MNI DAILY TECHNICAL ANALYSIS - ST Equity Gains Still Seen as Corrective

Price Signal Summary – Short-Term Equity Gains Still Seen as Corrective

• In the equity space, S&P E-minis traded higher again Wednesday. Gains are still considered corrective. Price action in January resulted in a reversal of the moving average condition to bearish. This suggests short-term gains are corrective. EUROSTOXX 50 futures traded higher again yesterday and price breached the 50-day EMA at 4121.10. This average marks a key resistance area and a clear break would suggest scope for a stronger recovery. This would open 4324.50, the Jan 13 high.
• In FX, EURUSD traded higher Wednesday and maintains this week’s firmer tone following the recovery from 1.1121, the Jan 28 low. A recent candlestick reversal pattern - morning star - provided an early warning of a possible shift in sentiment. GBPUSD traded higher again Wednesday as the pair extended the recovery from its recent low of 1.3358 on Jan 27 and has topped resistance at 1.3525, Jan 26 high. A resumption of strength would suggest scope for a climb towards 1.3662 next, the Jan 20 high. USDJPY remains below its recent high however the outlook remains bullish despite a recent correction lower. Last week’s gains resulted in a breach of former resistance at 115.06, the Jan 18 high.
• On the commodity front, Gold, despite trading above recent lows, remains vulnerable. The recent bull cycle stalled last week and the sharp sell-off resulted in a break of the base of its bull channel drawn off the Aug 9 low. WTI futures traded higher yesterday. The uptrend remains intact - the contract last week 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 maintain a bearish tone. The contract traded below former support at 168.95, Jan 19 low, earlier this week. This maintains the bearish sequence of lower lows and lower highs. Gilt futures remain bearish. The contract traded lower Monday and breached support at 121.93, Jan 19 low. This confirmed a resumption of the downtrend and marks an extension of the bearish price sequence of lower lows and lower highs.

FOREIGN EXCHANGE

EURUSD TECHS: Holding Onto This Week’s Gains

• RES 4: 1.1483 High Jan 14 and a key resistance
• RES 3: 1.1421 High Jan 18
• RES 2: 1.1356 Bear channel top drawn from the Jun 1 2021 high
• RES 1: 1.1338 50-day EMA
• PRICE: 1.1300 @ 05:46 GMT Feb 3
• SUP 1: 1.1221/1121 Low Jan 1 / Low Jan 28 and the bear trigger
• SUP 2: 1.1070 Low May 29, 2020
• SUP 3: 1.1016 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 traded higher Wednesday and maintains this week’s firmer tone following the recovery from 1.1121, the Jan 28 low. A recent candlestick reversal pattern - morning star - provided an early warning of a possible shift in sentiment. Attention is on the 50-day EMA at 1.1338 and bear channel resistance at 1.1356. A reversal lower would signal the end of the correction and refocus attention on 1.1121.

GBPUSD TECHS: Maintains This Week’s Bullish Theme

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3715/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3587 High Feb 02
• PRICE: 1.3551 @ 05:18 GMT Feb 3
• SUP 1: 1.3435 Low Feb 1
• SUP 2: 1.3358/43 Low Jan 27 / Low Dec 23
• SUP 3: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase
• SUP 4: 1.3224 2.0% 10-dma envelope

GBPUSD traded higher again Wednesday as the pair extended the recovery from its recent low of 1.3358 on Jan 27 and has topped resistance at 1.3525, Jan 26 high. A resumption of strength would suggest scope for a climb towards 1.3662 next, the Jan 20 high. On the downside, a reversal lower would instead again refocus attention on key short-term support at 1.3358, Jan 27 low. This is the trigger for a resumption of bearish pressure.

EURGBP TECHS: Consolidation Mode

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8465 High Dec 24
• RES 2: 0.8401/23 50-day EMA / High Jan 24 and a key resistance
• RES 1: 0.8372 High Jan 26
• PRICE: 0.8336 @ 06:22 GMT Feb 3
• 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 is consolidating. A bearish theme still dominates however from a short-term perspective, there is potential for a correction - a bullish engulfing candle Monday signals a near-term base. An extension higher would open 0.8401, the 50-day EMA. The broader trend remains down though and a resumption of weakness would refocus attention on 0.8282/77, the Feb’20 and Dec’19 lows and the multi-year range base just above at 0.8300.

USDJPY TECHS: Pullback Considered Corrective

• RES 4: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 2021 price swing
• RES 3: 116.35 High Jan 4 and the bull trigger
• RES 2: 115.67/68 76.4% of the Jan 4 - 24 downleg / High Jan 28
• RES 1: 115.19 High Jan 1
• PRICE: 114.55 @ 06:28 GMT Feb 3
• SUP 1: 114.16/113.47 Low Feb 02 / 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: 112.53/112.23 Low Nov 30 / 2.0% 10-dma envelope

USDJPY remains below its recent high however the outlook remains bullish despite a recent correction lower. Last week’s gains resulted in a breach of former resistance at 115.06, the Jan 18 high. This has strengthened the recent reversal from 113.47, Jan 24 low and signals scope for an extension towards 116.35, high Jan 4 and a key medium-term resistance. Key short-term support is at 113.47. A break would be bearish.

