MNI DAILY TECHNICAL ANALYSIS - Oil Breaches Resistance As Bounce Extends

Price Signal Summary - Oil Breaches Resistance As Bounce Extends

• In the equity space, S&P E-Minis short-term gains are considered corrective and the primary trend direction remains down. Last week’s continuation lower and fresh cycle lows, reinforce the downtrend and signal scope for a continuation lower. The next objective is 3843.25, the Mar 25 2021 low (cont). In terms of resistance, the key short-term level is 4303.50, the Apr 26/28 high. Initial firm resistance is at 4099.00, the May 9 high. The primary trend direction in the EUROSTOXX 50 futures remains down. However, the contract is currently in a corrective cycle following the recovery from 3466.00, May 10 low. Price is trading at its recent highs ahead of the next resistance at 3740.30, the 50-day EMA. A clear break of this EMA would improve a short-term bullish theme. On the downside, key support and the bear trigger is 34666.00.
• In FX,EURUSD remains in a downtrend and short-term gains are considered corrective. The pair traded lower last Thursday and cleared support at 1.0472, Apr 28 low - confirming a bear flag breakout and a resumption of the primary downtrend. The focus is on 1.0341, the Jan 3 2017 low and a key support. Resistance is at 1.0583, the 20-day EMA. GBPUSD is firmer today and the pair has traded cleared 1.2406, the May 9 high. This improves short-term conditions for bulls. Attention is on the next resistance at 1.2512, the 20-day EMA, where a break would open 1.2638, the May 4 high and a key resistance. On the downside, key support has been defined at 1.2156, May 13 low. This is also the bear trigger. The USDJPY primary uptrend remains intact and last week’s move lower is likely a correction. Initial support has been defined at 127.52, May 12 low. A resumption of gains would refocus attention on the bull trigger at 131.35, May 9 high. A break would open 131.96, the 1.00 projection of the Feb 24 - Mar 28 - 31 price swing.
• On the commodity front, Gold remains vulnerable following last week’s resumption of the downtrend and short-term gains are considered corrective. The yellow metal traded through the $1800.0 handle Monday. The focus is on $1780.4, the Jan 28 low. In the Oil space, WTI futures started the week on a firmer note, trading higher Monday. The contract has breached resistance at $111.37. May 5 high and this has improved the outlook for bulls. Note that $113.51, the Mar 24 high has also been cleared. A continuation higher would open $120.00 and the key resistance and trend high of $121.17, Mar 7 high.
• In the FI, Bund futures remain in a downtrend and recent gains are considered corrective. A fresh cycle low on May 9 reinforced the bearish condition. A resumption of weakness would refocus attention on 150.49, the bear trigger. Firm trend resistance is 156.00, the Apr 28 high. The broader trend condition in Gilts remains down. However, last week’s gains resulted in a break of resistance at 119.79, the Apr 25 high. This signals potential for a stronger short-term corrective bounce and opens 121.84 next, 50.0% of the Mar 1 - May 9 bear leg. Key support has been defined at 116.87, May 9 low.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Needle Pointing South

• RES 4: 1.0852 High Apr 22
• RES 3: 1.0758 Low Apr 14 and a recent breakout level
• RES 2: 1.0642 High May 5 and key short-term resistance
• RES 1: 1.0529/0583 High May 12 / 20-day EMA
• PRICE: 1.0447 @ 06:22 BST May 17
• SUP 1: 1.0350 Low May 13 and the bear trigger
• SUP 2: 1.0341 Low Jan 3 2017 and a key support
• SUP 3: 1.0333 1.236 proj of the Feb 10 - Mar 7 - 31 price swing
• SUP 4: 1.0296 2.0% 10-dma envelope

EURUSD gains are likely a correction and the trend direction is down. The pair traded to a fresh cycle low Friday, reinforcing current bearish conditions. Support at 1.0472, Apr 28 low, was breached last week. This confirmed a bear flag breakout and a resumption of the downtrend. MA studies remain in a bear mode condition, highlighting current sentiment. The focus is on 1.0341 next, Jan 3 2017 low and key support. Key resistance is 1.0642, May 5 high.

