MNI DAILY TECHNICAL ANALYSIS - Equities Pull Back

Gold Bulls Continue To Shine

In mid-April, we highlighted a potential bullish reversal in Gold that suggested the yellow metal was likely to appreciate near-term.

• The key reversal signal was marked by a double bottom formation that started Mar 8 and was confirmed Apr 8 and 15. The double bottom suggested market sentiment was moving away from the bearish mood that has seen price drop from $1959.4 to $1676.9 between Jan 6 and Mar 8.
• The significance of the pattern was reinforced by the fact that the base coincided with the low end of a bear channel drawn off the Aug 7 2020 high.
• Subsequent price action saw price climb, eventually achieving the double bottom objective of $1834.1 on May 7.
• Gold has continued to appreciate and most recently, an important retracement has been cleared at $1851.5. This is 61.8% value of the Jan 6 - Mar 8 bear leg.
• Furthermore, yesterday saw Gold clear the top of the bear channel from the Aug 7 2020 high, following the move above $1858.4.
• These recent technical breaks strengthen the bullish case in Gold. An extension higher would open $1892.7 next, the 76.4% retracement of the Jan 6 - Mar 8 phase. Further out, gains above $1900.00 would suggest potential for an extension towards $1959.4, the Jan 6 high. This would mark a full retracement of the last bear cycle.
• The trend is overbought however until a reversal signal in price is confirmed, it is a condition that will be monitored and currently does not appear to be a threat to bulls.
• Key near-term trend support has been defined at $1808.9, May 13 low.

Price Signal Summary - Equities Pull back

• In the equity space, S&P E-minis are pulling away from yesterday's high print of 4179.50. Futures are approaching the 50-day EMA at 4072.74 which represents an important support area. Last week's low of 4029.25 however marks the key short-term support.
• In the FX space, EURUSD traded higher earlier today and probed key resistance at 1.2243, Feb 25 high. An extension higher would open 1.2285, Jan 8 high. GBPUSD remains bullish following last week's gains. Attention is on 1.4237, Feb 24 high and this year's high. USDJPY support has been defined at 108.34, May 7 low. A bullish theme remains intact while it holds and attention is on 109.79, May 13 high. A break of support would highlight a trendline break drawn off the Jan 6 low and risk a deeper pullback.
• On the commodity front, Gold remains bullish. The focus is on $1875.7, Jan 29 high. Oil is off recent highs. Brent (N1) focus is on the psychological $70.00 level that was probed yesterday. A clear break would open and $71.75, Jan 8 2020 high (cont). Key short-term support is $66.48, May 13 low. WTI bulls are eyeing the key resistance at $67.29, Mar 8 high despite the recent pullback. Key near-term support is at $63.09, May 3 low
• In the FI space, Bunds (M1) have traded lower this morning and cleared support at 168.59, May 13 low. This confirms a resumption of the underlying downtrend and opens 168.09, 0.764 projection of the Jan 27 - Feb 25 - Mar 25 price swing. Near-term risk in Gilts (M1) is still skewed to the downside. The key support and bear trigger is 126.79, Mar 18 low. {IT} BTPs (M1) remain in a clear downtrend. The focus is on 144.16, 1.236 projection of the Feb 12 - 26 - Mar 11 price swing.

FOREIGN EXCHANGE

EURUSD TECHS: Holding Onto Gains

• RES 4: 1.2414 High Apr 17, 2018
• RES 3: 1.2353 High Apr 20, 2018
• RES 2: 1.2285 High Jan 8
• RES 1: 1.2243 High Feb 25 and a key resistance
• PRICE: 1.2231 @ 05:48 BST May 19
• SUP 1: 1.2126 Low May 17
• SUP 2: 1.2052 Low May 13 and key short-term support
• SUP 3: 1.2032 50-day EMA
• SUP 4: 1.1986 Low May 5 and key short-term support

The EURUSD outlook remains bullish following the recovery last week from 1.2052, May 13 low. The pair rallied Tuesday and cleared former resistance at 1.2182, May 11 high. With 1.2200 cleared and the pair holding onto gains, the focus turns to key resistance at 1.2243, Feb 25 high and a bull trigger. A break would open 1.2285, Jan 8 high. On the downside, key short-term support has been defined at 1.2052, May 13 low.

