MNI DAILY TECHNICAL ANALYSIS - GBP Bullish Binge Continues

Tech Focus: Cable Ripping Higher
- The pair's bullish binge extended in early Asia-Pac hours, hitting new cycle highs of 1.4237. This cleared out all near-term resistance and sets up the pair nicely for a test on the major resistance layered ahead of 2018's high of 1.4377.
- The bullish sequence of higher highs and higher lows continues, but RSI measures are now flashing overbought. This week, GBP/USD's RSI has hit levels not seen since mid-2020, after late July's run up from 1.25 to 1.30.
- In contrast, moving average studies remain in bull mode.
- On the downside, key near-term support has been defined at 1.4079 23.6% Fib of February Rally.
- Resistance levels to watch:

• RES 4: 1.4377 2018 High and Major Resistance
• RES 3: 1.4344 High April 18 2018
• RES 2: 1.4246 2.0% 10-dma envelope
• RES 1: 1.4237 High Feb 24

Price Signal Summary - Equity Weakness Short-lived

• Global stock markets saw sharp weakness mid-Tuesday, but this was swiftly reversed ahead of the close, showing the buy-the-dip mentality remains in tact and new alltime highs for stocks are within reach. 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 at the beginning of the week, but has since recovered and taken out the short-term top at 1.2169, Feb 16 high. This negates the pattern and resumes the uptrend. Support to watch lies at 1.2020, Feb 8 low. EURJPY trades well, clearing resistance at last Wednesday's 128.46 high and signalling that the corrective pullback has now concluded. The next key resistance is at 129.26, Dec 13. 2018 high.
• On the commodity front, Gold cleared a number of supports last week but has bounced smartly since. Markets need to top the 20-day EMA next to improve the technical picture. To the downside, bears need to make ground below $1747.6, Jun 26, 2020 low to extend recent weakness. Oil contracts remain particularly strong despite the pullback from yesterday's high. Brent (J1) targets $66.79, the Tuesday high and WTI (J1) targets $63.17 - 1.618 projection of the Apr - Aug rally from the Nov 2 low.
• In the FI space, Bunds (H1) remain heavy. The focus is on 173.58, the weekly low. Gilts (H1) remain in a downtrend with markets looking increasingly comfortable below 130.00.

FOREIGN EXCHANGE

EURUSD TECHS: Negates Bearish Candle

• RES 4: 1.2237 1.0% 10-dma Envelope
• RES 3: 1.2223 High Jan 13
• RES 2: 1.2190 High Jan 22 and a key resistance
• RES 1: 1.2180 High Feb 22
• PRICE: 1.2153 @ 16:38 GMT Feb 23
• SUP 1: 1.2082 Low Feb 19
• SUP 2: 1.2023 Low Feb 17
• SUP 3: 1.1952 Low Feb 5 and the bear trigger
• SUP 4: 1.1945 23.6% retracement March - Jan rally

EURUSD is holding onto Friday's gains having cleared resistance at 1.2110, Feb 17 high. Markets have now also topped 1.2169, the Feb 16 high, firming the outlook in the process. This confirms a resumption of the recovery from the Feb 5 low and opens 1.2190 initially, Jan 22 high. Importantly too, this break higher negates the bearish shooting candle pattern from Feb 16. The key S/T support is at 1.2023. A break would be bearish and expose 1.1952, Feb 5 low.

GBPUSD TECHS: Bullish Binge Extends

• RES 4: 1.4377 2018 High and Major Resistance
• RES 3: 1.4344 High April 18 2018
• RES 2: 1.4246 2.0% 10-dma envelope
• RES 1: 1.4237 High Feb 24
• PRICE: 1.4171 @ 08:59 GMT Feb 24
• SUP 1: 1.4079 23.6% Fib of February Rally
• SUP 2: 1.3952 High Feb 16
• SUP 3: 1.3776 Low Feb 12 and Key near-term support
• SUP 4: 1.3737 Low Feb 9

Another day, another high for GBP/USD as the pair ripped higher in Asia-Pac hours to touch new cycle and multi-year highs of 1.4237. This clears out all near-term resistance but does put the pair firmly in technically overbought territory. In contrast, moving average studies are solidly in bull mode. Next upside levels rest at 1.4246 vol band resistance and the 1.4344 high last posted in 2018.

EURGBP TECHS: Downside Persists 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: 0.8638 @ 17:21 GMT Feb 23
• SUP 1: 0.8615 Low Feb 23
• SUP 2: 0.8610 1.0% 10-dma Envelope
• SUP 3: 0.8595 Low Mar 2, 2020
• SUP 4: 0.8570 76.4% Feb-Mar 2020 Rally

EURGBP outlook deteriorated further Tuesday, with the cross hitting new cycle lows of 0.8615. The cross now looks comfortable below the 0.8700 handle, which 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. Last 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: 105.16 @ 17:24 GMT Feb 23
• SUP 1: 104.92 Low Feb 23
• 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 104.74.

