MNI DAILY TECHNICAL ANALYSIS - Bund Bounce Stalls

Price Signal Summary – Bund Bounce Stalls Ahead of Key Resistance

• In the equity space, S&P E-minis are drifting off the week's highs, but major supports remain intact. This keeps nearby resistance at the 4238.25 May 10 high in sight, with the outlook remaining bullish above key trend support at 4029.25, May 13 low. EUROSTOXX 50 futures are flat on the week, keeping directional parameters intact. The modest uptrend is still in play and opens 4099.00,1.00 projection of the Mar - Jul - Oct 2020 price swing.
• In the FX space, EURUSD continues to trade inside the April-May uptrend, maintaining a bullish tone. The pair this week cleared 1.2245 with sights set on 1.2285 next, Jan 8 high. GBPUSD is trading closer to recent highs and remains bullish. The focus is on 1.4237, Feb 24 high and this year's high print. A break would confirm a resumption of the broader uptrend. USDJPY support is unchanged at 108.34, May 7 low. A bullish theme holds while this support remains intact and attention is on 109.79, May 13 high. A break of 108.34 however would highlight a trendline break drawn off the Jan 6 low and risk a deeper pullback.
• On the commodity front, Gold has broken higher, cementing the bullish theme. The yellow metal has topped $1,900 this week and is narrowing in on next resistance at the Jan 8 high of $1917.6. There are some signs that markets could be overbought, however, with the 14-day RSI now at its highest level since August last year. Oil contracts have recovered from recent lows and are holding onto this week's highs. Brent (N1) key resistance is at $70.24, May 18 high and this marks the bull trigger. WTI (N1) bulls are eyeing $67.02, May 18 high.
• Within FI, Bunds (M1) continue to climb and are through the 20-day EMA. The next resistance is the 170.47, 50-day EMA. Gilts (M1) are firmer too as the correction higher extends. Key resistance is 128.80 High May 7.

FOREIGN EXCHANGE

EURUSD TECHS: Bullish Focus

• RES 4: 1.2414 High Apr 17, 2018
• RES 3: 1.2349/53 High Jan 6 / High Apr 20, 2018
• RES 2: 1.2285 High Jan 8
• RES 1: 1.2266 High May 25
• PRICE: 1.2193 @ 06:03 BST May 27
• SUP 1: 1.2160/26 Low May 19 / Low May 17
• SUP 2: 1.2052 Low May 13 and key short-term support
• SUP 3: 1.2070 50-day EMA
• SUP 4: 1.1986 Low May 5 and key short-term support

EURUSD faced selling pressure Wednesday. Despite the pullback, the pair is still trading within its recent range and the outlook remains bullish. The recent breach of 1.2245, May 19 high strengthens the positive theme and opens 1.2285, Jan 8 high. Further out, the 2021 high of 1.2349, Jan 6 high beckons. On the downside, key short-term support has been defined at 1.2052, May 13 low while initial support remains 1.2160, the May 19 low.

GBPUSD TECHS: Consolidation Mode

• RES 4: 1.4418 2.0% 10-dma envelope
• RES 3: 1.4315 High Apr 18, 2018
• RES 2: 1.4237 High Feb 24 and the bull trigger
• RES 1: 1.4234 High May 21
• PRICE: 1.4115 @ 06:08 BST May 27
• SUP 1: 1.4091 Intraday low
• SUP 2: 1.4006/3972 Low May 13 / Low May 10
• SUP 3: 1.3962 50-day EMA
• SUP 4: 1.3858 Low May 6

GBPUSD, while slightly weaker, remains in consolidation mode. The outlook is unchanged and is bullish. Sights are on 1.4237, Feb 24 high and the key bull trigger. A break would reinforce a bullish case and importantly confirm a resumption of the broader uptrend that started March 2020. On the downside, initial firm support is unchanged at 1.4006, May 13 low where a break would suggest scope for a deeper corrective pullback.

