MNI DAILY TECHNICAL ANALYSIS - Stocks Stabilise, But Close to Lows

Price Signal Summary – Equities Stabilise, But Close to Lows

• Last week's pullback in equity markets continues to appear corrective, with DMAs continuing to provide some support and leaving markets open to near-term recovery. Key support remains the 3803.30 50-dma, with a medium-term target remaining at the 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 had a volatile week and is settling lower at the time of writing. Markets have so far steered clear of any test on nearby supports. Early last week, markets cleanly topped both 1.2169 and 1.2190, to extend the recovery off the Feb 5 low and to retain targets north of 1.2243. GBPUSD's medium-term outlook remains firm following last Wednesday's break to new multi-year highs, but overbought conditions appear to have slowed progress. 1.4377 remains critical resistance.
• On the commodity front, Gold suffered at the tail-end of last week, edging below $1750. Markets need to build a base above the 1,800 level to steady the outlook, but for now, the most likely course of direction is lower. For oil, the bull run is still firmly in control as Brent crude futures topped out at - again - new cycle highs of $67.70 on Thursday last week. Markets had been defying overbought signals, although the RSI has now eased away from February's multi-decade peak. The focus is on $70.30 next, a clearance of which raises the risk of a test on the 2020 highs at $71.75.
• In the FI space, Bund futures broke lower Thursday, hitting new 2021 lows of 169.24 for June contract as they joined the global bond market sell-off. Markets edged through all nearby support, clearing the way for a broader slide toward the lower levels of 2020, including the March 2020 low of 167.52.
• For Gilts, further weakness is likely with a bearish cycle continuing to dominate. New cycle lows for the June contract were printed down at 127.55.

FOREIGN EXCHANGE

EURUSD TECHS: Bearish Engulfing Candle

• RES 4: 1.2285 High Jan 8
• RES 3: 1.2255 76.4% retracement of the Jan - Feb sell off
• RES 2: 1.2243 High Feb 25 and the bull trigger
• RES 1: 1.2184 High Feb 26
• PRICE: 1.2082 @ 05:43 GMT Mar 1
• SUP 1: 1.2062 Low Feb 26
• SUP 2: 1.2023 Low Feb 17 and a key support
• SUP 3: 1.1952 Low Feb 5 and the bear trigger
• SUP 4: 1.1945 23.6% retracement of the Mar - Jan rally

After hitting multi-week highs of 1.2243 Thursday, the single currency reversed course Friday and closed near session lows. Friday's price pattern in candle terms is a bearish engulfing and highlights the possibility of a deeper short-term pullback. Attention turns to support at 1.2023, Feb 17 low. A break would again be bearish and expose 1.1952, Feb 5 low. Key resistance has been defined at 1.2243.

GBPUSD TECHS: Back In Its Bull Channel

• RES 4: 1.4237 High Feb 24 and the bull trigger
• RES 3: 1.4182 High Feb 25
• RES 2: 1.4119 High Bull channel top drawn off the Nov 2, 2020 low
• RES 1: 1.4029 High Feb 26
• PRICE: 1.3981@ 05:52 GMT Mar 1
• SUP 1: 1.3888 Low Feb 26
• SUP 2: 1.3823 61.8% Retracement February Rally
• SUP 3: 1.3776 Low Feb 12 and key near-term support
• SUP 4: 1.3737 Low Feb 9

Cable appears vulnerable following the pullback from the Feb 24 multi-year high of 1.4237. The pullback has been sharp and persistent, with the pair moving back into the range highlighted by a bull channel drawn off the Nov 2, 2020 low. The pair has also tested the 20-day EMA at 1.3900. A clear break would open 1.3823 and the key near-term support at 1.3776, Feb 12 low. Key resistance has been defined at 1.4237.

EURGBP TECHS: Stalls At The 20-day EMA

• RES 4: 0.8822 50-day EMA
• RES 3: 0.8797 High Feb 9
• RES 2: 0.8739 Low Feb 5
• RES 1: 0.8731 High Feb 26 and the short-term bull trigger
• PRICE: 0.8642 @ 06:04 GMT Mar 1
• SUP 1: 0.8597 Low Feb 26
• SUP 2: 0.8541 Low Feb 24 and the bear trigger
• SUP 3: 0.8521 3.0% Lower Bollinger Band
• SUP 4: 0.8490 2.0% 10-dma Envelope

EURGBP has started the week on a softer note following Friday's failure to clear resistance highlighted by the 20-day EMA at 0.8719. Technical signals continue to register a bearish trend and further weakness would open 0.8597, Feb 26 low ahead of the bear trigger at 0.8541, Feb 24 low. On the upside, a move above Friday's high of 0.8731, would signal a resumption of the corrective bounce and expose the 50-day EMA at 0.8822.

