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MNI DAILY TECHNICAL ANALYSIS - Bunds Remain Below Key Resistance

Price Signal Summary - Bunds Remain Below Resistance

  • In the equity space, S&P E-minis continue to consolidate ahead of resistance at 4238.25 May 10 high. Key trend support is unchanged at 4029.25, May 13 low. Intraday volatility persisted this week, with the first support at the 20-day EMA 4170.22 already briefly giving way this week. A firm break would signal scope for a deeper pullback.
  • In the FX space, price action Thursday worked against the EURUSD bullish outlook. This resulted in prices showing below 1.2133 support, May 28 low. This signals scope for a deeper corrective pullback. 1.2266 remains resistance, May 25 high - this is also the intraday bull trigger. GBPUSD traded above resistance at 1.4237, Feb 24 high on Tuesday but has since pulled back. A clear break higher would confirm a resumption of the broader uptrend. Support to watch lies at 1.4092, May 27 low. USDJPY attention is on 110.20, May 28 high where a break would resume the recent recovery. Key support is unchanged at 108.56, May 25 low.
  • Trend conditions in Oil remain bullish. Brent (Q1) gains have opened $72.21 next, 0.764 projection of the Mar 23 - May 18 - May 21 price swing. WTI (N1) is approaching the $70.00 psychological level.
  • Within FI, Bunds (M1) remain below the 50-day EMA at 170.38. While it holds, the outlook is bearish. A clear break of the average is required to highlight scope for further gains. Support is at 169.02. May 24 low. Gilts (U1) remains below resistance at 127.74/82, highs between Apr 20 and May 26. A bearish risk remains present.
Tech Focus: Gold Reverses Course
- Gold is under pressure and back below $1900.0. The yellow metal has arrived at the 20-day EMA at $1868.5.
- A clear breach of the EMA would signal scope for a deeper pullback to $1852.3, May 19 low.
- Note that below this level lies support highlighted by the 50-day EMA at $1826.4.
- If the pullback is able to remain at the lows and extend, today's price action is finally allowing an overbought condition to unwind.
- Key resistance is at $1916.6.
- Support levels to watch:
  • SUP 1: $1863.9 - Low May 20
  • SUP 2: $1852.3 - Low May 19
  • SUP 3: $1826.4 - 50-day EMA

* SUP 4: $1808.9 - Low May 13FOREIGN EXCHANGE

EURUSD TECHS: Approaching The 50-Day EMA

  • RES 4: 1.2414 High Apr 17, 2018
  • RES 3: 1.2349/53 High Jan 6 / High Apr 20, 2018
  • RES 2: 1.2266/85 High May 25 and the bull trigger / High Jan 8
  • RES 1: 1.2214 High Jun 3
  • PRICE: 1.2113 @ 06:06 BST Jun 4
  • SUP 1: 1.2096 50-day EMA
  • SUP 2: 1.2052 Low May 13 and key short-term support
  • SUP 3: 1.1986 Low May 5
  • SUP 4: 1.1919 61.8% retracement of the Mar 31 - May 25 rally

The EURUSD outlook deteriorated Thursday following a sharp pullback that saw price trade below initial support at 1.2133, May 28 low. This highlights a short-term top and signals scope for a deeper corrective pullback. The focus is on the 50-day EMA that intersects at 1.2096. The average marks a key area of support. On the upside, initial resistance is at yesterday's high of 1.2214. Key resistance has been defined at 1.2266, May 25 high.

