MNI DAILY TECHNICAL ANALYSIS - Equity Vol Favours Further Downside

Price Signal Summary – Equity Volatility Still Favours Further Downside

• In the equity space, S&P E-minis sold off sharply yesterday but recovered strongly from the day low, during a volatile trading session. The contract remains bearish and further downside pressure is seen likely near-term. EUROSTOXX 50 futures remain vulnerable and yesterday’s sharp accelerated sell-off reinforces the bearish threat. Former support at 4216.50, Jan 10 low has been cleared and this has resulted in the break of several short-term support levels.
• In FX, AUDUSD remains vulnerable. The pair traded sharply lower Monday and, in the process, cleared support at 0.7130, Jan 7 low. The recent failure to hold above the 50-day EMA and subsequent sharp sell-off strengthens the case for bears and signals potential for a deeper pullback. EURUSD also looks weak. The pair traded lower Monday, strengthening the short-term bearish condition. This follows the recent break below both the 20- and 50-day EMAs. GBPUSD remains softer following yesterday's bearish session. The pair has traded below both the 20- and 50-day EMAs to reinforce a bearish threat and suggest scope for a deeper pullback.
• On the commodity front, Gold short-term conditions remain bullish following last Wednesday’s strong rally. The climb 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 short-term corrective phase following the pullback from last week’s high of $87.10. The recent break of key resistance at $80.72, Oct 26 high reinforced a bullish theme
• In the FI space, Bund futures traded higher again yesterday and probed key short-term resistance at 171.00, the Jan 13 high. A clear break of this hurdle would signal potential for a stronger short-term recovery and open the 50-day EMA at 171.64. Gilt futures traded sharply lower last week before rebounding. This has defined a key support and bear trigger at 121.93, Jan 19 low. Bearish trend conditions remain intact and short-term gains are considered corrective.

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 and key resistance / Low Nov 5
• RES 1: 1.1421 High Jan 18
• PRICE: 1.1306 @ 06:10 GMT Jan 25
• SUP 1: 1.1291 Low Jan 24
• SUP 2: 1.1272 Low Jan 04
• SUP 3: 1.1260/22 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 remains vulnerable. The pair traded lower Monday, strengthening the short-term bearish condition. This follows the recent break below both the 20- and 50-day EMAs and more importantly, the failure to strengthen following recent bullish technical developments - a range breakout and breach of a bear channel resistance earlier this month. Further downside would expose 1.1272, Jan 4 low. Key resistance is 1.1483, Jan 14 high.

GBPUSD TECHS: Remains Soft

• RES 4: 1.3913 High Sep 14, 2021
• RES 3: 1.3835 High Oct 20 and key resistance
• RES 2: 1.3730/49 200-dma / High Jan 13
• RES 1: 1.3566/ 3662 High Jan 24 High Jan 20
• PRICE: 1.3474 @ 06:14 GMT Jan 25
• SUP 1: 1.3440 Low Jan 24
• SUP 2: 1.3409 Low Dec 29
• SUP 3: 1.3387 61.8% retracement of the Dec 8 - Jan 13 bull phase
• SUP 4: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase

GBPUSD remains softer following yesterday's bearish session. The pair has traded below both the 20- and 50-day EMAs to reinforce a bearish threat and suggest scope for a deeper pullback. The focus is on 1.3409 and 1.3387, the Dec 29 low and a Fibonacci retracement level. On the upside, initial firm resistance has been defined at 1.3662, the Dec 20 high. A break of this level is required to ease the developing bearish threat.

EURGBP TECHS: Finds Resistance At The 50-Day EMA

• RES 4: 0.8553 High Dec 10 and 14
• RES 3: 0.8498 High Dec 23
• RES 2: 0.8465 High Dec 24
• RES 1: 0.8420/23 50-day EMA / High Jan 24
• PRICE: 0.8391 @ 06:29 GMT Jan 25
• SUP 1: 0.8351/8305 Low Jan 24 / 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 is recovering off the multiyear low of 0.8305, Jan 20 low. The cross has so far stalled at the 50-day EMA, at 0.8420. Gains are considered corrective and the trend remains down. A resumption of weakness would refocus attention on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows plus the base of a broad multi-year range at 0.8300. For bulls, clearance of the 50-day EMA would allow for a stronger correction.