GBPUSD TECHS: Corrective Bounce Extends

• RES 4: 1.2812 50-day EMA
• RES 3: 1.2772 High Apr 26
• RES 2: 1.2638 High May 4 and a key resistance
• RES 1: 1.2512 High May 9 / 20-day EMA
• PRICE: 1.2476 @ 10:00 BST May 17
• SUP 1: 1.2317/2156 Intraday low / Low May 13
• SUP 2: 1.2081 76.4% retracement of the Mar ‘20 - Jun ‘21 uptrend
• SUP 3: 1.2000 psychological round number
• SUP 4: 1.1903 1.00 proj of the Apr 14 - 28 - May 4 price swing

GBPUSD is firmer today and the pair has traded through resistance at 1.2406, the May 9 high. The break higher improves short-term conditions for bulls, and signals scope for a stronger short-term recovery. Attention is on the next resistance at 1.2512, the 20-day EMA, where a break would open 1.2638, the May 4 high and a key resistance. On the downside, key support has been defined at 1.2156, May 13 low. This is also the bear trigger.

EURGBP TECHS: Bear Leg Extends And Trades Through Its EMAs

• RES 4: 0.8658 High Sep 29 2021
• RES 3: 0.8643 High Sep 30 2021
• RES 2: 0.8534/8619 High May 16 / High May 12
• RES 1: 0.8475 Intraday high
• PRICE: 0.8464 @ 06:47 BST May 17
• SUP 1: 0.8391 61.8% retracement of the Apr 14 - May 12 upleg
• SUP 2: 0.8367 Low May 2 and a key support
• SUP 3: 0.8337 76.4% retracement of the Apr 14 - May 12 upleg
• SUP 4: 0.8313 Low Apr 22

EURGBP traded lower Monday and the cross remains weak, as bearish activity continues to dominate. For now, the pullback is considered corrective, however, given the pace of the recent sell-off an extension is likely. Price has traded through its 20- and 50-day EMAs and this exposes support at 0.8367, the May 2 low and a key support. On the upside, a firm short-term resistance has been defined at 0.8534, May 16 high.

USDJPY TECHS: Holding Above Last Week’s Low

• RES 4: 133.11 High Apr 4 2002
• RES 3: 132.39 High Apr 15 2002
• RES 2: 131.96 1.00 proj of the Feb 24 - Mar 28 - 31 price swing
• RES 1: 130.05/131.35 High May 12 / High May 9 and the bull trigger
• PRICE: 129.36 @ 06:51 BST May 17
• SUP 1: 127.52 Low May 12
• SUP 2: 126.95 Low Apr 27 and a key support
• SUP 3: 125.09 Low Apr 14
• SUP 4: 124.01 Low Apr 11

The USDJPY outlook is bullish and the pair remains above 127.52, May 12 low. This level represents the first key support. A resumption of gains and a break above 131.35, May 9 high, would clear the path for 131.96, a Fibonacci projection. A move higher would also maintain a bullish price sequence of higher highs and higher lows and confirm a resumption of the downtrend. Key trend support is unchanged at 126.95, Apr 27 low.

EURJPY TECHS: Head And Shoulders Reversal

• RES 4: 141.06 High Jun 4 2015 and a key resistance
• RES 3: 140.87 0.50 proj of the Mar 7 - 28 - Apr 5 price swing
• RES 2: 138.32/140.00 High May 9 / High Apr 21 and the bull trigger
• RES 1: 136.75 High May 12
• PRICE: 135.20 @ 06:56 BST May 17
• SUP 1: 132.66 Low May 12 and the bear trigger
• SUP 2: 132.40 100-dma
• SUP 3: 132.20 50% retracement of the Mar 7 - Apr 21 bull phase
• SUP 4: 131.59 Low Mar 22

EURJPY fell sharply on May 12 and remains vulnerable. The move lower last week marks an extension of the reversal from Apr 21. The cross has breached a number of important support levels, clearing the 50-day EMA, and the Apr 5 low of 134.30. Furthermore, the move lower highlights a head and shoulders reversal pattern. A continuation lower would open 132.40 initially - the 100-dma. Initial resistance is 136.75, May 12 high.

