MNI DAILY TECHNICAL ANALYSIS - Path of Least Resistance Remains Down for Equities

Price Signal Summary – Path of Least Resistance Remains Down for Equities

• The E-Mini S&P technical conditions remain bearish. The moving average set-up and the contracts recent inability to remain above the 50-day EMA - at 4528.69 - suggest the broader path of least resistance remains down. EUROSTOXX 50 futures remain vulnerable despite managing to hold above the Jan 24 low of 3990.50. The 50-day EMA - at 4176.50 - still represents a key resistance where a clear break would suggest scope for a stronger bull reversal.
• In FX, EURUSD is trading higher today leaving the recent low of 1.1280, Feb 14 low intact. The broader outlook remains modestly positive and while support holds, attention is on the next resistance at the Feb16 high of 1.1396. GBPUSD is trading closer to its recent highs and the outlook remains bullish. Support at 1.3487 has remained in place and moving average studies continue to point north. USDJPY continues to trade closer to last week’s lows. The previous bullish outlook has faded for now and price is approaching the 50-day EMA at 114.74. This average represents an important short-term support and a clear break would expose 114.16, the Feb 2 low.
• On the commodity front, Gold remains in an uptrend. The yellow metal's gains puts gold at the best levels since June last year and keeps the trend direction pointed higher. Resistance at $1881.6 has given way, setting the medium-term upside target to $1916.6, the Jun 1 2021 high and a key bull trigger. WTI futures dips remain corrective in nature for now, with the broader outlook still bullish. Recent gains confirmed a resumption of the bullish price sequence of higher highs and higher lows.
• In the FI space, Bund futures traded higher Friday, extending the recovery from the recent 164.34 low on Feb 16. Short-term gains are still deemed corrective, however, with the broader trend signals still pointing south. The medium-term trend condition in Gilt futures remains down, but this market is currently still in a corrective rally. Price has traded above the 20-day EMA and this suggests potential for a climb towards the 122.00 handle and the 50-day EMA at 122.69.

FOREIGN EXCHANGE

EURUSD TECHS: Positive Outlook

• 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: 1.1396/95 High Feb 16 / High Feb 10
• PRICE: 1.1363 @ 05:55 GMT Feb 21
• SUP 1: 1.1280 Low Feb 14
• SUP 2: 1.1265 Low Feb 3
• 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 is trading higher today leaving the recent low of 1.1280, Feb 14 low intact. The broader outlook remains modestly positive and while support holds, attention is on the next resistance at the Feb16 high of 1.1396. A break of this level would improve the outlook for bulls and expose 1.1495, the Feb 10 high and bull trigger. Weakness through 1.1280 would suggest scope for a deeper retracement of the Jan 28 - Feb 10 upleg.

GBPUSD TECHS: Trading Near Its Recent Highs

• RES 4: 1.3835 High Oct 20
• RES 3: 1.3690/49 200-dma / High Jan 13 and a key resistance
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3643/44 High Feb 18 / 10
• PRICE: 1.3620 @ 06:04 GMT Feb 21
• SUP 1: 1.3550/3487 20-day EMA / 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 is trading closer to its recent highs and the outlook remains bullish. Support at 1.3487 has remained in place and moving average studies continue to point north. The focus is on a test of 1.3662 next, Jan 20 high where a break would expose 1.3749, the Jan 13 high and key near-term resistance. On the downside, a move below 1.3487 would instead threaten the current bull theme and open 1.3358, Jan 27 low.

EURGBP TECHS: Support Remains Exposed

• RES 4: 0.8512 High Dec 22
• RES 3: 0.8480 61.8% retracement of the Dec 8 - Feb 3 downleg
• RES 2: 0.8432/78 High Feb 11 / High Feb 7
• RES 1: 0.8403 High Feb 16
• PRICE: 0.8344 @ 06:14 GMT Feb 21
• SUP 1: 0.8322 Intraday low
• SUP 2: 0.8285 Low Feb 3 and a key support
• 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 remains weak and has printed a fresh short-term low of 0.8322 today. A continuation lower would leave the 0.8285 low from Feb 3 exposed and a break of this support would completely erase the recent recovery off the Feb 3 low. The cross remains below both the 20- and 50-day EMAs further highlighting a bearish threat. Initial resistance to watch is at 0.8403, the Feb 16 high. A break would ease bearish concerns.

USDJPY TECHS: Watching The 50-Day EMA

• 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: 116.34/35 High Feb 10 / High Jan 4 and the bull trigger
• RES 1: 115.87 High Feb 15
• PRICE: 114.96 @ 06:29 GMT Feb 21
• SUP 1: 114.74 50-day EMA
• SUP 2: 114.16 Low Feb 02
• SUP 3: 113.47 Low Jan 24 and key support
• SUP 4: 113.14 Low Dec 17

USDJPY continues to trade closer to last week’s lows. The previous bullish outlook has faded for now and price is approaching the 50-day EMA at 114.74. This average represents an important short-term support and a clear break would expose 114.16, the Feb 2 low. A resumption of strength would refocus attention on the 116.34/35 key resistance where a break would highlight a continuation of the medium-term uptrend.

