MNI DAILY TECHNICAL ANALYSIS - GBPUSD Hits Bear Trigger

Price Signal Summary – GBPUSD Hits Bear Trigger

• In the equity space, S&P E-minis rallied sharply higher Tuesday and the contract is holding onto recent gains. Futures are once again above the 50-day EMA, at 4568.46 today. EUROSTOXX 50 futures rallied sharply higher Tuesday. The contract breached resistance at 4186.00, the Dec 1 high and price has traded through both the 20- and 50-day EMAs.
• In FX, EURUSD has recovered from recent lows but remains below last week’s high. Key short-term resistance is unchanged at 1.1383, Nov 30 high. A break would signal scope for a stronger corrective bounce and open 1.1460, the 50-day EMA. GBPUSD traded lower yesterday, slipping through the bear trigger at 1.3195 to hit fresh 2021 lows of 1.3163. This cements the downside risk and confirms a resumption of the downtrend. USDJPY is in a consolidation mode. Attention is on Monday’s price action that in pattern terms is a bullish engulfing reversal. If correct, it suggests the pair has found a base at the recent low of 112.53 on Nov 30.
• On the commodity front, Gold is consolidating and remains above last week’s lows. Short-term conditions are still bearish. Price has recently breached both the 20- and the 50-day EMAs and attention is on the base of a bull channel at $1764.7 today. Last week’s rebound in WTI has resulted in a strong recovery and the contract remains firm. On the 60-min chart, the move higher has confirmed an inverted head and shoulder reversal, reinforcing the current bull cycle.
• In the FI space, Bund futures stalled at 175.02 and sold off sharply yesterday. The move lower at this stage, appears to be a correction and the contract is holding above the 20-day EMA at 173.35. Gilt futures traded higher yesterday but found resistance at the session high of 127.67. The move higher maintains the bullish price sequence of higher highs and higher lows, reinforcing the current uptrend.

FOREIGN EXCHANGE

EURUSD TECHS: Remains Below Last Week’s Highs

• RES 4: 1.1559 Bear channel top from Jun 1 high
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1460 50-day EMA
• RES 1: 1.1383 High Nov 30
• PRICE: 1.1329 @ 06:03 GMT Dec 9
• SUP 1: 1.1228 Low Dec 07
• SUP 2: 1.1186/85 Low Nov 24 / Low Jul 1, 2020
• 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 has recovered from recent lows but remains below last week’s high. Key short-term resistance is unchanged at 1.1383, Nov 30 high. A break would signal scope for a stronger corrective bounce and open 1.1460, the 50-day EMA. The broader trend direction remains down though with the bear trigger at 1.1186/85. A break of this support would confirm a resumption of the downtrend.

GBPUSD TECHS: Fresh Trend Lows

• RES 4: 1.3698 High Nov 4
• RES 3: 1.3607 High Nov 9
• RES 2: 1.3514 High Nov 18 and a key resistance
• RES 1: 1.3351/70 20-day EMA / High Nov 30
• PRICE: 1.3211 @ 06:11 GMT Dec 9
• SUP 1: 1.3163 Low Dec 08
• SUP 2: 1.3148 1.0% 10-dma envelope
• SUP 3: 1.3135 Low Dec 11 2020
• SUP 4: 1.3104 3.0% Lower Bollinger Band

GBPUSD traded lower yesterday, slipping through the bear trigger at 1.3195 to hit fresh 2021 lows of 1.3163. This cements the downside risk and confirms a resumption of the downtrend. The focus is on a vol-band support at 1.3148 ahead of the Dec 11 2020 lows of 1.3135. Moving average conditions remain in bear mode, highlighting the current trend direction. Resistance to watch is at 1.3351, the 20-day EMA.

