MNI DAILY TECHNICAL ANALYSIS - Gold Breaks to New Cycle Highs

Price Signal Summary - Gold Breaks to New Cycle Highs

• In the equity space, the e-mini S&P partially reversed the Tuesday recovery into the Thursday close, reinforcing the fragile nature of equity sentiment. This keeps the outlook pointed lower for now, with downside impetus strengthened by the failure of the contract to hold above the 50-day EMA - at 4549.15. EUROSTOXX 50 futures remain vulnerable. Last week, the contract failed to hold above the 50-day EMA - at 4188.70. This average still represents a key resistance point where a clear break would suggest scope for a stronger recovery and open 4324.50, Jan 13 high.
• In FX, EURUSD traded in a volatile manner across the Thursday session but provided few fresh technical signals. The outlook remains modestly positive, having narrowed the gap with next resistance at the Feb11 high of 1.1401. GBPUSD traded slightly higher again Thursday, having recovered from brief slippage on Tuesday. The rate continues to trade inside its recent range and importantly above support at 1.3491, Feb 7 low. AUDUSD continues to hold recovery gains, putting the pair at odds with the likes of USDJPY, which have slipped lower. Markets re-target the early February highs of 0.7249 to sustain any rally, while a return back below 0.7086 would prove bearish.
• On the commodity front, the Gold rally resumed Thursday, pushing prices to fresh cycle highs as the uptrend accelerated through 1879.6. This puts gold at the best levels since June last year, and keeps the trend direction pointed higher. WTI faded into the Wednesday close, but dips remain corrective in nature for now, with the broader outlook remaining positive. Corrections remain shallow and this both highlights and reinforces underlying bullish sentiment.
• In the FI space, Bund futures recovered off the day’s lows ahead of the Wednesday close and built further through the Thursday session. This rally is deemed corrective, however, with the broader outlook bearish for now. The medium-term trend condition in Gilt futures is unchanged, but markets are currently undergoing a corrective rally, putting prices back toward recent highs of 120.96.

FOREIGN EXCHANGE

EURUSD TECHS: Steadier Footing

• RES 4: 1.1692 High Oct 28, 2021
• RES 3: 1.1608 High Nov 9, 2021
• RES 2: 1.1558 38.2% retracement of the May ‘21 - Jan 28 sell-off
• RES 1: 1.1401/95 High Feb 11 / High Feb 10
• PRICE: 1.1368 @ 09:33 GMT Feb 18
• SUP 1: 1.1280 Low Feb 14
• SUP 2: 1.1267 Low Feb 2
• SUP 3: 1.1209 76.4% retracement of the Jan 28 - Feb 10 rally
• SUP 4: 1.1121 Low Jan 28 and the bear trigger

EURUSD traded in a volatile manner across the Thursday session, but provided few fresh technical signals. The outlook remains modestly positive, having narrowed the gap with next resistance at the Feb11 high of 1.1401. A break of this level is required to confirm a resumption of the recent upleg and would remove bearish concerns. To the downside, a breach of the next support at 1.1267, Feb 2 low, would signal scope for a deeper retracement of recent gains.

GBPUSD TECHS: Touches New Weekly High

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3703/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3643/44 High Feb 18 / 10
• PRICE: 1.3623 @ 09:34 GMT Feb 18
• SUP 1: 1.3487 Low Feb 15
• SUP 2: 1.3435 Low Feb 1
• SUP 3: 1.3358 Low Jan 27 and the bear trigger
• SUP 4: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase

GBPUSD traded slightly higher again Thursday, having recovered from brief slippage on Tuesday. The rate continues to trade inside its recent range and importantly above support at 1.3491, Feb 7 low. The outlook is bullish following recent gains from 1.3358, the Jan 27 low and scope is seen for a test of 1.3662 next, Jan 20 high. On the downside, a move below 1.3491, Feb 7 low would threaten the current bull theme and instead expose key support at 1.3358, Jan 27 low.