EURJPY TECHS: Challenging The 50-Day EMA

• RES 4: 134.37 3.0% Upper Bollinger Band
• RES 3: 133.48/96 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 2: 133.15 High Feb 10 and key resistance
• RES 1: 131.91 High Feb 16
• PRICE: 130.68 @ 06:39 GMT Feb 21
• SUP 1: 129.97 Intraday low
• 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

EURJPY touched a fresh low again overnight before recovering. The recent pullback is considered a correction and attention is on resistance at 131.91, the Feb 16 high and the more important 133.15 hurdle, Feb 10 high. Support at the 50-day EMA - at 130.29 - is being challenged. A meaningful break of this EMA would instead suggest scope for a deeper pullback towards 128.25, the Jan 25 low.

AUDUSD TECHS: Approaching Resistance

• RES 4: 0.7314 High Jan 13 and a key resistance
• RES 3: 0.7302 2.0% 10-dma envelope
• RES 2: 0.7277 High Jan 20
• RES 1: 0.7249 High Feb 09
• PRICE: 0.7219 @ 06:52 GMT Feb 21
• 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 is firmer today and has remained above support at 0.7086, the Feb 14 low. Initial resistance to watch is 0.7249, the Feb 10 high where a break would open a more important resistance at 0.7314, the Jan 13 high. A break of 0.7314 would highlight a broader reversal. For bears, clearance of 0.7086 would instead signal potential for weakness towards the major support at 0.6968, the Jan 28 low.

USDCAD TECHS: Range Bound

• 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: 1.2725 @ 06:56 GMT Feb 21
• 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 continues to trade inside this month's range. From a bullish perspective the pair 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 climb above the 50-day EMA and a move through 1.2768, 61.8% of the Dec 20 - Jan 19 sell-off. The focus is on 1.2843, the 76.4% value. Sub 1.2636 levels would threaten the bullish theme.

FIXED INCOME

BUND TECHS: (H2) Corrective Bounce Extends

• RES 4: 170.42 High Jan 27
• RES 3: 169.00 50-day EMA
• RES 2: 168.42 38.2% retracement of the Dec 8 - Feb 16 downleg
• RES 1: 166.90 20-day EMA
• PRICE: 166.55 @ 04:55 GMT Feb 21
• 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 traded higher Friday, extending the recovery from the recent 164.34 low on Feb 16. Short-term gains are still deemed corrective, however, with the broader trend signals still pointing south. A sequence of lower lows and lower highs and bearish moving average conditions clearly highlight a dominant downtrend. The focus is on the 164.00 handle next. 166.90, the 20-day EMA, is initial resistance.

BOBL TECHS: (H2) Trades Above The 20-Day EMA

• RES 4: 132.680 High Jan 31
• RES 3: 132.287 50-day EMA
• RES 2: 132.060 High Feb 3
• RES 1: 131.630 Intraday high
• PRICE: 131.460 @ 04:53 GMT Feb 21
• SUP 1: 130.510 Low Feb 15
• SUP 2: 130.080 Low Feb 10 and the bear trigger
• SUP 3: 130.000 Psychological round number
• SUP 4: 129.460 High Dec 7, 2015 (cont)

Bobl futures remain in a corrective cycle - price has traded above 131.360, the Feb 1 high and the 20-day EMA at 131.389. The underlying trend remains bearish though as highlighted by the moving average set-up and a clear bearish price sequence of lower lows and lower highs. Stronger gains would open 132.060, the Feb 3 high and 132.287, the 50-day EMA. A resumption of weakness would refocus attention on the 130.080 bear trigger.

SCHATZ TECHS: (H2) Corrective Cycle Still In Play

• RES 4: 112.145 High Jan 24 and a key resistance
• RES 3: 112.070 High Jan 27
• RES 2: 112.020 High Jan 31
• RES 1: 111.935 High Feb 18
• PRICE: 111.860 @ 04:13 GMT Feb 21
• SUP 1: 111.545/420 Low Feb 15 / Low 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 however, the contract remains in a corrective cycle as the recovery from 111.250, the Feb 7 low extends. The contract has cleared the 20-day EMA and Friday probed the 50-day EMA. The latter average intersects at 111.888 and a clear break would signal scope for a stronger rally and open 112.145, Jan 24 high. A reversal lower would open 111.545 initially, the Feb 15 low.

GILT TECHS: (H2) Eyeing Further Short-Term Gains

• RES 4: 123.71 High Jan 24
• RES 3: 122.69 50-day EMA
• RES 2: 122.40 High Feb 3
• RES 1: 121.71 High Feb 18
• PRICE: 121.46 @ Close Feb 18
• SUP 1: 119.32 Low Feb 16 and the bear trigger
• SUP 2: 119.28 2.382 proj of the Jan 13 - 19 - 24 price swing
• SUP 3: 119.17 1.0% 10-dma envelope
• SUP 4: 119.06 2.500 proj of the Jan 13 - 19 - 24 price swing

The medium-term trend condition in Gilt futures remains down, but this market is currently still in a corrective rally. Price has traded above the 20-day EMA and this suggests potential for a climb towards the 122.00 handle and the 50-day EMA at 122.69. The EMA represents a key resistance point. A failure to hold onto highs and a reversal lower would refocus attention on 119.32, Feb 16 low and the bear trigger.