EURGBP TECHS: Probes Key Resistance

• RES 4: 0.8670 High Jul 20
• RES 3: 0.8658 High Sep 29 and a key resistance
• RES 2: 0.8624 High Oct 1
• RES 1: 0.8597 High Dec 8
• PRICE: 0.8575 @ 06:23 GMT Dec 9
• SUP 1: 0.8559/8489 20-day EMA
• SUP 2: 0.8446 High Dec 6 / Low Dec 7 and a key S/T support
• SUP 3: 0.8411/8381 Low Nov 26 / Low Nov 22 and the bear trigger
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP rallied Wednesday as GBP weakness was prevalent across markets. The strong reversal confirms a resumption of the recent uptrend and the cross has tested the key short-term resistance at 0.8595, Nov 5 high. A clear break of this level would pave the way for strength towards 0.8658, the Sep 29 high. A key short-term support has been defined at 0.8489, Tuesday’s low. A break of this level would be bearish.

USDJPY TECHS: Monitoring The Bullish Engulfing Candle

• RES 4: 116.09 1.764 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 3: 115.52 High Nov 24 and the bull trigger
• RES 2: 114.38 61.8% of the Nov 24 - 30 downleg
• RES 1: 113.95/96 High Dec 8 / Nov 29
• PRICE: 113.62 @ 06:28 GMT Dec 9
• SUP 1: 112.53 Low Nov 30 and the bear trigger
• SUP 2: 112.08 High Sep 30 and a recent breakout level
• SUP 3: 111.32 61.8% retracement of the Aug - Nov rally
• SUP 4: 110.82 Low Oct 4

USDJPY is in a consolidation mode. Attention is on Monday’s price action that in pattern terms is a bullish engulfing reversal. If correct, it suggests the pair has found a base at the recent low of 112.53 on Nov 30. The 20-day EMA as resistance - at 113.70 - is holding for now. A clear break would reinforce the pattern and suggest scope for a climb towards the November high of 115.52. Sub 112.53 levels would reinstate a bearish threat.

EURJPY TECHS: Arrives At Its 20-Day EMA

• RES 4: 131.59 High Nov 5
• RES 3: 129.99 High Nov 19
• RES 2: 129.74 50-day EMA
• RES 1: 129.11 High Dec 08
• PRICE: 128.77 @ 06:38 GMT Dec 9
• SUP 1: 127.39 Low Dec 3 / Dec 6 and the bear trigger
• SUP 2: 127.28 1.00 proj of the Jun 1 - Sep 22 - Oct 20 price swing
• SUP 3: 127.04/126.65 Low Feb 15 / Low Feb 10
• SUP 4: 125.82 1.236 proj of the Jun1 - Sep 22 - Oct 20 price swing

EURJPY traded higher yesterday and the cross is challenging resistance at the 20-day EMA. A clear breach of this indicator would expose the 50-day EMA, at 129.74 today. Short-term gains are considered corrective though and the downtrend remains intact. A resumption of weakness would refocus attention on the recent 127.39 low. Clearance of this level would confirm a resumption of the trend and open 127.04, Feb 15 low.

AUDUSD TECHS: Holding Onto This Week’s Gains

• RES 4: 0.7284 Former channel base drawn from the Aug 20 low
• RES 3: 0.7209 High Nov 25
• RES 2: 0.7187 20-day EMA
• RES 1: 0.7170 High Dec 8
• PRICE: 0.7185 @ 06:45 GMT Dec 9
• SUP 1: 0.7115/7040 Low Dec 8 / Low Dec 7
• SUP 2: 0.6993/91 Low Dec 3 / Low Nov 2 2020 and a key support
• SUP 3: 0.6963 Low Jul 16 2020
• SUP 4: 0.6921 Low Jul 14 2020

AUDUSD continues to recover following this week's bounce off 0.6993, the Dec 3 low. The pair has arrived at the 20-day EMA that intersects at 0.7185. A clear breach of this average would strengthen the current bull phase and expose 0.7287, the base of the bull channel drawn from the Aug 20 low. The channel base was breached on Nov 19. For bears, a reversal lower would refocus attention on 0.6991, Nov 2 low and the bear trigger.

