MNI DAILY TECHNICAL ANALYSIS - Gilt Weakness Highlights Bearish Threat

Price Signal Summary – Gilt Weakness Highlights Bearish Threat

• A broader uptrend in S&P E-Minis remains intact and the contract is holding on to the bulk of its recent gains. The price has recently traded to fresh cycle highs, confirming a resumption of the uptrend. Recent corrections have been shallow - this also highlights a strong uptrend. Eurostoxx 50 futures remain firm and the contract is trading at its recent highs. Key resistance at the Dec 14 high of 4634.00 has recently been cleared. The break confirmed a resumption of the medium-term uptrend and sights are on the 4700.00 handle next.
• GBPUSD traded sharply lower Friday and extended the pullback through Monday’s session. The sell-off has resulted in a clear break of support at 1.2597, the Jan 17 low and the base of a range that has been in place since mid-January. The USDJPY trend outlook is bullish and Friday’s strong rally reinforces this condition. Key resistance at 148.80, the Jan 19 high, has been pierced. A clear break of this hurdle would confirm a resumption of the uptrend that started late December and open 149.16. A bearish theme in AUDUSD remains intact and the latest sell-off reinforces this condition. The break to fresh cycle lows last week and again Monday, confirms a resumption of the downtrend and signals scope for weakness towards 0.6453, the Nov 17 low.
• Gold has pulled back from last week’s high but - for now - remains above the Jan 17 low of $2001.9. Recent short-term gains improved a bullish condition and a resumption of gains would signal scope for a climb towards $2088.5, the Dec 28 high. WTI futures remain soft following last week’s steep sell-off. The move lower undermines the recent bullish theme and a continuation would expose support at $70.62, the Jan 17 low, and $69.56, the Jan 3 low.
• Bund futures traded lower Monday and the contract maintains a bearish tone. A continuation lower would further undermine the recent bullish theme and expose key short-term support at 133.55, the Jan 25 low. Gilt futures traded sharply lower Friday and again yesterday, highlighting a clear bearish threat. The move lower has defined a key short-term resistance at 100.62, the Feb 1 high. A break of this level is required to reinstate the recent bullish theme and would open 100.76.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Needle Points South

• RES 4: 1.1077 76.4% retracement of the Dec 28 - Jan 5 sell-off
• RES 3: 1.1046 High Jan 2
• RES 2: 1.0932/98 High Jan 24 / 5 and a reversal trigger
• RES 1: 1.0898 High Feb 02
• PRICE: 1.0753 @ 05:35 GMT Feb 6
• SUP 1: 1.0724/23 Low Dec 8 / Low Feb 5
• SUP 2: 1.0712 61.8% retracement of the Oct - Dec bull leg
• SUP 3: 1.0656 Low Nov 10
• SUP 4: 1.0611 76.4% retracement of the Oct - Dec bull leg

EURUSD maintains a bearish theme and Friday’s steep sell-off plus Monday’s follow through reinforces current conditions. The break lower confirms a resumption of the downtrend and maintains the bearish sequence of lower lows and lower highs. Sights are on 1.0724, the Dec 8 low. It has been pierce, a clear break would open 1.0712, a Fibonacci retracement. Key resistance is 1.0932, the Jan 24 high.

GBPUSD TECHS: Bearish Theme Following A Range Breakout

• RES 4: 1.2881 76.4% retracement of the Jul 14 - Oct 4 bear leg
• RES 3: 1.2827 High Dec 28 and the bull trigger
• RES 2: 1.2697/2775 20-day EMA / High Jan 24
• RES 1: 1.2597 Low Jan 17
• PRICE: 1.2553 @ 05:54 GMT Feb 6
• SUP 1: 1.2519 Low Feb 5
• SUP 2: 1.2500 Low Dec 13
• SUP 3: 1.2432 50.0% retracement of the Oct 4 - Dec 28 bull phase
• SUP 4: 1.2374 Low Nov 17

GBPUSD traded sharply lower Friday and extended the pullback through Monday’s session. The sell-off has resulted in a clear break of support at 1.2597, the Jan 17 low and the base of a range that has been in place since mid-January. A clear range breakout strengthens a bearish condition and opens 1.2500, the Dec 13 low. Initial firm resistance is at 1.2682, the 20-day EMA. Key resistance is unchanged at 1.2827, the Dec 28 high.

