MNI DAILY TECHNICAL ANALYSIS - Stocks Bounce Ahead of Support

Price Signal Summary - Stocks Bounce Ahead of Support

• In the equity space, global stocks are recovering from the protracted downside suffered earlier in the week, with the e-mini S&P around 100 points off the week's lows. This retains the 50-dma as key support going forward, which prints at 4059.97 early Friday. A break and close below the mark would open key support at 3994.14, raising the risk of a decline toward 3843.25 and a technical correction.
• In FX, EURUSD has recovered off the week's lows and remains above 1.1986, May 5 low. Nonetheless, bulls are consistently finding trouble in solidly breaking above clustered resistance of 1.2177-82. A rally through here opens 1.2184, Feb 26 high and 1.2243, Feb 25 high. GBPUSD is firm following Monday's strong rally and attention is on 1.4237, Feb 24 high and this year's high. USDJPY support has been defined at 108.34, May 7 low. A bullish theme remains intact while it holds and attention is on 109.79, May 13 high. A break of support would highlight a trendline break drawn off the Jan 6 low and risk a deeper pullback.
• On the commodity front, Gold is holding onto gains and the outlook remains bullish. Last week's climb has opened $1851.5, 61.8% retracement of the Jan 6 - Mar 8 sell-off. Oil is well off recent highs but the uptrend remains intact. The Brent (N1) focus is on the psychological $70.00 level and $71.75, Jan 8 2020 high (cont). Watch key support at $66.10, May 3 low. WTI bulls are eyeing the key resistance at $67.29, Mar 8 high. Support at $62.91, May 3 low is key.
• In the FI space, Bunds (M1) remain vulnerable and through 169.24, Feb 25 low, hitting the bear trigger in the process. This highlights a real risk of a revisit of the 2020 lows at 167.52. Near-term risk in Gilts is still skewed to the downside. This week saw prices take out the intraday bear trigger at 127.32, opening 126.79.

FOREIGN EXCHANGE

EURUSD TECHS: Remains Heavy

• RES 4: 1.2285 High Jan 8
• RES 3: 1.2243 High Feb 25 and a key resistance
• RES 2: 1.2207 1.0% 10-dma envelope
• RES 1: 1.2182/84 High May 11 / High Feb 26
• PRICE: 1.2069 @ 16:50 BST May 13
• SUP 1: 1.2052 Low May 13
• SUP 2: 1.2055 20-day EMA
• SUP 3: 1.1986 Low May 5 and key short-term support
• SUP 4: 1.1943 Low Apr 19

EURUSD remains heavy after the considerably higher-than-expected US CPI, which opens a sizeable gap with Tuesday's 1.2182 high. This works against the bullish outlook, particularly as former resistance-turned-support at trendline resistance drawn off the Jan 6 high has given way. MA conditions support a bullish theme, but markets need to take the 1.2184, Feb 26 high to cement.

GBPUSD TECHS: Key Resistance Exposed

• RES 4: 1.4315 High Apr 18, 218
• RES 3: 1.4237 High Feb 24 and a key resistance
• RES 2: 1.4233 2.0% 10-dma envelope
• RES 1: 1.4166 High May 11
• PRICE: 1.4031 @ 16:55 BST May 13
• SUP 1: 1.3972 Low May 10
• SUP 2: 1.3858 Low May 6
• SUP 3: 1.3801 Low May 3 and a key support
• SUP 4: 1.3752 Bull channel base drawn off the May 2020 low

GBPUSD outlook remains bullish despite the post-CPI weight in the pair. The rate has cleared a number of resistance levels reinforcing a positive theme with sights set on the key resistance at 1.4237, Feb 24 high. A break of 1.4237 would strengthen a bullish case and importantly confirm a resumption of the broader uptrend that started in March 2020. On the downside, initial support is at Monday's intraday low of 1.3972.

