MNI DAILY TECHNICAL ANALYSIS - Possible Bearish Pattern in EUR/USD

Tech Focus: Price Signal Summary - E-Minis S&P Futures Eyeing 4000.00

• Equity indices remain bullish despite Tuesday's pullback, E-mini S&P futures have edged higher and are moving towards the psychological 4000.00 handle. An initial objective is at 3988.40, 2.236 projection of the Sep 24 - Oct 12 - Oct 30 price swing last year.
• In the FX space, EURUSD has traded close to the top end of the recent range highs and attention is on 1.2190, Jan 22 high. The key support to watch in the USD Index is 90.05, Jan 21 low. A break would negate the recent reversal pattern and strengthen a USD bearish argument. USDJPY key resistance is at 105.77, Feb 5 high. EURGBP outlook remains bearish with scope for an extension below 0.8700. The next objective is 0.8691, May 5 low, 2020.
• On the commodity front, Gold stalled at $1855.5, last week. Key support lies at $1785.0, Feb 4 low. Oil contracts are firm. Brent (J1) targets $64.58, Jan 22 high, 2020 (cont). WTI (H1) bulls eye $61.11, 1.500 projection of Apr - Aug rally from the Nov 2 low

In the FI space, Bunds (H1) are heavy having traded through 175.07, the 1.50 projection of the Jan 4 - 12 sell-off from the Jan 27 high. Gilts (H1) gapped lower at the beginning of the week and have taken out 131.01 support, the 2.50 projection of the Dec 11 - 24 sell-off from the Jan 4 high. Similarly in Treasuries, key support and the bear trigger at 136-01, Jan 12 low has given way, reinforcing the bearish theme to open levels not seen since March last year.

Tech Focus: Gold traded fresh weekly lows having slipped through Friday's $1810.7 low.
- Last week's failure at $1855.5, Feb 10 high is weighing on the yellow metal and attention turns to support at $1792.2, Feb 5 low and $1785.0, the Feb 4 low. The latter is a key support where a break would confirm a resumption of the downtrend that started Jan 6.
- The 20-day EMA at $1837.9 offers initial resistance.

FOREIGN EXCHANGE

EURUSD TECHS: Monitoring A Bearish Shooting Star

• RES 4: 1.2255 76.4% retracement of the Jan 6 - Feb 5 sell-off
• RES 3: 1.2223 High Jan 13
• RES 2: 1.2190 High Jan 22 and a key resistance
• RES 1: 1.2169 High Feb 16
• PRICE: 1.2093 @ 05:49 GMT Feb 17
• SUP 1: 1.2082 Low Feb 12
• SUP 2: 1.2020 Low Feb 8
• SUP 3: 1.1952 Low Feb 5 and the bear trigger
• SUP 4: 1.1945 23.6% retracement March - Jan rally

EURUSD failed to hold onto yesterday's day's gains and retreated from the session high of 1.2169. Despite the pullback, a bullish theme remains intact. The Feb 5 price pattern, a bullish engulfing reversal, is still in play highlighting current conditions. A concern for bulls though is yesterday's bearish candle pattern - a shooting star. A deeper pullback would expose 1.2020, Feb 8 low. The bull trigger is 1.2169 where a break would negate the candle pattern.

GBPUSD TECHS: Needle Still Points North

• RES 4: 1.4082 1.00 proj of May - Sep 2020 rally from Sep 23 low
• RES 3: 1.4031 High Apr 23, 2018
• RES 2: 1.3998 High Apr 26, 2018
• RES 1: 1.3952 High Feb 16
• PRICE: 1.3891 @ 05:59 GMT Feb 17
• SUP 1: 1.3843 Low Feb 15
• SUP 2: 1.3776 Low Feb and Key near-term support
• SUP 3: 1.3737 Low Feb 9
• SUP 4: 1.3605 50-day EMA

GBPUSD maintains a firmer tone and extended gains again Tuesday reaching a high of 1.3952. Continued gains reinforce bullish conditions as the rising sequence of higher highs and higher lows is maintained. Moving average studies are in a bull mode too and also reinforce current conditions. The focus is on 1.3998 next, Apr 26, 2018 high. On the downside, firm support lies at 1.3776, Feb 12 low. A break would dent the current sentiment.

