GOLD TECHS: MA Studies Remain In A Bull-Mode Position

• RES 4: 5773.25 High Apr 2    
• RES 3: 5639.32 50-day EMA        
• RES 2: 5528.75 High Apr 10 and the bull trigger 
• RES 1: 5425.57 20-day EMA                             
• PRICE: 5401.75 @ 07:15 BST Apr 23   
• SUP 1: 5098.16 61.8% retracement of the Apr 7 - 10 bounce                      
• SUP 2: 4996.43 76.4% retracement of the Apr 7 - 10 bounce
• SUP 3: 4832.00 Low Apr 7 and the bear trigger
• SUP 4: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing 

A reversal higher in S&P E-Minis on Apr 9 highlighted the start of a correction. The trend condition has been oversold following recent weakness and gains have allowed this to unwind. The contract remains below important resistance points and the trend condition is bearish. A resumption of weakness would refocus attention on 4832.00, the Apr 7 low and bear trigger. Initial resistance to watch is 5425.57, the 20-day EMA.

Austria is due to hold a syndication today; Germany and Italy are both still due to hold auctions this week while Slovakia and Germany both held auctions yesterday. There is also the potential for a Finnish syndication in upcoming weeks, although the timing of these are more uncertain than usual given the recent market volatility. We look for estimated gross issuance for the week of E22.3bln, down from E34.0bln last week.

For the full PDF and a look ahead to next week please click here.

• Austria will come to the market in the “near future” for a triple tranche syndicated tap with the 2.50% Oct-29 RAGB (ISIN: AT0000A3EPP2), the 3.20% Jul-39 RAGB (ISIN: AT0000A3D3Q8) and the 3.15% Oct-53 RAGB (ISIN: AT0000A33SK7) all on offer.
  • We expect a transaction today with a E5-7bln combined size. We had expected an Austrian syndication in April, so the timing is not a huge surprise to us.
• This morning, Germany will return to the market to issue E4bln of the 10-year 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
• To conclude the week, Italy will hold a BTP Short Term auction tomorrow. As expected there will be a reopening of the on-the-run 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794) for E2.5-3.0bln.
  • Note that the BTPei line has been cancelled due to the syndicated launch of the May-56 BTPei via syndication.

• RES 4: $75.51 - High Jan 15 and a key resistance   
• RES 3: $72.56 - High Feb 20
• RES 2: $66.12/71.76 - 50-day EMA / High Apr 2 and key resistance
• RES 1: $64.49 Low Mar 5 low and a recent breakout level.  
• PRICE: $64.45 @ 07:11 BST Apr 23 
• SUP 1: $58.29/54.67 - Low Apr 10 / 9 and the bear trigger  
• SUP 2: $53.72 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 3: $52.54 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
• SUP 4: $50.00 - Psychological round number  

A bearish theme in WTI futures remains intact and the recovery since Apr 9 is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels, reinforcing a bearish threat. A resumption of the bear cycle would open $53.72, a Fibonacci projection. Resistance is seen at $64.49, the Mar 5 low. The 50- day EMA is at $66.12.