AUDUSD TECHS: Correction Higher Extends

• RES 4: 0.7266 High May 4/5 and a bull trigger
• RES 3: 0.7209 50-day EMA
• RES 2: 0.7135 Low May 6
• RES 1: 0.7054 High May 11 and key resistance
• PRICE: 0.7007 @ 07:03 BST May 17
• SUP 1: 0.6829 Low May 12 and the bear trigger
• SUP 2: 0.6805 Low Jun 22 2020
• SUP 3: 0.6784 0.764 proj of the Apr 5 - May 2 - 4 price swing
• SUP 4: 0.6759 50.0% retracement of the Mar ‘20 - Feb ‘21 upleg

AUDUSD is firmer again today. Short-term gains are considered corrective and the primary direction remains down. Last week’s fresh cycle lows marked an extension of the reversal from 0.7266, the May 4/5 high and moving average studies remain in bear mode condition. A resumption of weakness would open 0.6805 next, Jun 22 2020 low. Initial firm resistance is seen at 0.7054, the May 11 high.

USDCAD TECHS: Corrective Pullback Extends

• RES 4: 1.3173 High Nov 13 2020 and 2.0% 10-dma envelope
• RES 3: 1.3091 High Nov 24 2020
• RES 2: 1.3077 High May 16 and the bull trigger
• RES 1: 1.2982 Intraday high
• PRICE: 1.2820 @ 07:13 BST May 17
• SUP 1: 1.2749 50-day EMA
• SUP 2: 1.2714 Low May 5 and a key support
• SUP 3: 1.2568 Low Apr 22
• SUP 4: 1.2459 Low Apr 21

USDCAD remains below last week’s high of 1.3077 and has started the week on a bearish note. A pullback is still considered corrective though and the broader outlook is bullish. Recent gains resulted in a breach of 1.2914, May 2 high, and 1.2964, the Dec 20 2021 high. The break of the latter marks an important medium-term bullish development and reinforces the positive outlook, opening 1.3177 next. Key support is at 1.2714, May 5 low.

FIXED INCOME

BUND TECHS: (M2) Primary Trend Direction Remains Down

• RES 4: 157.87 High Apr 7
• RES 3: 156.81 50-day EMA
• RES 2: 156.00 High Apr 28 and a key short-term resistance
• RES 1: 155.33 High May 12
• PRICE: 153.49 @ 05:02 BST May 17
• SUP 1: 151.87/150.49 Low May 11 / Low May 9
• SUP 2: 150.15 0.764 proj of the Mar 7 - 29 - Apr 4 price swing
• SUP 3: 150.00 Psychological round number
• SUP 4: 149.49 Low Jul 13 2015 (cont)

The primary trend direction in Bund futures remains down and last week’s gains are considered corrective. A recent fresh cycle low on May 9 reinforced the bearish condition and confirmed, once again, an extension of the price sequence of lower lows and lower highs - the definition of a downtrend. MA studies remain in a bear mode. A resumption of weakness would refocus attention on 150.49, the bear trigger. Firm trend resistance is at 156.00.

BOBL TECHS: (M2) Corrective Cycle

• RES 4: 129.350 High Apr 4 and a reversal point
• RES 3: 128.830 High Apr 7
• RES 2: 128.616 50-day EMA
• RES 1: 128.380 High May 12
• PRICE: 127.530 @ 05:11 BST May 17
• SUP 1: 126.770/126.010 Low May 11 / Low May 6 and a bear trigger
• SUP 2: 126.00 Round number support
• SUP 3: 125.450 0.618 proj of the Mar 7 - 29 - Apr 4 price swing
• SUP 4: 125.260 Low Apr 24 20014 (cont)

Bobl futures continue to trade above recent lows and the contract remains in a corrective cycle. Price has traded above the 20-day EMA and has recently probed resistance at 128.310, the Apr 14/28 high. A continuation higher would signal scope for a test of the 50-day EMA at 128.616. Gains are still considered corrective and the primary trend direction is down. A resumption of weakness would refocus attention on key support at 126.010.

SCHATZ TECHS: (M2) Eyeing The 50-Day EMA

• RES 4: 111.000 Round number resistance
• RES 3: 110.855 High Apr 4
• RES 2: 110.698 50-day EMA
• RES 1: 110.690 High MAy 13
• PRICE: 110.420 @ 05:06 BST May 17
• SUP 1: 110.210/109.980 Low May 10 / Low May 6 and bear trigger
• SUP 2: 109.777 0.618 proj of the Mar 7 - 30 - Apr 4 price swing
• SUP 3: 109.555 Low Oct 31 2011 (cont)
• SUP 4: 109.340 Low Oct 28 011 (cont)

The primary trend direction in Schatz futures remains down and recent short-term gains are considered corrective. The contract continues to trade above its 20-day EMA and the extension higher last week resulted in a break of 110.540, the Apr 28 high and a key resistance. This opens 110.698 next, the 50-day EMA. A turn lower would refocus attention on the bear trigger at 109.980, May 6 low. A break of this level would resume the downtrend.