EURGBP TECHS: At Risk of Bearish Breakout

• RES 4: 0.8791/8835 High Feb 12 / 2.0% 10-dma envelope
• RES 3: 0.8731 High Feb 26
• RES 2: 0.8701/21 High May 7 / High Apr 26 and the bull Trigger
• RES 1: 0.8660 50-day EMA
• PRICE: 0.8600 @ 16:57 BST May 13
• SUP 1: 0.8561 Low May 12
• SUP 2: 0.8475 2.0% 10-dma envelope
• SUP 3: 0.8472 Low Apr 5 and the bear trigger
• SUP 4: 0.8430 Low Feb 27, 2020

EURGBP held inside the week's range Thursday, after extended losses mid-week to take out key support at 0.8589, Apr 19 low. This sees the cross move out of its recent range and confirm a bearish breakout. This suggests scope for a deeper pullback, potentially towards the key support at 0.8472, Apr 5 low. On the upside, the key resistance and bull trigger is unchanged at 0.8721, Apr 26 high. Initial resistance is at 0.8660.

USDJPY TECHS: Fierce Bounce, But Needs to Stick

• RES 4: 110.97 High Mar 31 and the bull trigger
• RES 3: 110.55 High Apr 6
• RES 2: 109.96 High Apr 9
• RES 1: 109.79 High May 13
• PRICE: 109.58 @ 16:59 BST May 13
• SUP 1: 108.34/08 Low May 7 / Low Apr 27
• SUP 2: 107.48 Low Apr 23 and the bear trigger
• SUP 3: 106.97 Low Mar 4
• SUP 4: 106.78 50.0% retracement of the Jan - Mar rally

USDJPY rallied sharply on the back of higher-than-expected US CPI mid-week, pushing prices through near-term resistance to open the early April highs of 109.96. This counters any downside signals evident in last week's trade through the trendline support at 108.44 (drawn off the Jan 6 low). A break of 109.70, May 3 high, would strengthen a bullish case and signal scope for a climb above 110.00.

EURJPY TECHS: Needle Still Points North

• RES 4: 133.68 Bull channel top drawn off the Oct 30, 2020 low
• RES 3: 133.28 1.50 proj of Jun-Sep-Oct 2020 swing
• RES 2: 133.13 High Sep 21, 2018 and a key resistance
• RES 1: 132.73 High May 13
• PRICE: 132.26 @ 17:04 BST May 13
• SUP 1: 131.48 Low May 7
• SUP 2: 130.99 Low May 5 and a key support
• SUP 3: 130.57 Low Apr 27
• SUP 4: 130.17 Bull channel base drawn off the Oct 30, 2020 low

EURJPY ebbed to new highs of 132.73 in Asia, retaining a bullish outlook. This reinforces bullish conditions and signals scope for further gains within the bull channel drawn off the Oct 30 2020 low. Moving average studies are still pointing north, reinforcing current conditions. Support is at 130.99, May 5 low. The focus is on 133.28 next, a Fibonacci projection.

AUDUSD TECHS: Fresh Weekly Lows

• RES 4: 0.8044 High Feb 2, 2018
• RES 3: 0.8007 High Feb 25 and the bull trigger
• RES 2: 0.7934 2.0% 10-dma envelope
• RES 1: 0.7895 76.4% retracement of the Feb 25 - Apr 1 sell-off
• PRICE: 0.7728 @ 17:17 BST May 13
• SUP 1: 0.7688 Low May 13
• SUP 2: 0.7675 Low May 4 and key support
• SUP 3: 0.7635 Low Apr 14
• SUP 4: 0.7586 Low Apr 13

AUDUSD started the week well, but traded poorly Thursday, hitting new weekly lows of 0.7688 and denting the outlook further. This comes despite the pair recently clearing the April highs, which had triggered bullish signals. In order for the uptrend to resume, markets need to top the 76.4% retracement of the February - April downtick at 0.7895. A break here would strengthen bullish conditions and point the needle toward the year's best levels printed in late February at 0.8007.

USDCAD TECHS: Tests Major Support - The 2017 Low!

