MNI DAILY TECHNICAL ANALYSIS - GBPUSD Downtrend Remains Intact

Price Signal Summary - GBPUSD Downtrend Accelerates    

• In the equity space, a bear threat in the S&P E-Minis contract remains present. The reversal lower from the Dec 26 high, highlights the end of the Dec 20 - 26 correction. Attention is on 5866.00, Dec 20 low and a key short-term support. Initial firm resistance is 6107.50, the Dec 26 high. A breach of this hurdle would highlight a bull reversal and open key resistance at 6178.75, the Dec 6 high. A bull cycle in the EUROSTOXX 50 futures contract remains intact. This week’s strong rally highlights a reversal of the recent corrective pullback. Resistance at 5040.00, the Dec 9 high, has been pierced. A clear break of this hurdle would open 5068.13, the 0.764 projection of the Nov 21 - Dec 9 - 20 price swing. On the downside, initial firm support lies at 4929.18, the 50-day EMA.              
• In FX, the trend condition in EURUSD remains bearish and short-term gains are considered corrective. The Jan 2 sharp sell-off reinforces the bear theme and note too that moving average studies are in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0396, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The bear trigger has been defined at 1.0226, the Jan 2 low. The trend condition in GBPUSD remains bearish and Wednesday’s sharp sell-off reinforces the bear trend. The pair has traded lower again, today. The move down has also confirmed a resumption of the bear leg. Sights are on 1.2226 next, 0.618 projection of the Sep 26 - Nov 22 - Dec 6 price swing. Initial firm trend resistance has been defined at 1.2576, the Jan 7 high. The bear trigger is 1.2353, the Jan 2 low. USDJPY bulls remain in the driver’s seat. This week’s fresh cycle high, reinforces the bullish condition. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and has paved the way for a move towards 159.45, the Jul 12 high. Initial firm support is 156.44, the 20-day EMA.  
• On the commodity front, recent gains in Gold appear corrective - for now. A bear threat remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low. The first firm support to watch is $2583.6, the Dec 19 low. On the upside, a stronger climb would instead signal scope for gains towards resistance at $2726.2, the Dec 12 high. In the oil space, the trend structure in WTI futures remains bullish and the contract traded to a fresh cycle high again, yesterday. A stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. On the downside, a reversal lower would expose support at the 20-day EMA, at $71.32. This average is seen as a key short-term support.         
• In the FI space, the trend in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has breached key support at 132.00, the Nov 6 low. The clear break of this level strengthens a bearish theme. Sights are on a move towards 131.28 next, the Nov 14 low on the continuation chart. Key short-term resistance is at 133.90, the 20-day EMA. Gains would be considered corrective and allow an oversold condition to unwind. The trend condition in Gilt futures is unchanged, it remains bearish and this week’s fresh cycle lows reinforces current conditions. Today’s move lower reinforces bearish conditions and this week’s sell-off highlights an acceleration of the trend. Sights are on the 88.87 next, a 2.764 projection of the Dec 20 -27 - Jan 2 price swing. Initial resistance is at 91.58, Wednesday’s intraday high. Resistance at the 20-day EMA, is at 92.63. The EMA is seen as an important hurdle for bulls.

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