MNI DAILY TECHNICAL ANALYSIS - Bearish Equity Pressure Eases

Price Signal Summary – Bearish Equity Pressure Eases

• In the equity space, bearish pressure in the S&P E-minis has eased and the contract is trading higher, extending the bounce from 4492.00, the Dec 3 low. The contract is once again back above the 50-day EMA, at 4610.59 today. EUROSTOXX 50 futures are firmer but remain inside the recent range. Trend conditions remain bearish following the recent sharp sell-off that resulted in a breach of the 50-day EMA.
• In FX, EURUSD remains below last week’s high. Recent price action resulted in a test of the 20-day EMA, at 1.1349 today, plus a print above 1.1374, the Nov 18 high. GBPUSD remains weak despite still trading above recent lows. 1.3195, Nov 30 low, represents an important short-term support and bear trigger following the volatile nature of price action early last week. USDJPY started the week on a firmer note and is trading higher today. Yesterday’s price action appears to be a bullish engulfing reversal.
• On the commodity front Gold remains above last week’s lows. Short-term conditions however remain bearish, having recently pulled back from $1877.2, the Nov 16 high. Last week’s rebound in WTI is resulting in a stronger short-term recovery. On the 60-min chart, the move higher has confirmed an inverted head and shoulder reversal, reinforcing the current bull cycle and suggesting scope for stronger gains near-term.
• In the FI space, Bund futures traded to a fresh trend Friday reinforcing the uptrend and confirming a resumption of it. Gilt futures maintain a bullish tone with the contract holding onto recent gains. Furthermore, a bullish price sequence of higher highs and higher lows remains intact, reinforcing current conditions.

FOREIGN EXCHANGE

EURUSD TECHS: Holding Below Recent Highs

• RES 4: 1.1692 High Oct 28
• RES 3: 1.1569 Bear channel top from Jun 1 high
• RES 2: 1.1514 Low Nov 5
• RES 1: 1.1383/1.1464 High Nov 30 / High Nov 15
• PRICE: 1.1290 @ 06:03 GMT Dec 7
• SUP 1: 1.1236 Low Nov 30
• SUP 2: 1.1186/85 Low Nov 24 / Low Jul 1, 2020
• SUP 3: 1.1128 1.764 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1040 76.4% retracement of the Mar ‘20 - Jan ‘21 uptrend

EURUSD remains below last week’s high. Recent price action resulted in a test of the 20-day EMA, at 1.1349 today, plus a print above 1.1374, the Nov 18 high. Key short-term resistance has been defined at 1.1383, Nov 30 high where a break would signal scope for a stronger short-term corrective bounce and open 1.1514, Nov 5 high. The broader trend remains bearish though with the bear trigger at 1.1186/85. Moving average studies remain in bear mode.

GBPUSD TECHS: Bearish Risk Still Present

• RES 4: 1.3698 High Nov 4
• RES 3: 1.3607 High Nov 9
• RES 2: 1.3514 High Nov 18 and a key resistance
• RES 1: 1.3370/3379 High Nov 30 / 20-day EMA
• PRICE: 1.3286 @ 06:09 GMT Dec 7
• SUP 1: 1.3195 Low Nov 30 and the bear trigger
• SUP 2: 1.3188 Low Dec 21 2020
• SUP 3: 1.3165 38.2% Mar ‘20 - Jun ‘21 Upleg
• SUP 4: 1.3040 2.0% 10-dma envelope

GBPUSD remains weak despite still trading above recent lows. 1.3195, Nov 30 low, represents an important short-term support and bear trigger following the volatile nature of price action early last week. A break lower would resume the downtrend and pave the way for weakness towards 1.3165, a retracement level. Resistance is seen at 1.3379, the 20-day EMA. A break would signal a potential short-term base.

EURGBP TECHS: Monitoring Support

• RES 4: 0.8624 High Oct 1
• RES 3: 0.8595 High Nov 5 and a key resistance
• RES 2: 0.8574 High Nov 11
• RES 1: 0.8559 High Dec 6
• PRICE: 0.8499 @ 06:23 GMT Dec 7
• SUP 1: 0.8483 20-day EMA
• SUP 2: 0.8446 Low Nov 29
• SUP 3: 0.8411/8381 Low Nov 26 / Low Nov 22
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP has erased Friday’s gains and has failed to hold above 0.8550. Short-term trend conditions are unchanged though and remain bullish. The recent breach of 0.8544, 76.4 of the Nov 5 - 22 sell-off suggests potential for an extension towards a key short-term resistance at 0.8595, the Nov 5 high. The broader trend signals remaining bearish though and the first support to watch is 0.8483. A clear break would signal a potential top.

USDJPY TECHS: Bullish Engulfing Reversal?