EURGBP TECHS: Bounce Considered Corrective

• RES 4: 0.8715 High Dec 28 and the bull trigger
• RES 3: 0.8676 High Jan 3
• RES 2: 0.8620 High Jan 20
• RES 1: 0.8572/8601 High Feb 5 / 50-day EMA and key resistance
• PRICE: 0.8566 @ 06:07 GMT Feb 6
• SUP 1: 0.8513 Low Jan 29
• SUP 2: 0.8493 Low Aug 23 2023 and a key medium-term support
• SUP 3: 0.8454 61.8% of the Mar 7 - Sep 26 ‘23 bull phase
• SUP 4: 0.8388 Low Aug 17 2023

EURGBP bears remain in the driver’s seat despite Monday’s recovery - a correction. Moving average studies remain in a bear-mode position highlighting a clear bearish theme. The break in January of support at 0.8549, the Dec 11 low, strengthened current conditions and sights are on 0.8493, Aug 23 ‘23 low and a key support. The 50-day EMA - at 0.8599 - is the firm resistance to watch. A clear break of the average would concern bears.

USDJPY TECHS: Trend Needle Points North

• RES 4: 150.78 High Nov 17
• RES 3: 149.75 High Nov 22
• RES 2: 149.16 76.4% retracement of the Nov 13 - Dec 28 bull leg
• RES 1: 148.89 High Feb 05
• PRICE: 148.42 @ 06:32 GMT Feb 6
• SUP 1: 146.99/145.90 20-day EMA / Low Feb 1 and key support
• SUP 2: 145.59 Low Jan 16
• SUP 3: 144.36 Low Jan 12
• SUP 4: 143.42 Low Jan 9

The USDJPY trend outlook is bullish and Friday’s strong rally reinforces this condition. Key resistance at 148.80, the Jan 19 high, has been pierced. A clear break of this hurdle would confirm a resumption of the uptrend that started late December and open 149.16, a Fibonacci retracement point. The break higher would also signal scope for gains towards 149.75, the Nov 22 high. Key short-term support lies at 145.90, the Feb 1 low.

EURJPY TECHS: Short-Term Bear Threat Remains Present

• RES 4: 163.72 High Nov 27
• RES 3: 162.25 High Nov 29
• RES 2: 160.97/161.86 High Jan 25 / 19 and the bull trigger
• RES 1: 160.34 High Jan 30
• PRICE: 159.58 @ 06:45 GMT Feb 6
• SUP 1: 158.08 Low Feb 1 and a key near-term support
• SUP 2: 157.21 Low Jan 9
• SUP 3: 156.08 Low Jan 4
• SUP 4: 155.08 Low Jan 2

The current corrective bear cycle in EURJPY remains in play and this highlights potential for an extension lower. The cross has recently traded below the 20- and 50-day EMAs - a bearish development. A break of 158.08, Feb 1 low, would resume bearish pressure and open 157.21, Jan 9 low. For bulls, a stronger reversal would refocus attention on 161.86, the Jan 19 high and bull trigger. A break of this level would reinstate the recent bullish theme.

AUDUSD TECHS: Bear Cycle Extends

• RES 4: 0.6900 High Jun 16 and a key resistance
• RES 3: 0.6871 High Dec 28 and the bull trigger
• RES 2: 0.6729/71 High Jan 12 / 3
• RES 1: 0.6625 High Jan 30 and key short-term resistance
• PRICE: 0.6515 @ 07:26 GMT Feb 6
• SUP 1: 0.6469 Low Feb 05
• SUP 2: 0.6453 Low Nov 17
• SUP 3: 0.6412 76.4% Fibonacci retracement for Oct - Dec upleg
• SUP 4: 0.6360 Low Nov 14

A bearish theme in AUDUSD remains intact and the latest sell-off reinforces this condition. The break to fresh cycle lows last week and again Monday, confirms a resumption of the downtrend and signals scope for weakness towards 0.6453, the Nov 17 low. Moving average studies are crossing into a bear-mode set-up, strengthening a bearish theme. Key short-term resistance to watch has been defined at 0.6625, the Jan 30 high.