USDJPY TECHS: Probes 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: 114.51/115.06 20-day EMA / High Jan 18
• PRICE: 113.86 @ 06:36 GMT Jan 25
• SUP 1: 113.47/49 Low Jan 24/14
• SUP 2: 113.43 76.4% of the Nov 30 - Jan 4 rally
• SUP 3: 113.14 Low Dec 17
• SUP 4: 112.08 2.0% 10-dma envelope

USDJPY has continued to pull back from its most recent high of 115.06 on Jan 18. The pair has tested key support at 113.49, Jan 14 low. The print below 113.49 yesterday negates a recent bullish candle pattern - a doji on Jan 14. Further weakness would open 113.43, a Fibonacci retracement and 113.14, the Dec 17 low. Key near-term resistance is at 115.06, Jan 18 high. A break of this hurdle would be positive.

EURJPY TECHS: Short-Term Trend Needle Points South

• RES 4: 132.56/58 High Nov 4 / 3% Upper Bollinger Band
• 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: 129.94/131.18 20-day EMA / High Jan 18
• PRICE: 128.77 @ 06:44 GMT Jan 25
• SUP 1: 128.41/38 Low Jan 24 / 76.4% of the Dec 3 - Jan 5 high
• SUP 2: 128.05 Low Dec 21
• SUP 3: 127.39 Low Dec 6 and a major support
• SUP 4: 127.04 Low Feb 15, 2021

EURJPY remains under pressure having failed to hold onto recent highs.The continued move lower threatens the recent bullish theme and the cross remains below its 50-day EMA. Price is approaching 128.38, a Fibonacci retracement, where a break would expose 127.39, 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 129.94, the 20-day EMA.

AUDUSD TECHS: Support Remains Exposed

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7362 Former channel base drawn from the Aug 20 low
• RES 2: 0.7277/7314 High Jan 20 / High Jan 13
• RES 1: 0.7188 High Jan 24
• PRICE: 0.7141 @ 06:47 GMT Jan 25
• SUP 1: 0.7082 Low Dec 20 and a key support
• SUP 2: 0.7130 Low Jan 7
• SUP 3: 0.7069 76.4% retracement of the Dec 3 - Jan 13 upleg
• SUP 4: 0.6993 Low Dec 3

AUDUSD remains vulnerable. The pair traded sharply lower Monday and in the process cleared support at 0.7130, Jan 7 low. The recent failure to hold above the 50-day EMA and subsequent sharp sell-off strengthens the case for bears and signals potential for a deeper pullback. This has exposed 0.7082, the Dec 20 low and potentially 0.6993 further out, the Dec 3 low. Monday’s intraday high of 0.7188, marks initial resistance.

USDCAD TECHS: Challenging The 50-Day EMA

• RES 4: 1.2814 High Jan 6 and a key resistance
• RES 3: 1.2768 50.0% retracement of the Dec 20 - Jan 19 sell-off
• RES 2: 1.2708 50.0% retracement of the Dec 20 - Jan 19 sell-off
• RES 1: 1.2702 High Jan 24
• PRICE: 1.2630 @ 06:51 GMT Jan 25
• SUP 1: 1.2555 Low Jan 24
• SUP 2: 1.2451 Low Jan 19 / 76.4% of the Oct - Dec rally
• SUP 3: 1.2387 Low Nov 10
• SUP 4: 1.2328 Low Oct 29

USDCAD started the week on a firmer note and appears set to extend its recovery from 1.2451, the Jan 19 low. Price has traded through the 50-day EMA and the clear break of this average, at 1.2650, would expose 1.2708 and 1.2768, Fibonacci retracement levels. The strong recovery also threatens the recent bearish theme. On the downside, initial support lies at Monday’s intraday low of 1.2555. Key support has been defined at 1.2451, Jan 19 low.

