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BOBL TECHS

(M2) Resistance Remains Intact

OIL

A Touch Higher In Asia

BUND TECHS

(M2) Pulling Away From Its Recent High

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NAB: RBA Still To Hike 25bp In June

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Price Signal Summary – Convincing Break Higher For Equities

In the equity space, S&P E-minis have made a convincing break higher, topping 4,000 and hitting new record highs in the process. EUROSTOXX 50 is trading higher too as the uptrend extends. This reinforces the underlying bullish theme and opens 3987.14 next, 2.00 projection of the Dec 21 - Jan 8 rally from the Jan 28 low.

In the FX space, EURUSD has bounced, but 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 with scope for a move towards 1.3641, 38.2% of the Sep 23 - Feb 24 bull cycle. Nonetheless, near-term resistance at 1.3883 has given way, the former bull channel base drawn off the Nov 2 low. USDJPY remains bullish and is holding onto recent gains. The focus is on 111.30 next, Mar 26, 2020 high.

On the commodity front:
- Gold remains vulnerable despite last week's gains. The focus is on the key support at $1676.9, Mar 8 low and the bear trigger.
- Brent (M1) key directional triggers remain:
Resistance at $65.41, Apr 1 high and key support at $60.33, Mar 23 low and the bear trigger
- WTI (K1) directional triggers are:
Resistance at $62.27, Mar 30 high and support at $57.25, Mar 23 low and the bear trigger

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 Monday. The focus is on 130-07, Feb 2, 2020 low and the psychological 130-00 handle.

FOREIGN EXCHANGE

EURUSD TECHS: Gains Considered Corrective

  • RES 4: 1.1990 High Mar 11
  • RES 3: 1.1947 High Mar 22 and the 50-day EMA
  • RES 2: 1.1853 High Mar 24
  • RES 1: 1.1828 Former bear channel base drawn off the Jan 6 high
  • PRICE: 1.1806 @ 05:57 GMT Apr 6
  • SUP 1: 1.1738 Low Apr 5
  • SUP 2: 1.1695 38.2% retracement of the Mar 2020 - Jan rally
  • SUP 3: 1.1647 1.50 proj of the Jan 6 - Feb 5 - Feb 25 price swing
  • SUP 4: 1.1603 Low Nov 4 and a key support

EURUSD traded higher yesterday however short-term gains are considered corrective. A bearish theme remains in place with technical indicators still highlighting a bearish outlook. Activity in March resulted in a break of support at 1.1836, Mar 9 low extending this year's bearish price sequence of lower and lower highs. Attention is on 1.1695 next, a Fibonacci retracement. Initial resistance is at 1.1828, a former bear channel base breached on Mar 8.

GBPUSD TECHS: Testing The Former Bull Channel Base

  • RES 4: 1.4017 High Mar 4 and key resistance
  • RES 3: 1.3959 High Mar 19
  • RES 2: 1.3953 50% Retracement Feb - Mar Downleg
  • RES 1: 1.3916 Intraday high
  • PRICE: 1.3908 @ 06:07 GMT Apr 6
  • SUP 1: 1.3804 50-day EMA
  • SUP 2: 1.3706 Low Mar 30
  • SUP 3: 1.3670/63 Low Mar 25 / Low Feb 5
  • SUP 4: 1.3641 38.2% retracement of the Sep 23 - Feb 24 bull cycle

GBPUSD started the week on a firmer note as the pair extended its recovery from the Mar 25 low. Price has breached a short-term trendline resistance drawn off the Feb 25 low and is currently testing resistance defined by a bull channel base from the Nov 2, 2020 low. The bull channel base was cleared Mar 23 and intersects at 1.3911 today. A clear break would open a recovery toward 1.4017, Mar 4 high. Initial support lies at 1.3804, the 50-day EMA.

EURGBP TECHS: Bearish Sequence Extends

  • RES 4: 0.8668 High Mar 3
  • RES 3: 0.8646 High Mar 24 and the S/T reversal trigger
  • RES 2: 0.8572 High Mar 26
  • RES 1: 0.8564 20-day EMA
  • PRICE: 0.8489 @ 06:18 GMT Apr 6
  • SUP 1: 0.8472 Low Apr 5
  • SUP 2: 0.8453 3.0% Lower Bollinger Band
  • SUP 3: 0.8430 Low Feb 27, 2020
  • SUP 4: 0.8356 Low Feb 26

EURGBP remains bearish and yesterday registered a fresh trend low once again. This maintains the current price sequence of lower lows and lower highs, reinforcing bearish sentiment. The cross has breached the 38.2% retracement of the 2015 - 2020 rally at 0.8521. An extension lower would open 0.8430, the Feb 27, 2020 low. Firm trend resistance is seen at 0.8646, Mar 24 high where a break is needed to signal a short-term reversal.

