MNI DAILY TECHNICAL ANALYSIS - Bonds Remain In A Downtrend

Price Signal Summary - Bonds Remain In A Downtrend

• In the equity space, S&P E-minis traded sharply lower on Jan 10 before rebounding. The contract managed to find support below the 50-day EMA and has defined a key short-term support at 4572.75, Jan 10 low. The sell-off between Jan 5 - 10 in the EUROSTOXX 50 contract is considered corrective. Bullish conditions remain intact following a strong recovery between Dec 20 - Jan 5.
• In FX, EURUSD dips are considered corrective and a bullish theme continues to dominate. This follows last week’s break of resistance at 1.1383/86, Nov 30 and Dec 31 highs, confirming a range breakout. GBPUSD trend conditions are unchanged and the outlook remains bullish. The pair last week cleared 1.3676, 76.4% of the Oct - Dec downleg. This strengthens the bullish case and maintains the current bullish price sequence
• On the commodity front, Gold conditions remain bullish. The yellow metal recently found support at the base of its bull channel drawn from the Aug 9 low - the Jan 7 low of $1782.8 and the recovery from this level means the yellow metal remains inside its bull channel. WTI futures remain in an uptrend. This week’s rally has resulted in a break of the key resistance at $82.13, Oct 25 high. This strengthens a bullish case and confirms a resumption of the broader uptrend.
• In the FI space, Bund futures have started the week on a softer note. The outlook remains bearish and recent gains have proved to be corrective. Attention remains on the major support at 169.34, Oct 29 low. Recent gains in Gilt futures are considered corrective and a downtrend remains intact. The bearish theme follows the recent break of support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Trend Outlook Remains Bullish

• RES 4: 1.1726 50.0% retracement of the May - Nov 2021 bear leg
• RES 3: 1.1692 High Oct 28, 2021
• RES 2: 1.1608 High Nov 9
• RES 1: 1.1483/1514 High Jan 14/ Low Nov 5
• PRICE: 1.1417 @ 06:08 GMT Jan 17
• SUP 1: 1.1399 Low Jan 14
• SUP 2: 1.1386/53 High Dec 31 / 20-day EMA
• SUP 3: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 4: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger

EURUSD dips are considered corrective and a bullish theme continues to dominate. This follows last week’s break of resistance at 1.1383/86, Nov 30 and Dec 31 highs, confirming a range breakout. The pair has also cleared the top of a bear channel drawn from the Jun 1, 2021 high. This highlights an important reversal and opens 1.1514 next, the Nov 5 high. Initial firm support is seen at 1.1386.

GBPUSD TECHS: Bullish Price Sequence Intact

• RES 4: 1.3958 High Aug 4, 2021
• RES 3: 1.3913 High Sep 14, 2021
• RES 2: 1.3835/55 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 1: 1.3737/49 200-dma/High Jan 13
• PRICE: 1.3675 @ 06:15 GMT Jan 17
• SUP 1: 1.3621 Low Jan 12
• SUP 2: 1.3531/3485 20-day EMA / 50-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD trend conditions are unchanged and the outlook remains bullish. The pair last week cleared 1.3676, 76.4% of the Oct - Dec downleg. This strengthens the bullish case and maintains the current bullish price sequence of higher highs and higher lows. Attention is on the 200-dma at 1.3737. A firm break of this average and close above it, would open 1.3835, Oct 20 high. Key short-term support to watch is 1.3531, the 20-day EMA.

EURGBP TECHS: Still In Consolidation Mode

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8443 50-day EMA
• RES 2: 0.8391/8419 20-day EMA / High Jan 3
• RES 1: 0.8381 Low Nov 22
• PRICE: 0.8348 @ 06:20 GMT Jan 17
• SUP 1: 0.8324 Low Jan 11
• SUP 3: 0.8300 Base of the multi-year broad range
• SUP 4: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fibonacci Retracement 2015-2020 Upleg

EURGBP is unchanged and is still in consolidation mode. The outlook is bearish and further weakness is seen likely with attention on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. Price is also trading near the base of its broad multi-year range at 0.8300. This level represents a key pivot chart point and a clear break would highlight an important range breakout. Initial firm resistance is at 0.8419.