USDCAD TECHS: Bullish Outlook

• RES 4: 1.3661 High Nov 27
• RES 3: 1.3623 61.8% retracement of the Nov 1 - Dec 27 bear leg
• RES 2: 1.3608 High Dec 13
• RES 1: 1.3542/44 High Jan 17 / Feb 05 and bull trigger
• PRICE: 1.3516 @ 08:03 GMT Feb 6
• SUP 1: 1.3440/3359 20-day EMA / Low Jan 31 and key S/T support
• SUP 2: 1.3343 Low Jan 12
• SUP 3: 1.3288 Low Jan 5
• SUP 4: 1.3229 Low Feb 1

USDCAD traded high MOnday, starting the week on a bullish note and in the process tested key short-term resistance at 1.3542, the Jan 17 high. A clear break of this hurdle would confirm a resumption of the bull cycle that started Dec 27 and open 1.3623, 61.8% of the Nov 1 - Dec 27 bear leg. Key support to watch lies at 1.3343, Jan 12 low. A break would be a bearish development. First support lies at 1.3440, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H4) Key Support Remains Exposed

• RES 4: 137.96 High Jan 4
• RES 3: 137.59 76.4% retracement of the Dec 27 - Jan 25 bear leg
• RES 2: 136.82 61.8% retracement of the Dec 27 - Jan 25 bear leg
• RES 1: 134.96/136.29 20-day EMA / High Feb 1 and the bull trigger
• PRICE: 134.31 @ 05:12 GMT Feb 6
• SUP 1: 133.87 Low Feb 5
• SUP 2: 133.55 Low 25 and the bear trigger
• SUP 3: 132.89 50.0% retracement of the Oct 4 - Dec 27 bull phase
• SUP 4: 132.29 Low Nov 29

Bund futures traded lower Mondayand the contract maintains a bearish tone. A continuation lower would further undermine the recent bullish theme and expose key short-term support at 133.55, the Jan 25 low. Clearance of this level would strengthen a bearish threat. For bulls, clearance of last week’s high at 136.29 (Feb 1), is required to reinstate the recent bullish theme. Initial resistance is at 134.96, the 20-day EMA.

BOBL TECHS: (H4) Approaching Key Support

• RES 4: 119.228 76.4% retracement of the Dec 27 - Jan 25 bear leg
• RES 3: 119.000 Round number resistance
• RES 2: 118.856 61.8% retracement of the Dec 27 - Jan 25 bear leg
• RES 1: 118.660 High Jan 31 and key short-term resistance
• PRICE: 117.590 @ 05:24 GMT Feb 6
• SUP 1: 117.370/280 Low Feb 5 / Low Jan 25 and bear trigger
• SUP 2: 117.060 Low Dec 1
• SUP 3: 117.000 Round number support
• SUP 4: 116.830 Low Nov 29

A bearish cycle in Bobl futures remains intact and the strong pullback from last week’s high reinforces this theme. The continuation lower has exposed key support at 117.280, the Jan 25 low. Clearance of this level would confirm a resumption of the bear cycle that started Dec 27. On the upside, key short-term resistance has been defined at 118.660, the Jan 31 high. A break would be a bullish development.

SCHATZ TECHS: (H4) Pierces The Bear Trigger

• RES 4: 106.432 76.4% retracement of the Dec 29 - Jan 25 bear leg
• RES 3: 106.304 61.8% retracement of the Dec 29 - Jan 25 bear leg
• RES 2: 106.270 High Jan 5 and key short-term resistance
• RES 1: 106.015 20-day EMA / High Jan 31 and key resistance
• PRICE: 105.795@ 05:44 GMT Feb 6
• SUP 1: 105.730 Low Nov 30
• SUP 2: 105.660 High Nov 17
• SUP 3: 105.470 Low Nov 28
• SUP 4: 105.265 Low Nov 27

A broader downtrend in Schatz futures remains intact and the strong sell-off from last week’s highs reinforces this condition. Yesterday’s move lower resulted in a print below 105.760, the Jan 25 low and bear trigger. A clear break of this level would confirm a resumption of the bear cycle that started Dec 29. This would open 105.660, the Nov 16 high. Key resistance has been defined at 106.215, the Jan 31 high.

