MNI DAILY TECHNICAL ANALYSIS - EUR/JPY Extends Bounce, Nears First Resistance

Price Signal Summary – EUR/JPY Extends Bounce, Nears First Resistance

• S&P E-Minis have found support at 3901.75, the Jan 19 low. A short-term bearish threat remains present following the pullback last week from 4035.25, the Jan 18 high. Price has traded through support at the 50-day EMA. EUROSTOXX 50 futures traded lower last Thursday. The broader trend outlook remains bullish, however, the cycle is overbought and this warns of the potential for a short-term pullback. A move lower would allow the overbought reading to unwind.
• EURUSD is trading higher today and has breached last week’s high to confirm a resumption of the primary uptrend. The trend extension maintains the bullish price sequence of higher highs and higher lows and moving average studies continue to highlight bullish market sentiment. EURGBP continues to trade closer to its recent lows and maintains a softer tone following last week’s move lower. The cross has traded below the 50-day EMA, at 0.8755. The average represents a key short-term support and a clear break of it would signal scope for a deeper retracement. EURJPY is trading firmer this morning as the cross extends the bounce from last week’s low of 137.92 on Jan 19. The 20-day EMA, at 141.77, has been pierced. A clear break of the EMA would expose key short-term resistance at 142.86, the Jan 11 high.
• Trend conditions in Gold remain bullish and the yellow metal traded to a fresh cycle high last week. This confirms an extension on the uptrend and maintains the price sequence of higher highs and higher lows. WTI futures traded higher last week but prices pulled back from $82.66, the Jan 18 high. The move lower warns of a potential bearish threat and attention is on support at $78.29, the 20-day EMA.
• Bund futures remain in an uptrend despite the latest pullback - the move lower is considered corrective. Last week’s trend highs confirmed a resumption of the bull cycle and this maintains a price sequence of higher highs and higher lows. Gilt futures remain in an uptrend and the contract traded higher last week. The extension confirms a resumption of the short-term uptrend and resulted in a break of 105.20, the 76.4% retracement of the Nov 24 - Dec 28 bear leg.

FOREIGN EXCHANGE

EURUSD TECHS: Resumes Its Uptrend

• RES 4: 1.1054 High Apr 4 2022
• RES 3: 1.1022 3.00 proj of the Sep 28 - Oct 4 - Oct 13 price swing
• RES 2: 1.0954 High Apr 11, 2022
• RES 1: 1.0927 Intraday high
• PRICE: 1.0911 @ 08:09 GMT Jan 23
• SUP 1: 1.0767/26 Low Jan 18 / 20-day EMA
• SUP 2: 1.0634 Low Jan 9
• SUP 3: 1.0557/1.0484 50-day EMA / Low Jan 6
• SUP 4: 1.0411 3.0% Lower Bollinger Band

EURUSD is trading higher today and has breached last week’s high to confirm a resumption of the primary uptrend. The trend extension maintains the bullish price sequence of higher highs and higher lows and moving average studies continue to highlight bullish market sentiment. The focus is on 1.0954, the Apr 11 2022 high. Initial firm support is at 1.0726, the 20-day EMA. Any near-term weakness would be considered corrective.

GBPUSD TECHS: Pierces The December High

• RES 4: 1.2599 High Jun 7
• RES 3: 1.2558 High Jub 9, 2022
• RES 2: 1.2506 1.382 proj of the Sep 26 - Oct 5 - Oct 12 price swing
• RES 1: 1.2448 Intraday high
• PRICE: 1.2416 @ 05:55 GMT Jan 23
• SUP 1: 1.2313 Low Jan 19
• SUP 2: 1.2197/2083 20-day EMA / Low Jan 9
• SUP 3: 1.2058 50-day EMA
• SUP 4: 1.1842 Low Jan 6 and the bear trigger

GBPUSD remains firm and has traded higher today and in the process, the pair has pierced 1.2446, the Dec 14 high. The move higher reinforces bullish conditions and a clear break of 1.2446 would confirm a resumption of the uptrend that started late September 2022. This would open 1.2506, a Fibonacci projection. On the downside, initial firm support is seen at 1.2197, the 20-day EMA.

