MNI DAILY TECHNICAL ANALYSIS - EURGBP Cracks Support

EURGBP Tech Focus and Level Update:

With the cross extending its weakness below 0.8700, the support levels to watch next are:

• SUP 1: 0.8648/46 Intraday low / Low Mar 3, 2020
• SUP 2: 0.8621 Low Mar 5, 2020
• SUP 3: 0.8595 Low Mar 2, 2020
• SUP 4: 0.8570 76.4% Feb-Mar 2020 Rally
• The clear break of the 0.8700 handle sets the scene for a move lower towards 0.8600 next and the 0.8570 Fibonacci retracement, 76.4% of the Feb - Mar 2020 rally.
• This week's key technical break has been the move below 0.8671, the Apr 30 2020 low. This reinforces current trend conditions.
• Initial resistance is at the Thursday high of 0.8700.

Tech Focus: Price Signal Summary - Bearish Engulfing Candle In EURJPY

• Equity indices outlook is unchanged and bullish despite this week's pullback, E-mini S&P futures still target the 4000.00 handle.
  • An initial objective is at 3988.40, 2.236 projection of the Sep 24 - Oct 12 - Oct 30 price swing last year.
• In the FX space, EURUSD traded lower mid-week, but has bounced since. Tuesday's candle pattern, a shooting star formation, has defined a short-term top at 1.2169, Feb 16 high. Support to watch lies at 1.2020, Feb 8 low. EURJPY also appears to have defined a short-term top at Wednesday's 128.46 high. A bearish engulfing candle mid-week suggests a corrective pullback is likely near-term. The next support is at 127.04, Feb 15 low. EURGBP downside extends with 0.8700 cleared. The April 2020 low has been breached, this opens 0.8646 next, the March 6, 2020 low.
• On the commodity front, Gold has cleared support at $1785.0, Feb 4 low. This confirms a resumption of the downtrend that started Jan 6 and opens $1764.8, Nov 30 low. Oil contracts remain firm. Brent (J1) targets $65.88 - 1.764 projection of the Apr - Aug - Nov 2020 price swing. WTI (H1) targets $63.17 - 1.618 projection of the Apr - Aug rally from the Nov 2 low.

In the FI space, Bunds (H1) are likely to remain heavy. The focus is on 174.06, 2.00 projection of the Jan 4 - 12 sell-off from the Jan 27 high. Gilts (H1) remain in a downtrend and scope is for a move to 130.49, 2.764 projection of the Dec 11 - 24 sell-off from the Jan 4 high.

FOREIGN EXCHANGE

EURUSD TECHS: Bearish Focus

• RES 4: 1.2223 High Jan 13
• RES 3: 1.2190 High Jan 22 and a key resistance
• RES 2: 1.2169 High Feb 16 and the bull trigger
• RES 1: 1.2110 High Feb 17
• PRICE: 1.2097 @ 06:12 GMT Feb 19
• SUP 1: 1.2023 Low Feb 17
• SUP 2: 1.2020 Low Feb 8
• SUP 3: 1.1952 Low Feb 5 and the bear trigger
• SUP 4: 1.1945 23.6% retracement March - Jan rally

EURUSD traded lower Wednesday following the pullback from 1.2169, Feb 16 high. The price pattern on Feb 16 is a bearish candle - a shooting star. Following Wednesday's extension lower, scope is seen for a deeper pullback with the next support at 1.2020, Feb 8 low. Thursday's gains are for now, considered a correction. A break of 1.2020 would expose 1.1952, Feb 5 low. Gains above 1.2110, Feb 12 high would refocus attention on 1.2169.

