MNI DAILY TECHNICAL ANALYSIS - EGB Downtrend Persists

Price Signal Summary – EGB Downtrend Persists

• In the equity space, S&P E-minis continue to trade below recent highs. Attention remains on the 50-day EMA that intersects at 4565.55 today. For bulls, a clear break of the EMA is required to suggest scope for a stronger rally that would open 4671.75 initially, the Jan 18 high. EUROSTOXX 50 futures last week’s 4250.00 Feb 2 high. Price has recently breached the 50-day EMA last week - currently at 4200.10. This average marks a key resistance area and a clear break would suggest scope for a stronger recovery that would open 4324.50, Jan 13 high.
• In FX, EURUSD is trading closer to its recent highs. The outlook remains bullish following last week’s gains and clearance of the 20- and 50-day EMAs. The pair also breached the top of its bear channel drawn from the Jun 1 high of last year. USDJPY is firmer and trend conditions remain bullish. The bull phase between Jan 24 - 28 resulted in a breach of former resistance at 115.06, Jan 18 high. AUDUSD is trading below recent highs and key resistance at the 0.7181 50-day EMA remains intact. The trend condition is bearish and short-term gains are considered corrective.
• On the commodity front, Gold remains above recent lows and the yellow metal traded higher Monday. Attention has been on the recent failure at $1853.9 on Jan 25 and the subsequent sell-off that resulted in a break of its bull channel base drawn off the Aug 9 low. The WTI futures uptrend remains intact - the contract recently cleared resistance at $87.10, Jan 20 high. This break higher maintains the bullish price sequence of higher highs and higher lows and moving average conditions remain in a bull mode.
• In the FI space, Bund futures remain in a clear downtrend and traded lower again yesterday. Futures cleared the 168.00 handle last week, reinforcing bearish conditions and maintaining a bearish price sequence of lower lows and lower highs. Gilt futures remain soft. The recent Jan 31 break of former support at 121.93, Jan 19 low, confirmed a resumption of the downtrend. This reinforces bearish conditions and maintains the bearish price sequence of lower lows and lower highs.

FOREIGN EXCHANGE

EURUSD TECHS: Trading Near Its Recent Highs

• 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: 1.1483/84 High Jan 14 / Feb 04 and a key resistance
• PRICE: 1.1416 @ 06:07 GMT Feb 8
• SUP 1: 1.1341 Bear channel top drawn from the Jun 1, 2021 high
• SUP 2: 1.1267 Low Jan 2
• SUP 3: 1.1221/1121 Low Jan 1 / Low Jan 28 and the bear trigger
• SUP 4: 1.1070 Low May 29, 2020

EURUSD is trading closer to its recent highs. The outlook remains bullish following last week’s gains and clearance of the 20- and 50-day EMAs. The pair also breached the top of its bear channel drawn from the Jun 1 high of last year. The clear break of this channel resistance highlights a more significant reversal. The focus is on 1.1558, a Fibonacci retracement. Initial support is seen at 1.1341.

GBPUSD TECHS: Still Looking For Gains

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3710/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3628 High Feb 02
• PRICE: 1.3517 @ 06:14 GMT Feb 8
• SUP 1: 1.3491/3435 Low Feb 7 / Low Feb 1
• SUP 2: 1.3358/43 Low Jan 27 / Low Dec 23
• SUP 3: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase
• SUP 4: 1.3221 2.0% 10-dma envelope

GBPUSD remains below last week’s high of 1.3628 on Feb 3. The short-term outlook is unchanged though and remains bullish. This follows the recent recovery from 1.3358, Jan 27 low and scope is seen for a climb towards 1.3662 next, Jan 20 high. On the downside, initial support lies at 1.3491, Monday’s low. Key support is unchanged at 1.3358, Jan 27 low. This is the trigger for a resumption of bearish pressure.

EURGBP TECHS: Bullish Theme

• 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: 0.8478 High Feb 7
• PRICE: 0.8445 @ 06:19 GMT Feb 8
• SUP 1: 0.8406/8379 Low Feb 4 / 20-day EMA
• 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

The EURGBP outlook remains positive. This follows last week’s rebound ahead of a major area of support. 0.8300 marks the base of a multi-year range the cross has been trading within since 2016 and 0.8282/77 marks the Feb’20 and Dec’19 lows. The reversal from these key chart points, suggest bullish activity will likely persist near-term. Sights are on 0.8480 next, a Fibonacci retracement.

