MNI DAILY TECHNICAL ANALYSIS - Gold Rally Reverses

Price Signal Summary – Gold Rally Reverses

• In the equity space, S&P E-minis remain volatile and continue to trade above Monday’s low of 4212.75. This week’s price action is allowing the recent oversold reading to unwind. Initial resistance to watch is Wednesday’s high of 4446.25, Jan 26 high. EUROSTOXX 50 futures remain vulnerable and volatile. Monday’s sell-off reinforced the bearish threat. Former support at 4216.50, Jan 10 low has been cleared and this resulted in the break of a number of short-term support levels.
• In FX, EURUSD traded sharply lower Thursday and cleared key support at 1.1186/85, the Nov 24 and Jul 1 2020 lows. This confirms a resumption of the broader downtrend that started Jan 6, 2021 and paves the way for weakness towards 1.1128. GBPUSD remains vulnerable following recent weakness and traded lower again Thursday. The pair has recently breached both the 20- and 50-day EMAs and a number of retracement levels, reinforcing a short-term bearish threat. USDJPY recovered well through the Wednesday session. Recent price action has defined a key short-term support at 113.47, Jan 24 low. The break higher has resulted in a move through former resistance at 115.06, the Jan 18 high.
• On the commodity front, the rally in gold has stalled. The sharp sell-off once again exposes support at the base of the bull channel that intersects at $1794.9 - the channel is drawn off the Aug 9 low. A clear break of the channel base would highlight a bearish threat and a more significant reversal. The uptrend in WTI futures resumed this week following Wednesday’s break of resistance at $87.10, Jan 20 high. This maintains the bullish price sequence of higher or higher highs and higher lows and moving average conditions remain in a bull mode.
• In the FI space, Bund futures remain below Monday’s high of 171.07. Key short-term resistance at 171.00 was only briefly probed earlier this week, the Jan 13 high. Recent price action in Gilt futures has defined 121.93, Jan 19 low, as a key support and bear trigger. Bearish trend conditions remain intact and short-term gains are considered corrective.

FOREIGN EXCHANGE

EURUSD TECHS: Resumes Its Major Downtrend

• RES 4: 1.1483/1514 High Jan 14 and key resistance / Low Nov 5
• RES 3: 1.1376/1421 Bear channel top / High Jan 18
• RES 2: 1.1315 20-day EMA
• RES 1: 1.1243 High Jan 27
• PRICE: 1.1151 @ 05:39 GMT Jan 28
• SUP 1: 1.1128 1.764 proj of the Jan - Mar - May 2021 price swing
• SUP 2: 1.1070 Low May 29, 2020
• SUP 3: 1.1036 Bear channel base drawn from the Jun 1 2021 high
• SUP 4: 1.0976 2.00 proj of the Jan - Mar - May 2021 price swing

EURUSD traded sharply lower Thursday and cleared key support at 1.1186/85, the Nov 24 and Jul 1 2020 lows. This confirms a resumption of the broader downtrend that started Jan 6, 2021 and paves the way for weakness towards 1.1128 next, a Fibonacci projection. Note that despite trading outside of the ranges recently, EURUSD remains in a bear channel. The base lies at 1.1031 Thursday. The channel is drawn from the Jun 1 2021 high.

GBPUSD TECHS: Heading South

• RES 4: 1.3913 High Sep 14, 2021
• RES 3: 1.3835 High Oct 20 and key resistance
• RES 2: 1.3723/49 200-dma / High Jan 13
• RES 1: 1.3525/3662 High Jan 26 / High Jan 20
• PRICE: 1.3410 @ 06:11 GMT Jan 28
• SUP 1: 1.3358 Low Jan 27
• SUP 2: 1.3343 Low Dec 23
• SUP 3: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase
• SUP 4: 1.3281 2.0% 10-dma envelope

GBPUSD remains vulnerable following recent weakness and traded lower again Thursday. The pair has recently breached both the 20- and 50-day EMAs and a number of retracement levels, reinforcing a short-term bearish threat. The focus turns to 1.3343, Dec 23 low and 1.3301, a Fibonacci retracement. Initial resistance is seen at 1.3525, the Jan 26 high. A break would ease bearish pressure.

