MNI DAILY TECHNICAL ANALYSIS - GBP/USD Bull Phase Extends

Price Signal Summary – GBP/USD Bull Phase Extends

• In the equity space, S&P E-minis traded sharply lower Monday before rebounding and the contract traded higher yesterday. The break below the 50-day EMA earlier this week marked a bearish development. However, support surfaced below this EMA and the strong recovery highlights a potential bullish reversal. The recent pullback in EUROSTOXX 50 futures was considered corrective with bullish conditions intact following a strong recovery between Dec 20 - Jan 5. Monday’s sell-off saw price find support at the 50-day EMA - the EMA intersects at 4228.00.
• In FX, EURUSD traded higher yesterday above resistance at 1.1383/86, Nov 30 and Dec 31 highs. This marked the top of its recent range and the break suggests scope for a stronger short-term recovery. GBPUSD continues to trade higher as the current bull phase extends. The pair has cleared the 1.3600 handle and 1.3676, 76.4% of the Oct - Dec downleg. The climb maintains the current bullish price sequence of higher highs and higher lows and signals scope for further strength. USDJPY remains in a S/T corrective cycle and traded lower yesterday. The pair has branched the 20-day EMA and attention turns to support at the 50-day EMA - at 114.22 today.
• On the commodity front, Gold recently found support at the base of its bull channel drawn from the Aug 9 low - last Friday's low of $1782.8 and the recovery from this level means the yellow metal remains inside the channel. WTI futures remain in an uptrend and the contract traded higher yesterday. The rally has resulted in a break of the key resistance at $82.13, Oct 25 high. This strengthens a bullish case and confirms a resumption of the broader uptrend.
• In the FI space, Bund futures are trading above recent lows but remain in a downtrend. Price has recently cleared the 170.19 objective, Nov 2 low and attention remains on the major support at 169.34, Oct 29 low. Short-term gains in Gilt futures are considered corrective. The downtrend remains intact - last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Challenges Bear Channel Resistance

• RES 4: 1.16923 High Oct 28, 2021
• RES 3: 1.1608 High Nov 9
• RES 2: 1.1514 Low Nov 5
• RES 1: 1.1432/53 Bear channel top from Jun 1 high / High Jan 13
• PRICE: 1.1441 @ 06:06 GMT Jan 13
• SUP 1: 1.1355 Low Jan 12
• SUP 2: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 3: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger
• SUP 4: 1.1128 1.764 proj of the Jan 6 - Mar 31 - May 25 price swing

EURUSD traded higher yesterday above resistance at 1.1383/86, Nov 30 and Dec 31 highs. This marked the top of its recent range and the break suggests scope for a stronger short-term recovery. Attention is on the next important resistance that today intersects at 1.1432 - the top of a bear channel drawn from the Jun 1, 2021 high. This level has been probed and a clear break would strengthen a bullish case. Initial firm support is at 1.1272, Jan 4 low.

GBPUSD TECHS: Approaching The 200-DMA

• RES 4: 1.3958 High Aug 4, 2021
• RES 3: 1.3913 High Sep 14, 2021
• RES 2: 1.3834/35 2.0% 10-dma envelope / High Oct 20
• RES 1: 1.3737 200-dma
• PRICE: 1.3706 @ 06:16 GMT Jan 13
• SUP 1: 1.3621 Low Jan 12
• SUP 2: 1.3496 20-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD continues to trade higher as the current bull phase extends. The pair has cleared the 1.3600 handle and 1.3676, 76.4% of the Oct - Dec downleg. The climb maintains the current bullish price sequence of higher highs and higher lows and signals scope for a climb towards the 200-dma at 1.3737. A break would open 1.3835, Oct 20 high. Key short-term support to watch is 1.3496, the 20-day EMA. A break would threaten the trend.