• RES 4: 1.2455 50-day EMA
• RES 3: 1.2419 High Apr 27
• RES 2: 1.2351 High May 4 and a key near-term resistance
• RES 1: 1.2194/2288 High May 7 / High May 6
• PRICE: 1.2146 @ 17:50 BST May 13
• SUP 1: 1.2046 Low May 12
• SUP 2: 1.2000 Psychological round number
• SUP 3: 1.1978 2.0% 10-dma envelope
• SUP 4: 1.1920 Low May 2015

USDCAD traded lower again mid-week as the bear cycle extends. This week's key technical development has been a test of the major support at 1.2062, Sep 2017 low. This represents an important pivot chart point that either represents the base of a broad range or the midpoint of a double top reversal pattern. A clear break lower would reinforce the current downtrend and open 1.2000 and below. Initial firm resistance is at 1.2194, May 7 high.

FIXED INCOME

BUND TECHS: (M1) Sixth Session of Lower Lows

• RES 4: 172.12 High Apr 8
• RES 3: 171.62 High Apr 14
• RES 2: 171.19/27 50-day EMA / High Apr 22
• RES 1: 170.55/98 20-day EMA / High Apr 7
• PRICE: 168.95 @ 15:59 BST May 13
• SUP 1: 168.59 Low May 13
• SUP 2: 168.52 Low Mar 20, 2020 (cont)
• SUP 3: 168.30 1.0% 10-dma envelope
• SUP 4: 168.09 0.764 proj of the Jan 27 - Feb 25 - Mar 25 price swing

Bund futures remain weak, with prices slipping to new lower lows for a sixth consecutive session Thursday. This week's sell-off has resulted in a breach of support at 169.47, May 3 low as well as 169.24, Feb 24 low, opening further losses below 169.00. Vol band support undercuts at 168.39 going forward, but the outlook is bleak. A key short-term resistance has been defined at 170.98, Apr 7 high.

BOBL TECHS: (M1) Bearish Breakout Cemented

• RES 4: 135.180 High Apr 14
• RES 3: 135.050 High Apr 22
• RES 2: 135.040 High May 6
• RES 1: 134.881 20-day EMA
• PRICE: 134.400 @ 16:56 BST May 12
• SUP 1: 134.300 Low May 13
• SUP 2: 134.140 Low Feb 26 and key support
• SUP 3: 134.000 Round number support
• SUP 4: 133.340 Low Mar 19, 2020 (cont)

Bobl futures extended recent weakness to hit new cycle lows of 134.300 Thursday. This further confirms a resumption of the bearish cycle that started Mar 25. The break lower and resumption of weakness signals scope for a move towards end-Feb lows next, with support layered between 134.00-134.14. Clearance of this level would open markets to further losses toward the 2020 lows. Key resistance is at 135.040, May 6 high.

SCHATZ TECHS: (M1) Clears Congestion Support

• RES 4: 112.165 High Mar 25 and the bull trigger
• RES 3: 112.150 High Apr 8
• RES 2: 112.110/120 High May 4, 5, and 6 / High Apr 22
• RES 1: 112.090 20-day EMA
• PRICE: 112.020 @ 16:14 BST May 13
• SUP 1: 112.005 Low May 13
• SUP 2: 112.000 Handle Support
• SUP 3: 111.993 76.4% retracement of the Feb 26 - Mar 25 rally
• SUP 4: 111.940 Low Feb 26 ad key support

Schatz futures stalled last week at 112.110 and resistance at 112.120, Apr 22 high remains intact. The subsequent pullback has resulted in a break of 112.060, a level that provided support in March and April. The clear break strengthens a bearish case and paves the way for weakness below 112.00. On the upside, a breach of 112.110 is required to signal a reversal. Bearish!