EURGBP TECHS: Closer to Support

• RES 4: 0.8526 76.4% retracement of the Dec 8 - Feb 3 downleg
• RES 3: 0.8512 High Dec 22
• RES 2: 0.8480 61.8% retracement of the Dec 8 - Feb 3 downleg
• RES 1: 0.8432/78 High Feb 11 / High Feb 7
• PRICE: 0.8343 @ 09:37 GMT Feb 18
• SUP 1: 0.8331 76.4% retracement of the Feb 3 - 7 uptrend
• SUP 2: 0.8285 Low Feb 3
• SUP 3: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fibonacci Retracement 2015-2020 Upleg

EURGBP remains weak, printing a new weekly low at 0.8334 ahead of the Thursday close. This keeps the cross below both the 20- and 50-day EMAs and reverses the previously bullish outlook. The recovery off the Feb 3 low has now been erased, leaving markets eyeing first key support of 0.8331 - 76.4% retracement of the Feb 3 - 7 uptrend.

USDJPY TECHS: Pulls Away From Key Resistance

• 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: 116.35 High Jan 4 and the bull trigger
• RES 1: 116.34 High Feb 10
• PRICE: 115.17 @ 09:38 GMT Feb 18
• SUP 1: 114.79 Low Feb 18
• SUP 2: 114.73 50-day EMA
• SUP 3: 114.16 Low Feb 02
• SUP 4: 113.47 Low Jan 24 and key support

USDJPY slipped to new weekly lows in overnight Friday trade. The previously bullish outlook has faded, with markets eyeing the 50-day EMA at 114.73 for direction. A break and close below here opens losses toward the levels last seen in early February, with 114.16 the Feb 2 low. For any uptrend to resume, focus is on key resistance at 116.35, Jan 4 high and the bull trigger.

EURJPY TECHS: Bounce Reversing

• RES 4: 134.14 3.0% Upper Bollinger Band
• RES 3: 133.48/82 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 2: 133.15 High Feb 10
• RES 1: 131.91 High Feb 16
• PRICE: 130.95 @ 09:40 GMT Feb 18
• SUP 1: 130.05 Low Feb 14
• SUP 2: 129.41 76.4% retracement of the Jan 25 - Feb 10 rally
• SUP 3: 129.19 Low Feb 3
• SUP 4: 128.25 Low Jan 25 and a key short-term support

The EURJPY bounce partially reversed into the Thursday close, however prices remain within range of the bull trigger at 133.15, Feb 10 high, meaning rallies will target this level before shifting sights to 133.48 and above. A key support zone at 130.65-20 (the 20- and 50-day EMAs) is creaking, and a meaningful break of the lower level exposes 130.05.

AUDUSD TECHS: Holding Gains

• RES 4: 0.7314 High Jan 13 and a key resistance
• RES 3: 0.7277 High Jan 20
• RES 2: 0.7273 2.0% 10-dma envelope
• RES 1: 0.7249 High Feb 09
• PRICE: 0.7214 @ 09:41 GMT Feb 18
• SUP 1: 0.7086/7052 Low Feb 14 / Low Feb 4
• SUP 2: 0.6968/6963 Low Jan 28 / Low Jul 16, 2020
• SUP 3: 0.6921 Low Jul 14, 2020
• SUP 4: 0.6884 0.764 proj of the Oct ‘21 - Dec ‘21 - Jan price swing

AUDUSD continues to hold recovery gains, putting the pair at odds with the likes of USDJPY, which have slipped lower. This works in favour of AUDUSD at this stage and negates the bearish signals evident in the bearish candle pattern posted late last week. As such, markets re-target the early February highs of 0.7249 to sustain any rally, while a return back below 0.7086 would prove bearish.

