MNI DAILY TECHNICAL ANALYSIS - EURJPY Signals Potential For Deeper Pullback

Price Signal Summary – EURJPY Signals Potential For Deeper Pullback

• In the equity space, E-Mini S&P technical conditions remain bearish however price action rallied sharply higher from yesterday’s low of 4101.75. Short-term momentum conditions highlight a bullish divergence between price and momentum and this does suggest scope for some unwinding of recent weakness. EUROSTOXX 50 futures traded down sharply Thursday. Price did however recover from session lows. The break lower confirms a resumption of the bear cycle that started on Nov 18 last year. Futures have this week cleared a number of key support levels and this suggests scope for a deeper sell-off.
• In FX, EURUSD remains vulnerable and traded sharply lower Thursday clearing support at; 1.1280, the Feb 14 low and 1.1209, the 76.4% retracement of the recent Jan 28 - Feb 10 upleg. GBPUSD remained under pressure Thursday but did recover off the session low. The outlook remains bearish. A sharp sell-off has seen the pair trade through support at 1.3487, Feb 15 low and 1.3358, the Jan 27 low and a key support. EURJPY traded sharply lower Thursday and delivered a low print of 127.92, confirming a break of key support at 128.25, the Jan 25 low. The breach of this support confirms a 100.0% retracement of the recent Jan 25 - Feb 10 bull phase and signals potential for a deeper pullback.
• On the commodity front, volatile price action in Gold Thursday saw the yellow metal reverse sharply from the session high of $1974.3. The outlook is bullish however following recent impulsive gains. Gold is back inside its bull channel, drawn from the Aug 9 2021 low. WTI futures traded higher again Thursday and confirmed a resumption of the underlying uptrend and an extension of the bullish price sequence of higher highs and higher lows.
• In the FI space, Bund futures traded higher Thursday and breached resistance at 167.17, Feb 22 high and trendline resistance at 167.20. The trendline is drawn from the Dec 20 high. Gilt futures traded lower Thursday. The medium-term trend condition remains down however there is still a near-term risk for a stronger corrective bounce. Initial resistance to watch is at 123.53, the Feb 18 high where a break would confirm a resumption of the recent recovery from the 121.10 low.

FOREIGN EXCHANGE

EURUSD TECHS: Probes Key Support

• RES 4: 1.1608 High Nov 9, 2021
• RES 3: 1.1558 38.2% retracement of the May ‘21 - Jan 28 sell-off
• RES 2: 1.1396/1.1495 High Feb 16 / High Feb 10
• RES 1: 1.1280/1313 Low Feb 14 / Intraday high
• PRICE: 1.1219 @ 06:12 GMT Feb 25
• SUP 1: 1.1106 Low Feb 24
• SUP 2: 1.1040 76.4% retracement of the Jan ‘21 - Mar ‘21 bull phase
• SUP 3: 1.0976 2.00 projection of the Jan - Jun - May ‘21 price swing
• SUP 4: 1.0871 Low May 25, 2020

EURUSD remains vulnerable and traded sharply lower Thursday clearing support at; 1.1280, the Feb 14 low and 1.1209, the 76.4% retracement of the recent Jan 28 - Feb 10 upleg. The breach of the latter support has strengthened the bearish threat and also resulted in a probe of support at 1.1121, the Jan 28 low and a bear trigger. A firm short-term resistance has been defined at 1.1280, the Feb 14 low.

GBPUSD TECHS: Bearish Risk Remains Present

• RES 4: 1.3677/49 200-dma / High Jan 13 and a key resistance
• RES 3: 1.3662 High Jan 20
• RES 2: 1.3643/44 High Feb 18 / 10
• RES 1: 1.3487 Low Feb 15
• PRICE: 1.3427 @ 06:17 GMT Feb 25
• SUP 1: 1.3273 Low Feb 24
• SUP 2: 1.3240 Low Dec 22
• SUP 3: 1.3174 Low Dec 20
• SUP 4: 1.3163 Low Dec 8 and a key support

GBPUSD remained under pressure Thursday but did recover off the session low. The outlook remains bearish. A sharp sell-off has seen the pair trade through support at 1.3487, Feb 15 low and 1.3358, the Jan 27 low and a key support. 1.3301, 76.4% retracement of the Dec 8 - Jan 13 rally has been probed. A clear break would strengthen the bearish case and open 1.3163, Dec 8 low and a key support. Initial resistance is seen at 1.3487.