GBPUSD TECHS: Eyeing The 1.4000 Handle

• RES 4: 1.4082 1.00 proj of May - Sep 2020 rally from Sep 23 low
• RES 3: 1.4031 High Apr 23, 2018
• RES 2: 1.3998 High Apr 26, 2018
• RES 1: 1.3986 High Feb 18
• PRICE: 1.3981 @ 06:25 GMT Feb 19
• SUP 1: 1.3830 Low Feb 17
• SUP 2: 1.3776 Low Feb and Key near-term support
• SUP 3: 1.3737 Low Feb 9
• SUP 4: 1.3640 50-day EMA

GBPUSD rallied once again yesterday and topped the Tuesday high of 1.3952, taking out key resistance on the move higher. A bullish tone remains intact and Cable maintains a bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode too. The focus is on 1.3998 next, Apr 26, 2018 high and 1.4031, Apr 23 high. On the downside, firm near-term support lies at 1.3776, Feb 12 low.

EURGBP TECHS: Bearish With 0.8700 Cleared

• RES 4: 0.8840 High Feb 4
• RES 3: 0.8797 High Feb 9
• RES 2: 0.8739 Low Feb 5
• RES 1: 0.8700 Feb 18 high
• PRICE: 0.8655 @ 06:28 GMT Feb 19
• SUP 1: 0.8641 Low Feb 18, 2021
• SUP 2: 0.8621 Low Mar 5, 2020
• SUP 3: 0.8595 Low Mar 2, 2020
• SUP 4: 0.8570 76.4% Feb-Mar 2020 Rally

EURGBP traded lower Thursday as the current bearish cycle extends. The clear break of the 0.8700 handle sets the scene for a move lower towards 0.8600 next and the 0.8570 Fibonacci retracement, 76.4% of the Feb - Mar 2020 rally. Thursday's key technical break has been the move below 0.8671, the Apr 30 2020 low. This reinforces current trend conditions. Initial resistance is at 0.8700, Feb 18 high.

USDJPY TECHS: Corrective Pullback

• RES 4: 106.95 High Aug 28, 2020
• RES 3: 106.55 High Sep 3, 2020
• RES 2: 106.26 1.50 projection of Jan 6 / 11 / 21 price swing
• RES 1: 106.22 High Feb 17
• PRICE: 105.61 @ 06:32 GMT Feb 19
• SUP 1: 105.18 Low Feb 16
• SUP 2: 104.74 Trendline drawn off the Jan 6 low / Low Feb 10
• SUP 3: 104.41 Low Feb 10
• SUP 4: 104.07 Low Jan 28

USDJPY maintains a bullish tone and the recent pullback is considered a correction. The Feb 16 climb resulted in a break of resistance at 105.77, Feb 5 high. This confirms a resumption of the uptrend that started Jan 6 and reinforces the significance of the recent key technical break - the breach on Jan 27 of the bear channel resistance drawn off the Mar 2020 high. The focus is on 106.26 next, a Fibonacci projection. Support is seen at 105.18.

EURJPY TECHS: Monitoring The Bearish Engulfing Candle

• RES 4: 129.47 1.00 proj of the Jun - Aug - Oct 2020 price swing
• RES 3: 129.26 High Dec 13, 2018
• RES 2: 128.59 High Dec 17, 2018
• RES 1: 128.46 High Feb 17 and bull trigger
• PRICE: 127.75 @ 06:43 GMT Feb 19
• SUP 1: 127.31 Low Feb 17
• SUP 2: 127.04 Low Dec 15
• SUP 3: 126.40 50-day EMA
• SUP 4: 126.10 Low Feb 4

The EURJPY broader outlook remains bullish however Wednesday's price action highlights a potential short-term top and the possibility of a corrective pullback. In patterns terms, Wednesday's Japanese candle pattern is a bearish engulfing reversal. If correct, this signals scope for a correction and opens 127.04, Feb 15 low. A break of this level would allow for a deeper pullback. On the upside, the bull trigger for a resumption of gains is 128.46.