EURGBP TECHS: Bearish Risk Still Present

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8450 50-day EMA
• RES 2: 0.8400/19 20-day EMA / High Jan 3
• RES 1: 0.8381 Low Nov 22
• PRICE: 0.8346 @ 06:24 GMT Jan 13
• SUP 1: 0.8324 Low Jan 11
• 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 unchanged and consolidating near recent lows. The cross remains vulnerable and further weakness is seen likely with attention on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. The cross is also approaching the base of a broad multi-year range at 0.8300. This level represents a key pivot chart point and a clear break would highlight an important range breakout. Initial firm resistance is at 0.8419.

USDJPY TECHS: Break Lower Exposes The 50-Day EMA

• 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: 115.68/116.35 High Jan 11 / High Jan 4 and the bull trigger
• PRICE: 114.62 @ 07:30 GMT Jan 13
• SUP 1: 114.38 Low Jan 12
• SUP 2: 114.22 50-day EMA
• SUP 3: 113.56 Low Dec 21
• SUP 4: 113.14 Low Dec 17

USDJPY remains in a S/T corrective cycle and traded lower yesterday. The pair has branched the 20-day EMA and attention turns to support at the 50-day EMA - at 114.22 today. The moving average set-up suggests the trend remains bullish and recent weakness is considered corrective. A clear breach of the 50-day EMA is required to suggest scope for a deeper sell-off instead. For bulls, a resumption of gains would open 116.35, Jan 4 high.

EURJPY TECHS: Bullish Outlook

• RES 4: 133.17 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 and the bull trigger
• PRICE: 131.16 @ 06:36 GMT Jan 13
• SUP 1: 130.16 Low Jan 10
• SUP 2: 129.91 50-day EMA
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

A bullish EURJPY theme remains in place. The cross has recently cleared 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a recent vol-based resistance, reinforcing bullish conditions. The moving average set-up has also recently shifted to bull mode, highlighting the current trend direction. Attention is on 132.04, a Fibonacci retracement. Firm support has been defined at 130.16, Jan 10 low. The 50-day EMA as support is at 129.91.

AUDUSD TECHS: Clears Resistance

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7344 Former channel base drawn from the Aug 20 low
• RES 1: 0.7287/93 100-dma / High Jan 12
• PRICE: 0.7283 @ 06:46 GMT Jan 13
• SUP 1: 0.7130 Low Jan 7
• 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 rallied Wednesday and has cleared the congestion zone of resistance layered between 0.7272-78, late Dec and early Jan highs. The 100-dma at 0.7287 has also been probed. A clear break would open 0.7341/44, 61.8% of the Oct - Dec bear leg and the former channel base drawn off the Aug 20 low. Initial support is at yesterday’s low of 0.7200. Ke short-term support has been defined at 0.7130, the Jan 7 low.

USDCAD TECHS: Head And Shoulders Pattern Highlights Bearish Theme

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2814 High Jan 6 and a key near-term resistance
• RES 1: 1.2621/2705 Low Dec 31 / 20-day EMA
• PRICE: 1.2498 @ 06:51 GMT Jan 13
• SUP 1: 1.2493 Low Nov 16
• SUP 2: 1.2448 76.4% retracement of the Oct - Dec rally
• SUP 3: 1.2387 Low Nov 10
• SUP 4: 1.2328 Low Oct 29

USDCAD remains under pressure following this week’s extension lower. A key support at 1.2621, the Dec 31 low, has been cleared. The break lower has strengthened the case for bears and highlights a head and shoulders reversal pattern on the daily chart. The focus is on 1.2493 - the Nov 16, 2021 low and 1.2448, a Fibonacci retracement. Initial resistance is at 1.2621. A firmer short-term resistance is at 1.2705, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Downtrend Remains Intact

• RES 4: 173.19 High Dec 23
• RES 3: 172.24 50-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 170.61/171.17 High Jan 6 / High Jan 4
• PRICE: 170.14 @ 05:20 GMT Jan 13
• SUP 1: 169.57 Low Jan 11
• 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 are trading above recent lows but remain in a downtrend. Price has recently cleared the 170.19 objective, Nov 2 low and attention remains on the major support at 169.34, Oct 29 low. Clearance of this support level would strengthen bearish conditions. On the upside, initial firm resistance is unchanged at 171.77 where a break is required to ease bearish pressure. First resistance is at 170.61.