EURGBP TECHS: Gains Still Considered Corrective

• RES 4: 0.8791 2.0% 10-dma envelope / High Feb 12
• RES 3: 0.8731 High Feb 26
• RES 2: 0.8701/21 High May 7 / High Apr 26 and the bull Trigger
• RES 1: 0.8672 High May 25
• PRICE: 0.8635 @ 06:21 BST May 27
• SUP 1: 0.8584/61 Low May 21 / Low May 12
• SUP 2: 0.8531 76.4% retracement of the Apr 5 - 26 rally
• SUP 3: 0.8472 Low Apr 5 and the bear trigger
• SUP 4: 0.8446 2.0% 10-dma envelope

EURGBP short-term gains appear to be a correction. A bearish theme still dominates following recent weakness and the low print on May 12 of 0.8561. The move lower saw the cross move out of its recent range suggesting scope for a deeper pullback, potentially towards the key support at 0.8472, Apr 5 low. The trigger for a move lower is 0.8561. On the upside, the key resistance and bull trigger is unchanged at 0.8721, Apr 26 high.

USDJPY TECHS: Support Holds

• RES 4: 110.97 High Mar 31 and the bull trigger
• RES 3: 110.55 High Apr 6
• RES 2: 109.96 High Apr 9
• RES 1: 109.79 High May 13
• PRICE: 109.12 @ 06:27 BST May 27
• SUP 1: 108.56/34 Low May 25 / Low May 7 and key S/T support
• SUP 2: 107.48 Low Apr 23 and the bear trigger
• SUP 3: 106.97 Low Mar 4
• SUP 4: 106.78 50.0% retracement of the Jan - Mar rally

USDJPY continues to consolidate and has held above recent lows. The outlook remains bullish. Attention is on 109.96, Apr 9 high with potential for a climb above 110.00. Note that the recovery May 12 means trendline support drawn off the Jan 6 low remains intact despite the move below it this week. Key support to watch is 108.34, May 7 low. A break would signal a reversal and confirm a break of the trendline.

EURJPY TECHS: Trend Condition Remains Bullish

• RES 4: 134.80 High Feb 8, 2018
• RES 3: 134.36 Bull channel top drawn off the Oct 30, 2020 low
• RES 2: 134.19 1.618 proj of Jun-Sep-Oct 2020 swing
• RES 1: 133.61 High May 25
• PRICE: 133.04 @ 06:40 BST May 27
• SUP 1: 132.52 Low May 24
• SUP 2: 131.69 Low May 12
• SUP 3: 130.99 Low May 5 and a key support
• SUP 4: 130.85 Bull channel base drawn off the Oct 30, 2020 low

EURJPY traded higher Tuesday but has ebbed lower since. Continued gains though reinforce bullish conditions and signal scope for an extension within the rising channel drawn off the Oct 30 2020 low. The top of the channel intersects at 134.36. Moving average studies are still pointing north, reinforcing current conditions. Initial firm support lies at 132.52, May 24 low. A firmer trend support is found at 130.99, May 5 low.

AUDUSD TECHS: Range Bound

• RES 4: 0.8007 High Feb 25 and the bull trigger
• RES 3: 0.7909 2.0% 10-dma envelope
• RES 2: 0.7891/95 High May 10 / 76.4% of the Feb 25 - Apr 1 sell-off
• RES 1: 0.7813/46 High May 18 / High May 12
• PRICE: 0.7743 @ 06:46 BST May 27
• SUP 1: 0.7688 Low May 13
• SUP 2: 0.7675 Low May 4 and key support
• SUP 3: 0.7635 Low Apr 14
• SUP 4: 0.7586 Low Apr 13

AUDUSD continues to trade in a range. A bearish theme dominates though following the recent move lower to 0.7688 on May 13. A firm support zone has been defined at 0.7688-75, the latter is the May 4 low. Clearance of this support would strengthen a bearish case and signal scope for a deeper pullback towards 0.7586, the Apr 13 low. For bulls, a breach of 0.7813, May 18 high would be positive and open 0.7891, high May 10.

