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MNI DAILY TECHNICAL ANALYSIS - Gilt Gains Considered Corrective

Price Signal Summary – Gilt Gains Considered Corrective

  • S&P E-minis trend conditions remain bullish and the contract traded higher Friday. Resistance at 4244.00, the Feb 2 high and a medium-term bull trigger, has been cleared. The break reinforces bullish conditions and confirms a resumption of the uptrend that started in October 2022. Eurostoxx 50 futures traded higher Friday as the contract recovered from last Wednesday’s low of 4216.00. For now, the climb appears to be a correction - price action earlier last week reinforced a bearish theme - support at 4252.00, the May 25 low has been breached.
  • GBPUSD faded into the Friday close and a key short-term resistance has been defined at that day's high of 1.2545. Note too that, despite a brief test above it, the 61.8% retracement of the May 10 - 25 downleg at 1.2538 remains intact. USDJPY bullish conditions remain intact and the latest pullback appears to be a correction. Recent highs resulted in a test of the top of a bull channel, drawn from the Jan 16 low which intersects at 141.01 today and represents a key resistance. AUDUSD traded higher Friday, extending the recovery from last Wednesday’s low. The 20-day EMA has been breached and attention turns to resistance at the 50-day EMA, which intersects at 0.6654.
  • The bear cycle in Gold remains intact and recent short-term gains appear to have been a correction. The yellow metal is once again testing trendline support drawn from Nov 3 2022. WTI futures traded higher overnight and in the process pierced resistance at $74.73, the May 24 high. The contract has pulled back from today’s high. A clear break of $74.73 would strengthen a bullish condition and signal scope for an extension higher.
  • Bund futures remain in an uptrend and the latest pullback appears to be a correction. Price has traded above the 20- and 50-day EMAs and this strengthens the current bull cycle. A continuation higher would open 136.75, the May 16 high ahead of a key resistance at 137.29. Gilt futures have recovered from 94.21, the May 26 low. Recent gains are considered corrective and the primary short-term trend condition remains bearish. Moving average studies are in a bear-mode position highlighting a bear cycle.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Needle Points South

  • RES 4: 1.1007 High May 10
  • RES 3: 1.0905 High May 16
  • RES 2: 1.0833 50-day EMA values
  • RES 1: 1.079720-day EMA
  • PRICE: 1.0697 @ 05:45 BST Jun 5
  • SUP 1: 1.0635 Low May 31 and the bear trigger
  • SUP 2: 1.0608 Low Mar 17
  • SUP 3: 1.0551 Low Mar 16
  • SUP 4: 1.0516 Low Mar 15 and a key support

EURUSD remains below Friday’s high. Short-term gains are considered corrective and the downtrend remains intact. Fresh trend lows last week reinforce bearish conditions and price is trading below the 20- and 50-day EMAs. 1.0653 has been breached, 76.4% of the Mar 15 - Apr 26 rally and this opens 1.0551, Mar 16 low. A firm resistance is seen at 1.0797, the 20-day EMA. Clearance of this average would ease recent bearish pressure.

GBPUSD TECHS: Gains Stall At The 61.8% Fibonacci Retracement

  • RES 4: 1.2680 High May 10 and the bull trigger
  • RES 3: 1.2641 High May 11
  • RES 2: 1.2592 76.4% retracement of the May 10 - 25 bear cycle
  • RES 1: 1.2545 High Jun 2
  • PRICE: 1.2432 @ 06:07 BST Jun 5
  • SUP 1: 1.2401/2308 Low Jun 1 / Low May 25 and the bear trigger
  • SUP 2: 1.2275 Low Apr 3
  • SUP 3: 1.2242 50.0% retracement of the Mar 8 - May 10 bull run
  • SUP 4: 1.2213 Low Mar 27

GBPUSD faded into the Friday close and a key short-term resistance has been defined at that day's high of 1.2545. Note too that, despite a brief test above it, the 61.8% retracement of the May 10 - 25 downleg at 1.2538 remains intact. A continuation lower would be bearish and attention would shift to 1.2308, the May 25 low and key support. Clearance of Friday’s high is required to reinstate the recent bull cycle.

