MNI DAILY TECHNICAL ANALYSIS - Oil Correction Underway

Price Signal Summary – Oil Correction Underway, Breaches Trendline Support

• In the equity space conditions deteriorated Thursday as E-mini S&P bulls fail to make any material test on the 4,000 level. Support to watch is at 3886.03, the 20-day EMA.
• In the FX space:
  • EURUSD resistance at 1.1990, Mar 11 high remains intact. This level represents the trigger for a stronger S/T recovery. Note, Wednesday's price action is a bullish engulfing candle and does highlight the potential for stronger gains. A break of 1.1990 would open 1.2067 Mar 4 high. Support is at 1.1883, Mar 16 low. A break would negate the pattern and expose key support at 1.1836, Mar 9 low.
  • USDJPY remains in an uptrend. The focus is on 109.56, 61.8% of the Mar 2020 - Jan downleg and an important pivot resistance. Support is at 108.34 Mar 10 low.
  • USDCAD extends the sell-off from Mar 5 with a fresh trend low this week. This confirms a resumption of the downtrend with attention on 1.2307, the lower band of a moving average envelope.
• On the commodity front, Gold is off yesterday's lows. A bullish outlook remains intact and scope is seen for a climb towards the 50-day EMA at $1786.7. Firm short-term support has been defined at $1699.3, Mar 12 low. In oil, a correction is underway, and trendline support has been breached. An extension lower for Brent would open $57.31, the Feb 12 low and WTI targets round number support at $60/bbl.
• In the FI space, Bunds (M1) traded under pressure and showed below support at 170.72, Mar 5 low. With resistance at 172.20, Mar 11 high intact, further weakness is likely near-term. 170.37, 61.8% of the Feb 25 - Mar 11 rally marks the next objective. Gilts (M1) have registered a fresh trend low print confirming a resumption of the downtrend. The focus is on 126.85 May 3, 2019 low (cont). Treasuries are offered once again as the downtrend extends. The focus is on 131-00 next.

FOREIGN EXCHANGE

EURUSD TECHS: Bullish Engulfing Candle Still In Play

• RES 4: 1.2113 High Mar 3
• RES 3: 1.2067 High Mar 4
• RES 2: 1.2040 50-day EMA
• RES 1: 1.1989/90 High Mar 18 / 11 and the short-term bull trigger
• PRICE: 1.1937 @ 05:45 GMT Mar 19
• SUP 1: 1.1883 Low Mar 16
• SUP 2: 1.1851/36 200-DMA / Low Mar 9 and the bear trigger
• SUP 3: 1.1800 Low Nov 23
• SUP 4: 1.1752 1.236 proj of the Jan 6 - Feb 5 - Feb 25 price swing

EURUSD was weaker yesterday as the pair retraced Wednesday gains. Attention is on Wednesday's price pattern, a bullish engulfing reversal candle. It suggests the recent pullback between Mar 12 - 16 has been a correction and that a bullish theme has returned. The pair still needs to clear resistance at 1.1990, Mar 11 high to strengthen the argument for bulls. This would open 1.2067, Mar 4 high. Support to watch is at 1.1883, Mar 16 low.

GBPUSD TECHS: Focus Is On The Bull Channel Base

• RES 4: 1.4237 High Feb 24 and the bull trigger
• RES 3: 1.4182 High Feb 25
• RES 2: 1.4062 61.8% retracement of the Feb 24 - Mar 5 low
• RES 1: 1.4005 High Mar 12 and key near-term resistance
• PRICE: 1.3917@ 05:58 GMT Mar 19
• SUP 1: 1.3808 50-day EMA
• SUP 2: 1.3797/79 Channel base from Nov 2, 2020 low / Low Mar 8
• SUP 3: 1.3663 Low Feb 5
• SUP 4: 1.3567 Low Feb 4

GBPUSD remains below resistance at 1.4005, Mar 12 high. Attention is still on support at 1.3779, Mar 5 low ahead of a key bull channel support that intersects at 1.3797. The channel is drawn off the Nov 2, 2020 low and a clear break of both support levels would represent an important short-term reversal. This would open the 1.3600 handle and below. For bulls, a break of 1.4005 is needed to signal scope for stronger gains.

