MNI DAILY TECHNICAL ANALYSIS - EUR/GBP Looks to Confirm Bear Flag Formation

Price Signal Summary – EUR/GBP Looks to Confirm Bear Flag Formation

• A bullish theme in S&P e-minis remains intact and the contract has started this week on a bullish note. The break higher confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. A bullish theme in Eurostoxx 50 futures remains intact and the contract continues to climb. The fresh trend high confirms a resumption of the uptrend and maintains a bullish price sequence of higher highs and higher lows.
• EURGBP is consolidating. The trend outlook remains bearish and the recent sideways move appears to be a bear flag formation - a bearish continuation signal. Moving average studies are in a bear-mode position too, highlighting a downtrend. EURJPY traded sharply lower last Thursday as the bear leg that started mid-November accelerated. The cross has cleared all key short-term retracement points of the Oct - Nov rally. This strengthens the current bearish threat. Key support at 154.46, the Oct 3 low, has been pierced. The USDCAD trend outlook remains bearish and the latest recovery appears to be a correction. The recent breach of trendline support, drawn from the Jul 14 low, strengthens the current downtrend and signals scope for a continuation lower near-term.
• Bearish conditions in WTI futures remain intact and the latest recovery is considered corrective. The contract has recently cleared support at $72.37, the Nov 16 low. The break lower confirms a resumption of the downtrend. The latest pullback in Gold is considered corrective and this is allowing an overbought trend condition to unwind. The next support to watch is $1978.4, the 50-day EMA. It has been pierced. A clear break would signal scope for a deeper retracement.
• Bund futures maintain a firmer short-term tone following last week’s continuation higher. The break on Nov 29 above 132.09, the Nov 17 high, confirmed a resumption of the uptrend. That break higher maintains the bullish price sequence of higher highs and higher lows. The latest pullback in Gilt futures appears to be a correction. Recent gains resulted in a break of resistance at 98.05, the Nov 17 high, reinforcing bullish conditions and confirming a resumption of the current uptrend. The break higher paves the way for a climb towards 99.41.

FOREIGN EXCHANGE

EURUSD TECHS: Challenging Support At The 50-Day EMA

• RES 4: 1.1081 76.4% retracement of the Jul 18 - Oct 3 downleg
• RES 3: 1.1065 High Aug 10 and a key resistance
• RES 2: 1.0913/1017 High Dec 1 / High Nov 29 and the bull trigger
• RES 1: 1.0820 20-day EMA
• PRICE: 1.0770 @ 05:45 GMT Dec 12
• SUP 1: 1.0724 Low Dec 8
• SUP 2: 1.0693 Low Nov 14
• SUP 3: 1.0665 61.8% retracement of the Oct 3 - Nov 29 rally
• SUP 4: 1.0582 76.4% retracement of the Oct 3 - Nov 29 rally

EURUSD is unchanged. The pair maintains a softer tone and is trading just above its recent lows. Price has recently pierced support at the 50-day EMA - at 1.0774. A clear break of this average would strengthen a bearish theme and open 1.0693, the Nov 14 low. On the upside, a strong reversal higher is required to refocus attention on key resistance and the bull trigger at 1.1017. Initial resistance is at 1.0820, the 20-day EMA.

GBPUSD TECHS: Watching Support At The 20-Day EMA

• RES 4: 1.2996 High Jul 27
• RES 3: 1.2881 76.4% retracement of the Jul 14 - Oct 4 bear leg
• RES 2: 1.2800 High May 5 / High Aug 22
• RES 1: 1.2651/1.2733 High Dec 5 / High Nov 29 and the bull trigger
• PRICE: 1.2583 @ 05:53 GMT Dec 12
• SUP 1: 1.2538/03 20-day EMA / Low Dec 8
• SUP 2: 1.2451 50-day EMA
• SUP 3: 1.2374 Low Nov 17
• SUP 4: 1.2266 Low Nov 14

The uptrend in GBPUSD remains intact and the recent pullback appears to be a correction. MA studies are in a bull-mode set-up, highlighting a rising trend. Initial firm support to watch is 1.2538, the 20-day EMA. It has been pierced, a clear break would signal scope for a deeper pullback towards 1.2451, the 50-day EMA. Key resistance has been defined at 1.2733, the Nov 29 high. A break of this level would resume the uptrend and open 1.2800.