GILT TECHS: (H4) Sharp Sell-Off

• RES 4: 101.51 61.8% retracement of the Dec 27 - Jan 25 bear leg
• RES 3: 101.98 High Jan 3
• RES 2: 100.76 50.0% retracement of the Dec 27 - Jan 25 bear leg
• RES 1: 99.29/100.62 20-day EMA / High Feb 1 and key resistance
• PRICE: 97.75 @ Close Feb 5
• SUP 1: 97.57 Low Jan 25 and the bear trigger
• SUP 2: 97.39 Low Dec 11 and a key support
• SUP 3: 96.67 Low Dec 5
• SUP 4: 96.10 Low Nov 30

Gilt futures traded sharply lower Friday and again yesterday, highlighting a clear bearish threat. The move lower has defined a key short-term resistance at 100.62, the Feb 1 high. A break of this level is required to reinstate the recent bullish theme and would open 100.76, 50.0% of the Dec 27 - Jan 25 bear leg. Key support and the bear trigger lies at 97.57, the Jan 25 low. A break of this support would confirm a resumption of the downtrend.

BTP TECHS: (H4) Support Remains Exposed

• RES 4: 122.63 High Dec 7 2022 (cont)
• RES 3: 122.18 3.00 proj of the Nov 10 - 17 - 24 price swing
• RES 2: 121.43 2.764 proj of the Nov 10 - 17 - 24 price swing
• RES 1: 119.27/77 High Jan 30 / 4
• PRICE: 117.41 @ Close Feb 5
• SUP 1: 116.98 Low Jan 25 and the bear trigger
• SUP 2: 115.70 Low Dec 8
• SUP 3: 114.10 50.0% retracement of the Oct 19 - Dec 27 bull cycle
• SUP 4: 113.31 Low Nov 28

BTP futures remain below last week’s high of 119.27 on Jan 30. The contract has recently traded above the 20-day EMA and pierced the Jan 12 high of 119.23. A clear break above 119.23 would highlight a base and a potential resumption of the primary uptrend. For now, attention is on key support at 116.98, the Jan 25 low. Clearance of this level would confirm a resumption of the recent bearish cycle and open 115.70, the Dec 8 low.

EQUITIES

EUROSTOXX50 TECHS: (H4) Bullish Condition Remains Intact

• RES 4: 4753.50 1.618 projection of the Nov 8 - 24 - 28 price swing
• RES 3: 4725.50 1.50 projection of the Nov 8 - 24 - 28 price swing
• RES 2: 4700.00 Round number resistance
• RES 1: 4697.00 High Feb 2 and the bull trigger
• PRICE: 4686.00 @ 06:04 GMT Feb 6
• SUP 1: 4599.00/4586.80 High Jan 2 / 20-day EMA
• SUP 2: 4513.70 50-day EMA
• SUP 3: 4402.00 Low Jan 17 and key short-term support
• SUP 4: 4370.00 Low Nov 28

Eurostoxx 50 futures remain firm and the contract is trading at its recent highs. Key resistance at the Dec 14 high of 4634.00 has recently been cleared. The break confirmed a resumption of the medium-term uptrend and sights are on the 4700.00 handle next. Initial firm support lies at 4586.80, the 20-day EMA. Key trend support has been defined at 4402.00, the Jan 17 low. A short-term pullback would be considered corrective.

E-MINI S&P TECHS: (H4) Bulls Remain In The Driver’s Seat

• RES 4: 5100.00 Round number resistance
• RES 3: 5050.14 1.764 proj of Nov 10 - Dec 1 - 7 price swing
• RES 2: 5012.80 1.618 proj of Nov 10 - Dec 1 - 7 price swing
• RES 1: 5000.00 Psychological round number
• PRICE: 4965.00 @ 06:48 GMT Feb 6
• SUP 1: 4866.000/4780.27 Low Jan 31 / 50-day EMA values
• SUP 2: 4702.00 Low Jan 5
• SUP 3: 4594.00 Low Nov 30
• SUP 4: 4550.75 Low Nov 16

A broader uptrend in S&P E-Minis remains intact and the contract is holding on to the bulk of its recent gains. The price has recently traded to fresh cycle highs, confirming a resumption of the uptrend. Recent corrections have been shallow - this also highlights a strong uptrend. The focus is on the psychological 5000.00 handle. On the downside, initial key short-term support has been defined at 4866.00, the Jan 31 low.

