MNI DAILY TECHNICAL ANALYSIS - Equities Tilt Toward Deeper Reversal

Price Signal Summary - Equities Tilt Toward Deeper Reversal

• In the equity space, S&P E-minis are trading lower today. The contract is back below the 50-day EMA however key short-term support lies 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. The sell-off between Jan 5 - 10 in the EUROSTOXX 50 contract is still considered corrective and bullish conditions remain intact following the Dec 20 - Jan 5 rally.
• In FX, the pullback in EURUSD is likely a correction 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 remain bullish and the recent pullback is considered corrective. Last week’s breach of 1.3676, 76.4% of the Oct - Dec downleg strengthens the bullish case and maintains the current bullish price sequence of higher highs and higher lows. USDJPY continues to recover from last week’s low of 113.49 on Jan 14. The recovery from below the 50-day EMA is a bullish development and this is reinforced by a reversal signal on Friday - a doji candle pattern.
• On the commodity front, Gold is consolidating but 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 and the contract has started the week on a firm bullish note. Last week’s rally resulted in a break of key resistance at $82.13, Oct 25 high.
• In the FI space, Bund futures started the week on a softer note. The outlook remains bearish and recent gains have proved to be corrective. Attention is on the major support at 169.34, Oct 29 low, that has been probed today. Gilt futures traded lower Monday and recent gains appear to have been corrective. Bearish trend conditions remain intact. This follows the recent break of 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Corrective Pullback

• 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: 1.1396 @ 06:04 GMT Jan 18
• SUP 1: 1.1386/85 High Dec 31 / Intraday low
• SUP 2: 1.1358 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

The pullback in EURUSD is likely a correction 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 the 1.1386 area ahead of 1.1358, the 20-day EMA.

GBPUSD TECHS: Trend Needle Still Points North

• 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: 1.3637 @ 06:08 GMT Jan 18
• SUP 1: 1.3621 Low Jan 12
• SUP 2: 1.3542/3491 20-day EMA / 50-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD trend conditions remain bullish and the recent pullback is considered corrective. Last week’s breach of 1.3676, 76.4% of the Oct - Dec downleg 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 MA and close above it, would open 1.3835, Oct 20 high. Key short-term support to watch is the 20-day EMA at 1.3542.

EURGBP TECHS: Trading In A Range

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8436 50-day EMA
• RES 2: 0.8388/8419 20-day EMA / High Jan 3
• RES 1: 0.8381 Low Nov 22
• PRICE: 0.8356 @ 06:12 GMT Jan 18
• 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 trading in a tight range. The outlook remains bearish. Attention on the major support and bear triggers at 0.8282/77, marking the Feb’20 and Dec’19 lows. Price is also trading close to the base of its broad multi-year range at 0.8300. This level represents a key pivot chart point and if cleared, would highlight an important range breakout. Initial firm resistance is at 0.8419.

USDJPY TECHS: Bullish Doji Candle Still In Play

• 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: 115.06 Intraday high
• PRICE: 114.85 @ 06:22 GMT Jan 18
• SUP 1: 14.24 50-day EMA
• SUP 2: 113.49/43 Low Jan 14 / 76.4% of the Nov 30 - Jan 4 rally
• SUP 3: 113.14 Low Dec 17
• SUP 4: 112.88 2.0% 10-dma envelope

USDJPY continues to recover from last week’s low of 113.49 on Jan 14. The recovery from below the 50-day EMA is a bullish development and this is reinforced by a reversal signal on Friday - a doji candle pattern. The 113.49 level marks a key short term support where a break is required to reinstate a bearish threat. Attention is on 115.68, Jan 11 high and the key resistance at 116.35 further out, the Jan 4 high and a bull trigger.

EURJPY TECHS: Eyeing Resistance

• RES 4: 132.92 High Oct 29, 2021
• RES 3: 132.53/56 3% Upper Bollinger Band / 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: 130.92 @ 06:29 GMT Jan 18
• 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

EURJPY technical conditions remain bullish and Friday’s recovery from just below the 50-day EMA is a positive development. 129.78, Jan 14 low, 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: Evening Star Candle

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7351 Former channel base drawn from the Aug 20 low
• RES 1: 0.7229/7314 High Jan 17 / High Jan 13
• PRICE: 0.7195 @ 06:39 GMT Jan 18
• 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 has traded lower again today. The move lower is a concern for bulls and a deeper retracement would expose 0.7130, the Jan 7 low. The 3-day price action between Dec 12 -14 is an evening star candle pattern and also highlights a potential reversal. A turn higher and importantly a break of 0.7314, would resume the recent upleg and cancel the developing bear threat.