EURGBP TECHS: Bearish Conditions Dominate

• RES 4: 0.8797 High Feb 9
• RES 3: 0.8731 High Feb 26 and the S/T bull trigger
• RES 2: 0.8668 High Mar 3
• RES 1: 0.8640 High Mar 16
• PRICE: 0.8566 @ 06:05 GMT Mar 19
• SUP 1: 0.8533 Low Mar 18 and bear trigger
• SUP 2: 0.8522 Low Feb 28
• SUP 3: 0.8489 3.0% Lower Bollinger Band
• SUP 4: 0.8430 Low Feb 27

EURGBP traded slightly lower Thursday, retaining the bearish outlook. Technical signals continue to highlight a downtrend and attention is on yesterday's 0.8533 low. A clear break would resume the trend and expose 0.8489, a volatility based support area. On the upside, firm short-term resistance is at 0.8731, Feb 26 high. A break would allow for a stronger bounce and open 0.8797, Feb 9 high. Initial resistance is 0.8640.

USDJPY TECHS: Consolidating At Recent Highs

• RES 4: 110.63 0.764 proj of Mar - Apr 2020 rally from Jan 6 low
• RES 3: 109.85 High Jun 5, 2020
• RES 2: 109.70 High Jun 8, 2020
• RES 1: 109.56 61.8% retracement of the Mar 2020 - Jan downleg
• PRICE: 108.87 @ 06:13 GMT Mar 19
• SUP 1: 108.34 Low Mar 10 and key near-term support
• SUP 2: 107.82 Low Mar 5
• SUP 3: 107.75 20-day EMA
• SUP 4: 106.97 Low Mar 4

USDJPY is unchanged and the pair continues to trade closer to recent highs. Trend conditions remain bullish. The focus is on 109.56, a key retracement where a break would reinforce current sentiment. Momentum studies are still overbought, however this is not having an impact on the trend and instead, continues to reinforce the current bullish mood. Support to watch is at 108.34, Mar 10 low. A break would signal a possible top and the start of a correction.

EURJPY TECHS: Bullish Despite Pullback

• RES 4: 132.06 76.4% of the Mar 2018 - May 2020 downtrend
• RES 3: 131.58 High Oct 4 2018
• RES 2: 131.22 1.236 proj of the Jun - Sep - Oct 2020 price swing
• RES 1: 130.67 High Mar 18
• PRICE: 129.71 @ 06:26 GMT Mar 19
• SUP 1: 129.49 Low Mar 16
• SUP 2: 128.78 Low Mar 8 and key near-term support
• SUP 3: 128.19 Low Mar 2
• SUP 4: 128.00 50-day EMA

EURJPY maintains a bullish tone despite yesterday's move lower. The breach on Mar 12 of 129.98, the bull trigger and the Feb 25 high confirms a resumption of the uptrend and sets the scene for a climb towards 131.22, a Fibonacci projection. Moving average conditions continue to point north, reinforcing the current trend direction. Support is at 129.49, Mar 16 low. A break of this level would alter the near-term outlook.

AUDUSD TECHS: Stalls At Yesterday's High

• RES 4: 0.8044 High Feb 2, 2018
• RES 3: 0.8007 High Feb 25 and the bull trigger
• RES 2: 0.7916 76.4% retracement of the Feb 25 - Mar 9 low
• RES 1: 0.7849/60 High MAr 18 / 61.8% of the Feb 25 - Mar 9 low
• PRICE: 0.7752 @ 06:40 GMT Mar 19
• SUP 1: 0.7699 Low Mar 17
• SUP 2: 0.7669 Low Mar 10
• SUP 3: 0.7621 Low Mar 9 and the bear trigger
• SUP 4: 0.7583 Low Feb 5

AUDUSD found resistance yesterday at 0.7849. This level marks an important intraday bull trigger where a break is required to reinforce the recent bullish cycle and suggest scope for an extension higher. This would open 0.7860, a Fibonacci retracement and beyond. On the downside, support to watch is at 0.7699, Mar 17 low. A break would expose the key support and bear trigger at 0.7621, Mar 9 low.