USDCAD TECHS: Needle Still Points South

• RES 4: 1.2419 High Apr 27
• RES 3: 1.2351 High May 4 and a key near-term resistance
• RES 2: 1.2288 High May 13
• RES 1: 1.2164/2203 20-day EMA / High May 6
• PRICE: 1.2120 @ 06:50 BST May 27
• SUP 1: 1.2013 Low May 18
• SUP 2: 1.2000 Psychological round number
• SUP 3: 1.1920 Low May 2015
• SUP 4: 1.1849 2.0% 10-dma envelope

USDCAD is higher, but remains bearish. The recent key technical development has been the move through major support at 1.2062, Sep 2017 low. This represents an important pivot chart point, marking either the base of a broad range or the midpoint of a double top reversal pattern. Scope is seen for a test and break of the psychological 1.2000 handle. Initial firm resistance is at 1.2203, May 13 high. The bear trigger is 1.2013, May 18 low.

FIXED INCOME

BUND TECHS: (M1) Correction Approaching 50-Day EMA

• RES 4: 171.27 High Apr 22
• RES 3: 170.98 High May 7 and key short-term resistance
• RES 2: 170.48 50-day EMA
• RES 1: 170.40 High May 26
• PRICE: 170.25 @ 05:12 BST May 27
• SUP 1: 169.02 Low May 24
• SUP 2: 168.29 Low May 19 and the bear trigger
• SUP 3: 168.09 0.764 proj of the Jan 27 - Feb 25 - Mar 25 price swing
• SUP 4: 167.52 Low Mar 19, 2020 (cont)

Bund futures traded higher yesterday extending this week's gains above the 20-day EMA. The recent recovery is still considered a correction and attention turns to resistance at the 50-day EMA that intersects at 170.48. A break of this level would expose 170.98, May 7 high. On the downside, key support has been defined at 168.29, May 19 low where a breach would confirm a resumption of the downtrend.

BOBL TECHS: (M1) Testing The 50-Day EMA

• RES 4: 135.050 High Apr 22
• RES 3: 135.040 High May 6 and key short-term resistance
• RES 2: 135.008 61.8% retracement of the Mar 25 - May 19 downleg
• RES 1: 134.850 High May 26
• PRICE: 134.810 @ 05:18 BST May 27
• SUP 1: 134.410 Low May 24
• SUP 2: 134.180/140 Low May 19 / Low Feb 26 and key support
• SUP 3: 134.000 Round number support
• SUP 4: 133.340 Low Mar 19, 2020 (cont)

Bobl futures traded higher again yesterday extending gains above the 20-day EMA. The recent climb is still considered corrective. Attention is on the area of resistance around the 50-day EMA that intersects at 134.825. The average has been probed and a clear break would signal scope for a stronger S/T recovery and expose 135.040. Initial support lies at 134.410, May 24 low. The broader trend remains bearish and the bear trigger is 134.180/140.

SCHATZ TECHS: (M1) Corrective Cycle Extends

• RES 4: 112.150 High Apr 8
• RES 3: 112.110/120 High May 4, 5, and 6 / High Apr 22
• RES 2: 112.089 50-day EMA
• RES 1: 112.060 High May 26 and intraday high
• PRICE: 112.050 @ 05:28 BST May 27
• SUP 1: 112.000 Low May 19
• SUP 2: 111.993 76.4% retracement of the Feb 26 - Mar 25 rally
• SUP 3: 111.940 Low Feb 26 ad key support
• SUP 4: 111.860 Low Apr 15, 2019 (cont)

Recent Schatz futures gains are considered corrective. The outlook is bearish following the recent sell-off from May 5 that marked a resumption of the bear cycle since Mar 25. Recent weakness resulted in a breach of 112.060, a level that provided support in March and April. This strengthens a bearish case and opens 111.940, Feb 26 low. For bulls, a breach of 112.110 is required to signal a reversal. Resistance around the 50-day EMA is at 112.089.