FIXED INCOME

BUND TECHS: (H2) Probes Resistance

• RES 4: 171.99 50.0% retracement of the Aug 12 - Jan 19 downleg
• RES 3: 171.77 Low Nov 24 and recent breakout level
• RES 2: 171.64 50-day EMA
• RES 1: 170.74 High Jan 25
• PRICE: 170.20 @ 04:58 GMT Jan 24
• SUP 1: 169.92 Low Jan g20
• SUP 2: 168.95 Low Jan 19
• SUP 3: 168.84 3.764 proj of the Dec 8 - Dec 20 price swing
• SUP 4: 168.46 4.00 proj of the Dec 8 - Dec 20 price swing

Bund futures traded higher again yesterday and probed key short-term resistance at 171.00, the Jan 13 high. A clear break of this hurdle would signal potential for a stronger short-term recovery and open the 50-day EMA at 171.64. Broader trend conditions remain bearish. A resumption of weakness would instead refocus attention on the recent low and bear trigger at 168.95.

BOBL TECHS: (H2) Corrective Bounce Extends

• RES 4: 133.928 76.4% retracement of the Dec 20 - Jan 19 sell-off
• RES 3: 133.636 61.8% retracement of the Dec 20 - Jan 19 sell-off
• RES 2: 133.451 50-day EMA
• RES 1: 133.250 High Jan 24
• PRICE: 133.130 @ 05:11 GMT Jan 25
• SUP 1: 132.720 Low Jan 21
• SUP 2: 132.400 Low Jan 19 and the bear trigger
• 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

Despite the recent bounce, trend conditions in Bobl futures remain bearish. There is potential however for a stronger recovery following the breach of 133.110 yesterday, the Jan 6 and 13 highs. This has opened the 50-day EMA at 133.451. Last week’s break of 132.620, Jan 11 low maintains the bearish price sequence of lower lows and lower highs. A resumption of weakness would refocus attention on the recent low of 132.400 on Jan 19.

SCHATZ TECHS: (H2) Rally Extends

• RES 4: 112.176 112.265 High Dec 20 and a key resistance
• RES 3: 112.250 High Dec 21
• RES 2: 112.176 76.4% retracement of the Dec 20 - Jan 19 downleg
• RES 1: 112.145 High Jan 24
• PRICE: 112.115 @ 05:17 GMT Jan 25
• SUP 1: 112.030 Low Jan 24
• SUP 2: 111.980/890 Low Jan 21 / Low Jan 19
• SUP 3: 112.861 1.618 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.824 1.764 proj of the Nov 26 - Dec 16 - 20 price swing

Schatz futures have continued their recovery from last Wednesday’s low. The break higher has resulted in a move through both the 20- and 50-day EMAs. The strong gains set the scene for a climb towards 112.176, a Fibonacci retracement. Clearance of this retracement would strengthen bullish conditions and open 112.265 further out. Initial support is seen at yesterday’s low of 112.030. The bear trigger is far off at 111.890.

GILT TECHS: (H2) Approaching Key Short-Term Resistance

• RES 4: 124.80 50.0% retracement of the Dec 8 - Jan 19 downleg
• RES 3: 124.59 50-day EMA
• RES 2: 124.17 Low Nov 24
• RES 1: 123.79 High Jan 13 and a key near-term resistance
• PRICE: 123.58 @ Close Jan 24
• SUP 1: 122.83/121.93 Low Jan 21 / Low Jan 19 and the bear trigger
• SUP 2: 121.61 Low Nov 13 2018 (cont)
• SUP 3: 121.12 Low Nov 8 2018 (cont)
• SUP 4: 120.98 3.0% Lower Bollinger Band

Gilt futures traded sharply lower last week before rebounding. This has defined a key support and bear trigger at 121.93, Jan 19 low. Bearish trend conditions remain intact and short-term gains are considered corrective. Firm resistance is seen at 123.79, Jan 13 high. A break of this level would however signal a S/T base and allow for a stronger corrective bounce towards 124.55, the 50-day EMA. A return lower would open 121.93 again.

