MNI DAILY TECHNICAL ANALYSIS - USDJPY Volatility Highlights Risk of Corrective Cycles

Price Signal Summary – USDJPY Volatility Highlights Risk of Corrective Cycles

• The short-term trend condition in S&P E-Minis remains bearish and recent gains appear to have been a correction. The contract has recently traded through the 50-day EMA, signalling scope for a continuation lower. Eurostoxx 50 futures are trading above 4762.00, the Apr 19 low. The contract has recently traded through the 20-day EMA and resistance at 4990.00, the Apr 15 high. This continues to highlight a potentially stronger reversal and the end of the correction between Apr 2 - 19.
• The USDJPY trend condition remains bullish. However, this week’s volatile session highlights the start of a possible corrective cycle and yesterday’s sharp sell-off reinforces this theme. The pair has traded through support at the 20-day EMA - at 154.58 - exposing the 50-day EMA at 152.39. The EURJPY trend condition remains bullish and the recent volatile bearish phase is considered corrective. This is allowing an overbought trend condition to unwind. Yesterday’s steep sell-off resulted in a test of support at 164.55, a trendline drawn from the Dec 7 ‘23 low. USDCAD traded sharply higher Tuesday. A bullish trend condition remains intact and the most recent pullback appears to have been a correction. The pair has recently cleared 1.3614, the Mar 19, 22, 25 and 29 highs, strengthening a bullish theme.
• Gold traded lower Tuesday and breached initial support at $2291.6, the Apr 23 low. The precious metal has also traded through the 20-day EMA and this highlights a corrective cycle. A continuation lower would signal scope for an extension towards $2242.7. WTI futures traded lower yesterday. Price has breached key support at the 50-day EMA, at $81.14. The clear breach of this average strengthens a short-term bearish theme and highlights scope for a deeper correction.
• The trend outlook in Bund futures remains bearish and the latest recovery is considered corrective. The contract traded to fresh cycle lows last week, confirming once again a resumption of the downtrend. Key support at 131.23, the Feb 29 low, has also recently been cleared. A bearish theme in Gilt futures remains intact. Last week’s breach of support at 96.01, the Apr 17 low, confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs.

FOREIGN EXCHANGE

EURUSD TECHS: Gains Considered Corrective

• RES 4: 1.0943 High Mar 21
• RES 3: 1.0885 High Apr 09
• RES 2: 1.0768 50-day EMA
• RES 1: 1.0717/53 20-day EMA / High Apr 26
• PRICE: 1.0718 @ 06:22 BST May 2
• SUP 1: 1.0650/0601 Low May 1 / Low Apr 16
• SUP 2: 1.0568 Low Nov 2 ‘23
• SUP 3: 1.0522 Base of a bear channel drawn from the Dec 28 high
• SUP 4: 1.0517 Low Nov 1 ‘23

EURUSD is testing resistance, at 1.0717 today, the 20-day EMA. The latest move higher appears to be a correction and the trend direction remains down. A resumption of the trend would open 1.0568, the Nov 2 2023 low, and 1.0522, the base of a bear channel drawn from the Dec 28 high. For bulls, a clear break of the 20-day EMA would instead signal scope for a stronger recovery. The 50-day EMA is at 1.0768.

GBPUSD TECHS: Watching Resistance At The 50-Day EMA

• RES 4: 1.2803 High Mar 21
• RES 3: 1.2709 High Apr 09
• RES 2: 1.2574 50-day EMA values
• RES 1: 1.2570 High Apr 29
• PRICE: 1.2534 @ 06:44 BST May 2
• SUP 1: 1.2423/2300 Low Apr 24 / 22 and the bear trigger
• SUP 2: 1.2266 Low Nov 14 ‘23
• SUP 3: 1.2239 76.4% retracement of the Oct 4 - Mar 8 bull leg
• SUP 4: 1.2187 Low Nov 10

GBPUSD is trading closer to its recent highs. The trend condition is bearish and the latest recovery is considered corrective. Moving average studies remain in a bear-mode set-up and the recent break lower, maintains the downward price sequence of lower lows and lower highs. A resumption of the trend would open 1.2266, the Nov 14 2023 low. Resistance to watch is 1.2576, the 50-day EMA. A clear break of this average would be bullish.