USDJPY TECHS: Bullish Doji Candle

• RES 4: 118.07 2.236 proj of Apr 23 - Jul 2 - Aug 4 2021 price swing
• RES 3: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 2021 price swing
• RES 2: 115.68/116.35 High Jan 11 / High Jan 4 and the bull trigger
• RES 1: 114.79 20-day EMA
• PRICE: 114.49 @ 06:28 GMT Jan 17
• SUP 1: 113.49/43 Low Jan 14 / 76.4% of the Nov 30 - Jan 4 rally
• SUP 3: 113.14 Low Dec 17
• SUP 4: 112.95 2.0% 10-dma envelope
• SUP 4: 112.53 Low Nov 30 and a key support

USDJPY traded lower last week and breached the 50-day EMA. The break is a bearish development however more importantly is the fact that strong support appears to have surfaced below the EMA. The broader trend condition remains bullish and the recent sell-off is likely a correction. Friday’s low of 113.49 marks a key short term support and note that Friday’s price pattern is a doji - a bullish reversal signal. Attention is on 114.79.

EURJPY TECHS: Finds Support Below The 50-Day EMA

• RES 4: 133.17 3% Upper Bollinger Band
• RES 3: 132.56 High Nov 4
• RES 2: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 1: 131.60 High Jan 5 and the bull trigger
• PRICE: 130.68 @ 06:44 GMT Jan 17
• SUP 1: 129.78 Low Jan 14 and key short-term support
• SUP 2: 129.20 Low Dec 27
• SUP 3: 128.57 Low Dec 22
• SUP 4: 128.05 Low Dec 21

A bullish EURJPY theme remains in place and Friday’s recovery from just below the 50-day EMA is a positive development. Friday’s low of 129.78 is seen as a key short-term support that potentially marks the end of the recent corrective pullback. A broader bullish theme is highlighted by the moving average set-up that continues to point north. Attention is on 132.04, a Fibonacci retracement. The bull trigger is 131.60, Jan 5 high.

AUDUSD TECHS: Bearish Threat Following Friday’s Sell-Off

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7348 Former channel base drawn from the Aug 20 low
• RES 1: 0.7314 High Jan 13
• PRICE: 0.7201 @ 06:55 GMT Jan 17
• SUP 1: 0.7155 Low Jan 11
• SUP 2: 0.7130 Low Jan 7
• SUP 3: 0.7082 Low Dec 20 and a key support
• SUP 4: 0.7069 76.4% retracement of the Dec 3 - Jan 13 upleg

AUDUSD traded to a high of 0.7314 last week before pulling back and Friday’s sell-off erased Wednesday’s strong gains. The pullback is a concern for bulls and a deeper retracement would expose support at 0.7130, the Jan 7 low. Clearance of this support would strengthen a bearish case. A turn higher and importantly a break of 0.7314, would resume the recent upleg. This would open 0.7348, a former channel base.

USDCAD TECHS: Corrective Bounce

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2814 High Jan 6 and a key near-term resistance
• RES 1: 1.2621/2687 Low Dec 31 / 20-day EMA
• PRICE: 1.2547 @ 07:01 GMT Jan 17
• SUP 1: 1.2454 Low Dec 13
• SUP 2: 1.2448 76.4% retracement of the Oct - Dec rally
• SUP 3: 1.2387 Low Nov 10
• SUP 4: 1.2328 Low Oct 29

USDCAD bears remain in control and short-term gains are considered corrective. Last week’s break of a key support at 1.2621, the Dec 31 low strengthened a bearish case and has opened 1.2448, 76.4% of the Oct - Dec rally. A move through this chart point would signal scope for an extension lower and open 1.2387, the Nov 10 low. Initial resistance is at 1.2621. A firmer short-term resistance is at 1.2675, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Starts The Week On A Softer Note

• RES 4: 173.19 High Dec 23
• RES 3: 172.18 50-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 171.00/171.31 High Jan 13 / 20-day EMA
• PRICE: 169.63 @ 05:05 GMT Jan 17
• SUP 1: 169.53 Intraday low
• SUP 2: 169.48 Low Nov 1
• SUP 3: 169.34 Low Oct 29 and major support
• SUP 4: 169.08 3.618 projection of the Dec 8 - 20 price swing

Bund futures have started the week on a softer note. The outlook remains bearish and recent gains have proved to be corrective. Attention remains on the major support at 169.34, Oct 29 low. Clearance of this level would strengthen bearish conditions and open 169.08, a Fibonacci projection. On the upside, initial firm short-term resistance has been defined at 171.00, Jan 13 high where a break is required to ease bearish pressure.

