MNI DAILY TECHNICAL ANALYSIS - EURGBP Approaches Base Of Multi-Year Range

Price Signal Summary - EURGBP Approaches Base Of Multi-Year Range

• In the equity space, S&P E-minis have failed to hold onto this week’s climb above 4800.00. Risk appetite has soured and the contract has reversed course. Price has traded below the 20-day EMA and attention is on the 50-day EMA that intersects at 4645.32 today. EUROSTOXX 50 futures have reversed course as a risk-off mood weighs on price. From a technical standpoint, the pullback at this stage is considered corrective following a strong recovery between Dec 20 and yesterday’s high.
• In FX, EURUSD is unchanged and still in consolidation mode. This means resistance at 1.1383/86, the Nov 30 and Dec 31 high, remains intact and that the pair continues to trade inside December’s range. EURGBP is trading near its recent lows. The cross printed a fresh multi-year low of 0.8335 yesterday. The outlook remains bearish and further weakness is likely. The focus is on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. Note that the cross is also approaching the base of a broad multi-year range at 0.8300.
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• On the commodity front, Gold traded sharply lower Monday and the yellow metal is trading near this week’s lows. In terms of price patterns, Monday appears to be a bearish engulfing candle but it remains to be seen whether this pattern is an early sign of a stronger bearish threat. WTI futures remain in an uptrend. The recovery from Monday’s low has resulted in a break of resistance at $77.44, the Dec 29 high and a Fibonacci retracement, 76.4% of the Oct - Dec downleg.
• In the FI space, Bund futures remain vulnerable, and the contract has resumed its downtrend with price approaching the next objective of 170.19, the Nov 2 low. Last week’s breach of support at 171.77, Nov 24 low strengthened a bearish case. Gilt futures remain in a downtrend and the contract traded lower again Wednesday. This week’s sell-off has resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Consolidation Mode

• RES 4: 1.1608 High Nov 9
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1457 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1383/86 High Nov 30 / High Dec 31
• PRICE: 1.1306 @ 06:12 GMT Jan 6
• SUP 1: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 2: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger
• SUP 3: 1.1128 1.764 proj of the Jan 6 - Mar 31 - May 25 price swing
• SUP 4: 1.1040 76.4% retracement of the Mar ‘20 - Jan ‘21 uptrend

EURUSD is unchanged and still in consolidation mode. This means resistance at 1.1383/86, the Nov 30 and Dec 31 high, remains intact and that the pair continues to trade inside December’s range. A resumption of weakness would expose support at 1.1222, the Dec 15 low. The bear trigger lies at the 1.1186/85 zone. For bulls, clearance of the 1.13783/86 resistance zone is required to suggest scope for a stronger short-term recovery.

GBPUSD TECHS: Bull Cycle Extends

• RES 4: 1.3745 2.0% 10-dma envelope
• RES 3: 1.3676 61.8% retracement of the Oct - Dec sell-off
• RES 2: 1.3607 High Nov 9
• RES 1: 1.3599 High Jan 6
• PRICE: 1.3527 @ 06:25 GMT Jan 6
• SUP 1: 1.3431 Low Jan 3
• SUP 2: 1.3419 20-day EMA
• SUP 3: 1.3343 Low Dec 23
• SUP 4: 1.3240 Low Dec 22

GBPUSD traded higher again Wednesday, confirming a resumption of the current uptrend. The 100-dma at 1.3558 has been probed. A clear break would firm the bullish outlook and maintain the current positive momentum structure with the trajectory of the 50-dma beginning to level out. Scope is seen for a climb to 1.3676 next, a Fibonacci retracement. Support to watch is 1.3419, the 20-day EMA. A move below this average would signal a top.

EURGBP TECHS: Trading Near Its Recent Lows

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8468 50-day EMA
• RES 2: 0.8434 20-day EMA
• RES 1: 0.8381/8419 Nov 22 low / High Jan 3
• PRICE: 0.8357 @ 06:32 GMT Jan 6
• SUP 1: 0.8335 Low Jan 5
• SUP 3: 0.8318 1.0% 10-dma envelope
• SUP 4: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fib Retracement 2015-2020 Upleg

EURGBP is trading near its recent lows. The cross printed a fresh multi-year low of 0.8335 yesterday. The outlook remains bearish and further weakness is likely. The focus is on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. Note that the cross is also approaching the base of a broad multi-year range at 0.8300. This level represents a key pivot chart point. Initial firm resistance is at 0.8419, Monday’s high.