EURGBP TECHS: Bear Flag Formation

• RES 4: 0.8725 High Nov 22
• RES 3: 0.8690 High Nov 27
• RES 2: 0.8637 20-day EMA
• RES 1: 0.8616 Low Oct 11
• PRICE: 0.8564 @ 06:09 GMT Dec 12
• SUP 1: 0.8549 Low Dec 11
• SUP 2: 0.8524 Low Sep 5
• SUP 3: 0.8493 Low Aug 23 and a key support
• SUP 4: 0.8421 2.0% 10-dma envelope

EURGBP is consolidating. The trend outlook remains bearish and the recent sideways move appears to be a bear flag formation - a bearish continuation signal. Moving average studies are in a bear-mode position too, highlighting a downtrend. Attention is on 0.8558, 76.4% of the Aug 23 - Nov 20 bull leg. It has been pierced, a clear break would open 0.8524, the Sep 5 low. Initial resistance is seen 0.8616, Oct 11 low.

USDJPY TECHS: Recent Gains Appear To Be A Correction

• RES 4: 148.51 High Nov 30
• RES 3: 147.67 20-day EMA
• RES 2: 147.32 High Dec 7 and a key resistance
• RES 1: 146.59 High Dec 11
• PRICE: 145.42 @ 06:46 GMT Dec 12
• SUP 1: 144.78 Low Dec 11
• SUP 2: 142.50/141.71 Low Dec 8 / 7 and the bear trigger
• SUP 3: 140.71 76.4% of the Jul 14 - Nov 13 bull run
• SUP 4: 139.11 1.764 proj of the Nov 13 - 21 - 22 price swing

USDJPY traded sharply lower last Thursday, touching a low of 141.71. The break lower confirmed a breach of the trendline drawn from the Mar 24 low. This strengthens a bearish threat and signals scope for a continuation lower with sights on 140.71 next, a Fibonacci retracement point. The latest recovery - for now - appears to be a correction. Key short-term resistance to watch is 147.32, the Dec 7 high. A break would undermine the bearish theme.

EURJPY TECHS: Bear Threat Remains Present

• RES 4: 159.78 20-day EMA
• RES 3: 159.76 50-day EMA
• RES 2: 158.67 High Dec 7
• RES 1: 157.70 Low Oct 30
• PRICE: 156.66 @ 07:25 GMT Dec 12
• SUP 1: 155.68/153.23 Low Dec 11 / 7 and the bear trigger
• SUP 2: 152.24 3.764 proj of the Nov 16 - 21 - 27 price swing
• SUP 3: 151.42 Low Jul 28 and a key support
• SUP 4: 150.92 Low Jun 14

EURJPY traded sharply lower last Thursday as the bear leg that started mid-November accelerated. The cross has cleared all key short-term retracement points of the Oct - Nov rally. This strengthens the current bearish threat. Key support at 154.46, the Oct 3 low, has been pierced. Clearance of this level would open 151.42, the Jul 28 low. Initial firm resistance is at 158.67, the Dec 7 high. The latest bounce is considered corrective.

AUDUSD TECHS: Trend Structure Remains Bullish

• RES 4: 0.6821 High Jul 27
• RES 3: 0.6747 76.4% retracement of the Jul 13 - Oct 26 bear leg
• RES 2: 0.6734 2.0% 10-dma envelope
• RES 1: 0.6623/91 High Dec 5 / 4 and the bull trigger
• PRICE: 0.6595 @ 07:29 GMT Dec 12
• SUP 1: 0.6556/26 20-day EMA / Low Dec 07
• SUP 2: 0.6501 50-day EMA
• SUP 3: 0.6453 Low Nov 17
• SUP 4: 0.6360 Low Nov 14

The uptrend in AUDUSD remains intact and the latest pullback appears to be a correction. Support at the 20-day EMA, at 0.6556, has been pierced. A clear break of the average would expose 0.6501, the 50-day EMA. Moving average studies remain in a bull-mode set-up, highlighting an uptrend. The bull trigger has been defined at 0.6691, the Dec 4 high. Clearance of this level would confirm a resumption of the uptrend.