BOBL TECHS: (H2) Trend Needle Points South

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.234 20-day EMA
• RES 1: 133.110 High Jan 6 and 13
• PRICE: 132.590 @ 05:12 GMT Jan 17
• SUP 1: 132.560 Intraday low
• SUP 2: 132.447 2.382 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.253 2.618 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures remain bearish and the contract has started this week’s session on a softer note. Price is through former support at 132.620, Jan 11 low and a bear trigger. This confirms a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. Scope is seen for an extension lower with the focus on 132.447 next, a Fibonacci projection level. On the upside, firm resistance is seen at 133.110, Jan 6 and 13 high.

SCHATZ TECHS: (H2) Resumes Its Downtrend

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.044/080 20-day EMA / High Jan 5
• RES 1: 112.020 High Jan 13 / 14
• PRICE: 111.905 @ 05:38 GMT Jan 17
• SUP 1: 111.900 Intraday low
• SUP 2: 112.890 1.50 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.861 1.618 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.816 3.0% Lower Bollinger Band

The Schatz futures outlook remains bearish and recent gains have proved to be corrective. Today's weakness has resulted in a break of support at 111.935, the Jan 11 low and bear trigger. This confirms a resumption of the broader downtrend and maintains the bearish price sequence of lower lows and lower highs. Attention is on 111.890 next, a Fibonacci projection. On the upside, initial firm resistance is seen at 112.020, the Jan 13 / 14 high.

GILT TECHS: (H2) Bearish Trend Conditions Intact

• RES 4: 125.18 High Dec 31
• RES 3: 124.29 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.79 High Jan 13
• PRICE: 123.36 @ Close Jan 14
• SUP 1: 123.10/122.78 Low Jan 12 / Low Jan 10 and the bear trigger
• SUP 2: 122.66 3.618 proj of the Dec 8 - 16 - 20 price swing
• SUP 3: 122.46 3.764 proj of the Dec 8 - 16 - 20 price swing
• SUP 4: 121.10 3.0% Lower Bollinger Band

Recent gains in Gilt futures are considered corrective and a downtrend remains intact. The bearish theme follows the recent break of support at 124.35, Dec 29 low and 124.17, Nov 24 low and the contract maintains a bearish price sequence of lower lows and lower highs. Furthermore, the moving average set-up remains in a bear mode. The focus is on 122.66 next, a Fibonacci projection. Firm resistance is seen at 124.29, the 20-day EMA.

BTP TECHS: (H2) Gains Considered Corrective

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.02 20-day EMA
• RES 1: 146.80 High Jan 14
• PRICE: 146.08 @ Close Jan 14
• SUP 1: 145.12 Low Jan 10 and the bear trigger
• SUP 2: 144.90 2.618 proj of the Dec 6 - 18 - 14 price swing
• SUP 3: 144.59 2.764 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 144.00 round number support

The recent bounce in BTP futures is considered corrective. A bearish trend remains intact with further weakness likely near-term. Futures recently cleared support at 148.25, Dec 1 low as well as the 147.36 former key support, Nov 24 low. Last week, the contract also traded below key support at 145.29, Nov 1 low. A clear break of this level would strengthen bearish conditions. Firm resistance is seen at 147.02, the 20-day EMA.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Remains Above Key S/T Support

• RES 4: 4426.80 1.382 proj of the Nov 30 - Dec 8 - 20 price swing
• RES 3: 4400.00 Round number resistance
• RES 2: 4392.50 High Nov 18 and key resistance
• RES 1: 4324.50/81.50 High Jan 13 / High Jan 5 and the bull trigger
• PRICE: 4267.00 @ 05:43 GMT Jan 17
• SUP 1: 4232.00/4216.50 50-day EMA / Low Jan 10 and key support
• SUP 2: 4161.80 61.8% retracement of the Dec 20 - Jan 5 rally
• SUP 2: 4109.90 76.4% retracement of the Dec 20 - Jan 5 rally
• SUP 4: 4026.00 Low Dec 20

The sell-off between Jan 5 - 10 in the EUROSTOXX 50 contract is considered corrective. Bullish conditions remain intact following a strong recovery between Dec 20 - Jan 5. The contract has also recently found support at the 50-day EMA - the EMA intersects at 4232.00 today. A resumption of gains would refocus attention on key resistance at 4392.50. Key support to watch is at 4216.50, the Jan 10 low. A break would be bearish.