GBPUSD TECHS: Testing Support

  • RES 4: 1.4453 2.0% 10-dma envelope
  • RES 3: 1.4377 High Apr 17, 2018 and a key resistance
  • RES 2: 1.4315 High Apr 18, 2018
  • RES 1: 1.4203/48 High Jun 3 / High Jun 1 and the bull trigger
  • PRICE: 1.4088 @ 06:11 BST Jun 4
  • SUP 1: 1.4087 Low Jun 3
  • SUP 2: 1.4006 Low May 13 and the 50-day EMA
  • SUP 3: 1.3972 Low May 10
  • SUP 4: 1.3858 Low May 6

GBPUSD gains faltered Thursday and the pair has moved further away from Tuesday's 1.4248 high. The probe this week of former resistance at 1.4237, Feb 24 high does reinforce the broader bullish theme however a clear break is required to confirm a resumption of the uptrend. This would open 1.4315 next, April 18, 2018 high. On the downside, initial firm support at 1.4092, May 27 low is under pressure. A break would expose 1.4006, May 13 low.

EURGBP TECHS: Stuck In A Range

  • RES 4: 0.8788 2.0% 10-dma envelope and 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: 0.8595 @ 06:20 BST Jun 4
  • SUP 1: 0.8575/61 Low May 28 / 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: 0.8443 2.0% 10-dma envelope

EURGBP continues to trade within its recently defined range. The outlook is bearish following the move lower between May 25 - 28. Initial resistance has been defined at 0.8672, May 25 high. Attention is on support at 0.8561, May 12 low where a break would strengthen a bearish case and open 0.8531, a Fibonacci retracement ahead of key support and bear trigger at 0.8472, Apr 5 low. On the upside, a break of 0.8672 resistance would alter the picture.

USDJPY TECHS: Trades Through Resistance

  • RES 4: 111.30 High Mar 26, 2020
  • RES 3: 110.97 High Mar 31 and the bull trigger
  • RES 2: 110.55 High Apr 6
  • RES 1: 110.33 Intraday high
  • PRICE: 110.26 @ 06:30 BST Jun 4
  • SUP 1: 109.33 Low Jun 1
  • SUP 2: 108.56/34 Low May 25 / Low May 7 and key S/T support
  • SUP 3: 107.48 Low Apr 23 and the bear trigger
  • SUP 4: 106.97 Low Mar 4

USDJPY rallied Thursday and traded above initial resistance at 110.20, May 28 high. This confirms a resumption of the bull cycle that started Apr 23 and opens the year's high print of 110.97 from Mar 31. A break of 110.97 would represent an important technical break and resume the broader USDJPY uptrend. Moving average studies are in a bull mode reinforcing current conditions. Key short-term support has been defined at 109.33, Jun 1 low.

EURJPY TECHS: Trend Conditions Remain Bullish

  • RES 4: 134.80 High Feb 8, 2018
  • RES 3: 134.74 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: 134.13 High Jun 1
  • PRICE: 133.51 @ 06:35 BST Jun 4
  • SUP 1: 133.00 20-day EMA
  • SUP 2: 132.52 Low May 24
  • SUP 3: 131.69 Low May 12
  • SUP 4: 131.22 Bull channel base drawn off the Oct 30, 2020 low

The EURJPY outlook remains bullish despite this week's move lower. The cross touched a high of 134.13 Tuesday and the extension reinforces bullish conditions signalling scope for further gains within the rising channel drawn off the Oct 30 2020 low. The top of the channel intersects at 134.74. Moving average studies remain in bull mode, reinforcing current conditions. Initial firm support lies at 132.52, May 24 low.

AUDUSD TECHS: Key Support Breached

  • RES 4: 0.8007 High Feb 25
  • RES 3: 0.7891/95 High May 10 / 76.4% of the Feb 25 - Apr 1 sell-off
  • RES 2: 0.7813/46 High May 18 / High May 12
  • RES 1: 0.7773 High Jun 2
  • PRICE: 0.7657 @ 06:46 BST Jun 4
  • SUP 1: 0.7646 Low Jun 3
  • SUP 2: 0.7635 Low Apr 14
  • SUP 3: 0.7586 Low Apr 13
  • SUP 4: 0.7534 200-dma

AUDUSD broke through key support at 0.7675 Thursday. The break lower signals the end of the recent period of consolidation that has been in place since mid-April. A stronger sell-off would open 0.7586, the Apr 13 low and would also expose 0.7532, Apr 1 low and a key support. Initial resistance has been defined at 0.7773, Jun 2 high ahead of 0.7813, May 18 high. A break of the latter would ease any developing bearish pressure.