USDJPY TECHS: Corrective Pullback

• RES 4: 118.66 High Dec 15, 2016
• RES 3: 118.07 2.236 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 116.35 High Jan 4
• PRICE: 115.84 @ 06:37 GMT Jan 6
• SUP 1: 115.29 Low Jan 4
• SUP 2: 114.71 20-day EMA
• SUP 3: 113.99 50-day EMA
• SUP 4: 113.33 Low Dec 20

USDJPY is still trading below Tuesday highs but trend conditions remain bullish. The break this week of key resistance at 115.52, the Nov 24 high, confirms a resumption of both the short and medium-term uptrend, paving the way for a climb towards 117.08 next, a Fibonacci projection. Moving average conditions are in a bull mode and this condition reinforces the current positive sentiment. Initial firm support is seen at 114.71, the 20-day EMA.

EURJPY TECHS: Holding Onto Recent Gains

• RES 4: 132.67 3% Upper Bollinger Band
• RES 3: 132.56 High Nov 4
• RES 2: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 1: 131.60 High Jan 5
• PRICE: 130.99 @ 06:45 GMT Jan 6
• SUP 1: 130.24 Low Jan 4
• SUP 2: 129.82/68 20- and 50-day EMA levels
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

EURJPY is trading lower. Dips though are considered corrective and this week’s gain have solidified the bullish tone. The cross has cleared resistance at 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a vol-based resistance, signalling potential for an extension of the recovery seen across the second half of December. This opens 132.04, a Fibonacci retracement. A firm support zone is seen at 129.82/68, the 20- and 50-day EMA levels.

AUDUSD TECHS: Fails To Hold Above The 50-Day EMA

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 2: 0.7332 Former channel base drawn from the Aug 20 low
• RES 1: 0.7223/7278 Intraday high / High Dec 31
• PRICE: 0.7163 @ 06:55 GMT Jan 6
• SUP 1: 0.7121 Low Dec 22
• SUP 2: 0.7082 Low Dec 20 and a key support
• SUP 3: 0.7060 76.4% retracement of the Dec 3 - 31 upleg
• SUP 4: 0.6993 Low Dec 3 and key support

AUDUSD sold off sharply Monday and bearish pressure has resumed. The Aussie has failed to hold onto recent gains and levels above the 50-day EMA. This highlights a bearish threat and the potential for a deeper pullback, exposing support at 0.7082, the Dec 20 low. Clearance of this support would strengthen a bearish case. Key short-term resistance has been defined at 0.7278, the Dec 31 high.

USDCAD TECHS: Resumes This Week’s Recovery

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2848 High Dec 27 and a key near-term resistance
• RES 1: 1.2813 High Dec 30
• PRICE: 1.2800 @ 07:01 GMT Jan 6
• SUP 1: 1.2667/2621 Low Jan 4 / Low Dec 31 and the bear trigger
• SUP 2: 1.2608 Low Dec 8 and key support
• SUP 3: 1.2585 Low Nov 19
• SUP 4: 1.2546 Low 61.8% retracement of the Oct - Dec rally

USDCAD traded higher Monday and is firmer once again today. The pair remains above last week’s low of 1.2621 on Dec 31 - a key short-term support. Monday’s rally is a bullish engulfing candle. The pattern highlights a base at 1.2621 and today’s resumption of strength opens 1.2848, Dec 27 high and a key near-term resistance. On the downside, sub 1.2621 levels would cancel the reversal pattern and instead open 1.2608, the Dec 8 low.

FIXED INCOME

BUND TECHS: (H2) Resumes Its Downtrend

• RES 4: 173.19 High Dec 23
• RES 3: 172.47 20-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 171.17 High Jan 4
• PRICE: 170.32 @ 05:13 GMT Jan 6
• SUP 1: 170.19 Low Nov 2
• SUP 2: 169.48 Low Nov 1
• SUP 3: 169.34 Low Oct 29 and major support
• SUP 4: 169.08 3.618 projection of the Dec 8 - 20 price swing

Bund futures remain vulnerable and the contract has resumed its downtrend with price approaching the next objective of 170.19, the Nov 2 low. Last week’s breach of support at 171.77, Nov 24 low strengthened a bearish case. A break of 170.19 would open the major support at 169.34, the Oct 29 low. On the upside, initial firm resistance is seen at 171.77 where a break is required to ease bearish pressure.