EURGBP TECHS: Trading Closer To Its Recent Lows

• RES 4: 0.8992 61.8% Retracement of the Sep 26 - Dec 1 bear leg
• RES 3: 0.8980 High Sep 29
• RES 2: 0.8907 50.0% retracement of the Sep 26 - Dec 1 bear leg
• RES 1: 0.8804/97 High Jan 18 / 13 and the bull trigger
• PRICE: 0.8773 @ 06:23 GMT Jan 23
• SUP 1: 0.8722 Low Jan 19
• SUP 2: 0.8691 Low Dec 19
• SUP 3: 0.8630 76.4% retracement of the Dec 1 - Jan 13 bull cycle
• SUP 4: 0.8593 Low Dec 15

EURGBP continues to trade closer to its recent lows and maintains a softer tone following last week’s move lower. The cross has traded below the 50-day EMA, at 0.8755. The average represents a key short-term support and a clear break of it would signal scope for a deeper retracement. This would open 0.8691 initially, the Dec 19 low. Key short-term resistance has been defined at 0.8897, Jan 13 high. A break would resume bullish activity.

USDJPY TECHS: Resistance Remains Intact

• RES 4: 134.77/81 High Jan 6 / 23.6% Oct - Jan downleg
• RES 3: 134.42 50-day EMA
• RES 2: 132.87 High Jan 11
• RES 1: 131.01/58 20-day EMA / High Jan 18
• PRICE: 129.96 @ 06:39 GMT Jan 23
• SUP 1: 127.23 Low Jan 16 and the bear trigger
• SUP 2: 126.81 1.382 proj of the Oct 31 - Nov 15 - 21 price swing
• SUP 3: 126.36 Low May 24 and a key support
• SUP 4: 125.49 1.50 proj of the Oct 31 - Nov 15 - 21 price swing

USDJPY remains below last week’s high of 131.58 and the 20-day EMA, at 131.01. Recent activity appears to be a bear flag formation - if correct it reinforces the downtrend and signals scope for a continuation of the trend. A break lower would open 126.81, a Fibonacci projection - the bear trigger is 127.23, the Jan 16 low. On the upside, clearance of 131.58, the Jan 18 high, would be bullish and signal scope for a stronger correction.

EURJPY TECHS: Pierces The 20-Day EMA

• RES 4: 144.00 Round number resistance
• RES 3: 143.16 61.8% retracement of the Dec 15 - Jan 3 bear leg
• RES 2: 142.86/94 High Jan 11 / High Dec 28 and key resistance
• RES 1: 142.06 50.0% retracement of the Dec 15 - Jan 3 downleg
• PRICE: 141.79 @ 06:50 GMT Jan 23
• SUP 1: 140.47/137.92 Intraday low / Low Jan 19
• SUP 2: 137.39 Low Jan 3 and the bear trigger
• SUP 3: 137.03 Low Aug 29
• SUP 4: 136.02 Low Aug 25

EURJPY is trading firmer this morning as the cross extends the bounce from last week’s low of 137.92 on Jan 19. The 20-day EMA, at 141.77, has been pierced. A clear break of the EMA would expose key short-term resistance at 142.86, the Jan 11 high. The broader trend direction remains down. A reversal would again refocus attention on the bear trigger at 137.39, the Jan 3 low. Clearance of this level resumes the downtrend.

AUDUSD TECHS: Remains Below Last Week’s High

• RES 4: 0.7200 Round number resistance
• RES 3: 0.7137 High Aug 11
• RES 2: 0.7063 High Jan 18
• RES 1: 0.7063 High Jan 18 and the bull trigger
• PRICE: 0.6981 @ 08:00 GMT Jan 23
• SUP 1: 0.6876 20-day EMA
• SUP 2: 0.6782 50-day EMA
• SUP 3: 0.6688 Low Jan 3 and key support
• SUP 4: 0.6650 Low Dec 22

AUDUSD remains below last Wednesday’s high of 0.7063. Short-term weakness is considered corrective - for now - and the 3-month uptrend remains intact. Support to watch lies at 0.6876, the 20-day EMA. A break of this average would signal scope for a deeper pullback and potentially open 0.6782, the 50-day EMA. Clearance of resistance at 0.7063 would confirm a resumption of recent bullish activity.