GBPUSD TECHS: Outlook Remains Remains Bullish

• RES 4: 1.4338 2.0% 10-dma envelope
• RES 3: 1.4315 High Apr 18, 2018
• RES 2: 1.4237 High Feb 24 and a key resistance
• RES 1: 1.4220 High May 18
• PRICE: 1.4186 @ 06:00 BST May 19
• SUP 1: 1.4006/3972 Low May 13 / Low May 10
• SUP 2: 1.3911 50-day EMA
• SUP 3: 1.3801 Low May 3 and a key support
• SUP 4: 1.3785 Bull channel base drawn off the May 2020 low

The GBPUSD outlook remains bullish and the pair traded higher Tuesday. Cable has recently cleared a number of resistance levels, reinforcing a positive theme and sights are set on the key resistance at 1.4237, Feb 24 high. Clearance of this level would strengthen a bullish case and confirm a resumption of the broader uptrend that started in March 2020. On the downside, initial firm support is unchanged at 1.4006, May 13 low.

EURGBP TECHS: Bearish Risk Still Present

• RES 4: 0.8791/8797 High Feb 12 / 2.0% 10-dma envelope
• RES 3: 0.8731 High Feb 26
• RES 2: 0.8701/21 High May 7 / High Apr 26 and the bull Trigger
• RES 1: 0.8650 50-day EMA
• PRICE: 0.8622 @ 06:06 BST May 19
• SUP 1: 0.8561 Low May 12
• SUP 2: 0.8472 Low Apr 5 and the bear trigger
• SUP 3: 0.8448 2.0% 10-dma envelope
• SUP 4: 0.8430 Low Feb 27, 2020

EURGBP is consolidating but remains bearish following fresh weekly lows last week and the print on May 12 of 0.8561. The move lower saw the cross move out of its recent range and confirm a bearish breakout. This suggests scope for a deeper pullback, potentially towards the key support at 0.8472, Apr 5 low. On the upside, the key resistance and bull trigger is unchanged at 0.8721, Apr 26 high. Initial resistance is at 0.8650, the 50-day EMA.

USDJPY TECHS: Retracing Recent Gains

• RES 4: 110.97 High Mar 31 and the bull trigger
• RES 3: 110.55 High Apr 6
• RES 2: 109.96 High Apr 9
• RES 1: 109.79 High May 13
• PRICE: 108.95 @ 06:16 BST May 19
• SUP 1: 108.34 Low May 7 and key short-term support
• SUP 2: 107.48 Low Apr 23 and the bear trigger
• SUP 3: 106.97 Low Mar 4
• SUP 4: 106.78 50.0% retracement of the Jan - Mar rally

USDJPY maintains a bullish outlook but is struggling to hold onto recent gains. The pair rallied last week from what is now a firm support at 108.34, May 7 low. This maintains the focus on 109.96, Apr 9 high with potential for a climb above 110.00. Note that the recovery last week means trendline support drawn off the Jan 6 low remains intact although the trendline is under pressure again. A break of 108.34 would threaten the uptrend.

EURJPY TECHS: Climbing Within Its Channel

• RES 4: 134.80 High Feb 8, 2018
• RES 3: 134.19 1.618 proj of Jun-Sep-Oct 2020 swing
• RES 2: 133.99 Bull channel top drawn off the Oct 30, 2020 low
• RES 1: 133.32 Intraday high
• PRICE: 133.29 @ 06:24 BST May 19
• SUP 1: 132.37 High Apr 29 and recent breakout level
• SUP 2: 131.69 Low May 12
• SUP 3: 130.99 Low May 5 and a key support
• SUP 4: 130.57 Low Apr 27

EURJPY is trading higher once again with bulls in firm control. The climb reinforces bullish conditions and signals scope for further gains within the bull channel drawn off the Oct 30 2020 low. The top of the channel intersects at 133.99. Moving average studies are still pointing north, also reinforcing current conditions. Initial firm support lies at 131.69, May 12 low. A firmer trend support is found at 130.99, May 5 low.

