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MNI DAILY TECHNICAL ANALYSIS - Gold Is Approaching Its Channel Base

Price Signal Summary - Gold Is Approaching Its Channel Base

  • In the equity space, S&P E-minis have started the week on a firm note and price is trading above last week’s highs. A bullish theme remains intact following last week’s gains. Futures are once again above the 50-day EMA, at 4577.19 today. EUROSTOXX 50 futures rallied on Dec 7 and breached 4186.00, the Dec 1 high. Price also traded through the 20- and 50-day EMAs. Futures however have pulled back from recent highs although the move lower is likely a correction.
  • In FX, EURUSD remains below resistance and is for now in consolidation mode. The key short-term hurdle for bulls remains 1.1383, the Nov 30 high. A break would signal scope for a stronger corrective bounce that would open 1.1448, the 50-day EMA. GBPUSD remains in a downtrend and recent gains are considered corrective. Last week’s move to a fresh trend low of 1.3163 on Dec 8 confirmed a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs.
  • On the commodity front, Gold is consolidating and remains above recent lows. The short-term outlook is unchanged and bearish. Price has recently breached both the 20- and the 50-day EMAs and attention is on the base of a bull channel at $1766.3 The near-term WTI outlook remains bullish following recent strong gains. Last week’s move higher has confirmed an inverted head and shoulder reversal on the 60-min chart, reinforcing the current bull cycle.
  • In the FI space, Bund futures remain in an uptrend. The recent move lower at this stage, appears to be a correction and the contract has remained above the 20-day EMA, at 173.51 today. Gilt futures trend conditions remain bullish. The contract traded higher on Dec 8 and last week’s gains maintain the bullish price sequence of higher highs and higher lows, reinforcing the current uptrend.

FOREIGN EXCHANGE

EURUSD TECHS: Consolidation Mode

  • RES 4: 1.1549 Bear channel top from Jun 1 high
  • RES 3: 1.1514 Low Nov 5
  • RES 2: 1.1454 50-day EMA
  • RES 1: 1.1383 High Nov 30
  • PRICE: 1.1298 @ 05:55 GMT Dec 13
  • 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 remains below resistance and is for now in consolidation mode. The key short-term hurdle for bulls remains 1.1383, the Nov 30 high. A break would signal scope for a stronger corrective bounce that would open 1.1448, the 50-day EMA. The broader trend direction remains down though with the bear trigger at 1.1186/85. Clearance of this support would confirm a resumption of trend and open 1.1128, a Fibonacci projection.

GBPUSD TECHS: Outlook Remains Fragile

  • 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: 1.3332/70 20-day EMA / High Nov 30
  • PRICE: 1.3250 @ 06:03 GMT Dec 13
  • SUP 1: 1.3163 Low Dec 08
  • SUP 2: 1.3131 1.0% 10-dma envelope
  • SUP 3: 1.3135 Low Dec 11 2020
  • SUP 4: 1.3078 3.0% Lower Bollinger Band

GBPUSD remains in a downtrend and recent gains are considered corrective. Last week’s move to a fresh trend low of 1.3163 on Dec 8 confirmed a resumption of the downtrend and maintains a bearish price sequence of lower lows and lower highs. The focus is on a vol-band support at 1.3138 ahead of the Dec 11 2020 lows of 1.3131. Resistance to watch is at 1.3332, the 20-day EMA. A break would signal scope for a stronger recovery.

EURGBP TECHS: Corrective Pullback

  • 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: 0.8600 High Dec 8
  • PRICE: 0.8526 @ 06:11 GMT Dec 13
  • SUP 1: 0.8502/8489 20-day EMA / Low Dec 7
  • SUP 2: 0.8446 Low Nov 29 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 on Dec 8 to a high of 08600 but has since pulled back. Dips are considered corrective and the outlook is bullish. Last week’s rally resulted in a test of 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, the Dec 7 low. A break would instead be bearish.

USDJPY TECHS: Bullish Engulfing Candle Still In Play

  • 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: 113.51 @ 06:18 GMT Dec 13
  • 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 still consolidating. A recent reversal pattern - bullish engulfing candle - on Dec 6 continues to highlight a potential reversal from the recent low of 112.53 on Nov 30. The 20-day EMA as a resistance, at 113.66, is holding firm for now. A clear break would reinforce the candle pattern and open the November high of 115.52. Sub 112.53 levels would reinstate a bearish threat.