AUDUSD TECHS: Key Resistance Remains Exposed

• RES 4: 0.7917 High Mar 14, 2018 and a key resistance
• RES 3: 0.7885 High Mar 15. 2018
• RES 2: 0.7820 High Jan 6 and the bull trigger
• RES 1: 0.7805 High Feb 16
• PRICE: 0.7787 @ 06:46 GMT Feb 19
• SUP 1: 0.7718 20-day EMA
• SUP 2: 0.7651 Low Feb 8
• SUP 3: 0.7583/64 Low Feb 5 / Low Feb 2 and the bear trigger
• SUP 4: 0.7557 Low Dec 28

AUDUSD maintains a bullish posture with scope for further gains. Price action on Feb 5 highlighted a reversal signal following the inability to clear the 50-day EMA. The pair has breached resistance at 0.7704, Jan 29 high and this opens 0.7820, Jan 6 high and the bull trigger. On the downside, a break of 0.7564, Feb 2 low is required to highlight a broader reversal. Initial support lies at 0.7718, the 20-day EMA.

USDCAD TECHS: Bearish Threat Still Present

• RES 4: 1.2915 High Dec 23
• RES 3: 1.2845/81 High Feb 4 / High Jan 28
• RES 2: 1.2763/78 High Jan 12 / 50-day EMA
• RES 1: 1.2746 High Feb 17
• PRICE: 1.2693 @ 06:50 GMT Feb 19
• SUP 1: 1.2610 Low Feb 16
• SUP 2: 1.2590 Low Jan 21 and major support
• SUP 3: 1.2547 Bear channel base drawn off the Jun 26, 2020 high
• SUP 4: 1.2528 Low Apr 17, 2018

USDCAD found support this week at 1.2610, Feb 16 low. The recent move lower is seen as a deeper corrective pullback however price has cleared 1.2686, Jan 27 low and a key S/T level. This is a bearish development and exposes the Jan 21 low of 1.2590 that also marks a bear trigger. Clearance of this level would resume the underlying downtrend. A 1.2881 break, Jan 28 high is required to reinstate bullish activity. 1.2763 is a firm resistance.

FIXED INCOME

BUND TECHS: (H1) Remains Vulnerable

• RES 4: 176.79 50-day EMA
• RES 3: 176.64 High Feb 11
• RES 2: 175.70 High Feb 15
• RES 1: 175.45 High Dec 16
• PRICE: 174.62 @ 05:04 GMT Feb 19
• SUP 1: 174.38/37 Low Feb 17 and 18 / Low Dec 2, 2020 (cont)
• SUP 2: 174.06 2.00 proj of Jan 4 - 12 sell-off from Jan 27 high
• SUP 3: 173.58 2.236 proj of Jan 4 - 12 sell-off from Jan 27 high
• SUP 4: 173.06 Low Sep 10, 2020 (cont)

Bund futures remain vulnerable with a bearish cycle dominating. The Feb 15 move lower resulted in price trading through 175.61, Feb 8 low. This confirmed a resumption of the downtrend that started mid-December. Momentum and moving average studies remain in a bear mode, reinforcing current conditions. Attention is on 174.37 next, Dec 2, 2020 low (cont). Initial resistance is at the Dec 16 high of 175.45.

BOBL TECHS: (H1) Bearish Cycle Dominates

• RES 4: 135.150 High Feb 11 and key resistance
• RES 3: 135.945 20-day EMA
• RES 2: 134.850 High Feb 15
• RES 1: 134.790 Low Feb 5 and Feb 18 high
• PRICE: 134.580 @ 05:02 GMT Feb 19
• SUP 1: 134.520 Low Feb 18
• SUP 2: 134.479 76.4% retracement of the Jun - Nov 2020 rally
• SUP 3: 134.450 Low Aug 14, 2020 (cont)
• SUP 4: 134.417 1.236 proj of Dec 11-Jan 12 sell-off from Jan 27 high

BOBL futures maintain a bearish tone and yesterday registered a fresh low print at 134.520. Earlier this week price traded below the key support and bear trigger at 134.790, Feb 5 low. The break strengthens a bearish argument and confirms a resumption of the underlying downtrend. Attention is on 134.417 next, a Fibonacci projection. Initial resistance is seen at 134.790. The Feb 11 high of 135.150 marks the key trend resistance.

