MNI DAILY TECHNICAL ANALYSIS - Gold Cracks $1,900, But RSI Warrants Caution

Price Signal Summary - Gold Cracks $1,900, But Could be Overbought

• In the equity space, S&P E-minis continue to trade constructively and have cleared resistance at 4185.00, May 21 high. This opens 4238.25, May 10 high. Key trend support lies at 4029.25, May 13 low. EUROSTOXX 50 futures have traded higher too, breaching 4036.00, May 10 high. The move higher confirms a resumption of the uptrend and opens 4099.00,1.00 projection of the Mar - Jul - Oct 2020 price swing.
• In the FX space, EURUSD strength persists to keep the uptrend in tact. The pair has cleared 1.2245 with sights set on 1.2285 next, Jan 8 high. GBPUSD is trading closer to recent highs and remains bullish. The focus is on 1.4237, Feb 24 high and this year's high print. USDJPY support is unchanged at 108.34, May 7 low. A bullish theme dominates while this support holds and attention is on 109.79, May 13 high. A break of 108.34 however would highlight a trendline break drawn off the Jan 6 low and risk a deeper pullback.
• On the commodity front, Gold has broken higher, cementing the bullish theme. Gold topped the $1,900 level this morning and is narrowing in on next resistance at the Jan 8 high of $1917.6. There are some signs that markets could be overbought, however, with the 14-day RSI now at its highest level since August last year. Oil contracts have recovered from recent lows. Brent (N1) key resistance is at $70.24, May 18 high and the bull trigger. WTI (N1) bulls are eyeing $67.02, May 18 high.
• In the FI space, Bunds (M1) have firmed further as the short-term correction extends. The next resistance is the 170.49, the 50-day EMA. The bear trigger is 168.29, May 19 low. Directional risk in Gilts (M1) is still skewed to the downside despite recent strength. The key support and bear trigger is 126.79, Mar 18 low. Key resistance is 128.80 High May 7.

FOREIGN EXCHANGE

EURUSD TECHS: Holding Onto Gains

• RES 4: 1.2414 High Apr 17, 2018
• RES 3: 1.2349/53 High Jan 6 / High Apr 20, 2018
• RES 2: 1.2285 High Jan 8
• RES 1: 1.2266 High May 25
• PRICE: 1.2259 @ 06:01 BST May 26
• SUP 1: 1.2160/26 Low May 19 / Low May 17
• SUP 2: 1.2052 Low May 13 and key short-term support
• SUP 3: 1.2057 50-day EMA
• SUP 4: 1.1986 Low May 5 and key short-term support

EURUSD started the week on a firmer note and traded higher Tuesday. The pair has breached resistance at 1.2245, May 19 high. This strengthens the bullish outlook and opens 1.2285, Jan 8 high. Further out, the 2021 high of 1.2349, Jan 6 high beckons. On the downside, key short-term support has been defined at 1.2052, May 13 low while initial support remains 1.2160, the May 19 low. A break of 1.2052 would signal a top.

GBPUSD TECHS: Key Resistance Remains Exposed

• RES 4: 1.4412 2.0% 10-dma envelope
• RES 3: 1.4315 High Apr 18, 2018
• RES 2: 1.4237 High Feb 24 and a key resistance
• RES 1: 1.4234 High May 21
• PRICE: 1.4169 @ 06:11 BST May 26
• SUP 1: 1.4100 Low May 19
• SUP 2: 1.4006/3972 Low May 13 / Low May 10
• SUP 3: 1.3955 50-day EMA
• SUP 4: 1.3858 Low May 6

GBPUSD is unchanged and continues to consolidate. The outlook remains bullish. Sights are on 1.4237, Feb 24 high and the bull trigger. A break would reinforce a bullish case and importantly confirm a resumption of the broader uptrend that started March 2020. On the downside, initial firm support is unchanged at 1.4006, May 13 low where a break would suggest scope for a deeper corrective pullback.

