MNI DAILY TECHNICAL ANALYSIS - Double Bottom Reversal In Gold

Tech Focus: Double Bottom Reversal In Gold

Price action in Gold suggests the yellow metal has been building a base since Mar 8. If correct, this signals a potential reversal and key nearby resistance levels appear exposed. The key technical factors to note are:
The low prints on Mar 8 and Mar 31 highlight a potential double bottom reversal. The midpoint at $1755.5, Mar 18 high has been probed and a clear break would confirm the reversal pattern. Near-term resistance is at $1758.8, Apr 8 high. A break of this level would confirm a breach of the neckline.
The recovery from recent lows means Gold has found support at key chart points.

• $1689.9 marks the 61.8% retracement of the rally between Mar - Aug 2020.
• The significance of the recovery from this retracement is highlighted by a bear channel base drawn off the Aug 7, 2020 high. On Mar 8, the channel base was probed but Gold quickly reversed direction from that day's low. The channel base intersected at $1689.9 on Mar 8 - the same value as the 61.8% retracement.
• A confirmed double bottom, a break of $1758.8 and as a result, a move above the 50-day EMA would confirm a reversal and pave the way for strength towards $1800.0. Note that further out, this could also suggest the possible start of a stronger recovery towards the bear channel top at $1882.3 over the medium-term.

Sub $1676.9 levels, Mar 8 low would negate a reversal prospect and instead highlight a stronger bearish risk.
See chart: https://emedia.marketnews.com/marketnewsintl/Gold_15.04.png

Price Signal Summary - Oil Stays Firm and AUDUSD Remains Bid

In the equity space, S&P E-minis bulls are still in charge. Markets topped resistance at 4160.13 late Thursday, clearing the way for further gains.
In the FX world, EURUSD has cleared the 50-day EMA and is testing resistance at 1.1990, Mar 11 high. A break would reinforce current bullish conditions and open 1.2037, 61.8% of the Feb 25 - Mar 31 sell-off. The GBPUSD outlook remains bearish despite recent gains. Firm resistance is at 1.3919, Apr 6 high. The key support and bear trigger to watch is 1.3670/69, Mar 25 and Apr 12 low. EURGBP key near term resistance is 0.8731, Feb 26 high. A break is required to suggest scope for an extension of recent gains. USDJPY remains vulnerable, attention is on 108.41, Mar 23 low. AUDUSD is firmer and has traded above the neckline of a recent head and shoulders reversal. The key pivot resistance is 0.7849, Mar 18 high.

On the commodity front:

Gold remains below recent highs. Resistance has been defined at $1758.8, Apr 8 high. Watch support at $1721.4, Apr 5 low.

• Brent (M1) is rallying in the second half of the week. Resistance to watch is at $67.30, former trendline support drawn off the Nov 2 low and $67.76, the Mar 18 high
• WTI (K1) is firmer too. The next resistance is at $64.47/88, former trendline support and the Mar 18 high.

In the FI space, key support to watch in Bunds (M1) remains 170.52, Mar 18 low. A break would signal scope for an extension lower and open 170.05, 76.4% of the Feb 25 - Mar 25 rally. Support to watch in Gilts (M1) is 127.32, Apr 1 low. Initial firm resistance is 128.93, Mar 25 high.

FOREIGN EXCHANGE

EURUSD TECHS: Needle Still Points North

• RES 4: 1.2131 2.0% 10-dma envelope
• RES 3: 1.2116 76.4% retracement of the Feb 25 - Mar 31 sell-off
• RES 2: 1.2037 61.8% retracement of the Feb 25 - Mar 31 sell-off
• RES 1: 1.1993 High Apr 15 and a key resistance
• PRICE: 1.1963 @ 06:11 BST Apr 16
• SUP 1: 1.1941 50-day EMA
• SUP 2: 1.1861 Low Apr 7 and 8 and key near-term support
• SUP 3: 1.1795 Low Apr 6
• SUP 4: 1.1738 Low Apr 5

EURUSD is holding onto recent gains and yesterday briefly traded above 1.1990, Mar 11 high. A solid break of this level would strengthen a bullish argument and signal scope for an extension of recent gains. The recent breach of the 50-day EMA is a bullish development and S/T momentum signals point north. On the downside, initial firm support is seen at 1.1861, Apr 7 and 8 low. A break would signal the end of the current recovery.