SCHATZ TECHS: (H1) Needle Still Points South

• RES 4: 112.297 50-day EMA
• RES 3: 112.290 High Feb 11 and key resistance
• RES 2: 112.262 20-day EMA
• RES 1: 112.245 High Feb 18
• PRICE: 112.215 @ 05:19 GMT Feb 19
• SUP 1: 112.200 Low Feb 18
• SUP 2: 112.185 50.0% retracement of the Jun - Nov 2020 rally (cont)
• SUP 3: 112.150 1.00 proj of Dec 11 -28 sell-off from Jan 27 high
• SUP 4: 112.145 High Sep 3 and 4, 2020 (cont)

Schatz futures maintain a bearish stance. On Feb 15, the contract cleared key support at 112.235, Dec 23 low and 112.240, Jan 2, 21 and 22 low. The break negated a recent triple bottom reversal and instead confirms a resumption of the downtrend that started early November 2020. Attention is on further bearish pressure towards 112.185 next, a Fibonacci retracement. Trend resistance has been defined at 112.290, Feb 11 high.

GILT TECHS: (H1) Fresh Trend Low Print

• RES 4: 133.55 Low Dec 1 and a recent breakout level
• RES 3: 132.67 High Feb 11
• RES 2: 131.73 Low Feb 8/12 and gap high on the daily chart
• RES 1: 131.49 HIgh Feb 16 and gap low on the daily chart
• PRICE: 130.85 @ Close Feb 18
• SUP 1: 130.49 2.764 proj of the Dec 11 - 24 sell-off from Jan 4 high
• SUP 2: 130.18 Low Mar 19, 2020 (cont)
• SUP 3: 130.00 Psychological round number
• SUP 4: 129.55 3.236 proj of the Dec 11 - 24 sell-off from Jan 4 high

Gilt futures traded to a fresh low of 130.49 yesterday. Further weakness is likely with a bearish cycle continuing to dominate. The move to fresh lows this week reinforces the bearish theme and confirms a resumption of the downtrend that started early August last year. With further selling pressure likely near-term, the focus is on the 130.00 psychological level next. Initial resistance is at 131.49, Feb 16 high.

BTP TECHS: (H1) Vulnerable As Corrective Cycle Extends

• RES 4: 154.00 Round number resistance
• RES 3: 153.82 High Feb 12 and the bull trigger
• RES 2: 152.89 High Dec 15
• RES 1: 152.06 High Feb 17
• PRICE: 151.13 @ Close Feb 18
• SUP 1: 150.75 Low Feb 18
• SUP 2: 150.43 Low Feb 26
• SUP 3: 150.00 Round number support
• SUP 4: 149.57 Low Jan 22 and key support

BTP futures have entered a corrective cycle following the reversal off the Feb 12 high of 153.82 and the contract has been under pressure all week. This has resulted in a break of the 20- and 50-day EMAs and yesterday price cleared 151.19, 61.8% of the Jan 22 - Feb 12 rally. The focus is on 150.57 next, the 76.4% retracement. A deeper pullback would also expose 149.57, the Jan 22 low and key support. Initial resistance is at 152.06, Feb 17 high.

EQUITIES

EUROSTOXX 50 Techs: Pullback Considered Corrective

• RES 4: 3867.28 High Feb 20, 2020
• RES 3: 3858.79 1.50 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 2: 3798.19 0.764 proj of Mar - Jul - Oct 2020 swing
• RES 1: 3742.53 High Feb 15
• PRICE: 3681.04 @ Close Feb 18
• SUP 1: 3672.80 High Feb 8
• SUP 2: 3648.95 20-day EMA
• SUP 3: 3628.47 Low Feb 10
• SUP 4: 3584.91 50-day EMA

EUROSTOXX 50 remains bullish despite this week's corrective pullback. The focus is on 3798.19 further out, a Fibonacci projection. Moving average studies remain in a bull mode reinforcing underlying conditions. On the downside, the index needs to clear support at 3473.76 to reinstate a bearish theme, the Jan 28 low. Initial support is at 3648.95,the 20-day EMA. The bull trigger is the Feb 15 high of 3742.53.