EURGBP TECHS: Trend Outlook Remains Bearish

  • RES 4: 0.8835 High May 3
  • RES 3: 0.8814 High May 4
  • RES 2: 0.8731 50-day EMA
  • RES 1: 0.8651/8677 High May 31 / 20-day EMA
  • PRICE: 0.8606 @ 06:28 BST Jun 5
  • SUP 1: 0.8567 Low Jun 1
  • SUP 2: 0.8562 Low Dec 13 2022
  • SUP 3: 0.8547 Low Dec 1 2022 and key support
  • SUP 4: 0.8522 Low Aug 30 2022

The EURGBP trend condition remains bearish. Last week, the cross printed a fresh 2023 low, at 0.8567 on Jun 1. Note too that the DMA space also signals downside momentum and a potential death cross (50-dma < 200-dma). The focus is on 0.8562 next, the Dec 13 low. The 14d RSI is technically oversold for the first time since March 2021 - a price reversal would signal scope for a correction. Initial firm resistance is at 0.8677 the 20-day EMA.

USDJPY TECHS: Resistance At The Channel Top Remains Intact

  • RES 4: 142.51 61.8% of the Oct 16 2022 - Jan 16 bear leg
  • RES 3: 142.16/35 2.0% 10-dma envelope / High Nov 21 2022
  • RES 2: 141.61 High Nov 23 2022
  • RES 1: 141.01 Bull channel top from the Jan 16 low
  • PRICE: 140.04 @ 06:37 BST Jun 5
  • SUP 1: 138.45 Low Jun 1
  • SUP 2: 138.20 20-day EMA
  • SUP 3: 137.43 Low May 19
  • SUP 4: 136.31 Low May 17

USDJPY bullish conditions remain intact and the latest pullback appears to be a correction. Recent highs resulted in a test of the top of a bull channel, drawn from the Jan 16 low which intersects at 141.01 today and represents a key resistance. A clear break of it would reinforce bullish conditions and open 141.61, the Nov 23 2022 high. For bears, a stronger reversal lower would highlight a potential top. Key support to watch is 138.20, the 20-day EMA.

EURJPY TECHS: Bullish Outlook

  • RES 4: 152.81 1.50 proj of the Mar 20 - 21 - Apr 6 price swing
  • RES 3: 152.00 1.382 proj of the Mar 20 - 21 - Apr 6 price swing
  • RES 2: 151.61 High May 2 and the bull trigger
  • RES 1: 150.12/ 151.07 High May 31 / 29
  • PRICE: 149.85 @ 06:59 BST Jun 5
  • SUP 1: 148.59 Low May 31
  • SUP 2: 147.65/146.87 13 50-day EMA / 2.0% 10-dma envelope
  • SUP 3: 146.13 Low May 11 and a key support
  • SUP 4: 145.67 High Mar 31

EURJPY maintains a short-term bullish tone and the latest pullback appears to be a correction. Recent strength resulted in a breach of 150.32, 76.4% of the May 2 - 11 sell-off. This break opens 151.61, the May 2 high and a bull trigger. The 50-day EMA, which intersects at 147.65, remains intact and is a key support. A clear break of it is required to signal a reversal. Initial support lies at 148.59, the May 31 low.

AUDUSD TECHS: Resistance Seen At The 50-Day EMA

  • RES 4: 0.6818 High May 10 and key resistance
  • RES 3: 0.6710 High May 16
  • RES 2: 0.6654 50-day EMA
  • RES 1: 0.6638 High Jun 02
  • PRICE: 0.6595 @ 08:02 BST Jun 5
  • SUP 1: 0.6567/6458 Low May 31 and the bear trigger
  • SUP 2: 0.6403 76.4% of the Oct - Feb bull cycle
  • SUP 3: 0.6387 Low Nov 10 2022
  • SUP 4: 0.6272 Low Nov 3 2022

AUDUSD traded higher Friday, extending the recovery from last Wednesday’s low. The 20-day EMA has been breached and attention turns to resistance at the 50-day EMA, which intersects at 0.6654. A clear break of this EMA would signal scope for a stronger recovery. The trend outlook remains bearish, a reversal lower would refocus attention on the bear trigger at 0.6458, the May 31 low.