GILT TECHS: (U1) Approaching Resistance

• RES 4: 128.10 2.500 projection of the May 13 - 19 price swing
• RES 3: 128.00 Round number resistance
• RES 2: 127.89 2.236 proj of the May 13 - 19 price swing
• RES 1: 127.74 High May 7 and 26
• PRICE: 127.68 @ Close May 26
• SUP 1: 127.34 Low May 26
• SUP 2: 126.81 Low May 24
• SUP 3: 126.12 Low May 19
• SUP 4: 125.94 Low May 13 and key support

The Gilt futures broader outlook remains bearish and recent gains are still considered a correction. Price though traded higher again yesterday and the contract is approaching key S/T resistance at the highs of early May and late April. A break of these highs would alter the picture and suggest a short-term base is in place signalling scope for a stronger near-term recovery. On the downside firm support is at 126.81, May 24 low. Key support lies at 125.94.

BTP TECHS: (M1) Corrective Cycle

• RES 4: 148.65 High Apr 22
• RES 3: 148.10 61.8% retracement of the Mar 29 - May 19 sell-off
• RES 2: 147.79 High May 4 and key near-term resistance
• RES 1: 147.40 50-day EMA
• PRICE: 147.27 @ Close May 26
• SUP 1: 145.64 Low May 21
• SUP 2: 144.48 Low May 17 and the bear trigger
• SUP 3: 144.16 1.236 proj of the Feb 12 - 26 - Mar 11 price swing
• SUP 4: 143.61 Low Jul 13, 2020 (cont)

BTP futures remain in a clear downtrend following last week's extension lower that resulted in a fresh 2021 low of 144.48 on Mar 19. However, this week prices are recovering and a corrective cycle is in play, allowing a recent oversold condition to unwind. The break of the 20-day EMA exposes the 50-day EMA at 147.40. This average represents a firm resistance area. On the downside, initial firm support lies at 145.64, May 21 low.

EQUITIES

EUROSTOXX 50 TECHS: (M1) Needle Still Points North

• RES 4: 4175.00 Low Nov 26, 2007 (cont)
• RES 3: 4140.00 High Jan 18, 2008 (cont)
• RES 2: 4099.00 1.00 proj of of the Mar - Jul - Oct 2020 price swing
• RES 1: 4059.00 High May 26
• PRICE: 4030.00 @ 05:57 BST May 27
• SUP 1: 3982.72 20-day EMA
• SUP 2: 3907.64/3882.00 50-day EMA / Low May 19
• SUP 3: 3844.00 Low May 13 and the bear trigger
• SUP 4: 3821.00 High Mar 18 and recent breakout level

EUROSTOXX 50 futures remain bullish and the contract is trading closer to recent highs following this week's breach of resistance at 4036.00, May 10 high. The break of resistance confirms a resumption of the uptrend and opens 4099.00, a Fibonacci projection. The climb also maintains the bullish price sequence of higher highs and higher lows, reinforcing the current trend condition. On the downside, firm support is at 3882.00, May 19 low.

E-MINI S&P (M1): Bulls Remain In Control

• RES 4: 4279.33 3.0% 10-dma envelope
• RES 3: 4239.26 1.764 proj of the Feb 1 - Feb 16 - Mar 4 price swing
• RES 2: 4238.25 High May 10 and the bull trigger
• RES 1: 4212.75 High May 25
• PRICE: 4184.25 @ 06:13 BST May 27
• SUP 1: 4154.69 20-day EMA
• SUP 2: 4055.60 Low May 19
• SUP 3: 4029.25 Low May 13 and key short-term support
• SUP 4: 4021.00 Low Apr 5

S&P E-minis remain firm. The contract started this week on a bullish note and breached initial resistance at 4185.00, May 21 high. This reinforces the bullish significance of the recent recovery from support defined by the 50-day EMA that has been tested twice this month. The break higher refocuses attention on key resistance and the bull trigger at 4238.25, May 10 high. On the downside, initial firm support is unchanged at 4055.50, May 19 low.