• RES 4: 116.09 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.52 High Nov 24 and the bull trigger
• RES 2: 114.38 61.8% of the Nov 24 - 30 downleg
• RES 1: 113.96 High Nov 29
• PRICE: 113.72 @ 06:30 GMT Dec 7
• SUP 1: 112.53 Low Nov 30
• SUP 2: 112.08 High Sep 30 and a recent breakout level
• SUP 3: 111.32 61.8% retracement of the Aug - Nov rally
• SUP 4: 110.82 Low Oct 4

USDJPY started the week on a firmer note and is trading higher today. Yesterday’s price action appears to be a bullish engulfing reversal. If correct, it suggests the pair has found a base at the recent low of 112.53 on Nov 30. The 20-day EMA at 113.71 is being tested. A clear break would reinforce the reversal pattern and suggest scope for a climb towards the November high of 115.52. Sub 112.53 levels would instead reinstate a bearish threat.

EURJPY TECHS: Corrective Bounce

• RES 4: 131.59 High Nov 5
• RES 3: 129.85 50-day EMA
• RES 2: 129.99 High Nov 19
• RES 1: 128.79/129.60 High Dec 1 / High Nov 23 and key resistance
• PRICE: 128.44 @ 06:34 GMT Dec 7
• SUP 1: 127.39 Low Dec 3 / Dec 6 and the bear trigger
• SUP 2: 127.28 1.00 proj of the Jun 1 - Sep 22 - Oct 20 price swing
• SUP 3: 127.04/126.65 Low Feb 15 / Low Feb 10
• SUP 4: 125.82 1.236 proj of the Jun1 - Sep 22 - Oct 20 price swing

EURJPY gains are for now at least, considered corrective and the outlook remains bearish. A bearish theme follows the recent breach of 127.93, Sep 22 low and an important support. The break opens 127.04, Feb 15 low and note that moving average studies still point south suggesting potential for a deeper decline further out. Key short-term resistance to watch is at 129.60, Nov 23 high. A break would signal a reversal.

AUDUSD TECHS: Key Support Holds

• RES 4: 0.7282 Former channel base
• RES 3: 0.7194 20-day EMA
• RES 2: 0.7173 High Dec 1
• RES 1: 0.7099 High Dec 3
• PRICE: 0.7086 @ 06:48 GMT Dec 7
• SUP 1: 0.6991 Low Nov 2 2020 and a key support
• SUP 2: 0.6963 Low Jul 16 2020
• SUP 3: 0.6921 Low Jul 14 2020
• SUP 4: 0.6759 50% 2020 - 2021 Rally

AUDUSD recovered Monday’s to narrow the gap with Friday highs at 0.7099. Trend conditions remain bearish following recent weakness and a bear channel breakout. The channel was drawn from the Aug 20 low. A key support at 0.6991, Nov 2 2020 low, however remains intact and a break is required to strengthen bearish conditions. Clearance of Friday’s high would suggest scope for a stronger correction and open 0.7194, the 20-day EMA.

USDCAD TECHS: Corrective Pullback

• RES 4: 1.3007 2.0% 10-dma envelope
• RES 3: 1.2949 High Aug 20 and a key resistance
• RES 2: 1.2896 High Sep 20
• RES 1: 1.2854 High Dec 3
• PRICE: 1.2729 @ 06:54 GMT Dec 7
• SUP 1: 1.2714 Low Dec 1
• SUP 2: 1.2641 Low Nov 25 Low Nov 1
• SUP 3: 1.2597 50-day EMA
• SUP 4: 1.2493 Low Nov 16

USDCAD has pulled back from recent highs and is trading lower today. Short-term trend conditions remain bullish and the move lower is likely a correction. Support to watch is 1.2714, Dec 1 low. A clear break would suggest scope for a deeper pullback. A return higher would refocus attention on 1.2854, Dec 3 high where a break would again expose the next key resistance at 1.2896.

FIXED INCOME

BUND TECHS: (H2) Trend Conditions Remain Bullish

• RES 4: 175.57 1.618 proj of the Nov 11 - 22 - 24 price swing
• RES 3: 175.29 1.50 proj of the Nov 11 - 22 - 24 price swing
• RES 2: 175.02 1.382 proj of the Nov 11 - 22 - 24 price swing
• RES 1: 174.89 High Dec 3 and the bull trigger
• PRICE: 174.27 @ 05:16 GMT Dec 7
• SUP 1: 173.31 Low Dec 2
• SUP 2: 172.70 Low Nov 26
• SUP 3: 171.77 Low Nov 24 and key near-term support
• SUP 4: 170.72 Low Nov 4

Bund futures traded to a fresh trend Friday reinforcing the uptrend and confirming a resumption of it. The current bull phase has been in place since Oct 29 and a bullish price sequence of higher highs and higher lows remains intact. Key support is at 171.77, Nov 24 low. The focus is on the 175.00 handle next. Initial support is seen at 173.31, Dec 1 low. A break is required to signal a potential top.