USDCAD TECHS: Bearish Extension

• RES 4: 1.2749 High Feb 26 and the bull trigger
• RES 3: 1.2700 High Mar 8
• RES 2: 1.2625 High Mar 11
• RES 1: 1.2527 High Mar 18
• PRICE: 1.2496 @ 06:47 GMT Mar 19
• SUP 1: 1.2365 Low Mar 18
• SUP 2: 1.2336 1.00 proj of the Jan 28 - Feb 25 - Feb 26 price swing
• SUP 3: 1.2289 2.0% 10-dma envelope
• SUP 4: 1.2278 Trendline Drawn From May 2015 Low

USDCAD remains vulnerable despite yesterday's recovery from the day low. The pair has this week cleared key support at 1.2468, Feb 25 low and a recent bear trigger. This confirms a resumption of the underlying downtrend with attention on 1.2289, the lower band of a moving average envelope. On the upside, initial resistance is at 1.2527, Mar 18 high. Key trend resistance is at 1.2749, Feb 26 high.

FIXED INCOME

BUND TECHS: (M1) Vulnerable

• RES 4: 172.83 Low May 5
• RES 3: 175.51 High Feb 16
• RES 2: 172.20 High Mar 11 and the bull trigger
• RES 1: 171.47 High Mar 18
• PRICE: 171.07 @ 05:00 GMT Mar 19
• SUP 1: 170.52 Low Mar 18
• SUP 2: 170.37 61.8% retracement of the Feb 25 - Mar 11 rally
• SUP 3: 169.94 76.4% retracement of the Feb 25 - Mar 11 rally
• SUP 4: 169.24 Low Feb 25 and the bear trigger

Bund futures were under pressure again yesterday. The contract has breached support at 170.72, Mar 5 low signalling scope for a deeper retracement. Attention turns to 170.37 and 169.94, two Fibonacci retracements. A break of the latter would open the key support at 169.24, Feb 25 low and the bear trigger. Key resistance remains 172.20, the Mar 11 high where a break is required to highlight a reversal.

BOBL TECHS: (M1) Resistance Remains Intact

• RES 4: 135.700 High Dec 11 (cont)
• RES 3: 135.580 High Feb 11
• RES 2: 135.270 Low Feb 8
• RES 1: 135.220 High Mar 16 and the bull trigger
• PRICE: 135.040 @ 05:04 GMT Mar 19
• SUP 1: 134.730 Low Mar 1
• SUP 2: 134.660 50.0% retracement of the Feb 26 - Mar 11 high
• SUP 3: 134.537 61.8% retracement of the Feb 26 - Mar 11 high
• SUP 4: 134.537 76.4% retracement of the Feb 26 - Mar 11 high

Bobl futures Tuesday probed a key short-term resistance at 135.180, Mar 11 high where a clear break is required to trigger stronger gains. A clear break would pave the way for strength towards 135.270 initially, Feb 8 low. A failure at this resistance though would keep the current bearish focus intact and fresh weakness would suggest scope for a test of 134.730, Mar 1 low and the trigger for a move towards 134.140, Feb 26 low.