EURGBP TECHS: Key Support Remains Intact

• RES 4: 0.8512 High Dec 22
• RES 3: 0.8480 61.8% retracement of the Dec 8 - Feb 3 downleg
• RES 2: 0.8432/78 High Feb 11 / High Feb 7
• RES 1: 0.8383/8403 High Feb 22 / High Feb 16
• PRICE: 0.8355 @ 06:19 GMT Feb 25
• SUP 1: 0.8306/8285 Low Feb 24 / Low Feb 3 and key support
• SUP 2: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 3: 0.8242 50% Fibonacci Retracement 2015-2020 Upleg
• SUP 4: 0.8238 0.764 proj of the Dec 8 - Feb 3 - 7 Price swing

EURGBP traded below 0.8311 Thursday, the June 22 low to again reinforce the dominant bearish theme. A continuation lower would expose support and the near-term bear trigger of 0.8285, the Feb 3 low. Clearance of this level would signal a resumption of the downtrend. If the cross can hold above 0.8285 and clear initial resistance at 0.8383, the Feb 22 high, this would represent a short-term bullish development.

USDJPY TECHS: Rebounded From Thursday’s Low

• 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: 116.34/35 High Feb 10 / High Jan 4 and the bull trigger
• RES 1: 115.87 High Feb 15
• PRICE: 115.24 @ 07:30 GMT Feb 25
• SUP 1: 114.41 Low Feb 24
• SUP 2: 114.16 Low Feb 02
• SUP 3: 113.47 Low Jan 24 and key support
• SUP 4: 113.14 Low Dec 17

USDJPY managed to find support at Thursday’s session low of 114.41. This leaves the 114.16 support intact, Feb 2 low. Note that the pair has moved back above the 50-day EMA that intersects at 114.80. A stronger recovery would refocus attention on the 116.34/35 key resistance. For bears, weakness below 114.41 and more importantly 114.16, would reinforce a bearish threat and expose 113.47, Jan 24 low and a key support.

EURJPY TECHS: Gains Considered Corrective

• RES 4: 133.48 High Oct 20 and key resistance
• RES 3: 133.15 High Feb 10 and key resistance
• RES 2: 130.90/131.91 High Feb 21 / High Feb 16
• RES 1: 130.07 High Feb 24
• PRICE: 129.26 @ 06:34 GMT Feb 25
• SUP 1: 127.92 Low Feb 24
• SUP 2: 127.52 Low Dec 20
• SUP 3: 127.39 Low Dec 3 / 6 and a key support
• SUP 4: 126.44 Low Feb 9 2021

EURJPY traded sharply lower Thursday and delivered a low print of 127.92, confirming a break of key support at 128.25, the Jan 25 low. The breach of this support confirms a 100.0% retracement of the recent Jan 25 - Feb 10 bull phase and signals potential for a deeper pullback. The move opens 127.52, the Dec 20 low and 127.39, the Dec 3 and 6 low. Initial resistance is seen at yesterday’s 130.07 high. Short term gains are considered corrective.

AUDUSD TECHS: Remains Below Its Recent Highs

• RES 4: 0.7371 High Nov 15, 2021
• RES 3: 0.7322 2.0% 10-dma envelope
• RES 2: 0.7314 High Jan 13 and a key resistance
• RES 1: 0.7284 High Feb 23
• PRICE: 0.7198 @ 06:38 GMT Feb 25
• SUP 1: 0.7095 Low Feb 24
• SUP 2: 0.7086/7052 Low Feb 14 / Low Feb 4
• SUP 3: 0.6968/6963 Low Jan 28 / Low Jul 16, 2020
• SUP 4: 0.6921 Low Jul 14, 2020

AUDUSD failed to hold onto Wednesday’s high and traded lower Thursday. This leaves the key resistance at 0.7314 intact for now, the Jan 13 high. A deeper pullback would signal potential for a test of support at 0.7086, Feb 14 low that also represents a key short-term support handle. On the upside, clearance of the 0.7284 (Feb 23 high) to 0.7314 zone is required to strengthen the case for bulls.

