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MNI DAILY TECHNICAL ANALYSIS - Equity Pullback Deemed Corrective

Price Signal Summary – Equity Pullback Deemed Corrective

  • Trend conditions in the S&P E-Minis remains positive and the most recent pullback is considered corrective. Bullish conditions have been reinforced by the recent break above both the 20- and 50-day EMAs. EUROSTOXX 50 futures are consolidating but remain in an uptrend. The contract recently traded above the 50-day EMA. This average represents an important resistance - at 3860.10 today - and a clear break would confirm a resumption of the bull cycle that started Mar 7.
  • EURUSD traded lower Tuesday, extending the pullback from 1.1185, Mar 31 high. The recent failure at 1.1185 and more importantly, the inability to remain above the 50-day EMA (breached last week), highlighted a developing bearish threat. USDJPY remains above last week’s low of 121.28 (Mar 31). A corrective cycle is still in play despite recent gains, with resistance at 125.09 intact, the Mar 28 trend high. USDCAD weakened Tuesday and this resulted in a break of last week’s 1.2430 low, on Mar 30. The pair however did recover from the session low. The move highlights a resumption of the current bear cycle and marks an extension of the bearish price sequence of lower lows and lower highs.
  • Gold remains range bound and continues to trade above $1890.2, the Mar 29 low. The outlook is bearish following the recent pullback from $2070.4, Mar 8 high. This has allowed a recent overbought condition to unwind. The recent move lower in WTI futures from $116.64, Mar 24 high, highlights a short-term bearish threat. The contract has also recently traded below the 20-day EMA. Attention is on the 50-day EMA at $97.78.
  • Bunds are pulling away from Monday’s high and the recent corrective phase appears to be over. The primary trend is down. Moving average studies are in a bear mode and a broader bearish price sequence of lower lows and lower highs, that has unfolded since Aug / Sep 2019, remains intact. Gilt futures have found resistance at 122.35, the Apr 4 high. The pullback means price has failed to remain above the 20-day EMA, and a key resistance at 122.72, the Mar 18 high, remains intact.

FOREIGN EXCHANGE

EURUSD TECHS: Eyeing Key Support

  • RES 4: 1.1241 2.0% 10-dma envelope
  • RES 3: 1.1222 61.8% of Feb 10 - Mar 7 sell-off
  • RES 2: 1.1185/1201 High Mar 31 / 3.0% Upper Bollinger Band
  • RES 1: 1.1036 20-day EMA
  • PRICE: 1.0899 @ 06:05 BST Apr 6
  • SUP 1: 1.0890 Low Mar 9
  • SUP 2: 1.0806 Low Mar 7 and the bear trigger
  • SUP 3: 1.0767 Low May 7 2020
  • SUP 4: 1.0727 Low Apr 24, 2020

EURUSD traded lower Tuesday, extending the pullback from 1.1185, Mar 31 high. The recent failure at 1.1185 and more importantly, the inability to remain above the 50-day EMA (breached last week), highlighted a developing bearish threat and this week’s sell-off has reinforced this theme. The break of 1.0945 signals scope for a deeper sell-off towards 1.0806, the Mar 7 low and a bear trigger. Clearance of 1.1185 would reinstate a bull theme.

GBPUSD TECHS: Bearish Theme

  • RES 4: 1.3439 High Feb 25
  • RES 3: 1.3398 61.8% retracement of the Feb 10 - Mar 15 downleg
  • RES 2: 1.3277/98 50-day EMA / High Mar 23
  • RES 1: 1.3183 High Mar 30
  • PRICE: 1.3074 @ 06:10 BST Apr 6
  • SUP 1: 1.3051/3000 Low Mar 29 / Low Mar 15 and the bear trigger
  • SUP 2: 1.2954 1.764 proj of the Jan 13 - 27 - Feb 10 price swing
  • SUP 3: 1.2933 Low Nov 5 2020
  • SUP 4: 1.2855 Low Nov 2 2020 and a key support

GBPUSD closed near session lows Tuesday. Trend conditions remain bearish. The pair has also recently failed to remain above a number of short-term resistance points and the pullback from 1.3298, Mar 23 high, means price is still trading below the 50-day EMA, at 1.3277 today. The focus is on 1.3000, Mar 15 low and a bear trigger. Clearance of the 50-day EMA would highlight a short-term reversal.