EURGBP TECHS: Gains Considered Corrective

• RES 4: 0.8787 2.0% 10-dma envelope / High Feb 12
• RES 3: 0.8731 High Feb 26
• RES 2: 0.8701/21 High May 7 / High Apr 26 and the bull Trigger
• RES 1: 0.8672 High May 25
• PRICE: 0.8662 @ 16:32 BST May 25
• SUP 1: 0.8584/61 Low May 21 / Low May 12
• SUP 2: 0.8472 Low Apr 5 and the bear trigger
• SUP 3: 0.8441 2.0% 10-dma envelope
• SUP 4: 0.8430 Low Feb 27, 2020

EURGBP short-term gains are likely a correction. A bearish theme dominates following recent weakness and the low print on May 12 of 0.8561. The move lower saw the cross move out of its recent range suggesting scope for a deeper pullback, potentially towards the key support at 0.8472, Apr 5 low. On the upside, the key resistance and bull trigger is unchanged at 0.8721, Apr 26 high. An initial firm resistance is at 0.8699, the May 10 high.

USDJPY TECHS: Consolidating

• RES 4: 110.97 High Mar 31 and the bull trigger
• RES 3: 110.55 High Apr 6
• RES 2: 109.96 High Apr 9
• RES 1: 109.79 High May 13
• PRICE: 108.78 @ 06:29 BST May 26
• SUP 1: 108.34 Low May 7 and key short-term support
• SUP 2: 107.48 Low Apr 23 and the bear trigger
• SUP 3: 106.97 Low Mar 4
• SUP 4: 106.78 50.0% retracement of the Jan - Mar rally

USDJPY continues to consolidate. The pair maintains a bullish outlook despite struggling to hold onto recent gains. A firm support lies at 108.34, May 7 low. Attention is on 109.96, Apr 9 high with potential for a climb above 110.00. Note that the recovery May 12 means trendline support drawn off the Jan 6 low remains intact. The trendline however remains under pressure and a break of 108.34 would signal a reversal.

EURJPY TECHS: Fresh Trend High

• RES 4: 134.80 High Feb 8, 2018
• RES 3: 134.30 Bull channel top drawn off the Oct 30, 2020 low
• RES 2: 134.19 1.618 proj of Jun-Sep-Oct 2020 swing
• RES 1: 133.61 High May 25
• PRICE: 133.35 @ 06:40 BST May 26
• SUP 1: 132.52 Low May 24
• SUP 2: 131.69 Low May 12
• SUP 3: 130.99 Low May 5 and a key support
• SUP 4: 130.79 Bull channel base drawn off the Oct 30, 2020 low

EURJPY traded higher yesterday. The continued move higher reinforces bullish conditions and signals scope for further gains within the rising channel drawn off the Oct 30 2020 low. The top of the channel intersects at 134.30. Moving average studies are still pointing north, reinforcing current conditions. Initial firm support lies at 132.52, May 24 low. A firmer trend support is found at 130.99, May 5 low.

AUDUSD TECHS: Still In A Range

• RES 4: 0.8007 High Feb 25 and the bull trigger
• RES 3: 0.7907 2.0% 10-dma envelope
• RES 2: 0.7891/95 High May 10 / 76.4% of the Feb 25 - Apr 1 sell-off
• RES 1: 0.7813/46 High May 18 / High May 12
• PRICE: 0.7791 @ 06:46 BST May 26
• SUP 1: 0.7688 Low May 13
• SUP 2: 0.7675 Low May 4 and key support
• SUP 3: 0.7635 Low Apr 14
• SUP 4: 0.7586 Low Apr 13

AUDUSD remains in a range. A bearish theme dominates though following the recent move lower to 0.7688 on May 13. A firm support zone has been defined at 0.7688-75, the latter is the May 4 low. Clearance of this support would strengthen a bearish case and signal scope for a deeper pullback towards 0.7586, the Apr 13 low. For bulls, a breach of 0.7813, May 18 high would signal scope for a climb towards 0.7891, high May 10.

