MNI DAILY TECHNICAL ANALYSIS - Bund and Gilt Futures Head South

Price Signal Summary - Bund and Gilt Futures Head South

• In the equity space, S&P E-minis remain vulnerable despite the recovery from Monday’s low. The sell-off late last week and earlier this week, signals potential for a deeper pullback. A resumption of weakness would open 4485.75, the Dec 3 low. Watch resistance at 4668.00, the Dec 17 high. EUROSTOXX 50 futures remain vulnerable too, having failed to hold onto last week’s high of 4234.00 on Dec 16 and despite the recent recovery. Monday’s bearish pressure has exposed the key support handle at 3980.00, the Nov 30 low and the bear trigger. On the upside, a clear break of the 20-day, at 4170.20, that has been probed would ease bearish pressure
• In FX, EURUSD is still trading sideways. The pair remains below resistance at 1.1383, Nov 30 high where a break is required to signal potential for a stronger recovery. Support to watch lies at 1.1222, Dec 15 low and 1.1186, Nov 24 low. The latter is a key support and the bear trigger. GBPUSD failed to hold onto last week’s high of 1.3374 on Dec 16. The reversal lower highlights a potential resumption of the underlying downtrend and attention is on support at 1.3163, the Dec 8 low and the bear trigger. The USDJPY near-term directional triggers are; 114.26, the Dec 15 high and 113.14, Friday’s low. The resistance at 114.26 has been breached this morning and this opens 114.38 next, the 61.8% retracement of the Nov 24 - 30 downleg. The 76.4% level is at 114.81.
• On the commodity front, last week’s channel break in Gold appears to have been a false one and the strong recovery from last week’s low of $1753.7, Dec 15 low suggests the yellow metal is reversing its recent downtrend. Watch resistance at $1815.6, the Nov 26 high. A breach would strengthen bullish conditions. Support is at $1772.2, the channel base. WTI futures traded lower Monday and despite the rebound from that day’s low, the contract remains vulnerable. A resumption of weakness would open $65.45, the Dec 6 low and more importantly expose key support at $62.26, the Dec 2 low. Key near-term resistance is seen at $73.13, the Dec 9 high and is just above the 50-day EMA at $73.06.
• In the FI space, Bund futures have breached support at 173.40, the Dec 8 low. This also means that the price is trading back below the 20-day EMA. The break suggests scope for a deeper short-term pullback and has opened 172.70, the Nov 26 low. Gilts yesterday breached support at 126.34, Dec 16 low and the contract is trading below its 20-day EMA. The break lower places on hold a recent bullish focus and instead opens 124.94, the Nov 25 high and a gap low on the daily chart.

FOREIGN EXCHANGE

EURUSD TECHS: Still In Consolidation Mode

• RES 4: 1.1518 Bear channel top from Jun 1 high
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1407 50-day EMA
• RES 1: 1.1360/83 High Dec 16 / High Nov 30
• PRICE: 1.1266 @ 06:08 GMT Dec 22
• SUP 1: 1.1222 Low Dec 15
• 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 is unchanged and remains range bound with price trading above initial support at 1.1222, the Dec 15 low. Key resistance at 1.1383 is intact, Nov 30 high. A break of this hurdle is required to signal potential for a stronger recovery towards 1.1407 the 50-day EMA. The trend remains down though and the trigger for a resumption of bearish activity is 1.1186/85 where a break would open 1.1128, a Fibonacci projection.

GBPUSD TECHS: Eyeing Support

• RES 4: 1.3607 High Nov 9
• RES 3: 1.3514 High Nov 18 and a key resistance
• RES 2: 1.3416 50-day EMA
• RES 1: 1.3374 High Dec 16
• PRICE: 1.3244 @ 06:12 GMT Dec 22
• SUP 1: 1.3163 Low Dec 08 and the bear trigger
• SUP 2: 1.3135 Low Dec 11 2020
• SUP 3: 1.3112 1.0% 10-dma envelope
• SUP 4: 1.3084 1.50 proj of the Sep 14 - 29 - Oct 20 price swing

GBPUSD remains vulnerable. The pair failed to hold onto last week’s gains and the reversal lower highlights a potential resumption of the underlying downtrend, with attention on support at 1.3163, the Dec 8 low and bear trigger. A breach of this level would confirm a resumption of the downtrend and open 1.3135, Dec 11 2020 low. On the upside, price needs to clear 1.3374, Dec 16 high to suggest scope for a stronger bounce.