EURGBP TECHS: Approaching The Recent Multi-Year Low

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8465 High Dec 24
• RES 2: 0.8416/23 50-day EMA / High Jan 24
• RES 1: 0.8372 High Jan 26
• PRICE: 0.8315 @ 06:18 GMT Jan 28
• SUP 1: 0.8305 Low Jan 20, lowest since 2020
• SUP 3: 0.8300 Base of the multi-year broad range
• SUP 4: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fibonacci Retracement 2015-2020 Upleg

The EURGBP outlook remains bearish and the cross is lower this morning as it approaches the recent multiyear low of 0.8305, Jan 20 low. Monday’s rally stalled at the 50-day EMA, currently at 0.8412. This average represents a key short-term resistance. The focus is on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows plus the base of a broad multi-year range at 0.8300. Clearance of the 50-day EMA would signal a S/T base.

USDJPY TECHS: Reinstates Bullish Theme

• 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: 115.85/116.35 High Jan 10 / Jan 4 high and the bull trigger
• RES 1: 115.67 76.4% retracement of the Jan 4 - 24 bear leg
• PRICE: 115.39 @ 06:25 GMT Jan 28
• SUP 1: 114.48/113.47 Low Jan 27 / Low Jan 24 and key support
• SUP 2: 113.43 76.4% of the Nov 30 - Jan 4 rally
• SUP 3: 113.14 Low Dec 17
• SUP 4: 112.53/111.94 Low Nov 30 / 2.0% 10-dma envelope

USDJPY recovered well through the Wednesday session. Recent price action has defined a key short-term support at 113.47, Jan 24 low. The break higher has resulted in a move through former resistance at 115.06, the Jan 18 high. This reinstates a bullish theme and signals scope for a climb towards 116.35, high Jan 4 and a key resistance. Initial resistance is at 115.67, a Fibonacci retracement.

EURJPY TECHS: Bearish Risk Still Present

• RES 4: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 3: 131.60 High Jan 5 and the bull trigger
• RES 2: 131.18 High Jan 18
• RES 1: 129.62/74 20- and 50-day EMA values
• PRICE: 128.66 @ 06:28 GMT Jan 28
• SUP 1: 128.25 Low Jan 25
• SUP 2: 128.05 Low Dec 21
• SUP 3: 127.39 Low Dec 6 and a major support
• SUP 4: 127.04 Low Feb 15, 2021

EURJPY remains inside its recent range. The cross is vulnerable though following the recent move lower and break of its 50-day EMA. The cross has probed 128.38, a Fibonacci retracement. A clear break of this level would expose 127.39, the Dec 6 low and a key near-term support. Key short-term resistance has been defined at 131.60, Jan 5 high. Initial resistance though is at 129.62/74, the 20- and 50-day EMAs.

AUDUSD TECHS: Approaching Key Support

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7277/7314 High Jan 20 / High Jan 13
• RES 2: 0.7208 50-day EMA
• RES 1: 0.7130/7176 Low Jan 7 / 20-day EMA
• PRICE: 0.7040 @ 06:35 GMT Jan 28
• SUP 1: 0.7023 Intraday low
• SUP 2: 0.6993/91 Low Dec 3 / Low Nov 2, 2020 and key support
• SUP 3: 0.6963 Low Jul 16, 2020
• SUP 4: 0.6921 Low Jul 14, 2020

AUDUSD traded sharply lower Thursday and has cleared 0.7082, Dec 20 low and 0.7069, 76.4% of the Dec 3 - Jan 13 upleg. The clear break of this latter level reinforces bearish conditions and clears the way for an extension towards the key support at 0.6993/91, the Dec 3 and Nov 2, 2020 lows. Moving average conditions remain in a bear mode, highlighting current sentiment. Initial resistance is at 0.7130.