USDCAD TECHS: Remains Soft

  • RES 4: 1.3730 76.4% retracement of the Mar 10 - Apr 14 low
  • RES 3: 1.3695 High Mar 28
  • RES 2: 1.3668 High Apr 28 and key resistance
  • RES 1: 1.3523 20-day EMA
  • PRICE: 1.3439 @ 08:05 BST Jun 5
  • SUP 1: 1.3407/04 Low Jun 02 / May 16
  • SUP 2: 1.3363 Low May 11
  • SUP 3: 1.3315 Low May 8
  • SUP 4: 1.3302 Low Apr 14 and a key near-term support

USDCAD traded sharply lower on Thursday as it extended the reversal from the May 26 high of 1.3655. The pair remains soft. The impulsive nature of the sell-off signals scope for a deeper pullback and the next support to watch is 1.3404, the May 16 low. A break of this level would expose 1.3315, the May 8 low and a key support. On the upside, initial resistance is at 1.3523, the 20-day EMA.

FIXED INCOME

BUND TECHS: (M3) Bull Cycle Remains In Play

  • RES 4: 138.09 High Apr 6
  • RES 3: 137.29 High May 11 and a key resistance
  • RES 2: 136.75 High May 12
  • RES 1: 136.59 High Jun 1
  • PRICE: 135.27 @ 05:13 BST Jun 5
  • SUP 1: 135.08/134.15 50-day EMA / Low May 30
  • SUP 2: 132.83 Low May 26 and the bear trigger
  • SUP 3: 132.71 76.4%retracement of the Mar 2 - 20 rally
  • SUP 4: 132.37 Low Mar 10

Bund futures remain in an uptrend and the latest pullback appears to be a correction. Price has traded above the 20- and 50-day EMAs and this strengthens the current bull cycle. A continuation higher would open 136.75, the May 16 high ahead of a key resistance at 137.29, the May 11 high. On the downside, initial firm support lies at 134.15, the May 30 low. A break is required to signal a bearish reversal.

BOBL TECHS: (M3) Pullback Considered Corrective

  • RES 4: 119.120 High May 4 and key resistance
  • RES 3: 119.020 High May 11
  • RES 2: 118.610 High May 16
  • RES 1: 118.400 High Jun 1
  • PRICE: 117.590 @ 05:15 BST Jun 5
  • SUP 1: 117.257, 61.8% retracement of the May 26 - Jun 1 rally
  • SUP 2: 117.080/116.550 Low May 30 / 26
  • SUP 3: 116.420 Low Apr 19 and the bear trigger
  • SUP 4: 116.170 Low Mar 13

Bobl futures maintain a bullish tone and a short-term pullback is considered corrective. The contract has recently traded above both the 20- and 50-day EMAs and this strengthens the short-term bull cycle. A continuation higher would open 118.610, the May 16 high. Further out, key short-term resistance is at 119.120, the May 4 high. On the downside, next support is at 117.257, the 61.8% retracement of the May 26 - Jun 1 rally.

SCHATZ TECHS: (M3) Support Remains Intact - For Now

  • RES 4: 106.020 High May 11
  • RES 3: 105.910 High May 16
  • RES 2: 105.775 High May 17
  • RES 1: 105.675 High Jun 1
  • PRICE: 105.390 @ 05:26 BST Jun 5
  • SUP 1: 105.300 Low May 30
  • SUP 2: 105.160 Low May 26 and the bear trigger
  • SUP 3: 105.030 Low Mar 15
  • SUP 4: 104.953 76.4% retracement of the Mar 9 - 20 rally

Short-term conditions in Schatz futures appear to be a correction - for now. Key resistance is at 106.675, the Jun 1 high where a break would highlight a continuation of the recovery from 105.160, the May 26 low. This would signal scope for a climb towards 105.775, the May 17 high. Initial support is seen at 105.300, the May 30 low where a break would instead expose 105.160. Clearance of this latter level resumes bearish activity.