EURGBP TECHS: Resistance Remains Intact

• RES 4: 0.8658 High Sep 29 and a key resistance
• RES 3: 0.8624 High Oct 1
• RES 2: 0.8600 High Dec 8 and the bull trigger
• RES 1: 0.8553 High Dec 10 / 14 and key near-term resistance
• PRICE: 0.8509 @ 06:25 GMT Dec 22
• SUP 1: 0.8485/54 Low Dec 20 / Low Dec 16
• SUP 2: 0.8411 Low Nov 26
• SUP 3: 0.8381 Low Nov 22 and the bear trigger
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP traded lower Dec 16 but has rebounded from that day’s low of 0.8454. Support at 0.8486 has recently been cleared, the Dec 15 low and this highlights a potential bearish threat. Further weakness would open 0.8411, Nov 26 low and the key support at 0.8381, Nov 22 low. Initial firm resistance is at 0.8553, Dec 10 / 14 high. Clearance of this level would reinstate the recent bullish theme.

USDJPY TECHS: Probes Key Near-Term Resistance

• 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: 114.81 76.4% of the Nov 24 - 30 downleg
• RES 1: 114.38 High 61.8% retracement of the Nov 24 - 30 downleg
• PRICE: 114.31 @ 09:51 GMT Dec 22
• SUP 1: 113.14 Low Dec 17
• SUP 2: 112.53 Low Nov 30 and the bear trigger
• SUP 3: 112.08 High Sep 30 and a recent breakout level
• SUP 4: 111.32 61.8% retracement of the Aug - Nov rally

USDJPY traded higher yesterday and this has brought the pair within range of resistance at last Weds/Thurs' 114.25/26 highs - these levels have been probed this morning. A recovery through here opens 114.38, a 61.8% Fibonacci retracement of the Nov 24 - 30 downleg and would signal potential for a stronger rally. A resumption of weakness would expose key support at 112.53, Nov 30 low. Watch initial support at 113.14, the Dec 17 low.

EURJPY TECHS: Retracing The Recent Sell-Off

• RES 4: 131.59 High Nov 5
• RES 3: 130.43 50.0% retracement of the Oct 20 - Dec 3 downleg.
• RES 2: 129.99 High Nov 19
• RES 1: 128.98/129.64 High Dec 17 / High Dec 16
• PRICE: 128.64 @ 06:39 GMT Dec 22
• SUP 1: 127.52 Low Dec 20
• SUP 2: 127.39 Low Dec 3 / 6 and the bear trigger
• SUP 3: 127.28 1.00 proj of the Jun 1 - Sep 22 - Oct 20 price swing
• SUP 4: 127.04/126.65 Low Feb 15 / Low Feb 10

EURJPY found support yesterday and has retraced a large portion of the recent sell-off between Dec 16 - 20. The recent break lower has exposed key support at 127.39, the Dec 3 / 6 low. A break of this level would strengthen the bearish threat and confirm a resumption of the underlying downtrend. For bulls, price needs to get above Friday’s intraday high of 128.98 to remove any bearish threat. This would open 129.64, the Dec 16 high.