EURGBP TECHS: Bearish Cycle Remains In Play

• RES 4: 0.8704 76.4% retracement of the Nov 20 - Feb 14 bear cycle
• RES 3: 0.8683 High Jan 2
• RES 2: 0.8665 61.8% retracement of the Nov 20 - Feb 14 bear cycle
• RES 1: 0.8600/45 High Apr 24 / 23
• PRICE: 0.8549 @ 06:57 BST May 2
• SUP 1: 0.8531 Low Apr 30
• SUP 2: 0.8521/8504 Low Apr 17 / Low Mar 8
• SUP 3: 0.8498/93 Low Feb 14 / Low Aug 23 2023 and key support
• SUP 4: 0.8454 76.4% of the Mar 7 - Sep 26 ‘23 bull phase

EURGBP remains closer to its recent low. The latest move down undermines a recent bullish theme and instead highlights potential for a deeper retracement. This has exposed 0.8521, the Apr 17 low. Clearance of this level would signal scope for a move towards the key support at 0.8498/93, the Feb 14 low and Aug 23 2023 low. Key resistance has been defined at 0.8645, the Apr 23 high.

USDJPY TECHS: Trades Through The 20-Day EMA

• RES 4: 160.17/20 High Apr 29 / High Apr 1990
• RES 3: 159.55 2.618 proj of the Feb 1 - 13 - Mar 8 price swing
• RES 2: 158.97 2.50 proj of the Feb 1 - 13 - Mar 8 price swing
• RES 1: 157.99/158.44 High May 1 / HIgh Apr 26
• PRICE: 155.82 @ 05:59 BST May 2
• SUP 1: 154.25/153.04 Intraday low / Low May 1
• SUP 2: 152.39 50-day EMA
• SUP 3: 151.05 Trendline support drawn from the Dec 28 low
• SUP 4: 150.81 Low Apr 5

The USDJPY trend condition remains bullish. However, this week’s volatile session highlights the start of a possible corrective cycle and yesterday’s sharp sell-off reinforces this theme. The pair has traded through support at the 20-day EMA - at 154.58 - exposing the 50-day EMA at 152.39, a key support. Note that trendline support drawn from the Dec 28 low, lies at 151.05. Initial resistance to watch is 157.99, yesterday’s intraday high.

EURJPY TECHS: Tests Key Short-Term Support

• RES 4: 171.64 2.00 proj of the Jan 1 - 19 - Feb 1 price swing
• RES 3: 171.56 High Apr 29
• RES 2: 170.04 1.764 proj of the Jan 1 - 19 - Feb 1 price swing
• RES 1: 168.66 High May1
• PRICE: 167.05 @ 06:11 BST May 2
• SUP 1: 164.55 Trendline drawn from the Dec 7 ‘23 low
• SUP 2: 164.07 50-day EMA
• SUP 3: 163.02 Low Apr 19
• SUP 4: 162.28 Low Apr 12

The EURJPY trend condition remains bullish and the recent volatile bearish phase is considered corrective. This is allowing an overbought trend condition to unwind. Yesterday’s steep sell-off resulted in a test of support at 164.55, a trendline drawn from the Dec 7 ‘23 low. Note that 164.07 marks the 50-day EMA. A clear break of both support points would signal scope for a deeper retracement. Initial resistance to watch is 168.66, yesterday’s high.

AUDUSD TECHS: Resistance Remains Intact

• RES 4: 0.6668 High Mar 8
• RES 3: 0.6644 High Apr 9 and a key resistance
• RES 2: 0.6617 50.0% retracement of the Dec 28 - Apr 19 bear leg
• RES 1: 0.6587 High Apr 29
• PRICE: 0.6544 @ 07:27 BST May 2
• SUP 1: 0.6465/6363 Low May 1 / Low Apr 19 and the bear trigger
• SUP 2: 0.6339 Low Nov 10 and a key support
• SUP 3: 0.6315 Low Oct 31 ‘23
• SUP 4: 0.6270 Low Oct 26 ‘23 and a key support

AUDUSD traded sharply lower Tuesday. The move down highlights a possible reversal of the rally from 0.6363, the Apr 19 low. A resumption of weakness would expose 0.6363 where a break would resume this year's downtrend. Initial resistance has been defined at 0.6587, Monday’s high. Clearance of this level would be bullish and signal scope for a climb towards 0.6644, Apr 9 high. For now, the latest recovery appears to be a correction.

