MNI DAILY TECHNICAL ANALYSIS - Equities Remain Vulnerable Despite Bounce

Price Signal Summary – Equities Remain Vulnerable Despite Bounce

• In the equity space, S&P E-minis remains vulnerable despite Tuesday’s gains. The contract recently failed to hold above the 50-day EMA - at 4549.15. This average represents a firm resistance and a clear break would suggest scope for a stronger rally towards 4671.75 initially, Jan 18 high. EUROSTOXX 50 futures remain vulnerable despite the Tuesday bounce. Last week, the contract failed to hold above the 50-day EMA - at 4188.70. 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 is recovering for a second session, narrowing the gap with next resistance at the Feb11 high of 1.1401. The price action follows several bearish signals that resulted in a breach of nearby support at the 1.1315 bear channel top. EURJPY has extended the bounce off recent lows, chewing further through the downtick posted on Friday. The bull trigger remains at 133.15, Feb 10 high, meaning rallies will target this level before shifting sights to 133.48 and above.
• On the commodity front, the Gold rally paused Tuesday, with prices drifting through the Tuesday session. Nonetheless, the recent clearance of resistance at $1853.9, the Jan 25 high reinforces the underlying bullish condition. The recent rally in WTI futures petered out on Tuesday, with prices retreating somewhat from recent highs. Nonetheless, the recent break higher resumed 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. Moving average conditions are in a bear mode set-up too, highlighting current sentiment. The focus is on the 164.00 handle next. The trend condition in Gilt futures is unchanged and remains bearish. With the 120.00 psychological handle cleared, the focus is on 119.28 next, a Fibonacci projection.

FOREIGN EXCHANGE

EURUSD TECHS: Extends Corrective Recovery

• 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: 1.1390 @ 08:53 GMT Feb 16
• 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 is recovering for a second session, narrowing the gap with next resistance at the Feb11 high of 1.1401. The price action follows several bearish signals that resulted 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: 1.3567 @ 09:01 GMT Feb 16
• SUP 1: 1.3487 Low Feb 15
• 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 slightly higher, having recovered from a brief slip lower on Tuesday. The rate 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: 0.8390 @ 09:04 GMT Feb 16
• 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 has stabilised slightly since. 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: 115.73 @ 09:06 GMT Feb 16
• 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: Extending Bounce

• 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: 131.52/54 50.0% retracement of Friday’s range / High Feb 15
• PRICE: 131.67 @ 09:12 GMT Feb 16
• 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 has extended the bounce off recent lows, chewing further through the downtick posted on Friday. The bull trigger remains at 133.15, Feb 10 high, meaning rallies will target this level before shifting sights to 133.48 and above. To the downside, 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 Monday’s low is also seen as a key short-term support - at 130.05.

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: 0.7174 @ 09:21 GMT Feb 16
• 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 reversed lower from last Thursday’s high of 0.7249 into the Monday low of 0.7086. 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: 1.2685 @ 09:24 GMT Feb 16
• 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 sits toward the bottom end of the recent range, but is holding above 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: 165.63 @ 17:19 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: 130.620 @ 17:23 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 (cont)

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: 111.585 @ 17:26 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 Lows

• 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: 119.49 @ Close Feb 15
• SUP 1: 119.39 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 Tuesday at 119.39. 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: 138.53 @ Close Feb 15
• SUP 1: 138.09 1.50 proj of the Dec 14 - Jan 19 - 31 price swing / Low Feb 15
• SUP 2: 137.64 2.0% 10-dma envelope
• 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 still Tuesday, 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 and the Tuesday low. On the upside, initial resistance is seen at the Feb 9 high of 141.14.

EQUITIES

E-MINI S&P (H2): Outlook 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: 4446.00 @ 17:38 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 remains vulnerable despite Tuesday’s gains. The contract recently failed to hold above the 50-day EMA - at 4549.15. 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: 4134.00 @ 17:39 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 despite the Tuesday bounce. Last week, the contract failed to hold above the 50-day EMA - at 4188.70. 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 year’s downtrend.

COMMODITIES

BRENT TECHS: (J2) Rally Hits Pause

• 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: $93.19 @ 17:51 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, before stalling somewhat into the Tuesday close. Nonetheless, the recent rally confirmed 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) Falters Near Recent Highs

• 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: $92.08 @ 17:53 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

The recent rally in WTI futures petered out on Tuesday, with prices retreating somewhat from recent highs. Nonetheless, the recent break higher resumed 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: Fades Off Highs, But Still Bullish

• 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: $1852.8 @ 17:58 GMT Feb 15
• SUP 1: $1844.7 Low Feb 15
• 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

The Gold rally paused Tuesday, with prices drifting through the Tuesday session. Nonetheless, the recent clearance of resistance at $1853.9, the Jan 25 high reinforces the underlying bullish condition and Tuesday’s show above $1877.2, the Nov 16 high adds to the bullish case. The break 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: Returns to Recent Range

• 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: $23.320 @ 18:04 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 strength faded into the Tuesday close. Nonetheless, 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.