USDCAD TECHS: Holding Above Key S/T Support

• RES 4: 1.2964 High Dec 20 and a key resistance
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2843 76.4% retracement of the Dec 20 - Jan 19 sell-off
• RES 1: 1.2797 High Jan 28 and a key resistance
• PRICE: 1.2683 @ 09:43 GMT Feb 18
• SUP 1: 1.2636 Low Feb 10 and key short-term 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 sits toward the bottom end of the recent range, but is holding above support at 1.2636, Feb 10 low. While this level holds, a positive outlook remains intact following the recent recovery from 1.2451, Jan 19 low that resulted in a move above the 50-day EMA and a climb through 1.2768, 61.8% of the Dec 20 - Jan 19 sell-off. The focus is on 1.2843, the 76.4% value. On the downside, a sub 1.2636 levels would threaten the bullish theme.

FIXED INCOME

BUND TECHS: (H2) Outlook Stabilising

• RES 4: 169.61 50-day EMA
• RES 3: 167.56 20-day EMA
• RES 2: 167.00 High Feb 4
• RES 1: 166.46 Feb 11 high
• PRICE: 165.86 @ 16:22 GMT Feb 17
• SUP 1: 164.34 Low Feb 16 and the bear trigger
• SUP 2: 164.00 Round number support
• SUP 3: 163.63 Low Mar, 2019 (cont)
• SUP 4: 162.60 76.4% retrace of the Oct ‘18 - Sep ‘19 bull cycle (cont)

Bund futures recovered off the day’s lows ahead of the Wednesday close and built further through the Thursday session. This rally is deemed corrective, however, with the broader outlook bearish for now. Downside pressure so far this month has reinforced current trend conditions, with moving averages in a bear mode set-up too. The focus is on the 164.00 handle next. 166.46 is initial resistance, the Feb 11 high.

BOBL TECHS: (H2) Bearish Below Moving Averages

• RES 4: 132.510 50-day EMA
• RES 3: 132.060 High Feb 3
• RES 2: 131.569 20-day EMA
• RES 1: 131.360 High Feb 11
• PRICE: 131.110 @ 16:27 GMT Feb 17
• SUP 1: 130.080 Low Feb 10
• SUP 2: 130.000 Psychological round number
• SUP 3: 129.460 High Dec 7, 2015 (cont)
• SUP 4: 129.020 Low Dec 7, 2015 (cont)

Bobl futures extended the recent recovery into the Thursday close, but key resistance at the 20-day EMA remained intact. Over the medium-term, prices remain in a clear downtrend and short-term gains are considered corrective. Recent selling pressure and fresh trend lows maintain the bearish price sequence of lower lows and lower highs. Moving averages are in a bear mode too and attention is on the psychological 130.00 handle next. Initial resistance is seen at 131.360, the Feb 11 high.

SCHATZ TECHS: (H2) Gains Considered Corrective

• RES 4: 112.020 High Jan 31
• RES 3: 111.917 50-day EMA
• RES 2: 111.870 High Feb 3
• RES 1: 111.800 High Feb 11
• PRICE: 111.780 @ 16:29 GMT Feb 17
• SUP 1: 111.420 High Feb 11
• SUP 2: 111.250/208 Low Feb 7 / 2.50 proj of Dec 20-Jan 19-24 swing
• SUP 3: 111.185 Low Jun 26, 2015 (cont)
• SUP 4: 111.140 Low Jun 11, 2015 (cont)

The trend direction in Schatz futures remains bearish, despite the intraday rally on Thursday. The sell-off between Jan 24 and Feb 7 resulted in a break of 111.890, Jan 19 low and confirmed a resumption and an acceleration of the downtrend. Moving average conditions remain bearish too. The Feb 11 high of 111.760 marks initial resistance. A return lower would refocus attention on 111.420, Feb 11 low and 111.250, the Feb 7 low.