BTP TECHS: (H2) Gains Considered Corrective

• RES 4: 148.02 High Dec 29
• RES 3: 147.62 50-day EMA
• RES 2: 146.80 High Jan 14 and key short-term resistance
• RES 1: 146.49 High Jan 24
• PRICE: 145.87 @ Close Jan 24
• SUP 1: 144.55 Low Jan 19 and the bear trigger
• 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 trend conditions remain bearish. The contract last week 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. This opens 144.08, a Fibonacci projection. Short-term gains are considered corrective and key resistance has been defined at 146.80, Jan 14 high. A break of this hurdle would highlight a short-term base.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Impulsive Drive Lower

• RES 4: 4392.50 High Nov 18 and key resistance
• RES 3: 4381.50 High Jan 5 and the bull trigger
• RES 2: 4324.50.50 High Jan 13
• RES 1: 4215.50/4229.60 High Jan 24 / 50-day EMA
• PRICE: 4099.00 @ 05:48 GMT Jan 25
• SUP 1: 3990.50 Low Jan 24
• SUP 2: 3980.00 Low Nov 30 2021
• SUP 2: 3935.00 Low Oct 6 2021
• SUP 4: 3895.00 Low Jul 19 2021 (cont)

EUROSTOXX 50 futures remain vulnerable and yesterday’s sharp accelerated sell-off reinforces the bearish threat. Former support at 4216.50, Jan 10 low has been cleared and this has resulted in the break of a number of short-term support levels. The move lower has exposed 3980.00, Nov 30 low and 3935.00, Oct 6 low. Both are important supports and a break would threaten a deeper sell-off. Initial resistance is at yesterday’s high of 4215.50.

E-MINI S&P (H2): Volatile Start To The Week

• RES 4: 4739.50 High Jan 12
• RES 3: 4471.75 High Jan 18
• RES 2: 4619.77 50-day EMA
• RES 1: 4485.75 Low Dec 3
• PRICE: 4364.00 @ 06:52 GMT Jan 25
• SUP 1: 4212.75 Low Jan 24
• SUP 2: 4215.00 Low Jul 19, 2021
• SUP 3: 4186.57 23.6% of the Mar ‘20 - Jan ‘22 major rally
• SUP 4: 4126.75 Low Jun 21, 2021 (cont)

S&P E-minis sold off sharply yesterday but recovered strongly from the day low, during a volatile trading session. The contract remains bearish and further downside pressure is seen likely near-term. Yesterday’s breach of 4383.85, 76.4% of Oct 2021 - Jan rally and 4252.75, Oct 1 low strengthens the current bearish threat. This opens 4215.00 next, the Jul 19, 2021 low. Initial resistance is seen at 4485.75, the Dec 3 low.

COMMODITIES

BRENT TECHS: (H2) Remains Below Recent Highs

• 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 and the bull trigger
• PRICE: $87.12 @ 07:01 GMT Jan 25
• SUP 1: $85.04 - Low Jan 24
• SUP 2: $83.65/80.50 - 20-day EMA / Low Jan 10
• SUP 3: $80.30 - 50-day EMA
• SUP 4: $77.04 - Low Jan 3 and key support

Brent futures remain below recent highs. A short-term pullback is considered corrective with trend conditions remaining 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 $83.97, the 20-day EMA.

WTI TECHS: (H2) Pullback Considered Corrective

• 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: $83.78 @ 07:09 GMT Jan 25
• SUP 1: $81.90 - Low Jan 24
• SUP 2: $80.33/77.34 - 20-day EMA / Low Jan 10
• SUP 3: $76.96/74.01 - 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 short-term corrective phase following the pullback from last week’s high of $87.10. 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 to watch is at $80.33, the 20-day EMA.

GOLD TECHS: Outlook Remains Bullish

• 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: $1848.0 - 76.4% retracement of the Nov 16 - Dec 15 downleg
• PRICE: $1842.1 @ 07:14 GMT Jan 25
• SUP 1: $1805.9 - Low Jan 18
• SUP 2: $1792.4/82.8 - 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 last Wednesday’s strong rally. The climb 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 Focus

• 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: $23.774 @ 08:01 GMT Jan 25
• 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 is off its recent highs but remains bullish. The rally last week resulted in a breach of key short-term resistance at $23.436, Dec 28 high, reinforcing 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.