MNI DAILY TECHNICAL ANALYSIS - Equity Sell-Off Flags Vulnerability

Price Signal Summary - Equity Sell-Off Flags Vulnerability

• In the equity space, S&P E-minis are weaker and remain vulnerable. The move lower below the 50-day EMA has accelerated and key support at 4485.75 has been cleared, the Dec 3 low. EUROSTOXX 50 futures remain vulnerable and price is trading lower again. Former support at 4216.50, Jan 10 low is again being challenged and has been probed.
• In FX, EURUSD traded lower again Thursday and maintains this week’s bearish pressure. Price is below both the 20- and 50-day EMAs. The move lower threatens the recent bullish theme and suggests that at this stage, the recent range and bear channel breakout appear to have been a false one. GBPUSD remains nearer its recent lows. Trend conditions are bullish and the recent pullback is considered corrective. MA conditions remain in a bull mode and the recent breach of 1.3676, 76.4% of the Oct - Dec downleg reinforced a positive theme.
• On the commodity front, Gold short-term conditions remain bullish following Wednesday’s strong rally. The climb has resulted in a break of resistance at $1831.9, Jan 3 high and a bull trigger. WTI futures remain in an uptrend, however for now the contract appears to have entered a corrective phase following the pullback from recent highs.
• In the FI space, Bund futures have recovered from recent lows. The outlook remains bearish though following this week’s resumption of the downtrend - key support at 169.34, Oct 29 low has been breached. Gilt futures traded sharply lower again Wednesday. Bearish trend conditions remain intact and this week’s move lower has resulted in a break of former support at 122.78, Jan 10 low.

FOREIGN EXCHANGE

EURUSD TECHS: Still Vulnerable

• 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: 1.1327 @ 06:05 GMT Jan 21
• SUP 1: 1.1301 Intraday low
• SUP 2: 1.1272 Low Jan 04
• SUP 3: 1.1261/22 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 traded lower again Thursday and maintains this week’s bearish pressure. Price is below both the 20- and 50-day EMAs. The move lower threatens the recent bullish theme and suggests that at this stage, the recent range and bear channel breakout appear to have been a false one, having failed to deliver a stronger bullish reversal. Further downside would expose 1.1272, Jan 4 low. Key resistance is at 1.1483, Jan 14 high.

GBPUSD TECHS: Support Remains Intact

• RES 4: 1.3958 High Aug 4, 2021
• RES 3: 1.3913 High Sep 14, 2021
• RES 2: 1.3835 High Oct 20 and key resistance
• RES 1: 1.3734/49 200-dma / High Jan 13
• PRICE: 1.3589@ 06:13 GMT Jan 21
• SUP 1: 1.3573 Low Jan 18
• SUP 2: 1.3558/3504 20-day EMA / 50-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD remains nearer its recent lows. Trend conditions are bullish and the recent pullback is considered corrective. MA conditions remain in a bull mode and the recent breach of 1.3676, 76.4% of the Oct - Dec downleg reinforced a positive theme. A bullish price sequence of higher highs and higher lows remains intact. The 200-dma at 1.3734 has recently provided resistance. A break would open 1.3835, Oct 20 high. Key S/T support is at 1.3558.

EURGBP TECHS: Approaching The Range Base

• RES 4: 0.8465 High Dec 24
• RES 3: 0.8424 50-day EMA
• RES 2: 0.8419 High Jan 3
• RES 1: 0.8379 High Jan 18 and key near-term resistance
• PRICE: 0.8336 @ 06:16 GMT Jan 20
• SUP 1: 0.8305 Low Jan 20, lowest since 2020
• 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 traded once again to a fresh multiyear low of 0.8305 on Thursday This reinforces the current bearish theme with attention 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: Approaching Key Short-Term Support

• 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: 113.83 @ 06:22 GMT Jan 21
• SUP 1: 113.63 Intraday low
• 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: 112.39 2.0% 10-dma envelope

USDJPY has pulled back from its most recent high of 115.06 on Jan 18. The pair remains above the Jan 14 low of 113.49. The recent recovery from below the 50-day EMA is a bullish development and this is highlighted by a reversal signal on Jan 14 - a doji candle pattern. 113.49 marks a key short term support where a break is required to reinstate a bearish threat. A resumption of gains would open 115.68, Jan 11 high and the key resistance at 116.35.

EURJPY TECHS: Bearish Extension

• RES 4: 132.33/56 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: 130.14/131.18 20-day EMA / High Jan 18
• PRICE: 128.96 @ 06:30 GMT Jan 21
• SUP 1: 128.56 Intraday low
• SUP 2: 128.38 76.4% retracement of the Dec 3 - Jan 5 high
• SUP 3: 128.05 Low Dec 21
• SUP 4: 127.39 Low Dec 6 and a major support

EURJPY has failed to hold onto recent highs and remains soft. The move lower continues to threaten the recent bullish theme and the cross is again trading below its 50-day EMA. Price is approaching 128.38, a Fibonacci retracement, where a break would expose 178.39, the Dec 6 low and a key support. Key short-term resistance has been defined at 131.60, Jan 5 high. Initial resistance though is at 130.14, the 20-day EMA.

