MNI DAILY TECHNICAL ANALYSIS - Bunds Bought on Dips

Price Signal Summary – Bunds Bought on Dips

• In the equity space, S&P E-minis rallied yesterday, resulting in a print above the all-time high of 4735.00 from Nov 22. The break to fresh all-time highs confirms a resumption of the underlying uptrend and paves the way for a climb towards 4800.00 next. EUROSTOXX 50 futures have failed to hold onto yesterday’s high of 4251.00 and the contract is lower today. Key near-term support lies at 4134.50, Dec 14 low where a break would signal scope for an extension lower.
• In FX, EURUSD traded lower Wednesday but has since recovered from that day’s low of 1.1222. The pair remains below key resistance at 1.1383, Nov 30 high. GBPUSD spiked higher following Thursday's BOE rate decision. Price has traded through the 20-day EMA at 1.3309 today and attention is on resistance at 1.3370. USDJPY broke out of its recent tight range and short-term conditions have improved for bulls - however the price action faltered yesterday and price is once again inside its recent range.
• On the commodity front, Gold is firmer and is extending the recovery from $1753.7, the Dec 15 low. The yellow metal has this week attempted to clear the base of its bull channel drawn from the Aug 9 low and it appears the move lower has been a false break. WTI futures traded lower earlier this week but did find support at Wednesday’s low. A deeper retracement would signal scope for weakness towards $65.60, the Dec 3 low. The major support is at the Dec 2 low of $62.43.
• In the FI space, Bund futures traded in a choppy manner yesterday. The sharp move lower managed to remain above support 173.40, the Dec 8 low. The print below the 20-day EMA yesterday however is potentially an early bearish signal and a break of 173.40 would reinforce this threat. Gilt futures traded sharply lower yesterday, down to 126.34 before some support arrived to push price higher. The move lower resulted in a print below the 20-day EMA at 126.56.

FOREIGN EXCHANGE

EURUSD TECHS: Resistance Appears Exposed

• RES 4: 1.1544 Bear channel top from Jun 1 high
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1425 50-day EMA
• RES 1: 1.1360/83 High Dec 16 / High Nov 30
• PRICE: 1.1342 @ 05:53 GMT Dec 17
• SUP 1: 1.1281/1222 Low Dec 16 / 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 traded lower Wednesday but has since recovered from that day’s low of 1.1222. The pair remains below key resistance at 1.1383, Nov 30 high. A break of this hurdle would signal potential for a stronger recovery towards 1.1425, the 50-day EMA. The recent consolidation is no longer a triangle formation and attention is on resistance. The trigger for a resumption of the downtrend is 1.1186/85 , a break would open 1.1128, a Fibonacci projection.

GBPUSD TECHS: Holding Above The 20-Day EMA

• RES 4: 1.3607 High Nov 9
• RES 3: 1.3514 High Nov 18 and a key resistance
• RES 2: 1.3439 50-day EMA
• RES 1: 1.3374 High Dec 16
• PRICE: 1.3336 @ 05:59 GMT Dec 16
• SUP 1: 1.3242 Low Dec 16
• SUP 2: 1.3163 Low Dec 08
• SUP 3: 1.3135 Low Dec 11 2020
• SUP 4: 1.3113 1.0% 10-dma envelope

GBPUSD spiked higher following Thursday's BOE rate decision. Price has traded through the 20-day EMA at 1.3309 today and attention is on resistance at 1.3370, the Nov 30 high that was probed yesterday The break of the 20-day EMA is a key short-term bullish development as it suggests scope for a stronger corrective bounce, potentially towards 1.3439, the 50-day EMA and 1.3514, the Nov 18 high. Initial support is at 1.3242.

