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Equity Roundup: Bear Cycle Continues

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MARKET INSIGHT
  • In the equity space, bearish pressure in the S&P E-minis has eased significantly this week and the contract rallied sharply higher yesterday. Futures are once again above the 50-day EMA, at 4569.94 today. The focus is on 4717.00 next, the Nov 26 high ahead of the all-time high of 4740.50. EUROSTOXX 50 futures rallied sharply higher yesterday. The contract has breached resistance at 4186.00, the Dec 1 high and price is also through both the 20- and 50-day EMAs. Attention is on 4311.7 next, the 61.8% retracement of the recent downleg between Nov 18 - 30.
  • In FX, EURUSD remains below last week’s high. 1.1383, the Nov 30 high is the key resistance to watch. A break is required to signal potential for a stronger short-term recovery. This would open 1.1514, Nov 5 low. The bear trigger is unchanged at 1.1186/85, Nov 24 and Jul 1, 2020 low. GBPUSD trend conditions remain bearish and support at 1.3195, Dec 1 low remains exposed. A break would confirm a resumption of the downtrend and open 1.3165, 38.2% retracement of the Mar ‘20 - Jun ‘21 upleg. 1.3366 is resistance, the 20-day EMA. USDJPY conditions have improved for bulls. Monday’s price action is to be a bullish engulfing reversal. If correct, it suggests the pair has found a base. The 20-day EMA at 113.70 has remained intact. A clear break though would reinforce the reversal pattern and open the November high of 115.52. Key support to watch is 112.53, the Nov 30 low.
  • On the commodity front, Gold remains vulnerable despite holding above recent lows. Attention is on the base of the bull channel at $1763.8, drawn from the Aug 9 low. This level represents a key short-term support. Watch resistance at $1815.6, high Nov 26. WTI futures remain firm. On the 60-min chart, the move higher this week has confirmed an inverted head and shoulder reversal, reinforcing the current bull cycle. Attention is on $73.07 next, the 20-day EMA. The 50-day EMA intersects at $74.89. Initial support lies at $65.60, the Dec 3 low.
  • In the FI space, Bund futures remain in an uptrend. The focus is on 175.02 1.382 projection of the Nov 11 - 22 - 24 price swing. Support is unchanged at 173.31, Dec 2 low. The Gilts trend needle points north. The 127.00 handle has been breached and this opens 128.00 next, the Aug 31 high. Initial firm support is at 125.44, Nov 26 low and a gap high on the daily chart.
MNI London Bureau | +44 203-586-3805 | taso.anastasiou.ext@marketnews.com

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