AUDUSD TECHS: Fails To Hold Onto Thursday’s High

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7357 Former channel base drawn from the Aug 20 low
• RES 1: 0.7277/7314 High Jan 20 / High Jan 13
• PRICE: 0.7198@ 06:33 GMT Jan 21
• SUP 1: 0.7170 Low Jan 18
• 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 failed to hold onto Thursday’s high and still appears vulnerable. The recent move lower represents a concern for bulls and a deeper retracement would expose 0.7130, Jan 7 low. The 3-day price action between Dec 12 -14 is an evening star candle pattern and a strong short-term reversal signal. A turn higher and importantly a break of 0.7314, Jan 13 high, is needed to cancel the reversal pattern and resume the recent upleg.

USDCAD TECHS: Consolidation Mode But Remains Bearish

• 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 Low Dec 31 and 20-day EMA
• PRICE: 1.2522 @ 06:37 GMT Jan 21
• SUP 1: 1.2451/48 Low Jan 19 / 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. The outlook remains bearish and a recent head and shoulders reversal pattern continues to highlight this theme. The recent break of support at 1.2621, Dec 31 low has strengthened the case for bears 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, the Dec 31 low and 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Recovers From Recent Lows

• RES 4: 171.81 50-day EMA
• RES 3: 171.77 Low Nov 24 and recent breakout level
• RES 2: 171.00 High Jan 13
• RES 1: 170.74 20-day EMA
• PRICE: 170.27 @ 05:03 GMT Jan 21
• SUP 1: 168.95 Low Jan 19
• SUP 2: 168.31 Low Nov 2 (cont)
• SUP 3: 168.00 Round number support
• SUP 4: 167.69 Low Nov 1 (cont)

Bund futures have recovered from recent lows. The outlook remains bearish though following this week’s resumption of the downtrend - key support at 169.34, Oct 29 low has been breached. An extension lower and a clear break strengthens bearish conditions and opens 168.84 next, a Fibonacci projection. Key short-term resistance has been defined at 171.00, the Jan 13 high. A break of this level is required to signal a short-term reversal.

BOBL TECHS: (H2) Corrective Bounce

• RES 4: 133.530 High Dec 29
• RES 3: 133.260 High Jan 3 and 4
• RES 2: 133.110 High Jan 6 and 13 and key resistance
• RES 1: 133.031 20-day EMA
• PRICE: 132.850 @ 05:08 GMT Jan 21
• SUP 1: 132.400 Low Jan 19 and the bear trigger
• SUP 2: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.253 2.618 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.230 Low Mar 19, 2019 (cont)

Despite the most recent bounce, trend conditions in Bobl futures remain bearish. Price earlier this week breached former support at 132.620, Jan 11 low and a bear trigger. This confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. The move lower opens 132.350 next, a Fibonacci projection level. On the upside, key short-term resistance to watch is seen at 133.110, Jan 6 and 13 high.

SCHATZ TECHS: (H2) Watching Resistance

• RES 4: 112.120 High Dec 27
• RES 3: 112.080 High Jan 5
• RES 2: 112.020 High Jan 13 / 14 and key short-term resistance
• RES 1: 112.011 20-day EMA
• PRICE: 112.000 @ 05:03 GMT Jan 21
• SUP 1: 111.890 Low Jan 19
• SUP 2: 112.861 1.618 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.824 3.0% Lower Bollinger Band
• SUP 4: 111.800 Round number support

Schatz futures have recovered from Wednesday’s low. Gains are considered corrective though. This week’s earlier move lower resulted in a break of support at 111.935, the Jan 11 low and bear trigger. The move confirms a resumption of the broader downtrend and maintains a bearish price sequence of lower lows and lower highs. 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) Gains Considered Corrective

• RES 4: 124.46 High Jan 4
• RES 3: 124.17 Low Nov 24
• RES 2: 123.79 High Jan 13 and a key near-term resistance
• RES 1: 123.22 High Jan 17
• PRICE: 122.66 @ Close Jan 20
• SUP 1: 121.93 Low Jan 19
• SUP 2: 121.61 Low Nov 13 2018 (cont)
• SUP 3: 121.12 Low Nov 8 2018 (cont)
• SUP 4: 121.01 3.0% Lower Bollinger Band

Gilt futures traded sharply lower again Wednesday. Bearish trend conditions remain intact and this week’s move lower has resulted in a break of former support at 122.78, Jan 10 low. This confirms a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs. The focus is on 121.61 next, the Nov 13 2018 low (cont). Firm resistance is seen at 123.79 where a break is required to signal a short-term base.