USDCAD TECHS: Attention Is On 1.2000

• RES 4: 1.2419 High Apr 27
• RES 3: 1.2351 High May 4 and a key near-term resistance
• RES 2: 1.2288 High May 13
• RES 1: 1.2145/2203 High May 20 / High May 6
• PRICE: 1.2045 @ 06:53 BST May 26
• SUP 1: 1.2013 Low May 18
• SUP 2: 1.2000 Psychological round number
• SUP 3: 1.1920 Low May 2015
• SUP 4: 1.1849 2.0% 10-dma envelope

USDCAD is trading closer to recent lows. The outlook remains bearish. The recent key technical development has been the move through major support at 1.2062, Sep 2017 low. This represents an important pivot chart point that either marks the base of a broad range or the midpoint of a double top reversal pattern. Scope is seen for a test and break of the psychological 1.2000 handle. Initial firm resistance is at 1.2203, May 13 high.

FIXED INCOME

BUND TECHS: (M1) Correction Extends

• RES 4: 171.27 High Apr 22
• RES 3: 170.98 High May 7 and key short-term resistance
• RES 2: 170.49 50-day EMA
• RES 1: 169.92 High May 25
• PRICE: 169.34 @ 05:03 BST May 25
• SUP 1: 169.02 Low May 24
• SUP 2: 168.29 Low May 19 and the bear trigger
• SUP 3: 168.09 0.764 proj of the Jan 27 - Feb 25 - Mar 25 price swing
• SUP 4: 167.52 Low Mar 19, 2020 (cont)

Bund futures have extended gains this week and also breached the 20-day EMA. The recent recovery is still considered a correction and attention turns to resistance at the 50-day EMA that intersects at 170.49. A breach of this level would expose 170.98, May 7 high. On the downside, key support has been defined at 168.29, May 19 low. A break would confirm a resumption of the downtrend.

BOBL TECHS: (M1) Trades Through The 20-Day EMA

• RES 4: 135.050 High Apr 22
• RES 3: 135.040 High May 6 and key short-term resistance
• RES 2: 134.825 50-day EMA
• RES 1: 134.740 High May 25
• PRICE: 134.700 @ 05:22 BST May 26
• SUP 1: 134.410 Low May 24
• SUP 2: 134.180/140 Low May 19 / Low Feb 26 and key support
• SUP 3: 134.000 Round number support
• SUP 4: 133.340 Low Mar 19, 2020 (cont)

Bobl futures traded higher yesterday and have cleared the 20-day EMA as the correction extends. Attention turns to the area of resistance around the 50-day EMA that intersects at 134.825. A clear break of the average would signal scope for a stronger recovery and potentially expose 135.040. On the downside, initial support lies at 134.410, May 24 low. The broader trend remains bearish and the next key support and bear trigger is 134.180/140.

SCHATZ TECHS: (M1) Corrective Cycle

• RES 4: 112.150 High Apr 8
• RES 3: 112.110/120 High May 4, 5, and 6 / High Apr 22
• RES 2: 112.090 50-day EMA
• RES 1: 112.051 20-day EMA
• PRICE: 112.050 @ 05:18 BST May 26
• SUP 1: 112.000 Low May 19
• SUP 2: 111.993 76.4% retracement of the Feb 26 - Mar 25 rally
• SUP 3: 111.940 Low Feb 26 ad key support
• SUP 4: 111.860 Low Apr 15, 2019 (cont)

Schatz futures maintain a bearish tone following the recent sell-off from May 5 that marked a resumption of the bearish cycle since Mar 25. Recent weakness resulted in a break of 112.060, a level that provided support in March and April. This strengthens a bearish case and opens 111.940, Feb 26 low. A breach of 112.110 is required to signal a reversal. Recent gains are considered corrective.