EURGBP TECHS: Pressuring The 0.8700 Handle

• RES 4: 0.8925 High Jan 18 and key resistance
• RES 3: 0.8886 50-day EMA
• RES 2: 0.8840 High Feb 4
• RES 1: 0.8797/8804 High Feb 9 / 20-day EMA
• PRICE: 0.8705 @ 06:12 GMT Feb 17
• SUP 1: 0.8697 Low Feb 16
• SUP 2: 0.8691 Low May 5, 2020
• SUP 3: 0.8671 Low Apr 30, 2020 and a key support
• SUP 4: 0.8595 2.0% 10-dma envelope

EURGBP traded lower again Tuesday and touched 0.8697. Bearish conditions remain intact. Moving average conditions are also in a bear mode set-up and this highlightS the current path of least resistance. The focus is on a clear break of the 0.8700 handle next with sights set on 0.8691, May 5, 220 low and 0.8671, Apr 30, 2020 low. On the upside, initial firm resistance is at 0.8797, Feb 9 high and 0.8804, the 20-day EMA. Bearish!

USDJPY TECHS: Resumes Uptrend

• RES 4: 106.95 High Aug 28, 2020
• RES 3: 106.55 High Sep 3, 2020
• RES 2: 106.26 1.50 projection of Jan 6 / 11 / 21 price swing
• RES 1: 106.22 Intrada high
• PRICE: 105.97 @ 06:28 GMT Feb 17
• SUP 1: 105.18 Low Feb 16
• SUP 2: 104.61 Trendline drawn off the Jan 6 low / Low Feb 10
• SUP 3: 104.41 Low Feb 10
• SUP 4: 104.07 Low Jan 28

USDJPY found support last week at the Feb 10 low of 104.41 and bulls have since not looked back. Yesterday's climb resulted in a break of resistance at 105.77, Feb 5 high. This confirms a resumption of the uptrend that started Jan 6 and reinforces the significance of the recent key technical break - the breach on Jan 27 of the bear channel resistance drawn off the Mar 2020 high. The focus is on 106.26 next, a Fibonacci projection.

EURJPY TECHS: Bullish Outlook

• RES 4: 129.47 1.00 proj of the Jun - Aug - Oct 2020 price swing
• RES 3: 129.26 High Dec 13, 2018
• RES 2: 128.59 High Dec 17, 2018
• RES 1: 128.46 Intraday high
• PRICE: 128.08 @ 06:38 GMT Feb 17
• SUP 1: 127.72 Low Feb 16
• SUP 2: 127.04 Low Dec 15
• SUP 3: 126.85 20-day EMA
• SUP 4: 126.10 Low Feb 4

The EURJPY outlook remains bullish. The cross continues to extend the week's rally - price cleared resistance at 127.49 Monday, the Jan 7 high to confirm a resumption of the broader uptrend that has been in place since early May 2020. With 128.00 breached too, attention shifts to 128.59, the Dec 17, 2018 high. Initial firm support lies at 126.98, Monday's low where a break would dent the current bullish theme.

AUDUSD TECHS: Focus Is On The The Bull Trigger

• RES 4: 0.7917 High Mar 14, 2018 and a key resistance
• RES 3: 0.7885 High Mar 15. 2018
• RES 2: 0.7820 High Jan 6 and the bull trigger
• RES 1: 0.7805 High Feb 16
• PRICE: 0.7752 @ 06:42 GMT Feb 17
• SUP 1: 0.7708 20-day EMA
• SUP 2: 0.7651 Low Feb 8
• SUP 3: 0.7583/64 Low Feb 5 / Low Feb 2 and the bear trigger
• SUP 4: 0.7557 Low Dec 28

AUDUSD maintains a firm posture despite the minor pullback. Price action on Feb 5 highlighted a reversal signal following the recent inability to clear the 50-day EMA. The pair has breached resistance at 0.7704, Jan 29 high and this signals scope for a climb towards 0.7820, the Jan 6 high and the bull trigger. On the downside, a break of 0.7564, Feb 2 low would resume recent bearish pressure. Initial support lies at 0.7708, the 20-day EMA.