EURGBP TECHS: Watching Support

• RES 4: 0.8658 High Sep 29 and a key resistance
• RES 3: 0.8624 High Oct 1
• RES 2: 0.8553/8600 High Dec 10 and 14 / High Dec 8
• RES 1: 0.8528 High Dec 15 / 16
• PRICE: 0.8508 @ 06:06 GMT Dec 17
• SUP 1: 0.8454 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 sold off sharply yesterday before rebounding from the session low of 0.8454. Support at 0.8486 has been cleared, Dec 15 low. This signals a strengthening of short-term bearish pressure and further weakness would open 0.8411, Nov 26 low and expose the key support at 0.8381, Nov 22 low. Initial firm resistance is seen at the 0.8553 level, the Dec 10 / 14 high. A move above this resistance would reinstate the recent bullish focus.

USDJPY TECHS: Back Inside Its Recent Range - Watch Support!

• 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 61.8% of the Nov 24 - 30 downleg
• PRICE: 113.56 @ 06:12 GMT Dec 17
• SUP 1: 113.23 Low Dec 10 / 13
• 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 broke out of its recent tight range and short-term conditions have improved for bulls - however the price action faltered yesterday and price is once again inside its recent range. The bullish engulfing candle on Dec 6 is still in play and highlights a reversal from 112.53, Nov 30 low. A resumption of gains would open the November high of 115.52. Sub 112.53 levels would reverse the trend. Watch initial support at 113.23, the Dec 10 / 13 low.

EURJPY TECHS: Reversal Pattern Intact

• 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: 129.64 High Dec 16
• PRICE: 128.79 @ 06:20 GMT Dec 17
• SUP 1: 128.45/127.81 Low Dec 16 / Low Dec 10
• 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 spiked higher Thursday, probing the 50-day EMA at 129.45 before giving back most of its gains. Note that Thursday’s rally does highlight an inverted head and shoulders reversal pattern on the daily chart and a breach of support at 127.81, Dec 10 low is required to negate this pattern. A break lower would expose 127.39, the Dec 3 / 6 low. Thursday’s intraday high of 129.64 is the trigger for a resumption of gains.

AUDUSD TECHS: Challenging The 20-Day EMA

• RES 4: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 3: 0.7300 Former channel base drawn from the Aug 20 low
• RES 2: 0.7247 50-day EMA
• RES 1: 0.7224 High Dec 16
• PRICE: 0.7172 @ 06:29 GMT Dec 17
• SUP 1: 0.7090/7040 Low Dec 14 / 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 traded higher yesterday and in the process breached resistance at 0.7187, the Dec 9 high. A key short-term support has been defined at 0.7090, the Dec 14 low. The pair has topped the 20-day EMA, at 0.7171 and a clear break would strengthen the current bull cycle and signal scope for a climb towards 0.7300, the base of the bull channel drawn from the Aug 20 low. The channel was breached Nov 19. For bears, a 0.7090 break would be bearish.

USDCAD TECHS: Shooting Star Candle Warns Of A Top

• RES 4: 1.3024 38.2% retracement of the Mar ‘20 - Jun ‘21 downleg
• RES 3: 1.3016 2.0% 10-dma envelope
• RES 2: 1.2949 High Aug 20 and a key resistance
• RES 1: 1.2858/2937 High Dec 15
• PRICE: 1.2791 @ 06:46 GMT Dec 17
• SUP 1: 1.2726 20-day EMA
• SUP 2: 1.2608 Low Dec 8 and key support
• SUP 3: 1.2585 Low Nov 19
• SUP 4: 1.2493 Low Nov 16

USDCAD traded higher Wednesday and breached 1.2854, Dec 3 high and 1.2896, Sep 20 high. Key resistance however at 1.2949, Aug 20 high remains intact and the pair has since pulled back. In pattern terms, Wednesday’s price action is a shooting star reversal candle and represents a concern for bulls. A continuation lower would expose the 20-day EMA at 1.2726. A break of 1.2949 is required to resume bullish activity.

