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MNI DAILY TECHNICAL ANALYSIS - USDJPY Corrective Rally Gathers Steam

Price Signal Summary – USDJPY Corrective Rally Gathers Steam

  • The S&P E-Minis trend condition is bullish and the latest pullback is considered corrective. The contract has pierced initial support at 4069.52, the 20-day EMA. Firmer support lies at the 50-day EMA, at 4006.63. EUROSTOXX 50 futures were tilted higher through the Thursday open, before fading slightly into the close. This puts prices just below first resistance at 4303.20, the 2.382 proj of the Sep 29 - Oct 4 rise from Dec 20 low.
  • The CPI-inspired intraday spike in EURUSD reversed into the Tuesday close and the pair has already printed a lower low early Friday. The price action shows rallies are still prone to pullbacks on any move higher. USDJPY topped the key short-term level marking the 50-day EMA on Tuesday. The break above 132.77 opened gains through 134.77, the Jan 6 high, firming the short-term outlook. AUDUSD printed a lower low early Friday, putting prices through first support at 0.6856 to expose 0.6781. The broader uptrend remains intact for now, and the recent move lower highlights a correction that is allowing a recent overbought trend condition to unwind.
  • Trend conditions in Gold are bearish for now, and the yellow metal remains in a corrective cycle. This follows the strong sell-off on Feb 2 / 3 as well as the break of support at the 50-day EMA early Wednesday. WTI futures showed above the Friday high ahead of the Monday close, marking an extension of the recovery from $72.25, the Feb 6 low. The rally has confirmed a break of the 50-day EMA, at $78.34, strengthening the current bull cycle.
  • Bund futures fell further still Thursday as the current sell-off gathers pace. This put prices at fresh lows of 134.22 just ahead of the European close, setting up markets for a bearish weekly candle. The weakness gathered pace on the break below 135.08, the Jan 4 low. The sell-off resumed across Gilt futures Thursday, marking another bearish break for the contract. This confirms a reversal of the late January bullish theme, and opens next support at 102.19 initially, before the 100-dma of 101.88.

FOREIGN EXCHANGE

EURUSD TECHS: 50-Day EMA Gives Way

  • RES 4: 1.1076 High Apr 1, 2022
  • RES 3: 1.1054 1.236 proj of the Oct 13 -27 rally from the Jan 6 low
  • RES 2: 1.0940/1.1033 High Feb 3 / High Feb 2
  • RES 1: 1.0793 20-day EMA
  • PRICE: 1.0637 @ 08:45 GMT Feb 17
  • SUP 1: 1.0630 Low Feb 17
  • SUP 2: 1.0597 1.0% 10-dma envelope
  • SUP 3: 1.0484 Low Jan 6 and a key support
  • SUP 4: 1.0461 38.2% retracement of the Sep 28 - Feb 2 bull leg

The CPI-inspired intraday spike in EURUSD reversed into the Tuesday close and the pair has already printed a lower low early Friday. The price action shows rallies are still prone to pullbacks on any move higher. Prices have now broken below the 50-day EMA at 1.0678, signalling that the current correction could have room to run lower. The clear break of the 50-day EMA strengthens the bearish cycle and exposes 1.0484, the Jan 6 low.

GBPUSD TECHS: Sell on Rallies Theme Remains Dominant

  • RES 4: 1.2506 1.382 proj of the Sep 26 - Oct 5 - Oct 12 price swing
  • RES 3: 1.2401/2448 High Feb 2 / High Jan 23 and the bull trigger
  • RES 2: 1.2265 High Feb 3
  • RES 1: 1.2269 / 99 High Feb 14 / 20-day EMA
  • PRICE: 1.1923 @ 08:50 GMT Feb 17
  • SUP 1: 1.1915 Low Feb 17
  • SUP 2: 1.1842 Low Jan 6 and a reversal trigger
  • SUP 3: 1.1859 3.0% 10-dma envelope
  • SUP 4: 1.1800 Round number support

GBPUSD maintains a sell-on-rallies theme as price failed to retain upside momentum after the 1.2269 print Tuesday. Recent weakness reinforces a S/T bearish theme and signals scope for a continuation. Price has now moved south of the 200-dma at 1.1947 to expose key support at 1.1842, the Jan 6 low. A break of 1.1842 would highlight a potential trend reversal and a double top. Firm resistance is 1.2265, Feb 3 high. Key resistance is 1.2448, Jan 23 high.