AUDUSD TECHS: Last Week’s High Marks Resistance

• RES 4: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 3: 0.7307 Former channel base drawn from the Aug 20 low
• RES 2: 0.7234 50-day EMA
• RES 1: 0.7161/7224 20-day EMA / High Dec 16
• PRICE: 0.7130 @ 06:44 GMT Dec 22
• SUP 1: 0.7082/7040 Low Dec 20 / Low Dec 7
• SUP 2: 0.6993/91 Low Dec 3 / Low Nov 2 2020 and a key support
• SUP 3: 0.6963 Low Jul 16 2020
• SUP 4: 0.6921 Low Jul 14 2020

AUDUSD remains below recent highs. The pair traded higher Thursday and breached 0.7187, Dec 9 high. The pair has failed to hold onto these recent gains.. Attention is on support at 0.7090, the Dec 14 low that was probed Monday. A clear break would strengthen a short-term bearish threat and expose support at 0.7040, Dec 7 low. Clearance of last week's high of 0.7224 on Dec 16 is needed to trigger a resumption of bullish activity.

USDCAD TECHS: Trend Needle Points North

• RES 4: 1.3173 High Nov 13, 2020
• RES 3: 1.3091 High Nov 24, 2020
• RES 2: 1.3024/39 38.2% Mar ‘20-Jun ‘21 downleg / 2.0% 10-dma env
• RES 1: 1.2964 High Dec 20
• PRICE: 1.2917 @ 06:49 GMT Dec 22
• SUP 1: 1.2882/2764 Low Dec 20 , Dec 16 and key S/T support
• SUP 2: 1.2706 Low Dec 13
• SUP 3: 1.2608 Low Dec 8 and key support
• SUP 4: 1.2585 Low Nov 19

USDCAD remains bullish. The pair traded higher Monday, confirming a resumption of its current uptrend and has probed the key resistance at 1.2949, Aug 20 high. Monday’s price action negates the recent shooting star reversal pattern posted last week and this reinforces the current bull cycle. A clear break of 1.2949 would open 1.3024, a Fibonacci retracement and 1.3091 beyond. To the downside, 1.2764, the Dec 16 low is a key support.

FIXED INCOME

BUND TECHS: (H2) Pullback Signals Scope For A Deeper Sell-Off

• RES 4: 176.00 Round number resistance
• RES 3: 175.57 1.618 proj of the Nov 11 - 22 - 24 price swing
• RES 2: 175.29 1.50 proj of the Nov 11 - 22 - 24 price swing
• RES 1: 174.44/75.02 High Dec 21 / High Dec 8 and the bull trigger
• PRICE: 173.02 @ 09:46 GMT Dec 22
• SUP 1: 172.97 Intraday low
• 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 lower yesterday and the contract has breached support at 173.40, the Dec 8 low. This also means that the price is trading back below the 20-day EMA. The break lower places a recent bullish focus on hold and suggests scope for a deeper short-term pullback. Scope is seen for a move towards 172.70, the Nov 26 low. On the upside, key resistance and the bull trigger is unchanged at 175.02, the Dec 8 high.

BOBL TECHS: (H2) Lower But Support Remains Intact

• 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: 134.400/530 High Dec 13 / High Nov 30 and the bull trigger
• PRICE: 133.940 @ 05:11 GMT Dec 22
• SUP 1: 133.710 Low Dec 8
• SUP 2: 133.610 Low Nov 16
• SUP 3: 133.410 Low Nov 11 and a key support
• SUP 4: 133.200 Low Nov 3

Bobl futures traded lower yesterday but price remains inside its recent range. The contract is holding above the Dec 8 low of 133.710. A clear breach of this level would strengthen a bearish case and open 133.410, the Nov 11 low. For bulls, key resistance is at 134.530, the Nov 30 high. A break of this hurdle would resume bullish activity and pave the way for a climb towards 134.740. A Fibonacci projection.

SCHATZ TECHS: (H2) Still Inside Its Range

• 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: 112.265 High Dec 20
• PRICE: 112.170 @ 05:11 GMT Dec 22
• SUP 1: 112.140 Intraday low
• SUP 2: 112.055 Low Dec 16 and key support
• SUP 3: 112.031 1.236 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 4: 112.007 1.382 proj of the Nov 26 - Dec 1 - Dec 3 price swing

Schatz futures faced strong selling pressure Dec 16 trading to 112.055 before rebounding and the contract is back inside its recent range. Attention is on resistance at 112.235, the Dec 2 / 3 high that was breached Monday. A clear break would be a bullish development and open the key resistance hurdle at 112.305, Nov 26 high. 112.055 has been defined as a key support, a breach is required to see bearish pressure return.

