MNI DAILY TECHNICAL ANALYSIS - EURGBP Weakness Confirms Bearish Price Pattern

Price Signal Summary – EURGBP Weakness Confirms Bearish Price Pattern

• The uptrend in S&P E-Minis remains intact and the contract has traded to a fresh cycle high today. Recent gains have resulted in a break of a key resistance at 5333.50, the Apr 1 high. This confirmed a resumption of the primary uptrend and has signalled scope for a climb to 5372.73. A bullish theme in Eurostoxx 50 futures remains intact and the recent pullback appears to be a correction. The contract has recently cleared key resistance at 5079.00, the Apr 2 high, to confirm a resumption of the uptrend.
• EURGBP remains soft having traded sharply lower on yesterday’s UK CPI release. Wednesday’s move resulted in a break of support at 0.8531, the Apr 30 low, and confirms an extension of the reversal that started May 9. EURJPY has recovered from the May 16 low and is holding on to its latest gains. The medium-term trend structure is bullish and sights are on 171.56, the Apr 29 high and key resistance. USDCAD has recovered from its recent lows. A bullish trend condition remains intact. Recently, key supports at 1.3638, the 50-day EMA, and 1.3610, the May 3 low, have been pierced.
• Gold has pulled back from its recent high. The medium-term trend structure remains bullish and short-term weakness is considered corrective. Monday’s initial gains resulted in a print above resistance at $2431.5, the Apr 12 high and bull trigger. WTI futures have pulled back from their most recent highs. A bearish theme remains intact. Price has recently traded below the 50-day EMA, strengthening a bearish set-up that highlights potential for a deeper correction.
• Bund futures continue to trade below the May 16 high. The rally on May 15 resulted in a print above the 50-day EMA and was followed by a breach of a key resistance at 131.86, the May 7 high. In order to strengthen a bullish condition, the contract needs to trade above 132.11. Gilt futures gapped lower at yesterday’s open. This resulted in the contract trading below support at 97.23, the May 14 low. The breach of this level undermines a recent bullish theme. A continuation lower would signal scope for a move towards key support at 95.36, the Apr 25 low.

EURUSD TECHS: Bull Flag Formation Reinforces Bullish Conditions

• RES 4: 1.0981 High Mar 8 and a key resistance
• RES 3: 1.0964 High Mar 13
• RES 2: 1.0933 61.8% retracement of the Dec 28 - Apr 16 bear leg
• RES 1: 1.0895 High May 16
• PRICE: 1.0829 @ 05:50 BST May 23
• SUP 1: 1.0814 Former channel top drawn from the Dec 28 high
• SUP 2: 1.0788 50-day EMA and a key near-term support
• SUP 3: 1.0724 Low May 3
• SUP 4: 1.0650 Low May 1

Recent price action is EURUSD appears to be a flag - a bullish continuation pattern that reinforces current bullish conditions. Last week's rally resulted in a bear channel breakout - price cleared the top of a channel drawn from the Dec 28 high and the break confirms a stronger reversal. Sights are on 1.0933 next, a Fibonacci retracement. Initial firm support lies at 1.0788, the 50-day EMA.

GBPUSD TECHS: Bull Cycle Remains In Play

• RES 4: 1.2894 High Mar 8 and a key resistance
• RES 3: 1.2823 High Mar 14
• RES 2: 1.2803 High Mar 21
• RES 1: 1.2761 High May 22
• PRICE: 1.2724 @ 06:07 BST May 23
• SUP 1: 1.2643/1.2592 Low May 16 / 50-day EMA
• SUP 2: 1.2510 Low May 14
• SUP 3: 1.2446 Low May 9 and a key near-term support
• SUP 4: 1.2423 Low Apr 24

A bullish trend condition in GBPUSD remains intact and the pair is trading closer to its recent highs. The break last week of 1.2634, the May 3 high, confirmed a resumption of the current bull cycle and this opened 1.2754, 76.4% of the Mar 8 - Apr 22 bear leg. It was pierced yesterday, a clear break would expose 1.2803, the Mar 21 high. Initial firm support lies at 1.2592, the 50-day EMA.