GILT TECHS: (M2) Corrective Cycle Still In Play

• RES 4: 122.72 High Mar 18
• RES 3: 122.35 High Apr 4
• RES 2: 121.84 50.0% retracement of the Mar 1 - May 9 bear leg
• RES 1: 121.07 High May 12
• PRICE: 120.27 @ Close May 16
• SUP 1: 119.22 20-day EMA
• SUP 2: 118.25/116.87 Low May 11 / Low May 9 and the bear trigger
• SUP 3: 116.35 Low Dec 30 2015 (cont)
• SUP 4: 115.40 1.00 proj of the Mar 1 - 28 - Apr 4 price swing

The primary trend direction in Gilt futures remains down and last week’s gains are considered corrective. Thursday’s move higher resulted in a break of resistance at 119.79, Apr 25 high. This signals potential for a stronger short-term corrective phase and the move has opened 121.84 next, a Fibonacci retracement. Key support has been defined at 116.87, the May 9 low. This level also represents the bear trigger.

BTP TECHS: (M2) Remains Above Recent Lows

• RES 4: 135.23 High Apr 14
• RES 3: 134.36 50-day EMA
• RES 2: 133.53 High Apr 28
• RES 1: 131.24 High May 12
• PRICE: 129.72 @ Close May 16
• SUP 1: 127.24/125.54 Low May 11 / Low May 9 and the bear trigger
• SUP 2: 125.02 1.236 proj of the Mar 1 - 29 - 31 price swing
• SUP 3: 124.02 Low Mar 18 2020 (cont) and a major support
• SUP 4: 123.41 1.382 proj of the of the Mar 1 - 29 - 31 price swing

The trend condition in BTP futures is bearish and the primary direction remains down. A corrective (bullish) cycle however has been established and the contract has traded above a trendline resistance drawn from the Mar 1 high. Price has also probed its 20-day EMA. This signals scope for a move towards 133.53, Apr 28 high. Key support has been defined at 125.54, the May 9 low and bear trigger.

EQUITIES

EUROSTOXX50 TECHS: (M2) Holding On To Recent Gains

• RES 4: 3944.00 High Mar 29 and a key resistance
• RES 3: 3883.00 High Apr 21
• RES 2: 3775.00 High May 5
• RES 1: 3740.30 50-day EMA
• PRICE: 3690.00 @ 06:01 BST May 17
• SUP 1: 3599.00/3466.00 Low May 13 / Low May 10 and bear trigger
• SUP 2: 3458.90 76.4% retracement of the Mar 7 - 29 rally
• SUP 3: 3400.00 Round number support
• SUP 4: 3309.00 Low Mar 7 and a major support

The primary trend direction in EUROSTOXX 50 futures remains down. However, the contract is currently in a corrective cycle following the recovery from 3466.00, May 10 low. Price is trading at its recent highs and ahead of the next resistance at 3740.30, the 50-day EMA. A clear break of this EMA would improve a short-term bullish theme. On the downside, key support and the bear trigger is 34666.00.

E-MINI S&P (M2): Remains Above Its Recent Lows

• RES 4: 4509.00 High Apr 21
• RES 3: 4393.25 High Apr 22
• RES 2: 4303.50 High Apr 26/28 and a key short-term resistance
• RES 1: 4099.00/4275.94 High May 9 / 50-day EMA
• PRICE: 4025.25 @ 06:56 BST May 17
• SUP 1: 3855.00/3843.25 Low May 12 / Low Mar 25 2021 (cont)
• SUP 2: 3820.25 2.50 proj of the Mar 29 - Apr 18 - 21 price swing
• SUP 3: 3787.74 2.618 proj of the Mar 29 - Apr 18 - 21 price swing
• SUP 4: 3747.52 2.764 proj of the Mar 29 - Apr 18 - 21 price swing

S&P E-Minis short-term gains are considered corrective and the primary trend direction remains down. Last week’s continuation lower and fresh cycle lows, reinforce the primary bearish trend condition and signals scope for a continuation lower. The next objective is 3843.25, the Mar 25 2021 low (cont). In terms of resistance, the key short-term level is 4303.50, the Apr 26/28 high. Initial resistance is at 4099.00, the May 9 high.