EURGBP TECHS: Adds to Recent Strength

  • RES 4: 0.9097 76.4% Retracement of the Sep 26 - Dec 1 bear leg
  • RES 3: 0.9047 2.0% 10-dma envelope
  • RES 2: 0.8992 61.8% Retracement of the Sep 26 - Dec 1 bear leg
  • RES 1: 0.8979 High Feb 3 and the bull trigger
  • PRICE: 0.8920 @ 08:52 GMT Feb 17
  • SUP 1: 0.8804 Low Feb 14
  • SUP 2: 0.8798 50-day EMA
  • SUP 3: 0.8762 Low Jan 30
  • SUP 4: 0.8722 Low Jan 19 and a reversal trigger

EURGBP trend conditions remain bullish, with prices reverting higher on the back of the UK CPI release earlier this week. Wednesday saw the first higher close in eight sessions for the cross, helping partially reverse a large part of the modest pullback. The recent clearance of 0.8897, the Jan 13 high, confirmed a resumption of the uptrend that started early December and sights are on 0.8992, a Fibonacci retracement. Moving average studies remain in a bull-mode position, highlighting an uptrend. First support to watch lies at 0.8798, the 50-day EMA.

USDJPY TECHS: Strong to Stronger

  • RES 4: 136.67 38.2% retracement of the Oct 21 - Jan 16 bear leg
  • RES 3: 136.38 3.0% Upper Bollinger Band
  • RES 2: 135.31 2.0% 10-dma envelope
  • RES 1: 135.03 High Feb 17
  • PRICE: 134.82 @ 08:55 GMT Feb 17
  • SUP 1: 129.81 Low Feb 10
  • SUP 2: 128.09/127.23 Low Feb 2 / Low Jan 16 and the bear trigger
  • SUP 3: 126.81 1.382 proj of the Oct 31 - Nov 15 - 21 price swing
  • SUP 4: 126.36 Low May 24 and a key support

USDJPY topped the key short-term level marking the 50-day EMA on Tuesday. The break above 132.77 opened gains through 134.77, the Jan 6 high, firming the short-term outlook. Vol band resistance is layered between 135.31 and 136.38 ahead of Fib retracements at 136.67. Firm support to watch is at 128.09, the Feb 2 low. The bear trigger is at 127.23, the Jan 16 low - a break would resume the downtrend.

EURJPY TECHS: Third Session of Closing at High

  • RES 4: 145.83 High Dec 20
  • RES 3: 144.53 76.4% retracement of the Dec 15 - Jan 3 bear leg
  • RES 2: 144.00 Round number resistance
  • RES 1: 143.62 High Feb 17
  • PRICE: 143.56 @ 09:03 GMT Feb 17
  • SUP 1: 139.56/06 Low Feb 10 and a key support / Low Jan 20
  • SUP 2: 138.45 2.0% 10-dma envelope
  • SUP 3: 137.92 Low Jan 19
  • SUP 4: 137.39 Low Jan 3 and the bear trigger

EURJPY recovered further off support headed through the Wednesday close, marking a third consecutive session of the cross closing at a session high. Wednesday’s break of 142.99 confirms a continuation of the recovery that started on Jan 3. The next upside level sits at 144.00 handle resistance ahead of 144.53. Firmer support is expected at 139.94, the Feb 3 low and the outlook remains bullish.

AUDUSD TECHS: Pullback Nears Support

  • RES 4: 0.7245 2.00 proj of the Nov 21 - Dec 13 - Dec 20 price swing
  • RES 3: 0.7202 High Jun 9
  • RES 2: 0.7172 1.764 proj of the Nov 21 - Dec 13 - Dec 20 price swing
  • RES 1: 0.7082/0.7158 High Feb 3 / 2 and the bull trigger
  • PRICE: 0.6828 @ 09:05 GMT Feb 17
  • SUP 1: 0.6822 Low Feb 16
  • SUP 2: 0.6781 38.2% retracement of the Oct 13 - Feb 2 uptrend
  • SUP 3: 0.6755 Trendline support drawn from the Oct 13 low
  • SUP 4: 0.6688 Low Jan 3

AUDUSD printed a lower low early Friday, putting prices through first support at 0.6856 to expose 0.6781. The broader uptrend remains intact for now, and the recent move lower highlights a correction that is allowing a recent overbought trend condition to unwind. Key resistance and the bull trigger have been defined at 0.7158, the Feb 2 high. A break would resume the uptrend.