USDJPY TECHS: Approaching First Resistance

• 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: 115.67/68 76.4% of the Jan 4 - 24 downleg / High Jan 28
• PRICE: 115.52 @ 06:28 GMT Feb 8
• SUP 1: 114.77 20-day EMA
• SUP 2: 114.16/113.47 Low Feb 02 / Low Jan 24 and key support
• SUP 3: 113.43 76.4% of the Nov 30 - Jan 4 rally
• SUP 4: 113.14 Low Dec 17

USDJPY is firmer and trend conditions remain bullish. The bull phase between Jan 24 - 28 resulted in a breach of former resistance at 115.06, Jan 18 high. This has strengthened the recent reversal from 113.47, Jan 24 low and signals scope for a test of 116.35, high Jan 4 and a key medium-term resistance. Key short-term support is unchanged at 113.47. Initial firmer support lies at 114.16, Feb 2 low.

EURJPY TECHS: Bulls Still In Charge

• RES 4: 133.48 High Oct 20 and a key resistance
• RES 3: 132.92 High Oct 21, 2021
• RES 2: 132.46 1.00 proj of the Dec 3 - Jan 5 - 25 price swing
• RES 1: 132.24 High Feb 7
• PRICE: 131.87 @ 06:42 GMT Feb 8
• SUP 1: 130.38, 50.0% of yesterday's large range
• SUP 2: 129.19 Low Feb 3
• SUP 3: 128.25 Low Jan 25 and a key short-term support
• SUP 4: 127.39 Low Dec 6 and a major support

EURJPY remains in a bull mode following last Thursday’s strong impulsive rally and is holding onto its gains. The cross has traded above resistance at 131.60, Jan 5 high and a bull trigger. This break confirms a resumption of a bull cycle that started on December 3. The focus is on 132.46 next, a Fibonacci projection. On the downside, initial support is seen at 130.38, 50.0% of the Feb 3 range.

AUDUSD TECHS: 50-Day EMA Remains Intact

• RES 4: 0.7314 High Jan 13 and a key resistance
• RES 3: 0.7277 High Jan 20
• RES 2: 0.7181 50-day EMA
• RES 1: 0.7168 High Feb 3
• PRICE: 0.7124 @ 06:46 GMT Feb 8
• SUP 1: 0.7034 Low Feb 1
• 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 is trading below recent highs and key resistance at the 0.7181 50-day EMA remains intact. The trend condition is bearish and short-term gains are considered corrective. The recent breach of key support at 0.6993/91, Dec 3 2021 and Nov 2 2020 lows reinforced a bearish theme and confirmed a resumption of the downtrend. This has opened 0.6963/21, the Jul 16 and Jul 14 2020 lows. A break of the 50-day EMA would alter the picture.

USDCAD TECHS: Short-Term Conditions Remain Bullish

• 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: 1.2797/2814 High Jan 28 / High Jan 6 and a key resistance
• PRICE: 1.2687 @ 06:51 GMT Feb 8
• SUP 1: 1.2650 Low Jan 27/Feb 2
• 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

The USDCAD outlook remains bullish despite yesterday’s bearish session. A positive theme follows the recovery from 1.2451, Jan 19 low. Price has traded above the 50-day EMA and the break has resulted in a move through 1.2768, 61.8% of the Dec 20 - Jan 19 sell-off. This reinforced a bullish theme and has opened 1.2843, the 76.4% value. Initial firm support lies at 1.2560, Jan 26 low. First support is at 1.2650, Jan 27 and Feb 2 low.

FIXED INCOME

BUND TECHS: (H2) Path Of Least Resistance Remains Down

• RES 4: 171.07 High Jan 24 and key short-term resistance
• RES 3: 170.58 50-day EMA
• RES 2: 169.08 20-day EMA
• RES 1: 167.00/168.81 High Feb 4 / High Feb 3
• PRICE: 166.20 @ 05:09 GMT Feb 8
• SUP 1: 165.38 Low Feb 7
• SUP 2: 165.24 Low May 7, 2019 (cont)
• SUP 3: 164.82 Low May 3, 2019 (cont)
• SUP 4: 164.33 Low Apr 18, 2019 (cont)

Bund futures remain in a clear downtrend and traded lower again yesterday. Futures cleared the 168.00 handle last week, reinforcing bearish conditions and maintaining a bearish price sequence of lower lows and lower highs. Moving average conditions are in a bear mode too highlighting current sentiment. Scope is seen for a move towards 165.24 next, May 7 2019 low on the continuation chart. Friday’s high of 167.00 marks initial resistance.