USDJPY TECHS: Uptrend Remains Intact

• RES 4: 107.05 High Aug 13, 2020
• RES 3: 106.95 High Aug 28, 2020
• RES 2: 106.80 1.0% 10-dma envelope
• RES 1: 106.70 Intraday high
• PRICE: 106.55 @ 06:15 GMT Mar 1
• SUP 1: 105.85 Low Feb 25/26
• SUP 2: 105.34 20-day EMA
• SUP 3: 105.15 Trendline drawn off the Jan 6 low
• SUP 4: 104.92 Low Feb 23 and a key support

USDJPY maintains a bullish tone. Last week's gains above 106.22, Feb 17 high, confirmed a resumption of the current uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies remain in a bull mode reinforcing current conditions and price remains above its trendline support drawn off the Jan 1 low. The focus is on 106.95 next, the Aug 28 2020 high. Initial support lies at 105.85, Feb 25/26 low.

EURJPY TECHS: Off Recent Highs

• RES 4: 132.36 1.382 proj of the Jun - Sep - Oct 2020 price swing
• RES 3: 131.22 1.236 proj of the Jun - Sep - Oct 2020 price swing
• RES 2: 130.73 1.0% 10-dma Envelope
• RES 1: 129.97 High Feb 25 and the bull trigger
• PRICE: 128.80 @ 06:31 GMT Mar 1
• SUP 1: 128.54 Intraday low
• SUP 2: 127.65 20-day EMA
• SUP 3: 127.31 Low Feb 17
• SUP 4: 127.04 Low Feb 15

EURJPY maintains its underlying bullish tone despite pulling back from last week's Feb 25 high of 129.98. From a short-term perspective, trend conditions have recently entered overbought territory signalling scope for a corrective pullback. If this occurs, a move lower would open 127.65, the 20-day EMA. For bulls, clearance of 129.98 would resume the uptrend and pave the way for a climb towards 131.22, a Fibonacci projection.

AUDUSD TECHS: 50-Day EMA Provides Support

• RES 4: 0.8164 High May 15, 2015
• RES 3: 0.8136 High Jan 2018 and Major Resistance
• RES 2: 0.8007 High Feb 25 and the bull trigger
• RES 1: 0.7883 High Feb 26
• PRICE: 0.7719 @ 17:03 GMT Feb 26
• SUP 1: 0.7693 Low Feb 26 and the 50-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 remains vulnerable following last week's sharp sell-off from 0.8007, Feb 25 high. Price action has so far managed to find support at the 50-day EMA that intersects at 0.7693. A clear break of the average would signal scope for a deeper pullback and open the 0.7600 handle and potentially below. Initial resistance is at 0.7883, Friday's high with the bull trigger for a resumption of gains defined at 0.8007.

USDCAD TECHS: Corrective Bounce

• RES 4: 1.2915 High Dec 23
• RES 3: 1.2845/81 High Feb 4 / High Jan 28
• RES 2: 1.2763/42 High Feb 12
• RES 1: 1.2749 High Feb 26
• PRICE: 1.2696 @ 06:58 GMT Mar 1
• SUP 1: 1.2587 Low Feb 26
• SUP 2: 1.2468/51 Low Feb 25 / Low Feb 16, 2018 Low
• SUP 3: 1.2385 2.0% 10-dma envelope
• SUP 4: 1.2276 Trendline Drawn From May 2015 Low

USDCAD bounced well into the Friday close, reversing last week's weakness that saw prices hit a low of 1.2468 on Feb 25. Price has so far stalled at the 50-day EMA that intersects at 1.2743. A breach of the average would signal scope for a stronger corrective bounce and open 1.2881, Jan 28 high. On the downside, a move through 1.2468 would resume bearish pressure towards support drawn from the May 2015 low, a trendline that crosses at 1.2276.

FIXED INCOME

BUND TECHS: (H1) Oversold And Volatile

• RES 4: 175.26 High Feb 18
• RES 3: 175.12 20-day EMA
• RES 2: 174.25 High Feb 25
• RES 1: 174.17 Intraday high
• PRICE: 174.08 @ 04:56 GMT Mar 1
• SUP 1: 173.07 Intraday hourly low during the Feb 26 session
• SUP 2: 172.08 Low Feb 25 and the bear trigger
• SUP 3: 171.82 61.8% retracement of the Mar - Dec 2020 rally (cont)
• SUP 4: 171.32 2.236 proj of the 4 - 11 Nov - Dec 11 2020 price swing

Bund futures ended last week on a volatile note. Thursday saw price trade to a new 2021 low of 172.08 before rebounding sharply Friday and is firmer today. Trend conditions remain bearish however, oversold conditions highlight a S/T bullish risk and scope for a corrective bounce. The recovery above the 174.00 handle signals scope for a stronger bounce perhaps towards the 20-day EMA at 175.12. The bear trigger is last week's 172.08 low.