EURGBP TECHS: Approaching Key Support

• RES 4: 0.8665 61.8% retracement of the Nov 20 - Feb 14 bear cycle
• RES 3: 0.8656 1.0% 10-dma envelope
• RES 2: 0.8645 High Apr 23 and the bull trigger
• RES 1: 0.8566/8621 20-day EMA / High May 9
• PRICE: 0.8508 @ 06:25 BST May 23
• SUP 1: 0.8504 Low Mar 8 & May 22
• SUP 2: 0.8498/93 Low Feb 14 / Low Aug 23 2023 and key support
• SUP 3: 0.8454 76.4% of the Mar 7 - Sep 26 ‘23 bull phase
• SUP 4: 0.8408 Low Aug 24 2023

EURGBP remains soft having traded sharply lower on yesterday’s UK CPI release. Wednesday’s move resulted in a break of support at 0.8531, the Apr 30 low, and confirms an extension of the reversal that started May 9. Sights are on 0.8504, the Mar 8 low, where a break would expose 0.8498, the Feb 14 low. Note that a key support and bear trigger lies at 0.8493, the Aug 23 ‘23 low. On the upside, initial firm resistance is at 0.8566, the 20-day EMA.

USDJPY TECHS: Testing Resistance

• RES 4: 160.17 High Apr 29 and the bull trigger
• RES 3: 157.99 High May 1
• RES 2: 157.00 61.8% retracement of the Apr 29 - May 3 sell-off
• RES 1: 156.90 Intraday high
• PRICE: 156.74 @ 06:51 BST May 23
• SUP 1: 155.42/153.78 20- and 50-day EMA values
• SUP 2: 152.85 Trendline support drawn from the Dec 28 low
• SUP 3: 151.86 Low May 3
• SUP 4: 150.81 Low Apr 5

USDJPY is holding on to its most recent gains. The pair has traded through resistance at 156.74, the May 14 high and attention turns to 157.00, a Fibonacci retracement point. A breach of this level would open 157.99, the May 1 high. For bears, a reversal lower would refocus attention on 153.78, the 50-day EMA, and 152.85, trendline support drawn from the Dec 28 low. Clearance of these two price points would strengthen a bearish threat.

EURJPY TECHS: Holding On To Its Latest Gains

• RES 4: 172.25 2.0% 10-dma envelope
• RES 3: 171.56 High Apr 29 and the bull trigger
• RES 2: 170.65 0.618 proj of the May 3 - 15 - 16 price swing
• RES 1: 169.94 High May 21
• PRICE: 169.58 @ 07:11 BST May 23
• SUP 1: 167.83 20-day EMA
• SUP 2: 166.18 Trendline support drawn from the Dec 7 ‘23 low
• SUP 3: 165.89 50-day EMA
• SUP 4: 164.02 Low May 3

EURJPY has recovered from the May 16 low and is holding on to its latest gains. The medium-term trend structure is bullish and sights are on 171.56, the Apr 29 high and key resistance. Initial support at the 20-day EMA, at 167.83, remains intact. Key trendline support drawn from the Dec 7 ‘23 low, lies at 166.18. A clear break of this line would highlight a stronger reversal and initially expose support at the 50-day EMA, at 165.89.

AUDUSD TECHS: Corrective Pullback

• RES 4: 0.6771 High Jan 3
• RES 3: 0.6751 76.4% retracement of the Dec 28 - Apr 19 bear leg
• RES 2: 0.6729 High Jan 12
• RES 1: 0.6714 High May 16
• PRICE: 0.6622 @ 07:59 BST May 23
• SUP 1: 0.6611 20-day EMA
• SUP 2: 0.6575 50-day EMA
• SUP 3: 0.6465/6407 Low May 1 / Low Apr 22
• SUP 4: 0.6363 Low Apr 19 and the bear trigger

The latest pullback in AUDUSD appears to be a correction. A bullish condition remains intact following recent gains. The pair has recently cleared a number of short-term resistance points and the May 15 rally resulted in a breach of a key short-term hurdle at 0.6668, the Mar 8 high. The break strengthens a bullish theme and opens 0.6751, a Fibonacci retracement. On the downside, support to watch lies at 0.6575, the 50-day EMA.