BOBL TECHS: (H2) Needle Still Points South

• RES 4: 132.940 50-day EMA
• RES 3: 132.216 20-day EMA
• RES 2: 132.060 High Feb 3
• RES 1: 131.150 High Jan 4
• PRICE: 130.410 @ 05:06 GMT Feb 8
• SUP 1: 130.240 Low Feb 7
• SUP 2: 130.000 Psychological round number
• SUP 3: 129.460 High Dec 7, 2015 (cont) (cont)
• SUP 4: 129.020 Low Dec 7, 2015 (sont)

Bobl futures remain bearish following last week's sharp sell-off and futures traded lower yesterday. Last week’s breach of support at 132.40, Jan 19 low, confirmed a resumption of the underlying downtrend and resumed the bearish price sequence of lower lows and lower highs. Moving averages also point south. Attention is on the psychological 130.00 handle next, the Oct 5, 2018 low (cont). Friday’s high of 131.150 is the first resistance.

SCHATZ TECHS: (H2) Bearish Focus

• RES 4: 111.996 50-day EMA
• RES 3: 111.870 High Feb 3
• RES 2: 111.857 20-day EMA
• RES 1: 111.615 High Jan 4
• PRICE: 111.440 @ 05:17 GMT Feb 8
• SUP 1: 111.250/208 Low Feb 7 / 2.50 proj of Dec 20-Jan 19-24 swing
• SUP 2: 111.185 Low Jun 26, 2015 (cont)
• SUP 3: 111.140 Low Jun 11, 2015 (cont)
• SUP 4: 111.090 Low Jun 10, 2015 (cont)

Schatz futures sold off sharply last week as the downtrend accelerated. Bears remain firmly in control despite yesterday’s bounce off the day low. The Jan 31 sell-off resulted in a break of 111.890, Jan 19 low and a bear trigger. This confirmed a resumption of the downtrend. Moving average conditions remain bearish too. The focus is on 111.208 next, a Fibonacci projection. Friday’s high of 111.615 marks initial resistance.

GILT TECHS: (H2) Southbound

• RES 4: 123.71 High Jan 24, 50-day EMA and a key resistance
• RES 3: 123.23 High Jan 26
• RES 2: 122.55/56 20-day EMA / High Feb 2
• RES 1: 121.59 High Feb 4
• PRICE: 120.95 @ Close Feb 7
• SUP 1: 120.43 1.764 proj of the Jan 13 - 19 - 24 price swing
• SUP 2: 120.00 Psychological round number
• SUP 3: 119.55 2.236 proj of the Jan 13 - 19 - 24 price swing
• SUP 4: 119.36 Low Oct 10, 2018 (cont)

Gilt futures remain soft. The recent Jan 31 break of former support at 121.93, Jan 19 low, confirmed a resumption of the downtrend. This reinforces bearish conditions and maintains the bearish price sequence of lower lows and lower highs. Moving average conditions are also in a bear mode, highlighting current sentiment. The focus is on a move to 120.43 next, a Fibonacci projection. Firm short-term resistance is seen at 122.56, Feb 2 high.

BTP TECHS: (H2) Impulsive Sell-Off

• RES 4: 146.16 High Feb 1
• RES 3: 145.11 High Feb 3
• RES 2: 144.55 Low Jan 27 and recent breakout level
• RES 1: 142.55 High Feb 4
• PRICE: 139.94 @ Close Feb 7
• SUP 1: 139.32 Low Feb 7
• 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)

A sharp sell-off dominated price action in BTP futures late last week and this continued into Monday’s session. The impulsive sell-off recently and break of support at 144.55, Jan 27 low, confirms a resumption of the 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 Friday’s 142.55 high.

EQUITIES

E-MINI S&P (H2): 50-Day EMA Remains A Key Pivot Resistance

• 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: 4565.55/4586.00 50-day EMA / High Feb 2
• PRICE: 4477.50 @ 07:00 GMT Feb 8
• SUP 1: 4395.50 Low Jan 31
• SUP 2: 4212.75 Low Jan 24 and the bear trigger
• SUP 3: 4186.57 23.6% of the Mar ‘20 - Jan ‘22 major rally
• SUP 4: 4126.75 Low Jun 21, 2021 (cont)

S&P E-minis continue to trade below recent highs. Attention remains on the 50-day EMA that intersects at 4565.55 today. For bulls, a clear break of the EMA is required to suggest scope for a stronger rally that would open 4671.75 initially, the Jan 18 high. On the downside, a stronger bearish reversal would instead refocus attention on the 4212.75 low from Jan 24. This remains the key bear trigger for a resumption of bearish activity.