USDCAD TECHS: Bearish Threat Remains Present

• RES 4: 1.3003 2.0% 10-dma envelope
• RES 3: 1.2949 High Aug 20 and a key resistance
• RES 2: 1.2896 High Sep 20
• RES 1: 1.2768/2854 High Dec 7 / High Dec 3 and the bull trigger
• PRICE: 1.2655 @ 06:50 GMT Dec 9
• SUP 1: 1.2601 50-day EMA
• SUP 2: 1.2571 50.0% retracement of the Oct 21 - Dec 3 rally
• SUP 3: 1.2493 Low Nov 16
• SUP 4: 1.2422 61.8% retracement of the Oct 21 - Dec 3 rally

USDCAD has reversed lower this week but has stabilized slightly. The sharp pullback has resulted in a break of the 20-day EMA and this has exposed the 50-day EMA at 1.2601. Clearance of this latter EMA would strengthen the bearish threat and open 1.2571, a Fibonacci retracement. Tuesday’s high of 1.2768 is the first resistance. A break would ease bearish pressure and attention would turn to the key resistance at 1.2854, Dec 3 high.

FIXED INCOME

BUND TECHS: (H2) Holding Above The 20-Day EMA

• RES 4: 176.00 Round number resistance
• RES 3: 175.57 1.618 proj of the Nov 11 - 22 - 24 price swing
• RES 2: 175.29 1.50 proj of the Nov 11 - 22 - 24 price swing
• RES 1: 175.02 High Dec 8 and the bull trigger
• PRICE: 173.66 @ 05:08 GMT Dec 9
• SUP 1: 173.35 20-day EMA
• SUP 2: 172.70 Low Nov 26
• SUP 3: 171.77 Low Nov 24 and key near-term support
• SUP 4: 170.72 Low Nov 4

Bund futures stalled at 175.02 and sold off sharply yesterday. The move lower at this stage, appears to be a correction and the contract is holding above the 20-day EMA at 173.35. A break through this EMA would strengthen the bearish threat and signal scope for a deeper pullback. For bulls, clearance of 175.02 is required to confirm a resumption of the uptrend and open 175.29, a Fibonacci projection.

BOBL TECHS: (H2) Probes Key Support

• RES 4: 135.126 1.382 pro of the Nov 11 - 22 - 23 price swing
• RES 3: 134.978 1.236 pro of the Nov 11 - 22 - 23 price swing
• RES 2: 134.740 1.00 pro of the Nov 11 - 22 - 23 price swing
• RES 1: 134.530 High Nov 30 and the bull trigger
• PRICE: 133.870 @ 05:16 GMT Dec 9
• SUP 1: 133.710 Low Dec 8
• SUP 2: 133.610 Low Nov 16
• SUP 3: 133.410 Low Nov 11 and a key support
• SUP 4: 133.200 Low Nov 3

Bobl futures traded sharply lower yesterday highlighting a possible threat to the recent uptrend. The contract probed support at 133.730, the Nov 23 low. A clear break of this support would strengthen a bearish case and signal scope for weakness towards 133.410, the Nov 11 low. A recovery however would instead refocus attention on 134.530, the Nov 30 high and bull trigger. Clearance of this hurdle would confirm a resumption of the recent uptrend.

SCHATZ TECHS: (H2) Clears Support

• RES 4: 112.375 1.382 proj of the Nov 16 - 26 - Dec 1 price swing
• RES 3: 112.350 1.236 proj of the Nov 16 - 26 - Dec 1 price swing
• RES 2: 112.305 High Nov 26 and the bull trigger
• RES 1: 112.235 High Dec 2 / 3
• PRICE: 112.130 @ 05:31 GMT Dec 9
• SUP 1: 112.090 Low Dec 8
• SUP 2: 112.070 1.000 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 3: 112.031 1.236 proj of the Nov 26 - Dec 1 - Dec 3 price swing
• SUP 4: 112.007 1.382 proj of the Nov 26 - Dec 1 - Dec 3 price swing

Schatz futures faced strong selling pressure yesterday and in the process cleared near term support levels. The break lower strengthens a bearish threat and confirms an extension of the pullback from 112.305, the Nov 26 high. A resumption of weakness would open 112.070 and 112.031, Fibonacci retracement levels. On the upside, a break above 112.235, the Dec 2 / 3 high would ease the bearish threat and refocus attention on 112.305.