USDCAD TECHS: Recovers From Its Recent Lows

• RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
• RES 3: 1.3899 High Nov 1 and a key resistance
• RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
• RES 1: 1.3698/3785 High May 22 / High Apr 30
• PRICE: 1.3684 @ 08:08 BST May 23
• SUP 1: 1.3590 Low May 16 and the bear trigger
• SUP 2: 1.3547 Low Apr 9
• SUP 3: 1.3512 50.0% retracement of the Dec 27 - Apr 16 bull cycle
• SUP 4: 1.3478 Low Apr 4

USDCAD has recovered from its recent lows. A bullish trend condition remains intact. Recently, key supports at 1.3638, the 50-day EMA, and 1.3610, the May 3 low, have been pierced. A clear break of both levels would threaten the bullish theme and instead signal scope for a deeper retracement. For bulls, a stronger resumption of gains would refocus attention on the bull trigger at 1.3846, the Apr 16 high.

FIXED INCOME

BUND TECHS: (M4) Support Holding For Now

• RES 4: 133.05 High Apr 12
• RES 3: 132.89 38.2% retracement of the Dec 27 - Apr 25 bear cycle
• RES 2: 132.55 High Apr 15
• RES 1: 131.54/132.11 50-day EMA / High Apr 16 and the bull trigger
• PRICE: 130.49 @ 05:30 BST May 23
• SUP 1: 130.30 Low May 22
• SUP 2: 130.24 Low May 14 and a key short-term support
• SUP 3: 129.83 Low Apr 30
• SUP 4: 129.53 Low Apr 25 and a bear trigger

Bund futures continue to trade below the May 16 high. The rally on May 15 resulted in a print above the 50-day EMA and was followed by a breach of a key resistance at 131.86, the May 7 high. In order to strengthen a bullish condition, the contract needs to trade above 132.11, the May 16 high. For bears, a breach of support at 130.24, the May 14 low, would instead be a bearish development and expose key support at 129.53, the Apr 25 low.

BOBL TECHS: (M4) Key Support Remains Exposed

• RES 4: 117.880 High Apr 15
• RES 2: 117.620 High Apr 19
• RES 3: 117.090/440 High 50-day EMA / May 16
• RES 1: 116.877 20-day EMA
• PRICE: 116.500 @ 05:37 BST May 23
• SUP 1: 116.420 Low May 22
• SUP 2: 116.230 Low Apr 30 and a bear trigger
• SUP 3: 116.135 1.50 proj of the Mar 8 - 18 - 27 price swing
• SUP 4: 116.000 Round number support

Bobl futures traded sharply higher on May 15 and the move highlighted a potential short-term reversal. However, clearance of 117.440, the May 16 high, is required to strengthen a bullish theme and note this would also highlight a breach of the 50-day EMA, at 117.291. The pullback from last week’s peak exposes key support at 116.230, the Apr 30 low. A break of this level would confirm a resumption of the downtrend.

SCHATZ TECHS: (M4) Trend Direction Remains Down

• RES 4: 105.790 High Mar 25 and key resistance
• RES 3: 105.680 High Apr 12
• RES 2: 105.444 50-day EMA
• RES 1: 105.250/105.395 20-day EMA / High May 3
• PRICE: 105.090 @ 05:23 BST May 23
• SUP 1: 105.045 Low Apr 30 and the bear trigger
• SUP 2: 105.000 Round number support
• SUP 3: 104.917 1.764 proj of the Aug 8 - Mar 18 - Mar 25 price swing
• SUP 4: 104.800 2.00 proj of the Mar 8 - 18 - 25 price swing

The trend direction in Schatz futures remains down. The contract has pulled back from last week’s high and - for now - resistance at 105.395, the May 3 high, remains intact. Price has traded through support at 105.150, the May 14 low. This exposes key support and the bear trigger at 105.045, the Apr 30 low, where a break would confirm a resumption of the primary downtrend. A move above 105.395 is required to signal a short-term reversal.

