MNI DAILY TECHNICAL ANALYSIS - Candle Pattern Weighing on Stocks

Price Signal Summary – Candle Pattern Weighing on Stocks

• In the equity space, S&P E-minis remain vulnerable. The Feb 10 candle pattern is a bearish engulfing reversal, signalling a potential top and the recent move lower reinforces the pattern. This has exposed 4212.75. EUROSTOXX 50 futures remain vulnerable. Last week, the contract failed to hold above the 50-day EMA - at 4188.70 today. This average still represents a key resistance point where a clear break would suggest scope for a stronger recovery and open 4324.50, Jan 13 high.
• In FX, EURUSD traded lower still Monday, resulting in a breach of nearby support at the 1.1315 bear channel top. A continuation lower together with a breach of the next support at 1.1267, Feb 2 low, would signal scope for a deeper retracement of recent gains. GBPUSD is unchanged and continues to trade inside its recent range and importantly above support at 1.3491, Feb 7 low. The outlook is bullish following recent gains from 1.3358, the Jan 27 low and scope is seen for a test of 1.3662 next.
• On the commodity front, Gold has continued to appreciate and added to last week’s gains. The yellow metal has cleared resistance at $1853.9, the Jan 25 high and today has traded above $1877.2, the Nov 16 high. WTI futures rallied Friday and continued to climb Monday. The break higher resumes the bullish price sequence of higher highs and higher lows. Note too that corrections remain shallow and this both highlights and reinforces underlying bullish sentiment.
• In the FI space, Bund futures are trading near its recent lows and remain in a clear downtrend. Bearish pressure so far this month has reinforced current trend conditions and maintained the bearish price sequence of lower lows and lower highs. The trend condition in Gilt futures is unchanged and remains bearish. Continued weakness reinforces bearish conditions and extends the bearish price sequence

FOREIGN EXCHANGE

EURUSD TECHS: Trades Below Support At The Bear Channel Top

• RES 4: 1.1692 High Oct 28, 2021
• RES 3: 1.1608 High Nov 9, 2021
• RES 2: 1.1558 38.2% retracement of the May ‘21 - Jan 28 sell-off
• RES 1: 1.1401/95 High Feb 11 / High Feb 10
• PRICE: 1.1315 @ 06:10 GMT Feb 15
• SUP 1: 1.1280 Low Feb 14
• SUP 2: 1.1267 Low Feb 2
• SUP 3: 1.1209 76.4% retracement of the Jan 28 - Feb 10 rally
• SUP 4: 1.1121 Low Jan 28 and the bear trigger

EURUSD traded lower still Monday, resulting in a breach of nearby support at the 1.1315 bear channel top. A continuation lower together with a breach of the next support at 1.1267, Feb 2 low, would signal scope for a deeper retracement of recent gains. On the upside, key short-term resistance is at last Thursday’s high of 1.1495. A break of this level is required to confirm a resumption of the recent upleg and would remove bearish concerns.

GBPUSD TECHS: Range Bound

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3703/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3644 High Feb 10
• PRICE: 1.3530 @ 06:23 GMT Feb 15
• SUP 1: 1.3491 Low Feb 7
• SUP 2: 1.3435 Low Feb 1
• SUP 3: 1.3358 Low Jan 27 and the bear trigger
• SUP 4: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase

GBPUSD is unchanged and continues to trade inside its recent range and importantly above support at 1.3491, Feb 7 low. The outlook is bullish following recent gains from 1.3358, the Jan 27 low and scope is seen for a test of 1.3662 next, Jan 20 high. On the downside, a move below 1.3491, Feb 7 low would threaten the current bull theme and instead expose key support at 1.3358, Jan 27 low. This is the trigger for a resumption of bearish pressure.

