MNI DAILY TECHNICAL ANALYSIS - Equities Under Pressure Again

Price Signal Summary - Equities Under Pressure Again

• In the equity space, S&P E-minis are under pressure. The contract is again below the 50-day EMA and has cleared key S/T support at 4572.75, Jan 10 low. The break of this level highlights a clear bearish threat and exposes support at 4520.25, Dec 20 low and 4485.75, the Dec 3 low. EUROSTOXX 50 futures remain under pressure this morning and the contract is approaching the key short-term support at 4216.50, Jan 10 low. Price is also back below the 50-day EMA.
• In FX, EURUSD continues to retrace recent gains and yesterday’s sell-off resulted in a breach of the 20-day EMA, currently at 1.1355. This week’s price action threatens the recent bullish theme. GBPUSD trend conditions remain bullish and the recent pullback is likely a correction. Moving average conditions are bullish and last week’s breach of 1.3676, 76.4% of the Oct - Dec downleg strengthens a bull theme. USDJPY has pulled back but remains above last week’s Jan 14 low of 113.49. The recent recovery from below the 50-day EMA is a bullish development and this is reinforced by a reversal signal last Friday.
• On the commodity front, Gold short-term conditions remain bullish despite the recent pullback. 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 traded higher again today. 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.
• In the FI space, Bund futures maintain a softer note. The outlook remains bearish following this week’s resumption of the downtrend. Attention is on the major support at 169.34, Oct 29 low, that has been breached. Gilt futures traded lower Tuesday. Bearish trend conditions remain intact and yesterday’s move lower resulted in a break of former support at 122.78, Jan 10 low.

FOREIGN EXCHANGE

EURUSD TECHS: Pullback Extends

• RES 4: 1.1692 High Oct 28, 2021
• RES 3: 1.1608 High Nov 9
• RES 2: 1.1483/1514 High Jan 14/ Low Nov 5
• RES 1: 1.1421 High Jan 18
• PRICE: 1.1330 @ 06:00 GMT Jan 19
• SUP 1: 1.1313 Low Jan 11
• SUP 2: 1.1272 Low Jan 04
• SUP 3: 1.1257/22 1.0% 10-dma envelope / Low Dec 15
• SUP 4: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger

EURUSD continues to retrace recent gains and yesterday’s sell-off resulted in a breach of the 20-day EMA, currently at 1.1355. This week’s price action threatens the recent bullish theme and suggests that at this stage, last week’s range and bear channel breakout appears to have been a false one and has failed to deliver a bullish reversal. Further weakness would expose 1.1272, the Jan 4 low. Key resistance has been defined at 1.1483, Jan 14 high.

GBPUSD TECHS: 20-Day EMA Is Support

• RES 4: 1.3958 High Aug 4, 2021
• RES 3: 1.3913 High Sep 14, 2021
• RES 2: 1.3835/94 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 1: 1.3736/49 200-dma/High Jan 13
• PRICE: 1.3608 @ 06:08 GMT Jan 19
• SUP 1: 1.3573 Low Jan 18
• SUP 2: 1.3547/3495 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 likely a correction. Moving average conditions are bullish and last week’s breach of 1.3676, 76.4% of the Oct - Dec downleg strengthens a bull theme and maintains the positive price sequence of higher highs and higher lows. The 200-dma at 1.3736 has recently provided resistance. A break would open 1.3835, Oct 20 high. Support to watch is the 20-day EMA at 1.3547.

EURGBP TECHS: Bearish Theme

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8432 50-day EMA
• RES 2: 0.8383/8419 20-day EMA / High Jan 3
• RES 1: 0.8379 High Jan 18
• PRICE: 0.8326 @ 06:14 GMT Jan 19
• SUP 1: 0.8324 Low Jan 11 and intraday low
• 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 failed to hold onto yesterday’s high and traded lower into the close. This keeps the outlook bearish and attention is on the major support and bear triggers at 0.8282/77, marking the Feb’20 and Dec’19 lows. The focus is also on the base of a 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 0.8379, Tuesday’s high.