SCHATZ TECHS: (M1) Consolidating

• RES 4: 112.250 High Feb 15 (cont)
• RES 3: 112.213 50-day EMA (cont)
• RES 2: 112.154 20-day EMA (cont)
• RES 1: 112.125 High Mar 1 and 2
• PRICE: 112.100 @ 05:11 GMT Mar 19
• SUP 1: 112.045 Low Mar 1
• SUP 2: 112.033 50.0% retracement of the Feb 26 - Mar 2 rally
• SUP 3: 112.011 61.8% retracement of the Feb 26 - Mar 2 rally
• SUP 4: 111.984 76.4% retracement of the Feb 26 - Mar 2 rally

Schatz futures are unchanged and the contract continues to consolidate. The underlying bear trend remains intact though. However, the recent recovery from 111.940, Feb 26 low, means this market remains in a corrective phase. Short-term resistance is at 112.125, Mar 1/2 high. A break would signal scope for stronger gains. On the downside, a pullback would suggest scope for a return to 111.940, Feb 26 low and the bear trigger.

GILT TECHS: (M1) Bear Trend Extends

• RES 4: 129.75 High Feb 19
• RES 3: 129.27 High Mar 2 and the key resistance
• RES 2: 128.33 High Mar 16
• RES 1: 127.34 High Mar 18
• PRICE: 127.14 @ Close Mar 18
• SUP 1: 126.79 Low Mar 18
• SUP 2: 126.55 Low Apr 17, 2019 (cont)
• SUP 3: 126.00 Round number support
• SUP 4: 125.07 High Dec 10, 2018

Gilt futures remain bearish and the contract traded lower yesterday, confirming once again a resumption of the downtrend. The move lower maintains the bearish price sequence of lower lows and lower highs and with moving average studies also pointing south, further downside is likely. The move below 127.00 opens 126.55 next, Apr 17, 2019 low (cont). On the upside, initial firm resistance has been defined at 128.33, Mar 16 high.

BTP TECHS: (M1) Bearish Focus

• RES 4: 151.33 1.618 proj of the Feb 26 - Mar 3 - Mar 5 price swing
• RES 3: 151.05 1.50 proj of the Feb 26 - Mar 3 - Mar 5 price swing
• RES 2: 150.69 76.4% retracement of the Feb 12 - 26 sell-off
• RES 1: 150.01/39 High Mar 16 / High Mar 11
• PRICE: 148.83 @ Close Mar 18
• SUP 1: 148.36 Low Mar 10
• SUP 2: 148.20 61.8% retracement of the Feb 26 - Mar 11 rally
• SUP 3: 147.56 Low Mar 5
• SUP 4: 146.84 Low Feb 26 and the bear trigger

BTP futures traded lower yesterday. This week's sell-off appears to be an early indication that the recent corrective rally between Feb 26 - Mar 11 has run its course. Resistance has been defined at 150.39, Mar 11 high and note that the pivotal 150.69 level also remains intact, 76.4% of the Feb 12 - 26 sell-off. Continued weakness would open 147.56, the Mar 5 low. For bulls, a break of 150.39 is required to reinstate a bullish focus.

EQUITIES

EUROSTOXX 50 Techs: Fresh Trend High

• RES 4: 3926.56 1.764 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 3: 3900.30 High May 2008
• RES 2: 3889.08 1.618 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 1: 3874.91 High Mar 18
• PRICE: 3867.54 @ Close Mar 18
• SUP 1: 3818.20 Low Mar 15
• SUP 2: 3780.00 Low Mar 10
• SUP 3: 3742.53 High Feb 15 and recent breakout level
• SUP 4: 3656.21 Low Mar 5 and the key near-term support

EUROSTOXX 50 traded higher yesterday and bullish conditions remain intact. The breach on Mar 8 of 3742.53, Feb 15 high confirmed a resumption of the underlying uptrend. This maintains the bullish price sequence of higher highs and higher lows. The focus is on 3889.08 next, a Fibonacci projection. Initial firm support is seen at 3818.20, the Mar 15 low. A move below this level would highlight potential for a deeper pullback.

