MNI DAILY TECHNICAL ANALYSIS - Gold Bull Cycle Remains In Play

Price Signal Summary - Bull Cycle In Gold Extends       

• In the equity space, the Feb 3 initial sell-off in the S&P E-Minis contract and the breach of support at 5948.00, Jan 27 low, continues to highlight a possible S/T reversal threat. A resumption of weakness would open 5892.37, the 76.4% retracement of the Aug 5 - Dec 6 bull leg. On the upside, a stronger rally would expose key resistance at 6178.75, the Dec 6 ‘24 high. Clearance of this hurdle would resume the primary uptrend. EUROSTOXX 50 futures are holding on to their recent gains and a bull cycle remains in play. Last week’s gains marked  a resumption of the uptrend that started on Nov 21 ‘24. The focus is on 5381.13 next, the 1.764 projection of the Nov 21 - Dec 9 - 20 ‘24 price swing. Initial firm support to watch lies at 5211.11, the 20-day EMA.                 
• In FX, EURUSD continues to trade below last week’s highs. Attention is on a bullish candle formation on Feb 3 - a hammer - that signals a possible reversal. However, additional reinforcing price evidence is required to signal a turn in the trend. MA studies in a bear-mode position, highlighting a dominant downtrend. 1.0435, the 50-day EMA, marks a key resistance. A clear break of it would be a bullish development. The bear trigger is 1.0141, the Feb 3 low. GBPUSD remains below the Feb 5 high. The pair has recently traded above the 20- and 50-day EMAs, and pierced 1.2523, the Jan 27 high. A resumption of gains would signal scope for a move towards 1.2610, 38.2% of the Sep 26 ‘24 - Jan 13 bear leg. On the downside, key short-term support to watch has been defined at 1.2249, the Jan 3 low. Clearance of this level would instead highlight a reversal.   A bearish theme in USDJPY remains intact and last week’s move down reinforces current conditions. 151.06, 76.4% of the Dec 3 - Jan 10 bull leg, has been pierced. A clear break of it would open 149.69, the Dec 9 low. Firm resistance is seen at 154.70, the 50-day EMA. Note that the pair has entered oversold territory. A recovery would be considered corrective and would allow the oversold condition to unwind.    
• On the commodity front, a bull cycle in Gold remains in play and the yellow metal has again traded to a fresh cycle high, today. The continued appreciation once again confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on the $2917.5, the 1.764 projection of the Nov 14 - Dec 12 - 19 price swing. The first key support to watch is $2776.3, the 20-day EMA. In the oil space, recent weakness in WTI futures marks an extension of the current corrective cycle. The 20-day EMA has been breached and attention is on support around the 50-day EMA, at $72.20. Price has traded through the average, a clear break of it would suggest scope for a deeper retracement. This would open $68.05, the Dec 20 ‘24 low. On the upside, a clear reversal higher would refocus attention on $79.48, the Apr 12 ‘24 high and a key resistance. Initial resistance is  $75.18, the Feb 3 high. 
• In the FI space, Bund futures remain in a bull cycle and the contract is holding on to its latest gains. The recent pause appears to be a flag formation - a bullish continuation signal. Price has recently cleared both the 20- and 50-day EMAs. The break higher confirms a resumption of the corrective bull cycle that started Jan 14. Sights are on 133.73, 50.0% of the Dec 2 - Jan 14 bear leg. First support is at 132.53, the 20-day EMA. A bull cycle in Gilt futures remains in play for now, signalling scope for a continuation higher near-term. Last week’s extension has reinforced current conditions. The contract has traded through 93.09, the Dec 20 high, and breached 93.64, the 61.8% retracement of the Dec 3 - Jan 13 bear leg. Sights are on the 94.75, the 76.4% retracement. Initial firm support lies at 92.50, the 20-day EMA.

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