USDJPY TECHS: Remains Above Recent Lows

• 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 High Jan 18
• PRICE: 114.27 @ 06:24 GMT Jan 19
• SUP 1: 114.07 Low Jan 17
• 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 has pulled back but remains above last week’s Jan 14 low of 113.49. The recent recovery from below the 50-day EMA is a bullish development and this is reinforced by a reversal signal last Friday - a doji candle pattern. 113.49 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: Bear Cycle Extends

• RES 4: 132.30/56 3% Upper Bollinger Band / High Nov 4
• RES 3: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 2: 131.60 High Jan 5 and the bull trigger
• RES 1: 130.31/131.18 20-day EMA / High Jan 18
• PRICE: 129.51 @ 06:35 GMT Jan 19
• SUP 1: 129.39 Intraday low
• SUP 2: 129.00 61.8% retracement of the Dec 3 - Jan 5 high
• SUP 3: 128.38 76.4% retracement of the Dec 3 - Jan 5 high
• SUP 4: 128.05 Low Dec 21

EURJPY has failed to hold onto recent highs and is trading lower again today. The move down threatens the recent bullish theme and the cross is trading below its 50-day EMA. A deeper pullback would open 129.00 and 128.38, Fibonacci retracement levels. On the upside, key short-term resistance has been defined at 131.60, Jan 5 high, where a break is required to reinstate the recent bullish theme.

AUDUSD TECHS: Evening Star Candle Highlights A Bearish Threat

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7353 Former channel base drawn from the Aug 20 low
• RES 1: 0.7229/7314 High Jan 17 / High Jan 13
• PRICE: 0.7193 @ 06:42 GMT Jan 19
• 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 remains below recent highs. The move lower is still 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 is a strong reversal signal. A turn higher and importantly a break of 0.7314, Jan 13 high would resume the recent upleg and cancel the developing bearish threat.

USDCAD TECHS: Consolidation Mode

• RES 4: 1.2924 High Dec 22
• RES 3: 1.2814 High Jan 6 and a key resistance
• RES 2: 1.2732 High Jan 7
• RES 1: 1.2621/2646 Low Dec 31 / 20-day EMA
• PRICE: 1.2506 @ 06:51 GMT Jan 19
• SUP 1: 1.2454/48 Low Dec 13 / 76.4% of the Oct - Dec rally
• SUP 2: 1.2387 Low Nov 10
• SUP 3: 1.2328 Low Oct 29
• SUP 4: 1.2288 Low Oct 21 and a key support

USDCAD is consolidating. Bears remain in control though and a recent head and shoulders reversal pattern continues to highlight a bearish threat. The break of support at 1.2621, Dec 31 low has 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 1.2646, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Resumes Its Downtrend

• 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/ High Jan 13 and the 20-day EMA
• PRICE: 169.36 @ 04:53 GMT Jan 19
• SUP 1: 169.25 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 maintain a softer note. The outlook remains bearish following this week’s resumption of the downtrend. Attention is on the major support at 169.34, Oct 29 low, that has been breached. An extension lower and a clear break would strengthen bearish conditions and open 169.08, a Fibonacci projection. 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: 133.122 20-day EMA
• RES 1: 133.110 High Jan 6 and 13
• PRICE: 132.530 @ 04:54 GMT Jan 19
• SUP 1: 132.500 Low Jan 18 and 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 is trading at its recent lows. Price has breached former support at 132.620, Jan 11 low and a bear trigger. This has confirmed 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 Condition Remains Bearish

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.023/080 20-day EMA / High Jan 5
• RES 1: 112.020 High Jan 13 / 14 and key near-term resistance
• PRICE: 111.915 @ 04:48 GMT Jan 19
• SUP 1: 111.900 Low Jan 17 / 18
• 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: 111.800 3.0% Lower Bollinger Band

Trend conditions in Schatz futures remain bearish. 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. A break is required to ease bearish pressure.