USDJPY TECHS: Corrective Pullback

  • 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: 110.19 @ 06:25 GMT Apr 6
  • SUP 1: 109.75 Low Mar 30
  • SUP 2: 109.27 20-day EMA
  • SUP 3: 108.41 Low Mar 23 and key support
  • SUP 4: 107.82 Low Mar 5

USDJPY has pulled back from recent highs, with prices very briefly showing below 110.00 yesterday. The outlook though remains bullish following the recent trend extension and breach of a number of important short-term resistance levels. Attention is on a climb towards 111.30 next, Mar 26, 2020 high. Note that overbought conditions are still not impacting this trend and instead this 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: 130.34 Intraday high
  • PRICE: 130.16 @ 06:33 GMT Apr 6
  • SUP 1: 129.45/13 20-day EMA / Low Mar 30
  • SUP 2: 128.57/56 50-day EMA / Trendline drawn off Oct 30, 2020 low
  • SUP 3: 127.50 Low Feb 22
  • SUP 4: 127.31 Low Feb 17

EURJPY remains above 128.29, Mar 24 low and is holding onto recent gains. The recent recovery from128.29 leaves the 50-day EMA at 128.57, and trendline support at 128.56 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 sell-off and signal a reversal of the current uptrend. Attention though is on 130.67, Mar 18 high and the bull trigger. A break would resume the uptrend.

AUDUSD TECHS: Bounce Considered Corrective

  • RES 4: 0.7712 Trendline resistance drawn off the Feb 25 high
  • RES 3: 0.7699 Low Mar 17
  • RES 2: 0.7685 50-day EMA
  • RES 1: 0.7664 High Mar 30
  • PRICE: 0.7643 @ 06:41 GMT Apr 6
  • SUP 1: 0.7596 Low Apr 2
  • SUP 2: 0.7532/17 Low Apr 1 and the bear trigger / Low Dec 22
  • SUP 3: 0.7462 Low Dec 21
  • SUP 4: 0.7418 23.6% retracement of the Mar 2020 - Feb rally

AUDUSD has recovered from last week's Apr 1 low of 0.7532. Nonetheless, the outlook remains fragile. The pair has recently 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: Bullish Theme Still In Play

  • RES 4: 1.2763 High Feb 12
  • RES 3: 1.2749 High Feb 26 and key resistance
  • RES 2: 1.2700 High Mar 8
  • RES 1: 1.2627/47 50-day EMA / High Mar 30
  • PRICE: 1.2534 @ 06:49 GMT Apr 6
  • SUP 1: 1.2502 Low Apr 5
  • 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

USDCAD traded lower yesterday extending the pullback from recent highs. Short-term trend conditions remain bullish though and attention is on resistance at 1.2647, Mar 30 high and the bull trigger. A break would confirm a resumption of the recovery that started Mar 18 and would open 1.2749, Feb 26 high. On the downside, an extension lower would instead expose the key support and bear trigger at 1.2365.

FIXED INCOME

BUND TECHS: (M1) Support Remains Exposed

  • 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: 171.86 High Apr 1
  • PRICE: 171.76 @ 05:04 GMT Apr 6
  • 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 recovered late last week. Attention though remains on the key near-term 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 since Mar 25 suggests the entire recovery between Feb 25 - Mar 25 has been a correction and that this correction is possibly over. Key resistance is unchanged at 172.66, Mar 25 high.

BOBL TECHS: (M1) Corrective Bounce

  • 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: 135.280 High Apr 1
  • PRICE: 135.240 @ 05:10 GMT Apr 6
  • 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 despite the strong bounce Apr 1. Attention remains on 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, the Mar 8 and 9 lows 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) Remains Below Recent Highs

  • 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: 112.145 High Apr 1
  • PRICE: 112.130 @ 05:18 GMT Apr 6
  • 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 remain below recent highs and the contract appears likely to extend a retracement lower despite Thursday's gains. This would expose support at 112.070, Mar 18 low where a break would strengthen a bearish argument and open 112.060, Mar 10 low and potentially below. On the upside, key resistance has been defined at 112.165, Mar 25 high. A break above this level is needed to reinstate the recent bullish theme.