USDCAD TECHS: Bearish Threat

• RES 4: 1.3751 High Nov 4
• RES 3: 1.3705 Dec 16 and the bull trigger
• RES 2: 1.3665 High Jan 6
• RES 1: 1.32470/3521 20-day EMA / High Jan 19
• PRICE: 1.3360 @ 08:07 GMT Jan 23
• SUP 1: 1.3351 Low Jan 18
• SUP 2: 1.3317 Low Nov 24 / 25
• SUP 3: 1.3226 Low Nov 15 and bear trigger
• SUP 4: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally

USDCAD is trading lower today and is starting the week on a softer note, following the pullback from 1.3521 last week, the Jan 19 high. A continuation lower would expose support at 1.3322, the Jan 13 low, where a break would signal scope for an extension towards 1.3226, the Nov 13 low and a bear trigger. On the upside, price needs to break above 1.3521 to highlight scope for a stronger bounce.

FIXED INCOME

BUND TECHS: (H3) Corrective Pullback

• RES 4: 142.91 High Dec 7 and key resistance
• RES 3: 142.55 High Dec 8
• RES 2: 141.70 High Dec 13
• RES 1: 139.55/140.73 High Jan 20 / 19 and the bull trigger
• PRICE: 138.36 @ 05:02 GMT Jan 23
• SUP 1: 137.76 20-day EMA
• SUP 2: 137.53 Low Jan 16 and a key short-term support
• SUP 3: 136.46 Low Jan 11
• SUP 4: 136.04 Low Jan 10

Bund futures remain in an uptrend despite the latest pullback - the move lower is considered corrective. Last week’s trend highs confirmed a resumption of the bull cycle and this maintains a price sequence of higher highs and higher lows. Furthermore, price has breached all retracement points of the Dec 7 - Jan 3 bear leg, reinforcing bullish conditions. Sights are on 141.70, the Dec 13 high. Initial firm support is at 137.53, the Jan 16 low.

BOBL TECHS: (H3) Trend Direction Remains Up Despite Recent Pullback

• RES 4: 119.490 High Dec 13
• RES 3: 119.310 High Dec 14
• RES 2: 119.086 76.4% retracement of the Dec 7 - Jan 2 downleg
• RES 1: 118.240/880 High Jan 20 / 19 and the bull trigger
• PRICE: 117.800 @ 05:11 GMT Jan 23
• SUP 1: 117.690 20-day EMA
• SUP 2: 117.560 Low Jan 16 and a key support
• SUP 3: 117.170 Low Jan 11
• SUP 4: 116.950 Low Jan 10

Bobl futures trend conditions remain bullish and the most recent pullback is considered corrective. Last week’s gains reinforce the current positive outlook and maintain the current positive price sequence of higher highs and higher lows. Attention is on 119.086, the 76.4% retracement of the Dec 7 - Jan 2 downleg. Initial firm support lies at 117.560, the Jan 16 low. A break would signal a likely reversal.

SCHATZ TECHS: (H3) Corrective Cycle

• RES 4: 106.517 76.4% retracement of the Dec 2 - Jan 2 bear leg
• RES 3: 106.370 Low Dec 12
• RES 2: 106.296 61.8% retracement of the Dec 2 - Jan 2 bear leg
• RES 1: 105.955/106.155 High Jan 20 / 18 and the bull trigger
• PRICE: 105.835 @ 05:15 GMT Jan 23
• SUP 1: 105.770 Low Jan 17
• SUP 2: 105.735 Low Jan 16 and a key short-term support
• SUP 3: 105.375 Low Jan 11
• SUP 4: 105.625 Low Jan 10

Schatz futures trend conditions remain bullish and the pullback late last week is considered corrective. Price has recently traded through the 20-day EMA and this reinforced short-term bullish conditions. A resumption of gains would signal potential for a climb towards 106.296, 61.8% of the Dec 2 - Jan 2 bear leg. On the downside, the firm support to watch lies at 105.735, the Jan 16 low. A break would alter the picture and signal a potential reversal.

GILT TECHS: (H3) Bull Cycle Remains In Play

• RES 4: 107.06 High Nov 24 and key resistance
• RES 3: 106.18 High Dec 12
• RES 2: 106.00 Round number resistance
• RES 1: 105.71 High Jan 18
• PRICE: 104.87 @ Close Jan 19
• SUP 1: 103.97 Low Jan 18
• SUP 2: 103.21/102.78 Low Jan 17 and key S/T support / High Jan 6
• SUP 3: 102.19/101.40 Low Jan 11 / 10
• SUP 4: 99.97 Low Jan 3

Gilt futures remain in an uptrend and the contract traded higher last week. The extension confirms a resumption of the short-term uptrend and resulted in a break of 105.20, the 76.4% retracement of the Nov 24 - Dec 28 bear leg. This paves the way for gains towards 107.06, the Nov 24 high and a key resistance. On the downside, initial firm support has been defined at 103.21, the Jan 17 low. A break would threaten the recent recovery.