GBPUSD TECHS: Bearish Focus

• RES 4: 1.3987 Former bull channel base
• RES 3: 1.3953 50% Retracement Feb - Mar Downleg
• RES 2: 1.3919 High Apr 6 and a key resistance
• RES 1: 1.3840 High Apr 7
• PRICE: 1.3762 @ 06:14 BST Apr 16
• SUP 1: 1.3670/69 Low Mar 25 / Low Apr 12
• SUP 2: 1.3663 Low Low Feb 5
• SUP 3: 1.3641 38.2% retracement of the Sep 23 - Feb 24 bull cycle
• SUP 4: 1.3567 Low Feb 4

Despite recent gains, the GBPUSD outlook remains bearish. Firm resistance is at 1.3919, Apr 6 high. Note, a former bull channel drawn off the Nov 2, 2020 low also highlights resistance at 1.3987. Clearance of this 1.3919/87 zone is required to strengthen a bullish argument. Attention is on key support at 1.3670, Mar 25 low. A clean break would resume the 1.5 month downtrend and open 1.3641, a Fibonacci retracement. Initial resistance is 1.3840.

EURGBP TECHS: Consolidating

• RES 4: 0.8840 High Feb 4
• RES 3: 0.8791/8805 High Feb 12 / 2.0% 10-dma envelope
• RES 2: 0.8731 High Feb 26
• RES 1: 0.8712 High Apr 13
• PRICE: 0.8694 @ 06:22 BST Apr 16
• SUP 1: 0.8640 Low Apr 12
• SUP 2: 0.8582 Low Apr 7
• SUP 3: 0.8472 Low Apr 5 and the bear trigger
• SUP 4: 0.8430/8396 Low Feb 27, 2020 / 3.0% Lower Bollinger Band

EURGBP remains in a consolidation mode, seen as a pause in the current uptrend. A bullish outlook remains intact. This theme follows recent gains and a bullish engulfing reversal pattern on Mar 6. The cross has traded above a key resistance at 0.8646, Mar 24 high and above the 50-day EMA. An extension higher would open 0.8731, Feb 26 high where a break would strengthen the current bull cycle. Initial support is at 0.8640, Apr 12 low.

USDJPY TECHS: Approaching Key Support

• RES 4: 111.71 High Mar 24
• RES 3: 111.30 High Mar 26, 2020
• RES 2: 110.55/97 High Apr 6 / High Mar 31 and the bull trigger
• RES 1: 109.96 High Apr 9
• PRICE: 108.82 @ 06:31 BST Apr 16
• SUP 1: 108.61 Low Apr 15 and intraday low
• SUP 2: 108.41 Low Mar 23 and key support
• SUP 3: 108.10 50-day EMA
• SUP 4: 107.43 Trendline support drawn off the Jan 6 low

USDJPY maintains a softer short-term as the current correction extends. This week's move lower has paved the way for a test of support at 108.41, Mar 23 low and a key short-term level. Note too that the 50-day EMA intersects at 108.10. Clearance of this 108.41/10 zone would signal scope for a deeper sell-off ahead of 107.43, a trendline support drawn off the Jan 6 low. Initial firm resistance is at 109.96, Apr 9 high.