AUDUSD TECHS: Extends This Week's Gains

• RES 4: 0.8007 High Feb 25 and the bull trigger
• RES 3: 0.7938 2.0% 10-dma envelope
• RES 2: 0.7891/95 High May 10 / 76.4% of the Feb 25 - Apr 1 sell-off
• RES 1: 0.7846 High May 12
• PRICE: 0.7786 @ 06:32 BST May 19
• SUP 1: 0.7688 Low May 13
• SUP 2: 0.7675 Low May 4 and key support
• SUP 3: 0.7635 Low Apr 14
• SUP 4: 0.7586 Low Apr 13

AUDUSD traded higher Tuesday. A bearish theme remains in place though following last week's sell-off to a low of 0.7688 on May 13. A firm support zone however has been defined at 0.7688-75, the latter is the May 4 low. Clearance of this zone would strengthen a bearish case and signal scope for a deeper pullback towards 0.7586, the Apr 13 low. Initial firm resistance is at 0.7846, May 12 high ahead of the key resistance at 0.7891, May 10 high.

USDCAD TECHS: 1.2062 Remains Under Pressure

• RES 4: 1.2491 High Apr 26
• RES 3: 1.2419 High Apr 27
• RES 2: 1.2351 High May 4 and a key near-term resistance
• RES 1: 1.2203/2288 High May 13 / High May 6
• PRICE: 1.2070 @ 06:46 BST May 19
• SUP 1: 1.2013 Low May 18
• SUP 2: 1.2000 Psychological round number
• SUP 3: 1.1920 Low May 2015
• SUP 4: 1.1886 2.0% 10-dma envelope

USDCAD needle still points south. The recent key technical development has been the test and so far breach, of the major support at 1.2062, Sep 2017 low. This represents an important pivot chart point that either represents the base of a broad range or the midpoint of a double top reversal pattern. A clear break lower would reinforce the current downtrend and open 1.2000 and below. Initial firm resistance is at 1.2203, May 13 high.

FIXED INCOME

BUND TECHS: (M1) Resumes Its Downtrend

• RES 4: 171.62 High Apr 14
• RES 3: 171.27 High Apr 22
• RES 2: 170.98 High May 7 and key short-term resistance
• RES 1: 169.35/90 High MAy 17 / 20-day EMA
• PRICE: 168.37 @ 09:12 BST May 19
• SUP 1: 168.29 Intraday low
• SUP 2: 168.09 0.764 proj of the Jan 27 - Feb 25 - Mar 25 price swing
• SUP 3: 167.88 1.0% 10-dma envelope
• SUP 4: 167.52 Low Mar 19, 2020 (cont)

Bund futures have traded lower this morning and cleared support at 168.59, May 13 low. This confirms a resumption of the underlying downtrend and reinforces current bearish conditions. The move lower opens 168.09, a Fibonacci projection and 167.88, the base of a volatility based indicator. On the upside, initial resistance is at 169.35, May 17 high. A break of this level is required to ease bearish pressure.

BOBL TECHS: (M1) Approaching The Late Feb Low

• RES 4: 135.050 High Apr 22
• RES 3: 135.040 High May 6 and key short-term resistance
• RES 2: 134.870 High May 10
• RES 1: 134.510/685 High May 17 / 20-day EMA
• PRICE: 134.240 @ 09:18 BST May 19
• SUP 1: 134.180 Intraday low
• SUP 2: 134.140 Low Feb 26 and key support
• SUP 3: 134.000 Round number support
• SUP 4: 133.340 Low Mar 19, 2020 (cont)

Bobl futures touched a new cycle low of 134.190 Monday. This reinforces the bearish cycle that started Mar 25. Prices have moved lower again today, resuming the downleg, signalling scope for weakness towards end-Feb lows next, with support layered between 134.00-134.14. Clearance of this zone would confirm a resumption of the broader downtrend. Key short-term resistance is at 134.510, May 17 high.

