MNI DAILY TECHNICAL ANALYSIS - Positive Short-Term Signals Emerge in EUR

Price Signal Summary – Positive Short-Term Signals Emerge in EUR

• In the equity space, S&P E-minis are firmer and the current corrective cycle is still in play. Yesterday’s gains resulted in a move above 4446.25, the Jan 26 high and price is approaching the 20-day EMA at 4521.05. EUROSTOXX 50 futures are trading near its recent highs. The contract remains vulnerable though and recent gains are considered corrective. This follows the sharp sell-off on Jan 24 and the break of a number of support levels.
• In FX, EURUSD started the week on a firmer note and has recovered from Friday’s low. Yesterday’s daily close highlights a 3-day Japanese candle reversal known as a morning star. This suggests scope for a stronger short-term corrective bounce. GBPUSD continues to trade above its recent lows. A bearish threat remains present following the recent strong reversal off 1.3749, the Jan 13 high. USDJPY is holding onto the bulk of its recent gains and the outlook remains bullish. Last week’s gains resulted in a move through former resistance at 115.06, the Jan 18 high.
• On the commodity front, Gold remains vulnerable. The recent rally stalled last week. The resulting sharp sell-off resulted in a break of the base of its bull channel drawn off the Aug 9 low. The break lower highlights a bearish threat and a more significant reversal. The uptrend in WTI futures remains intact having resumed last week - the contract cleared 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 resumed their downtrend yesterday, trading below former support at 168.95, Jan 19 low. This maintains the bearish sequence of lower lows and lower highs and the downtrend is also reinforced by a bearish set-up in the moving average condition. Gilt futures traded lower Monday and through support 121.93, Jan 19 low. This confirms a resumption of the downtrend and an extension of the bearish price sequence of lower lows and lower highs.

FOREIGN EXCHANGE

EURUSD TECHS: Morning Star Reversal

• RES 4: 1.1421 High Jan 18
• RES 3: 1.1366 Bear channel top
• RES 2: 1.142 50-day EMA
• RES 1: 1.1293 20-day EMA
• PRICE: 1.1240 @ 06:11 GMT Feb 1
• SUP 1: 1.1121 Low Jan 28 and the bear trigger
• SUP 2: 1.1070 Low May 29, 2020
• SUP 3: 1.1026 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 started the week on a firmer note and has recovered from Friday’s low. Yesterday’s daily close highlights a 3-day Japanese candle reversal known as a morning star. This suggests scope for a stronger short-term corrective bounce ahead of the next firm resistance at 1.1293, the 20-day EMA. The broader trend direction remains down though following the recent break of support 1.1186, Nov 24 low. The bear trigger is at 1.1121.

GBPUSD TECHS: Gains Considered Corrective

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3719/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3525 High Jan 26
• PRICE: 1.3449 @ 06:18 GMT Feb 1
• SUP 1: 1.3358/43 Low Jan 27 / Low Dec 23
• SUP 2: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase
• SUP 3: 1.3234 2.0% 10-dma envelope
• SUP 4: 1.3163 Low Dec 8 and a key support

GBPUSD continues to trade above its recent lows. A bearish threat remains present following the recent strong reversal off 1.3749, the Jan 13 high. The pair continues to trade below the 20- and 50-day EMAs and has recently cleared a number of retracement levels, highlighting a bearish theme. The focus is on 1.3343, Dec 23 low and 1.3301, a Fibonacci retracement. Initial firm resistance is seen at 1.3525, Jan 26 high.

EURGBP TECHS: Bullish Engulfing Candle

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8465 High Dec 24
• RES 2: 0.8407/23 50-day EMA / High Jan 24 and a key resistance
• RES 1: 0.8372 High Jan 26
• PRICE: 0.8346 @ 06:24 GMT Feb 1
• SUP 1: 0.8305 Low Jan 20/28/31, lowest since 2020
• SUP 2: 0.8300 Base of the multi-year broad range
• 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 bearish and yesterday’s bounce is considered corrective. From a S/T perspective, there is potential for a correction - yesterday’s candle pattern is a bullish engulfing reversal that signals a near-term base. An extension would open 0.8407, the 50-day EMA. The broader trend remains down and a resumption of weakness would open 0.8282/77, the Feb’20 and Dec’19 lows and the multi-year range base at 0.8300.