GILT TECHS: (M4) Clears Support

• RES 4: 99.37 High Apr 4
• RES 3: 99.19 76.4% of the Mar 12 - Apr 25 bear leg
• RES 2: 99.10 High Apr 10
• RES 1: 97.71/98.76 50-day EMA / High May 16 and bull trigger
• PRICE: 96.99 @ Close May 22
• SUP 1: 96.83 Low May 22
• SUP 2: 96.43/16 Low May 3 / 76.4% of the Apr 25 - May 16 rally
• SUP 3: 95.36 Low Apr 25 and the bear trigger
• SUP 4: 94.86 2.236 proj of the Mar 12 - 15 - 22 price swing

Gilt futures gapped lower at yesterday’s open. This resulted in the contract trading below support at 97.23, the May 14 low. The breach of this level undermines a recent bullish theme. A continuation lower would signal scope for a move towards key support at 95.36, the Apr 25 low. On the upside, initial resistance is seen at 97.71, the 50-day EMA. A break of key resistance at 98.76, the May 16 high, is required to reinstate a bullish theme.

BTP TECHS: (M4) Watching Support

• RES 4: 120.28 High Mar 14 and the bull rally
• RES 3: 119.55 High Mar 27
• RES 2: 119.10 High Apr 10 and a key near-term resistance
• RES 1: 119.00 High May 16
• PRICE: 117.83 @ Close May 22
• SUP 1: 116.94/115.76 Low May 14 / Low Apr 25 and the bear trigger
• SUP 2: 115.70 Low Dec 8 ‘23 (cont)
• SUP 3: 114.74 1.236 proj of the Dec 27 - Feb 22 - Mar 14 price swing
• SUP 4: 114.09 1.382 proj of the Dec 27 - Feb 22 - Mar 14 price swing

BTP futures rallied on May 15 and in the process traded above resistance at 118.61, the May 6 high. This exposed a more important resistance at 119.10, Apr 10 high. Clearance of this level would strengthen a bullish theme and signal scope for a climb towards key resistance at 120.28, the Mar 14 high. On the downside, support to watch is 116.94, the May 15 low. A break would instead be a bearish development.

EQUITIES

EUROSTOXX50 TECHS: (M4) Pullback Appears To Be A Correction

• RES 4: 5170.50 1.50 proj of the Jan 17 - Feb 12 - 13 price swing
• RES 3: 5162.00 High Nov 2000
• RES 2: 5127.70 1.382 proj of the Jan 17 - Feb 12 - 13 price swing
• RES 1: 5110.00 High May 16
• PRICE: 5049.00 @ 06:13 BST May 23
• SUP 1: 5018.80/4948.50 20- and 50- day EMA values
• SUP 2: 4862.00 Low Apr 25
• SUP 3: 4762.00 Low Apr 19 and the bear trigger
• SUP 4: 4711.00 Low Feb 19

A bullish theme in Eurostoxx 50 futures remains intact and the recent pullback appears to be a correction. The contract has recently cleared key resistance at 5079.00, the Apr 2 high, to confirm a resumption of the uptrend. This opens 5127.70 next, a Fibonacci projection. Key trend support is 4762.00, the Apr 19 low. The initial support zone to watch is the area between 5018.80 to 4948.50, the 20- and 50- day EMA values.

E-MINI S&P TECHS: (M4) Fresh Cycle High

• RES 4: 5417.75 2.00 proj of the Apr 19 - 29 - May 2 price swing
• RES 3: 5400.00 Round number resistance
• RES 2: 5372.73 1.764 proj of the Apr 19 - 29 - May 2 price swing
• RES 1: 5362.75 Intraday high
• PRICE: 5357.75 @ 07:16 BST May 23
• SUP 1: 5248.99 20-day EMA
• SUP 2: 5191.51 50-day EMA
• SUP 3: 5099.25 Low May 3
• SUP 4: 5036.25 Low May 2

The uptrend in S&P E-Minis remains intact and the contract has traded to a fresh cycle high today. Recent gains have resulted in a break of a key resistance at 5333.50, the Apr 1 high. This confirmed a resumption of the primary uptrend and has signalled scope for a climb to 5372.73, a Fibonacci projection. Moving average studies remain in a bull-mode set-up, highlighting a clear uptrend. Initial support is at 5248.99, the 20-day EMA.