FIXED INCOME

BUND TECHS: (H2) Probes The 20-Day EMA

• 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: 174.75/175.02 High Dec 8 and the bull trigger
• PRICE: 174.27 @ 05:08 GMT Dec 17
• SUP 1: 173.40 Low Dec 8
• 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 in a choppy manner yesterday. The sharp move lower managed to remain above support 173.40, the Dec 8 low. The print below the 20-day EMA yesterday however is potentially an early bearish signal and a break of 173.40 would reinforce this threat. A move lower would open 172.70, initially, the Nov 26 low. On the upside, the bull trigger is unchanged at 175.02, Dec 8 high.

BOBL TECHS: (H2) 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: 134.240/530 High Dec 13 / High Nov 30 and the bull trigger
• PRICE: 134.130 @ 05:08 GMT Dec 17
• 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 in a volatile manner yesterday but price is back inside the recent range. The contract has also remained above the Dec 8 low of 133.710. Price has recently probed support at 133.730, Nov 23 low. A clear breach of this level would strengthen a bearish case and open 133.410, Nov 11 low. A recovery would instead refocus attention on 134.530, Nov 30 high and the bull trigger. Clearance of this hurdle resumes bullish activity.

SCHATZ TECHS: (H2) Attention Is On Resistance

• 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: 112.205/235 High Dec 13 / High Dec 2 / 3
• PRICE: 112.180 @ 05:28 GMT Dec 17
• SUP 1: 112.055 Low Dec 16
• SUP 2: 112.031 1.236 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 3: 112.007 1.382 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 4: 112.000 Round number support

Schatz futures faced strong selling pressure yesterday trading to 112.055 before rebounding. The contract is back inside its recent range. Yesterday’s low has been defined as a key support. With price action holding onto gains, attention is on resistance at 112.235, the Dec 2 / 3 high. A break would be a bullish development and would open resistance at 112.305, the Nov 26 high. A breach of 112.055 would see bearish pressure return.

GILT TECHS: (H2) Recovers From Yesterday’s Low

• RES 4: 129.00 76.4% retracement of the Aug - Oct downleg (cont)
• RES 3: 128.18 High Sep 10 / 14 (cont)
• RES 2: 127.94/128.00 61.8% of Aug - Oct move (cont) / High Aug 31
• RES 1: 127.33/67 High Dec 16 / High Dec 8
• PRICE: 127.05 @ Close Dec 16
• SUP 1: 126.34 Low Dec 16
• 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

Gilt futures traded sharply lower yesterday, down to 126.34 before some support arrived to push price higher. The move lower resulted in a print below the 20-day EMA at 126.56. A clear break of this EMA would signal potential for a deeper sell-off below the 126.00 handle. On the upside the recent high of 127.67 on Dec 8 marks the bull trigger. Clearance of it would confirm a resumption of the uptrend.

BTP TECHS: (H2) Eyeing 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: 150.66 High Dec 6 and the bull trigger
• PRICE: 149.46 @ Close Dec 16
• SUP 1: 148.51/25 Low Dec 8 / 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 were volatile yesterday. Attention remains on resistance 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. Clearance of this level would threaten the bullish theme and instead expose support at 148.25, the Dec 1 low and a firmer support at 147.36, Nov 24 low.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Support Exposed Once Again

• 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: 4289.00/4311.70 High Dec 8 / 76.4% of Nov 18 - 30 downleg
• RES 1: 4251.00 High Dec 16
• PRICE: 4172.00 @ 05:31 GMT Dec 17
• SUP 1: 4134.50 Low Dec 14
• SUP 2: 4053.50/3995.00 Low Dec 3 / Low Nov 30
• SUP 2: 3949.50 Low Oct 6 and bear trigger3:
• SUP 4: 3882.00 Low Jul 19

EUROSTOXX 50 futures have failed to hold onto yesterday’s high of 4251.00 and the contract is lower today. Key near-term support lies at 4134.50, Dec 14 low where a break would signal scope for an extension lower and expose 4053.50, the Dec 3 low. Major support lies at 3995.00, Nov 30 low. For bulls, clearance of yesterday’s high would be encouraging and this would set the scene for a climb towards 4289.00, the Dec 8 high.

