MNI DAILY TECHNICAL ANALYSIS - Oil Bull Cycle Remains Intact

Price Signal Summary - Bull Cycle In Oil Extends    

• 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. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, the Dec 26 high. A breach of this hurdle would highlight a bull reversal.
• A bull cycle in the EUROSTOXX 50 futures contract remains intact and price is trading at its recent highs. This week’s 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 4933.29, the 50-day EMA.              
• In FX, the trend condition in EURUSD remains bearish. 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 1.0387, 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 this week’s sharp sell-off reinforces the bear trend - the break lower confirms a resumption of the downtrend. 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. USDJPY bulls remain in the driver’s seat and the pair is holding on to its recent gains. 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 156.60, the 20-day EMA.  
• On the commodity front, recent gains in Gold appear corrective - for now. However, the yellow metal remains firm and scope is seen for a continuation higher near-term. A stronger recovery would open $2726.2, the Dec 12 high and an important short-term resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2640.2, the 50-day EMA. In the oil space, the trend structure in WTI futures remains bullish and today’s gains reinforce current conditions. The stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. Clearance of this hurdle would strengthen a bull theme and open $77.41, the Jul 18 high. On the downside, a reversal lower would expose the 20-day EMA, at $71.57. 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 the 131.00 handle next. Key short-term resistance is at 133.48, the 20-day EMA. Initial resistance is 132.57, the Jan 6 high. The trend condition in Gilt futures is unchanged, it remains bearish and this week’s fresh cycle lows reinforces current conditions. Yesterday’s initial 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 92.39. The EMA is seen as an important hurdle for bulls.

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