USDCAD TECHS: Bull Rally Likely To Extend

• RES 4: 1.2843 76.4% retracement of the Dec 20 - Jan 19 sell-off
• RES 3: 1.2814 High Jan 6 and a key resistance
• RES 2: 1.2768 61.8% retracement of the Dec 20 - Jan 19 sell-off
• RES 1: 1.2748 High Jan 27 / Intraday high
• PRICE: 1.2717 @ 06:40 GMT Jan 28
• SUP 1: 1.2636/2560 20-day EMA / Low Jan 264
• SUP 2: 1.2451/48 Low Jan 19 / 76.4% of the Oct - Dec rally
• SUP 3: 1.2387 Low Nov 10
• SUP 4: 1.2328 Low Oct 29

USDCAD resumed this week’s climb Thursday as the pair extended its recovery from 1.2451, Jan 19 low. Price has traded above the 50-day EMA and the clear break of this average, at 1.2653, has exposed 1.2768, a Fibonacci retracement level. On the downside, initial firm support lies at Wednesday’s intraday low of 1.2560. Key support has been defined at 1.2451, Jan 19 low and this level marks the bear trigger.

FIXED INCOME

BUND TECHS: (H2) Resistance Remains Intact

• RES 4: 171.99 50.0% retracement of the Aug 12 - Jan 19 downleg
• RES 3: 171.77 Low Nov 24 and recent breakout level
• RES 2: 171.50 50-day EMA
• RES 1: 171.07 High Jan 24
• PRICE: 17013 @ 05:04 GMT Jan 28
• SUP 1: 169.66 Low Jan 26
• SUP 2: 168.95 Low Jan 19 and the bear trigger
• SUP 3: 168.84 3.764 proj of the Dec 8 - Dec 20 price swing
• SUP 4: 168.46 4.00 proj of the Dec 8 - Dec 20 price swing

Bund futures remain below Monday’s high of 171.07. Key short-term resistance at 171.00 was only briefly probed earlier this week, the Jan 13 high. A clear break of this hurdle would signal potential for a stronger short-term recovery and open the 50-day EMA at 171.50. Broader trend conditions remain bearish however. The trigger for a resumption of the downtrend is 168.95, the Jan 19 low.

BOBL TECHS: (H2) Broader Trend Condition Remains Bearish

• RES 4: 133.928 76.4% retracement of the Dec 20 - Jan 19 sell-off
• RES 3: 133.636 61.8% retracement of the Dec 20 - Jan 19 sell-off
• RES 2: 133.396 50-day EMA
• RES 1: 133.250 High Jan 24
• PRICE: 132.790 @ 05:10 GMT Jan 28
• SUP 1: 132.650 Low Jan 27
• SUP 2: 132.400 Low Jan 19 and the bear trigger
• SUP 3: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.253 2.618 proj of the Nov 30 - Dec 8 - 20 price swing

Trend conditions in Bobl futures remain bearish. The breach of 133.110 on Monday, the Jan 6 and 13 highs, however still suggests potential for a stronger short-term recovery ahead of resistance at the 50-day EMA at 133.396. For bears, the recent break of 132.620, Jan 11 low maintains a bearish price sequence of lower lows and lower highs. The trigger for a resumption of the downtrend is 132.400, Jan 19 low.

SCHATZ TECHS: (H2) Bullish Corrective Cycle Still In Play

• RES 4: 112.176 112.265 High Dec 20 and a key resistance
• RES 3: 112.250 High Dec 21
• RES 2: 112.176 76.4% retracement of the Dec 20 - Jan 19 downleg
• RES 1: 112.145 High Jan 24
• PRICE: 112.040 @ 05:04 GMT Jan 28
• SUP 1: 112.010 Low Jan 27
• SUP 2: 111.980/890 Low Jan 21 / Low Jan 19
• SUP 3: 112.861 1.618 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.824 1.764 proj of the Nov 26 - Dec 16 - 20 price swing

Schatz futures have pulled back from recent highs. The recent rally in price resulted in a move through the 20- and 50-day EMAs. This still signals potential for a climb near-term towards 112.176, a Fibonacci retracement. Clearance of this retracement would strengthen bullish conditions and open 112.265 further out, the Dec 20 high. The trend condition is bearish though and a deeper pullback would refocus attention on key support at 111.890.

