MNI DAILY TECHNICAL ANALYSIS - Intraday Vol Reinforces Fragility of Equities

Price Signal Summary - Intraday Volatility Reinforces Fragility of Equities

• In the equity space, S&P E-minis remains vulnerable, with corrective intraday rallies proving particularly shallow. 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 despite the Wednesday 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.
• In FX, EURUSD steadied Wednesday but has traded in a volatile manner overnight. The outlook remains modestly positive, however, having narrowed the gap with next resistance at the Feb11 high of 1.1401. GBPUSD traded slightly higher Wednesday, having recovered from a brief slip lower on Tuesday. The rate continues to trade inside its recent range and importantly above support at 1.3491, Feb 7 low.
• On the commodity front, the Gold rally paused Tuesday before prices regained some poise into the Wednesday close. The recent clearance of resistance at $1853.9, the Jan 25 high reinforces the underlying bullish condition and Tuesday’s show above $1877.2, the Nov 16 high adds to the bullish case. Strength across WTI futures resumed Wednesday, with the dip seen earlier in the week largely reversed - confirming that weakness is currently corrective in nature.
• In the FI space, Bund futures appear vulnerable and the downtrend remains firmly intact. The focus is on the 164.00 handle. The Gilts trend needle still points south and the contract has delivered another fresh cycle low today of 119.39. Price is approaching the 119.36 level, Oct 10, 2018 low (cont). A break would open 119.06, the 2.500 projection of the Jan 13 - 19 - 24 price swing.

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: 1.1357 @ 09:06 GMT Feb 17
• 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 steadied Wednesday but has traded in a volatile manner overnight. The outlook remains modestly positive, however, having narrowed the gap with next resistance at the Feb11 high of 1.1401. To the downside, any continuation lower together with a breach of the next support at 1.1267, Feb 2 low, would signal scope for a deeper retracement of recent gains. On the upside, key short-term resistance is at last Thursday’s high of 1.1495. A break of this level is required to confirm a resumption of the recent upleg and would remove bearish concerns.

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: 1.3644 High Feb 10
• PRICE: 1.3584 @ 09:08 GMT Feb 17
• 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 Wednesday, having recovered from a brief slip lower 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. This is the trigger for a resumption of bearish pressure.

EURGBP TECHS: Remains Below Its Key EMAs

• 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: 0.8355 @ 09:10 GMT Feb 17
• 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 pulled back sharply late last week but has stabilised slightly since. The cross is also below both the 20- and 50-day EMAs. Despite the pullback, the S/T outlook still appears bullish following the Feb 3 rebound from a major area of support at 0.8300, a multi-year range base since 2016 and 0.8282/77, the Feb’20 and Dec’19 lows. A rebound would again open 0.8480, a Fibonacci retracement. The next support to watch is 0.8331, a Fibonacci retracement.

USDJPY TECHS: Key S/T Resistance Remains Exposed

• 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: 115.05 @ 09:11 GMT Feb 17
• SUP 1: 114.99 Low Feb 11
• SUP 2: 114.65 50-day EMA
• SUP 3: 114.16 Low Feb 02
• SUP 4: 113.47 Low Jan 24 and key support

USDJPY remains below last week’s highs. The outlook is bullish following recent gains through resistance at 115.67/68, 76.4% of the Jan 4 - 24 downleg and the Jan 28 high. Attention is on key resistance at 116.35, Jan 4 high and the bull trigger. A clear break of this hurdle would resume the uptrend and pave the way for a climb towards 117.08, a projection of the Apr 23 - Jul 2 - Aug 4 price swing. Initial support is seen at 115.01.

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: 130.43 @ 09:13 GMT Feb 17
• 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 has partially reversed early Thursday, 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: Shooting Star Candle Still In Play

• 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: 0.7192 @ 09:23 GMT Feb 17
• 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 reversed lower from last Thursday’s high of 0.7249 into the Monday low of 0.7086. The pullback means the pair has failed to remain above the 50-day EMA and this is seen as an early warning of a possible stronger reversal. Last Thursday’s candle was a shooting star - a bearish signal. A deeper pullback would expose 0.7052, Feb 4 low. A break here would open 0.6968/6963, the Jan 28 and Jul 16, 2020 lows. Clearance of 0.7249 is required to reinstate a bullish theme.

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: 1.2707 @ 09:25 GMT Feb 17
• 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) Bearish, Despite Bounce Into Close

• 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: 165.26 @ 16:31 GMT Feb 16
• 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, but the broader outlook remains bearish for now. Downside pressure so far this month has reinforced current trend conditions and maintained the bearish price sequence of lower lows and lower highs. Moving average conditions are in a bear mode set-up too, highlighting current sentiment. The focus is on the 164.00 handle next. 166.46 is initial resistance, the Feb 11 high.

BOBL TECHS: (H2) Bearish Focus

• 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: 130.770 @ 16:42 GMT Feb 16
• 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 traded above recent lows throughout the Wednesday session, but 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: 111.760 High Feb 11
• PRICE: 111.625 @ 16:46 GMT Feb 16
• 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, with few fresh technical signals on Wednesday. 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) New 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: 120.13 @ Close Feb 16
• 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 trend condition in Gilt futures is unchanged and remains bearish, with Wednesday trade seeing fresh lows of 119.32. Continued weakness reinforces bearish conditions and extends the bearish price sequence of lower lows and lower highs. Furthermore, moving averages are 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) Heading South

• 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: 139.06 @ Close Feb 16
• 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)

BTP futures remain soft and the contract traded lower at the open Wednesday, extending recent poor performance. This keeps the outlook bearish. Continued selling pressure has again confirmed a resumption of the underlying downtrend and maintains the bearish price 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): Corrective Rallies Prove Shallow

• 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: 4446.00 @ 17:09 GMT Feb 16
• 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

S&P E-minis remains vulnerable, with corrective intraday rallies proving particularly shallow. 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. The Feb 10 candle pattern is a bearish engulfing reversal, signalling a potential top and the recent move lower reinforces the pattern. This has exposed 4212.75.

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: 4124.50 @ 17:46 GMT Feb 16
• 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 Wednesday 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) Tilted Higher Again

• 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: $95.55 @ 17:54 GMT Feb 16
• 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 resumed their recent strength Wednesday, rallying well into the NY close. The recent rally confirms the underlying uptrend, with the break higher also resuming the bullish price sequence of higher highs and higher lows. Note too that corrections remain shallow 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) Dip Proves Corrective

• 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: $94.37 @ 17:56 GMT Feb 16
• 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

Strength across WTI futures resumed Wednesday, with the dip seen earlier in the week largely reversed - confirming that weakness is currently corrective in nature. 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: Regains Some Poise

• 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: $1881.6 - 1.00 proj of the Dec 15 - Jan 25 - 28 price swing
• PRICE: $1868.8 @ 17:59 GMT Feb 16
• 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 paused Tuesday before prices regained some poise into the Wednesday close.The recent clearance of resistance at $1853.9, the Jan 25 high reinforces the underlying bullish condition and Tuesday’s show above $1877.2, the Nov 16 high adds to the bullish case. The break suggests scope for a stronger climb within the bull channel drawn off the Aug 9 low. A recent attempt at clearing the channel base failed, resulting in the current rally. The focus is on $1903.8, the Jun 8 2021 high.

SILVER TECHS: Returns to 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: $23.652 @ 18:02 GMT Feb 16
• 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 very slightly lower on the week, but have recovered front the lowest levels seen on Tuesday. 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.