USDJPY TECHS: Bullish Focus

• 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: 115.67/68 76.4% of the Jan 4 - 24 downleg / High Jan 28
• PRICE: 115.04 @ 06:29 GMT Feb 1
• 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: 112.53/112.15 Low Nov 30 / 2.0% 10-dma envelope

USDJPY is holding onto the bulk of its recent gains and the outlook remains bullish. Last week’s gains resulted in a move through former resistance at 115.06, the Jan 18 high. This strengthens the recent reversal and signals scope for a climb towards 116.35, high Jan 4 and the key resistance. Resistance is at 115.67, has been tested, a Fibonacci retracement. Key short-term support has been defined at 113.47, Jan 24 low.

EURJPY TECHS: Corrective Bounce

• 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: 129.50/68 20- and 50-day EMA values
• PRICE: 129.25 @ 06:43 GMT Feb 1
• SUP 1: 128.38/25 76.4% of the Dec 3 - Jan 5 upleg / 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 traded higher Monday. Short-term trend conditions are unchanged though and the cross remains vulnerable following the recent move lower. Price has recently 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. Initial resistance is at 129.50/68, the 20- and 50-day EMAs. Clearance of this zone would suggest scope for a stronger corrective bounce.

AUDUSD TECHS: Trend Needle Still Points South

• RES 4: 0.7277/7314 High Jan 20 / High Jan 13
• RES 3: 0.7194 50-day EMA
• RES 2: 0.7130/7149 Low Jan 7 / 20-day EMA
• RES 1: 0.7091 Low Jan 24
• PRICE: 0.7061 @ 06:49 GMT Feb 1
• SUP 1: 0.6963 Low Jul 16, 2020
• SUP 2: 0.6921 Low Jul 14, 2020
• SUP 3: 0.6884 0.764 proj of the Oct ‘21 - Dec ‘21 - Jan price swing
• SUP 4: 0.6759 50.0% Fibonacci retrace of the Mar ‘19 - Feb ‘21 rally

AUDUSD remains vulnerable and short-term gains are considered corrective. Last week’s bear leg resulted in a break of key support at 0.6993/91, the Dec 3 2021 and Nov 2 2020 lows. This reinforces bearish conditions and confirms a resumption of the broader downtrend that started February 2021. The move lower opens 0.6963/21, the Jul 16 and Jul 14 2020 lows. Firm short-term resistance is seen at 0.7130, the Jan 7 low.

USDCAD TECHS: Dips Considered Corrective

• 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: 1.2814 High Jan 6 and a key resistance
• PRICE: 1.2701 @ 06:56 GMT Feb 1
• SUP 1: 1.2654 20-day EMA
• 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

Despite yesterday’s pullback, the USDCAD outlook remains bullish. Last week’s gains confirmed an extension of the recovery from 1.2451, Jan 19 low. Price has cleared the 50-day EMA and the break has resulted in a move through 1.2768, 61.8% of the Dec 20 - Jan 19 sell-off. This opens 1.2843 next, the 76.4% retracement. On the downside, initial firm support lies at 1.2560, the Jan 26 low. The 20-day EMA, at 1.2654, is first support.

FIXED INCOME

BUND TECHS: (H2) Resumes Its Downtrend

• RES 4: 171.77 Low Nov 24 and recent breakout level
• RES 3: 171.35 50-day EMA
• RES 2: 171.07 High Jan 24 and key short-term resistance
• RES 1: 170.43 20-day EMA
• PRICE: 169.11 @ 05:04 GMT Feb 1
• SUP 1: 168.81 Low Jan 31
• SUP 2: 168.46 4.00 proj of the Dec 8 - Dec 20 price swing
• SUP 3: 168.00 Round number support
• SUP 4: 167.69 Low NOv 1, 2021 (cont)

Bund futures resumed their downtrend yesterday, trading below former support at 168.95, Jan 19 low. This maintains the bearish sequence of lower lows and lower highs and the downtrend is also reinforced by a bearish set-up in the moving average condition. The focus is on 168.46, a Fibonacci projection. On the upside, key short-term resistance has been defined at 171.07, Jan 24 high. Initial resistance is seen at 170.43, the 20-day EMA.