EURGBP TECHS: Remains Below Its Key EMAs

• RES 4: 0.8526 76.4% retracement of the Dec 8 - Feb 3 downleg
• RES 3: 0.8512 High Dec 22
• RES 2: 0.8480 61.8% retracement of the Dec 8 - Feb 3 downleg
• RES 1: 0.8432/78 High Feb 11 / High Feb 7
• PRICE: 0.8364 @ 06:28 GMT Feb 15
• SUP 1: 0.8331 76.4% retracement of the Feb 3 - 7 uptrend
• SUP 2: 0.8285 Low Feb 3
• SUP 3: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fibonacci Retracement 2015-2020 Upleg

EURGBP pulled back sharply Friday and inched lower Monday. The cross is also below both the 20- and 50-day EMAs. Despite the pullback, the S/T outlook still appears bullish following the Feb 3 rebound from a major area of support at 0.8300, a multi-year range base since 2016 and 0.8282/77, the Feb’20 and Dec’19 lows. A rebound would again open 0.8480, a Fibonacci retracement. The next support to watch is 0.8331, a Fibonacci retracement.

USDJPY TECHS: Key S/T Resistance Remains Exposed

• RES 4: 118.07 2.236 proj of Apr 23 - Jul 2 - Aug 4 2021 price swing
• RES 3: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 2021 price swing
• RES 2: 116.35 High Jan 4 and the bull trigger
• RES 1: 116.34 High Feb 10
• PRICE: 115.34 @ 06:33 GMT Feb 15
• SUP 1: 115.01 Low Feb 14
• SUP 2: 114.65 50-day EMA
• SUP 3: 114.16 Low Feb 02
• SUP 4: 113.47 Low Jan 24 and key support

USDJPY remains below last week’s highs. The outlook is bullish following recent gains through resistance at 115.67/68, 76.4% of the Jan 4 - 24 downleg and the Jan 28 high. Attention is on key resistance at 116.35, Jan 4 high and the bull trigger. A clear break of this hurdle would resume the uptrend and pave the way for a climb towards 117.08, a projection of the Apr 23 - Jul 2 - Aug 4 price swing. Initial support is seen at 115.01.

EURJPY TECHS: Trading Near Its Recent Lows

• RES 4: 134.14 3.0% Upper Bollinger Band
• RES 3: 133.48/82 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 2: 133.15 High Feb 10
• RES 1: 131.52 50.0% retracement of Friday’s range
• PRICE: 130.51 @ 06:42 GMT Feb 15
• SUP 1: 130.05 Low Feb 14
• SUP 2: 129.41 76.4% retracement of the Jan 25 - Feb 10 rally
• SUP 3: 129.19 Low Feb 3
• SUP 4: 128.25 Low Jan 25 and a key short-term support

EURJPY is trading near recent lows having traded sharply lower Friday. A key support zone is seen at 130.65-20 marking the area between the 20- and 50-day EMAs. The lower level has been probed and yesterday’s low is also seen as a key short-term support - at 130.05. For now, the pullback is considered corrective with bullish conditions intact following the recovery from the late January lows. The bull trigger is at 133.15, Feb 10 high.

AUDUSD TECHS: Shooting Star Candle Still In Play

• RES 4: 0.7314 High Jan 13 and a key resistance
• RES 3: 0.7277 High Jan 20
• RES 2: 0.7273 2.0% 10-dma envelope
• RES 1: 0.7249 High Feb 09
• PRICE: 0.7112 @ 06:46 GMT Feb 15
• SUP 1: 0.7086/7052 Low Feb 14 / Low Feb 4
• SUP 2: 0.6968/6963 Low Jan 28 / Low Jul 16, 2020
• SUP 3: 0.6921 Low Jul 14, 2020
• SUP 4: 0.6884 0.764 proj of the Oct ‘21 - Dec ‘21 - Jan price swing

AUDUSD has reversed lower from last Thursday’s high of 0.7249. The pullback means the pair has failed to remain above the 50-day EMA and this is seen as an early warning of a possible stronger reversal. Thursday’s candle is a shooting star - a bearish signal. A deeper pullback would expose 0.7052, Feb 4 low. A break here would open 0.6968/6963, the Jan 28 and Jul 16, 2020 lows. Clearance of 0.7249 is required to reinstate a bullish theme.