BTP TECHS: (H2) Trend Signals Still Point South

• RES 4: 148.02 High Dec 29
• RES 3: 147.39 High Jan 3
• RES 2: 146.80 High Jan 14 and key short-term resistance
• RES 1: 146.51 20-day EMA
• PRICE: 145.65 @ Close Jan 20
• SUP 1: 144.55 Low Jan 19
• SUP 2: 144.08 3.00 proj of the Dec 6 - 18 - 14 price swing
• SUP 3: 143.57 3.236 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 143.26 3.382 proj of the Dec 6 - 18 - 14 price swing

BTP futures traded lower Wednesday. A bearish trend remains intact and further weakness is likely near-term. Futures have cleared support at 145.12, Jan 10 low to confirm a resumption of the primary downtrend and maintain a sequence of lower lows and lower highs. The focus is on 144.08 next, a Fibonacci projection. Key short-term resistance has been defined at 146.80, Jan 14 high. A break of this hurdle would signal a short-term base.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Probes Key Short-Term 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: 4222.50 @ 05:41 GMT Jan 21
• SUP 1: 4204.00 Intraday low
• 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 vulnerable and price is trading lower again. Former support at 4216.50, Jan 10 low is again being challenged and has been probed. A clear break of this level would reinforce 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): Clears A Key Short-Term Support

• 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: 4594.25/671.75 High Jan 20 / High Jan 18
• PRICE: 4459.50 @ 06:48 GMT Jan 21
• SUP 1: 4429.50 Intraday low
• SUP 2: 4383.85 76.4% retracement of the Oct 2021 - Jan rally
• SUP 3: 4311.00 Low Oct 12
• SUP 4: 4252.75 Low Oct 1 and a key support

S&P E-minis are weaker and remain vulnerable. The move lower below the 50-day EMA has accelerated and key support at 4485.75 has been cleared, the Dec 3 low. The move through 4485.75 significantly strengthens the current bearish case and signals potential for an extension lower towards 4383.85, a Fibonacci retracement. Initial resistance is seen at yesterday’s 4594.25 high. Short-term gains would be considered corrective.

COMMODITIES

BRENT TECHS: (H2) Corrective Pullback

• 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: $89.50 - High Jan 19
• PRICE: $86.84 @ 06:57 GMT Jan 21
• SUP 1: $85.54/83.52 - Low Jan 14 / Low Jan 12
• SUP 2: $82.90/80.50 - 20-day EMA / Low Jan 10
• SUP 3: $79.74 - 50-day EMA
• SUP 4: $77.04 - Low Jan 3 and key support

Brent futures have pulled back from recent highs. A short-term pullback is considered corrective however with trend conditions still bullish. Recent gains through key resistance at $83.69, Oct 10 high confirmed a resumption of the broader uptrend and a bullish price sequence of higher highs and higher lows remains intact. The focus is on the $90.00 handle next, a Fibonacci projection. Initial firm support to watch is at $83.52, the Jan 12 low.

WTI TECHS: (H2) Corrective Cycle

• RES 4: $91.58 - 2.382 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $90.00 - Psychological round number
• RES 2: $87.47 - 2.00 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $87.10 - High Jan 20
• PRICE: $83.93 @ 07:08 GMT Jan 21
• SUP 1: $82.78/80.55 - Intraday low / Low Jan 12
• SUP 2: $79.48/77.34 - 20-day EMA / Low Jan 10
• SUP 3: $76.36/74.01 - 50-day EMA / Low Jan 3
• SUP 4: $72.22 - Low Dec 27

WTI futures remain in an uptrend, however for now the contract appears to have entered a corrective phase following the pullback from recent highs. The recent break of key resistance at $80.72, Oct 26 high reinforced a bullish theme - the break higher confirmed a resumption of the broader uptrend. The focus is on $87.47, a Fibonacci projection. Firm support is seen at $80.55, the Jan 12 low.

GOLD TECHS: Heading North

• 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: $1848.1 - 76.4% retracement of the Nov 16 - Dec 15 downleg
• PRICE: $1842.4 @ 07:11 GMT Jan 21
• SUP 1: $1805.9 - Low Jan 18
• SUP 2: $1790.7/82.8 - 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 following Wednesday’s strong rally. The climb has resulted in a break of resistance at $1831.9, Jan 3 high and a bull trigger. The breach reinforces bullish conditions following the recent recovery from the base of its bull channel drawn from the Aug 9, 2021 low. Attention is on $1848.0 next, a Fibonacci retracement. Firm short-term support has been defined at $1805.9.

SILVER TECHS: Bullish Extension

• RES 4: $26.002 - High Aug 4 2021
• RES 3: $25.406 - High Nov 16
• RES 2: $24.886 - High Nov 22
• RES 1: $24.700 - High Jan 20
• PRICE: $24.559 @ 07:25 GMT Jan 21
• SUP 1: $23.391 - Low Jan 19
• SUP 2: $22.809/21.949 - Low Jan 17 / Low Jan 7
• SUP 3: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally

Silver traded higher again yesterday. This week’s rally has resulted in a breach of key short-term resistance at $23.436, Dec 28 high and this has reinforced 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. Scope is seen for gains towards $24.886 next, the Nov 22 high. A firm support has been defined at $22.809.