BOBL TECHS: (H2) Bearish Price Sequence

• RES 4: 133.530 High Dec 29
• RES 3: 133.326 50-day EMA
• RES 2: 133.250 High Jan 24 and key short-term resistance
• RES 1: 132.914 20-day EMA
• PRICE: 132.200 @ 05:02 GMT Feb 1
• SUP 1: 132.133 2.764 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 2: 132.000 Round number support
• SUP 3: 131.940 3.00 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 131.746 3.236 proj of the Nov 30 - Dec 8 - 20 price swing

A sharp sell-off yesterday in Bobl futures resulted in a break of support at 132.40, the Jan 19 low and a bear trigger. The breach confirms a resumption of the underlying downtrend and resumes the bearish price sequence of lower lows and lower highs. Moving averages also point south. Attention is on 132.133, a Fibonacci projection and the 132.00 handle. Key resistance has been defined at 133.250, the Jan 24 high.

SCHATZ TECHS: (H2) Bearish Start To The Week

• RES 4: 112.265 High Dec 20
• RES 3: 112.185 High Dec 22
• RES 2: 112.070/145 High Jan 27 / High Jan 24 and key resistance
• RES 1: 112.020 High Jan 31
• PRICE: 111.860 @ 05:16 GMT Feb 1
• SUP 1: 111.824 1.764 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 2: 111.800 Round number support
• SUP 3: 111.770 Low Dec 13, 2018 (cont)
• SUP 4: 111.706 2.236 proj of the Nov 26 - Dec 16 - 20 price swing

Schatz futures started the week on a soft note, trading sharply lower Monday and breached support at 111.890, the Jan 19 low and bear trigger. This brings to an end the recent corrective cycle and confirms a resumption of the underlying downtrend. The move lower opens 111.824, a Fibonacci projection and the 111.800 handle. On the upside, initial resistance is seen at yesterday’s high of 112.020 and key resistance is at 112.145, the Jan 24 high.

GILT TECHS: (H2) Clears Key Short-Term Support

• RES 4: 124.21 50-day EMA
• RES 3: 124.17 Low Nov 24
• RES 2: 123.79 High Jan 13 and a key near-term resistance
• RES 1: 123.26 20-day EMA
• PRICE: 121.96 @ Close Jan 31
• SUP 1: 121.83 Low Jan 31
• SUP 2: 121.61 Low Nov 13 2018 (cont)
• SUP 3: 121.56 3.0% Lower Bollinger Band
• SUP 4: 121.12 Low Nov 8 2018 (cont)

Gilt futures traded lower Monday and through support 121.93, Jan 19 low. This confirms a resumption of the downtrend and an extension of the bearish price sequence of lower lows and lower highs. Note too that moving average studies are in a bear mode, reinforcing the current trend direction. The move lower opens 121.61 next, the Nov 13 2018 low. On the upside, key short-term resistance has been defined at 123.71, Jan 24 high.

BTP TECHS: (H2) Activity Remains Volatile

• RES 4: 148.45 High Dec 23
• RES 3: 148.02 High Dec 29
• RES 2: 147.28 50-day EMA
• RES 1: 147.06 High Jan 31
• PRICE: 145.88 @ Close Jan 31
• SUP 1: 145.41/144.54 Low Jan 31 / Low Jan 27 and the bear trigger
• 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 last Thursday - a fresh trend low - before rebounding. Monday also saw a strong reversal off the intraday high of 147.06. The primary direction is down following the recent breach of 145.12, Jan 10 low. The trigger for a resumption of the downtrend is 144.54, the Jan 27 low. Key resistance is seen at 147.28, the 50-day EMA.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Corrective Recovery

• 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: 4212.10/4215.50 50-day EMA / High Jan 24
• PRICE: 4185.50 @ 05:46 GMT Feb 1
• SUP 1: 3990.50 Low Jan 24 and a key near-term support
• SUP 2: 3980.00 Low Nov 30 2021
• SUP 3: 3935.00 Low Oct 6 2021
• SUP 4: 3895.00 Low Jul 19 2021 (cont)

EUROSTOXX 50 futures are trading near its recent highs. The contract remains vulnerable though and recent gains are considered corrective. This follows the sharp sell-off on Jan 24 and the break of a number of support levels. Firm resistance is seen at 4215.50, Jan 24 high and this is just above the 50-day EMA. A break of this resistance is required to suggest scope for a stronger short-term bounce. Key support and the bear trigger is at 3990.50.