GILT TECHS: (H2) Recovering Off Contract Lows

• RES 4: 123.07 50-day EMA
• RES 3: 122.56 High Feb 2
• RES 2: 121.59 High Feb 4 and the 20-day EMA
• RES 1: 120.96 High Feb 8
• PRICE: 120.72 @ Close Feb 17
• SUP 1: 119.32 Low Feb 16
• SUP 2: 119.28 2.382 proj of the Jan 13 - 19 - 24 price swing
• SUP 3: 119.18 1.0% 10-dma envelope
• SUP 4: 119.06 2.500 proj of the Jan 13 - 19 - 24 price swing

The medium-term trend condition in Gilt futures is unchanged, but markets are currently undergoing a corrective rally, putting prices back toward recent highs of 120.96. A return to the downside would reinforce bearish conditions, with moving averages pointing south too. With the 120.00 psychological handle cleared, the focus is on 119.28 next, a Fibonacci projection. Firm S/T resistance is seen at 120.96.

BTP TECHS: (H2) Corrective Bounce

• RES 4: 145.16 50-day EMA
• RES 3: 144.55 Low Jan 19
• RES 2: 142.55/142.59 High Feb 4 / 20-day EMA
• RES 1: 141.14 High Jan 9
• PRICE: 139.93 @ Close Feb 17
• SUP 1: 138.06 Low Feb 16
• SUP 2: 137.64 2.0% 10-dma envelope
• SUP 3: 137.52 Low May 18, 2020 (cont)
• SUP 4: 136.86 Low May 13, 2020 (cont)

The bias still points lower for BTP futures, despite strength posted across the Wednesday and Thursday sessions. The outlook remains bearish for now, with recent selling pressure confirming a resumption of the underlying downtrend and maintaining the bearish sequence of lower lows and lower highs. The focus is on 137.64 next, the May 18 2020 low on the continuation contract. On the upside, initial resistance is seen at the Feb 9 high of 141.14.

EQUITIES

E-MINI S&P (H2): Returning Lower

• RES 4: 4808.25 All-time high on Jan 4
• RES 3: 4739.50 High Jan 12
• RES 2: 4671.75 High Jan 18
• RES 1: 4586.00 High Feb 2 and a near-term bull trigger
• PRICE: 4416.50 @ 16:44 GMT Feb 17
• SUP 1: 4354.00 Low Feb 14
• SUP 2: 4263.25 Low Jan 27
• SUP 3: 4212.75 Low Jan 24 and the bear trigger
• SUP 4: 4186.57 23.6% of the Mar ‘20 - Jan ‘22 major rally

Markets partially reversed the Tuesday recovery into the Thursday close, reinforcing the fragile nature of equity sentiment. This keeps the outlook pointed lower for now, with downside impetus strengthened by the failure of the contract to hold above the 50-day EMA - at 4549.15. This average represents a firm resistance and a clear break would suggest scope for a stronger rally towards 4671.75 initially, Jan 18 high. Recent bearish candle patterns have exposed 4212.75 the key downside target.

EUROSTOXX50 TECHS: (H2) Bear Trigger Exposed

• RES 4: 4392.50 High Nov 18 and key resistance
• RES 3: 4381.50 High Jan 5 and the bull trigger
• RES 2: 4324.50 High Jan 13
• RES 1: 4188.70/4250.00 50-day EMA / High Feb 2
• PRICE: 4110.00 @ 16:49 GMT Feb 17
• SUP 1: 3996.00 Low Feb 15
• SUP 2: 3990.50 Low Jan 24 and key support
• SUP 3: 3980.00 Low Nov 30 2021
• SUP 4: 3935.00 Low Oct 6 2021

EUROSTOXX 50 futures remain vulnerable despite the Tuesday bounce. Last week, the contract failed to hold above the 50-day EMA - at 4188.70. This average still represents a key resistance point where a clear break would suggest scope for a stronger recovery and open 4324.50, Jan 13 high. The shift lower however highlights the bearish threat and has exposed 3990.50, the Jan 24 low and the next bear trigger. A break would resume this year’s downtrend.