USDCAD TECHS: Holding Above Key S/T Support

• RES 4: 1.2964 High Dec 20 and a key resistance
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2843 76.4% retracement of the Dec 20 - Jan 19 sell-off
• RES 1: 1.2797 High Jan 28 and a key resistance
• PRICE: 1.2739 @ 06:50 GMT Feb 15
• SUP 1: 1.2636 Low Feb 10 and key short-term support
• SUP 2: 1.2560 Low Jan 26
• SUP 3: 1.2451/48 Low Jan 19 / 76.4% of the Oct - Dec rally
• SUP 4: 1.2387 Low Nov 10

USDCAD is currently trading in a range and holding above its support at 1.2636, Feb 10 low. While this level holds, a positive outlook remains intact following the recent recovery from 1.2451, Jan 19 low that resulted in a move above the 50-day EMA and a climb through 1.2768, 61.8% of the Dec 20 - Jan 19 sell-off. The focus is on 1.2843, the 76.4% value. On the downside, a sub 1.2636 levels would threaten the bullish theme.

FIXED INCOME

BUND TECHS: (H2) Bearish Trend Sequence Intact

• RES 4: 169.61 50-day EMA
• RES 3: 167.56 20-day EMA
• RES 2: 167.00 High Feb 4
• RES 1: 166.46 Feb 11 high
• PRICE: 165.39 @ 05:02 GMT Feb 15
• SUP 1: 164.37 Low Jan 10 and the bear trigger
• SUP 2: 164.00 Round number support
• SUP 3: 163.63 Low Mar, 2019 (cont)
• SUP 4: 162.60 76.4% retrace of the Oct ‘18 - Sep ‘19 bull cycle (cont)

Bund futures are trading near its recent lows and remain in a clear downtrend. Bearish pressure so far this month has reinforced current trend conditions and maintained the bearish price sequence of lower lows and lower highs. Moving average conditions are in a bear mode set-up too, highlighting current sentiment. The focus is on the 164.00 handle next. 166.46 is initial resistance, the Feb 11 high.

BOBL TECHS: (H2) Bearish Focus

• RES 4: 132.510 50-day EMA
• RES 3: 132.060 High Feb 3
• RES 2: 131.569 20-day EMA
• RES 1: 131.360 High Feb 11
• PRICE: 130.880 @ 05:06 GMT Feb 15
• SUP 1: 130.080 Low Feb 10
• SUP 2: 130.000 Psychological round number
• SUP 3: 129.460 High Dec 7, 2015 (cont)
• SUP 4: 129.020 Low Dec 7, 2015 (sont)

Bobl futures are trading above recent lows but remain in a clear downtrend and short-term gains are considered corrective. Recent selling pressure and fresh trend lows maintain the bearish price sequence of lower lows and lower highs. Moving averages are in a bear mode too and attention is on the psychological 130.00 handle next. Initial resistance is seen at 131.360, the Feb 11 high.

SCHATZ TECHS: (H2) Gains Considered Corrective

• RES 4: 112.020 High Jan 31
• RES 3: 111.917 50-day EMA
• RES 2: 111.870 High Feb 3
• RES 1: 111.760 High Feb 11
• PRICE: 111.660 @ 05:18 GMT Feb 15
• SUP 1: 111.420 High Feb 11
• SUP 2: 111.250/208 Low Feb 7 / 2.50 proj of Dec 20-Jan 19-24 swing
• SUP 3: 111.185 Low Jun 26, 2015 (cont)
• SUP 4: 111.140 Low Jun 11, 2015 (cont)

The trend direction in Schatz futures remains bearish and recent strong recovery is still considered corrective. The sell-off between Jan 24 and Feb 7 resulted in a break of 111.890, Jan 19 low and confirmed a resumption and an acceleration of the downtrend. Moving average conditions remain bearish too. The Feb 11 high of 111.760 marks initial resistance. A return lower would refocus attention on 111.420, Feb 11 low and 111.250, the Feb 7 low.

