MNI DAILY TECHNICAL ANALYSIS - Gilt Downtrend Persists

Price Signal Summary – Gilt Downtrend Persists

• In the equity space, S&P E-minis remain vulnerable near-term following a reversal lower last week from levels just above 4800.00. Price has traded below the 20-day EMA and attention is on the 50-day EMA that intersects at 4647.81 today. EUROSTOXX 50 futures reversed course last Thursday as a risk-off mood weighed on price. The pullback at this stage is considered corrective with bullish conditions intact following a strong recovery between Dec 20 and last Wednesday’s high.
• In FX, EURUSD traded higher Friday. The pair continues to respect the recent range and has failed to challenge the nearby key resistance levels at 1.1383/86, Nov 30 and Dec 31 high. The broader trend condition is bearish and the MA set-up reinforces this outlook. GBPUSD trend conditions remain bullish. This follows recent gains that have resulted in a breach of the 100-dma. A clear break of this average would strengthen the bullish outlook and maintain the current positive momentum structure. USDJPY remains below last week’s high of 116.35 but trend conditions are unchanged and the outlook remains bullish. The break last week of 115.52, Nov 24 high, confirmed a resumption of the trend, paving the way for a climb towards 117.08 next, a Fibonacci projection.
• On the commodity front, Gold traded lower last week. The move reinforces the potential importance of the Jan 3 sell-off that in pattern terms, is an engulfing candle and a bearish reversal signal. WTI futures remain in an uptrend. The recovery from the Jan 3 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 in a downtrend and the contract is trading at its recent lows. Price has recently cleared the previous 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. Gilt futures remain in a downtrend and the contract traded lower again Friday. 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: Key Resistance Remains Intact

• RES 4: 1.1608 High Nov 9
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1447 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1383/86 High Nov 30 / High Dec 31
• PRICE: 1.1330 @ 06:09 GMT Jan 10
• 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 traded higher Friday. The pair continues to respect the recent range and has failed to challenge the nearby key resistance levels at 1.1383/86, Nov 30 and Dec 31 high. The broader trend condition is bearish and the MA set-up reinforces this outlook. A resumption of weakness would expose 1.1222, Dec 15 low and the bear trigger at 1.1186/85. For bulls, clearance of the 1.13783/86 would suggest scope for a stronger recovery.

GBPUSD TECHS: Through The 100-DMA

• RES 4: 1.3778 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: 1.3584 @ 06:19 GMT Jan 10
• SUP 1: 1.3490 Low Jan 6
• SUP 2: 1.3445 20-day EMA
• SUP 3: 1.3343 Low Dec 23
• SUP 4: 1.3240 Low Dec 22

GBPUSD trend conditions remain bullish. This follows recent gains that have resulted in a breach of the 100-dma. A clear break of this average would strengthen the bullish outlook and maintain the current positive momentum structure. Scope is seen for a climb to 1.3676 next, a Fibonacci retracement. Support to watch is at 1.3445, the 20-day EMA. A move below this average is required to threaten the trend.

EURGBP TECHS: Trend Needle Points South

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8459 50-day EMA
• RES 2: 0.8419/20 High Jan 3 / 20-day EMA
• RES 1: 0.8381 Nov 22 low
• PRICE: 0.8342 @ 06:24 GMT Jan 10
• SUP 1: 0.8335 Low Jan 5
• SUP 3: 0.8300 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 remains vulnerable and the recent consolidation is likely a pause in the downtrend. Further weakness is likely and attention 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 both from a short and longer-term perspective. Initial firm resistance is at 0.8419.

USDJPY TECHS: Trend Outlook Remains Bullish

• 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: 115.81 @ 06:31 GMT Jan 10
• SUP 1: 115.29 Low Jan 4
• SUP 2: 114.89 20-day EMA
• SUP 3: 114.12 50-day EMA
• SUP 4: 113.33 Low Dec 20

USDJPY remains below last week’s high of 116.35 but trend conditions are unchanged and the outlook remains bullish. The break last week of 115.52, Nov 24 high, confirmed a resumption of the trend, paving the way for a climb towards 117.08 next, a Fibonacci projection. Moving average conditions remain in a bull mode and this set-up reinforces the current positive sentiment. Initial firm support is seen at 114.89, the 20-day EMA.