USDCAD TECHS: Bearish Outlook

• RES 4: 1.3855/3899 High Nov 10 / 1 and the bull trigger
• RES 3: 1.3777 High Nov 16
• RES 2: 1.3712 High Nov 24
• RES 1: 1.3641 50-day EMA
• PRICE: 1.3553 @ 07:57 GMT Dec 12
• SUP 1: 1.3480 Low Dec 4
• SUP 2: 11.3417 Low Sep 29
• SUP 3: 1.3401 61.8% retracement of the Jul 14 - Nov 1 bull phase
• SUP 4: 1.3381 Low Sep 19 and a key support

The USDCAD trend outlook remains bearish and the latest recovery appears to be a correction. The recent breach of trendline support, drawn from the Jul 14 low, strengthens the current downtrend and signals scope for a continuation lower near-term. Sights are on 1.3417 next, the Sep 29 low. Initial firm resistance is at 1.3641, the 50-day EMA. A break of this hurdle is required to ease the current bearish pressure.

FIXED INCOME

BUND TECHS: (H4) Uptrend Remains Intact

• RES 4: 136.39 2.50 proj of the Nov of the 13 - 17 - 24 price swing
• RES 3: 136.12 2.382 proj of the Nov of the 13 - 17 - 24 price swing
• RES 2: 136.00 Round number resistance
• RES 1: 135.81 High Dec 7
• PRICE: 135.09 @ 05:19 GMT Dec 12
• SUP 1: 133.91 Low Dec 4
• SUP 2: 132.98 20-day EMA
• SUP 3: 132.09 High Nov 17 and a recent breakout point
• SUP 4: 130.47 Low Nov 24 and key support

Bund futures maintain a firmer short-term tone following last week’s continuation higher. The break on Nov 29 above 132.09, the Nov 17 high, confirmed a resumption of the uptrend. That break higher maintains the bullish price sequence of higher highs and higher lows and sights are on the 136.00 handle next. Initial firm support lies at 132.98, the 20-day EMA. A short-term pullback would be considered corrective.

BOBL TECHS: (H4) Trend Needle Points North

• RES 4: 119.000 Round number resistance
• RES 3: 118.820 3.00 proj of the Sep 28 - Oct 10 - 19 price swing
• RES 2: 118.584 2.764 proj of the Nov 14 - 17 - 24 price swing
• RES 1: 118.480 High Dec 8
• PRICE: 118.080 @ 05:22 GMT Dec 12
• SUP 1: 117.690 Low Dec 5
• SUP 2: 117.168 20-day EMA
• SUP 3: 116.650 High Nov 17 and a recent breakout level
• SUP 4: 116.390 Low Nov 28

A bull cycle in Bobl futures remains in play and recent gains have reinforced this theme. On Nov 28, the contract cleared 116.65, the Nov 17 high, to confirm a resumption of the uptrend that started on Sep 28. The break paves the way for a move towards 118.584 next, a Fibonacci projection. Initial firm support lies at 117.168, the 20-day EMA. The short-term trend condition is overbought. A corrective pullback would unwind this condition.

SCHATZ TECHS: (H4) Pullback Considered Corrective

• RES 4: 106.621 1.382 proj of the Nov 24 - 30 minor price swing
• RES 3: 106.527 1.236 proj of the Nov 24 - 30 minor price swing
• RES 2: 106.375 1.00 proj of the Nov 24 - 30 minor price swing
• RES 1: 106.290 High Dec 6
• PRICE: 106.065 @ 05:38 GMT Dec 12
• SUP 1: 105.985 Low Dec 4 / 8
• SUP 2: 105.821 20-day EMA
• SUP 3: 105.780 Low Dec 1
• SUP 4: 105.640 Low Nov 29

Trend conditions in Schatz futures remain bullish and the latest pullback appears to be a correction. A deeper retracement would allow an overbought condition to unwind. Resistance at 105.660, the Aug 17 high, was breached on Nov 17 , strengthening current bullish conditions. This signals scope for a climb towards 106.375, a Fibonacci projection. Initial firm support lies at 105.780, the Nov 30 low.