BTP TECHS: (H2) Still Trading Above Last Week’s High

• RES 4: 144.31 50-day EMA
• RES 3: 142.55 High Feb 4
• RES 2: 141.54 20-Day EMA
• RES 1: 141.14 High Jan 9
• PRICE: 139.97 @ Close Feb 18
• SUP 1: 138.06 Low Feb 16 and the bear trigger
• SUP 2: 137.68 2.0% 10-dma envelope
• SUP 3: 137.52 Low May 18, 2020 (cont)
• SUP 4: 136.86 Low May 13, 2020 (cont)

The bias still points lower for BTP futures, despite strength posted across the second half of last week. Recent selling pressure confirmed a resumption of the underlying downtrend and maintains the bearish sequence of lower lows and lower highs. The focus is on 137.64, the May 18 2020 low on the continuation contract. On the upside, initial firm resistance is seen at the Feb 9 high of 141.14.

EQUITIES

E-MINI S&P (H2): Key Support Remains Exposed

• RES 4: 4739.50 High Jan 12
• RES 3: 4671.75 High Jan 18
• RES 2: 4586.00 High Feb 2 and a near-term bull trigger
• RES 1: 4484.50 High Feb 16
• PRICE: 4368.00 @ 05:33 GMT Feb 21
• SUP 1: 4312.75 Intraday low
• 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

E-Mini S&P technical conditions remain bearish. The moving average set-up and the contracts recent inability to remain above the 50-day EMA - at 4528.69 - suggest the broader path of least resistance remains down. For bulls, a clear break of the 50-day EMA is required to suggest scope for a stronger recovery. Until then, this year’s low of 4212.75 on Jan 24 remains exposed. A break would confirm a resumption of bearish activity.

EUROSTOXX50 TECHS: (H2) Remains Vulnerable

• 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: 4176.50/4250.00 50-day EMA / High Feb 2
• PRICE: 4083.50 @ 05:16 GMT Feb 21
• 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 managing to hold above the Jan 24 low of 3990.50. The 50-day EMA - at 4176.50 - still represents a key resistance where a clear break would suggest scope for a stronger bull reversal. This would open 4250.00, the Feb 2 high. Attention is on 3990.50. A break of this level would resume this year’s downtrend and signal scope for a deeper sell-off below the 4000.00 handle.

COMMODITIES

BRENT TECHS: (J2) Key S/T Support Defined At $90.12

• 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 and the bull trigger
• PRICE: $93.36 @ 06:57 GMT Feb 21
• SUP 1: $90.12/87.72 - Low Feb 18 / Low Feb 1
• SUP 2: $86.19 - 50-day EMA
• SUP 3: $84.22 - Low Jan 24 and a key support
• SUP 4: $79.95 - Low Jan 10

Brent futures have managed to recover from Friday’s low of $90.12 and this low represents an important short-term support. Continued gains would expose the bull trigger at $96.78, Feb 14 high where a break would once again confirm a resumption of the underlying uptrend and open $97.36, a Fibonacci projection. On the downside, a clear break of $90.12 would alter the picture.

WTI TECHS: (H2) Dips Still Considered Corrective For Now

• 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: $91.21 @ 09:16 GMT Feb 21
• 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

WTI futures dips remain corrective in nature for now, with the broader outlook still bullish. Recent gains confirmed a resumption of 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 to watch is at $88.41, the Feb 9 low.

GOLD TECHS: Northbound

• RES 4: $1959.4 - High Jan 6 2021
• RES 3: $1935.8 bull channel top drawn from the Aug 9 2021 low
• RES 2: $1916.6 - High Jun 1 2021 and a key resistance
• RES 1: $1908.3 - Intraday high
• PRICE: $1888.3 @ 07:19 GMT Feb 21
• SUP 1: $1853.9 - High Jan 25
• SUP 2: $1844.7 Low Feb 15
• SUP 3: $1821.1 - Low Feb 11
• SUP 4: $1808.4 - Bull channel base drawn from the Aug 9 2021 low

Gold remains in an uptrend. The yellow metal's gains puts gold at the best levels since June last year and keeps the trend direction pointed higher. Resistance at $1881.6 has given way, setting the medium-term upside target to $1916.6, the Jun 1 2021 high and a key bull trigger. Note that the top of the bull channel drawn from the Aug 9 2021 low intersects at $1935.8. On the downside, $1853.9, the January cycle high is seen as a firm support.

SILVER TECHS: Eyeing Key Short-Term Resistance

• 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: $24.088 - High Feb 18
• PRICE: $23.771 @ 09:32 GMT Feb 21
• 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 are trading toward the upper-end of the recent range. The recent rally suggests scope for a continuation higher towards $24.700, the Jan 20 high and a key resistance. 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.