USDCAD TECHS: Recovers Within Its Range

  • RES 4: 1.2419 High Apr 27
  • RES 3: 1.2351 High May 4 and a key near-term resistance
  • RES 2: 1.2271 50-day EMA
  • RES 1: 1.2142/2203 High May 27 / High May 6
  • PRICE: 1.2121 @ 06:52 BST Jun 4
  • SUP 1: 1.2007 Low May 18
  • SUP 2: 1.2000 Psychological round number
  • SUP 3: 1.1920 Low May 2015
  • SUP 4: 1.1836 2.0% 10-dma envelope

USDCAD traded higher yesterday but is still trading within its recent range. Trend conditions remain bearish. The pair printed a new trend low of 1.2007 Tuesday, extending the downtrend. USDCAD continues to erode major support at 1.2062, Sep 2017 low. This level represents an important pivot point marking either the base of a broad range or the midpoint of a double top reversal. Initial firm resistance is at 1.2203, May 13 high.

FIXED INCOME

BUND TECHS: (U1) 50-Day EMA Remains Intact

  • RES 4: 172.80 High Apr 23
  • RES 3: 172.60 High May 7
  • RES 2: 172.08 50.0% retracement of the Mar 25 - May 19 sell-off
  • RES 1: 171.98/72.01 High May 26 / 50-day EMA
  • PRICE: 171.46 @ 05:09 BST Jun 4
  • SUP 1: 170.99 Low Mar 31
  • SUP 2: 170.56 Low May 24
  • SUP 3: 170.27 Low May 21
  • SUP 4: 169.75 Low May 19 and the bear trigger

Bund futures are trading in a range and below last week's highs. Recent gains stalled just ahead of a key resistance marked by the 50-day EMA. The average intersects at 172.01 today with the recent high at 171.98 on May 26. A reversal lower would signal scope for a move towards 170.56, May 24 low and open the key support and bear trigger at 169.75, May 19 low. A clear break of the 50-day EMA would be bullish.

BOBL TECHS: (U1) Trading At Recent Highs

  • RES 4: 134.357 0.764 proj of the May 20 - 26 - 31 price swing
  • RES 3: 134.290 High May 7
  • RES 2: 134.185 0.50 proj of the May 20 - 26 - 31 price swing
  • RES 1: 134.120 High Jun 3
  • PRICE: 134.090 @ 05:26 BST Jun 4
  • SUP 1: 133.953 20-day EMA
  • SUP 2: 133.860 Low May 28 and 31
  • SUP 3: 133.690 Low May 24
  • SUP 4: 133.450 Low May 20 and the bear trigger

Bobl futures are holding onto this week's gains and yesterday probed initial resistance at 134.100, May 26, 27 and June 2 high before pulling back. Recent gains are still considered corrective. Further gains would open the next key short-term resistance at 134.290, May 7 high. On the downside, initial support is seen at 133.86, low May 28 and 31. A break would signal the end of the correction and the potential for a stronger move lower.

SCHATZ TECHS: (U1) Consolidating

  • RES 4: 112.197 1.236 proj of the May 24 - 27 - 31 price swing
  • RES 3: 112.185 1.00 proj of the May 24 - 27 - 31 price swing
  • RES 2: 112.180 High May 27
  • RES 1: 112.170 High Jun 2 and 3
  • PRICE: 112.165 @ 05:37 BST Jun 4
  • SUP 1: 112.145 LowJun 3
  • SUP 2: 112.135 Low May 27, 28 and 31
  • SUP 3: 112.125 Low May 17
  • SUP 4: 112.110 Low Apr 20 and key support

Schatz futures continue to consolidate. The outlook is bearish following the sell-off from the early May highs. Recent price action has also defined key S/T directional triggers at; 112.180, May 27 high and 112.135, the lows between May 27 - 31. A break of support would strengthen a bearish case and open 112.120, May 17 low and the key support at 112.110. Clearance of resistance at 112.180 would instead signal scope for stronger S/T gains.