USDCAD TECHS: Key Support Remains Exposed

• RES 4: 1.2915 High Dec 23
• RES 3: 1.2845/81 High Feb 4 / High Jan 28
• RES 2: 1.2763/85 High Jan 12 / 50-day EMA
• RES 1: 1.2718 Intraday high
• PRICE: 1.2693 @ 06:48 GMT Feb 17
• SUP 1: 1.2610 Low Feb 16
• SUP 2: 1.2590 Low Jan 21 and major support
• SUP 3: 1.2551 Bear channel base drawn off the Jun 26, 2020 high
• SUP 4: 1.2528 Low Apr 17, 2018

USDCAD found support Tuesday at 1.2610. The recent move lower remains a deeper corrective move however price has recently cleared 1.2686, Jan 27 low and a key S/T level. This is a bearish development and exposes the Jan 21 trend low of 1.2590 that also marks a bear trigger. Clearance of this level would resume the underlying downtrend. A 1.2881 break, Jan 28 high, is required to reinstate bullish activity. 1.2763 is the initial firm resistance.

FIXED INCOME

BUND TECHS: (H1) Sharp Slide

• RES 4: 176.95 50-day EMA
• RES 3: 176.64 High Feb 11
• RES 2: 175.70 High Feb 15
• RES 1: 175.49 High Dec 16
• PRICE: 174.60 @ 05:03 GMT Feb 17
• SUP 1: 174.37 Low Dec 2, 2020 (cont)
• SUP 2: 174.06 2.00 proj of Jan 4 - 12 sell-off from Jan 27 high
• SUP 3: 173.58 2.236 proj of Jan 4 - 12 sell-off from Jan 27 high
• SUP 4: 173.06 Low Sep 10, 2020 (cont)

Bund futures remain heavy and a fresh low has been registered overnight. Monday's activity resulted in price trading through support at 175.61, Feb 8 low. This confirms a resumption of the downtrend that started mid-December. With momentum studies in a clear bear mode too, scope is seen for an extension lower. Attention is on 174.37 next, Dec 2, 2020 low (cont). On the upside, initial resistance is at yesterday's high of 175.45.

BOBL TECHS: (H1) Heavy

• RES 4: 135.150 High Feb 11 and key resistance
• RES 3: 135.010 20-day EMA
• RES 2: 134.850 High Feb 15
• RES 1: 134.770 High Feb 16
• PRICE: 134.590 @ 05:08 GMT Feb 17
• SUP 1: 134.530 Intraday low
• SUP 2: 134.479 76.4% retracement of the Jun - Nov 2020 rally
• SUP 3: 134.450 Low Aug 14, 2020 (cont)
• SUP 4: 134.417 1.236 proj of Dec 11-Jan 12 sell-off from Jan 27 high

BOBL futures maintain a bearish tone. This week price has traded below the key support and bear trigger at 134.790, Feb 5 low. The break strengthens a bearish argument and confirms a resumption of the underlying downtrend. Attention is on 134.417 next, a Fibonacci projection. Initial resistance is seen at 134.770, yesterday's high. 135.150, the Feb 11 high marks the key trend resistance.