BTP TECHS: (H3) Pullback Considered Corrective

• RES 4: 120.73 0.764 proj of the Dec 30 - Jan 12 - 16 price swing
• RES 3: 120.00 Psychological round number
• RES 2: 118.96 High Dec 7 and a key resistance
• RES 1: 117.53/118.56 High Jan 20 / 19
• PRICE: 115.70 @ Close Jan 20
• SUP 1: 115.51 Low Jan 20
• SUP 2: 114.51/46 20-day EMA / Low Jan 16
• SUP 3: 111.59 Low Jan 6
• SUP 4: 110.77 Low Jan 4

The current bull cycle in BTP futures remains intact despite the move lower late last week - the pullback is considered corrective. Last week’s gains reinforce the short-term bullish condition and scope is seen for a test of key resistance at 118.96, the Dec 7 high. Clearance of this level would strengthen the case for bulls. On the downside, key short-term support has been defined at 114.46, the Jan 16 low. A break would alter the picture.

US 10YR FUTURE TECHS: (H3) Bull Cycle Still In Play

• RES 4: 117-17+ 1.00 proj of the Nov 3 - Dec 13 - Dec 30 price swing
• RES 3: 117-00 High Sep 8 2022
• RES 2: 116-30 2.0% 10-dma env
• RES 1: 116-08 High Jan 19
• PRICE: 115-03 @ 15:51 GMT Jan 20
• SUP 1: 114-16 Low Jan 18
• SUP 2: 114-09+ Low Jan 17 and a key support
• SUP 3: 114-03+ 20-day EMA
• SUP 4: 113-26+ Low Jan 10

Treasury futures traded higher Thursday to maintain the positive price sequence of higher highs and higher lows and note that moving average studies are highlighting a bullish backdrop. On the continuation chart, the 200-dma has been pierced. A clear break would reinforce current conditions. The focus is on 116-30, the upper band of a MA envelope. Key support to watch is 114-09+, Jan 17 low. The latest pullback is considered corrective.

EQUITIES

EUROSTOXX50 TECHS: (H3) Overbought Trend Condition

• RES 4: 4269.50 2.236 proj of the Sep 29 - Oct 4 rise from Dec 20 low
• RES 3: 4230.50 High Feb 10, 2022 (cont)
• RES 2: 4215.00 2.00 proj of the Sep 29 - Oct 4 rise from Dec 20 low
• RES 1: 4206.00 High Jan 18 and the bull trigger
• PRICE: 4145.00 @ 05:47 GMT Jan 23
• SUP 1: 4046.30 20-day EMA
• SUP 2: 3931.20 50-day EMA values
• SUP 3: 3753.00 Low Dec 20 and the bear trigger
• SUP 4: 3720.00 Low Nov 10

EUROSTOXX 50 futures traded lower last Thursday. The broader trend outlook remains bullish, however, the cycle is overbought and this warns of the potential for a short-term pullback. A move lower would allow the overbought reading to unwind. A resumption of weakness would open 4046.30, the 20-day EMA and a key near-term support. Key short-term resistance and the bull trigger has been defined at 4206.00, the Jan 18 high.

E-MINI S&P (H3): Bear Threat Remains Present

• RES 4: 4194.25 High Sep 13
• RES 3: 4180.00 High Dec 13 and the bull trigger
• RES 2: 4090.75 High Dec 14
• RES 1: 4035.25 High Jan 18
• PRICE: 3986.75 @ 06:56 GMT Jan 23
• SUP 1: 3901.75/3891.50 Low Jan 19 / Low Jan 10
• SUP 2: 3788.50/78.45 Low Dec 22 / 61.8% of Oct 13-Dec 13 uptrend
• SUP 3: 3735.00 Low Nov 3
• SUP 4: 3670.00 76.4% retracement of the Oct 13 - Dec 13 uptrend

S&P E-Minis have found support at 3901.75, the Jan 19 low. A short-term bearish threat remains present following the pullback last week from 4035.25, the Jan 18 high. Price has traded through support at the 50-day EMA. The average intersects at 3933.04 and a clear break would highlight a potential bearish reversal and expose 3891.50, Jan 10 low. On the upside, the contract needs to clear 4035.25 to cancel any developing bearish threat.

