MNI DAILY TECHNICAL ANALYSIS - Bund Futures Remain in Downtrend

Price Signal Summary – Bund Futures Remain in Downtrend

• In the equity space, S&P E-minis traded sharply lower Monday before rebounding. The break below the 50-day EMA marked a bearish development. However, the fact that support has also been found below this EMA highlights a potential bullish reversal and note that Monday’s candle pattern is a hammer - a bullish signal. The recent pullback in EUROSTOXX 50 futures is considered corrective with bullish conditions still intact following a strong recovery between Dec 20 - Jan 5. Monday’s sell-off saw price trade through the 20-day EMA however support at the 50-day EMA has remained intact
• In FX, EURUSD is trading just ahead of key resistance at 1.1383/86, Nov 30 and Dec 31 highs. This marks the top of its current range and a resistance zone that needs to be cleared to suggest scope for a stronger S/T recovery. GBPUSD continues to trade higher and remains in an uptrend. The pair has this week cleared the 1.3600 handle and resistance at 1.3607, the Nov 9 high. This maintains the current bullish price sequence of higher highs and higher lows. USDJPY remains in a short-term corrective cycle and below last week’s high of 116.35. Trend conditions are unchanged however and the outlook is bullish. This follows the recent break of 115.52, Nov 24 high, that confirmed a resumption of the trend and opens 117.08 next.
• On the commodity front, Gold has managed to remain inside its bull channel drawn from the Aug 9 low - last Friday's low of $1782.8 and the recovery from this level means the channel base has provided support. WTI futures remain in an uptrend and the contract traded higher yesterday. Futures are approaching the next objective of $81.73, the Nov 10 high where a break would expose the key resistance at $82.13, Oct 25 high.
• In the FI space, Bund futures remain in a downtrend and the contract traded lower again yesterday. Price has recently cleared the 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. The Gilt futures downtrend remains intact. Last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support has strengthened bearish conditions signalling scope for further downside.

FOREIGN EXCHANGE

EURUSD TECHS: Approaching The Upper End Of Its Range

• RES 4: 1.1608 High Nov 9
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1437 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1383/86 High Nov 30 / High Dec 31
• PRICE: 1.1375 @ 06:04 GMT Jan 12
• SUP 1: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 2: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger
• 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 trading just ahead of key resistance at 1.1383/86, Nov 30 and Dec 31 highs. This marks the top of its current range and a resistance zone that needs to be cleared to suggest scope for a stronger S/T recovery. A range breakout would open 1.1437, the top of a bear channel drawn from the Jun 1 high. A failure at the range top and a resumption of weakness would open 1.1272/22, Jan 04 and Dec 15 lows and the bear trigger at 1.1186/85.

GBPUSD TECHS: Bull Trend Extension

• RES 4: 1.3835 High Oct 20 and a key resistance
• RES 3: 1.3813 2.0% 10-dma envelope
• RES 2: 1.3698 High Nov 4
• RES 1: 1.3676 76.4% retracement of the Oct - Dec sell-off
• PRICE: 1.3644 @ 06:17 GMT Jan 12
• SUP 1: 1.3528 Low Jan 7
• SUP 2: 1.3474 20-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD continues to trade higher and remains in an uptrend. The pair has this week cleared the 1.3600 handle and resistance at 1.3607, the Nov 9 high. This maintains the current bullish price sequence of higher highs and higher lows and scope is seen for a climb to 1.3676 next, a Fibonacci retracement. Support to watch is at 1.3474, the 20-day EMA. A move below this average is required to threaten the trend.

EURGBP TECHS: Trend Outlook Remains Bearish

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8450 50-day EMA
• RES 2: 0.8405/19 20-day EMA / High Jan 3
• RES 1: 0.8381 Low Nov 22
• PRICE: 0.8336 @ 06:21 GMT Jan 12
• SUP 1: 0.8324 Low Jan 11
• SUP 3: 0.8283 1.0% 10-dma envelope
• 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 remains vulnerable and the cross traded lower yesterday signalling a resumption of its downtrend. Further weakness is seen likely and attention is on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. Note that the cross is also approaching the base of a broad multi-year range at 0.8300. This level represents a key pivot chart point. Initial firm resistance is at 0.8419.

USDJPY TECHS: Remains Above The 20-Day EMA

• RES 4: 118.66 High Dec 15, 2016
• RES 3: 118.07 2.236 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 116.35 High Jan 4 and the bull trigger
• PRICE: 115.32 @ 06:29 GMT Jan 12
• SUP 1: 114.96 20-day EMA
• SUP 2: 114.21 50-day EMA
• SUP 3: 113.56 Low Dec 21
• SUP 4: 113.14 Low Dec 17

USDJPY remains in a short-term corrective cycle and below last week’s high of 116.35. Trend conditions are unchanged however and the outlook is bullish. This follows the recent break of 115.52, Nov 24 high, that confirmed a resumption of the trend and opens 117.08 next, a Fibonacci projection. Moving average conditions are in a bull mode reinforcing the current positive sentiment. Initial firm support is seen at 114.96, the 20-day EMA.