USDCAD TECHS: Bullish Structure Intact

• RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
• RES 3: 1.3899 High Nov 1 and a key resistance
• RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
• RES 1: 1.3804 High Apr 9
• PRICE: 1.3712 @ 07:31 BST May 2
• SUP 1: 1.3632 Low Apr 29
• SUP 2: 1.3620 50-day EMA
• SUP 3: 1.3547 Low Apr 9
• SUP 4: 1.3478 Low Apr 4

USDCAD traded sharply higher Tuesday. A bullish trend condition remains intact and the most recent pullback appears to have been a correction. The pair has recently cleared 1.3614, the Mar 19, 22, 25 and 29 highs, strengthening a bullish theme. This opens 1.3855 next, the Nov 10 ‘23 high. Looking at moving average studies, they remain in a bull-mode position, highlighting a clear rising trend. Key support to watch 1.3620, 50-day EMA.

FIXED INCOME

BUND TECHS: (M4) Bearish Trend Condition

• RES 4: 132.24 High Apr 19
• RES 3: 132.00 50-day EMA
• RES 2: 131.47 High Apr 23
• RES 1: 131.20 20-day EMA
• PRICE: 130.26 @ 05:30 BST May 2
• SUP 1: 129.53 Low Apr 25
• SUP 2: 129.26 1.618 proj of the Mar 8 - 18 - 27 price swing
• SUP 3: 129.00 Round number support
• SUP 4: 128.88 1.764 proj of the Mar 8 - 18 - 27 price swing

The trend outlook in Bund futures remains bearish and the latest recovery is considered corrective. The contract traded to fresh cycle lows last week, confirming once again a resumption of the downtrend. Key support at 131.23, the Feb 29 low, has also recently been cleared. Sights are on 129.26, a Fibonacci projection. On the upside, firm resistance is at 133.05, the Apr 12 high. First resistance to watch is at 131.20, the 20-day EMA.

BOBL TECHS: (M4) Trend Condition Remains Bearish

• RES 4: 118.100/118.310 High Apr 12 / High Mar 27
• RES 2: 117.620 High Apr 19
• RES 3: 117.260 High Apr 23
• RES 1: 117.129 20-day EMA
• PRICE: 116.560 @ 06:02 BST May 2
• SUP 1: 116.230 Low May 1
• SUP 2: 116.135 1.50 proj of the Mar 8 - 18 - 27 price swing
• SUP 3: 115.964 1.618 proj of the Mar 8 - 18 - 27 price swing
• SUP 4: 115.752 1.764 proj of the Mar 8 - 18 - 27 price swing

The downtrend in Bobl futures remains intact and Tuesday’s move lower reinforces this condition. The contract traded to a fresh cycle low of 116.230 yesterday. Key support at 117.200, Feb 29 low, has recently been cleared, confirming a resumption of the primary downtrend. Sights are on 116.135, a Fibonacci projection. First resistance to watch is 117.129, the 20-day EMA. A break of this average would signal scope for a stronger short-term correction.

SCHATZ TECHS: (M4) Downtrend Remains Intact

• RES 4: 105.790 High Mar 25 and key resistance
• RES 3: 105.680 High Apr 12
• RES 2: 105.525 High Apr 23
• RES 1: 105.389/425 20-day EMA / High Apr 19
• PRICE: 105.145 @ 06:11 BST May 2
• SUP 1: 105.045 Low Apr 30
• SUP 2: 105.000 Round number support
• SUP 3: 104.917 1.764 proj of the Aug 8 - Mar 18 - Mar 25 price swing
• SUP 4: 104.800 2.00 proj of the Mar 8 - 18 - 25 price swing

The trend condition in Schatz futures is unchanged and remains bearish. The recent break of support at 105.490, the Feb 29 low and bear trigger, confirmed a resumption of the downtrend that started late December last year. Tuesday’s move lower reinforces current conditions. Sights are on the 105.00 handle. Key resistance has been defined at 105.790, the Mar 25 high. Initial firm resistance is 105.389, the 20-day EMA.