USDCAD TECHS: Building Base for Recovery

  • RES 4: 1.3751 High Nov 4
  • RES 3: 1.3705 Dec 16 and the bull trigger
  • RES 2: 1.3665 High Jan 6
  • RES 1: 1.3522 High Feb 17
  • PRICE: 1.3522 @ 09:06 GMT Feb 17
  • SUP 1: 1.3275/3262 Low Feb 14 / 2
  • SUP 2: 1.3226 Low Nov 15 and bear trigger
  • SUP 3: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally
  • SUP 4: 1.3131 0.764 proj of the Oct 13 - Nov 15 - Dec 16 price swing

USDCAD is trading higher again Friday, hitting the week’s best levels at 1.3522. This defies the view that the recent bounce was corrective, as the pair builds a base for further gains. The bull trigger is still someway off at 1.3705, but a weekly close above the 1.3500 would prove constructive. A break of 1.3262, Feb 2 low, would strengthen bearish conditions and open 1.3226, the Nov 15 low and the bear trigger.

FIXED INCOME

BUND TECHS: (H3) Sell-Off Gathers Pace

  • RES 4: 142.59 0.764 proj of the Jan 2 - 19 - 30 price swing
  • RES 3: 141.70 High Dec 13
  • RES 2: 140.73 High Jan 19 and the bull trigger
  • RES 1: 137.71/139.86 50-day EMA / High Feb 2
  • PRICE: 134.24 @ 15:07 GMT Feb 15
  • SUP 1: 134.22 Low Feb 16
  • SUP 2: 133.88 2.0% 10-dma envelope
  • SUP 3: 133.79 Low Jan 3
  • SUP 4: 132.60 Low Jan 2

Bund futures fell further still Thursday as the current sell-off gathers pace. This put prices at fresh lows of 134.22 just ahead of the European close, setting up markets for a bearish weekly candle. The weakness gathered pace on the break below 135.08, the Jan 4 low. Moving average studies are in a bear-mode position, reinforcing current conditions and highlighting bearish sentiment. Next notable level crosses at 133.79, the Jan 3. On the upside, resistance to watch is at 137.71, the 50-day EMA.

BOBL TECHS: (H3) Short-Term Trend Needle Points South

  • RES 4: 119.086 76.4% retracement of the Dec 7 - Jan 2 downleg
  • RES 3: 118.880 High Jan 19 and the bull trigger
  • RES 2: 117.725/118.670 50-day EMA / High Feb 2
  • RES 1: 117.460 High Feb 9
  • PRICE: 116.040 @ 15:10 GMT Feb 16
  • SUP 1: 116.000 Low Feb 16
  • SUP 2: 115.721 1.0% 10-dma envelope
  • SUP 3: 115.650 Low Jan 2
  • SUP 4: 115.423 3.0% Lower Bollinger Band

Bobl futures maintain a weaker tone following the reversal lower from 118.670, the Feb 2 high. Key short-term support at 117.020, the Jan 30 low, has opened further losses for the contract and on Tuesday took out 116.405, a Fibonacci retracement. Vol-band based support at 115.721 is next up, ahead of the early January lows. On the upside, the resistance to watch is at 117.725, the 50-day EMA. A break above this average would ease bearish pressure.

SCHATZ TECHS: (H3) Key Support Gives Way For Contract Lows

  • RES 4: 106.296 61.8% retracement of the Dec 2 - Jan 2 bear leg
  • RES 3: 106.130/106.155 High Feb 2 / High Jan 18 and bull trigger
  • RES 2: 105.978 50-day EMA
  • RES 1: 105.850 High Feb 7
  • PRICE: 105.315 @ 15:07 GMT Feb 16
  • SUP 1: 105.305 Low Feb 16
  • SUP 2: 105.271 Lower 3.0% Bollinger Band
  • SUP 3: 105.140 Low Oct 21 2008
  • SUP 4: 104.656 1.0% 10-dma Envelope

Schatz futures started the week softer and retained the downside bias into the Thursday close. Prices printed down at 105.305, a new contract low. This price action reinforces the current bearish theme and signals scope for weakness towards 105.140 - levels last seen in October 2008. On the upside, key resistance has been defined at 106.130, the Feb 2 high and 106.155, the Jan 18 high. Clearance of this resistance zone would reinstate a bullish condition.