COMMODITIES

BRENT TECHS: (H3) Resistance Remains Exposed

• RES 4: $92.43 - High Nov 16
• RES 3: $90.49 - High Nov 17
• RES 2: $89.18 - High Dec 1
• RES 1: $87.85 - High Jan 18 and key short-term resistance
• PRICE: $87.52 @ 06:48 GMT Jan 23
• SUP 1: $83.64/77.61 - 20-day EMA / Low Jan 5
• SUP 2: $75.64 - Low Dec 9 and the bear trigger
• SUP 3: $73.73 - 1.00 proj of the Nov 7 - 28 - Dec 1 price swing
• SUP 4: $69.28 - Low Dec 20 2021 (cont)

Brent futures have returned to their recent highs and attention is on $87.85, the Jan 18 high. A break of this hurdle would cancel recent bearish signals and resume the uptrend that started Jan 5. A break would expose $89.18, the Dec 1 high and key resistance. On the downside, support to watch lies at $83.64, the 20-day EMA. A move through this support would represent a bearish development.

WTI TECHS: (H3) Key Short-Term Resistance Defined at $82.38

• RES 4: $87.00 - High Nov 14
• RES 3: $85.33 - 76.4% retracement of the Nov 7 - Dec 9 bear leg
• RES 2: $83.14 - High Dec 1 and a key resistance
• RES 1: $82.66 - High Jan 18
• PRICE: $81.67 @ 07:09 GMT Jan 23
• SUP 1: $78.29/72.74 - 20-day EMA / Low Jan 5
• SUP 2: $70.56 - Low Dec 9 and the bear trigger
• SUP 3: $70.00 - Psychological round number
• SUP 4: $67.44 - 1.236 proj of the Aug 25 - Sep 28 - Nov 7 price swing

WTI futures traded higher last week but prices pulled back from $82.66, the Jan 18 high. The move lower warns of a potential bearish threat and attention is on support at $78.29, the 20-day EMA. A break of this average would highlight a stronger bear threat and expose support at $72.74, the Jan 5 low. On the upside, clearance of $82.66 would reinstate the recent bullish theme and instead expose $83.14, the Dec 1 high.

GOLD TECHS: Trend Needle Points North

• RES 4: $1998.4 - High Apr 18, 2022
• RES 3: $1982.0 - High Apr 19, 2022
• RES 2: $1963.0 - 76.4% retracement of the Mar - Sep 2022 bear leg
• RES 1: $1937.6 - High Jan 20
• PRICE: $1922.9 @ 07:22 GMT Jan 23
• SUP 1: $1896.7/73.0 - Low Jan 12 / 20-day EMA
• SUP 2: $1825.2 - Low Jan 5 and key near-term support
• SUP 3: $1797.1 - Low Dec 28
• SUP 4: $1774.0 - Low Dec 15

Trend conditions in Gold remain bullish and the yellow metal traded to a fresh cycle high last week. This confirms an extension on the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull mode position - reflecting the uptrend. The focus is on $1963.0 next, a Fibonacci retracement. Support to watch lies at $1873.0, the 20-day EMA. Short-term pullbacks are considered corrective.

SILVER TECHS: Trend Structure Remains Bullish

• RES 4: $26.002 - High Apr 19
• RES 3: $25.293 - High Apr 20
• RES 2: $24.729 - 76.4% retracement of the Mar - Sep bear leg
• RES 1: $24.548 - High Jan 3 and the bull trigger
• PRICE: $23.774 @ 08:11 GMT Jan 23
• SUP 1: $22.856 - 50-day EMA
• SUP 2: $22.557 - Low Dec 16 and key short-term support
• SUP 3: $20.872 - Low Nov 28
• SUP 4: $20.585 - Low Nov 21

The uptrend in Silver remains bullish. Moving average studies are in a bull mode position, highlighting an uptrend, and fresh trend highs in December reinforced the positive theme. Furthermore, the move higher has maintained the positive price sequence of higher highs and higher lows. The focus is on $24.729, a Fibonacci retracement. Key short-term support is at $22.557, the Dec 16 low.