BOBL TECHS: (H2) Trend Needle Still Points North

• RES 4: 135.126 1.382 pro of the Nov 11 - 22 - 23 price swing
• RES 3: 134.978 1.236 pro of the Nov 11 - 22 - 23 price swing
• RES 2: 134.740 1.00 pro of the Nov 11 - 22 - 23 price swing
• RES 1: 134.530 High Nov 30 and the bull trigger
• PRICE: 134.150 @ 05:14 GMT Dec 7
• SUP 1: 133.920 Low Dec 1
• SUP 2: 133.730 Low Nov 23 and key near-term support
• SUP 3: 133.610 Low Nov 16
• SUP 4: 133.410 Low Nov 11

Bobl futures trend conditions remain bullish with the contract still consolidating near recent highs. A bullish theme follows the break on Nov 19 of 134.000, Nov 15 high that confirmed a resumption of the recovery since Oct 29 and established a bullish price sequence of higher highs and higher lows. The focus is on a climb towards 134.740 next, a Fibonacci projection. Key short-term support has been defined at 133.730, Nov 23 low.

SCHATZ TECHS: (H2) Watching Key Short-Term Support

• RES 4: 112.375 1.382 proj of the Nov 16 - 26 - Dec 1 price swing
• RES 3: 112.350 1.236 proj of the Nov 16 - 26 - Dec 1 price swing
• RES 2: 112.305 High Nov 26 and the bull trigger
• RES 1: 112.235 High Dec 2 / 3
• PRICE: 112.155 @ 05:17 GMT Dec 7
• SUP 1: 112.140 Low Dec 1 and key near-term support
• SUP 2: 112.109 0.764 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 3: 112.100 Round number support
• SUP 4: 112.070 1.000 proj of the Nov 26 - Dec 1 - Dec 3 price swing

Schatz futures outlook remains bullish despite the continued pullback from recent highs. The contract recently probed resistance at 112.300, Nov 22 high. A clear break would confirm a resumption of the short-term uptrend that started late October and open 112.350, a Fibonacci projection. On the downside, initial support to watch lies at 112.140, Dec 1 low. Clearance of this level would alter the short-term outlook and instead expose 112.100.

GILT TECHS: (H2) Bullish Conditions Intact

• RES 4: 128.00 High Aug 31
• RES 3: 127.69 High Sep 3
• RES 2: 127.36 High Sep 7
• RES 1: 127.19 High Dec 3
• PRICE: 127.13 @ Close GMT Dec 6
• SUP 1: 125.44 Low Nov 26 and gap high
• SUP 2: 124.94 High Nov 25 and gap low
• SUP 3: 124.48 Low Nov 25
• SUP 4: 124.17 Low Nov 24 and key support

Gilt futures maintain a bullish tone with the contract holding onto recent gains. Furthermore, a bullish price sequence of higher highs and higher lows remains intact, reinforcing current conditions. The 127.00 objective has been achieved and the focus turns to 127.36, Sep 7 high and the 128.00 handle further out. On the downside, key short-term support has been defined at 124.17, Nov 24 low. Initial firm support is at 125.44.

BTP TECHS: (H2) Testing The Bull Trigger

• RES 4: 152.71 1.00 proj of the Nov 1 - 22 - 24 price swing
• RES 3: 151.45 0.764 proj of the Nov 1 - 22 - 24 price swing
• RES 2: 151.00 Round number resistance
• RES 1: 150.66 High Dec 6
• PRICE: 150.52 @ Close GMT Dec 6
• SUP 1: 149.14/148.25 Low Dec 3 / Low Dec 1
• SUP 2: 147.36 Low Nov 24 and key support
• SUP 3: 146.55 76.4% retracement of the Nov 1 - 22 rally
• SUP 4: 145.29 Low Nov 1 and the bear trigger

BTP futures started the week on a firm note trading higher Monday and testing territory just above key resistance and bull trigger at 159.64, the Nov 22 high. The climb reinforces short-term bullish conditions following the recent recovery from 147.36, Nov 24 low. A clear break of 159.64 would confirm a resumption of the uptrend since early November and open 151.00. Initial firm support is seen at 148.25, Dec 1 low.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Gains Considered Corrective

• RES 4: 4420.80 1.382 proj of the Jul 19 - Sep 6 - Oct 6 price swing
• RES 3: 4409.50 High Nov 18 and the bull trigger
• RES 2: 4304.50 Nov 24 high and a key short-term resistance
• RES 1: 4186.00/4206.60 High Dec 1 / 50-day EMA
• PRICE: 4164.50 @ 05:53 GMT Dec 7
• SUP 1: 4053.50/995.00 Low Dec 3 / Low Nov 30
• SUP 2: 3949.50 Low Oct 6 and bear trigger
• SUP 3: 3882.00 Low Jul 19
• SUP 4: 3844.00 Low May 13 (cont)

EUROSTOXX 50 futures are firmer but remain inside the recent range. Trend conditions remain bearish following the recent sharp sell-off that resulted in a breach of the 50-day EMA. A resumption of weakness would open 3949.50 Oct 6 low. This is an important support and a break would strengthen the bearish theme. On the upside, initial resistance is at 4186.00, the Dec 1 high ahead of the 50-day EMA at 4206.60. Gains are considered corrective.