COMMODITIES

BRENT TECHS: (N1) Bullish Focus

• RES 4: $71.95 - High Sep 16, 2019 (cont)
• RES 3: $71.75 - High Jan 8 2020 (cont)
• RES 2: $70.24 - High May 18 and the bull trigger
• RES 1: $69.17 - High May 26
• PRICE: $68.58 @ 06:45 BST May 27
• SUP 1: $66.46/64.57 - Low May 24 / Low May 21 and key support
• SUP 2: $63.93 - Low Apr 26
• SUP 3: $62.00 - Low Apr 12
• SUP 4: $60.93 - Low Apr 5

Brent crude is consolidating and holding onto recent gains following the recovery from Friday's low of $64.57. The underlying uptrend remains intact and attention is on $70.24, May 18 high and the bull trigger. Price has recently traded below the 50-day EMA however levels around the average continue to provide support. Weakness through last week's $64.57 low is required to signal a short-term top and the start of a corrective pullback.

WTI TECHS: (N1) Focus Is On Key Resistance

• RES 4: $70.00 - Psychological round number
• RES 3: $67.95 - High Oct 29, 2018
• RES 2: $67.25 - 2.00 proj of Mar 23 - 30 - Apr 5 price swing
• RES 1: $67.02 - High May 18 and the bull trigger
• PRICE: $65.99 @ 06:54 BST May 27
• SUP 1: $63.63/61.56 - Low May 24 / Low May 21
• SUP 2: $60.55 - Low Apr 22 and key short-term support
• SUP 3: $58.70 - Low Apr 12
• SUP 4: $57.63 - Low Apr 5

WTI crude edged higher Tuesday, extending the recovery from the May 21 low of $61.56. This level marks a key short-term support where a break is required to suggest a short-term top and the start of a deeper corrective pullback. Attention is on $67.02, May 18 high and the bull trigger. A break would confirm a resumption of the bull trend. Moving average studies remain in bull mode, reinforcing trend conditions.

GOLD TECHS: Heading North

• RES 4: $1959.4 - High Jan 6 and key resistance
• RES 3: $1927.7 - High Jan 7
• RES 2: $1917.6 - High Jan 8
• RES 1: $1912.8 - High May 26
• PRICE: $1903.0 @ 07:08 BST May 27
• SUP 1: $1872.8/52.3 - Low May 25 / Low May 19
• SUP 2: $1808.9 - Low May 13
• SUP 3: $1809.4 - 50-day EMA
• SUP 4: $1764.3 - Low Apr 30

Gold bulls remain in charge and the yellow metal traded higher yesterday. This confirms again a resumption of the underlying uptrend as the bullish price sequence of higher highs and higher lows extends. Price has cleared $1892.7, 76.4% of the Jan 6 - Mar 8 sell-off. This signals scope for a climb towards $1917.6, high Jan 8 while further out, attention is on $1959.4, Jan 6 high and the key resistance. Initial firm support is $1852.3.

SILVER TECHS: Needle Still Points North

• RES 4: $30.100 - High Feb 1 and key resistance
• RES 3: $30.000 - Round number resistance
• RES 2: $29.053 - High Feb 2
• RES 1: $28.753 - High May 18
• PRICE: $27.717 @ 07:18 BST May 27
• SUP 1: $27.202 - Low May 21
• SUP 2: $26.721 - Low Mar 13 and key near-term support
• SUP 3: $26.646 - 50-day EMA
• SUP 4: $25.718 - Low Apr 29

The Silver outlook remains bullish. Price action last week probed $28.609, 76.4% of the sell-off between Feb 1 - Mar 31. The May 18 high of $28.753 marks a short-term bull trigger. A break would confirm a resumption of the uptrend and pave the way for strength towards $29.00 and above. Key short-term support has been defined at $26.721, Mar 13 low. Clearance of this level is required to threaten the trend. Initial support is at $27.202.