COMMODITIES

BRENT TECHS: (J2) Edging Off Highs

• RES 4: $100.00 - Key psychological barrier
• RES 3: $98.94 - 2.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $97.36 - 2.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $96.78 - High Feb 14
• PRICE: $93.18 @ 16:55 GMT Feb 17
• SUP 1: $89.93/87.72 - Low Feb 8 / Low Feb 1
• SUP 2: $84.89 - 50-day EMA
• SUP 3: $84.22 - Low Jan 24 and key support
• SUP 4: $79.95 - Low Jan 10

Brent futures have printed lower highs for a second session, suggesting some near-term congestion in prices - although the longer-term outlook remains a positive one. Note too that corrective dips remain shallow for now and this highlights and reinforces underlying bullish sentiment. The focus is on $97.36 next, a Fibonacci projection. On the downside, key short-term support has been defined at $89.93, the Feb 8 low.

WTI TECHS: (H2) Dips Corrective For Now

• RES 4: $100.78 - 3.236 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $100.00 - Key psychological barrier
• RES 2: $98.24 - 3.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $95.82 - High Feb 14
• PRICE: $91.81 @ 17:07 GMT Feb 17
• SUP 1: $88.41 - Feb 9 low and key short-term support
• SUP 2: $86.34 - Low Jan 31
• SUP 3: $82.79 - 50-day EMA
• SUP 4: $81.90 - Low Jan 24

Prices faded into the Wednesday close, but dips remain corrective in nature for now, with the broader outlook remaining positive. The recent break higher resumed the bullish price sequence of higher highs and higher lows. Note too that corrections remain shallow and this both highlights and reinforces underlying bullish sentiment. The focus is on $98.24 next, a Fibonacci projection. On the downside, key short-term support has been defined at $88.41, the Feb 9 low.

GOLD TECHS: Tops First Resistance

• RES 4: $1932.5 bull channel top drawn from the Aug 9 2021 low
• RES 3: $1916.6 - High Jun 1 2021 and a key resistance
• RES 2: $1903.1 - High Jun 11, 2021
• RES 1: $1899.4 - High Feb 17
• PRICE: $1898.7 @ 17:10 GMT Feb 17
• SUP 1: $1844.7 Low Feb 15
• SUP 2: $1821.1 - Low Feb 11
• SUP 3: $18005.0 - Bull channel base drawn from the Aug 9 2021 low
• SUP 4: $1788.7 - Low Feb 3

The Gold rally resumed Thursday, pushing prices to fresh cycle highs as the uptrend accelerated through 1879.6. This puts gold at the best levels since June last year, and keeps the trend direction pointed higher. Resistance at $1881.6 has given way, setting the medium-term upside target to 1916.6 - a key bull trigger. At this stage, dips appear corrective until 1853.9, the January cycle high. Weakness through here opens 1844.7 and below.

SILVER TECHS: Returns to Upper End of Recent Range

• RES 4: $25.406 - High Nov 16, 2021
• RES 3: $24.886 - High Nov 22
• RES 2: $24.700 - High Jan 20 and a key resistance
• RES 1: $23.994 - High Jan 25
• PRICE: $23.828 @ 17:19 GMT Feb 17
• SUP 1: $22.863/008 - Low Feb 11 / Low Feb 3 and key S.T support
• SUP 2: $21.949 - Low Jan 7
• SUP 3: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally

Silver prices sit broadly flat on the week, but well toward the upper-end of the recent range. The recent rally suggests scope for a stronger recovery and this has opened $23.994, the Jan 25 high. A break of this level would pave the way for gains towards $24.700, the Jan 20 high. On the downside, key support lies at $22.008, the Feb 3 low. A break of this support would reinstate the recent bearish theme. This would instead open $21.949, the Jan 7 low. Initial firm support lies at $22.863, Feb 11 low.