GILT TECHS: (H2) Short-Term Bearish Threat

• RES 4: 128.18 High Sep 10 / 14 (cont)
• RES 3: 127.94/128.00 61.8% of Aug - Oct move (cont) / High Aug 31
• RES 2: 127.47/67 High Dec 20 / High Dec 8
• RES 1: 126.76 High Dec 21
• PRICE: 125.46 @ 09:45 GMT Dec 22
• SUP 1: 125.41 Intraday low
• SUP 2: 125.44 Low Nov 26 and gap high
• SUP 3: 124.94 High Nov 25 and gap low
• SUP 4: 124.48 Low Nov 25

A steep sell-off in Gilt futures yesterday resulted in a break of support at 126.34, Dec 16 low and the contract is trading below its 20-day EMA. The break lower places on hold a recent bullish focus and instead signals scope for a deeper pullback. Attention is on support at 125.44, the Nov 26 low and a gap high on the daily chart that has been breached. This opens 124.94 next. Resistance is at 126.76, yesterday’s high.

BTP TECHS: (H2) Remains Below Resistance

• 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: 149.57/150.66 20-day EMA / High Dec 6 and the bull trigger
• PRICE: 148.45 @ 09:51 GMT Dec 22
• SUP 1: 148.25 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 key resistance is unchanged at 150.64, the Nov 22 high. A clear break of this hurdle (probed on Dec 6) would reinstate a bullish theme and open the 151.00 handle. On the downside, support lies at 148.51, the Dec 8 low. This level has been breached and a clear break would threaten the bullish theme and instead expose 148.25, the Dec 1 low and a firmer support at 147.36, Nov 24 low.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Challenging The 20-Day EMA

• RES 4: 4305.00 High Nov 23
• RES 3: 4270.00 High Dec 8 and a key resistance
• RES 2: 4234.00 High Dec 16
• RES 1: 4180.80 High Dec 21
• PRICE: 4172.50 @ 06:01 GMT Dec 22
• SUP 1: 4026.00 Low Dec 20
• SUP 2: 3980.00 Low Nov 30 and the bear trigger
• SUP 2: 3935.00 Low Oct 6
• SUP 4: 3857.50 1.00 proj of the Nov 18 - 30 - Dec 8 price swing

EUROSTOXX 50 futures have recovered from Monday’s sharp sell-off and the 4026.00 low. The move higher however does not remove a bearish threat - recent weakness has exposed the key support handle at 3980.00, Nov 30 low and a bear trigger. A breach of this support would strengthen a bearish theme and signal scope for a deeper sell-off. On the upside, a clear break of the 20-day, at 4170.20, that has been probed would ease bearish pressure.

E-MINI S&P (H2): Bearish Threat Remains Present

• RES 4: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 1: 4800.00 Round number resistance
• RES 2: 4783.78 0.618 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 1: 4668.00/4743.25 High Dec 17 / High Dec 16 and the ATH
• PRICE: 4636.50 @ 07:06 GMT Dec 22
• SUP 1: 4520.25 Low Dec 20
• SUP 2: 4485.75 Low Dec 3 and the bear trigger
• SUP 3: 4493.88 61.8% retracement of the Oct 1 - Nov 22 rally
• SUP 4: 4436.97 76.4% retracement of the Oct 1 - Nov 22 rally

S&P E-minis started the week on a softer note but futures have bounced from Monday’s low of 4520.25. Despite the recovery, a bearish threat remains present - the sell-off late last week signals potential for a deeper pullback. A resumption of weakness would open key support at 4485.75, the Dec 3 low where a break would strengthen a bearish threat. Major resistance has been defined at 4743.25.COMMODITIES