USDCAD TECHS: Pullback Considered Corrective

• RES 4: 1.3009 High Dec 1 2020
• RES 3: 1.2964 High Dec 20 and a key resistance
• RES 2: 1.2924 High Dec 22
• RES 1: 1.2878 High Feb 24
• PRICE: 1.2788 @ 06:41 GMT Feb 25
• SUP 1: 1.2694/36 50-day EMA / Low Feb 10 and key S/T 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 traded higher Thursday and cleared resistance at 1.2797, the Jan 28 high and a key short-term resistance. The clear breach of this level strengthens bullish conditions and opens 1.2964, the Dec 20 high and the next key resistance. Clearance of this hurdle would significantly strengthen a bullish case. Key S/T support has been defined at 1.2636, Feb 10 low where a break is required to alter the picture. Pullbacks are considered corrective.

FIXED INCOME

BUND TECHS: (H2) Corrective Cycle Still In Play

• RES 4: 170.42 High Jan 27
• RES 3: 169.68 50.0% retracement of the Dec 8 - Feb 16 downleg
• RES 2: 168.59 50-day EMA
• RES 1: 168.01 High Feb 24
• PRICE: 166.80 @ 05:12 GMT Feb 25
• SUP 1: 165.16 Low Feb 22
• SUP 2: 164.34 Low Feb 16 and the bear trigger
• SUP 3: 164.00 Round number support
• SUP 4: 163.63 Low Mar, 2019 (cont)

Bund futures traded higher Thursday and breached resistance at 167.17, Feb 22 high and trendline resistance at 167.20. The trendline is drawn from the Dec 20 high. Despite a pullback from yesterday’s high, price action signals scope for a stronger short-term correction that has opened the 50-day EMA at 168.59. This EMA represents a key resistance area. Initial support to watch is at 165.16, the Feb 22 low.

BOBL TECHS: (H2) Eyeing The 50-Day EMA

• RES 4: 132.680 High Jan 31
• RES 3: 132.400 Low Jan 19
• RES 2: 132.126 50-day EMA
• RES 1: 131.890 High Feb 24
• PRICE: 131.340 @ 05:25 GMT Feb 25
• SUP 1: 130.730 Low Feb 22 / 23
• SUP 2: 130.510 Low Feb 15
• SUP 3: 130.080 Low Feb 10 and the bear trigger
• SUP 4: 130.000 Psychological round number

Bobl futures resumed their recent uptrend Thursday trading higher and above resistance at 131.750, the Feb 22 high. The climb signals scope for a stronger short-term correction and has exposed the 50-day EMA at 132.126. This EMA represents a key resistance area and a clear break would strengthen the case for short-term bulls. Initial support to watch is at 130.710, the Feb 22/23 low.

SCHATZ TECHS: (H2) Correction Likely To Extend Higher

• RES 4: 112.145 High Jan 24 and a key resistance
• RES 3: 112.070 High Jan 27
• RES 2: 112.020 High Jan 31
• RES 1: 111.965 High Feb 22
• PRICE: 111.780 @ 05:25 GMT Feb 25
• SUP 1: 111.635 Low Feb 23
• SUP 2: 111.545/420 Low Feb 15 / Low Feb 11
• SUP 3: 111.250/208 Low Feb 7 / 2.50 proj of Dec 20-Jan 19-24 swing
• SUP 4: 111.185 Low Jun 26, 2015 (cont)

The trend direction in Schatz futures remains bearish however, the contract is still in a bullish corrective cycle, following the recovery from 111.250, the Feb 7 low. The contract has recently cleared the 20-day EMA and price has traded above the 50-day EMA. The latter average intersects at 111.872 today and a clear break would signal scope for a stronger rally towards 112.145, Jan 24 high. Initial firm support has been defined at 111.635, the Feb 23 low.