E-MINI S&P (H2): Support Remains Intact

• RES 4: 4900.00 Round number resistance
• RES 3: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 2: 4808.25 High Jan 4 and the bull trigger
• RES 1: 4739.50/52.67 High Jan 12 / 76.4% of the Jan 4 - 10 sell-off
• PRICE: 4649.50 @ 06:58 GMT Jan 17
• SUP 1: 4572.75 Low Jan 10 and key short-term support
• SUP 2: 4565.75 Low Dec 21
• SUP 3: 4520.25 Low Dec 20 and a key support
• SUP 4: 4485.75 Low Dec 3

S&P E-minis traded sharply lower on Jan 10 before rebounding. The contract managed to find support below the 50-day EMA and has defined a key short-term support at 4572.75, Jan 10 low. Price needs to remain above this level to avoid a deeper reversal that would expose 4520.25, the Dec 20 low. On the upside, clearance of the 4739.50/52.57 zone would refocus attention on the key resistance and bull trigger at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Bullish Extension

• RES 4: $90.00 - Psychological round number
• RES 3: $88.70 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $87.10 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $86.71 - Intraday high
• PRICE: $86.31 @ 07:04 GMT Jan 17
• SUP 1: $83.52 - Low Jan 12
• SUP 2: $80.50/49 - Low Jan 10 / 20-day EMA
• SUP 3: $77.04 - Low Jan 3 and key support
• SUP 4: $75.38 - Low Dec 27

Brent futures remain in an uptrend and last week’s strong gains resulted in a break of key resistance at $83.69, Oct 10 high. This confirmed a resumption of the broader uptrend and with the contract higher again today, the focus is on $87.10 next, a Fibonacci projection. Moving average conditions are also in a bull mode, highlighting the current positive sentiment. Initial frim support to watch is at $83.52, the Jan 12 low.

WTI TECHS: (G2) Key Resistance Cleared

• RES 4: $86.00 - Round number resistance
• RES 3: $85.29 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $83.71 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $83.10 - High Jan 12
• PRICE: $82.16 @ 07:06 GMT Jan 17
• SUP 1: $77.83/77.22 - Low Jan 10 / 20-day EMA
• SUP 2: $75.39/74.27 - 50-day EMA / Low Jan 3 and key S/T support
• SUP 3: $72.57 - Low Dec 27
• SUP 4: $70.80 - Low Dec 22

WTI futures remain in an uptrend. This week’s rally has resulted in a break of the key resistance at $82.13, Oct 25 high. This strengthens a bullish case and confirms a resumption of the broader uptrend. Moving average conditions are also in a bull-mode, highlighting the current positive sentiment. The focus is on $83.71, a Fibonacci projection. Key short-term support has been defined at $77.83, the Jan 10 low.

GOLD TECHS: Key S/T Resistance Remains Exposed

• RES 4: $1877.2 - High Nov 16 and key resistance
• RES 3: $1871.0 - High Nov 18
• RES 2: $1849.1 - High Nov 22
• RES 1: $1831.9 - High Jan 3 and key near-term resistance
• PRICE: $1820.1 @ 07:18 GMT Jan 17
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1787.4/82.8 - Channel base from Aug 9 low / Low Jan 7
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

Gold conditions remain bullish. The yellow metal recently found support at the base of its bull channel drawn from the Aug 9 low - the Jan 7 low of $1782.8 and the recovery from this level means the yellow metal remains inside its bull channel. The recovery has exposed key resistance at $1831.9, Jan 3 high and a bull trigger. A reversal lower and a move below $1782.8 would instead highlight a channel breakout.

SILVER TECHS: Eyeing Key Short-Term Resistance

• RES 4: $23.886 - 61.8% retracement of the Nov 16 - Dec 15 sell-off
• RES 3: $23.772 - High Nov 24
• RES 2: $23.436 - High Dec 28 and key resistance
• RES 1: $23.312 - High Jan 14
• PRICE: $23.023 @ 07:27 GMT Jan 17
• SUP 1: $22.428/21.949 - Low Jan 11 / Low Jan 7
• SUP 2: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 3: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally
• SUP 4: $20.000 - Psychological round number

Silver maintains a firmer short-term tone. This follows the recent bounce from $21.949, Jan 7 low. Attention is on the key short-term resistance at $23.436, Dec 28 high. A break of this level would strengthen the case for bulls and signal potential for a stronger recovery towards $23.886, 61.8% of the Nov - Dec sell-off. Key support is at $21.949 where a break is required to reinstate a bearish threat.