EURJPY TECHS: Bullish Outlook

• RES 4: 133.06 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: 131.21 @ 06:36 GMT Jan 10
• SUP 1: 130.64 Low Jan 6
• SUP 2: 130.05/129.78 20- and 50-day EMA levels
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

Recent dips in EURJPY are considered corrective. A bullish theme continues to dominate and last week’s gains solidified this tone. The cross has cleared 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a vol-based resistance, signalling potential for an extension higher. Attention is on 132.04, a Fibonacci retracement. A firm support zone is seen at 130.05/129.78, the 20- and 50-day EMA levels.

AUDUSD TECHS: Bearish Threat Still Present

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 2: 0.7335 Former channel base drawn from the Aug 20 low
• RES 1: 0.7223/7278 High Jan 6 / High Dec 31
• PRICE: 0.7190 @ 06:40 GMT Jan 10
• 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 remains vulnerable following this week’s move lower and despite the recovery from Friday’s low. The pair has recently failed to hold onto levels above the 50-day EMA. This highlights a bearish threat and the potential for a deeper pullback with support at 0.7082 exposed, Dec 20 low. Clearance of this level would strengthen a bearish case. Key short-term resistance is at 0.7278, the Dec 31 high.

USDCAD TECHS: Watching Support

• 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: 1.2748/2814 20-day EMA / High Jan 6
• PRICE: 1.2651 @ 06:46 GMT Jan 10
• SUP 1: 1.2632/2621 Low Jan 7 / 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 sharply lower Friday. A key short-term support lies at 1.2621, the Dec 31 low. The short-term outlook remains bullish despite the recent sell-off and while 1.2621 holds. This keeps alive a bullish engulfing candle on Jan 3 that highlights a potential base and signals scope for a climb towards 1.2848, Dec 27 high and a key near-term resistance. Sub 1.2621 levels would cancel the reversal pattern and instead open 1.2608, Dec 8 low.

FIXED INCOME

BUND TECHS: (H2) Approaching The Key Support

• RES 4: 173.19 High Dec 23
• RES 3: 172.05 20-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: 169.88 @ 05:13 GMT Jan 10
• SUP 1: 169.70 3.236 projection of the Dec 8 - 20 price swing
• 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 in a downtrend and the contract is trading at its recent lows. Price has recently cleared the previous 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. A break of this support level would strengthen bearish conditions. On the upside, initial firm resistance is seen at 171.77 where a break is required to ease bearish pressure. First resistance is at 170.61.

BOBL TECHS: (H2) Fresh Trend Lows

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.488 20-day EMA
• RES 1: 133.110/260 High Jan 6 / High Jan 3 and 4
• PRICE: 132.780 @ 05:32 GMT Jan 10
• SUP 1: 132.760 2.00 proj of the Nov 30 - Dec 8 - 20 price swing
• 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

Bobl futures remain bearish, with a fresh low print Friday and again today, reinforcing current conditions. 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 132.566 next, a Fibonacci projection level. On the upside, initial firm resistance is seen at 133.530, the Dec 29 high. Initial resistance is at 133.110.

SCHATZ TECHS: (H2) Resumes Its Downtrend

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.088 20-day EMA
• RES 1: 112.080 High Jan 6
• PRICE: 111.980 @ 05:41 GMT Jan 10
• SUP 1: 111.970 Intraday low
• SUP 2: 112.956 1.764 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.888 3.0% Lower Bollinger Band

Schatz futures are trading lower today. The S/T outlook remains bearish following last week’s extension lower and today’s move has confirmed a break of support at 111.985, Jan 3 low. This confirms a resumption of the downtrend and paves the way for weakness towards 111.956 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.088. A break would ease bearish pressure.

GILT TECHS: (H2) Heading South

• RES 4: 125.18 High Dec 31
• RES 3: 124.94 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.73 Low Jan 1 and gap high
• PRICE: 123.02 @ Close Jan 7
• SUP 1: 122.81 3.50 proj of the Dec 8 - 16 - 20 price swing
• 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

Gilt futures remain in a downtrend and the contract traded lower again Friday. 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 signalling scope for further downside. Moving average conditions are bearish, reinforcing current conditions. The focus is on the 122.81 next, a Fibonacci projection. Initial resistance is seen at 124.17.