BOBL TECHS: (H2) Outlook Remains Bearish

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.619 20-day EMA
• RES 2: 133.530 High Dec 29
• RES 1: 133.260 High Jan 3 and 4
• PRICE: 133.010 @ 05:20 GMT Jan 6
• SUP 1: 133.00 Low Jan 3
• SUP 2: 132.954 1.764 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.760 2.00 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.566 2.236 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures remain bearish and the recent shallow correction reinforces this theme. The break on Dec 23 of support at 133.710, Dec 8 low confirmed a resumption of bearish activity and bears haven’t looked back. Scope is seen for an extension lower with the focus on 132.954 and 132.760 next, Fibonacci projection levels. On the upside, initial firm resistance is seen at 133.530, the Dec 29 high. A break would ease bearish pressure.

SCHATZ TECHS: (H2) Remains Above Recent Lows

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.107 20-day EMA
• RES 1: 112.080 High Dec 29
• PRICE: 112.040 @ 05:22 GMT Jan 6
• SUP 1: 111.985 Low Jan 3 and the bear trigger
• SUP 2: 112.956 1.764 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.927 3.0% Lower Bollinger Band
• SUP 4: 111.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing

Schatz futures outlook remains bearish following last week’s bearish extension - the downleg started Dec 20. Short-term gains are considered corrective. Support at 112.055, Dec 16 low has recently been cleared, reinforcing a bearish theme and this has opened 111.956 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.107. A break would ease bearish pressure.

GILT TECHS: (H2) Needle Still Points South

• RES 4: 126.76 High Dec 21
• RES 3: 125.93 High Dec 22
• RES 2: 125.34 20-day EMA
• RES 1: 124.46/125.18 High Jan 4 / High Dec 31
• PRICE: 123.92 @ Close Jan 5
• SUP 1: 123.73 2.764 proj of the Dec 8 - 16 - 20 price swing
• SUP 2: 123.48 3.00 proj of the Dec 8 - 16 - 20 price swing
• SUP 3: 123.00 Round number support
• SUP 4: 122.32 3.0% Lower Bollinger Band

Gilt futures remain in a downtrend and the contract traded lower again Wednesday. This week’s sell-off has resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support strengthens bearish conditions and opens 123.48, a Fibonacci projection. Resistance is seen at 125.18, the Dec 31 high and 125.34, the 20-day EMA. Clearance of this zone would ease bearish pressure.

BTP TECHS: (H2) Bear Cycle Extends

• RES 4: 150.08 High Dec 21
• RES 3: 149.22 High Dec 22
• RES 2: 148.13 20-day EMA
• RES 1: 148.02 High Dec 29
• PRICE: 146.29 @ Close Jan 5
• SUP 1: 146.09 Low Jan 5
• SUP 2: 146.00 Round number support
• SUP 3: 145.72 2.236 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 145.29 Low Nov 1 and key support

BTP futures traded lower again yesterday as the current bear cycle extends. The contract recently breached support at 148.25, Dec 1 low as well as the 147.36 key support, Nov 24 low. 146.55, 76.4% of the Nov 1 - 22 rally has also been cleared. The break of this level signals scope for an extension towards a key support at 145.29, the Nov 1 low. Initial firm resistance is seen at 148.02, Dec 29 high.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Reverses Course

• 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
• RES 1: 4381.50 High Jan 5
• PRICE: 4288.50 @ 05:50 GMT Jan 6
• SUP 1: 4249.50 20-day EMA
• SUP 2: 4216.00 50-day EMA
• SUP 3: 4149.00 Low Dec 22
• SUP 4: 4108.50 Low Dec 21

EUROSTOXX 50 futures have reversed course as a risk-off mood weighs on price. From a technical standpoint, the pullback at this stage is considered corrective following a strong recovery between Dec 20 and yesterday’s high. Initial support is seen at 4249.50, the 20-day EMA. A more important area of support however lies at 4216.00, the 50-day EMA. For bulls, a return higher would refocus attention on key resistance at 4392.50.