EURGBP TECHS: Bear Cycle Extends

  • RES 4: 0.8624 High Oct 1 2021
  • RES 3: 0.8600 High Dec 8 2022
  • RES 2: 0.8512/59 High Mar 31 / 2.0% 10-dma envelope
  • RES 1: 0.8435 High Apr 4
  • PRICE: 0.8334 @ 06:23 BST Apr 6
  • SUP 1: 0.8322 Low Mar 28
  • SUP 2: 0.8296 Low Mar 23 and a key support
  • SUP 3: 0.8276 76.4% retracement of the Mar 7 - 31 rally
  • SUP 4: 0.8203 Low Mar 7 and the bear trigger

Yesterday’s move lower in EURGBP marks an extension of this week’s bearish price activity and the reversal from the 0.8512 high on Mar 31. The move lower has reversed a recent bullish theme and signals scope for a continuation of the current bear cycle. The cross has traded through both the 20- and 50-day EMAs, opening 0.8296, the Mar 23 low. Initial resistance is seen at Monday’s 0.8435 high.

USDJPY TECHS: Key Resistance At 125.09 Remains Intact

  • RES 4: 126.26 3.382 proj of the Dec 3 ‘21 - Jan 4 -24 price swing
  • RES 3: 125.86 High Jun 5 2015 and a major resistance
  • RES 2: 125.28 High Aug 12 2015
  • RES 1: 124.30/125.09 High Mar 29 / High Mar 28 and the bull trigger
  • PRICE: 123.88 @ 06:31 BST Apr 6
  • SUP 1: 122.38/21.28 Low Apr 5 / Low Mar 31
  • SUP 2: 120.95 Low Mar 24
  • SUP 3: 120.66/00 20-day EMA / Round number support
  • SUP 4: 119.44 Low Mar 22

USDJPY remains above last week’s low of 121.28 (Mar 31). A corrective cycle is still in play despite recent gains, with resistance at 125.09 intact, the Mar 28 trend high. 121.28 represents a key short-term support. A break of this level would allow for an extension lower and open 120.95, Mar 24 low ahead of the 120.00 handle. On the upside, clearance of 125.09 would confirm a resumption of the primary uptrend.

EURJPY TECHS: Corrective Cycle

  • RES 4: 139.00 High Aug 21 2015 and a key resistance
  • RES 3: 138.62 High Aug 25 2015
  • RES 2: 137.50/53 High Feb 2 ‘18 and major resistance / High Mar 28
  • RES 1: 135.88 High Apr 1
  • PRICE: 135.01 @ 06:44 BST Apr 6
  • SUP 1: 133.94 Low Mar 28
  • SUP 2: 132.97 20-day EMA
  • SUP 3: 131.34 50-day EMA
  • SUP 4: 130.72 Low Mar 17

The pullback in EURJPY is considered corrective and is allowing an overbought condition to unwind. Support to watch is 133.94, Mar 28 low. A break of this level would open the 20-day EMA at 133.14. The primary trend remains up. The cross traded to a fresh cycle high on Mar 28 and breached a key resistance at 134.13, Jun 1 2021 high, on Mar 24. This strengthened bullish conditions. The bull trigger is 137.50/53.

AUDUSD TECHS: Fresh Cycle High

  • RES 4: 0.7776 High Jun 11 2021
  • RES 3: 0.7762 76.4% retracement of the Feb ‘21 - Jan ‘22 downleg
  • RES 2: 0.7716 High Jun 16 2021
  • RES 1: 0.7661/64 High Apr 5 / 2.0% 10-dma envelope
  • PRICE: 0.7578 @ 06:49 BST Apr 6
  • SUP 1: 0.7536 Low Apr 5
  • SUP 2: 0.7457 Low Mar 29 and a key support
  • SUP 3: 0.7441/7376 20-day EMA / Low Mar 22
  • SUP 4: 0.7339 50-day EMA

AUDUSD rallied Tuesday and the break higher confirmed a resumption of its uptrend. Tuesday’s gains also confirmed a bull flag breakout and price has cleared resistance at 0.7556, the Oct 28 2021 high. The Aussie has also cleared the Jul 6 2021 high of 0.7599 and 0.7610, 61.8% of the Feb ‘21 - Jan ‘22 downleg. This opens 0.7716 next, the Jun 16 2021 high. Key support has been defined at 0.7457, the Mar 29 low.