GILT TECHS: (U1) Bearish Focus

  • RES 4: 128.10 2.500 projection of the May 13 - 19 price swing
  • RES 3: 127.89 2.236 proj of the May 13 - 19 price swing
  • RES 2: 127.74/82 High May 7, 26 / High Apr 20 and a key resistance
  • RES 1: 127.37 High May 28
  • PRICE: 126.87 @ Close Jun 3
  • SUP 1: 126.70 Low Jun 3
  • SUP 2: 126.55 Low May 21
  • SUP 3: 126.12 Low May 19
  • SUP 4: 125.94 Low May 13 and key support

Gilt futures broader outlook remains bearish. Recent gains stalled on May 27, resulting in a sharp pullback. This signals the end of the recent corrective recovery. If correct, it suggests scope for short-term weakness that would expose last month's low of 125.94 on May 13. This level also represents the bear trigger. Key short-term resistance is marked by the highs of early May and late April. A break would instead be bullish.

BTP TECHS: (M1) Corrective Cycle Extends

  • RES 4: 148.95 76.4% retracement of the Mar 29 - May 19 sell-off
  • RES 3: 148.65 High Apr 22
  • RES 2: 148.10 61.8% retracement of the Mar 29 - May 19 sell-off
  • RES 1: 147.98 High Jun 3
  • PRICE: 147.67 @ Close Jun 3
  • SUP 1: 146.83 Low May 28
  • SUP 2: 145.64 Low May 21
  • SUP 3: 144.48 Low May 17 and the bear trigger
  • SUP 4: 144.16 1.236 proj of the Feb 12 - 26 - Mar 11 price swing

BTP futures remain in a clear downtrend following the recent extension lower to 144.48 on Mar 19. However, since May 19, prices have recovered and a corrective cycle remains in play, allowing a recent oversold condition to unwind. The recent break of the 20- and the 50-day EMA signals scope for further short-term gains and this has opened 148.10, a Fibonacci retracement. On the downside, initial support is at 146.83.

EQUITIES

EUROSTOXX 50 TECHS: (M1) Bullish Trend Structure Remains Intact

  • RES 4: 4175.00 Low Nov 26, 2007 (cont)
  • RES 3: 4168.83 Bull channel top drawn off the Feb 1 low
  • RES 2: 4140.00 High Jan 18, 2008 (cont)
  • RES 1: 4100.00 High Jun 1
  • PRICE: 4082.00 @ 05:56 BST Jun 4
  • SUP 1: 4020.28 20-day EMA
  • SUP 2: 3941.03/3882.00 50-day EMA / Low May 19
  • SUP 3: 3844.00 Low May 13 and the bear trigger
  • SUP 4: 3727.00 Low Mar 25

EUROSTOXX 50 futures remain bullish and the contract is trading near recent highs. A positive outlook follows the recent breach of resistance at 4036.00, May 10 high. The break confirmed a resumption of the uptrend, maintaining the price sequence of higher highs and higher lows. On the downside, firm trend support is unchanged at 3882.00, May 19 low. The focus is on 4140.00, Jan 18 high, 2008 (cont).

E-MINI S&P (M1): Corrective Pullback

  • RES 4: 4305.01 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: 4230.00 High Jun 1
  • PRICE: 4168.75 @ 06:55 BST Jun 4
  • SUP 1: 4142.50 Low May 24
  • 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 traded slightly lower yesterday. The outlook is unchanged and remains bullish. The contract breached former resistance at 4185.00 last week, May 21 high. Recent gains reinforce the bullish significance of the recovery in May from support defined by the 50-day EMA - the average was tested twice in May. Attention is on key resistance and the bull trigger at 4238.25, May 10 high. Initial firm support is at 4055.50, May 19 low.