GILT TECHS: (M4) Trend Needle Points South

• RES 4: 97.74 50-day EMA
• RES 3: 97.28 High Apr 22
• RES 2: 96.90 20-day EMA
• RES 1: 96.57 High Apr 29
• PRICE: 95.65 @ Close May 1
• SUP 1: 95.36 Low Apr 25
• SUP 2: 95.00 Round number support
• SUP 3: 94.86 2.236 proj of the Mar 12 - 15 - 22 price swing
• SUP 4: 94.52 2.382 proj of the Mar 12 - 15 - 22 price swing

A bearish theme in Gilt futures remains intact. Last week’s breach of support at 96.01, the Apr 17 low, confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. Furthermore, moving average studies have recently crossed, highlighting a bear-mode set-up. Scope is seen for a move towards the 95.00 handle next. Initial firm resistance to watch is 96.90, the 20-day EMA.

BTP TECHS: (M4) Support Remains Exposed

• RES 4: 120.65 High Dec 27 and the bull trigger
• RES 3: 120.28 High Mar 14
• RES 2: 119.55 High Mar 27
• RES 1: 117.95/119.10 High Apr 23 / 10
• PRICE: 116.99 @ Close Apr 30
• SUP 1: 115.76 Low Apr 25
• SUP 2: 115.70 Low Dec 8 ‘23 (cont)
• SUP 3: 114.74 1.236 proj of the Dec 27 - Feb 22 - Mar 14 price swing
• SUP 4: 114.09 1.382 proj of the Dec 27 - Feb 22 - Mar 14 price swing

A bearish threat in BTP futures remains present and the latest recovery appears to be a correction - for now. Last week’s move lower reinforces a bearish theme. The break lower resulted in a breach of 116.15, the Feb 22 low and a bear trigger. A clear break of this level would highlight an important bearish development and open 115.70 initially, the Dec 8 2023 low (cont). Key short-term resistance to watch is 119.10, the Mar 27 high.

EQUITIES

EUROSTOXX50 TECHS: (M4) Remains Above Support

• RES 4: 5127.70 1.382 proj of the Jan 17 - Feb 12 - 13 price swing
• RES 3: 5079.00 High Apr 2 and the bull trigger
• RES 2: 5043.00 High Apr 4
• RES 1: 5006.00 High Apr 30
• PRICE: 4897.00 @ 06:47 BST May 2
• SUP 1: 4878.10 50-day EMA
• SUP 2: 4762.00 Low Apr 19 and the bear trigger
• SUP 3: 4711.00 Low Feb 19
• SUP 4: 4700.00 Round number support

Eurostoxx 50 futures are trading above 4762.00, the Apr 19 low. The contract has recently traded through the 20-day EMA and resistance at 4990.00, the Apr 15 high. This continues to highlight a potentially stronger reversal and the end of the correction between Apr 2 - 19. An extension higher would expose the bull trigger at 5079.00, the Apr 2 high. Key support lies at 4762.00, a break would be bearish. Initial support to watch is 4878.10, the 50-day EMA.

E-MINI S&P TECHS: (M4) Bear Threat Remains Present

• RES 4: 5333.50 High Apr 1 and the bull trigger
• RES 3: 5285.00 High Apr 10
• RES 2: 5213.25 High Apr 15
• RES 1: 5124.01/5154.25 20-day EMA / High Apr 29
• PRICE: 5069.50 @ 07:08 BST May 2
• SUP 1: 5022.25/4963.50 Low Apr 25 / 19 and the bear trigger
• SUP 2: 4907.57 50.0% retracement of the Oct 27 ‘23 - Apr 1 bull leg
• SUP 3: 4863.75 Low Jan 19
• SUP 4: 4799.50 Low Jan 17

The short-term trend condition in S&P E-Minis remains bearish and recent gains appear to have been a correction. The contract has recently traded through the 50-day EMA, signalling scope for a continuation lower. A resumption of the bear leg would open 4907.57, a Fibonacci retracement. Firm resistance at 5124.01, the 20-day EMA, has been pierced, a clear break would signal a reversal and expose key resistance at 5333.50, Apr 1 high.