SCHATZ TECHS: (H1) Sell-off Extends

• RES 4: 112.335 High Jan 1
• RES 3: 112.303 50-day EMA
• RES 2: 112.290 High Feb 11 and key resistance
• RES 1: 112.250 High Feb 15
• PRICE: 112.215 @ 05:08 GMT Feb 17
• SUP 1: 112.210 Intraday low
• SUP 2: 112.201 0.764 proj of Dec 11 -28 sell-off from Jan 27 high
• SUP 3: 112.185 50.0% retracement of the Jun - Nov 2020 rally
• SUP 4: 112.150 1.00 proj of Dec 11 -28 sell-off from Jan 27 high

Schatz futures remain softer. On Monday the contract cleared the key support area at 112.235, Dec 23 low and 112.240, Jan 2, 21 and 22 low. The break lower negates the recent triple bottom reversal and instead confirms a resumption of the downtrend that started early November 2020. Attention is on further bearish pressure with the focus on 112.201 next, a Fibonacci projection. Trend resistance has been defined at 112.290, Feb 11 high.

GILT TECHS: (H1) Bears Still In Charge

• RES 4: 133.55 Low Dec 1 and a recent breakout level
• RES 3: 132.67 High Feb 11
• RES 2: 131.73 Low Feb 8 and today's breakout level
• RES 1: 131.49 HIgh Feb 16
• PRICE: 130.84 @ Close Feb 16
• SUP 1: 130.72 Low Feb 16
• SUP 2: 130.49 2.764 proj of the Dec 11 - 24 sell-off from Jan 4 high
• SUP 3: 130.18 Low Mar 19, 2020 (cont)
• SUP 4: 130.00 Psychological round number

Gilt futures traded heavy again yesterday extending this week's bearish start - the contract gapped lower at the open Monday. The move to fresh lows reinforces the bearish theme and once again confirms a resumption of the underlying downtrend that started early August last year. Further weakness is likely near-term, the focus is on 130.49 next, a Fibonacci projection. On the upside, initial resistance is at 131.49, Feb 16 high.

BTP TECHS: (H1) Corrective Cycle Still In Play

• RES 4: 154.640 2.00 proj of Jan 22 - Feb 1 rally from the Feb 2 low
• RES 3: 154.00 Round number resistance
• RES 2: 153.82 High Feb 12 and the bull trigger
• RES 1: 152.89 High Dec 15
• PRICE: 152.26 @ Close Feb 16
• SUP 1: 151.63 Low Feb 16
• SUP 2: 151.50 50-day EMA
• SUP 3: 151.43 Low Jan 4
• SUP 4: 150.70 Low Feb 2

BTP futures remain bullish but have entered a corrective cycle. Last week saw the contract register successive all-time highs reinforcing underlying bullish conditions. For now though a top has been defined at 153.82, Feb 12 high. Attention is on the 50-day EMA that intersects at 151.50 and this area marks a firm support level. A break would signal scope for a deeper pullback. Initial resistance is seen at 152.89, Feb 15 high.

EQUITIES

EUROSTOXX 50 Techs: Bull Trend Remains Intact

• RES 4: 3867.28 High Feb 20, 2020
• RES 3: 3858.79 1.50 proj of Dec 21 - Jan 8 rally from Jan 28 low
• RES 2: 3798.19 0.764 proj of Mar - Jul - Oct 2020 swing
• RES 1: 3742.53 High Feb 15
• PRICE: 3726.40 @ Close Feb 16
• SUP 1: 3639.86 20-day EMA
• SUP 2: 3628.47 Low Feb 10
• SUP 3: 3570.18 50-day EMA
• SUP 4: 3473.76 Low Jan 28 and the bear trigger

EUROSTOXX 50 remains bullish with a fresh trend high registered Monday, to confirm a resumption of the underlying uptrend. The focus is on 3798.19 further out, a Fibonacci projection. Moving average studies remain in a bull mode reinforcing underlying conditions. On the downside, the index needs to clear support at 3473.76 to reinstate a bearish theme, the Jan 28 low. Initial support is at 3639.86,the 20-day EMA. The focus is on 3798.19.