BOBL TECHS: (H2) Trend Needle Still Points South

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.310 20-day EMA
• RES 1: 133.110/260 High Jan 6 / High Jan 3 and 4
• PRICE: 132.800 @ 05:25 GMT Jan 13
• SUP 1: 132.620 Low Jan 11
• SUP 2: 132.566 2.236 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.447 2.382 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing

Despite yesterday’s gains, Bobl futures remain bearish, with a fresh low print on Tuesday reinforcing current conditions. The continued sequence of lower lows and lower highs clearly highlights current bearish sentiment. Scope is seen for an extension lower with the focus on 132.566 next, a Fibonacci projection level. On the upside, firm resistance is seen at 133.530, the Dec 29 high. Initial resistance is at 133.110.

SCHATZ TECHS: (H2) Still Vulnerable

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.058/080 20-day EMA / High Jan 6
• RES 1: 112.000 High Jan 10
• PRICE: 111.965 @ 05:26 GMT Jan 13
• SUP 1: 111.935 Low Jan 11
• SUP 2: 112.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.890 1.50 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.844 3.0% Lower Bollinger Band

The Schatz futures outlook remains bearish following last week’s extension lower and this week’s confirmed break of support at 111.985, Jan 3 low. This marks a resumption of the downtrend and paves the way for weakness towards 111.920 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.058. A break would ease bearish pressure.

GILT TECHS: (H2) Corrective Bounce

• RES 4: 125.18 High Dec 31
• RES 3: 124.47 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.73 Low Jan 5 and gap high
• PRICE: 123.35 @ Close Jan 12
• SUP 1: 122.78 Low Jan 10
• SUP 2: 122.66 3.618 proj of the Dec 8 - 16 - 20 price swing
• SUP 3: 122.46 3.764 proj of the Dec 8 - 16 - 20 price swing
• SUP 4: 121.45 3.0% Lower Bollinger Band

Short-term gains in Gilt futures are considered corrective. The downtrend remains intact - last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support has strengthened bearish conditions. Moving average conditions are also in a bear mode, reinforcing current conditions. The focus is on the 122.66 next, a Fibonacci projection. Initial resistance is seen at 123.73.

BTP TECHS: (H2) Trend Conditions Remain Bearish

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.18 20-day EMA
• RES 1: 146.36/147.00 High Jan 12 / High Jan 4
• PRICE: 146.14 @ Close Jan 12
• SUP 1: 145.12 Low Jan 10
• SUP 2: 144.90 2.618 proj of the Dec 6 - 18 - 14 price swing
• SUP 3: 144.59 2.764 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 144.00 round number support

The recent bounce in BTP futures is considered corrective. The contract traded lower last week and registered a fresh low print Monday. Futures recently cleared support at 148.25, Dec 1 low as well as the 147.36 key support, Nov 24 low. The contract has also this week traded below key support at 145.29, Nov 1 low. A clear break of this level would strengthen bearish conditions. Firm firm resistance is seen at 147.18, 20-day EMA.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Monday’s Low Marks Key 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: 4381.50 High Jan 5 and the bull trigger
• PRICE: 4296.00 @ 05:55 GMT Jan 13
• SUP 1: 4228.00/4216.50 50-day EMA / Low Jan 10 and key support
• 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

The recent pullback in EUROSTOXX 50 futures was considered corrective with bullish conditions intact following a strong recovery between Dec 20 - Jan 5. Monday’s sell-off saw price find support at the 50-day EMA - the EMA intersects at 4228.00. For bulls, a continuation higher would refocus attention on key resistance at 4392.50. Key support to watch is at 4216.50, the Jan 10 low. A break would reinstate a bearish threat.