USDCAD TECHS: Bearish, Despite A Bounce Off Yesterday’s Low

  • RES 4: 1.2699 High Mar 17
  • RES 3: 1.2636 50-day EMA
  • RES 2: 1.2574/93 20-day EMA / High Mar 28
  • RES 1: 1.2540 High Apr 1
  • PRICE: 1.2505 @ 07:02 BST Apr 6
  • SUP 1: 1.2403/2381 Low Apr 5 / 1.0% 10-dma envelope
  • SUP 2: 1.2387 Low Nov 10 2021
  • SUP 3: 1.2328 Low Oct 29 2021
  • SUP 4: 1.2301 Low Oct 27 2021

USDCAD weakened Tuesday and this resulted in a break of last week’s 1.2430 low, on Mar 30. The pair however did recover from the session low. The move highlights a resumption of the current bear cycle and marks an extension of the bearish price sequence of lower lows and lower highs. Moving average conditions are in a bear mode too. The focus is on 1.2381, the lower band of a MA envelope. Firm short-term resistance is at 1.2540/83.

FIXED INCOME

BUND TECHS: (M2) Trend Structures Remains Bearish

  • RES 4: 162.73 High Mar 14
  • RES 3: 161.81 High Mar 16
  • RES 2: 159.92/160.31 20-day EMA / High Mar 23
  • RES 1: 159.79 High Apr 4 and key short-term resistance
  • PRICE: 157.38 @ 05:04 BST Apr 6
  • SUP 1: 156.90 Low Mar 31
  • SUP 2: 156.05/00 Low Mar 29 / Round number support
  • SUP 3: 155.70 Low Dec 7 2015 (cont)
  • SUP 4: 155.03 Low Dec 4 2015 (cont)

Bunds are pulling away from Monday’s high and the recent corrective phase appears to be over. The primary trend is down. Moving average studies are in a bear mode and a broader bearish price sequence of lower lows and lower highs, that has unfolded since Aug / Sep 2019, remains intact. A continuation lower would open 156.00. Firm resistance is at 159.79, the Apr 4 high where a break is required to signal a possible base.

BOBL TECHS: (M2) Bearish Price Structure

  • RES 4: 130.924 50-day EMA
  • RES 3: 130.160 High Mar 23
  • RES 2: 129.714 20-day EMA
  • RES 1: 129.350 High Apr 4
  • PRICE: 128.270 @ 05:13 BST Apr 6
  • SUP 1: 127.770/750 Low Mar 29 / Low Jun 5 2015 (cont)
  • SUP 2: 127.540 Low Jun 4 2015 (cont)
  • SUP 3: 127.520 Low Sep 3 2014 (cont)
  • SUP 4: 127.280 Low Sep 18 2014 (cont)

Bobl futures remain above recent lows but price is lower and pulling away from Monday’s high. The primary trend remains down. Bearish price activity in March confirmed a resumption of the underlying downtrend to maintain the broader bearish price sequence of lower lows and lower highs. The focus is on a move towards 127.750 next, the Jun 5 2015 low (cont). The 20-day EMA at 129.714 marks a firm resistance.

SCHATZ TECHS: (M2) Trend Needle Points South

  • RES 4: 111.355 High Mar 21
  • RES 3: 111.170 High Mar 23
  • RES 2: 111.012 20-day EMA
  • RES 1: 110.855 High Apr 4
  • PRICE: 110.600 @ 05:19 BST Apr 6
  • SUP 1: 110.465 Low Mar 30 and the bear trigger
  • SUP 2: 110.410 Low May 8 2014 (cont)
  • SUP 3: 110.400 Round number support
  • SUP 4: 110.360 Low Apr 29 2014 (cont)

Schatz futures remain vulnerable and the recent move higher appears to be a correction. Last week’s fresh cycle lows strengthened bearish conditions and confirmed a resumption of the primary downtrend plus, it marked an extension of the broader bearish price sequence of lower lows and lower highs. 111.00 has recently been cleared and this paves the way for a move towards 110.410 next. Firm resistance is seen at 111.012, the 20-day EMA.

