MNI DAILY TECHNICAL ANALYSIS - Bear Threat In EUROSTOXX 50

Price Signal Summary - Bear Threat In The EUROSTOXX50 Contract Remains Present     

• In the equity space, a bear threat in the S&P E-Minis contract remains present despite the most recent recovery. The reversal lower from the Dec 26 high, highlights the end of the recent Dec 20 - 26 corrective bounce. Attention is on 5866.00, the Dec 20 low and a key short-term support. Clearance of this level would strengthen a bearish theme. Initial firm resistance to monitor is 6107.50, the Dec 26 high. A bull cycle in the EUROSTOXX 50 futures contract remains intact. However, the recent move down continues to highlight a corrective phase and despite the latest bounce, a short-term bear threat remains present - for now. Key short-term support has been defined at 4829.00, the Dec 20 low. A break of it would confirm a resumption of the bear cycle. Initial firm resistance to watch is at 4942.00, the Jan 2 high.            
• In FX, the trend condition in EURUSD remains bearish and last Thursday’s sharp sell-off reinforces current conditions. Note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. Sights are on 1.0201, 61.8% of the Sep ‘22 - Jul ‘23 bull leg. Initial firm resistance is at 1.0414, the 20-day EMA. The sharp sell-off in GBPUSD last Thursday confirmed a resumption of the medium-term downtrend. The move lower maintains the bearish price sequence of lower lows and lower highs. Sights are on 1.2300, the Apr 22 ‘24 low and an important chart point. Initial firm resistance is at 1.2562, the 20-day EMA. USDJPY continues to trade below its recent high. The trend outlook remains bullish. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and has paved the way for a move towards 159.45, the Jul 12 high. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support is 155.89, the 20-day EMA.  
• On the commodity front, a bear threat in Gold remains present despite the latest recovery. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. 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 resumption of gains would instead signal scope for a climb towards resistance at $2726.2, the Dec 12 high. In the oil space WTI futures traded higher last week as the contract extended recent gains. A stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. A firm resistance at $71.97, the Nov 7 high, has been breached, strengthening a bullish theme. On the downside, a reversal lower would expose support at the 20-day EMA, at $70.49. This average is seen as a key short-term support.        
• In the FI space, the trend cycle in Bund futures remains bearish and last Friday’s sell-off reinforces this theme. The contract has recently traded through 133.22, 76.4% of the Nov 6 - Dec 2 bull cycle. This has opened key support at 132.00, the Nov 6 low. Initial resistance is seen at 133.48, Friday’s high. The trend condition in Gilt futures is unchanged, it remains bearish and short-term gains are considered corrective - for now. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.

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