E-MINI S&P (H2): Monday’s Low Remains Intact

• RES 4: 4900.00 Round number resistance
• RES 3: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 2: 4808.25 High Jan 4 and the bull trigger
• RES 1: 4752.67 76.4% retracement of the Jan 4 - 10 sell-off
• PRICE: 4708.25 @ 06:56 GMT Jan 13
• SUP 1: 4572.75 Low Jan 10 and key short-term support
• 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 traded sharply lower Monday before rebounding and the contract traded higher yesterday. The break below the 50-day EMA earlier this week marked a bearish development. However, support surfaced below this EMA and the strong recovery highlights a potential bullish reversal. Note that Monday’s candle pattern is a hammer - a bullish signal. Watch support at 4572, 75, Monday’s low. Major resistance and the bull trigger is at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Rally Extends

• RES 4: $90.00 - Psychological round number
• RES 3: $87.10 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $85.80 - 1.50 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $85.21 - High Jan 12
• PRICE: $84.40 @ 06:52 GMT Jan 13
• SUP 1: $80.50/79.42 - Low Jan 10 / 20-day EMA
• SUP 2: $77.04 - Low Jan 3 and key support
• SUP 3: $75.38 - Low Dec 27
• SUP 4: $74.75 - Low Dec 23

Brent futures remain in an uptrend and this week’s strong gains have resulted in a break of key resistance at $83.69, Oct 10 high. This confirms a resumption of the broader uptrend and paves the way for a climb towards $85.80 next, a Fibonacci projection. Moving average conditions are in a bull mode, highlighting the current positive sentiment. Initial frim support to watch is at $80.50, the Jan 10 low.

WTI TECHS: (G2) Through Key Resistance

• RES 4: $86.00 - Round number resistance
• RES 3: $85.29 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $83.71 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 1: $83.10 - High Jan 12
• PRICE: $82.26 @ 07:11 GMT Jan 13
• SUP 1: $77.83/76.70 - Low Jan 10 / 20-day EMA
• SUP 2: $74.81/27 - 50-day EMA / Low Jan 3 and key S/T support
• SUP 3: $72.57 - Low Dec 27
• SUP 4: $70.80 - Low Dec 22

WTI futures remain in an uptrend and the contract traded higher yesterday. The rally has resulted in a break of the key resistance at $82.13, Oct 25 high. This strengthens a bullish case and confirms a resumption of the broader uptrend. Moving average conditions are also in a bull-mode, highlighting the current positive sentiment. Key short-term support has been defined at $77.83, the Jan 10 low.

GOLD TECHS: Approaching Key S/T Resistance

• 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 resistance
• PRICE: $1824.3 @ 07:14 GMT Jan 13
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1785.7/82.8 - 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 recently found support at the base of its bull channel drawn from the Aug 9 low - last Friday's low of $1782.8 and the recovery from this level means the yellow metal remains inside the channel. The subsequent recovery signals scope for a climb towards key near-term resistance at $1831.9, the Jan 3 high and the bull trigger. A reversal lower and a move below Friday’s low would instead highlight a channel breakout.

SILVER TECHS: Approaching Key Short-Term Resistance

• 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 and key resistance
• RES 1: $23.259 - High Jan 5
• PRICE: $23.138 @ 09:28 GMT Jan 13
• SUP 1: $22.428/21.949 - Low Jan 11 / Low Jan 7
• SUP 2: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 3: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally
• SUP 4: $20.000 - Psychological round number

Silver was firmer yesterday and the metal has extended the recent bounce from $21.949, Jan 7 low. Attention turns to key short-term resistance at $23.436, Dec 28 high. A break of this level would strengthen the case for bulls and signal potential for a stronger recovery towards $23.886, 61.8% of the Nov - Dec sell-off. Key support is at $21.949 where a break is required to reinstate a bearish threat.