EUROSTOXX50 TECHS: (H2) Trading Below Recent Highs

• 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: 4200.10/50.00 50-day EMA / High Feb 2
• PRICE: 4105.50 @ 05:47 GMT Feb 8
• SUP 1: 4056.00/3990.50 Low Feb 4 / Low Jan 24 and key support
• SUP 2: 3980.00 Low Nov 30 2021
• SUP 3: 3935.00 Low Oct 6 2021
• SUP 4: 3895.00 Low Jul 19 2021 (cont)

EUROSTOXX 50 futures last week’s 4250.00 Feb 2 high. Price has recently breached the 50-day EMA last week - currently at 4200.10. This average marks a key resistance area and a clear break would suggest scope for a stronger recovery that would open 4324.50, Jan 13 high. A stronger reversal lower though would instead refocus attention on 3990.50, Jan 24 low and the trigger for a resumption of recent bearish pressure.

COMMODITIES

BRENT TECHS: (J2) Heading North

• RES 4: $96.09 - 2.50 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $95.00 - Round number resistance
• RES 2: $94.82 - 2.382 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $94.00 - High Feb 7
• PRICE: $93.62 @ 07:00 GMT Feb 7
• SUP 1: $91.20/87.72 - Low Feb 4 / Low Feb 1
• SUP 2: $87.58/84.22 - 20-day EMA / Low Jan 24 and key support
• SUP 3: $83.09 - 50-day EMA
• SUP 4: $79.95 - Low Jan 10

Brent futures traded higher yesterday and conditions remain bullish. The contract recently resumed its uptrend following the break of $88.69, Jan 20 high. This means that a bullish price sequence of higher highs and higher lows remains intact. Moving average conditions are in a bull mode too. The $90.00 handle has been cleared and the focus is on $94.82, a Fibonacci projection. Initial firm support is at $87.72, the Feb 1 low.

WTI TECHS: (H2) Bullish Trend Structure

• RES 4: $95.70 - 2.764 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $95.00 - Round number support
• RES 2: $94.13 - 2.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $93.17 - High Jan 4
• PRICE: $91.22 @ 07:15 GMT Feb 8
• SUP 1: $90.07/86.34 - Low Feb 4 / Low Jan 31
• SUP 2: $85.84/81.90 - 20-day EMA / Low Jan 24
• SUP 3: $80.83/77.34 - 50-day EMA / Low Jan 10
• SUP 4: $74.01 - Low Jan 3

The WTI futures uptrend remains intact - the contract recently cleared resistance at $87.10, Jan 20 high. This break higher maintains the bullish price sequence of higher highs and higher lows and moving average conditions remain in a bull mode. Futures have cleared the psychological $90.00 handle and this opens $94.13 next, a Fibonacci projection. Key short-term support is seen at $86.34, the Jan 31 low.

GOLD TECHS: Key Resistance Is At $1853.9

• RES 4: $1877.2 - High Nov 16 and key resistance
• RES 3: $1871.0 - High Nov 18
• RES 2: $1853.9 - High Jan 25 and the bull trigger
• RES 1: $1823.3 - Intraday high
• PRICE: $1817.6 @ 07:22 GMT Feb 8
• SUP 1: $1805.6/1780.4 - Low Feb 7 / Low Jan 28 and the bear trigger
• SUP 2: $1775.7 - Low Dec 16
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

Gold remains above recent lows and the yellow metal traded higher Monday. Attention has been on the recent failure at $1853.9 on Jan 25 and the subsequent sell-off that resulted in a break of its bull channel base drawn off the Aug 9 low. This break highlights a bearish threat plus a more significant reversal and signals potential for weakness towards $1775.7, the Dec 16 low. For bulls, an extension higher would expose key resistance at $1853.9.

SILVER TECHS: Bounce Considered Corrective

• RES 4: $24.886 - High Nov 22
• RES 3: $24.700 - High Jan 20
• RES 2: $23.994 - High Jan 25
• RES 1: $23.077/102 - 50-day EMA / High Feb 7
• PRICE: $22.858 @ 08:12 GMT Feb 8
• SUP 1: $22.008 - Low Feb 3
• 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 vulnerable despite the recent bounce. The metal reversed a recent bullish theme following a sharp sell-off from the Jan 20 high and breached $22.809, Jan 17 low. This signals scope for a deeper retracement and has opened $21.949, the Jan 7 low. A break would reinforce the bearish threat and expose $21.427/423, the Dec 15 and Sep 29 lows and a key support zone. Initial resistance is seen at $23.077, the 50-day EMA.