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Price Signal Summary - Gold Remains Inside Its Bull Channel

MARKET INSIGHT
  • In the equity space, the S&P E-minis technical condition remain bearish. Short-term momentum conditions however highlight a bullish divergence between price and momentum and this does suggest scope for some unwinding of recent weakness or at the very least, a period of consolidation. Note that yesterday’s candle pattern is a hammer - a short-term reversal signal. The next resistance is at 4345.50, the Feb 23 high. Thursday’s low of 4101.75 is the bear trigger. EUROSTOXX 50 futures traded down sharply Thursday. Price did however recover from session lows. The break lower confirms a resumption of the bear cycle and futures have this week cleared a number of key support levels. This suggests scope for a deeper sell-off. Attention is on 3727.00, the Mar 25 2021 low on the continuation chart.
  • In FX, EURUSD remains vulnerable and traded lower Thursday clearing support at 1.1280, the Feb 14 low and 1.1209, the 76.4% retracement of the recent Jan 28 - Feb 10 upleg. The breach of the latter support has strengthened the bearish threat and also resulted in a probe of support at 1.1121, the Jan 28 low and a bear trigger. A clear break of 1.1121 would open 1.1040, 76.4% of the Jan ‘21 - Mar ‘21 bull phase. The GBPUSD outlook remains bearish. A sharp sell-off has seen the pair trade through support at 1.3487, Feb 15 low and 1.3358, the Jan 27 low and a key support. 1.3301, 76.4% retracement of the Dec 8 - Jan 13 rally has been probed. A clear break would strengthen the bearish case and open 1.3163, Dec 8 low. USDJPY key short-term support at 114.16, the Feb 2 low, remains intact. While it holds, trend conditions is bullish. In EURJPY, the cross traded through support at 128.25, Feb 25 low. This exposes 127.52, the Dec 20 low and 127.39, the Dec 3 and 6 low.
  • On the commodity front, volatile price action in Gold Thursday saw the yellow metal reverse sharply from the session high of $1974.3. The outlook is bullish however following recent impulsive gains. Gold is back inside its bull channel, drawn from the Aug 9 2021 low. The channel top intersects at $1939.2 today and represents a key short-term resistance. Watch support at $1878.4, yesterday’s low. WTI futures remain in an uptrend despite the pullback from yesterday’s high. The $100.00 level has been probed and a clear breach of this psychological barrier would strengthen current trend conditions. This would open 102.01 next, 3.382 projection of the Dec 2 - 9 - 20 price swing.
  • In the FI space, Bund futures traded higher Thursday, reversing Tuesday’s pullback and have breached resistance at 167.17, Feb 22 high plus trendline resistance at 167.03. The trendline is drawn from the Dec 20 high. This signals scope for a stronger short-term correction and has opened the 50-day EMA at 168.59. The trend condition in Gilts remains bearish. Resistance to watch is at 123.53, the Feb 18 high. A break would signal potential for a stronger short-term climb. Key near-term support is at 121.10, the Feb 16 low.
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