EURJPY TECHS: Recovers From Monday’s Low

• RES 4: 133.06 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: 131.17 @ 06:36 GMT Jan 12
• SUP 1: 130.18/16 20-day EMA / Low Jan 10
• SUP 2: 129.86 50-day EMA
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

Recent EURJPY pullbacks are considered corrective and a bullish theme still dominates. The cross has recently cleared 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a recent vol-based resistance, signalling potential for an extension higher. MA conditions have also recently shifted to bull mode, highlighting the current trend direction. Attention is on 132.04, a Fibonacci retracement. Firm support is at 130.18/129.86, the 20- and 50-day EMAs.

AUDUSD TECHS: Bearish Threat Still Present Despite Bounce

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7341 Former channel base drawn from the Aug 20 low
• RES 1: 0.7278 High Dec 31 and a bull trigger
• PRICE: 0.7222 @ 06:45 GMT Jan 12
• SUP 1: 0.7130 Low Jan 7
• SUP 2: 0.7082 Low Dec 20 and a key support
• SUP 3: 0.7060 76.4% retracement of the Dec 3 - 31 upleg
• SUP 4: 0.6993 Low Dec 3 and key support

Although AUDUSD has recovered from recent lows, a S/T bearish threat remains present following last week’s move lower. An inability to hold onto levels above the 50-day EMA highlights a bearish threat and the potential for a deeper pullback with support at 0.7082 exposed, Dec 20 low. Clearance of this level would strengthen a bearish case. Key short-term resistance is unchanged at 0.7278, the Dec 31 high. A break would be bullish.

USDCAD TECHS: Head And Shoulders Reversal

• 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: 1.2726 20-day EMA
• PRICE: 1.2558 @ 06:54 GMT Jan 12
• SUP 1: 1.2493 Low Nov 16
• 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 traded sharply lower yesterday and has confirmed a clear break of support at 1.2621, the Dec 31 low. The break lower has strengthened the case for bears and highlights a head and shoulders reversal pattern on the daily chart. A continuation lower would open 1.2493 - the Nov 16, 2021 low and 1.2448, a Fibonacci retracement. Firm short-term resistance is at 1.2726, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Downtrend Intact

• RES 4: 173.19 High Dec 23
• RES 3: 172.32 50-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 170.61/171.17 High Jan 6 / High Jan 4
• PRICE: 169.93 @ 05:18 GMT Jan 12
• SUP 1: 169.57 Low Jan 11
• 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 remain in a downtrend and the contract traded lower again yesterday. Price has recently cleared the 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. A break of this support level would strengthen bearish conditions. On the upside, initial firm resistance is unchanged at 171.77 where a break is required to ease bearish pressure. First resistance is at 170.61.

BOBL TECHS: (H2) Bearish Extension

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.356 20-day EMA
• RES 1: 133.110/260 High Jan 6 / High Jan 3 and 4
• PRICE: 132.770 @ 05:01 GMT Jan 12
• SUP 1: 132.620 Low Jan 11
• SUP 2: 132.566 2.236 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.447 2.382 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures remain bearish, with a fresh low print again yesterday reinforcing current conditions. The continued sequence of lower lows and lower highs clearly highlights current bearish sentiment. Scope is seen for an extension lower with the focus on 132.566 next, a Fibonacci projection level. On the upside, firm resistance is seen at 133.530, the Dec 29 high. Initial resistance is at 133.110.

SCHATZ TECHS: (H2) Remains Vulnerable

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.066/080 20-day EMA / High Jan 6
• RES 1: 112.000 High Jan 10
• PRICE: 111.970 @ 05:21 GMT Jan 11
• SUP 1: 111.935 Low Jan 11
• SUP 2: 112.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.890 1.50 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.844 3.0% Lower Bollinger Band

Schatz futures traded lower again Tuesday. The short-term outlook remains bearish following last week’s extension lower and this week’s confirmed break of support at 111.985, Jan 3 low. This marks a resumption of the downtrend and paves the way for weakness towards 111.920 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.066. A break would ease bearish pressure.

GILT TECHS: (H2) Bears Still In Charge

• RES 4: 125.18 High Dec 31
• RES 3: 124.59 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.73 Low Jan 5 and gap high
• PRICE: 123.08 @ Close Jan 11
• SUP 1: 122.78 Low Jan 10
• 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: 121.45 3.0% Lower Bollinger Band

The Gilt futures downtrend remains intact. Last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support has strengthened bearish conditions signalling scope for further downside. Moving average conditions are also in a bear mode, reinforcing current conditions. The focus is on the 122.66 next, a Fibonacci projection. Initial resistance is seen at 123.73.