GILT TECHS: (H4) Corrective Pullback

• RES 4: 99.80 1.382 proj of the Nov 24 - 29 - 30 price swing
• RES 3: 99.41 1.236 proj of the Nov 24 - 29 - 30 price swing
• RES 2: 99.00 Round number resistance
• RES 1: 98.97 High Dec 6 and the bull trigger
• PRICE: 97.52 @ Close Dec 11
• SUP 1: 97.02/96.10 20-day EMA / Low Nov 30
• SUP 2: 95.25 Low Nov 24 and key support
• SUP 3: 95.00 Round number support
• SUP 4: 94.74 2.618 proj of the Nov 17 - 20 - 22 price swing

The latest pullback in Gilt futures appears to be a correction. Recent gains resulted in a break of resistance at 98.05, the Nov 17 high, reinforcing bullish conditions and confirming a resumption of the current uptrend. The break higher paves the way for a climb towards 99.41, a Fibonacci projection. On the downside, initial firm support lies at 96.10, the Nov 30 low. Key short-term trend support has been defined at 95.25, the Nov 24 low.

BTP TECHS: (H4) Trend Outlook Remains Bullish

• RES 4: 118.00 Round number resistance
• RES 3: 117.81 1.618 proj of the Nov 10 - 17 - 24 price swing
• RES 2: 117.44 1.50 proj of the Nov 10 - 17 - 24 price swing
• RES 1: 117.22 High Dec 7
• PRICE: 115.94 @ Close Dec 11
• SUP 1: 114.53/114.13 20-day EMA / Low Nov 30
• SUP 2: 112.70 Low Nov 24 and a key support
• SUP 3: 111.53 Low Nov 14
• SUP 4: 110.50 Low Nov 7

A bull cycle in BTP futures remains in play and last week’s gains reinforced the bullish condition. The recent break of resistance at 114.11, Nov 17 high, confirmed a resumption of the uptrend that started Oct 19. Potential is for a climb towards 117.44 next, a Fibonacci projection. Key short-term trend support has been defined at 112.70, the Nov 24 low. Initial support is at 114.53, the 20-day EMA. A move lower would be considered corrective.

EQUITIES

EUROSTOXX50 TECHS: (Z3) Continues To Climb

• RES 4: 4665.50 2.50 proj of the Oct 27 - Nov 3 - Nov 8 price swing
• RES 3: 4636.70 76.4% retracement of the 2000 - 2009 downleg
• RES 2: 4608.00 High Jun 2007 and a key resistance
• RES 1: 4561.00 2.00 proj of the Oct 27 - Nov 3 - 8 price swing
• PRICE: 4554.00 @ 05:45 GMT Dec 12
• SUP 1: 4463.00/4398.00 Low Dec 6 / 20-day EMA
• SUP 2: 4312.10 50-day EMA
• SUP 3: 4238.00 Low Nov 14
• SUP 4: 4185.00 Low Nov 9 and 10

A bullish theme in Eurostoxx 50 futures remains intact and the contract continues to climb. The fresh trend high confirms a resumption of the uptrend and maintains a bullish price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position too, signalling a rising cycle. The focus is on 4561.00, a Fibonacci projection. Support to watch is at 4398.00, the 20-day EMA.

E-MINI S&P TECHS: (H4) Northbound

• RES 4: 4738.50 High Jul 27 and key resistance
• RES 3: 4700.00 Round number resistance
• RES 2: 4690.75 High Aug 2
• RES 1: 4682.50 Intraday high
• PRICE: 4679.00 @ 06:27 GMT Dec 12
• SUP 1: 4592.23 20-day EMA
• SUP 2: 4523.54 50-day EMA
• SUP 3: 4420.25.25 Low Nov 14
• SUP 4: 4354.25 Low Nov 10

A bullish theme in S&P e-minis remains intact and the contract has started this week on a bullish note. The break higher confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting positive market sentiment. Sights are on 4690.75, the Aug 2 high. Initial support lies at 4592.23, the 20-day EMA.