COMMODITIES

BRENT TECHS: (Q1) Needle Still Points North

  • RES 4: $74.20 - High Apr 26, 2019 (cont)
  • RES 3: $73.40 - High May 20 2019 (cont)
  • RES 2: $72.21 - 0.764 proj of Mar 23 - May 18 - May 21 price swing
  • RES 1: $71.99 - High Jun 3
  • PRICE: $71.36 @ 06:48 BST Jun 4
  • SUP 1: $69.90 High May 18 and the recent break out level
  • SUP 2: $68.63 - 20-day EMA
  • SUP 3: $66.39/64.50 - Low May 24 / Low May 21 and key support
  • SUP 4: $63.51 - Low Apr 22

Brent crude futures continue to head north and the contract extended the uptrend once again yesterday. The focus turns to $72.21, a Fibonacci extension and $73.40, the May 20, 2019 high (cont). Price recently breached the 50-day EMA however levels around the average continue to provide strong trend support. Weakness through $64.50 low is required to signal a key short-term top. Initial support is at $69.90.

WTI TECHS: (N1) Bullish Focus

  • RES 4: $72.70 High Oct 15, 2018 (cont)
  • RES 3: $70.22 - 2.618 proj of Mar 23 - 30 - Apr 5 price swing
  • RES 2: $70.00 - Psychological round number
  • RES 1: $69.66 - 2.5 proj of Mar 23-30-Apr 5 price swing
  • PRICE: $68.88 @ 07:01 BST Jun 4
  • SUP 1: $67.02 - High May 18
  • SUP 2: $65.84 - 20-day EMA
  • SUP 3: $63.63/61.56 - Low May 24 / Low May 21
  • SUP 4: $60.55 - Low Apr 22 and key short-term support

WTI crude futures continue to defy gravity and the uptrend extended once again yesterday. The focus is on $69.66, a Fibonacci projection and the psychological $70.00 handle. A break of $70.00 would reinforce the current trend conditions. On the downside, key support has been defined at $61.56, May 21 low. A break is required to suggest a key short-term top. Initial support is at $67.02.

GOLD TECHS: Short-Term Top Defined

  • RES 4: $1965.6 - High Nov 9, 2020
  • RES 3: $1959.4 - High Jan 6 and key resistance
  • RES 2: $1927.7 - High Jan 7
  • RES 1: $1916.6 - High Jun 1
  • PRICE: $1871.3 @ 07:16 BST Jun 4
  • SUP 1: $1856.2 - Intraday low
  • SUP 2: $1852.3 - Low May 19
  • SUP 3: $1828.1 - 50-day EMA
  • SUP 4: $1808.9 - Low May 13

Gold faced strong selling pressure Thursday. The yellow metal has probed the 20-day EMA at $1868.7. A clear breach of the EMA would signal scope for a deeper pullback to $1852.3, May 19 low. Note that below this level lies support highlighted by the 50-day EMA at $1828.1. If the pullback is able to remain at the lows and extend, this price action is finally allowing an overbought condition to unwind. Key resistance is at $1916.6.

SILVER TECHS: Facing Selling Pressure

  • RES 4: $30.100 - High Feb 1 and key resistance
  • RES 3: $29.053 - High Feb 2
  • RES 2: $28.753 - High May 18
  • RES 1: $28.237 - High Jun 3
  • PRICE: $27.360 @ 09:28 BST Jun 4
  • SUP 1: $27.040 - Low Jun 3
  • SUP 2: $26.939 - 50-day EMA
  • SUP 3: $26.721 - Low Mar 13 and key near-term support
  • SUP 4: $25.718 - Low Apr 29

Silver faced selling pressure yesterday moving sharply below the $28.00 handle. The move lower exposes support defined by the 50-day EMA at $26.939. A clear break of the EMA would concern bulls and attention would likely turn to support at $26.721, Mar 13 low. Key resistance has been defined at $28.753, May 18 high. Initial resistance though is seen at yesterday's high of $28.237.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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