MNI DAILY TECHNICAL ANALYSIS - GBP/USD Challenging 200DMA

Price Signal Summary – GBP/USD Challenging 200-dma

• In the equity space, S&P E-minis traded sharply lower Monday before rebounding. 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 4230.90.
• In FX, EURUSD traded higher again Thursday and is holding onto this week’s gains. The pair has traded through both resistance at 1.1383/86, Nov 30 and Dec 31 highs as well as 1.1432 - the top of a bear channel drawn from the Jun 1, 2021 high. GBPUSD maintains a bullish tone. The pair has this week cleared the 1.3600 handle and 1.3676, 76.4% of the Oct - Dec downleg. This maintains the current bullish price sequence of higher highs and higher lows. Cable is currently testing the 200-dma at 1.3737.
• On the commodity front, Gold is holding onto recent gains. The yellow metal recently found support at the base of its bull channel drawn from the Aug 9 low - the Jan 7 low of $1782.8 and the recovery from this level means the yellow metal remains inside the channel. WTI futures remain in an uptrend. This week’s 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. Short-term gains are considered corrective though and the trend remains down. Attention remains on the major support at 169.34, Oct 29 low. Short-term gains in Gilt futures are considered corrective and the downtrend remains intact. This follows the recent break of support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Has Cleared Channel Resistance

• RES 4: 1.1726 50.0% retracement of the May - Nov 2021 bear leg
• RES 3: 1.1692 High Oct 28, 2021
• RES 2: 1.1608 High Nov 9
• RES 1: 1.1514 Low Nov 5
• PRICE: 1.1480 @ 06:12 GMT Jan 14
• SUP 1: 1.1427 Former bear channel top
• SUP 2: 1.1386 High Dec 31
• SUP 3: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 4: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger

EURUSD traded higher again Thursday and is holding onto this week’s gains. The pair has traded through both resistance at 1.1383/86, Nov 30 and Dec 31 highs as well as 1.1432 - the top of a bear channel drawn from the Jun 1, 2021 high. The break here reinforces the growing likelihood of a further short-term recovery and a more significant reversal. The next objective is 1.1514. Initial firm support is at 1.1386.

GBPUSD TECHS: Challenging The 200-DMA

• RES 4: 1.3958 High Aug 4, 2021
• RES 3: 1.3913 High Sep 14, 2021
• RES 2: 1.3835/55 High Oct 20 and key resistance / 2.0% 10-dma env
• RES 1: 1.3737/49 200-dma/High Jan 13
• PRICE: 1.3734 @ 06:19 GMT Jan 14
• SUP 1: 1.3621 Low Jan 12
• SUP 2: 1.3516/3477 20-day EMA
• SUP 3: 1.3409 Low Dec 29
• SUP 4: 1.3343 Low Dec 23

GBPUSD maintains a bullish tone. The pair has this week cleared the 1.3600 handle and 1.3676, 76.4% of the Oct - Dec downleg. This maintains the current bullish price sequence of higher highs and higher lows. Cable is currently testing the 200-dma at 1.3737. A firm break of this average and close above would open 1.3835, Oct 20 high. Key short-term support to watch is 1.3516, the 20-day EMA. A break would threaten the trend.

EURGBP TECHS: Consolidation Mode

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8443 50-day EMA
• RES 2: 0.8396/19 20-day EMA / High Jan 3
• RES 1: 0.8381 Low Nov 22
• PRICE: 0.8358 @ 06:23 GMT Jan 14
• 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 remains inside its recent range. The outlook remains bearish 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. Price 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: Clears The 50-Day EMA

• 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: 114.86 20-day EMA
• PRICE: 113.72 @ 06:32 GMT Jan 14
• SUP 1: 113.43 76.4% retracement of the Nov 30 - Jan 4 rally
• SUP 3: 113.14 Low Dec 17
• SUP 4: 113.03 2.0% 10-dma envelope
• SUP 4: 112.53 Low Nov 30 and a key support

USDJPY continues to trade lower and today’s price action has resulted in a clear breach of the 50-day EMA at 114.22. The break lower suggests scope for a deeper pullback ahead of the next firm support at 113.14, the Dec 17 low. Key support lies at 112.53, Nov 30 and if breached, would strengthen the case for bears. On the upside, the pair needs to trade back above 114.86, the 20-day EMA, to ease the current bearish pressure.

EURJPY TECHS: Remains Above Support

• 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: 130.50 @ 06:37 GMT Jan 14
• SUP 1: 130.16 Low Jan 10
• SUP 2: 129.94 50-day EMA
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

A bullish EURJPY theme remains in place although for now, the cross appears to be consolidating. The recent break of 131.15, 61.8% of the Oct - Dec bear leg reinforced bullish conditions. The moving average set-up has also recently shifted to bull mode. Attention is on 132.04, a Fibonacci retracement. Firm support has been defined at 130.16, Jan 10 low. The 50-day EMA as a support lies at 129.94.