COMMODITIES

BRENT TECHS: (J1) Uptrend Remains Intact

• RES 4: $67.00 - Round number resistance
• RES 3: $66.00 - High Jan 20, 2020 (cont)
• RES 2: $65.88 - 1.764 proj of the Apr - Aug - Nov 2020 price swing
• RES 1: $65.52 - High Feb 18
• PRICE: $63.35 @ 06:58 GMT Feb 19
• SUP 1: $62.09 - Intraday low
• SUP 2: $60.35 - Low Dec 12
• SUP 3: $60.02 - 20-day EMA
• SUP 4: $58.43 - Bull channel base drawn off the Nov 2, 2020 low

Brent futures maintain a bullish stance despite the pullback from yesterday's high of $65.52. The continued gains this week confirms a resumption of the underlying bull trend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode too, reinforcing current trend conditions. The focus is on $65.88 next, a Fibonacci projection. On the downside, initial firm support lies at $60.35, Feb 12 low.

WTI TECHS: (J1) Corrective Pullback

• RES 4: $65.66 - 1.764 proj of Apr - Aug rally from the Nov 2 low
• RES 3: $64.00 - Round number resistance
• RES 2: $63.17 - 1.618 proj of Apr - Aug rally from the Nov 2 low
• RES 1: $62.29 - High Feb 18
• PRICE: $59.83 @ 07:09 GMT Feb 19
• SUP 1: $58.60 - Intraday low
• SUP 2: $57.31 - Low Feb 12
• SUP 3: $56.63 - 20-day EMA
• SUP 4: $54.94 - Bull channel base drawn off the Nov 2, 2020 low

WTI futures maintain a bullish tone and the pullback from yesterday's high of $62.29 is likely a correction. The recent break higher confirms a resumption of the underlying uptrend and maintains the bullish price sequence of higher highs and higher lows. The focus is on $63.17 next, a Fibonacci projection. On the downside, the near-term firm support lies at $57.31, the Feb 12 low. Initial support is at $58.60, today's intraday low.

GOLD TECHS: Trades Below Key Support Levels

• RES 4: $1855.5 - High Feb 10 and a key resistance
• RES 3: $1830.8 - High Dec 12
• RES 2: $1823.3 - 20-day EMA
• RES 1: $1795.1 - High Feb 17
• PRICE: $1772.2 @ 07:00 GMT Feb 19
• SUP 1: $1760.7 - Intraday low
• SUP 2: $1757.8 - Low Jul 2, 2020
• SUP 3: $1747.6 - Low Jun 26, 2020
• SUP 4: $1742.5 - Low Jun 22, 2020

Gold remains bearish. The yellow metal yesterday traded through support at $1785.00, Feb 4 low. This reinforces the current bearish theme with the reversal from $1855.5, Feb 10 high clearly weighing on the yellow metal. MA studies are also in a bear mode highlighting the current path of least resistance. Note that today, $1764.8, Nov 30 low has been probed. A clear break would open $1757.8, Jul 2, 2020 low. Resistance is at $1795.1.

SILVER TECHS: Volatile, Outlook Remains Bearish

• RES 4: $30.100 - High Feb 1
• RES 3: $29.053 - High Feb 2
• RES 2: $28.498 - 61.8% retracement of the Feb 1 - 4 sell-off
• RES 1: $28.003 - 50.0% retracement of the Feb 1 - 4 sell-off
• PRICE: $27.152 @ 09:20 GMT Feb 19
• SUP 1: $26.139 - Intraday low
• SUP 2: $25.905 - Low Feb 4
• SUP 3: $25.483 - 76.4% retracement of the Jan 18 - Feb 1 rally
• SUP 4: $24.700 - Low Jan 27

Silver is volatile, trading sharply lower earlier today but has since recovered. The metal remains vulnerable following the sell-off on Feb 2. Recent gains are considered a correction and a resumption of weakness is seen likely near-term. A move lower once again would refocus attention on $25.905, Feb 4 low. Clearance of this support would set the scene for a deeper pullback. Resistance is seen at $28.003 and $28.498, Fibonacci retracement levels.