GILT TECHS: (H2) Fresh Cycle Low

• RES 4: 123.07 50-day EMA
• RES 3: 122.56 High Feb 2
• RES 2: 121.59 High Feb 4 and the 20-day EMA
• RES 1: 120.96 High Feb 8
• PRICE: 119.64 @ Close Feb 14
• SUP 1: 119.48 Low Feb 14
• SUP 2: 119.36 Low Oct 10, 2018 (cont)
• SUP 3: 119.28 2.382 proj of the Jan 13 - 19 - 24 price swing
• SUP 4: 119.06 2.500 proj of the Jan 13 - 19 - 24 price swing

The trend condition in Gilt futures is unchanged and remains bearish. The contract delivered a fresh cycle low Monday of 119.48. Continued weakness reinforces bearish conditions and extends the bearish price sequence of lower lows and lower highs. Furthermore, moving averages are pointing south too. With the 120.00 psychological handle cleared, the focus is on 119.28 next, a Fibonacci projection. Firm S/T resistance is seen at 120.96.

BTP TECHS: (H2) Heading South

• RES 4: 145.16 50-day EMA
• RES 3: 144.55 Low Jan 19
• RES 2: 142.55/142.59 High Feb 4 / 20-day EMA
• RES 1: 141.14 High Jan 9
• PRICE: 138.52 @ Close Feb 14
• SUP 1: 138.35 Low Feb 14
• SUP 2: 138.09 1.50 proj of the Dec 14 - Jan 19 - 31 price swing
• SUP 3: 137.52 Low May 18, 2020 (cont)
• SUP 4: 136.86 Low May 13, 2020 (cont)

BTP futures remain soft and the contract traded lower Monday, starting the week on a softer note. The outlook remains bearish. Continued selling pressure has again confirmed a resumption of the underlying downtrend and maintains the bearish price sequence of lower lows and lower highs. The focus is on 138.09 next, a Fibonacci projection. On the upside, initial resistance is seen at the Feb 9 high of 141.14.

EQUITIES

E-MINI S&P (H2): Remains Vulnerable

• RES 4: 4808.25 All-time high on Jan 4
• RES 3: 4739.50 High Jan 12
• RES 2: 4671.75 High Jan 18
• RES 1: 4586.00 High Feb 2 and a near-term bull trigger
• PRICE: 4392.75 @ 06:52 GMT Feb 15
• SUP 1: 4354.00 Low Feb 14
• SUP 2: 4263.25 Low Jan 27
• SUP 3: 4212.75 Low Jan 24 and the bear trigger
• SUP 4: 4186.57 23.6% of the Mar ‘20 - Jan ‘22 major rally

S&P E-minis traded sharply lower Friday and remains vulnerable. The contract recently failed to hold above the 50-day EMA - at 4549.15 today. This average represents a firm resistance and a clear break would suggest scope for a stronger rally towards 4671.75 initially, Jan 18 high. The Feb 10 candle pattern is a bearish engulfing reversal, signalling a potential top and the recent move lower reinforces the pattern. This has exposed 4212.75.

EUROSTOXX50 TECHS: (H2) Bear Trigger Exposed

• RES 4: 4392.50 High Nov 18 and key resistance
• RES 3: 4381.50 High Jan 5 and the bull trigger
• RES 2: 4324.50 High Jan 13
• RES 1: 4188.70/4250.00 50-day EMA / High Feb 2
• PRICE: 4035.00 @ 05:45 GMT Feb 15
• SUP 1: 3996.00 Low Feb 15
• SUP 2: 3990.50 Low Jan 24 and key support
• SUP 3: 3980.00 Low Nov 30 2021
• SUP 4: 3935.00 Low Oct 6 2021

EUROSTOXX 50 futures remain vulnerable. Last week, the contract failed to hold above the 50-day EMA - at 4188.70 today. This average still represents a key resistance point where a clear break would suggest scope for a stronger recovery and open 4324.50, Jan 13 high. The shift lower however highlights the bearish threat and has exposed 3990.50, the Jan 24 low and the next bear trigger. A break would resume this years downtrend.