COMMODITIES

BRENT TECHS: (N4) Bear Threat Remains Present

• RES 4: $94.00 - 2.236 proj of the Jan 3 - 29 - Feb 5 price swing
• RES 3: $92.09 - 2.00 proj of the Jan 8 - 29 - Feb 5 price swing
• RES 2: $91.18 - High Apr 12 and the bull trigger
• RES 1: $84.32/88.64 - 50-day EMA / High Apr 26
• PRICE: $81.41 @ 07:08 BST May 23
• SUP 1: $81.05 - Low May 15 and the bear trigger
• SUP 2: $80.24 - 61.8% retracement of the Dec 13 - Apr 12 bull cycle
• SUP 3: $75.91 - Low Feb 5
• SUP 4: $73.47 - Low Dec 13 and a key support

Brent futures are trading lower but remain inside the recent range for now. The trend condition remains bearish. Price has recently cleared the 50-day EMA and the clear breach of this average signals scope for a deeper correction towards $80.24, a Fibonacci retracement. Key resistance and the bull trigger has been defined at $91.18, the Apr 12 high. Clearance of this level would resume the uptrend. Initial firm resistance is $88.64, Apr 26 high.

WTI TECHS: (N4) Bearish Trend Condition

• RES 4: $90.00 - Psychological round number
• RES 3: $86.93 - 2.00 proj of the Jan 8 - 29 - Feb 5 price swing
• RES 2: $83.63/86.16 - High Apr 26 / 12 and the bull trigger
• RES 1: $80.11 - High May 20
• PRICE: $77.04 @ 07:20 BST May 23
• SUP 1: $76.36 - Low May 15
• SUP 2: $75.64 - Low Mar 11
• SUP 3: $73.24 - 76.4% retracement of the Dec 13 - Apr 12 bull leg
• SUP 4: $71.33 - Low Feb 5

WTI futures have pulled back from their most recent highs. A bearish theme remains intact. Price has recently traded below the 50-day EMA, strengthening a bearish set-up that highlights potential for a deeper correction. Scope is seen for a move to $75.64, the Mar 11 low. Key resistance and the bull trigger is at $86.16, the Apr 12 high. Initial firm resistance to watch is at $83.63, the Apr 26 high.

GOLD TECHS: Trend Needle Points North

• RES 4: $2528.4 - 3.00 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 3: $2500.0 - Round number resistance
• RES 2: $2481.5 - 2.764 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 1: $2452.5 - 2.618 proj of the Oct 6 - 27 - Nov 13 price swing
• PRICE: $23.64.1 @ 07:22 BST May 23
• SUP 1: $2360.0/2297.2 - 20- and 50- day EMA values
• SUP 2: $2277.4 - Low May 3 and a pivot support
• SUP 3: $2187.4 - Low Mar 28
• SUP 4: $2146.2 - Low Mar 18 and key short-term support

Gold has pulled back from its recent high. The medium-term trend structure remains bullish and short-term weakness is considered corrective. Monday’s initial gains resulted in a print above resistance at $2431.5, the Apr 12 high and bull trigger. The break reinforces the primary uptrend and paves the way for a climb towards 2452.5 next, a Fibonacci projection. The 50-day EMA, at $2297.2, represents a key support. A clear break of it would be bearish.

SILVER TECHS: Unwinding An Overbought Trend Condition

• RES 4: $35.745 - 1.236 proj of Jan 22 - Apr 12 - Nov 13 price swing
• RES 3: $35.226 - 50.0% of the Apr 2011 - Mar 2020 bear leg
• RES 2: $33.887 - 1.00 proj of the Jan 22 - Apr 12 - Nov 13 price swing
• RES 1: $32.518 - High May 20
• PRICE: $30.440 @ 08:13 BST May 23
• SUP 1: $29.797 - High Apr 12 and a recent breakout level
• SUP 2: $29.076 - 20-day EMA
• SUP 3: $27.464/26.018 - 50-day EMA / Low May 2
• SUP 4: $24.328 - Low Mar 27

Silver maintains a bullish theme and the latest pullback appears to be a correction that is allowing an overbought condition to unwind. Recent gains resulted in a break of resistance at $29.797, the Apr 12 high. The breach confirmed a resumption of the uptrend and has opened $33.887 next, a Fibonacci projection. A key support zone to watch lies between $29.076-27.464, the 20- and 50-day EMA values.