COMMODITIES

BRENT TECHS: (N2) Bullish Extension

• RES 4: $123.44 - High Mar 8
• RES 3: $121.13 - 76.4% retracement of the Mar 7 - 15 downleg
• RES 2: $115.76 - High Mar 24 and a bull trigger
• RES 1: $115.14 - Intraday high
• PRICE: $113.99 @ 05:35 BST May 17
• SUP 1: $107.87/101.30 - 20-day EMA / Low May 11
• SUP 2: $99.25 - Low Apr 25 and a key near-term support
• SUP 3: $97.18 - Low Apr 11
• SUP 4: $92.59 - Low Mar 15 and a bear trigger

Brent futures traded higher Monday and in the process managed to breach resistance at $114.00, the May 5 high. This signals potential for an extension higher short-term and has opened $115.76, the Mar 24 high and a bull trigger. A break would open the $120.00 handle. On the downside, key support has been defined at $101.30, the May 11 low. Initial support is seen at $107.87, the 20-day EMA.

WTI TECHS: (M2) Clears Resistance

• RES 4: $121.17 High Mar 7 and the trend high
• RES 3: $120.00 Psychological round number
• RES 2: $118.13 - High Mar 9
• RES 1: $114.98 - Intraday high
• PRICE: $113.77 @ 05:57 BST May 17
• SUP 1: $105.52 20-day EMA
• SUP 2: $101.58/98.20 - 50-day EMA / Low May 11
• SUP 3: $95.28 - Low Apr 25 and a key near-term support
• SUP 4: $92.60 - Low Apr 11 and a key support

WTI futures started the week on a firmer note, trading higher Monday. The contract has breached resistance at $111.37. May 5 high and this has improved the outlook for bulls. Note that $113.51, the Mar 24 high has also been cleared. A continuation higher would open $120.00 and the key resistance and trend high of $121.17, Mar 7 high. On the downside, key short-term support lies at $98.20, May 11 low.

GOLD TECHS: Finds Support - For Now

• RES 4: $1919.9 - High Apr 29 and key resistance
• RES 3: $1909.8 - High May 5
• RES 2: $1873.4 - 20-day EMA
• RES 1: $1858.8 - High May 12
• PRICE: $1828.30 @ 07:18 BST May 17
• SUP 1: $1787.0 - Low May 16
• SUP 2: $1780.4 - Low Jan 28 and a key support
• SUP 3: $1753.7 - Low Dec 15 2021
• SUP 4: $1749.3 - 1.236 proj of the Mar 8 - 29 - Apr 18 price swing

Gold remains vulnerable despite yesterday’s recovery. The yellow metal has traded through the $1800.0 handle. The break of this support sets the scene for an extension lower towards the next key support at $1784.4, the Jan 28 low. Last week’s breach of $1848.8, 76.4% of the Jan 28 - Mar 8 rally, confirmed a resumption of the downtrend. Initial resistance has been defined at $1858.8, the May 12 high ahead of the 20-day EMA at $1873.4.

SILVER TECHS: Retracement Mode

• RES 4: $24.666 - High Apr 22
• RES 3: $23.974 - Low Mar 29
• RES 2: $23.544 - 50-day EMA
• RES 1: $22.596 - 20-day EMA
• PRICE: $21.659 @ 07:27 BST May 17
• SUP 1: $20.464 - Low May 13
• SUP 2: $20.282 - 2.00 proj of the Mar 8 - 29 - Apr 18 price swing
• SUP 3: $20.000 - Psychological round number
• SUP 4: $19.581 - 2.236 proj of the Mar 8 - 29 - Apr 18 price swing

Silver remains bearish despite the bounce from Friday’s low of $20.464. Recent weakness resulted in a break of support at $22.008, the Feb 3 low and a bear trigger. The move lower reinforced the bearish theme and also resulted in a break of $21.427/423, the Dec 15 2021 low and Sep 29 2021 low. Sights are on $20.000 next. Firm short-term resistance is at $22.596, the 20-day EMA.