EURJPY TECHS: Bullish Conditions Remain Intact

• RES 4: 132.36 1.382 proj of the Jun - Sep - Oct 2020 price swing
• RES 3: 131.58 High Oct 4, 2018
• RES 2: 131.22 1.236 proj of the Jun - Sep - Oct 2020 price swing
• RES 1: 130.69 High Apr 7 and the bull trigger
• PRICE: 130.20 @ 06:35 BST Apr 16
• SUP 1: 129.57/13 Low Apr 8 / Low Mar 30
• SUP 2: 129.05/06 Trendline drawn off Oct 30 low / 50-day EMA
• SUP 3: 128.29 Low Mar 24
• SUP 4: 127.50 Low Feb 22

EURJPY remains in consolidation mode. The cross has defined an initial support at 129.57, Apr 8 low and note, the 20-day EMA has also recently provided support. A clear break of this average would suggest scope for a deeper pullback and expose the 50-day EMA at 129.05 and trendline support at 129.06, drawn off the Oct 30, 2020 low. While this support zone holds, the uptrend remains intact. The trigger for a resumption of gains remains 130.69.

AUDUSD TECHS: Holding Onto Recent Gains

• RES 4: 0.7895 76.4% retracement of the Feb 25 - Apr 1 sell-off
• RES 3: 0.7849 High Mar 18 and a reversal trigger
• RES 2: 0.7774 High Mar 19
• RES 1: 0.7761 High Apr 15
• PRICE: 0.7742 @ 06:40 BST Apr 16
• SUP 1: 0.7635 Low Apr 14
• SUP 2: 0.7586 Low Apr 13
• SUP 3: 0.7532/17 Low Apr 1 and the bear trigger / Low Dec 22
• SUP 4: 0.7462 Low Dec 21

AUDUSD remains firm following the break this week of 0.7677, Apr 7 high. The move higher has also resulted in a breach of trendline resistance drawn off the Feb 25 high and note, price is back above the neckline of a recent head and shoulders reversal pattern, suggesting scope for a stronger recovery. An ability to remain above the 50-dma would strengthen a bullish case. Initial firm support is at 0.7635, Feb 14 low. A break would be bearish.

USDCAD TECHS: Breaches Support

• 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: 1.2647 High Mar 30 and the short-term bull trigger
• PRICE: 1.2531 @ 06:45 BST Apr 16
• SUP 1: 1.2477 Low Apr 15
• 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 failed to hold onto Tuesday's highs and has since traded lower. Support at 1.2502, Apr 5 low has given way. A resumption of intraday weakness would suggest scope for a deeper pullback and highlight potential for a test of 1.2365, Mar 18 low and the bear trigger. For bulls, a recovery would once again refocus attention on the key resistance and bull trigger at 1.2647, Mar 30 high.

FIXED INCOME

BUND TECHS: (M1) Focus Is On Support

• RES 4: 172.66 High Mar 25
• RES 3: 172.34 High Mar 29
• RES 2: 172.12 High Apr 8
• RES 1: 171.62 High Apr 14
• PRICE: 171.21 @ 05:12 BST Apr 16
• SUP 1: 170.52 Low Mar 18 and key support
• SUP 2: 170.05 76.4% retracement of the Feb 25 - Mar 25 rally
• SUP 3: 170.00 Round number support
• SUP 4: 169.24 Low Feb 24 and major support

Bund futures remain vulnerable following Wednesday's sell-off and despite yesterday's bounce. Attention is on the key short-term support at 170.52, Mar 18 low. Clearance of this level would further strengthen a bearish case and signal scope for a deeper sell-off, opening 170.05, a Fibonacci retracement. On the upside, initial resistance is at 171.62, Apr 14 high A firmer resistance though is at 172.12, Apr 8 high. Bearish!