COMMODITIES

BRENT TECHS: (G4) Corrective Bounce

• RES 4: $88.55 - High Oct 27
• RES 3: $87.12 - High Nov 3
• RES 2: $84.61 - High Nov 30 and key short-term resistance
• RES 1: $79.04/81.72 - 20- and 50-day EMA
• PRICE: $76.58 @ 07:01 GMT Dec 12
• SUP 1: $73.50 - Low Jul 6
• SUP 2: $71.45 - Low Jun 23
• SUP 3: $69.86 - Low May 4 and a key support
• SUP 4: $66.90 - 1.236 proj of the Oct 20 - Nov 16 - 30 price swing

A bear threat in Brent futures remains present. A sharp sell-off last week reinforced a bearish theme. The contract cleared support at $76.71, the Nov 16 low. This confirmed a resumption of the downtrend and marks an extension of the sequence of lower lows and lower highs. Price has traded through $75.00 and sights are set on $73.50, the Jul 6 low. Initial firm resistance is at $79.04, the 20-day EMA. Gains are considered corrective.

WTI TECHS: (F4) Gains Appear To Be A Correction

• RES 4: $85.00 - High Oct 27
• RES 3: $83.20 - High Nov 3
• RES 2: $79.65 - High Nov 14 and a key short-term resistance
• RES 1: $72.37/74.46 - Low Nov 16 / 20-day EMA
• PRICE: $71.85 @ 07:11 GMT Dec 12
• SUP 1: $68.80 - Low Dec 7
• SUP 2: $67.28 - Jun 23
• SUP 3: $65.00 - Low May 4 and a key support
• SUP 4: $63.32 - 2.236 proj of the Nov 14 - 16 - 30 price swing

Bearish conditions in WTI futures remain intact and the latest recovery is considered corrective. The contract has recently cleared support at $72.37, the Nov 16 low. The break lower confirms a resumption of the downtrend and note too that moving average studies are in a bear-mode position, highlighting a clear downtrend. Sights are on $67.28 next, the Jun 23 low. Resistance is seen at $74.46 the 20-day EMA.

GOLD TECHS: Testing Support At The 50-Day EMA

• RES 4: $2206.6 - 1.382 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 3: $2177.6 - 1.236 proj of the Oct 6 - 27 - Nov 13 price swing
• RES 2: $2135.4 - High Dec 4 and all-time high
• RES 1: $2041.3 - High Dec 5
• PRICE: $1987.3 @ 07:16 GMT Dec 12
• SUP 1: $1978.4/1975.9 - 50-day EMA / Low Dec 11
• SUP 2: $1931.7 - Low Nov 13 and key support
• SUP 3: $1908.3 - Low Oct 16
• SUP 4: $1868.8 - Low Oct 13

The latest pullback in Gold is considered corrective and this is allowing an overbought trend condition to unwind. The next support to watch is $1978.4, the 50-day EMA. It has been pierced. A clear break would signal scope for a deeper retracement. Last week’s early gains reinforce the primary bullish condition. The yellow metal traded to a fresh all-time high of $2135.4 and this signals potential for a climb towards $2177.6 next, a Fibonacci projection.

SILVER TECHS: Corrective Cycle Remains In Play

• RES 4: $26.397 - 1.50 proj of the Oct 3 - 20 - Nov 13 price swing
• RES 3: $26.222 - High Apr 18 2022
• RES 2: $26.135 - High May 5 and a key resistance
• RES 1: $24.361/25.761 - High Dec 6 / 4 and the bull trigger
• PRICE: $22.935 @ 08:00 GMT Dec 12
• SUP 1: $22.793 - Trendline support drawn from the Oct 5 low
• SUP 2: $21.883 - Low Nov 13 and a key support
• SUP 3: $20.689 - Low Oct 3 and the bear trigger
• SUP 4: $19.904 - Low Mar 10 and a key support

Silver failed to hold on to last week’s gains and reversed sharply lower. For now, the move down is considered corrective - for now - and the pullback is allowing an overbought condition to unwind. The 50-day EMA has been breached and this signals scope for a deeper pullback, potentially towards $21.883, the Nov 13 low and a key support. On the upside, $25.761 is the bull trigger, the Dec 4 high.