E-MINI S&P (H2): Corrective Bounce Extends

• RES 4: 4739.50 High Jan 12
• RES 3: 4671.75 High Jan 18
• RES 2: 4578.22 50-day EMA
• RES 1: 4521.05 20-day EMA
• PRICE: 4493.25 @ 06:54 GMT Feb 1
• SUP 1: 4395.50 Low Jan 31
• SUP 2: 4212.75 Low Jan 24 and the bear trigger
• 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 are firmer and the current corrective cycle is still in play. Yesterday’s gains resulted in a move above 4446.25, the Jan 26 high and price is approaching the 20-day EMA at 4521.05. A break would expose the 50-day EMA at 4578.22. The 50-day average represents a key short-term resistance. A resumption of weakness would refocus attention on the key short-term supports and bear trigger at 4212.75, the Jan 24 low.

COMMODITIES

BRENT TECHS: (J2) Trend Conditions Remain Bullish

• RES 4: $95.00 Round number resistance
• RES 3: $93.24 - 2.382 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $90.69 - 2.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $90.27 - High Jan 28
• PRICE: $89.38 @ 07:02 GMT Feb 1
• SUP 1: $87.79 - Low Jan 27
• SUP 2: $85.14/84.22 - 20-day EMA / Low Jan 24 and key support
• SUP 3: $81.29 - 50-day EMA
• SUP 4: $79.95 - Low Jan 10

Brent futures remain bullish. The contract resumed its uptrend last week following the break of former resistance at $88.69, the Jan 20 high. This maintains the bullish price sequence of higher highs and higher lows and moving average conditions remain in a bull mode. The $90.00 handle has been probed and the focus is on $90.69, a Fibonacci projection. On the downside, key S/T support has been defined at $84.22, the Jan 24 low.

WTI TECHS: (H2) Bulls Remain In Charge

• 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: $88.84 - High Jan 28
• PRICE: $88.30 @ 07:05 GMT Feb 1
• SUP 1: $85.01 - Low Jan 26
• SUP 2: $82.95/81.90 - 20-day EMA / Low Jan 24
• SUP 3: $78.77/77.34 - 50-day EMA / Low Jan 10
• SUP 4: $74.01 - Low Jan 3

The uptrend in WTI futures remains intact having resumed last week - the contract cleared 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: Vulnerable Following Bull Channel Breakout

• 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: $1802.7 @ 07:20 GMT Feb 1
• SUP 1: $1780.4 - Low Jan 28 and the bear trigger
• SUP 2: $1775.7 - Low Dec 16
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

Gold remains vulnerable. The recent rally stalled last week. The resulting sharp sell-off resulted in a break of the base of its bull channel drawn off the Aug 9 low. The break lower highlights a bearish threat and a more significant reversal. This signals potential for weakness towards $1775.7, the Dec 16 low. For bulls, a break of $1853.9, Jan 25 high is required to reinstate the recent bull theme. Initial resistance is at $1822.2.

SILVER TECHS: Bearish Risk Still Present

• RES 4: $24.886 - High Nov 22
• RES 3: $24.700 - High Jan 20
• RES 2: $23.994 - High Jan 25
• RES 1: $23.170/599 - 50-day EMA / High Jan 27
• PRICE: $22.561 @ 07:23 GMT Feb 1
• SUP 1: $22.151 - Low Jan 28
• 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 last week’s sharp, accelerated sell-off. The metal has breached former support at $22.809, Jan 17 low signalling scope for a deeper retracement. This opens $21.949, the Jan 7 low. A break would reinforce the bearish threat and expose $21.427/423, the Dec 15 and Sep 29 lows and key support. On the upside, initial resistance is seen at $23.170, the 50-day EMA.