MNI DAILY TECHNICAL ANALYSIS - Equities Start Week Softly

Price Signal Summary - Equities Start Week Softly

• In the equity space, S&P E-minis have started the week on a softer note. The sell-off late last week and today, signals potential for a deeper pullback. Note that futures are back below the 50-day EMA, at 4590.64. EUROSTOXX 50 futures last week failed to hold onto the high of 4234.00 on Dec 16 and the contract has started the week on a softer note. Today’s bearish pressure has exposed 4038.00, Dec 3 low.
• In FX, EURUSD traded sharply lower Friday. The pair is still trading inside its range and above initial support at 1.1222, Dec 15 low. Key resistance at 1.1383 remains intact, Nov 30 high. GBPUSD has failed to hold onto recent gains. The reversal lower Friday highlights a potential resumption of the underlying downtrend and attention is on support at 1.3163, the Dec 8 low and the bear trigger.
• On the commodity front, Gold traded higher last week, extending the recovery from $1753.7, the Dec 15 low. The yellow metal last 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 are firmer this morning. The sharp move lower on Thursday failed to clear support 173.40, the Dec 8 low. The print below the 20-day EMA however is potentially an early bearish signal and a break of 173.40 would reinforce this threat. Gilt futures traded sharply lower Dec 16, down to 126.34 before 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: Trend Conditions Remain Bearish

• RES 4: 1.1544 Bear channel top from Jun 1 high
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1418 50-day EMA
• RES 1: 1.1360/83 High Dec 16 / High Nov 30
• PRICE: 1.1255 @ 06:06 GMT Dec 20
• 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 traded sharply lower Friday. The pair is still trading inside its range and above initial support at 1.1222, Dec 15 low. Key resistance at 1.1383 remains intact, Nov 30 high. A break is required to signal potential for a stronger recovery towards 1.1418, 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: Fails To Hold Onto Recent Highs

• RES 4: 1.3607 High Nov 9
• RES 3: 1.3514 High Nov 18 and a key resistance
• RES 2: 1.3431 50-day EMA
• RES 1: 1.3374 High Dec 16
• PRICE: 1.3221 @ 06:17 GMT Dec 20
• SUP 1: 1.3163 Low Dec 08 and the bear trigger
• SUP 2: 1.3135 Low Dec 11 2020
• SUP 3: 1.3116 1.0% 10-dma envelope
• SUP 4: 1.3084 1.50 proj of the Sep 14 - 29 - Oct 20 price swing

GBPUSD has failed to hold onto recent gains. The reversal lower Friday highlights a potential resumption of the underlying downtrend and attention is on support at 1.3163, the Dec 8 low and the 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 break 1.3374, Dec 16 high to suggest scope for a stronger bounce.

EURGBP TECHS: Holding Above Last Week’s Low

• 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 / 17
• PRICE: 0.8511 @ 06:22 GMT Dec 20
• 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 Dec 16 before rebounding from the session low of 0.8454. Support at 0.8486 has been cleared, Dec 15 low. This signals a potential strengthening of short-term bearish pressure and further weakness would open 0.8411, Nov 26 low and the key support at 0.8381, Nov 22 low. Initial firm resistance is seen at the 0.8553 level, the Dec 10 / 14 high. Clearance of this resistance would reinstate the recent bullish focus.

USDJPY TECHS: Watching 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: 114.26/38 High Dec 15 / 61.8% of the Nov 24 - 30 downleg
• PRICE: 113.45 @ 06:17 GMT Dec 17
• 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 broke out of its recent tight range last week signalling potential for a stronger rally. However, the price action faltered Thursday and price is once again inside its recent range and on Friday did probe support at 113.23, the Dec 10 / 13 low. A stronger sell-off would expose the key support at 112.53, Nov 30 low while on the upside, clearance of 114.26, Dec 15 high is needed to offset any bearish concerns.

EURJPY TECHS: Key Support Appears Exposed

• 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: 127.65 @ 06:36 GMT Dec 20
• SUP 1: 127.52 Intraday low
• 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 faced strong selling pressure Friday, resulting in a deeper pullback from Thursday’s high of 129.64. The cross remains weak. The 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. Note that the move lower has canceled the inverted head and shoulders pattern. Price needs to get above Friday’s intraday high of 128.98 to ease bearish pressure.

AUDUSD TECHS: Approaching First Support

• RES 4: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 3: 0.7303 Former channel base drawn from the Aug 20 low
• RES 2: 0.7242 50-day EMA
• RES 1: 0.7166/7224 20-day EMA / High Dec 16
• PRICE: 0.7096 @ 06:43 GMT Dec 20
• 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 Thursday and breached resistance at 0.7187, Dec 9 high. This appears to have been a false break - the Aussie has failed to hold onto recent gains and is trading lower. Attention is on support at 0.7090, the Dec 14 low. A break of this level 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 required to reinstate a bullish theme.