GILT TECHS: (U3) Corrective Bounce Still In Play

  • RES 4: 98.95 Low May 18
  • RES 3: 98.80 High May 22
  • RES 2: 98.00 Round number resistance
  • RES 1: 97.78 High May 23
  • PRICE: 97.07 @ Close Jun 2
  • SUP 1: 96.34 Low Jun 1
  • SUP 2: 94.91/21 Low May 30 / 26 and the bear trigger
  • SUP 3: 94.00 Round number support
  • SUP 4: 93.45 1.618 projection of the Feb 2 - 28 - Mar 20 swing (cont)

Gilt futures have recovered from 94.21, the May 26 low. Recent gains are considered corrective and the primary short-term trend condition remains bearish. Moving average studies are in a bear-mode position highlighting a bear cycle. A resumption of weakness would open the 94.00 handle next. The bear trigger is 94.21, the May 26 low. Initial resistance to watch is at 97.78, the May 23 high.

BTP TECHS: (M3) Impulsive Bull Rally

  • RES 4: 118.97 Low Nov 30 2022 (cont)
  • RES 3: 118.56 Hgh Jan 19 and a key resistance (cont)
  • RES 2: 118.18 High Feb 2 (cont)
  • RES 1: 117.17 High Mar 24 and a key resistance
  • PRICE: 116.91 @ Close Jun 2
  • SUP 1: 115.60 Low May 31
  • SUP 2: 114.06/112.60 Low May 30 / 26 and the bear trigger
  • SUP 3: 111.88 76.4% retracement of the Mar 2 - 24 rally
  • SUP 4: 111.05 Low Mar 8

BTP futures traded higher last week. The contract has cleared the 20- and 50-day EMAs and this strengthens current short-term bullish conditions. Furthermore, 115.89, the May 11 high, has been breached and this paves the way for an extension towards 117.17, the Mar 24 high. On the downside, initial, initial firm support lies at 114.06, the May 30 low. A break of this level would signal a possible reversal.

EQUITIES

EUROSTOXX50 TECHS: (M3) Watching Resistance

  • RES 4: 4457.50 0.5 proj of the Mar 20 - Apr 21 - May 4 price swing
  • RES 3: 4448.00 High Jan 2008 (cont)
  • RES 2: 4409.50 High Nov 18 2021 (cont) and a major resistance
  • RES 1: 4362.00 High May 29
  • PRICE: 4236.00 @ 06:39 BST Jun 5
  • SUP 1: 4216.00 Low May 31 and the bear trigger
  • SUP 2: 4200.00 Round number support
  • SUP 3: 4175.00 Low Mar 30
  • SUP 4: 4164.00 High Mar 22

Eurostoxx 50 futures traded higher Friday as the contract recovered from last Wednesday’s low of 4216.00. For now, the climb appears to be a correction - price action earlier last week reinforced a bearish theme - support at 4252.00, the May 25 low has been breached. Price has also pierced support at 4233.00, the May 4 low and a key short-term level. Resistance to watch is 4362.00, May 29 high, a break would be bullish.

E-MINI S&P TECHS: (M3) Clears Key Resistance

  • RES 4: 4400.00 Round number resistance
  • RES 3: 4393.25 High Apr 22 2022 (cont)
  • RES 2: 4327.50 High Aug 16 2022 (cont)
  • RES 1: 4297.75 High Jun 2
  • PRICE: 4286.25 @ 07:18 BST Jun 5
  • SUP 1: 4229.00 Low Jun 2
  • SUP 2: 4184.26 20-day EMA
  • SUP 3: 4144.35 50-day EMA
  • SUP 4: 4144.00 Low May 24 and a key support

S&P E-minis trend conditions remain bullish and the contract traded higher Friday. Resistance at 4244.00, the Feb 2 high and a medium-term bull trigger, has been cleared. The break reinforces bullish conditions and confirms a resumption of the uptrend that started in October 2022. This opens 4327.50 next, the Aug 16 2022 high (cont). The 50-day EMA, at 4144.35 remains a key support. A break of this average is required to signal a reversal.