EURJPY TECHS: 20-Day EMA Holds Firm For Now

  • RES 4: 131.59 High Nov 5
  • RES 3: 129.99 High Nov 19
  • RES 2: 129.63 50-day EMA
  • RES 1: 128.82/129.11 20-day EMA / High Dec 08
  • PRICE: 128.16 @ 06:25 GMT Dec 13
  • 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 on Dec 8, but reversed into Thursday’s close and failed to clear the 20-day EMA. For bulls, a clear breach of this indicator would strengthen conditions and open the 50-day EMA, at 129.63. S/T gains are considered corrective though and the downtrend remains intact. A resumption of weakness would refocus attention on the recent 127.39 low. A break would confirm a resumption of the trend and open 127.04, Feb 15 low.

AUDUSD TECHS: Holding Onto Recent Gains

  • RES 4: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
  • RES 3: 0.7289 Former channel base drawn from the Aug 20 low
  • RES 2: 0.7264 50-day EMA
  • RES 1: 0.7181/87 20-day EMA / High Dec 9
  • PRICE: 0.7166 @ 06:30 GMT Dec 13
  • 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 is consolidating and holding onto last week’s gains. The pair is testing the 20-day EMA that intersects at 0.7181. A clear break of this average would strengthen the current bull phase and signal scope for a climb towards 0.7291, 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, the Nov 2 2020 low and the bear trigger.

USDCAD TECHS: 50-Day EMA Remains Exposed

  • RES 4: 1.3002 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: 1.2726 @ 06:52 GMT Dec 13
  • SUP 1: 1.2610/08 50-day EMA / Low Dec 8
  • 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 reversed lower last week but did find support at 1.2608, the Dec 8 low. The sharp pullback has exposed the 50-day EMA at 1.2610. Clearance of this average would strengthen the bearish threat and open 1.2571, a Fibonacci retracement. 1.2768, the Dec 7 high, is the first resistance. A break would ease bearish pressure and attention would turn to the key resistance and bull trigger 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: 173.99 @ 05:07 GMT Dec 13
  • SUP 1: 173.51/40 20-day EMA / Low Dec 8
  • 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 remain in an uptrend. The recent move lower at this stage, appears to be a correction and the contract has remained above the 20-day EMA, at 173.51 today. A break of this EMA would strengthen a bearish threat and signal scope for a deeper pullback. For bulls, clearance of 175.02, the Dec 8 high, is required to confirm a resumption of the uptrend and would open 175.29, a Fibonacci projection.

BOBL TECHS: (H2) Holding Above Last Week’s Low

  • 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: 133.960 @ 05:12 GMT Dec 13
  • 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 Dec 8 but have also managed to recover from that day's low. The contract probed support at 133.730, the Nov 23 low. A clear breach of this support would strengthen a bearish case and signal scope for weakness towards 133.410, the Nov 11 low. A recovery 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) Dec 8 Low Remains Intact

  • 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: 112.140 @ 05:22 GMT Dec 13
  • 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 on Dec 8 and cleared near term support levels. The break lower strengthened a bearish threat and confirmed an extension of the pullback from 112.305, Nov 26 high. A resumption of weakness would open 112.070 and 112.031, Fibonacci retracements. The contract has however recovered from the Dec 8 low and remains above it. A break of 112.235, Dec 2 / 3 high would ease the bearish threat.

GILT TECHS: (H2) Trend Conditions Remain Bullish

  • 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: 127.67 High Dec 8
  • PRICE: 127.32 @ Close Dec 10
  • SUP 1: 126.67/32 Low Dec 10 / 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 trend conditions remain bullish. The contract traded higher on Dec 8 and last week’s gains maintain the bullish price sequence of higher highs and higher lows, reinforcing the current uptrend. The focus is on the 128.00 handle next. Short-term dips would be considered corrective with initial support seen at 126.32, the Dec 10 and Dec 2 low. Also watch support at 125.44, the Nov 26 low and a gap high on the daily chart.

BTP TECHS: (H2) Support Remains Intact

  • 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: 149.62 @ Close Dec 13
  • SUP 1: 148.51/25 Low Dec 8 / 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 on Dec 8 and sold off sharply. The move lower has exposed support at 148.25, the Dec 1 low where a break would highlight potential for a test of a firmer support at 147.36, Nov 24 low. Note though that the contract has recovered from 148.51, the Dec 8 low and remains above it. A clear break of resistance at 159.64, Nov 22 high (probed last week) would reinstate a bullish theme. This would open the 151.00 handle.