SCHATZ TECHS: (M1) Remains Bearish

• RES 4: 112.165 High Mar 25 and the bull trigger
• RES 3: 112.150 High Apr 8
• RES 2: 112.110/120 High May 4, 5, and 6 / High Apr 22
• RES 1: 112.040/063 High May 17 / 20-day EMA
• PRICE: 112.010 @ 09:34 BST May 19
• SUP 1: 112.000 Intraday low
• SUP 2: 111.993 76.4% retracement of the Feb 26 - Mar 25 rally
• SUP 3: 111.940 Low Feb 26 ad key support
• SUP 4: 111.860 Low Apr 15, 2019 (cont)

Schatz futures maintain a bearish tone following last week's sell-off and resumption of the bearish cycle that started Mar 25. Recent weakness has resulted in a break of 112.060, a level that provided support in March and April. The clear break strengthens a bearish case and paves the way for weakness below 112.00 and towards 111.940, Feb 26 low. On the upside, a breach of 112.110 is required to signal a reversal.

GILT TECHS: (M1) Eyeing Key Support

• RES 4: 129.75 High Feb 19
• RES 3: 129.09/27 High Apr 23 and the reversal trigger / High Mar 2
• RES 2: 128.80 High May 7 and key short-term resistance
• RES 1: 128.08 High MAy 11
• PRICE: 127.49 @ Close May 18
• SUP 1: 126.86 Low May 13
• SUP 2: 126.79 Low Mar 18 and the bear trigger
• SUP 3: 126.55 Low Apr 17, 2019 (cont)
• SUP 4: 126.46 1.0% 10-dma Envelope

The Gilt futures technical outlook remains bearish. The pullback from 128.80, May 7 high and last week's follow through reinforce bearish conditions. The move lower resulted in a break of support between 127.40 and 127.32, Apr 29 and Apr 1 lows respectively. This exposes the major support at 126.79, Mar 18 low and the bear trigger. A break of 126.79 would confirm a resumption of the broader downtrend. Initial firm resistance is 128.80.

BTP TECHS: (M1) Bear Extension

• RES 4: 147.79 High May 4 and key near-term resistance
• RES 3: 147.33 High May 7
• RES 2: 146.84 Low Feb 26 and recent breakout level
• RES 1: 145.96 High May 13
• PRICE: 144 65 @ Close May 19
• SUP 1: 144.48 Low May 17
• SUP 2: 144.16 1.236 proj of the Feb 12 - 26 - Mar 11 price swing
• SUP 3: 144.00 Round number support
• SUP 4: 143.22 2.0% 10-dma envelope

BTP futures remain in a clear downtrend following last week's extension lower. Furthermore, the contract started this week on a soft note and continues to weaken, trading to a fresh 2021 low today of 144.48. The recent break of 146.84, Feb 26 low confirmed a resumption of the bear cycle from Feb 12. MA studies are in a bear mode reinforcing current conditions. Attention is on 144.16, a Fibonacci projection. Firm resistance is 146.84.

EQUITIES

EUROSTOXX 50 TECHS: (M1) Off Recent Highs

• RES 4: 4175.00 Low Nov 26, 2007 (cont)
• RES 3: 4140.00 High Jan 18, 2008 (cont)
• RES 2: 4099.00 1.00 proj of of the Mar - Jul - Oct 2020 price swing
• RES 1: 4036.00 High May 10 and the bull trigger
• PRICE: 3965.00 @ 05:39 BST May 19
• SUP 1: 3958.79 20-day EMA
• SUP 2: 3844.00 Low May 13 and the bear trigger
• SUP 3: 3821.00 High Mar 18 and recent breakout level
• SUP 4: 3727.00 Low Mar 25

EUROSTOXX 50 futures are off recent highs but remain bullish. The contract staged a solid recovery last week and has defined a key support at 3844.00, May 13 low. A test of the 50-day EMA last week failed to result in a clear break of the average. The EMA represents a key trend support reference and intersects at 3880.20. A break of 4036.00, May 10 high would confirm a resumption of the uptrend. Sub 3844.00 levels are required to signal a top.