GILT TECHS: (M1) Remains Vulnerable

  • 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: 128.25 20-day EMA
  • PRICE: 128.07 @ Close Apr 1
  • SUP 1: 127.32 Low Apr 1
  • 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

Despite Thursday's gains, Gilt futures maintain a softer tone. This follows the recent pullback from the Mar 25 high and attention remains on key support at 126.79, Mar 18 low. From a trend perspective, the primary direction is down - the trigger for a resumption of the trend is 126.79. On the upside, initial firm resistance has been defined at 128.93, Mar 25 high. A break would expose the key hurdle for bulls at 129.27, Mar 2 high.

BTP TECHS: (M1) Directional Triggers Defined

  • 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 and key short-term resistance
  • RES 1: 149.82 High Apr 1
  • PRICE: 149.75 @ Close Apr 1
  • SUP 1: 148.57 Low Mar 30
  • SUP 2: 148.36 Low Mar 18 and key short-term support
  • 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

Recent price action in BTP futures have defined resistance at 150.39, Mar 11 high and support at 148.36, Mar 18 low as key short-term directional triggers. While 150.39 and a pivotal level at 150.69, 76.4% of the Feb 12 - 26 sell-off remain intact, 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.Clearance of 150.39 would instead be bullish.

EQUITIES

EUROSTOXX 50 Techs: Still Heading 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: 3948.99 High Apr 1
  • PRICE: 3945.96 @ Close Apr 1
  • SUP 1: 3885.11 Low Mar 30
  • SUP 2: 3841.46 Low Mar 26
  • SUP 3: 3784.09 Low Mar 25 and key support
  • SUP 4: 3742.53 High Feb 15 and recent breakout level

EUROSTOXX 50 registered a fresh trend high again Thursday and appears set to continue heading north. Last 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) Remains Below 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: $62.67 @ 06:49 Apr 6
  • SUP 1: $61.25 - Low Apr 5
  • 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 yesterday. Last week's break higher 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 is unchanged at $60.33, low Mar 23.

WTI TECHS: (K1) Pulls Away From Resistance

  • 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: $59.34 @ 06:54 Apr 6
  • SUP 1: $57.63 - Low Apr 5
  • 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 traded lower yesterday. Last week's test above resistance at $62.04, Mar 22 high failed to deliver any bullish follow through despite signalling scope for a recovery. Price needs to clear $62.27, Mar 30 high to once again suggest scope for gains. This would open $64.88, the Mar 18 high. On the downside, key support and the bear trigger is unchanged at $57.25, Mar 23 low. A break would resume bearish pressure.

GOLD TECHS: Approaching Resistance

  • RES 4: $1805.7 - High Feb 25
  • RES 3: $1761.6 - 50-day EMA
  • RES 2: $1755.5 - High Mar 18 and key resistance
  • RES 1: $1738.7 - Intraday high
  • PRICE: $1735.4 @ 07:23 GMT Apr 6
  • SUP 1: $1705.9 - Low Apr 1
  • 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 found support last week, bouncing off $1678.0, Mar 3 low. Despite these gains, the yellow metal maintains a bearish tone and a break of resistance at $1755.5, Mar 18 high is required to alter the short-term picture. This would also highlight a potential break of the 50-day EMA at $1761.6 and open $1805.7, Feb 25 high. On the downside, key support and the bear trigger has been defined at $1676.9, Mar 8 low.

SILVER TECHS: Gains Considered Corrective

  • 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: $24.960 @ 09:25 GMT Apr 6
  • SUP 1: $23.781 - Low Mar 31
  • SUP 2: $23.524 - Low Dec 7 and key near-term support
  • SUP 3: $22.591 - Low Dec 12
  • SUP 4: $21.899 - Low Nov 30 and a key support

Silver is holding onto recent gains following the recovery from $23.781, Mar 31 high. The outlook remains bearish and upticks are considered corrective. Recent weakness has opened $23.524, Dec 7 low and a key near-term support. On the upside, 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.

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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