E-MINI S&P (H2): 50-Day EMA Back In Range

• RES 4: 4968.50 1.00 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 3: 4900.00 Round number resistance
• RES 2: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 1: 4808.25 High Jan 4 and the bull trigger
• PRICE: 4672.75@ 06:03 GMT Jan 6
• SUP 1: 4645.32 50-day EMA
• SUP 2: 4565.75 Low Dec 21
• SUP 3: 4520.25 Low Dec 20 and a key support
• SUP 4: 4485.75 Low Dec 3

S&P E-minis have failed to hold onto this week’s climb above 4800.00. Risk appetite has soured and the contract has reversed course. Price has traded below the 20-day EMA and attention is on the 50-day EMA that intersects at 4645.32 today. This average is regarded as a key pivot chart point and a clear break of it would signal scope for a deeper pullback. For now, the move lower is considered corrective. The bull trigger is at 4808.25, Tuesday’s high.

COMMODITIES

BRENT TECHS: (H2) Fresh Trend High

• RES 4: $84.00 - Round number resistance
• RES 3: $83.69 - High Oct 10 and a major resistance
• RES 2: $83.11 - High Nov 10
• RES 1: $81.50 - High Jan 5
• PRICE: $80.06 @ 06:57 GMT Jan 6
• SUP 1: $77.04 - Low Jan 3
• SUP 2: $76.69 - 50-day EMA
• SUP 3: $75.38 - Low Dec 27
• SUP 4: $73.55 - Low Dec 22

Brent futures remain in an uptrend and the contract traded higher once again yesterday. The break this week of resistance at $80.03, the Dec 29 high, confirms a resumption of the current bull cycle and opens $83.11 next, the Nov 10 high. On the downside, Monday’s low of $77.04 represents the key short-term support. A break would threaten the trend and suggest scope for a deeper corrective pullback.

WTI TECHS: (G2) Clears Key Short-Term Resistance

• RES 4: $82.13 - High Oct 25 and a major resistance
• RES 3: $81.73 - High Nov 10
• RES 2: $79.40 - High Nov 16
• RES 1: $78.59 - High Nov 24
• PRICE: $77.30 @ 07:08 GMT Jan 6
• SUP 1: $74.27 - Low Jan 3 and key short-term support
• SUP 2: $74.00 - 50-day EMA
• SUP 3: $72.57 - Low Dec 27
• SUP 4: $70.80 - Low Dec 22

WTI futures remain in an uptrend. The recovery from Monday’s low has resulted in a break of resistance at $77.44, the Dec 29 high and a Fibonacci retracement, 76.4% of the Oct - Dec downleg. The breach confirms a resumption of the uptrend and open $78.59, Nov 24 high. On the downside, Monday’s low of $74.27 represents a key short-term support. A break would instead suggest scope for a deeper pullback.

GOLD TECHS: Remains Below Monday’s High

• 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: $1802.2 @ 07:12 GMT Jan 6
• SUP 1: $1798.5 - Low Jan 3
• SUP 2: $1781.5 - Channel base drawn from the Aug 9 low
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

Gold traded sharply lower Monday and the yellow metal is trading near this week’s lows. In terms of price patterns, Monday appears to be a bearish engulfing candle but it remains to be seen whether this pattern is an early sign of a stronger bearish threat that would result in a break of support at $1753.7, Dec 15 low. For now, Monday’s high of $1831.9 and 1781.5, the channel base drawn from the Aug 9 low, mark the key S/T directional triggers.

SILVER TECHS: Clears Support

• RES 4: $23.886 - 61.8% retracement of the Nov 16 - Dec 15 sell-off
• RES 3: $23.772 - High Nov 24
• RES 2: $23.436 - High Dec 28
• RES 1: $22.829 - Intraday high
• PRICE: $22.464 @ 08:12 GMT Jan 6
• SUP 1: $22.182 - Low Dec 21
• SUP 2: $21.918 - Low Dec 16
• 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 trading lower today and has cleared support at $22.593, the Dec 29 low. This week’s move lower highlights the fact that the metal has failed to remain above the 50-day EMA and bearish price action suggests scope for a deeper short-term sell-off. The focus is on $22.182, Dec 21 low. A break of this support would strengthen a bearish case. Key resistance has been defined at $23.436, Dec 28 high.