GILT TECHS: (H2) Uptrend Remains Intact

• RES 4: 129.00 76.4% retracement of the Aug - Oct downleg (cont)
• RES 3: 128.18 High Sep 10 / 14 (cont)
• RES 2: 127.94/128.00 61.8% of Aug - Oct move (cont) / High Aug 31
• RES 1: 12767 High Dec 8
• PRICE: 126.87 @ Close Dec 8
• SUP 1: 126.32 Low Dec 2
• SUP 2: 125.44 Low Nov 26 and gap high
• SUP 3: 124.94 High Nov 25 and gap low
• SUP 4: 124.48 Low Nov 25

Gilt futures traded higher yesterday but found resistance at the session high of 127.67. The move higher maintains the bullish price sequence of higher highs and higher lows, reinforcing the current uptrend. The focus is on a climb towards the 128.00 handle next. Short-term dips would be considered corrective with initial support seen at 126.32, the Dec 2 low. Also watch support at 125.44, the Nov 26 low and a gap high on the daily chart.

BTP TECHS: (H2) Reversal Lower Exposes Support

• RES 4: 152.71 1.00 proj of the Nov 1 - 22 - 24 price swing
• RES 3: 151.45 0.764 proj of the Nov 1 - 22 - 24 price swing
• RES 2: 151.00 Round number resistance
• RES 1: 150.66 High Dec 6 and the bull trigger
• PRICE: 148.64 @ Close Dec 8
• SUP 1: 148.25 Low Dec 1
• SUP 2: 147.36 Low Nov 24 and key support
• SUP 3: 146.55 76.4% retracement of the Nov 1 - 22 rally
• SUP 4: 145.29 Low Nov 1 and the bear trigger

BTP futures reversed course yesterday and sold off sharply. The move lower exposes support at 148.25, the Dec 1 low where a break would highlight potential for a test of a firmer support handle at 147.36, the Nov 24 low. Gains earlier this week resulted in a test of resistance at 159.64, Nov 22 high. A Clear break is required to reinstate a bullish theme. This would open the 151.00 handle.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Trading Near Recent Highs

• RES 4: 4461.00 1.50 proj of the Jul 19 - Sep 6 - Oct 6 price swing
• RES 3: 4420.80 1.382 proj of the Jul 19 - Sep 6 - Oct 6 price swing
• RES 2: 4409.50 High Nov 18 and the bull trigger
• RES 1: 4311.70 76.4% retracement of the Nov 18 - 30 downleg
• PRICE: 4237.50 @ 05:53 GMT Dec 9
• SUP 1: 4137.00 Low Dec 7
• SUP 2: 4053.50/3995.00 Low Dec 3 / Low Nov 30
• SUP 2: 3949.50 Low Oct 6 and bear trigger3:
• SUP 4: 3882.00 Low Jul 19

EUROSTOXX 50 futures rallied sharply higher Tuesday. The contract breached resistance at 4186.00, the Dec 1 high and price has traded through both the 20- and 50-day EMAs. The focus is on 4311.70, the 76.4% retracement of the recent downleg between Nov 18 - 30. A break of this level would open 4409.50, the Nov 18 high and key resistance. Tuesday’s low of 4137.00 marks initial support. The key support lies at 3995.00, Nov 30 low.

E-MINI S&P (Z1): Attention Is On All-Time High

• RES 4: 4800.00 Round number resistance
• RES 1: 4788.95 0.618 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 2: 4740.50 High Nov 22 and the bull trigger
• RES 1: 4717.00 High Nov 26
• PRICE: 4688.75 @ 07:05 GMT Dec 9
• SUP 1: 4587.25 Low Dec 8
• SUP 2: 4492.00 Low Dec 3 and the bear trigger
• SUP 3: 4443.55 61.8% retracement of the Oct 1 - Nov 22 rally
• SUP 4: 4373.40 76.4% retracement of the Oct 1 - Nov 22 rally

S&P E-minis rallied sharply higher Tuesday and the contract is holding onto recent gains. Futures are once again above the 50-day EMA, at 4568.46 today. This average highlights a pivot level and the strong recovery through it has improved conditions for bulls. The focus is on 4717.00 next, the Nov 26 high ahead of the all-time high of 4740.50. Key support and the bear trigger is at 4492.00, the Dec 3 low.