GILT TECHS: (H2) Resistance Still Intact

• RES 4: 124.80 50.0% retracement of the Dec 8 - Jan 19 downleg
• RES 3: 124.37 50-day EMA
• RES 2: 124.17 Low Nov 24
• RES 1: 123.79 High Jan 13 and a key near-term resistance
• PRICE: 122.62 @ Close Jan 27
• SUP 1: 121.93 Low Jan 19 and the bear trigger
• SUP 2: 121.61 Low Nov 13 2018 (cont)
• SUP 3: 121.34 3.0% Lower Bollinger Band
• SUP 4: 121.12 Low Nov 8 2018 (cont)

Recent price action in Gilt futures has defined 121.93, Jan 19 low, as a key support and bear trigger. Bearish trend conditions remain intact and short-term gains are considered corrective. Firm resistance is seen at 123.79, Jan 13 high. A break of this level is required to signal a short-term base and allow for a stronger corrective bounce towards 124.37, the 50-day EMA. An extension lower would refocus attention on 121.93 again.

BTP TECHS: (H2) Volatile Price Action

• RES 4: 148.02 High Dec 29
• RES 3: 147.39 50-day EMA
• RES 2: 146.80 High Jan 14 and key short-term resistance
• RES 1: 146.49 High Jan 24
• PRICE: 145.81 @ Close Jan 27
• SUP 1: 144.54 Low Jan 27
• SUP 2: 144.08 3.00 proj of the Dec 6 - 18 - 14 price swing
• SUP 3: 143.57 3.236 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 143.26 3.382 proj of the Dec 6 - 18 - 14 price swing

Trend conditions in BTP futures remain bearish however the contract is trading in a volatile manner. Futures traded down to 144.54 - a fresh trend low - before rebounding sharply higher. The primary direction is down though following the recent breach of 145.12, Jan 10 low, that confirmed a resumption of the trend to maintain a price sequence of lower lows and lower highs. This opens 144.08, a Fibonacci projection. Key resistance is at 146.80.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Volatile, Outlook Remains Bearish Though

• RES 4: 4392.50 High Nov 18 and key resistance
• RES 3: 4381.50 High Jan 5 and the bull trigger
• RES 2: 4324.50.50 High Jan 13
• RES 1: 4215.50/4218.50 High Jan 24 / 50-day EMA
• PRICE: 4164.00 @ 05:50 GMT Jan 28
• SUP 1: 3990.50 Low Jan 24
• SUP 2: 3980.00 Low Nov 30 2021
• SUP 2: 3935.00 Low Oct 6 2021
• SUP 4: 3895.00 Low Jul 19 2021 (cont)

EUROSTOXX 50 futures remain vulnerable and volatile. Monday’s sell-off reinforced the bearish threat. Former support at 4216.50, Jan 10 low has been cleared and this resulted in the break of a number of short-term support levels. The focus is on 3980.00, Nov 30 low and 3935.00, Oct 6 low. Both are important supports and a break would threaten a deeper sell-off. Initial resistance is at Monday’s high of 4215.50. Gains are considered corrective.

E-MINI S&P (H2): Volatile Price Action

• RES 4: 4739.50 High Jan 12
• RES 3: 4671.75 High Jan 18
• RES 2: 4587.64 50-day EMA
• RES 1: 4446.25/4485.75 High Jan 26 / Low Dec 3
• PRICE: 4347.25 @ 06:43 GMT Jan 28
• SUP 1: 4212.75 Low Jan 24 and the bear trigger
• SUP 2: 4200.00 Round number support
• SUP 3: 4186.57 23.6% of the Mar ‘20 - Jan ‘22 major rally
• SUP 4: 4126.75 Low Jun 21, 2021 (cont)

S&P E-minis remain volatile and continue to trade above Monday’s low of 4212.75. This week’s price action is allowing the recent oversold reading to unwind. Initial resistance to watch is Wednesday’s high of 4446.25, Jan 26 high. The trigger for a resumption of bearish activity is 4212.75 low. Price action is likely to remain choppy near-term, however from a trend perspective, the direction remains down.