GILT TECHS: (M1) Key Support Zone Exposed

• RES 4: 130.38 High Feb 17 / 18
• RES 3: 129.75 High Feb 19
• RES 2: 129.09/27 High Apr 23 and the reversal trigger / High Mar 2
• RES 1: 128.80 High May 7
• PRICE: 127.08 @ Close May 13
• SUP 1: 126.86 Low May 13
• SUP 2: 126.79 Low Mar 18 and the bear trigger
• SUP 3: 126.64 1.0% 10-dma Envelope
• SUP 4: 126.55 Low Apr 17, 2019 (cont)

The Gilt futures outlook remains bearish. The pullback from 128.80, last week's high on May 7, has extended, with markets taking out a firm area of support between 127.40 and 127.32, the Apr 29 and Apr 1 lows respectively. This strengthens the bearish case and exposes the major support at 126.79, Mar 18 low and the bear trigger. A break of 126.79 would confirm a resumption of the broader downtrend. Initial firm resistance is 128.80.

BTP TECHS: (M1) Downtrend Accelerates

• RES 4: 148.85 High Apr 15
• RES 3: 148.65 High Apr 22
• RES 2: 147.79 High May 4 and key near-term resistance
• RES 1: 147.33 High May 7
• PRICE: 145.55 @ Close May 13
• SUP 1: 145.15 Low May 13
• SUP 2: 144.96 Low Sep 9, 2020 (cont)
• SUP 3: 144.16 1.236 proj of the Feb 12 - 26 - Mar 11 price swing
• SUP 4: 143.87 2.0% 10-dma envelope

BTP futures remain weak and hit new 2021 lows Thursday. A bearish theme follows last week's move lower and break of support at 146.84, Feb 26 low. On an intraday basis, prices bounced off 145.15 ahead of the close, which may act as a short-term support for now. Nonetheless, recent price action confirms a resumption of the downtrend that has been in place since Feb 12. Moving average studies are in a bear mode reinforcing the current bear cycle. On the upside, key short-term resistance is at 147.79, May 4 high.

EQUITIES

EUROSTOXX 50 TECHS: (M1) Bounces Off Lows

• RES 4: 4175.00 Low Nov 26, 2007 (cont)
• RES 3: 4140.00 High Jan 18, 2008 (cont)
• RES 2: 4099.00 1.00 proj of of the Mar - Jul - Oct 2020 price swing
• RES 1: 4036.00 High May 10 and the bull trigger
• PRICE: 3947.00 @ 16:25 BST May 13
• SUP 1: 3877.97 50-day EMA
• SUP 2: 3844.00 Low May 13
• SUP 3: 3821.00 High Mar 18 and recent breakout level
• SUP 4: 3727.00 Low Mar 25

EUROSTOXX 50 futures were under pressure for much of the first half of the Thursday session, with prices slipping further to hit 3844.00. The index staged a solid recovery into the close, which marks the intraday low as first support. With prices managing to avoid a close below the 50-day EMA, there is potential for a near-term recovery, which would initially target 3984 ahead of 4036.

E-MINI S&P (M1): Bounce Needs to Solidify

• RES 4: 4264.32 2.0% 10-dma envelope
• RES 3: 4239.26 1.764 proj of the Feb 1 - Feb 16 - Mar 4 price swing
• RES 2: 4238.25 High May 10 and the bull trigger
• RES 1: 4185.50 High May 12
• PRICE: 4132.00 @ 10:01 BST May 14
• SUP 1: 4042.75 Low May 13
• SUP 2: 4028.42 3.0% 10-dma Envelope
• SUP 3: 4021.00 Low Apr 5
• SUP 4: 3932.86 100-dma

The pullback in the S&P E-mini is extended Thursday, taking out nearby support and edging below the 50-dma at 4059.97. The level managed to hold at the close, however, prompting a swift 100 point recovery in the index. This retains the 50-dma as key support going forward. A break and close below the mark would open key support at 3994.14, raising the risk of a decline toward 3843.25 and a technical correction. For the outlook to improve, markets need to contest with the May 12 high initially at 4185.50.