BTP TECHS: (H2) Remains Heavy

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.29 20-day EMA
• RES 1: 146.11/147.00 High Jan 10 / High Jan 4
• PRICE: 145.80 @ Close Jan 10
• SUP 1: 145.12 Low Jan 10
• 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

BTP futures traded lower last week and registered a fresh low print Monday before recovering. Despite the bounce, the downtrend is intact. Futures recently cleared support at 148.25, Dec 1 low as well as the 147.36 key support, Nov 24 low. The contract has also this week traded below key support at 145.29, the Nov 1 low. A clear break of this level would strengthen bearish conditions. Initial firm resistance is seen at 148.02, Dec 29 high.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Recovers From Monday’s Low

• 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: 4381.50 High Jan 5 and the bull trigger
• PRICE: 4309.50 @ 05:53 GMT Jan 12
• SUP 1: 4224.90/4216.50 50-day EMA / Low Jan 10
• 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 recent pullback in EUROSTOXX 50 futures is considered corrective with bullish conditions still intact following a strong recovery between Dec 20 - Jan 5. Monday’s sell-off saw price trade through the 20-day EMA however support at the 50-day EMA has remained intact - the EMA intersects at 4224.90. For bulls, a continuation higher would refocus attention on key resistance at 4392.50. Key support to watch is at 4216.50, the Jan 10 low.

E-MINI S&P (H2): Extends Rebound From Monday’s Low

• 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: 4718.29 61..8% retracement of the Jan 4 - 10 sell-off
• PRICE: 4711.75 @ 07:08 GMT Jan 12
• SUP 1: 4572.75 Low Jan 10
• 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 Monday before rebounding. The break below the 50-day EMA marked a bearish development. However, the fact that support has also been found below this EMA highlights a potential bullish reversal and note that Monday’s candle pattern is a hammer - a bullish signal. Watch support at 4572, 75, Monday’s low. Major resistance and the bull trigger is at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Clears Key Resistance

• RES 4: $87.10 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $85.80 - 1.50 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $85.00 - Round number resistance
• RES 1: $84.50 - 1.382 proj of the Dec 2 - 9 - 20 price swing
• PRICE: $83.57 @ 07:05 GMT Jan 12
• SUP 1: $80.50/78.87 - Low Jan 10 / 20-day EMA
• SUP 2: $77.04 - Low Jan 3 and key support
• SUP 3: $75.38 - Low Dec 27
• SUP 4: $74.75 - Low Dec 23

Brent futures remain in an uptrend and yesterday's strong rally resulted in a break of key resistance at $83.69, Oct 10 high. This confirms a resumption of the broader uptrend and paves the way for a climb towards $84.50 next, a Fibonacci projection and the $85.00 handle. Moving average conditions are in a bull mode, highlighting the current sentiment. Initial support to watch is at $80.50, the Jan 10 low.

WTI TECHS: (G2) Bullish Extension

• RES 4: $85.29 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $83.71 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $82.13 - High Oct 25 and a major resistance
• RES 1: $81.73 - High Nov 10
• PRICE: $81.29 @ 07:15 GMT Jan 12
• SUP 1: $77.83/76.08 - Low Jan 10 / 20-day EMA
• SUP 2: $74.81/27 - 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 and the contract traded higher yesterday. Futures are approaching the next objective of $81.73, the Nov 10 high where a break would expose the key resistance at $82.13, Oct 25 high. Moving average conditions are in a bull mode, reinforcing the current trend condition. On the downside, initial support is seen at $77.83, Monday’s low and a key near-term level.

GOLD TECHS: Firmer Outlook

• 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 resistance
• PRICE: $1809.7 @ 07:17 GMT Jan 11
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1784.8/82.8 - 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 has managed to remain inside its bull channel drawn from the Aug 9 low - last Friday's low of $1782.8 and the recovery from this level means the channel base has provided support. The subsequent recovery and yesterday’s gains signal scope for a climb towards key near-term resistance at $1831.9, the Jan 3 high. A reversal lower and a move below Friday’s low would instead highlight a bearish threat and a channel breakout.

SILVER TECHS: Bearish Threat Remains Present

• 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: $23.013 - 50-day EMA
• PRICE: $22.707 @ 08:06 GMT Jan 12
• SUP 1: $21.918 - 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 traded lower last week and cleared $22.593, Dec 29 low. The move lower highlights the fact that the metal has recently failed to remain above the 50-day EMA and bearish price action suggests scope for a deeper short-term sell-off. The focus is on $21.918, Dec 16 low. A break would expose $21.427/423, the Dec 15 and Sep 29 lows. Key resistance is at $23.436, Dec 28 high where a break is required to alter the picture.