BRENT TECHS: (G2) Bearish Threat Remains Present

• RES 4: $81.88 - High Nov 24
• RES 3: $80.42 - High Nov 26
• RES 2: $76.21/70 -50-day EMA / High Dec 9
• RES 1: $74.61 20-day EMA
• PRICE: $73.91 @ 07:02 GMT Dec 22
• SUP 1: $69.24 - Low Dec 3
• SUP 2: $65.72 - Low Dec 2 and the bear trigger
• SUP 3: $62.95 - Low Aug 23 and a key support
• SUP 4: $62.54 - Low May 21

Brent futures started the week on a bearish note but the contract has recovered from that day’s low of $69.28. A bearish threat remains present though - futures have cleared support at $72.50, Dec 15 low and confirmed an extension of the pullback from $76.70, the Dec 9 high. The move lower has exposed $69.24, the Dec 3 low where a break would pave the way for a retest of key support at $65.72, Dec 2 low. Initial resistance is seen at $74.61.

WTI TECHS: (G2) Bounce Considered Corrective

• RES 4: $77.59 - High Nov 26
• RES 3: $74.54 - 61.8% retracement of the Oct - Dec sell-off
• RES 2: $73.06/13 - 50-day EMA / High Dec 9
• RES 1: $71.77 - Intraday high
• PRICE: $71.22 @ 07:13 GMT Dec 22
• SUP 1: $68.56/66.12 - Low Dec 21 / Low Dec 20
• SUP 2: $65.45 - Low Dec 3
• SUP 3: $62.26 - Low Dec 2 and the bear trigger
• SUP 4: $60.52 - Low Aug 20 and a key support

WTI futures have recovered from Monday’s low of $66.12. Despite the recovery, a bearish threat remains present. The recent move lower has resulted in a breach of support at $69.21 and this signals scope for a sell-off towards $65.45, the Dec 3 low and more importantly towards the key support at $62.26, the Dec 2 low. On the upside, key near-term resistance is seen at $73.13, the Dec 9 high and is just above the 50-day EMA at $73.06.

GOLD TECHS: Monitoring Support At The Channel Base

• RES 4: $1877.2/99.7 High Nov 16 / Bull channel top
• RES 3: $1849.1 - High Nov 22
• RES 2: $1830.0 - 61.8% retracement of the Nov 16 - Dec 15 downleg
• RES 1: $1815.6 - High Nov 26 and the near-term bull trigger
• PRICE: $1787.1 @ 07:27 GMT Dec 22
• SUP 1: $1772.2 - Bull channel base drawn from the Aug 9 low
• SUP 2: $1753.7 - Low Dec 15 and a key support
• SUP 3: $1746.0 - Oct 6 low
• SUP 4: $1721.7 - Low Sep 29

Gold traded higher last week but has since pulled back from Friday’s high. A bullish focus remains intact. The yellow metal last week attempted to clear the base of its bull channel from the Aug 9 low and it appears the move lower has been a false break. Resistance at $1794.5, Dec 1 high has been cleared and attention is on $1815.6, the Nov 26 high. Initial support to watch is seen at $1772.2, the channel base.

SILVER TECHS: Hammer Reversal Still In Play

• RES 4: $24.323 - High Nov 23
• RES 3: $23.772 - High Nov 24
• RES 2: $23.030/180 - High Dec 1 / 50-day EMA
• RES 1: $22.791 - High Dec 22
• PRICE: $22.547 @ 09:48 GMT Dec 22
• SUP 1: $22.182/21.918 - Low Dec 21 / Low Dec 16
• 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 is holding onto gains having rebounded from last week’s low of $21.427 on Dec 15. In pattern terms, price action on Dec 15 is a bullish hammer formation and subsequent gains have reinforced this reversal signal. Attention is on $22.609, Dec 6 high that has been probed . A clear break would strengthen the developing bullish condition and signal scope for an extension higher. Key support lies at $21.427 and $21.423.