COMMODITIES

BRENT TECHS: (J2) Defying Gravity

• RES 4: $100.00 - Key psychological barrier
• RES 3: $98.94 - 2.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $97.36 - 2.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $96.78 - High Feb 14
• PRICE: $96.05 @ 06:59 GMT Feb 15
• SUP 1: $89.93/87.72 - Low Feb 8 / Low Feb 1
• SUP 2: $84.89 - 50-day EMA
• SUP 3: $84.22 - Low Jan 24 and key support
• SUP 4: $79.95 - Low Jan 10

Brent futures traded higher again Monday, confirming a resumption of the underlying uptrend. The break higher also resumes the bullish price sequence of higher highs and higher lows. Note too that corrections remain shallow and this highlights and reinforces underlying bullish sentiment. The focus is on $97.36 next, a Fibonacci projection. On the downside, key short-term support has been defined at $89.93, the Feb 8 low.

WTI TECHS: (H2) Another Cycle High

• RES 4: $100.78 - 3.236 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $100.00 - Key psychological barrier
• RES 2: $98.24 - 3.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $95.82 - High Feb 14
• PRICE: $94.82 @ 07:15 GMT Feb 15
• SUP 1: $88.41 - Feb 9 low and key short-term support
• SUP 2: $86.34 - Low Jan 31
• SUP 3: $82.79 - 50-day EMA
• SUP 4: $81.90 - Low Jan 24

WTI futures rallied Friday and continued to climb Monday. The break higher resumes the bullish price sequence of higher highs and higher lows. Note too that corrections remain shallow and this both highlights and reinforces underlying bullish sentiment. The focus is on $98.24 next, a Fibonacci projection. On the downside, key short-term support has been defined at $88.41, the Feb 9 low.

GOLD TECHS: Extension Higher

• RES 4: $1932.5 bull channel top drawn from the Aug 9 2021 low
• RES 3: $1916.6 - High Jun 1 2021 and a key resistance
• RES 2: $1903.1 - High Jun 11, 2021
• RES 1: $1881.6 - 1.00 proj of the Dec 15 - Jan 25 - 28 price swing
• PRICE: $1878.6 @ 07:21 GMT Feb 15
• SUP 1: 1850.9 Low Feb 14
• SUP 2: $1821.1 - Low Feb 11
• SUP 3: $18005.0 - Bull channel base drawn from the Aug 9 2021 low
• SUP 4: $1788.7 - Low Feb 3

Gold has continued to appreciate and added to last week’s gains. The yellow metal has cleared resistance at $1853.9, the Jan 25 high and today has traded above $1877.2, the Nov 16 high. The break reinforces current bullish conditions and suggests scope for a stronger climb within the bull channel drawn off the Aug 9 low. A recent attempt at clearing the channel base failed, resulting in the current rally. The focus is on $1903.8, the Jun 8 2021 high.

SILVER TECHS: Bullish Extension

• RES 4: $25.406 - High Nov 16, 2021
• RES 3: $24.886 - High Nov 22
• RES 2: $24.700 - High Jan 20 and a key resistance
• RES 1: $23.994 - High Jan 25
• PRICE: $23.764 @ 08:02 GMT Feb 15
• SUP 1: $22.863/008 - Low Feb 11 / Low Feb 3 and key S.T support
• SUP 2: $21.949 - Low Jan 7
• SUP 3: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally

Silver remains firm. The recent rally suggests scope for a stronger recovery and this has opened $23.994, the Jan 25 high. A break of this level would pave the way for gains towards $24.700, the Jan 20 high. On the downside, key support lies at $22.008, the Feb 3 low. A break of this support would reinstate the recent bearish theme. This would instead open $21.949, the Jan 7 low. Initial firm support lies at $22.863, Feb 11 low.