USDCAD TECHS: Corrective Bounce

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2732/2814 High Jan 7 / High Jan 6 and a key resistance
• RES 1: 1.2621/2659 Low Dec 31 / 20-day EMA
• PRICE: 1.2506 @ 06:44 GMT Jan 18
• 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 is unchanged. Bears remain in control and short-term gains are considered corrective. The recent 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 open 1.2387, the Nov 10 low. Initial resistance is at 1.2621. A firmer short-term resistance is at 1.2659, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Maintains A Bearish Tone

• 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: 171.00/171.15 High Jan 13 / 20-day EMA
• PRICE: 169.54 @ 05:00 GMT Jan 18
• SUP 1: 169.42 Intraday low
• SUP 2: 169.08 3.618 projection of the Dec 8 - 20 price swing
• SUP 3: 169.00 Round number support
• SUP 4: 168.84 3.794 projection of the Dec 8 - 20 price swing

Bund futures started the week on a softer note. The outlook remains bearish and recent gains have proved to be corrective. Attention is on the major support at 169.34, Oct 29 low, that has been probed today. A clear break 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, the Jan 13 high where a break is required to ease bearish pressure.

BOBL TECHS: (H2) Heading South

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.173 20-day EMA
• RES 1: 133.110 High Jan 6 and 13
• PRICE: 132.540 @ 05:07 GMT Jan 18
• SUP 1: 132.500 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 started this week’s session on a softer note. Price has breached 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. The move lower opens 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) Trend Needle Still Points South

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.033/080 20-day EMA / High Jan 5
• RES 1: 112.020 High Jan 13 / 14
• PRICE: 111.905 @ 05:09 GMT Jan 18
• SUP 1: 111.900 Low Jan 17 and 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. This week’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 a 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) Downtrend Remains Intact

• RES 4: 125.18 High Dec 31
• RES 3: 124.46 High Jan 4
• RES 2: 124.17 Low Nov 24, recent breakout level and 20-day EMA
• RES 1: 123.79 High Jan 13
• PRICE: 123.03 @ Close Jan 17
• SUP 1: 122.78 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

Gilt futures traded lower Monday and recent gains appear to have been corrective. Bearish trend conditions remain intact. This follows the recent break of 124.35, Dec 29 low and 124.17, Nov 24 low. The contract also maintains a price sequence of lower lows and lower highs. Furthermore, the MA set-up remains in a bear mode. The focus is on 122.66 next, a Fibonacci projection. Firm resistance is seen at 124.17, the 20-day EMA.

BTP TECHS: (H2) Recent Gains Considered Corrective

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.39 High Jan 3
• RES 1: 146.80/90 High Jan 14 / 20-day EMA
• PRICE: 145.67 @ Close Jan 17
• 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 appears to be a correction. A bearish trend remains intact with further weakness likely near-term. Futures recently cleared support at 148.25, Dec 1 low and 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 146.90, the 20-day EMA.

EQUITIES

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

• 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: 4273.50 @ 05:39 GMT Jan 18
• SUP 1: 4234.40/4216.50 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 still considered corrective and bullish conditions remain intact following the Dec 20 - Jan 5 rally. The contract has also recently found support at the 50-day EMA - the EMA intersects at 4234.40 today. A resumption of gains would refocus attention on key resistance at 4392.50. Key support to watch is unchanged at 4216.50, the Jan 10 low. A break would be bearish.

E-MINI S&P (H2): Is Again Below The 50-Day EMA

• 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: 4635.00 @ 06:48 GMT Jan 18
• 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 are trading lower today. The contract is back below the 50-day EMA however key short-term support lies 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, watch resistance at the 4739.50/52.57 zone. A break would refocus attention on the key resistance and bull trigger at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Still Defying Gravity

• RES 4: $93.89 - 2.236 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $91.29 - 2.00 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $90.00 - Psychological round number
• RES 1: $88.70 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• PRICE: $87.75 @ 06:56 GMT Jan 18
• SUP 1: $85.54/83.52 - Low Jan 14 / Low Jan 12
• SUP 2: $81.06/80.50 - 20-day EMA / Low Jan 10
• SUP 3: $78.67 - 50-day EMA
• SUP 4: $77.04 - Low Jan 3 and key support

Brent futures continue to defy gravity. 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 the contract continues to climb. The focus is on $88.70 next, a Fibonacci projection. Moving average conditions remain in a bull mode, highlighting the current positive sentiment. Initial firm support to watch is at $83.52, the Jan 12 low.

WTI TECHS: (G2) Uptrend Accelerates

• RES 4: $90.43 - 2.236 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $90.00 - Psychological round number
• RES 2: $87.86 - 2.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $86.00 - Round number resistance
• PRICE: $85.34 @ 07:08 GMT Jan 18
• SUP 1: $83.50/81.17 - Intraday low / Low Jan 12
• SUP 2: $77.85/77.83 - 20-day EMA / Low Jan 10
• SUP 3: $75.72/74.27 - 50-day EMA / Low Jan 3
• SUP 4: $72.57 - Low Dec 27

WTI futures remain in an uptrend and the contract has started the week on a firm bullish note. Last week’s rally resulted in a break of 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 $87.86, a Fibonacci projection. Firm support is seen at $81.17, the Jan 12 low.

GOLD TECHS: Bullish 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 near-term resistance
• PRICE: $1817.0 @ 07:10 GMT Jan 18
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1788.2/82.8 - 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 is consolidating but 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. This 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: Key Short-Term Resistance Remains Exposed

• 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: $22.939 @ 07:23 GMT Jan 18
• 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 is consolidating but 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. Clearance 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.