GILT TECHS: (M2) Finds Resistance At 122.35

  • RES 4: 124.60 High Mar 8
  • RES 3: 123.52 High Mar 9
  • RES 2: 122.72 High Mar 18 and a key near-term resistance
  • RES 1: 122.35 High Apr 4
  • PRICE: 120.82 @ Close Apr 5
  • SUP 1: 120.55 Low Apr 1
  • SUP 2: 119.86 Low Mar 28 and the bear trigger
  • SUP 3: 119.75 123.6% retracement of the Feb 15 - Mar 1 climb
  • SUP 4: 119.36 Low Oct 10 2018 (cont)

Gilt futures have found resistance at 122.35, the Apr 4 high. The pullback means price has failed to remain above the 20-day EMA, and a key resistance at 122.72, the Mar 18 high, remains intact. The broader trend direction is down and gains are considered corrective. The bear trigger is at 119.86, the Mar 28 low. For bulls, clearance of 122.72 would suggest scope for a stronger bullish short-term cycle.

BTP TECHS: (M2) Heading South

  • RES 4: 143.85 High Mar 10
  • RES 3: 142.51 Low Mar 1
  • RES 2: 140.71 High Mar 11
  • RES 1: 138.77 20-day EMA
  • PRICE: 135.96 @ Close Apr 5
  • SUP 1: 135.69 Low Mar 29 and the bear trigger
  • SUP 2: 135.43 Low May 7 2020 (cont)
  • SUP 3: 134.61 Low Apr 24 2020 (cont)
  • SUP 4: 134.00 Round number support

BTP futures traded lower Tuesday signalling the end of the recent corrective cycle. The trend remains down. The move lower last week marked an extension of the breach of support at 138.60, Feb 16 low, and confirmed a resumption of the downtrend. It also highlights a continuation of the broader bearish price sequence of lower lows and lower highs. The focus is on 135.43, May 7 2020 low (cont). Firm resistance is seen at 138.77.

EQUITIES

EUROSTOXX50 TECHS: (M2) Consolidation Mode

  • RES 4: 4189.00 High Feb 1
  • RES 3: 4132.00 High Feb 10
  • RES 2: 4072.00 High Feb 16
  • RES 1: 3944.00/3965.50 High Mar 29 / High Feb 23
  • PRICE: 3811.00 @ 05:30 BST Apr 6
  • SUP 1: 3735.00/3555.50 Low Mar 18 / Low Mar 15
  • SUP 2: 3455.00 Low Mar 9
  • SUP 3: 3441.50 Low Mar 7 and the bear trigger
  • SUP 4: 3379.00 Low Dec 21 2020 (cont)

EUROSTOXX 50 futures are consolidating but remain in an uptrend. The contract recently traded above the 50-day EMA. This average represents an important resistance - at 3860.10 today - and a clear break would confirm a resumption of the bull cycle that started Mar 7. The move higher last week also confirmed a bull flag breakout on the daily chart. The focus is on 3965.50, Feb 23 high. Initial support is at 3735.00.

E-MINI S&P (M2): Remains Above The 50-Day EMA

  • RES 4: 4800.00 High Apr 1 and the bull trigger
  • RES 3: 4730.50 High Jan 1
  • RES 2: 4663.50 High Jan 18
  • RES 1: 4633.44 76.4% retracement of the Jan 4 - Feb 24 downleg
  • PRICE: 4521.00 @ 06:55 BST Apr 6
  • SUP 1: 4452.75 50-day EMA
  • SUP 2: 4320.25 Low Mar 17
  • SUP 3: 4129.50/4094.25 Low Mar 15 / Low Feb 24 and a bear trigger
  • SUP 4: 4055.60 Low May 19 2021 (cont)

Trend conditions in the S&P E-Minis remains positive and the most recent pullback is considered corrective. Bullish conditions have been reinforced by the recent break above both the 20- and 50-day EMAs. Furthermore, resistance at 4578.50, Feb 9 high has been cleared. This opens, 4663.50, the Jan 18 high. Initial firm support is at 4452.75, the 50-day EMA. A clear break of this average would be seen as a bearish development.