GILT TECHS: (M2) Resistance Intact For Now

• RES 4: 125.04 1.236 proj of the Feb 16 - 18 - 23 price swing
• RES 3: 124.47 1.00 proj of the Feb 16 - 18 - 23 price swing
• RES 2: 124.00 Round number support
• RES 1: 123.53 High Feb 18 and the near-term bull trigger
• PRICE: 122.65 @ Close Feb 24
• SUP 1: 122.04 Low Feb 23
• SUP 2: 121.10 Low Feb 16 and the bear trigger
• SUP 3: 121.00 Round number support
• SUP 4: 120.00 Psychological handle

Gilt futures traded lower Thursday. The medium-term trend condition remains down however there is still a near-term risk for a stronger corrective bounce. Initial resistance to watch is at 123.53, the Feb 18 high where a break would confirm a resumption of the recent recovery from the 121.10 low of Feb 16. This support level also represents a key short-term handle and is the trigger for a resumption of the primary downtrend.

BTP TECHS: (H2) Challenges The 20-Day EMA

• RES 4: 143.59 50-day EMA
• RES 3: 142.55 High Feb 4
• RES 2: 141.14 High Jan 9
• RES 1: 141.04 High Feb 24
• PRICE: 139.101 @ Close Feb 23
• SUP 1: 138.63/06 Low Feb 22 / 16 and the bear trigger
• SUP 2: 137.52 Low May 18, 2020 (cont)
• SUP 3: 136.86 Low May 13, 2020 (cont)
• SUP 4: 136.46 2.0% 10-dma envelope

BTP futures remain in a downtrend, however, a short-term corrective cycle dominates following yesterday’s gains. Resistance at 140.33, Feb 18 high, was breached yesterday and this resulted in a print above the 20-day EMA at 140.87. This average represents a key short-term resistance level and a clear break would open 142.55, the Feb 4 high. On the downside, the bear trigger lies at 138.06, Feb 16 low.

EQUITIES

E-MINI S&P (H2): Strong Rebound Off Thursday’s Low

• RES 4: 4586.00 High Feb 2
• RES 3: 4491.21 50-day EMA
• RES 2: 4415.92 20-day EMA
• RES 1: 4345.50 High Feb 23
• PRICE: 4260.75 @ 06:41 GMT Feb 25
• SUP 1: 4101.75 Low Feb 24
• SUP 2: 4055.60 Low May 19 2021 (cont)
• SUP 3: 4029.25 Low May 13 2021 (cont)
• SUP 4: 3990.50 0.764 proj of the Jan 4 - 24 - Feb 2 price swing

E-Mini S&P technical conditions remain bearish however price action rallied sharply higher from yesterday’s low of 4101.75. Short-term momentum conditions highlight a bullish divergence between price and momentum and this does suggest scope for some unwinding of recent weakness or at the very least, a period of consolidation. The next resistance is at 4345.50, the Feb 23 high. Thursday’s low of 4101.75 is the bear trigger.

EUROSTOXX50 TECHS: (H2) Outlook Remains Bearish

• RES 4: 4381.50 High Jan 5 and the bull trigger
• RES 3: 4324.50 High Jan 13
• RES 2: 4140.30/4250.00 50-day EMA / High Feb 2
• RES 1: 4049.50 High Feb 23
• PRICE: 3903.50 @ 05:53 GMT Feb 25
• SUP 1: 3749.50 Low Feb 24
• SUP 2: 3727.00 Low Mar 25 2021 (cont)
• SUP 3: 3709.60 1.382 proj of the Jan 5 - 24 - Feb 2 price swing
• SUP 4: 3663.50 1.50 proj of the Jan 5 - 24 - Feb 2 price swing

EUROSTOXX 50 futures traded down sharply Thursday. Price did however recover from session lows. The break lower confirms a resumption of the bear cycle that started on Nov 18 last year. Futures have this week cleared a number of key support levels and this suggests scope for a deeper sell-off. Attention is on 3727.00, the Mar 25 2021 low on the continuation chart. On the upside, firm resistance is seen at 4049.50, Wednesday’s high.