GILT TECHS: (H3) Bearish Break

  • RES 4: 108.96 2.236 proj of the Jan 23 - 25 - 30 price swing
  • RES 3: 108.44 2.00 proj of the Jan 23 - 25 - 30 price swing
  • RES 2: 107.78 High Feb 2 and the bull trigger
  • RES 1: 105.67/106.88 High Feb 9 / 6
  • PRICE: 102.44 @ 15:18 GMT Feb 16
  • SUP 1: 102.36 Low Feb 14
  • SUP 2: 102.19 Low Jan 11
  • SUP 3: 101.88 100-dma
  • SUP 4: 101.85 3.0% 10-dma envelope

The sell-off resumed across Gilt futures Thursday, marking another bearish break for the contract. This confirms a reversal of the late January bullish theme, and opens next support at 102.19 initially, before the 100-dma of 101.88. Initial resistance remains at 105.67, the Feb 9 high, but markets have opened a decent gap with that next upside level.

BTP TECHS: (H3) Sell Off Accelerates

  • RES 4: 121.26 0.764 proj of the Dec 30 - Jan 19 - 30 price swing
  • RES 3: 120.00 Psychological round number
  • RES 2: 118.56/96 High Jan 19 / Dec 7 and a key resistance zone
  • RES 1: 116.33/118.18 High Feb 9 / High Feb 2
  • PRICE: 113.59 @ 15:20 GMT Feb 16
  • SUP 1: 113.26 Low Feb 16
  • SUP 2: 112.26 61.8% retracement of the Dec 30 - Jan 19 rally
  • SUP 3: 111.59 Low Jan 6
  • SUP 4: 110.77 Low Jan 4 and 76.4% of the Dec 30 - Jan 19 rally

BTP futures faded further Thursday, taking out key support at the late January lows of 113.47. This shifts the outlook more bearish, and defies views that the recent weakness was corrective in nature. The next downside levels to watch cross at 112.26, the 61.8% retracement of the Dec 30 - Jan 19 rally. A break would be a bearish development. A reversal higher would signal scope for a test of firm resistance at 118.56, the Jan 19 high and 118.96, the Dec 7 high.

EQUITIES

EUROSTOXX50 TECHS: (H3) Overbought Rally Falters

  • RES 4: 4409.50 High Nov 18 2021
  • RES 3: 4335.50 High Jan 6 2022 (cont)
  • RES 2: 4324.50 High Jan 13 2022 (cont)
  • RES 1: 4315.00 High Feb 16
  • PRICE: 4290.00 @ 15:24 GMT Feb 16
  • SUP 1: 4167.50/4097.00 20-day EMA / Low Jan 19 and a key support
  • SUP 2: 4062.40 Bull channel base drawn from the Oct 13 low
  • SUP 3: 3890.00 Low Jan 4
  • SUP 4: 3753.00 Low Dec 20 and the bear trigger

EUROSTOXX 50 futures were tilted higher through the Thursday open, before fading slightly into the close. This puts prices just below first resistance at 4303.20, the 2.382 proj of the Sep 29 - Oct 4 rise from Dec 20 low, but still above 4265.00, the Feb 3 high. Note that the trend is overbought. A pullback would represent a healthy correction. Key support lies at 4097.00, the Jan 19 low. Initial support is at 4167.50, the 20-day EMA.

E-MINI S&P (H3): Circling Below Highs

  • RES 4: 4361.00 High Aug 16
  • RES 3: 4300.00 Round number resistance
  • RES 2: 4250.00 High Aug 26, 2022
  • RES 1: 4208.50 High Feb 2 and the bull trigger
  • PRICE: 4161.25 @ 07:08 GMT Feb 16
  • SUP 1: 4060.75 Low Feb 13
  • SUP 2: 4006.63 50-day EMA
  • SUP 3: 3901.75 Low Jan 19
  • SUP 4: 3788.50 Low Dec 22 and a key support

The S&P E-Minis trend condition is bullish and the latest pullback is considered corrective. The contract has pierced initial support at 4069.52, the 20-day EMA. Firmer support lies at the 50-day EMA, at 4006.63. A clear break of this average would signal scope for a deeper pullback and potentially highlight a reversal. Key resistance and the bull trigger intersect at 4208.50, the Feb 2 high. A breach would resume the uptrend.