COMMODITIES

BRENT TECHS: (N1) Falls Back Into Range

• RES 4: $71.95 - High Sep 16, 2019 (cont)
• RES 3: $71.75 - High Jan 8 2020 (cont)
• RES 2: $70.00 - Psychological round number
• RES 1: $69.95 - High May 5
• PRICE: $67.52 @ 16:39 BST May 13
• SUP 1: $67.13 - Low May 11
• SUP 2: $66.10 - Low May 3
• SUP 3: $64.75 - 50-day EMA
• SUP 4: $63.93 - Low Apr 26

The Brent crude price structure remains bullish, but Thursday price action saw some alleviation of the bullish momentum. This keeps the technical picture unchanged. Price on May 5, probed key resistance at $69.73, Mar 8 high. A clear break of this level would confirm a resumption of the broader uptrend and extend the bullish price sequence of higher highs and higher lows. This would open $71.75, the Jan 8, 2020 high (cont). On the downside, initial firm support has been defined at $66.10. A break would be bearish.

WTI TECHS: (M1) Back Toward Week's Lows

• RES 4: $70.00 - Psychological round number
• RES 3: $67.95 - High Oct 29, 2018
• RES 2: $67.29 - High Mar 8 and the bull trigger
• RES 1: $66.76 - High May 5
• PRICE: $64.25 @ 16:42 BST May 13
• SUP 1: $63.68 - Low May 11
• SUP 2: $62.91 - Low May 3 and key near-term support
• SUP 3: $60.61 - Low Apr 22 and key short-term support
• SUP 4: $58.77 - Low Apr 12

After maintaining a bullish tone throughout the first half of the week, prices faded into the Thursday close putting WTI back toward the weekly lows. The contract has probed resistance at $66.15, Mar 15 high where a clear break would pave the way for a test of the key hurdle for bulls at $67.29, Mar 8 high. Clearance of this resistance would confirm a resumption of the broader uptrend. On the downside, firm near-term support has been defined at $62.91, May 3 low. A break would be bearish.

GOLD TECHS: Bullish Price Sequence

• RES 4: $1875.7 - High Jan 29
• RES 3: $1855.5 - High Feb 10
• RES 2: $1851.5 - 61.8% retracement of the Jan 6 - Mar 8 sell-off
• RES 1: $1845.5 - High May 10
• PRICE: $1825.0 @ 16:45 BST May 13
• SUP 1: $1799.1 - High May 4 and a recent breakout level
• SUP 2: $1790.2 - 20-day EMA
• SUP 3: $1764.3 - Low Apr 30
• SUP 4: $1756.2 - Low Apr 29 and key near-term support

Gold is ebbed lower Thursday, but directional parameters remain unchanged for now as key support/resistance lines are intact. The yellow metal recently cleared resistance at $1797.9, Apr 22 high. This confirmed a resumption of the uptrend that started early March where a reversal pattern in the shape of a double bottom began. This pattern was confirmed on Apr 8. The move higher paves has also confirmed a bullish price sequence of higher highs and higher lows and the focus is on $1851.5 next, a retracement. Support is at $1799.1.

SILVER TECHS: Bulls Still In Charge

• RES 4: $28.609 - 76.4% retracement of the Feb 1 - Mar 31 sell-off
• RES 3: $28.328 - High Feb 23 and a key resistance
• RES 2: $28.205 - High Feb 25
• RES 1: $27.883 - High May 10
• PRICE: $26.971 @ 16:48 BST May 13
• SUP 1: $26.506 - 20-day EMA
• SUP 2: $25.718 - Low Apr 29 and key near-term support
• SUP 3: $25.636 - Low Apr 19
• SUP 4: $25.199 - Low Apr 14

Silver remains bullish despite a fade in prices after the US CPI release. The metal rallied last week, extending the current bull cycle that started Mar 3. The push higher strengthens a bullish case and confirms a resumption of the recovery from Mar 31. With moving average signals in a bull mode too, further gains are likely towards $28.328, Feb 23 high. This level represents the next key resistance handle. On the downside, key short-term support has been defined at $25.718, Apr 29 low.