GILT TECHS: (M1) Extends Recent Gains

• RES 4: 129.75 High Feb 19
• RES 3: 129.09/27 High Apr 23 and the reversal trigger / High Mar 2
• RES 2: 128.80 High May 7 and key short-term resistance
• RES 1: 128.37 High May 25
• PRICE: 128.31 @ Close May 25
• SUP 1: 127.12/126.86 Low May 19 / Low May 13
• SUP 2: 126.79 Low Mar 18 and the bear trigger
• SUP 3: 126.55 Low Apr 17, 2019 (cont)
• SUP 4: 126.35 1.0% 10-dma Envelope

Gilt futures outlook remains bearish and recent gains are still considered a correction. The pullback from 128.80, May 7 high reinforced bearish conditions. This resulted in a break of support between 127.40-32, Apr 29 and Apr 1 lows respectively. The major support though at 126.79, Mar 18 low remains intact. A breach would confirm a resumption of the broader downtrend. Key near-term resistance is at 128.80, May 7 high.

BTP TECHS: (M1) Unwinding A Recent Oversold Condition

• RES 4: 148.65 High Apr 22
• RES 3: 147.79 High May 4 and key near-term resistance
• RES 2: 147.44 50-day EMA
• RES 1: 146.90/147.44 High May 25
• PRICE: 146.75 @ Close May 25
• SUP 1: 145.64 Low May 21
• SUP 2: 144.48 Low May 17 and the bear trigger
• SUP 3: 144.16 1.236 proj of the Feb 12 - 26 - Mar 11 price swing
• SUP 4: 143.61 Low Jul 13, 2020 (cont)

BTP futures remain in a clear downtrend following last week's extension lower that resulted in a fresh 2021 low of 144.48 on Mar 19. However, prices are recovering. This is part of a correction that is allowing the recent oversold condition to unwind. The break of the 20-day EMA exposes the 50-day EMA at 147.41. This average highlights a firm resistance area. On the downside key support and the bear trigger is at 144.48, May 17 low.

EQUITIES

EUROSTOXX 50 TECHS: (M1) Uptrend Remains Intact

• RES 4: 4175.00 Low Nov 26, 2007 (cont)
• RES 3: 4140.00 High Jan 18, 2008 (cont)
• RES 2: 4099.00 1.00 proj of of the Mar - Jul - Oct 2020 price swing
• RES 1: 4059.00 High May 26
• PRICE: 4050.00 @ 05:49 BST May 25
• SUP 1: 3977.95/3882.00 50-day EMA / Low May 19
• SUP 2: 3844.00 Low May 13 and the bear trigger
• SUP 3: 3821.00 High Mar 18 and recent breakout level
• SUP 4: 3727.00 Low Mar 25

EUROSTOXX 50 futures remain bullish and the contract has traded higher this week, breaching resistance at 4036.00, May 10 high. The breach of resistance confirms a resumption of the uptrend and opens 4099.00, a Fibonacci projection. The climb also maintains the bullish price sequence of higher highs and higher lows, reinforcing the current trend condition. On the downside, firm support lies at 3882.00, May 19 low.

E-MINI S&P (M1): Bullish Price Structure

• RES 4: 4265.49 3.0% 10-dma envelope
• RES 3: 4239.26 1.764 proj of the Feb 1 - Feb 16 - Mar 4 price swing
• RES 2: 4238.25 High May 10 and the bull trigger
• RES 1: 4212.75 High May 25
• PRICE: 4197.75 @ 05:55 BST May 26
• SUP 1: 4055.60 Low May 19
• SUP 2: 4029.25 Low May 13 and key short-term support
• SUP 3: 4021.00 Low Apr 5
• SUP 4: 3963.98 100-dma

S&P E-minis started this week on a firm note and breached initial resistance at 4185.00, May 21 high. The move higher reinforces the bullish significance of the recent recovery from support defined by the 50-day EMA that has been tested twice this month. The break higher also refocuses attention on key resistance and the bull trigger at 4238.25, May 10 high. On the downside, initial firm support is at 4055.50, May 19 low.