COMMODITIES

BRENT TECHS: (N4) Clears Support At The 50-Day EMA

• RES 4: $95.18 - 2.382 proj of the Jan 3 - 29 - Feb 5 price swing
• RES 3: $94.00 - 2.236 proj of the Jan 3 - 29 - Feb 5 price swing
• RES 2: $92.09 - 2.00 proj of the Jan 8 - 29 - Feb 5 price swing
• RES 1: $88.64/91.18 - High Apr 26 / 12 and the bull trigger
• PRICE: $84.00 @ 06:56 BST May 2
• SUP 1: $82.32 - 50.0% retracement of the Dec 13 - Apr 12 bull cycle
• SUP 2: $80.24 - 61.8% retracement of the Dec 13 - Apr 12 bull cycle
• SUP 3: $75.91 - Low Feb 5
• SUP 4: $73.47 Low Dec 13 and a key support

Brent futures have pulled back from their most recent highs and the contract traded lower Wednesday. Price has cleared key support at $85.29, the 50-day EMA. The clear breach of this average signals scope for a deeper correction towards $80.24, a Fibonacci retracement. Key resistance and the bull trigger has been defined at $91.18, the Apr 12 high. Clearance of this level would resume the uptrend. Initial resistance is $88.64, Apr 26 high.

WTI TECHS: (M4) Bear Cycle Extends

• RES 4: $91.24 - 2.382 proj of the Jan 3 - 29 - Feb 5 price swing
• RES 3: $90.00 - Psychological round number
• RES 2: $88.07 - 2.00 proj of the Jan 3 - 29 - Feb 5 price swing
• RES 1: $84.46/86.97 - High Apr 26 / 12 and the bull trigger
• PRICE: $79.57 @ 07:12 BST May 2
• SUP 1: $78.03 - 50% of the Dec 13 - Apr 12 upleg
• SUP 2: $76.07 - Low Mar 11
• SUP 3: $71.47 Low Feb 5
• SUP 4: $70.11 - Low Jan 3

WTI futures traded lower yesterday. Price has breached key support at the 50-day EMA, at $81.14. The clear breach of this average strengthens a short-term bearish theme and highlights scope for a deeper correction. This has opened $76.07, the Mar 11 low. Key resistance and the bull trigger has been defined at $86.97, the Apr 12 high. Initial firm resistance is at $84.46, the Apr 26 high.

GOLD TECHS: Corrective Cycle Remains In Play

• RES 4: $2500.0 - Round number resistance
• RES 3: $2481.5 - 1.764 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 2: $2452.5 - 2.618 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 1: $2352.6/2431.5 - High Apr 16 / 12 and the bull trigger
• PRICE: $2315.5 @ 07:10 BST May 2
• SUP 1: $2281.7 - Low May 1
• SUP 2: $2242.7 - 50-day EMA
• SUP 3: $2146.2 - Low Mar 18 and key short-term support
• SUP 4: $2088.5 - High Dec 28

Gold traded lower Tuesday and breached initial support at $2291.6, the Apr 23 low. The precious metal has also traded through the 20-day EMA and this highlights a corrective cycle. A continuation lower would signal scope for an extension towards $2242.7, the 50-day EMA. Note that a short-term bear cycle is allowing significant overbought condition to unwind. Key resistance and the bull trigger is at $2431.5, the recent Apr 12 high.

SILVER TECHS: Short-Term Bearish Threat

• RES 4: $30.912 - 3.00 proj of the Oct 3 - 20 - Nov 13 price swing
• RES 3: $30.100 - Feb 2021 high and a key resistance
• RES 2: $30.000 - Psychological round number
• RES 1: $27.732/29.797 - High Apr 26 / 12
• PRICE: $26.438 @ 08:06 BST May 1
• SUP 1: $26.245 - Low Apr 30
• SUP 2: $26.020/24.328 - 50-day EMA / Low Mar 27
• SUP 3: $22.277 - Low Feb 28
• SUP 4: $21.928 - Low Jan 22 and a key support

Silver traded lower Tuesday confirming an extension of the pullback from $29.797, the Apr 12 high. This maintains the current corrective cycle and sights are on support at the 50-day EMA, at $26.020. A clear break of the 50-day average is required to strengthen a bearish threat. On the upside, key resistance and the bull trigger is at $29.797, the Apr 12 high. Initial resistance is at $27.732, the Apr 26 high.