COMMODITIES

BRENT TECHS: (H2) Northbound

• RES 4: $95.00 Round number resistance
• RES 3: $93.89 - 2.236 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $91.29 - 2.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $91.04 - High Jan 28
• PRICE: $89.75 @ 06:51 GMT Jan 28
• SUP 1: $87.79 - Low Jan 26
• SUP 2: $85.09/04 - 20-day EMA / Low Jan 24 and key support
• SUP 3: $81.31/80.50 - 50-day EMA / Low Jan 10
• SUP 4: $77.04 - Low Jan 3 and key support

Brent futures have resumed their uptrend this week following Wednesday's climb above former resistance at $89.50, the Jan 19 high. This maintains the bullish price sequence of higher or higher highs and higher lows and moving average conditions remain in a bull mode. $90.00 has been probed and the focus is on $91.29, a Fibonacci projection. On the downside, key short-term support has been defined at $85.04, the Jan 24 low.

WTI TECHS: (H2) Bullish Price Sequence

• RES 4: $92.85 - 2.50 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $91.58 - 2.382 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $90.00 - Psychological round number
• RES 1: $88.54 - High Jan 27
• PRICE: $87.16@ 07:04 GMT Jan 28
• SUP 1: $85.01 - Low Jan 26
• SUP 2: $81.94/90 - 20-day EMA / Low Jan 24
• SUP 3: $78.04/77.34 - 50-day EMA / Low Jan 10
• SUP 4: $74.01 - Low Jan 3

The uptrend in WTI futures resumed this week following Wednesday’s break of resistance at $87.10, Jan 20 high. This maintains the bullish price sequence of higher or higher highs and higher lows and moving average conditions remain in a bull mode. Attention is on the psychological $90.00 handle next as price continues to climb. On the downside, key short-term support has been defined at $81.90, the Jan 24 low.

GOLD TECHS: Bear Channel Support Remains Exposed

• RES 4: $1877.2 - High Nov 16 and key resistance
• RES 3: $1871.0 - High Nov 18
• RES 2: $1853.9 - High Jan 25 and the bull trigger
• RES 1: $1822.2 - High Jan 27
• PRICE: $1796.8 @ 07:11 GMT Jan 28
• SUP 1: $/1749.9/1791.9 - Channel base from Aug 9 low / Low Jan 27
• SUP 2: $1782.8 - Low Jan 7
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

The rally in gold has stalled. The sharp sell-off once again exposes support at the base of the bull channel that intersects at $1794.9 - the channel is drawn off the Aug 9 low. A clear break of the channel base would highlight a bearish threat and a more significant reversal. This would signal potential for weakness towards $1782.8, the Jan 7 low. For bulls, a break of $1853.9, Jan 25 high is required to reinstate the recent bull theme.

SILVER TECHS: Strong Bearish Reversal

• RES 4: $25.406 - High Nov 16
• RES 3: $24.886 - High Nov 22
• RES 2: $23.994/24.700 - High Jan 25 / High Jan 20
• RES 1: $23.599 - High Jan 27
• PRICE: $22.656 @ 07:23 GMT Jan 28
• SUP 1: $22.409 - Trendline drawn from the Dec 15 low
• 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 has reversed the recent bullish theme following this week’s sharp sell-off that accelerated yesterday. The metal has breached former support at $22.809, Jan 17 low signalling scope for a deeper retracement. This opens $22.409, a trendline support drawn from the Dec 15 low. A break would reinforce the bearish threat. On the upside, initial resistance is seen at Thursday’s high of $23.599.