COMMODITIES

BRENT TECHS: (J4) Bearish Theme

• RES 4: $87.12 - High Oct 27
• RES 3: $86.03 - 76.4% retracement of the Sep 15 - Dec 13 bear cycle
• RES 2: $84.17 - High Jan 29 and key short-term resistance
• RES 1: $81.55 - High Feb 1
• PRICE: $78.12 @ 06:57 GMT Feb 6
• SUP 1: $76.13 - Low Jan 17
• SUP 2: $74.82 - Low Jan 03
• SUP 3: $72.96 - Low Dec 13 and the bear trigger
• SUP 4: $70.99 - Low Jun 23 ‘23

Brent futures reversed course last week and the contract maintains a short-term bearish tone. The move lower has resulted in a break below the 50-day EMA. A continuation would signal scope for weakness towards $76.13, the Jan 17 low, ahead of $74.82, the Jan 3 low. For bulls, a break of $84.17, the Jan 29 high, is required to reinstate a bullish theme. First resistance is $81.55, the Feb 1 high.

WTI TECHS: (H4) Maintains A Softer Tone

• RES 4: $86.68 - High Sep 19 and a key resistance
• RES 3: $85.71 - High Oct 20
• RES 2: $82.34 - 76.4% retracement of the Sep 19 - Dec 13 bear cycle
• RES 1: $76.95/79.29 - High Feb 1 / High Jan 29 and a key resistance
• PRICE: $72.93 @ 07:11 GMT Feb 6
• SUP 1: $70.62 - Low Jan 17
• SUP 2: $69.56 - Low Jan 3
• SUP 3: $68.28 - Low Dec 13 and the bear trigger

• SUP 4: $65.63 - Low Jun 12

WTI futures remain soft following last week’s steep sell-off. The move lower undermines the recent bullish theme and a continuation would expose support at $70.62, the Jan 17 low, and $69.56, the Jan 3 low. For bulls, a reversal higher is required to refocus attention on the key short-term resistance at $79.29, the Jan 29 high. A break of this level would reinstate a bullish theme. Initial resistance is at $76.95, the Feb 1 high.

GOLD TECHS: Watching Support

• RES 4: $2135.4 - High Dec 4 and all-time high
• RES 3: $2097.1 - 76.4% retracement of the Dec 4 - 13 bear leg
• RES 2: $2088.5 - High Jan 12 / High Dec 28
• RES 1: $2065.5 - High Feb 1
• PRICE: $2028.4 @ 07:15 GMT Feb 6
• SUP 1: $2015.0/2001.9 - Low Feb 5 / Low Jan 17
• SUP 2: $1973.2 - Low Dec 13 and key support
• SUP 3: $1931.7 - Low Nov 13
• SUP 4: $1908.3 - Low Oct 16

Gold has pulled back from last week’s high but - for now - remains above the Jan 17 low of $2001.9. Recent short-term gains improved a bullish condition and a resumption of gains would signal scope for a climb towards $2088.5, the Dec 28 high and a key resistance. For bears, a stronger reversal lower would refocus attention on $2001.9 where a break is required to reinstate the recent bearish theme.

SILVER TECHS: Technical Signals Remain Bearish

• RES 4: $26.135 - High May 5 and a key resistance
• RES 3: $25.761 - High Dec 4 and key resistance
• RES 2: $24.606/994 - High Dec 22 / 76.4% of Dec 4 - 13 bear leg
• RES 1: $23.534 - High Jan 12
• PRICE: $22.367 @ 08:06 GMT Feb 6
• SUP 1: $21.883 - Low Nov 13 and a key support
• SUP 2: $20.689 - Low Oct 3 and the bear trigger
• SUP 3: $19.904 - Low Mar 10 and a key support
• SUP 4: $19.904 - Low Mar 10 2023

A bearish theme in Silver remains intact and the latest recovery appears to be a correction - for now. The recent breach of support at $22.510, the Dec 13 low, signals scope for a move to $21.883, the Nov 13 low. A break of this support would further strengthen the bearish theme. On the upside, initial key short-term resistance to watch is $23.534, the Jan 12 high. A break of this level would be bullish and highlight a stronger reversal.