GILT TECHS: (H2) Bearish Extension

• RES 4: 125.18 High Dec 31
• RES 3: 124.46 High Jan 4
• RES 2: 124.04/17 20-day EMA / Low Nov 24
• RES 1: 123.79 High Jan 13 and key near-term resistance
• PRICE: 122.77 @ Close Jan 18
• SUP 1: 122.42 Low Jan 18
• SUP 2: 122.15 Low Jan 18, 2019 (cont)
• SUP 3: 122.00 Round number support
• SUP 4: 121.21 3.0% Lower Bollinger Band

Gilt futures traded lower Tuesday. Bearish trend conditions remain intact and yesterday’s move lower resulted in a break of former support at 122.78, Jan 10 low. This confirms a resumption of the underlying downtrend and maintains a bearish price sequence of lower lows and lower highs. The MA set-up also 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) Trend Needle Points South

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.39 High Jan 3
• RES 1: 146.76/80/90 20-day EMA / High Jan 14
• PRICE: 145.45 @ Close Jan 18
• SUP 1: 145.29/12 Low Nov 1 / 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 and confirm a resumption of the downtrend. Firm resistance is seen at 146.80.

EQUITIES

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

• 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: 4219.00 @ 05:29 GMT Jan 19
• SUP 1: 4216.50 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

EUROSTOXX 50 futures remain under pressure this morning and the contract is approaching the key short-term support at 4216.50, Jan 10 low. Price is also back below the 50-day EMA. A break of 4216.50 would once again highlight a bearish threat and confirm a resumption of the bear cycle that started Jan 5. This would expose 4161.80, a Fibonacci retracement. On the upside, resistance to watch is at 4324.50, the Nov 18 high.

E-MINI S&P (H2): Under Pressure

• RES 4: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 3: 4808.25 High Jan 4 and the bull trigger
• RES 2: 4739.50/52.67 High Jan 12 / 76.4% of the Jan 4 - 10 sell-off
• RES 1: 4671.75 High Jan 18
• PRICE: 4645.75 @ 06:52 GMT Jan 19
• SUP 1: 4520.25 Low Dec 20 and a key support
• SUP 2: 4485.75 Low Dec 3
• SUP 3: 4464.95 61.8% retracement of the Oct 2021 - Jan rally
• SUP 4: 4420.00 Low Oct 15, 2021

S&P E-minis are under pressure. The contract is again below the 50-day EMA and has cleared key S/T support at 4572.75, Jan 10 low. The break of this level highlights a clear bearish threat and exposes support at 4520.25, Dec 20 low and 4485.75, the Dec 3 low. The latter is an important bear trigger. On the upside, watch resistance at 4739.50, Jan 12 high. A break is needed to refocus attention on the key resistance and bull trigger at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Approaching $90.00

• 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: $89.05 - Intraday high
• PRICE: $87.98 @ 06:58 GMT Jan 19
• SUP 1: $85.54/83.52 - Low Jan 14 / Low Jan 12
• SUP 2: $81.67/80.50 - 20-day EMA / Low Jan 10
• SUP 3: $79.02 - 50-day EMA
• SUP 4: $77.04 - Low Jan 3 and key support

Brent futures continue to defy gravity and the contract has traded higher again today. 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. The focus is on the $90.00 handle 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) Northbound

• 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: $87.08 - Intraday high
• PRICE: $85.98 @ 07:11 GMT Jan 19
• SUP 1: $83.50/81.17 - Intraday low / Low Jan 12
• SUP 2: $78.57/77.83 - 20-day EMA / Low Jan 10
• SUP 3: $76.11/74.27 - 50-day EMA / Low Jan 3
• SUP 4: $72.57 - Low Dec 27

WTI futures remain in an uptrend and the contract has traded higher again today. 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: Remains Above Support

• 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: $1813.3 @ 07:17 GMT Jan 19
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1789.1/82.8 - 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 short-term conditions remain bullish despite the recent pullback. 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. Attention is on 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: Breaches Key Short-Term Resistance

• RES 4: $23.467 - 76.4% retracement of the Nov 16 - Dec 15 sell-off
• RES 3: $24.323 - High Nov 23
• RES 2: $23.886 - 61.8% retracement of the Nov 16 - Dec 15 sell-off
• RES 1: $23.641 - High Jan 18
• PRICE: $23.605 @ 08:07 GMT Jan 19
• SUP 1: $22.809/21.949 - Low Jan 17 / 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 traded higher yesterday and is through a key short-term resistance at $23.436, Dec 28 high. This reinforces bullish conditions following the recent bounce from $21.949, Jan 7 low. The move through $23.436 also highlights a bullish price sequence of higher highs and higher lows, reinforcing the positive outlook. Scope is seen for gains towards $23.886, 61.8% of the Nov - Dec sell-off. A firm short-term support has been defined at $22.809.