EQUITIES

EUROSTOXX 50 TECHS: (Z1) Bullish Focus

  • 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: 4216.0 @ 05:47 GMT Dec 13
  • 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 on Dec 7 and breached 4186.00, the Dec 1 high. Price also traded through the 20- and 50-day EMAs. Futures however have pulled back from recent highs although the move lower is likely a correction. The focus is on 4311.70, 76.4% of the Nov 18 - 30 downleg. A break would open 4409.50, the Nov 18 high and key resistance. The Dec 7 low of 4137.00 is initial support. The key support lies at 3995.00, Nov 30 low.

E-MINI S&P (H2): Approaching The All-Time High

  • RES 4: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
  • RES 1: 4800.00 Round number resistance
  • RES 2: 4783.78 0.618 proj of the Oct 1 - Nov 22 - Dec 3 price swing
  • RES 1: 4735.00 High Nov 22 and the bull trigger
  • PRICE: 4719.25 @ 06:59 GMT Dec 13
  • SUP 1: 4577.19 50-day EMA
  • SUP 2: 4485.75 Low Dec 3 and the bear trigger
  • SUP 3: 4493.88 61.8% retracement of the Oct 1 - Nov 22 rally
  • SUP 4: 4436.97 76.4% retracement of the Oct 1 - Nov 22 rally

S&P E-minis have started the week on a firm note and price is trading above last week’s highs. A bullish theme remains intact following last week’s gains. Futures are once again above the 50-day EMA, at 4577.19 today. This average is a pivot level and the strong recovery through it has improved conditions for bulls. The focus is on the 4735.00 all-time high. Key support and the bear trigger is at 4492.00, the Dec 3 low.

COMMODITIES

BRENT TECHS: (G2) Approaching Last Week’s High

  • 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: $77.02 - 50-day EMA
  • PRICE: $76.28 @ 06:58 GMT Dec 13
  • 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 are firmer this morning and approaching last week’s high of $76.70 on Dec 9. Last week’s rally confirmed an inverted head and shoulders reversal on the 60-min chart, 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 $77.02, the 50-day EMA. Initial support is at $73.20, the Dec 3 low.

WTI TECHS: (F2) Bullish Outlook

  • 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: $74.53 - 50-day EMA
  • PRICE: $72.76 @ 07:05 GMT Dec 13
  • 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

The near-term WTI outlook remains bullish following recent strong gains. Last week’s move higher has confirmed an inverted head and shoulder reversal on the 60-min chart, reinforcing the current bull cycle. The climb is considered corrective though and is allowing a recent oversold condition to unwind. Attention is on $74.53 next, the 50-day EMA. Initial firm support lies at $69.52, the Dec 7 low.

GOLD TECHS: Bull Channel Base Remains Exposed

  • RES 4: $1903.8 - High Jun 8
  • RES 3: $1877.2/93.0 High Nov 16 / Bull channel top
  • RES 2: $1815.6/49.1 - High Nov 26 / High Nov 22
  • RES 1: $1794.5 High Dec 1
  • PRICE: $1785.5 @ 07:20 GMT Dec 13
  • SUP 1: $1766.3/62.0 - 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 recent lows. The short-term outlook is unchanged and bearish. Price has recently breached both the 20- and the 50-day EMAs and attention is on the base of a bull channel at $1766.3 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: Trend Outlook Remain Bearish

  • RES 4: $26.002 - High Aug 4 and a key resistance
  • RES 3: $25.406 - High Nov 16
  • RES 2: $23.030/772 - High Dec 1 / High Nov 24
  • RES 1: $22.609 High Dec 6
  • PRICE: $22.221 @ 07:23 GMT Dec 13
  • SUP 1: $21.423 - Low Sep 29 and key support
  • SUP 2: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally
  • SUP 3: $20.000 - Psychological round number
  • SUP 4: $19.851 - Low Jul 21 2020

Silver traded lower last week and breached support at $21.995, Oct 1 low. The break confirms a resumption of the downtrend and paves the way for weakness towards $21.423, the Sep 29 low and an important support. Moving average conditions have recently reversed to a bear mode and this highlights the current bearish sentiment. Initial resistance has been defined at $22.609, Dec 6 high.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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