COMMODITIES

BRENT TECHS: (M2) Monitoring The 50-Day EMA

  • RES 4: $134.91 - High Mar 7 and key resistance
  • RES 3: $128.04 - High Mar 8
  • RES 2: $125.40 - 76.4% retracement of the Mar 7 - 16 downleg
  • RES 1: $112.28/119.74 - High Mar 30 / High Mar 24 and a bull trigger
  • PRICE: $106.99 @ 07:00 BST Apr 6
  • SUP 1: $102.19/100.57 - Low Mar 29 / 50-day EMA
  • SUP 2: $94.61 - Low Mar 16
  • SUP 3: $90.58 - Low Feb 25
  • SUP 4: $84.74 - Low Feb 18

Brent futures are unchanged and continue to consolidate. The contract remains above $102.19, Mar 29 low. However a bearish threat remains present following the recent move lower from $119.74, Mar 24 high. The contract has traded below the 20-day EMA and this exposes the 50-day EMA, at $100.57. The 50-day average marks a key pivot support. $119.74 remains the key short-term resistance.

WTI TECHS: (K2) Bearish Threat Remains Present

  • RES 4: $126.42 - High Mar 7 and the bull trigger
  • RES 3: $122.73 - High Mar 9
  • RES 2: $116.64/118.34 - High Mar 24 / 76.4% of Mar 7 - 15 downleg
  • RES 1: $108.75/112.93 -High Mar 30 / High Mar 28
  • PRICE: $102.30 @ 07:04 BST Apr 6
  • SUP 1: $97.78 - Low Apr 1 / 50-day EMA
  • SUP 2: $92.20 - Low Mar 15 and a bear trigger
  • SUP 3: $88.49 - Low Feb 25
  • SUP 4: $85.81 - Low Feb 18

The recent move lower in WTI futures from $116.64, Mar 24 high, highlights a short-term bearish threat. The contract has also recently traded below the 20-day EMA. Attention is on the 50-day EMA at $97.78. This average represents an important pivot level and a break would suggest scope for a deeper pullback. On the upside, clearance of $116.64 would reinstate recent bullish conditions. Initial resistance is at $108.75.

GOLD TECHS: Range Bound

  • RES 4: $2104.6 - 3.236 proj of the Dec 15 - Jan 25 - 28 price swing
  • RES 3: $2075.5 - High Aug 7 2020 and the all-time high
  • RES 2: $2009.2/2070.4 - High Mar 10 / High Mar 8
  • RES 1: $1966.1 - High Mar 24
  • PRICE: $1919.3 @ 07:19 BST Apr 6
  • SUP 1: $1890.2 - Low Mar 29 and a bear trigger
  • SUP 2: $1878.4 - Low Feb 24
  • SUP 3: $1848.8 - 76.4% retracement of the Jan 28 - Mar 8 rally
  • SUP 4: $1821.1 - Low Feb 11

Gold remains range bound and continues to trade above $1890.2, the Mar 29 low. The outlook is bearish following the recent pullback from $2070.4, Mar 8 high. This has allowed a recent overbought condition to unwind. Key support at the 50-day EMA - today at $1908.3 - and the Mar 15 low of $1895.3 have recently been probed. A clear break lower would signal scope for a deeper pullback. Initial resistance is $1966.1.

SILVER TECHS: Bearish Theme

  • RES 4: $27.831 - High Jun 16 2021
  • RES 3: $27.245 - High Jun 17 2021
  • RES 2: $26.063/943 - High Mar 10 / High Mar 8 and the bull trigger
  • RES 1: $25.847 - High Mar 24
  • PRICE: $24.290 @ 07:27 BST Apr 6
  • SUP 1: $23.974 - Low Mar 29 and the bear trigger
  • SUP 2: $23.850 - Low Feb 24
  • SUP 3: $23.173 76.4% retracement of the Feb 3 - Mar 8 rally
  • SUP 4: $23.082 - Low Feb 15

Silver resistance is at $25.847, the Mar 24 high. A short-term bearish theme remains intact and potential is seen for a deeper retracement. Price is once again below the 50-day EMA at $24.521. This EMA marks an important support and a clear break would signal scope for a deeper pullback. For bulls, a move above $26.00 would alter the picture and refocus attention on $26.943, the Mar 8 high.

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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