COMMODITIES

BRENT TECHS: (K1) Correction Underway

• RES 4: $71.38 - High Mar 5
• RES 3: $70.03 - High Mar 15
• RES 2: $68.15 - High Mar 18
• RES 1: $65.92 - 20-day EMA
• PRICE: $62.57 @ 06:46 Mar 19
• SUP 1: $61.45 - Low Mar 18 - Low Mar 10
• SUP 2: $60.00 - Round number support
• SUP 3: $58.56 - 38.2% retracement of the Nov 2 - Mar 8 rally
• SUP 4: $57.09 - High Jan 13

Brent crude futures sold off sharply yesterday and this confirms a correction is underway. The trend condition is overbought and a pullback is allowing this to unwind. Yesterday's sell-off breached trendline support drawn off the Nov 2, 2020 low and this reinforces the current bearish theme. Price is testing the 50-day EMA too, a clear break of the average would open $60.00 and $58.56, 38.2% of the Nov 2 - Mar 8 rally. Resistance is seen at $65.92.

WTI TECHS: (J1) Corrective Cycle

• RES 4: $67.98 - High Mar and the bull trigger
• RES 3: $66.40 - High Mar 15
• RES 2: $64.82 - High Mar 18
• RES 1: $62.68 - 20-day EMA
• PRICE: $59.37 @ 06:58 Mar 19
• SUP 1: $58.20 - Low Mar 18
• SUP 2: $57.31 - Low Feb 12
• SUP 3: $55.58 - 38.2% retracement of the Nov 2 - Mar 8 rally
• SUP 4: $53.79 - High Jan 15

WTI futures sold off sharply yesterday confirming a corrective cycle. The trend condition is overbought and the pullback is allowing this to unwind. Yesterday's sell-off breached trendline support drawn off the Nov 2, 2020 low and this reinforces the current bearish theme. Price is also testing the 50-day EMA too, a clear break of the average would open $55.58, the 38.2% retracement of the Nov 2 - Mar 8 rally. Resistance is at $62.68.

GOLD TECHS: Needle Still Points North

• RES 4: $1816.0 - High Feb 23
• RES 3: $1805.7 - High Feb 25
• RES 2: $1784.7 - 50-day EMA
• RES 1: $1755.5 - High Mar 18
• PRICE: $1741.3 @ 07:12 GMT Mar 19
• SUP 1: $1719.3 - Low Mar 18
• SUP 2: $1699.3 - Low Mar 12
• SUP 3: $1676.9 - Low Mar 8 and the bear trigger
• SUP 4: $1671.0 - Low Jun 5, 2020

Gold maintains a firmer tone. Price action on Mar 9 suggested Gold had found a base. Activity on this day was a bullish engulfing candle and the pattern is still in play. The candle signals scope for a stronger short-term correction and with the 20-day EMA breached, attention turns to the 50-day EMA at $1784.7. Firm short-term support has been defined at $1699.3, Mar 12 low.

SILVER TECHS: Gains Considered Corrective

• RES 4: $28.328 - High Feb 23 and key resistance
• RES 3: $27.595 - High Feb 26
• RES 2: $27.081 - High Mar 1 and firm near-term resistance
• RES 1: $26.636 - High Mar 18
• PRICE: $26.163 @ 07:17 GMT Mar 19
• SUP 1: $25.391 - Low Mar 12
• SUP 2: $24.836/700 - Low Mar 5 / Low Jan 27
• SUP 3: $24.057 - Jan 18 low and a key support
• SUP 4: $23.524 - Low Dec 7

Silver is trading closer to recent highs. Short-term gains though are likely a correction. A bearish risk remains intact and the recent sell-off between Feb 23 - Mar 5 reinforces this theme. A former key support at $25.905, Feb 4 low has also recently been cleared and this sets the scene for a deeper pullback exposing $24.700, Jan 27 low ahead of the Jan 18 low at $24.057. On the upside, firm near-term resistance is seen at $27.081, Mar 1 high.