COMMODITIES

BRENT TECHS: (N1) Eyeing Key Resistance

• RES 4: $71.95 - High Sep 16, 2019 (cont)
• RES 3: $71.75 - High Jan 8 2020 (cont)
• RES 2: $70.24 - High May 18 and the bull trigger
• RES 1: $68.90 - High May 25
• PRICE: $68.86 @ 06:50 BST May 26
• SUP 1: $66.46/64.57 - Low May 24 / Low May 21 and key support
• SUP 2: $63.93 - Low Apr 26
• SUP 3: $62.00 - Low Apr 12
• SUP 4: $60.93 - Low Apr 5

Brent crude yesterday extended the recovery from Friday's low of $64.57. The underlying uptrend remains intact and attention is on $70.24, May 18 high and the bull trigger. Price has recently traded below the 50-day EMA however levels around the average continue to provide support. On the downside, weakness through last week's $64.57 low is required to signal a short-term top and the start of a corrective pullback.

WTI TECHS: (N1) Approaching Key Resistance

• RES 4: $70.00 - Psychological round number
• RES 3: $67.95 - High Oct 29, 2018
• RES 2: $67.25 - 2.00 proj of Mar 23 - 30 - Apr 5 price swing
• RES 1: $67.02 - High May 18 and the bull trigger
• PRICE: $66.12 @ 06:54 BST May 26
• SUP 1: $63.63/61.56 - Low May 24 / Low May 21
• SUP 2: $60.55 - Low Apr 22 and key short-term support
• SUP 3: $58.70 - Low Apr 12
• SUP 4: $57.63 - Low Apr 5

WTI crude edged higher yesterday, extending the recovery from Friday's low of $61.56. This low marks a key short-term support where a break is required to suggest a short-term top and the start of a deeper corrective pullback. Attention is on $67.02, May 18 high and the bull trigger. A break would confirm a resumption of the bull trend. Moving average studies remain in bull mode, reinforcing trend conditions.

GOLD TECHS: Uptrend Resumes

• RES 4: $1959.4 - High Jan 6 and key resistance
• RES 3: $1927.7 - High Jan 7
• RES 2: $1917.6 - High Jan 8
• RES 1: $1907.9 - Intraday high
• PRICE: $1901.8 @ 07:19 BST May 26
• SUP 1: $1872.8/52.3 - Low May 25 / Low May 19
• SUP 2: $1808.9 - Low May 13
• SUP 3: $1805.9 - 50-day EMA
• SUP 4: $1764.3 - Low Apr 30

Gold bulls remain in charge and the yellow metal has traded higher. This confirms a resumption of the underlying uptrend as the bullish price sequence of higher highs and higher lows extends. Price has cleared $1892.7, the 76.4% retracement of the Jan 6 - Mar 8 sell-off. This signals scope for a climb towards $1917.6, high Jan 8 while further out, attention is on $1959.4, Jan 6 high and key resistance. Initial firm support is $1852.3.

SILVER TECHS: Bullish Focus

• RES 4: $30.100 - High Feb 1 and key resistance
• RES 3: $30.000 - Round number resistance
• RES 2: $29.053 - High Feb 2
• RES 1: $28.753 - High May 18
• PRICE: $28.035 @ 07:23 BST May 26
• SUP 1: $27.202 - Low May 21
• SUP 2: $26.721 - Low Mar 13 and key near-term support
• SUP 3: $26.646 - 50-day EMA
• SUP 4: $25.718 - Low Apr 29

The Silver outlook remains bullish. Price action last week probed $28.609, 76.4% of the sell-off between Feb 1 - Mar 31. The May 18 high of $28.753 marks a short-term bull trigger. A break would confirm a resumption of the uptrend and pave the way for strength towards $29.00 and above. Key short-term support has been defined at $26.721, Mar 13 low. Clearance of this level is required to threaten the trend. Initial support is at $27.202.