EURJPY TECHS: Gains Considered Corrective

• 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: 129.65/130.09 50-day EMA / High Jan 20
• PRICE: 129.35 @ 06:35 GMT Feb 3
• 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 is consolidating. The recovery since Jan 25 is still considered corrective and a bearish threat remains present following recent weakness. Price recently probed 128.38, a Fibonacci retracement. A clear break of this level would strengthen bearish conditions and expose 127.39, Dec 6 low and a key support. Initial resistance is at 129.65, the 50-day EMA. A clear break of this resistance would suggest scope for a stronger corrective bounce.

AUDUSD TECHS: Remains Below The 50-Day EMA

• RES 4: 0.7314 High Jan 13 and a key resistance
• RES 3: 0.7277 High Jan 20
• RES 2: 0.7189 50-day EMA
• RES 1: 0.7159 High Feb 2
• PRICE: 0.7123 @ 06:54 GMT Feb 2
• SUP 1: 0.7034 Low Feb 1
• 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 holding onto recent gains from the Jan 28 low of 0.6968. The trend condition remains bearish and gains are considered corrective. The recent breach of key support at 0.6993/91, the Dec 3 2021 and Nov 2 2020 lows reinforces a bearish theme. The move lower confirmed a resumption of the downtrend and has opened 0.6963/21, the Jul 16 and Jul 14 2020 lows. The next firm resistance is seen at 0.7189, the 50-day EMA values.

USDCAD TECHS: Still Looking For Gains

• 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: 1.2797/2814 High Jan 28 / High Jan 6 and a key resistance
• PRICE: 1.2686 @ 07:01 GMT Feb 3
• SUP 1: 1.2650 Low Jan 27
• 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

The USDCAD outlook remains bullish despite this week’s corrective pullback. A positive theme follows the recent 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 has opened 1.2843, a retracement value. On the downside, initial firm support lies at 1.2560, the Jan 26 low. First support is at 1.2650, the Jan 27 low.

FIXED INCOME

BUND TECHS: (H2) Downtrend Remains Intact

• RES 4: 171.77 Low Nov 24 and recent breakout level
• RES 3: 171.14 50-day EMA
• RES 2: 171.07 High Jan 24 and key short-term resistance
• RES 1: 170.12 20-day EMA
• PRICE: 168.70 @ 05:05 GMT Feb 3
• SUP 1: 168.41 Low Feb 2
• SUP 2: 168.00 Round number support
• SUP 3: 167.69 Low Nov 1, 2021 (cont)
• SUP 4: 167.46 4.618 proj of the Dec 8 - Dec 20 price swing

Bund futures maintain a bearish tone. The contract traded below former support at 168.95, Jan 19 low, earlier this week. This maintains the bearish sequence of lower lows and lower highs. The downtrend is also reinforced by a bearish set-up in the moving average condition. The focus is on 168.00 next. Key short-term resistance has been defined at 171.07, Jan 24 high. Initial resistance is seen at 170.12, the 20-day EMA.

BOBL TECHS: (H2) Needle Still Points South

• RES 4: 133.530 High Dec 29
• RES 3: 133.250 High Jan 24 and key short-term resistance
• RES 2: 133.227 50-day EMA
• RES 1: 132.400/755 Low Jan 19 / 20-day EMA
• PRICE: 131.980 @ 05:00 GMT Feb 3
• SUP 1: 131.870 Low Feb 2
• SUP 2: 131.746 3.236 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 131.627 3.382 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 131.530 3.50 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures remain bearish and the contract traded lower once again yesterday. This week’s breach of support at 132.40, Jan 19 low and a bear trigger, confirmed a resumption of the underlying downtrend and resumed the bearish price sequence of lower lows and lower highs. Moving averages also point south. Attention is on 131.746 next, a Fibonacci projection. Key resistance has been defined at 133.250, the Jan 24 high.

SCHATZ TECHS: (H2) Outlook Remains Bearish

• 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: 111.925/112.020 High Feb 1 / High Jan 31
• PRICE: 111.845 @ 05:24 GMT Feb 3
• SUP 1: 111.805 Low Jan 2
• 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 traded lower again yesterday. Monday’s sell-off resulted in a break of support at 111.890, the Jan 19 low and bear trigger. The break lower confirms a resumption of the underlying downtrend. The move opens the 111.800 handle and 111.770 next, the Dec 13, 2018 low. On the upside, initial firm resistance is seen at Monday’s high of 112.020 and key resistance is at 112.145, the Jan 24 high.