USDCAD TECHS: Eyeing Key Resistance

• RES 4: 1.3091 High Nov 24, 2020
• RES 3: 1.3020/24 2.0% 10-dma env / 38.2% Mar ‘20-Jun ‘21 downleg
• RES 2: 1.2949 High Aug 20 and a key resistance
• RES 1: 1.2937 High Dec 15
• PRICE: 1.2914 @ 06:51 GMT Dec 20
• SUP 1: 1.2764/42 Low Dec 16 / 20-day EMA
• 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 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, although given the strong rally Friday and today’s gains, this resistance appears exposed. In pattern terms, Wednesday’s price action is a shooting star reversal candle and a concern for bulls. A break of 1.2949 would cancel the pattern and confirm an important technical break. Key support is 1.2764.

FIXED INCOME

BUND TECHS: (H2) Approaching The Bull Trigger

• 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: 175.02 High Dec 8 and the bull trigger
• PRICE: 174.75 @ 05:15 GMT Dec 20
• SUP 1: 173.85/40 20-day EMA / 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 are firmer this morning. The sharp move lower on Thursday failed to clear support 173.40, the Dec 8 low. The print below the 20-day EMA 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. A break would confirm a resumption of the uptrend.

BOBL TECHS: (H2) Holding Above Support

• 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: 134.370/530 High Dec 13 / High Nov 30 and the bull trigger
• PRICE: 134.290 @ 05:16 GMT Dec 20
• 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 are firmer but price remains inside its recent range. The contract has also held above the Dec 8 low of 133.710. A clear breach of this level would strengthen a bearish case and open 133.410, Nov 11 low. Recent gains have instead refocused attention on 134.530, Nov 30 high and the bull trigger. Clearance of this hurdle would resume bullish activity and pave the way for a climb towards 134.740. A Fibonacci projection.

SCHATZ TECHS: (H2) Extending The Bounce From Last Week’s Lows

• 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: 112.230 @ 05:32 GMT Dec 20
• SUP 1: 112.145 Low Dec 17
• SUP 2: 112.055 Low Dec 16
• 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. The contract is back inside its recent range but is extending the recovery. 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. 112.055 has been defined as a key support, a breach is required to see bearish pressure return.

GILT TECHS: (H2) Trend Conditions Remain Bullish

• 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: 126.88 @ Close Dec 17
• 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 Dec 16, down to 126.34 before 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. The trend remains up and a break of this hurdle would confirm a resumption of the uptrend.

BTP TECHS: (H2) Attention Is On 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: 150.20 @ Close Dec 20
• 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 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. A breach of this level is required to 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: (H2) Starting The Week On A Softer Note

• 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: 4180.50 20-day EMA
• PRICE: 4059.00 @ 05:59 GMT Dec 20
• SUP 1: 4038.00 Low Dec 3
• 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 last week failed to hold onto the high of 4234.00 on Dec 16 and the contract has started the week on a softer note. Today’s bearish pressure has exposed 4038.00, Dec 3 low. A break of this level would strengthen the developing bearish threat and signal scope for a test of the key support handle at 3980.00, the Nov 30 low and the bear trigger. A move above 4251.00 is required to ease bearish pressure.

E-MINI S&P (H2): Heavy!

• RES 4: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 3: 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
• PRICE: 4548.75 @ 07:12 GMT Dec 20
• SUP 1: 4524.75 Low Dec 6
• 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 have started the week on a softer note. The sell-off late last week and today, signals potential for a deeper pullback. Note that futures are back below the 50-day EMA, at 4590.64. This is an important technical development as it strengthens a bearish threat and exposes key support at 4485.75, Dec 3 low. A break would reinforce a bearish threat. Major resistance has been defined at last week’s high of 4743.25, Dec 16 high.

COMMODITIES

BRENT TECHS: (G2) Under Pressure

• RES 4: $81.88 - High Nov 24
• RES 3: $80.42 - High Nov 26
• RES 2: $76.49/70 -50-day EMA / High Dec 9
• RES 1: $75.01 20-day EMA
• PRICE: $71.10 @ 07:11 GMT Dec 20
• 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 have started the week on a bearish note. 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. On the upside, initial resistance is seen at $75.01, the 20-day EMA. A breach would ease the current bearish threat.

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 Has Improved 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 and the near-term bull trigger
• PRICE: $1800.1 @ 07:26 GMT Dec 20
• SUP 1: $1770.5 - 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, extending the recovery from $1753.7, the Dec 15 low. The yellow metal last 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 attention is on $1815.6, the Nov 26 high. Initial support is seen at yesterday’s $1770.5, 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.