COMMODITIES

BRENT TECHS: (J1) Consolidating But Remains Bullish

• RES 4: $65.88 - 1.764 proj of the Apr - Aug - Nov 2020 price swing
• RES 3: $65.00 - Round number resistance
• RES 2: $64.58 - High Jan 22, 2020 (cont)
• RES 1: $63.76 - High Feb 15
• PRICE: $63.51 @ 06:45 GMT Feb 17
• SUP 1: $60.35 - Low Dec 12
• SUP 2: $59.12 - 20-day EMA
• SUP 3: $57.31 - High Jan 13 and former breakout level
• SUP 4: $56.33 - Low Feb 2

Brent futures are consolidating but remain bullish. Monday's fresh trend high of $63.76 confirmed a resumption of the underlying bull trend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode too, reinforcing underlying positive conditions. The focus is on $64.58 next, Jan 22, 2020 high. On the downside, initial firm support lies at $60.35, the Feb 12 low.

WTI TECHS: (H1) Bullish With $60.00 Cleared

• RES 4: $64.00 - Round number resistance
• RES 3: $63.17 - 1.618 proj of Apr - Aug rally from the Nov 2 low
• RES 2: $61.11 - 1.500 proj of Apr - Aug rally from the Nov 2 low
• RES 1: $60.33 - High Feb 16
• PRICE: $60.11 @ 06:52 GMT Feb 17
• SUP 1: $57.41 - Low Feb 12
• SUP 2: $55.79 - 20-day EMA
• SUP 3: $53.94 - High Jan 13 and recent breakout level
• SUP 4: $52.01 - 50-day EMA

WTI futures maintain a bullish tone. The contract is trading above $60.00 and further gains are likely near-term. The recent break higher confirms a resumption of the underlying uptrend and maintains the bullish price sequence of higher highs and higher lows. The focus is on $61.11 next, a Fibonacci projection. On the downside, initial support lies at $57.41, the Feb 12 low.

GOLD TECHS: Approaching The Bear Trigger

• RES 4: $1892.8 - 61.8% retracement of the Jan 6 - Feb 4 sell-off
• RES 3: $1875.7 - High Jan 29 and key near-term resistance
• RES 2: $1855.5 - High Feb 10
• RES 1: $1833.8 - 20-day EMA
• PRICE: $1793.0 @ 07:10 GMT Feb 17
• SUP 1: $1785.0 - Low Feb 4 and the near-term bear trigger
• SUP 2: $1775.9 - Low Dec 1
• SUP 3: $1764.8 - Low Nov 30
• SUP 4: $1764.8 - Low Nov 30 and a key support

Gold traded below $1810.7 yesterday, the Feb 12 low. Last week's failure at $1855.5, Feb 10 high is weighing on the yellow metal and attention turns to the key support at $1785.0, Feb 4 low where a break would confirm a resumption of the downtrend that started Jan 6. This would pave the way for a sell-off towards $1764.8, Nov 30 low. The 20-day EMA at $1833.8 offers initial resistance.

SILVER TECHS: Bearish Focus

• RES 4: $30.100 - High Feb 1
• RES 3: $29.053 - High Feb 2
• RES 2: $28.498 - 61.8% retracement of the Feb 1 - 4 sell-off
• RES 1: $28.003 - 50.0% retracement of the Feb 1 - 4 sell-off
• PRICE: $27.289 @ 07:18 GMT Feb 17
• SUP 1: $26.788 - 20-day EMA
• SUP 2: $25.905 - Low Feb 4
• SUP 3: $25.483 - 76.4% retracement of the Jan 18 - Feb 1 rally
• SUP 4: $24.700 - Low Jan 27

Silver remains vulnerable following the sharp sell-off on Feb 2. Recent gains are considered a correction and a resumption of weakness is seen likely near-term. A move lower would refocus attention on $25.905, the Feb 4 low and clearance of this support would set the scene for a deeper pullback. On the upside, resistance is seen at $28.003 and $28.498, Fibonacci retracement levels. Key resistance is at $30.100, Feb 1 high.