BTP TECHS: (H2) Key Support Exposed

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.66 20-day EMA
• RES 1: 146.04/147.00 High Jan 6 / High Jan 4
• PRICE: 145.39 @ Close Jan 7
• SUP 1: 145.29 Low Nov 1 and key support
• 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

BTP futures traded lower last week. The contract remains weak as it extends its current downtrend. Futures recently cleared 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 breached. The break reinforced bearish conditions and has exposed 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) 20-Day EMA Remains Intact

• 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
• PRICE: 4301.50 @ 06:03 GMT Jan 10
• SUP 1: 4258.30 20-day EMA
• SUP 2: 4222.40 50-day EMA
• SUP 2: 4149.00 Low Dec 22
• SUP 4: 4108.50 Low Dec 21

EUROSTOXX 50 futures reversed course last Thursday as a risk-off mood weighed on price. The pullback at this stage is considered corrective with bullish conditions intact following a strong recovery between Dec 20 and last Wednesday’s high. Initial support is seen at 4258.30, the 20-day EMA. A more important area of support though lies at 4222.40, the 50-day EMA. For bulls, a return higher would refocus attention on key resistance at 4392.50.

E-MINI S&P (H2): Remains Above Its 50-Day EMA

• 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 @ 06:50 GMT Jan 10
• SUP 1: 4647.81 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 remain vulnerable near-term following a reversal lower last week from levels just above 4800.00. Price has traded below the 20-day EMA and attention is on the 50-day EMA that intersects at 4647.81 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, a move lower is considered corrective. The bull trigger is unchanged at 4808.25, Jan 4 high.

COMMODITIES

BRENT TECHS: (H2) Bulls Still In Charge

• RES 4: $84.50 - 1.382 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $84.00 - Round number resistance
• RES 2: $83.69 - High Oct 10 and a major resistance
• RES 1: $83.11 - High Nov 10
• PRICE: $81.86 @ 06:56 GMT Jan 10
• SUP 1: $79.51 - Low Jan 5
• 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 last week’s gains reinforced the current bullish theme. The break of resistance at $80.03, Dec 29 high, confirmed a resumption of the bull cycle and has opened $83.11 next, the Nov 10 high ahead of the key resistance at $83.69, Oct 10 high. On the downside, the Jan 3 low of $77.04 represents the key short-term support. A break of this level would threaten the trend.

WTI TECHS: (G2) Northbound

• RES 4: $85.29 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $83.71 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $82.13 - High Oct 25 and a major resistance
• RES 1: $81.73 - High Nov 10
• PRICE: $79.03 @ 07:09 GMT Jan 10
• SUP 1: $75.25 - 20-day EMA
• SUP 2: $74.40/27 - 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. The recovery from the Jan 3 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 break confirms a resumption of the uptrend and opens $81.73 next, the Nov 10 high ahead of the key resistance at $82.13, Oct 25 high. On the downside, the Jan 3 low of $74.27 represents a key short-term support.

GOLD TECHS: Eyeing The Bull Channel Base

• 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: $1811.6/31.9 - High Jan 6 / High Jan 3 and key resistance
• PRICE: $1791.7 @ 07:13 GMT Jan 10
• SUP 1: $1783.2 - Channel base drawn from the Aug 9 low
• SUP 2: $1753.7 - Low Dec 15 and a key support
• SUP 3: $1746.0 - Low Oct 6
• SUP 4: $1721.7 - Low Sep 29

Gold traded lower last week. The move reinforces the potential importance of the Jan 3 sell-off that in pattern terms, is an engulfing candle and a bearish reversal signal. Attention is on the base of a bull channel drawn from the Aug 9 low that intersects at $1783.2. A break would strengthen a bearish case and open $1753.7, the Dec 15 low. The Jan 3 high of $1831.9 is key resistance.

SILVER TECHS: Bearish Threat Still Present

• 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: $22.829 - High Jan 6
• PRICE: $22.276 @ 07:23 GMT Jan 10
• SUP 1: $21.918 - Low Dec 16
• 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 traded lower last week and cleared $22.593, Dec 29 low. The 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 $21.918, Dec 16 low. A break would expose $21.427/423, the Dec 15 and Sep 29 lows. Key resistance is at $23.436, Dec 28 high where a break is required to alter the picture.