E-MINI S&P (M1): Pulling Away From Yesterday's High

• RES 4: 4280.65 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: 4179.50 High May 18
• PRICE: 4091.25 @ 09:33 BST May 19
• SUP 1: 4072.74 50-day EMA
• SUP 2: 4029.25 Low May 13 and key short-term support
• SUP 3: 4021.00 Low Apr 5
• SUP 4: 3937.12 100-dma

S&P E-minis are pulling away from the high print of 4179.50 yesterday. Futures are approaching the 50-day EMA at 4072.74 which represents an important support area. Last week's low of 4029.25 however marks the key short-term support where a break is required to signal a top and highlight the potential for a deeper pullback. A break above 4179.50 is required to offset bearish concerns.

COMMODITIES

BRENT TECHS: (N1) Off Recent Highs

• RES 4: $71.95 - High Sep 16, 2019 (cont)
• RES 3: $71.75 - High Jan 8 2020 (cont)
• RES 2: $71.61 - Bull channel top drawn off the Apr 5 low
• RES 1: $70.24 - High May 18
• PRICE: $67.90 @ 06:41 BST May 19
• SUP 1: $67.28 - Low May 18
• SUP 2: $66.48 - Low May 13 and key near-term support
• SUP 3: $66.10 - Low May 3
• SUP 4: $65.46 - 50-day EMA

Brent crude if off recent highs but remains bullish. Price on May 5, probed key resistance at $69.73, Mar 8 high and yesterday the contract traded above $70.00. A move higher would confirm a resumption of the broader uptrend and extend the bullish price sequence of higher highs and higher lows. This would open $71.75, the Jan 8, 2020 high (cont). On the downside, initial firm trend support has been defined at $66.48, May 13 low.

WTI TECHS: (M1) Watching Support

• RES 4: $70.00 - Psychological round number
• RES 3: $67.95 - High Oct 29, 2018
• RES 2: $67.29 - High Mar 8 and the bull trigger
• RES 1: $67.01 - High May 18
• PRICE: $64.64 @ 06:46 BST May 19
• SUP 1: $64.11 - 20-day EMA
• SUP 2: $63.09 - Low May 13 and key near-term support
• SUP 3: $62.43 - 50-day EMA
• SUP 4: $60.61 - Low Apr 22 and key short-term support

WTI maintains a bullish tone dispute pulling back from yesterday's high. Price action has probed resistance at $66.76, May 5 high. A clear break would pave the way for a test of the key hurdle for bulls at $67.29, Mar 8 high. Clearance of this latter resistance would confirm a resumption of the broader uptrend. On the downside, firm near-term support has been defined at $63.09, May 13 low. A break would be bearish.

GOLD TECHS: Bullish Focus

• RES 4: $1927.7 - High Jan 7
• RES 3: $1917.6 - High Jan 8
• RES 2: $1892.7 - 76.4% retracement of the Jan 6 - Mar 8 sell-off
• RES 1: $1875.7 - High Jan 29
• PRICE: $1871.7 @ 07:01 BST May 19
• SUP 1: $1841.3 - Low May 17
• SUP 2: $1808.9 - Low May 13
• SUP 3: $1789.0 - 50-day EMA
• SUP 4: $1764.3 - Low Apr 30

Gold traded higher again yesterday and confirmed once again a resumption of the underlying uptrend as the bullish price sequence of higher highs and higher lows extends. Price action has cleared $1851.5, a Fibonacci retracement signalling scope for a climb towards 1875.7 next, the Jan 29 high. On the downside, key short-term support has been defined at $1808.9, May 13 low. A break would be bearish.

SILVER TECHS: Bull Rally Remains Intact

• RES 4: $30.100 - High Feb 1 and key resistance
• RES 3: $30.000 - Round number resistance
• RES 2: $29.053 - High Feb 2
• RES 1: $28.753 - High May 18
• PRICE: $28.175 @ 07:05 BST May 19
• SUP 1: $27.351 - Low May 17
• SUP 2: $26.721 - Low Mar 13 and key near-term support
• SUP 3: $26.398 - 50-day EMA
• SUP 4: $25.718 - Low Apr 29

Silver remains bullish and continues to climb following the recovery from $26.721, May 13 low. This level represents an important short-term support where a break is required to signal scope for a deeper pullback. While it holds, the outlook remains bullish. The metal has probed $28.609, a Fibonacci retracement paving the way for $29.00 and above. Further out, the Feb 1 high of $30.100 beckons.