MNI DAILY TECHNICAL ANALYSIS - Bear Cycle In Bunds Intact

Price Signal Summary - Trend Needle In Bunds Points South    

• In the equity space, a bear threat in the S&P E-Minis contract remains present despite the most recent move higher. The reversal lower from the Dec 26 high, highlights the end of the Dec 20 - 26 correction. Attention is on 5866.00, Dec 20 low and a key S/T support. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, Dec 26 high. A breach of this hurdle would highlight a bull reversal. A bull cycle in the EUROSTOXX 50 futures contract remains intact. This week’s strong rally highlights a reversal of the recent corrective pullback. Resistance at 5040.00, the Dec 9 high, has been pierced. A clear break of it would open 5068.13, the 0.764 projection of the Nov 21 - Dec 9 - 20 price swing. On the downside, initial firm support lies at 4925.88, the 50-day EMA.              
• In FX, the trend condition in EURUSD remains bearish and recent gains appear corrective. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0405, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The bear trigger is 1.0226, the Jan 2 low.  The trend condition in GBPUSD remains bearish. The sharp sell-off on Jan 2 confirmed a resumption of the medium-term downtrend. Note too that MA studies are in a bear-mode position, highlighting a downtrend. The latest recovery is for now, considered corrective. Initial firm resistance is at 1.2550, the 20-day EMA (pierced). The bear trigger is 1.2353, the Jan 2 low. USDJPY bulls remain in the driver’s seat and the pair is trading at its recent highs. Tuesday’s fresh cycle high reinforces current bullish conditions. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and this has paved the way for a move towards 159.45, the Jul 12 high. Initial firm support is 156.24, the 20-day EMA.  
• On the commodity front, a bear threat in Gold remains present despite the latest recovery. A resumption of weakness would open key support at $2536.9, the Nov 14 low. The first firm support to watch is $2583.6, the Dec 19 low. On the upside, a strong climb would instead signal scope for a climb towards resistance at $2726.2, the Dec 12 high. In the oil space, the trend structure in WTI futures remains bullish and the contract has traded higher again, today. A stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. On the downside, a reversal lower would expose support at the 20-day EMA, at $71.11. This average is seen as a key short-term support.        
• In the FI space, the trend cycle in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has traded through key support at 132.00, the Nov 6 low. A clear break of this level would strengthen a bearish theme. Sights are on a move towards 131.70, the Nov 20 low on the continuation chart. Initial resistance is at 132.57, the Jan 6 high. The trend condition in Gilt futures is unchanged, it remains bearish and this week’s fresh cycle lows reinforce current conditions. The move lower has confirmed a resumption of the downtrend. Sights are on the 91.00 handle next. Initial resistance is at 92.13, the Jan 7 high.

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