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: 127.77 @ 17:30 GMT Feb 23
• 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 despite Monday's pullback. Last 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: Hits Bull Trigger

• RES 4: 0.7988 High Mar 14, 2018 and a key resistance
• RES 3: 0.7960 3.0% Upper Bollinger Band
• RES 2: 0.7955 2.0% 10-dma envelope
• RES 1: 0.7935 High Feb 23
• PRICE: 0.7910 @ 17:32 GMT Feb 23
• 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 and once again traded higher still early Tuesday. Price action on Feb 5 highlighted a reversal signal following the inability to clear the 50-day EMA. The pair has breached resistance at 0.7820, Jan 6 high as well as 0.7915, hitting the bull trigger in the process. This opens vol band resistance at 0.7955. 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: 1.2600 @ 17:33 GMT Feb 23
• SUP 1: 1.2581 Low Feb 22
• 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 last week at 1.2610, Feb 16 low, but this gave way into the Friday close. 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) Inside Monday Range

• RES 4: 176.64 High Feb 11
• RES 3: 176.44 50-day EMA
• RES 2: 175.70 High Feb 15
• RES 1: 175.45 High Feb 16
• PRICE: 174.48 @ 05:13 GMT Feb 24
• SUP 1: 173.58 2.236 proj of Jan 4 - 12 sell-off from Jan 27 high
• SUP 2: 173.24 1.0% 10-dma envelope
• SUP 3: 173.06 Low Sep 10, 2020 (cont)
• SUP 4: 172.71 Lower 3.0% Bollinger band

Bund futures traded wholly inside the Monday range Tuesday, but 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 173.58 next, 2.236 proj of Jan 4 - 12 sell-off from Jan 27 high. 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: 134.850 High Feb 15
• RES 2: 134.823 20-day EMA
• RES 1: 134.790 Low Feb 5 and Feb 18 high
• PRICE: 134.580 @ 05:18 GMT Feb 24
• SUP 1: 134.400 Low Feb 23
• SUP 2: 134.319 76.4% retracement of the Jun - Nov 2020 rally
• SUP 3: 134.417 1.236 proj of Dec 11-Jan 12 sell-off from Jan 27 high
• SUP 4: 133.790 Low Jun 5, 2020 (cont)

Bobl futures continue to maintain a bearish tone after markets registered a fresh low print at 134.400 on Monday. Early last week, prices traded below through 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 134.319 next, a Fibonacci retracement. 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: 112.365 High Jan 27
• RES 3: 112.285/112.290 50-day EMA/High Feb 11 and key resistance
• RES 2: 112.248 20-day EMA
• RES 1: 112.245 High Feb 18
• PRICE: 112.220 @ 05:20 GMT Feb 24
• SUP 1: 112.200 Low Feb 18 / 19
• 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) Bears In Control

• 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: 129.85 @ Close Feb 23
• SUP 1: 129.35 Low Feb 23
• SUP 2: 128.50 2.0% 10-dma envelope
• SUP 3: 127.99 Low Mar 19, 2020 (cont)
• SUP 4: 127.91 3.0% Lower Bollinger Band

Bears remain solidly in control Tuesday, with the technical outlook deteriorating further. A combination of contract rolls and bullish GBP prices sent prices to new 2021 lows of 129.35. Further weakness is likely with a bearish cycle continuing to dominate. The focus is on a clean break of the 130.00 psychological level, opening the Mar 19 2020 low of 127.99.

BTP TECHS: (H1) Finds Support at Last Week's Low

• 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: 151.21 @ Close Feb 23
• 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 traded rangebound Tuesdsay as markets sold into Monday's bounce before finding some support at last week's low. The outlook remains fragile, however, after the recent break of the 20- and 50-day EMAs and 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: Intraday Bounce

• 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: 3689.10 @ Close Feb 23
• SUP 1: 3659.35 20-day EMA
• SUP 2: 3643.33 Low Feb 23
• SUP 3: 3628.47 Low Feb 10
• SUP 4: 3594.18 50-day EMA

Despite early weakness, the EUROSTOXX 50 staged a decent bounce into the close, staving any near-term bearish signals. This keeps the contract bullish despite the corrective pullback in the middle of last week. 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 close below the 20-day EMA to reinstate a bearish theme. The bull trigger is the Feb 15 high of 3742.53.

COMMODITIES

BRENT TECHS: (J1) Bullish Cycle Intact

• RES 4: $71.75 - High Jan 8, 2020 (cont)
• RES 3: $67.00 - Round number resistance
• RES 2: $67.01 - 2.0% Upper Bollinger Band
• RES 1: $66.79 - High Feb 23
• PRICE: $65.43 @ 19:09 Feb 23
• SUP 1: $62.09 - Low Feb 19
• 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

The bull run in oil markets persisted Tuesday, with Brent crude futures hitting new cycle highs up at $66.79 to maintain the price sequence of higher highs and higher lows. Moving average studies remain in a bull mode too, reinforcing current trend conditions. The focus is on $67.00 next, psychological resistance ahead of the 2020 highs at $71.75. On the downside, initial firm support lies at $60.35, Feb 12 low.

WTI TECHS: (J1) Uptrend Resumes

• 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: $63.00 - High Feb 23
• PRICE: $61.67 @ 19:14 Feb 23
• SUP 1: $58.59 - Low Feb 19
• 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

After the bull run paused slightly at the tail-end of last week, WTI futures resumed their rally Tuesday, shifting the high watermark up to $63/bbl. This 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 $58.59, Friday's low.

GOLD TECHS: Bouncing Off Key Support

• 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: $1816.0 - High Feb 23
• PRICE: $1804.3 @ 19:21 GMT Feb 23
• SUP 1: $1760.7 - Low Feb 19
• 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 found some support Monday, bouncing back above the 1,800 level to narrow the gap with key resistance at the 20-day EMA. Nonetheless, the outlook remains fragile after trading through support at $1785.00, Feb 4 low last week. 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. At the tail-end of last week, $1764.8, Nov 30 low had been probed. A clear break would open $1757.8, Jul 2, 2020 low.

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: $27.507 @ 19:22 GMT Feb 23
• SUP 1: $26.139 - Low Feb 19
• 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 had a volatile finish last week, having trading sharply lower early Friday before staging a decent recovery. 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.