BOBL TECHS: (M1) Support Remains Exposed

• RES 4: 135.520 High Mar 25
• RES 3: 135.440 High Mar 29
• RES 2: 135.350 High Apr 8 and key near-term resistance
• RES 1: 135.180 High Apr 14
• PRICE: 135.050 @ 05:18 BST Apr 16
• SUP 1: 134.830 Low Apr 15
• SUP 2: 134.780 Low Mar 8 and 9
• SUP 3: 134.667 61.8% retracement of the Feb 26 - Mar 25 rally
• SUP 4: 134.446 76.4% retracement of the Feb 26 - Mar 25 rally

Bobl futures traded lower Wednesday clearing a number of near-term supports along the way. Despite yesterday's gains, a bearish outlook remains intact with attention on support at 134.780, Mar 9 low where a break would strengthen a bearish argument and suggest scope for a deeper pullback. This would open 134.667, a Fibonacci retracement. On the upside, initial resistance is at 135.180, Apr 14 high.

SCHATZ TECHS: (M1) Bearish Focus

• RES 4: 112.201 0.764 proj of the Feb 26 - Mar 2 - Mar 10 price swing
• 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 / 50-day EMA (cont)
• RES 1: 112.150 High Apr 8
• PRICE: 112.115 @ 05:30 BST Apr 16
• 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

Initial Schatz futures resistance is at 112.150, Mar 25 high. The contract also remains below a key resistance at 112.165, Mar 25 high. Wednesday's sell-off reinforces a bearish theme and further weakness would expose support at 112.070, Mar 18 low. Clearance of this level would strengthen a bearish argument and open 112.060, Mar 10 low and potentially below. For bulls, a break of 112.165 would reinstate a bullish theme.

GILT TECHS: (M1) Key Resistance Is 129.27

• RES 4: 130.38 High Feb 17 and 18
• RES 3: 129.75 High Feb 19
• RES 2: 129.27 High Mar 2 and the reversal trigger
• RES 1: 128.93 High Mar 25
• PRICE: 128.82 @ Close Apr 15
• SUP 1: 127.81 Low Apr 14
• SUP 2: 127.32 Low Apr 1
• SUP 3: 126.79 Low Mar 18 and the bear trigger
• SUP 4: 126.55 Low Apr 17, 2019 (cont)

Gilt futures rebounded yesterday. The downtrend remains intact and short-term gains are considered corrective. Key near-term resistance levels are seen at 128.93, Mar 25 high and 129.27, Mar 2 high. A break of the latter level is required to signal a short-term reversal and the potential for stronger gains. On the downside, a breach of support at 127.81, Apr 14 low would reinstate a near-term bearish tone and expose support at 127.32, Apr 1 low.

BTP TECHS: (M1) Bearish Risk Still Present

• RES 4: 150.39 High Mar 11 and key short-term resistance
• RES 3: 149.88 High Apr 6
• RES 2: 149.47 High Apr 8
• RES 1: 148.92 20-day EMA
• PRICE: 148.57 @ Close Apr 15
• SUP 1: 147.69/68 Low Apr 14 / 76.4% of the Feb 26 - Mar 11 rally
• SUP 2: 147.56 Low Mar 5
• SUP 3: 146.84 Low Feb 26 and the bear trigger
• SUP 4: 1456.16 Low Sep 21, 2020

BTP futures traded lower Wednesday and despite yesterday's gains, remains bearish. The break of support at 148.36, Mar 18 low reinforces a bearish theme and paves the way for weakness towards 147.56, Mar 5 low. Clearance of this level would expose the key support and bear trigger at 146.84, Feb 26 low. On the upside, initial resistance is seen at 148.95, the 20-day EMA ahead of 149.47, Apr 8 high.

EQUITIES

EUROSTOXX 50 Techs: Closing In On 4000

• RES 4: 4110.24 High Jan 18, 2008
• RES 3: 4047.72 2.236 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 2: 4000.00 Psychological round number
• RES 1: 3997.69 High Apr 7
• PRICE: 3993.43 @ Close Apr 15
• SUP 1: 3953.26 Low Apr 6
• SUP 2: 3914.46 20-day EMA
• SUP 3: 3910.90 Low Mar 31
• SUP 4: 3841.46 Low Mar 26

EUROSTOXX 50 maintains a bullish theme and traded higher yesterday registering a fresh trend high of 3997.69. The recovery from 3784.09, Mar 25 low confirmed a resumption of the uptrend, extending the bullish price sequence of higher highs and higher lows. Attention is on the psychological 4000.00 handle next. On the downside, key trend support is at 3784.09. A break is required to signal a potential top. Initial support is at 3953.26.