AUDUSD TECHS: Holding Onto Recent Gains

• RES 4: 0.7393 High Nov 10
• RES 3: 0.7371 High Nov 15
• RES 2: 0.7346 Former channel base drawn from the Aug 20 low
• RES 1: 0.7314 High Jan 13
• PRICE: 0.7288 @ 06:44 GMT Jan 14
• SUP 1: 0.7200 Low Jan 12
• SUP 2: 0.7130 Low Jan 7
• SUP 3: 0.7082 Low Dec 20 and a key support
• SUP 4: 0.7060 76.4% retracement of the Dec 3 - 31 upleg

AUDUSD is holding onto this week’s gains. The pair has cleared both the congestion zone of resistance layered between 0.7272-78 as well as the 100-dma. The break higher reinforces a bullish theme and opens 0.7341/46, 61.8% of the Oct - Dec bear leg and the former channel base drawn off the Aug 20, 2021 low. Initial support is at Wednesday’s low of 0.7200. Key short-term support has been defined at 0.7130, the Jan 7 low.

USDCAD TECHS: Heading South

• 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: 1.2621/2687 Low Dec 31 / 20-day EMA
• PRICE: 1.2486 @ 06:50 GMT Jan 14
• SUP 1: 1.2454 Low Dec 13
• 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 bears remain in control and the pair is trading near its recent lows. A key support at 1.2621, the Dec 31 low, has been cleared. The break lower has strengthened the case for bears with attention on 1.2448, 76.4% of the Oct - Dec rally. A move through this chart point would expose 1.2387, the Nov 10 low. Initial resistance is at 1.2621. A firmer short-term resistance is at 1.2687, the 20-day EMA.

FIXED INCOME

BUND TECHS: (H2) Gains Considered Corrective

• RES 4: 173.19 High Dec 23
• RES 3: 172.18 50-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 170.17/171.44 High Jan 4 / 20-day EMA
• PRICE: 170.76 @ 05:16 GMT Jan 14
• 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. Short-term gains are considered corrective though and the trend remains down. Attention remains on the major support at 169.34, Oct 29 low. Clearance of this level would strengthen bearish conditions and open 169.08, a Fibonacci projection. 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 Points South

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.281 20-day EMA
• RES 1: 133.110/260 High Jan 6 and 13 / High Jan 3 and 4
• PRICE: 133.010 @ 05:06 GMT Jan 14
• SUP 1: 132.620 Low Jan 11 and the bear trigger
• 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 this week’s gains, Bobl futures remain bearish, with a fresh low print on Tuesday reinforcing this theme. 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) Corrective Bounce

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.052/080 20-day EMA / High Jan 5
• RES 1: 112.020 High Jan 13 and intraday high
• PRICE: 112.000 @ 05:29 GMT Jan 14
• SUP 1: 111.935 Low Jan 11 and the bear trigger
• 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 despite recent gains. Last week’s extension lower and this week’s confirmed break of support at 111.985, Jan 3 low reinforces a bearish theme. It 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 112.052 today. A break would ease bearish pressure.

GILT TECHS: (H2) Holding Above Recent Lows

• RES 4: 125.18 High Dec 31
• RES 3: 124.39 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.79 High Jan 13
• PRICE: 123.65 @ Close Jan 13
• SUP 1: 123.10/122.78 Low Jan 12 / 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: 121.10 3.0% Lower Bollinger Band

Short-term gains in Gilt futures are considered corrective and the downtrend remains intact. This follows the recent break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support strengthened bearish conditions. The moving average set-up remains in a bear mode, highlighting the current trend direction. The focus is on the 122.66 next, a Fibonacci projection. Firm resistance is seen at 124.39, the 20-day EMA.

BTP TECHS: (H2) Corrective Cycle

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.12 20-day EMA
• RES 1: 147.00 High Jan 4
• PRICE: 146.57 @ Close Jan 13
• SUP 1: 145.12 Low Jan 10 and the bear trigger
• 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. A bearish trend remains intact with further weakness likely near-term. 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 resistance is seen at 147.12, the 20-day EMA.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Key Support Seen At 4216.50

• 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: 4324.50/81.50 High Jan 13 / High Jan 5 and the bull trigger
• PRICE: 4262.00 @ 05:58 GMT Jan 14
• SUP 1: 4230.90/4216.50 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 4230.90. 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 the bearish threat.

E-MINI S&P (H2): Hammer Formation Still In Play

• 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: 4663.25 @ 07:03 GMT Jan 14
• 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. 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 was a hammer - a bullish signal. Watch support at 4572,75, Monday’s low, a break would reinstate a bearish theme. Major resistance and the bull trigger is at 4808.25.

COMMODITIES

BRENT TECHS: (H2) Bullish Outlook

• 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: $84.74 @ 06:57 GMT Jan 14
• SUP 1: $80.50/79.90 - 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) Key Resistance Cleared

• 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: $82.16 @ 07:06 GMT Jan 14
• SUP 1: $77.83/77.22 - Low Jan 10 / 20-day EMA
• SUP 2: $75.39/74.27 - 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. This week’s 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. The focus is on $83.71, a Fibonacci projection. Key short-term support has been defined at $77.83, the Jan 10 low.

GOLD TECHS: Eyeing 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 near-term resistance
• PRICE: $1827.0 @ 07:12 GMT Jan 14
• SUP 1: $1800.2 - Low Jan 11
• SUP 2: $1786.5/82.8 - 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 is holding onto recent gains. The yellow metal recently found support at the base of its bull channel drawn from the Aug 9 low - the Jan 7 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 resistance at $1831.9, Jan 3 high and a bull trigger. A reversal lower and a move below $1782.8 would instead highlight a channel breakout.

SILVER TECHS: Key Short-Term Resistance Exposed

• 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: $23.272 - High Jan 14
• PRICE: $23.175 @ 07:20 GMT Jan 14
• 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 maintains a firmer tone. 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.