E-MINI S&P (Z1): Short-Term Bounce Extends

• RES 4: 4783.40 1.764 proj of Jul 19 - Aug 16 - 19 price swing
• RES 1: 4740.50/46.68 High Nov 22 / 1.618 of Jul 19-Aug 16-19 swing
• RES 2: 4669.75/4717.00 High Nov 29 / High Nov 26
• RES 1: 4627.10 61.8% retracement of the Nov 22 - Dec 3 downleg
• PRICE: 4619.50 @ 07:02 GMT Dec 7
• SUP 1: 4492.00 Low Dec 3
• SUP 2: 4443.55 61.8% retracement of the Oct 1 - Nov 22 rally
• SUP 3: 4373.40 76.4% retracement of the Oct 1 - Nov 22 rally
• SUP 4: 4317.25/4260.00 Low Oct 12 / Low Oct 1 and the bear trigger

Bearish pressure in the S&P E-minis has eased and the contract is trading higher, extending the bounce from 4492.00, the Dec 3 low. The contract is once again back above the 50-day EMA, at 4610.59 today. This average highlights a pivot area and a stronger recovery through it would improve conditions for bulls. This would open 4669.75, the Nov 29 high. Key support and the bear trigger is at 4492.00.

COMMODITIES

BRENT TECHS: (G2) Corrective Rally Extends

• RES 4: $84.66 - High Oct 26 and the bull trigger
• RES 3: $81.88 - High Nov 24
• RES 2: $77.34 - 50-day EMA
• RES 1: $75.82 - 20-day EMA
• PRICE: $73.78 @ 07:00 GMT Dec 7
• SUP 1: $69.24/65.72 - Low Dec 3 / Low Dec 2 and the bear trigger
• SUP 2: $62.95 - Low Aug 23 and a key support
• SUP 3: $62.54 - Low May 21
• SUP 4: $61.39 - Low Apr 21

Brent futures have continued to trade higher following the sharp bounce from $65.72, Dec 2 low. On the 60-min chart, the move higher has confirmed an inverted head and shoulder reversal suggesting scope for stronger gains near-term. The move higher is considered corrective and is also allowing a recent oversold condition to unwind. Attention is on $75.82, the 20-day EMA. Initial support lies at $69.24, the Dec 3 low.

WTI TECHS: (F2) Inverted Head And Shoulders

• RES 4: $80.68 - High Nov 16
• RES 3: $79.23 - High Nov 24
• RES 2: $75.01 - 50-day EMA
• RES 1: $73.18 - 20-day EMA
• PRICE: $70.63 @ 07:06 GMT Dec 7
• SUP 1: $65.60 - Low Dec 3
• SUP 2: $62.43 - Low Dec 2 and the bear trigger
• SUP 3: $60.77 - Low Aug 23 and a key support
• SUP 4: $59.63 - Low May 20

Last week’s rebound in WTI is resulting in a stronger short-term recovery. On the 60-min chart, the move higher has confirmed an inverted head and shoulder reversal, reinforcing the current bull cycle and suggesting scope for stronger gains near-term. The climb is considered corrective and is allowing a recent oversold condition to unwind. Attention is on $73.18, the 20-day EMA. Initial support lies at $65.60, the Dec 3 low.

GOLD TECHS: Attention Remains On The Bull Channel Base

• RES 4: $1909.7 - High Jun 3
• RES 3: $1903.8 - High Jun 8
• RES 2: $1877.2/88.7 High Nov 16 / Bull channel top
• RES 1: $1815.6/49.1 - High Nov 26 / High Nov 22
• PRICE: $1783.8 @ 07:19 GMT Dec 7
• SUP 1: $1763.0 - Bull Channel base drawn from the Aug 9 low
• SUP 2: $1759.0 - Low Nov 3 and a key support
• SUP 3: $1721.7 - Low Sep 29 and a key support
• SUP 4: $1690.6 - Low Aug 9

Gold remains above last week’s lows. Short-term conditions however remain bearish, having recently pulled back from $1877.2, the Nov 16 high. Price has breached both the 20- and the 50-day EMAs and attention is on the base of a bull channel at $1763.0 today. The channel is drawn off the Aug 9 low and represents an important support. A breakout would strengthen bearish conditions. Initial firm resistance to watch is at $1815.6, the Nov 26 high.