E-MINI S&P (H2): Fails To Hold Onto The Fresh ATH

• 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: 4743.25 High Dec 16
• PRICE: 4650.00 @ 06:52 GMT Dec 17
• SUP 1: 4589.76 50-day EMA
• 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 rallied yesterday, resulting in a print above the all-time high of 4735.00 from Nov 22. The break to fresh all-time highs confirms a resumption of the underlying uptrend and paves the way for a climb towards 4800.00 next. However, the contract failed to hold onto the day’s high and attention turns to support at 4589.76, the 50-day EMA. A break would strengthen a bearish threat. Clearance of 4743.25, yesterday's high resumes the uptrend.

COMMODITIES

BRENT TECHS: (G2) Support Defined At $72.50

• RES 4: $81.88 - High Nov 24
• RES 3: $80.42 - High Nov 26
• RES 2: $76.61/70 -50-day EMA / High Dec 9
• RES 1: $75.61 High Dec 16
• PRICE: $74.49 @ 06:51 GMT Dec 17
• SUP 1: $72.50 - Low Dec 15
• SUP 2: $69.24/65.72 - Low Dec 3 / 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 have retraced part of the rally between Dec 2 - 9. A deeper retracement would signal scope for a test of $69.24, Dec 3 low. The major support is at the Dec 2 low of $65.72. On the upside, clearance of $76.70, Dec 9 high and $76.61, the 50-day EMA would reinstate a bullish focus and open $80.42, the Nov 26 low. Initial support has been defined at $72.50, the Dec 15 low.

WTI TECHS: (F2) Holding Above Wednesday’s Low

• RES 4: $80.68 - High Nov 16
• RES 3: $78.65 - High Nov 26
• RES 2: $74.05 - 50-day EMA
• RES 1: $73.34 - High Dec 9
• PRICE: $71.72 @ 07:07 GMT Dec 17
• SUP 1: $69.39 - Low Dec 15
• SUP 2: $65.60 - Low Dec 3
• SUP 3: $62.43 - Low Dec 2 and the bear trigger
• SUP 4: $60.77 - Low Aug 23 and a key support

WTI futures traded lower earlier this week but did find support at Wednesday’s low. A deeper retracement would signal scope for weakness towards $65.60, the Dec 3 low. The major support is at the Dec 2 low of $62.43. On the upside, clearance of $73.34, Dec 9 high and $74.05 the 50-day EMA would reinstate a bullish focus and open $78.65, Nov 26 low. MA studies are pointing south. This suggests short-term gains are corrective.

GOLD TECHS: Outlook Improves For Bulls

• RES 4: $1877.2/97.1 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
• PRICE: $1806.9 @ 07:13 GMT Dec 17
• SUP 1: $1769.7 - Bull channel base drawn from the Aug 9 low
• SUP 2: $1753.7 - Low Dec 15
• SUP 3: $1746.0 - Oct 6 low
• SUP 4: $1721.7 - Low Sep 29

Gold is firmer and is extending the recovery from $1753.7, the Dec 15 low. The yellow metal has this week attempted to clear the base of its bull channel drawn from the Aug 9 low and it appears the move lower has been a false break. Initial resistance at $1794.5, Dec 1 high has been cleared and this signals potential for a stronger recovery with the focus on $1815.6, the Nov 26 high. Initial support is seen at yesterday’s $1769.7, the channel base.

SILVER TECHS: Hammer Reversal

• RES 4: $24.323 - High Nov 23
• RES 3: $23.772 - High Nov 24
• RES 2: $23.030/280 - High Dec 1 / 50-day EMA
• RES 1: $22.609 - High Dec 6
• PRICE: $22.553 @ 07:26 GMT Dec 17
• 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 has rebounded from this week’s low of $21.427 on Wednesday. In pattern terms, price action that day is a bullish hammer formation and yesterday's gains have reinforced this reversal signal. Attention is on $22.609, Dec 6 high where a break would strengthen the developing bullish condition and signal scope for an extension higher. Key support lies at $21.427 and $21.423. A break of this zone would resume bearish pressure.