COMMODITIES

BRENT TECHS: (J2) Clears $100.00

• RES 4: $110.00 - Round number support
• RES 3: $109-71 - 3.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $108.16 - 3.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $105.79 - High Feb 24
• PRICE: $101.11 @ 06:43 GMT Feb 25
• SUP 1: $97.56 - Low Feb 24
• SUP 2: $95.80 - Low Feb 22
• SUP 3: $93.08 20-day EMA
• SUP 4: $90.12/87.72 - Low Feb 18 / Low Feb 1

Brent futures resumed their uptrend Thursday and the rally accelerated before finding resistance at the day high. Yesterday’s key technical development was the breach of the psychological barrier at $100.00. This marks an extension of the bullish price sequence of higher highs and higher lows and paves the way for a climb towards $108.16 next, a Fibonacci projection. Initial firm support is seen at yesterday’s intraday low of $97.56.

WTI TECHS: (J2) Has Probed The $100.00 Handle

• RES 4: $105.25 - High Jul 22, 2014 (cont)
• RES 3: $103.28 - 3.50 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $102.01 - 3.382 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $100.54 - High Feb 24
• PRICE: $94.60 @ 06:56 GMT Feb 25
• SUP 1: $94.95/90.64 - High Feb 22 / Low Feb 23
• SUP 2: $87.46 - Low Feb 18 and a key support
• SUP 3: $84.92 - Low Feb 1
• SUP 4: $84.08 - 50-day EMA

WTI futures traded higher again Thursday and confirmed a resumption of the underlying uptrend and an extension of the bullish price sequence of higher highs and higher lows. The $100.00 level has been probed and a clear breach of this psychological barrier would strengthen current trend conditions. This would open 102.01 next, a Fibonacci projection. On the downside, initial support is seen at $90.64, Wednesday’s low.

GOLD TECHS: Eyeing The Bull Channel Top At $1939.2

• RES 4: $1992.5 - High Sep 1 2020
• RES 3: $1980.8 - 2.00 proj of the Dec 15 - Jan 25 - 28 price swing
• RES 2: $1974.3 - High Feb 24
• RES 1: $1939.2 - Bull channel top drawn from the Aug 9 2021 low
• PRICE: $1912.9 @ 05:37 GMT Feb 25
• SUP 1: $1878.4 - Low Feb 24 and key short-term support
• SUP 2: $1853.9 - High Jan 25
• SUP 3: $1844.7 Low Feb 15
• SUP 4: $1821.1 - Low Feb 11

Volatile price action in Gold Thursday saw the yellow metal reverse sharply from the session high of $1974.3. The outlook is bullish however following recent impulsive gains. Gold is back inside its bull channel, drawn from the Aug 9 2021 low. The channel top intersects at $1939.2 today and represents a key S/T resistance. For bears, a breach of yesterday’s $1878.4 low would suggest the tide has turned signalling scope for a pullback within the channel.

SILVER TECHS: Outlook Remains Bullish Despite A Pullback

• RES 4: $26.775 - High Jul 6 2021
• RES 3: $26.467 - High Jul 14, 2021
• RES 2: $26.002 - High Aug 4, 2021
• RES 1: $25.625 - High Feb 24
• PRICE: $24.472 @ 07:14 GMT Feb 25
• SUP 1: $23.850 - Low Feb 24
• SUP 2: $23.630 - 20-day EMA
• SUP 3: $22.863/008 - Low Feb 11 / Low Feb 3 and key S/T support
• SUP 4: $21.949 - Low Jan 7

Silver traded in an extremely volatile manner yesterday rallying to a high of $25.625 before reversing lower. Despite the pullback, the outlook remains bullish and scope is seen for a continuation higher to retest $25.406, the Nov 16 2021 high. This level was probed yesterday, a clear break would strengthen the case for bulls. On the downside, initial support lies at $23.850, the Feb 24 low. Dips would be considered corrective.