BOBL TECHS: (H1) Finds Support

• RES 4: 134.790 Low Feb 5 and High Feb 18
• RES 3: 134.697 20-day EMA
• RES 2: 134.530 High Feb 25
• RES 1: 134.470 Intraday high
• PRICE: 134.430 @ 05:02 GMT Mar 1
• SUP 1: 134.100 Intraday hourly low during the Feb 26 session
• SUP 2: 133.800 Low Feb 26
• SUP 3: 133.790 Low Jun 5, 2020 (cont)
• SUP 4: 133.760 2.00 proj of Dec 11 - Jan 27 high

Bobl futures maintain a bearish theme however last week's volatile session on Thursday/Friday does highlight the oversold condition in the trend and the risk of a short-term corrective bounce. Continued upside follow through would signal scope for a climb towards 134.530, Feb 25 high ahead of the 20-day EMA at 134.697. The bear trigger is Friday's 133.800 low. A break would resume the recent bearish pressure.

SCHATZ TECHS: (H1) Recovers From Friday's Low

• RES 4: 112.276 50-day EMA
• RES 3: 112.245 High Feb 18
• RES 2: 112.232 20-day EMA
• RES 1: 112.215 Intraday high
• PRICE: 112.205 @ 05:08 GMT Mar 1
• SUP 1: 112.140 Intraday hourly low during the Feb 26 session
• SUP 2: 112.070 Low Feb 26
• SUP 3: 112.040 Low Sep 7 and 8 2020 (cont)
• SUP 4: 112.000 76.4% 2019 - 2020 Rally

Schatz futures maintain a bearish stance although the sharp recovery from 112.070, Friday's low, highlights the current oversold trend condition and the potential for a short-term corrective bounce. Further gains would allow for a climb towards the 20-day EMA that intersects at 112.232. A break of this average would allow for a stronger bounce. On the downside, 112.070 marks the bear trigger.

GILT TECHS: (M1) Bearish Price Sequence Maintained

• RES 4: 130.46 High Feb 16
• RES 3: 129.75 High Feb 19
• RES 2: 129.00 High Feb 24 and key near-term resistance
• RES 1: 128.63 High Feb 26
• PRICE: 127.77 @ Close Feb 26
• SUP 1: 127.55 Low Feb 26
• SUP 2: 127.37 61.8% retrace of the 2018 - 2020 bullish cycle (cont)
• SUP 3: 127.00 Round number support
• SUP 4: 126.85 Low May 3, 2019 (cont)

Gilt futures bears remain in control as price maintains a bearish sequence of lower lows and lowers highs. The contract has been in oversold territory since early Feb and although this has not had an impact on bearish sentiment, the risk of a potentially sharp corrective bounce remains present. Until then however, bears remain in charge and further weakness would open 127.37, a major Fibonacci retracement. Initial resistance is at 129.00, Feb 24 high.

BTP TECHS: Remains Heavy

• RES 4: 151.98 High Feb 22
• RES 3: 151.31/33 50- and 20-day EMA zone
• RES 2: 150.60 High Feb 25
• RES 1: 150.02 High Feb 26
• PRICE: 149.80 @ Close Feb 26
• SUP 1: 148.72 Low Feb 26
• SUP 2: 148.37 Low Oct 22 and key support
• SUP 3: 148.08 200-dma (cont)
• SUP 4: 147.46 Low Sep 30, 2020 (cont)

BTP futures remain in a bear mode following last week's strong sell-off. Price has cleared support at 149.57, Jan 22 low adding further weight to the current sell-off. A break of Friday's low of 148.72 would trigger an extension lower towards 148.37, Oct 22, 2020 low (cont). Clearance of this level would open the 148.00 handle. On the upside, resistance is seen at 150.60, the Feb 25 high ahead of 151.31/33 zone, the 50- and 20-day EMA.