COMMODITIES

BRENT TECHS: (M1) Climbing

• 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: $67.55 - Former trendline support drawn off the Nov 2 low
• PRICE: $67.37 @ 06:55 BST Apr 16
• SUP 1: $63.88 - Low Apr 14
• SUP 2: $61.25 - Low Apr 5
• SUP 3: $60.33 - Low Mar 23 and the bear trigger
• SUP 4: $58.27 - 38.2% retracement of the Nov 2 - Mar 8 rally

Brent crude futures are trading higher once again, extending this week's gains following the break of $63.59, Mar 29 high. With short-term momentum studies pointing north, further gains are likely. Initial resistance is at $67.55, a former trendline support drawn off the Nov 2, 2020 low. A break would open $67.76 and $69.50, the Mar 18 and 15 highs respectively. Initial support is at $63.88, Apr 14 low.

WTI TECHS: (K1) Heading North

• 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
• RES 1: $64.72 - Former trendline support drawn off Nov 2, 2020 low
• PRICE: $63.76 @ 07:05 BST Apr 16
• SUP 1: $60.38 - Low Apr 14
• SUP 2: $57.63 - Low Apr 5
• SUP 3: $57.25 - Low Mar 23 and the bear trigger
• SUP 4: $55.65 - 38.2% retracement of the Nov 2 - Mar 8 rally

WTI futures are trading higher, extending this week's climb following the breach of $62.27, Mar 30 high. With short-term momentum studies pointing north, further gains are likely. The next key resistance is $64.72, a former trendline support drawn off the Nov 2, 2020 low. A break would open $64.88 and $66.44, the Mar 18 and 15 highs respectively. Initial support is at $60.38, Wednesday's low.

GOLD TECHS: Double Bottom Reversal

• RES 4: $1816.0 - High Feb 23
• RES 3: $1805.7 - High Feb 25
• RES 2: $1784.8 - 38.2% retracement of the Jan 6 - Mar 8 sell-off
• RES 1: $1769.7 - High Apr 15
• PRICE: $1764.3 @ 07:11 BST Apr 16
• SUP 1: $1721.4 - Low Apr 5
• SUP 2: $1705.9 - Low Apr 1
• SUP 3: $1676.9 - Low Mar 8 and the bear trigger
• SUP 4: $1671.0 - Low Jun 5, 2020

Gold rallied yesterday signalling a resumption of recent strength. The yellow metal has cleared resistance at $1758.8, Apr 8 high and is trading above the 50-day EMA. The break higher confirms a double bottom reversal pattern that has formed since the Mr 8 low. Attention turns to $1784.8, a retracement level. On the downside, key short-term support has been defined at $1721.4, Apr 5 low. A break would be bearish.

SILVER TECHS: Trades Above The 50-day EMA

• RES 4: $26.941 - 50.0% retracement of the Feb 1 - Mar 31 sell-off
• RES 3: $26.636 - High Mar 18 and firm near-term resistance
• RES 2: $26.318 - High Mar 19
• RES 1: $25.987 - High Apr 15
• PRICE: $25.810 @ 07:51 BST Apr 16
• SUP 1: $24.686 - Low Apr 13
• SUP 2: $23.781 - Low Mar 31
• SUP 3: $23.524 - Low Dec 7 and key near-term support
• SUP 4: $22.591 - Low Dec 12

Silver maintains this week's bullish phase and traded higher yesterday. The metal has cleared the 50-day EMA and this places on hold the recent bearish focus. The break higher signals scope for gains towards $26.636, Mar 18 high and a key near-term resistance. A break of this hurdle would strengthen a bullish case. On the downside, short-term support has been defined at $24.686, Apr 13 low.