COMMODITIES

BRENT TECHS: (G2) Remains Firm

• RES 4: $84.66 - High Oct 26 and key resistance
• RES 3: $81.88 - High Nov 24
• RES 2: $80.42 - High Nov 26
• RES 1: $77.21 - 50-day EMA
• PRICE: $76.22 @ 07:02 GMT Dec 9
• SUP 1: $73.20 - Low Dec 7
• SUP 2: $69.24/65.72 - Low Dec 3 / Low Dec 2 and the bear trigger
• SUP 3: $62.95 - Low Aug 23 and a key support
• SUP 4: $62.54 - Low May 21

Brent futures continue to trade higher, extending the sharp bounce from $65.72, Dec 2 low. On the 60-min chart, this week’s rally has confirmed an inverted head and shoulders reversal suggesting scope for stronger gains near-term. The move higher though is considered corrective and this is allowing a recent oversold condition to unwind. Attention is on $77.21, the 50-day EMA. Initial support is at $73.20, the Dec 3 low.

WTI TECHS: (F2) Approaching The 50-Day EMA

• RES 4: $83.83 - High Oct 25 and a key resistance
• RES 3: $80.68 - High Nov 16
• RES 2: $78.65 - High Nov 26
• RES 1: $74.79 - 50-day EMA
• PRICE: $72.83 @ 07:08 GMT Dec 9
• SUP 1: $69.52 - Low Dec 7
• SUP 2: $65.60 - Low Dec 3
• SUP 3: $62.43 - Low Dec 2 and the bear trigger
• SUP 4: $60.77 - Low Aug 23 and a key support

Last week’s rebound in WTI has resulted in a strong recovery and the contract remains firm. On the 60-min chart, the move higher has confirmed an inverted head and shoulder reversal, reinforcing the current bull cycle. The climb is considered corrective though and is allowing a recent oversold condition to unwind. Attention is on $74.79 next, the 50-day EMA. Initial firm support lies at $69.52, the Dec 7 low.

GOLD TECHS: Consolidating Ahead Of The Bull Channel Base

• RES 4: $1909.7 - High Jun 3
• RES 3: $1903.8 - High Jun 8
• RES 2: $1877.2/88.7 High Nov 16 / Bull channel top
• RES 1: $1815.6/49.1 - High Nov 26 / High Nov 22
• PRICE: $1785.3 @ 07:22 GMT Dec 9
• SUP 1: $1764.7/62.0 - Bull Channel base from Aug 9 / Low Dec 2
• SUP 2: $1759.0 - Low Nov 3
• SUP 3: $1721.7 - Low Sep 29
• SUP 4: $1690.6 - Low Aug 9

Gold is consolidating and remains above last week’s lows. Short-term conditions are still bearish. Price has recently breached both the 20- and the 50-day EMAs and attention is on the base of a bull channel at $1764.7 today. The channel is drawn off the Aug 9 low and represents an important support. A breakout would strengthen bearish conditions. Initial firm resistance to watch is at $1815.6, the Nov 26 high.

SILVER TECHS: Bear Flag Formation

• RES 4: $26.467 - High Jul 14
• RES 3: $26.002 - High Aug 4 and a key resistance
• RES 2: $25.406 - High Nov 16
• RES 1: $23.030/772 - High Dec 1 / High Nov 24
• PRICE: $22.355 @ 07:25 GMT Dec 9
• SUP 1: $21.995 - Low Oct 1
• SUP 2: $21.423 - 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 continues to consolidate and recent price action appears to be a bear flag. This reinforces current bearish conditions. The metal last week breached support at $23.020, Nov 23 low and has recently cleared the 50-day EMA. The break lower suggests scope for a deeper S/T pullback with the focus on $21.995 next, Oct 1 low. A break would expose the major support at $21.423, Sep 29 low. A firm S/T resistance is seen at $23.030, the Dec 1 high.