EQUITIES

EUROSTOXX 50 Techs: Corrective Cycle

• RES 4: 3798.19 0.764 proj of Mar - Jul - Oct 2020 swing
• RES 3: 3742.53 High Feb 15 and the bull trigger
• RES 2: 3728.65 High Feb 25
• RES 1: 3676.59 High Feb 26
• PRICE: 3636.44 @ Close Feb 26
• SUP 1: 3622.24 Low Feb 26
• SUP 2: 3606.70 50-day EMA
• SUP 3: 3576.43 61.8% retracement of the Jan 28 - Feb 15 rally
• SUP 4: 3537.19 76.4% retracement of the Jan 28 - Feb 15 rally

EUROSTOXX 50 remains in a broader uptrend but has entered a short-term corrective phase following the recent pullback from 3742.53, Feb 15 high. Near-term attention is on the 50-day EMA at 3606.70 where a break would suggest potential for a deeper pullback. On the upside, 3742.53 marks the bull trigger. A break would confirm a resumption of the underlying uptrend and open 3798.19, a Fibonacci projection.

COMMODITIES

BRENT TECHS: (K1) Bulls Pause For Breath

• RES 4: $71.75 - High Jan 8, 2020 (cont)
• RES 3: $70.00 - Psychological round number
• RES 2: $67.25 - 2.0% Upper Bollinger Band
• RES 1: $66.82 - High Feb 25
• PRICE: $65.70 @ 07:51 Mar 1
• SUP 1: $63.59 - Low Feb 23
• SUP 2: $62.09 - Low Feb 19 and key support
• SUP 3: $59.92 - Low Feb 12
• SUP 4: $59.66 - Bull channel support drawn off the Nov 2, 2020 low

Brent crude futures maintain a bullish tone with the uptrend intact. Last week's price action registered a new cycle high of $66.82 Thursday. This market continues to defy overbought signals - the RSI entered overbought territory early February. A break of $67.70 would confirm a resumption of the uptrend and open the $70.00 handle. On the downside, initial firm support is seen at $62.09, Feb 19 low.

WTI TECHS: (J1) Uptrend Remains Intact

• RES 4: $66.60 - High Apr 23, 2019
• RES 3: $65.65 - High Jan 8, 2020 (cont)
• RES 2: $65.00 - Round number resistance
• RES 1: $63.81 - High Feb 24
• PRICE: $62.66 @ 08:00 Mar 1
• SUP 1: $60.67 - Low Feb 23
• SUP 2: $58.60 - Low Feb 19 and key short-term support
• SUP 3: $57.31 -Low Feb 12
• SUP 4: $56.51 - Bull channel base drawn off the Nov 2, 2020 low

WTI futures remain in an uptrend. Last week's gains registered a new cycle high of $63.81 Thursday. This market also continues to defy overbought signals - the RSI entered overbought territory early February. A break of $63.81 would confirm a resumption of the uptrend and open the $65.00 handle. On the downside, initial firm support is seen at $58.60, the Feb 19 low.

GOLD TECHS: Bounce Likely A Correction

• RES 4: $1831.4 - 50-day EMA
• RES 3: $1816.0 - High Feb 23
• RES 2: $1804.5 - 20-day EMA
• RES 1: $1775.9 - High Feb 26
• PRICE: $1755.5 @ 07:08 GMT Mar 1
• SUP 1: $1733.1 - Intraday low
• SUP 2: $1700.0 - Round number support
• SUP 3: $1689.9 - 61.8% retracement of the Mar - Aug 2020 rally
• SUP 4: $1671.0 - Low Jun 5, 2020

Gold remains in a clear downtrend following last week's sharp sell-off that saw the yellow metal trade through support at $1760.67, Feb 19 low. This confirms a resumption of the broader downtrend that has been in place since the reversal in August 2020. The focus is on the $1700.0 level next. MA studies are also in a bear mode highlighting the current path of least resistance. Initial resistance is seen at $1775.9, Friday's high.

SILVER TECHS: Eyeing Key Near-Term Support

• RES 4: $29.053 - High Feb 2
• RES 3: $28.498 - 61.8% retracement of the Feb 1 - 4 sell-off
• RES 2: $28.328 - High Feb 23
• RES 1: $27.595 - High Feb 26
• PRICE: $26.803 @ 09:29 GMT Mar 1
• SUP 1: $26.139/138 - Low Feb 19 / Low Feb 26
• 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 last week's bearish pressure and despite recovering off Friday's low of $26.138. The key near-term support is at $25.905, Feb 4 low. Clearance of this support would set the scene for a deeper pullback and expose $25.483, 76.4% retracement of the Jan 18 - Feb 1 rally. Key resistance has been defined at $28.328, Feb 23 high where a break would likely trigger stronger gains.