COMMODITIES

BRENT TECHS: (J3) Fades Off Weekly High

  • RES 4: $92.64 - High Nov 14
  • RES 3: $90.34 - 76.4% retracement of the Nov 7 - Dec 12 bear leg
  • RES 2: $89.00 - High Jan 23 and the bull trigger
  • RES 1: $86.95 - High Feb 14
  • PRICE: $85.46 @ 15:29 GMT Feb 16
  • SUP 1: $83.05/79.10 - Low Feb 9 / 6
  • SUP 2: $77.77 - Low Jan 5
  • SUP 3: $75.89 - Low Dec 12 and the bear trigger
  • SUP 4: $73.48 - 1.00 proj of the Nov 7 - Dec 12 - Jan 23 price swing

Brent futures continue to gradually fade last Friday’s gains, but the $84.00 handle support is intact for now. Having broken the 50-day EMA resistance early last week, markets have exposed the bull trigger at 89.00. On the downside, a move below $79.10, Feb 6 low, is required to reinstate a bearish theme. Initial support is $83.05, the Feb 9 low.

WTI TECHS: (H3) Recovery Fades, But Medium-Term View Unchanged

  • RES 4: $87.00 - High Nov 14
  • RES 3: $85.33 - 76.4% retracement of the Nov 7 - Dec 9 bear leg
  • RES 2: $83.14 - High Dec 1 and a key resistance
  • RES 1: $80.62 - High Feb 13
  • PRICE: $78.73 @ 15:30 GMT Feb 16
  • SUP 1: $76.52 - Low Feb 9
  • SUP 2: $72.25 - Low Feb 6
  • SUP 3: $70.56 - Low Dec 9 and the bear trigger
  • SUP 4: $70.00 - Psychological round number

WTI futures showed above the Friday high ahead of the Monday close, marking an extension of the recovery from $72.25, the Feb 6 low. The rally has confirmed a break of the 50-day EMA, at $78.34, strengthening the current bull cycle. Prices have faded slightly since, however the medium-term view remains unchanged. Key resistance remains at $82.66, the Jan 18 high. On the downside, initial firm support has been defined at $76.52, the Feb 9 low.

GOLD TECHS: Support Begins to Crack

  • RES 4: $1998.4 - High Apr 18, 2022
  • RES 3: $1982.0 - High Apr 19, 2022
  • RES 2: $1963.0 - 76.4% retracement of the Mar - Sep 2022 bear leg
  • RES 1: $1892.1/1959.7 - 20-day EMA / High Feb 2
  • PRICE: $1834.8 @ 15:38 GMT Feb 16
  • SUP 1: $1827.7 - Low Feb 16
  • SUP 2: $1825.2 - Low Jan 5 and key near-term support
  • SUP 3: $1797.1 - Low Dec 28
  • SUP 4: $1787.3 - 50.0% retracement of the Sep 28 - Feb 2 bull leg

Trend conditions in Gold are bearish for now, and the yellow metal remains in a corrective cycle. This follows the strong sell-off on Feb 2 / 3 as well as the break of support at the 50-day EMA early Wednesday. A clear break here would strengthen a bearish case and suggest scope for a deeper pullback - towards $1825.2, the Jan 5 low. On the upside, key resistance and the bull trigger is at $1959.7, the Feb 2 high.

SILVER TECHS: Bearish Price Action

  • RES 4: $25.293 - High Apr 20
  • RES 3: $24.729 - 76.4% retracement of the Mar - Sep bear leg
  • RES 2: $24.637 - High Feb 2 and the bull trigger
  • RES 1: $23.109 - 20-day EMA
  • PRICE: $21.618 @ 15:40 GMT Feb 16
  • SUP 1: $21.430 - Low Feb 15
  • SUP 2: $21.099 - 50.0% retracement of the Sep 1 - Feb 2 bull leg
  • SUP 3: $20.872 - Low Nov 28
  • SUP 4: $20.585 - Low Nov 21

A sharp sell-off in Silver on Feb 3 resulted in a break of $22.557, the Dec 16 low. Price has also traded below the 50-day EMA - a bearish development. The move lower highlights a range breakout and if this is correct, it warns of a short-term trend reversal. A continuation lower would open $21.099, a Fibonacci retracement. On the upside, initial resistance is seen at $23.109, the 20-day EMA ahead of $24.637, the Feb 2 high.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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