COMMODITIES

BRENT TECHS: (Q3) Pierces Resistance

  • RES 4: $84.56 - High Apr 18
  • RES 3: $82.47 - High Apr 25
  • RES 2: $80.08 - High Apr 28
  • RES 1: $78.73 Intraday high
  • PRICE: $76.96 @ 07:01 BST Jun 5
  • SUP 1: $74.18 - Low Jun 2
  • SUP 2: $71.50/71.20 - Low May 31 / 4
  • SUP 3: $70.06 - Low Mar 20 and a key support
  • SUP 4: $69.28 - Low Dec 20 2021 (cont)

Brent futures traded higher overnight and in the process pierced resistance at $78.50, the May 24 high. A clear break of this hurdle would strengthen a bullish condition and signal scope for an extension higher. This would open $80.08, the Apr 28 high. For bears, a stronger reversal would instead signal a top and this would once again expose key support at $71.20, the May 4 low, ahead of $70.06, the Mar 20 low.

WTI TECHS: (N3) Watching Key Short-Term Resistance

  • RES 4: $80.93 - High Apr 19
  • RES 3: $79.00 - High Apr 24
  • RES 2: $76.74 - High Apr 28
  • RES 1: $75.06 - Intraday high
  • PRICE: $72.65 @ 07:10 BST Jun 5
  • SUP 1: $70.00 - Low Jun 2
  • SUP 2: $67.03/63.90 - Low May 31 / 4 and key support
  • SUP 3: $62.43 - Low Dec 2 2021 (cont)
  • SUP 4: $60.00 - Psychological round number

WTI futures traded higher overnight and in the process pierced resistance at $74.73, the May 24 high. The contract has pulled back from today’s high. A clear break of $74.73 would strengthen a bullish condition and signal scope for an extension higher. This would open $76.74, the Apr 28 high. For bears, a stronger reversal would instead signal a top and this would once again expose key support at $63.90, the May 4 low.

GOLD TECHS: Trend Trendline Support

  • RES 4: $2070.4 - High Mar 8 and a bull trigger
  • RES 3: $2063.0 - High May 4
  • RES 2: $2022.6 - High May 12
  • RES 1: $1985.3 - High May 24 and key short-term resistance
  • PRICE: $1943.3 @ 07:12 BST Jun 2
  • SUP 1: $1932.2/18.3 - Low May 31 / Low Mar 17
  • SUP 2: $1903.5 - 61.8% retracement of the Feb 28 - May 4 bull cycle
  • SUP 3: $1885.8 - Low Mar 15
  • SUP 4: $1865.8 - 76.4% retracement of the Feb 28 - May 4 bull cycle

The bear cycle in Gold remains intact and recent short-term gains appear to have been a correction. The yellow metal is once again testing trendline support drawn from Nov 3 2022. A clear breach of this trendline, at $1946.9, would reinforce bearish conditions and open $1903.5, a Fibonacci retracement. Initial firm resistance is $1985.3, the May 24 high. Clearance of this level is required to signal a short-term reversal.

SILVER TECHS: Trend Condition Remains Bearish

  • RES 4: $26.771 - High Mar 9 2022
  • RES 3: $26.222 - High Apr 18 2022 and a key resistance
  • RES 2: $26.135 - High May 5
  • RES 1: $24.022/24.492 - High Jun 2 / Low Apr 25
  • PRICE: $23.426 @ 08:08 BST Jun 5
  • SUP 1: $22.682 - Low May 26 and the bear trigger
  • SUP 2: $22.284 - 61.8% retracement of the Mar 10 - May 5 rally
  • SUP 3: $22.157 - Low Mar 21
  • SUP 4: $21.375 - 76.4% retracement of the Mar 10 - May 5 rally

The Silver trend condition remains bearish and recent gains are considered corrective. The May 11 sell-off confirmed a double top reversal following the break of $24.492, the Apr 25 low. The subsequent bearish extension has reinforced the importance of this reversal signal. Sights are set on $22.284 next, a Fibonacci retracement level. Initial firm resistance is seen at $24.492, the double top mid-point.

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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