GILT TECHS: (H2) Bearish Cycle Intact

• RES 4: 124.17 Low Nov 24
• RES 3: 124.05 50-day EMA
• RES 2: 123.79 High Jan 13 and a key near-term resistance
• RES 1: 123.07 20-day EMA
• PRICE: 122.42 @ Close Feb 2
• SUP 1: 121.82 Low Feb 1
• SUP 2: 121.61 Low Nov 13 2018 (cont)
• SUP 3: 121.45 3.0% Lower Bollinger Band
• SUP 4: 121.12 Low Nov 8 2018 (cont)

Gilt futures remain bearish. The contract traded lower Monday and breached support at 121.93, Jan 19 low. This confirmed a resumption of the downtrend and marks an extension of the bearish price sequence of lower lows and lower highs. Note too that MA studies remain in a bear mode, reinforcing the current direction. The move lower opens 121.61 next, Nov 13 2018 low. Key short-term resistance has been defined at 123.71, Jan 24 high.

BTP TECHS: (H2) Trend Needle Still Points South

• RES 4: 148.45 High Dec 23
• RES 3: 148.02 High Dec 29
• RES 2: 147.06/11 High Jan 1 / 50-day EMA
• RES 1: 146.16 High Feb 1
• PRICE: 145.11 @ Close Feb 1
• SUP 1: 144.54 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 and recent activity has been volatile. Futures traded down to 144.54 on Jan 27, before rebounding. Monday also saw a strong reversal off the intraday high of 147.06. The primary direction remains down following the recent breach of 145.12, Jan 10 low. The trigger for a resumption of this trend is 144.54, the Jan 27 low. Key resistance is seen at 147.06/11, the Jan 1 high and 50-day EMA.

EQUITIES

E-MINI S&P (H2): Probes The 50-Day EMA

• RES 4: 4808.25 All-time high on Jan 4
• RES 3: 4739.50 High Jan 12
• RES 2: 4671.75 High Jan 18
• RES 1: 4576.56/4586.00 50-day EMA / High Feb 2
• PRICE: 4533.25 @ 06:56 GMT Feb 3
• 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 traded higher again Wednesday. Gains are still considered corrective. Price action in January resulted in a reversal of the moving average condition to bearish. This suggests short-term gains are corrective. 4576.56, the 50-day EMA has been probed. A decisive break of this resistance area would suggest scope for a stronger reversal. For bears, a resumption of weakness would refocus attention on 4121.75.

EUROSTOXX50 TECHS: (H2) Challenging The 50-Day EMA

• 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: 4250.00 High Feb 2
• PRICE: 4205.50 @ 05:50 GMT Feb 3
• SUP 1: 4123.00/3990.50 Low Jan 31 / Low Jan 24 and key 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 traded higher again yesterday and price breached the 50-day EMA at 4121.10. This average marks a key resistance area and a clear break would suggest scope for a stronger recovery. This would open 4324.50, the Jan 13 high. Gains are, for now at least, still considered corrective. A reversal lower would refocus attention on 3990.50, the Jan 24 low and the trigger for a resumption of the recent bearish theme.

COMMODITIES

BRENT TECHS: (J2) Fresh Trend High

• 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: $90.52 - High Feb 2
• PRICE: $89.07 @ 07:00 GMT Feb 3
• SUP 1: $87.79 - Low Jan 27
• SUP 2: $85.89/84.22 - 20-day EMA / Low Jan 24 and key support
• SUP 3: $81.90 - 50-day EMA
• SUP 4: $79.95 - Low Jan 10

Brent futures delivered a fresh trend high print yesterday. The condition remains bullish. The contract resumed its uptrend last week following the break of $88.69, Jan 20 high. This maintains the bullish price sequence of higher highs and higher lows and MA conditions remain in a bull mode. The $90.00 handle has been probed and the focus is on $90.69, a Fibonacci projection. Key S/T support has been defined at $84.22, the Jan 24 low.

WTI TECHS: (H2) Approaching The Psychological $90.00 Handle

• 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: $89.72 - High Feb 2
• PRICE: $87.90 @ 07:11 GMT Feb 3
• SUP 1: $85.01 - Low Jan 26
• SUP 2: $83.91/81.90 - 20-day EMA / Low Jan 24
• SUP 3: $79.50/77.34 - 50-day EMA / Low Jan 10
• SUP 4: $74.01 - Low Jan 3

WTI futures traded higher yesterday. The uptrend remains intact - the contract last week 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. Key short-term support has been defined at $81.90, the Jan 24 low.

GOLD TECHS: Bearish Threat

• 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: $1805.2 @ 07:13 GMT Feb 3
• 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, despite trading above recent lows, remains vulnerable. The recent bull cycle stalled last week and the sharp sell-off resulted in a break of the base of its bull channel drawn off the Aug 9 low. This highlights a bearish threat and a more significant reversal and 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: Bear Flag Formation

• RES 4: $24.886 - High Nov 22
• RES 3: $24.700 - High Jan 20
• RES 2: $23.994 - High Jan 25
• RES 1: $23.130/599 - 50-day EMA / High Jan 27
• PRICE: $22.536 @ 07:18 GMT Feb 3
• 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 remains vulnerable and the recent consolidation appears to be a bear flag. The metal reversed a recent bullish theme following last week’s sharp sell-off and breached $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 a key support area. Initial resistance is seen at $23.130, the 50-day EMA.