - High Mar 1
• RES 3: $26.636 - High Mar 18 and firm near-term resistance
• RES 2: $25.826 - High Mar 23
• RES 1: $25.257 - High Mar 26
• PRICE: $24.273 @ 07:17 GMT Apr 1
• SUP 1: $23.781 - Low Mar 31
• SUP 2: $23.524 - Low Dec 7
• SUP 3: $22.591 - Low Dec 12
• SUP 4: $21.899 - Low Nov 30 and a key support

Silver remains soft. The metal traded lower Mar 25 clearing support at $24.836, Mar 5 low and continues to edge lower with further weakness seen likely short-term. The break lower has opened $23.524, the Dec 7 low and a key near-term support. Initial firm resistance is seen at $25.257, Mar 26 high. Key short-term resistance has been defined at $26.636, Mar 18 high. A break of this level is required to alter the picture.