MNI DAILY TECHNICAL ANALYSIS - Shallow Equity Bounce So Far

Price Signal Summary – Shallow Equity Bounce So Far

• In the equity space, S&P E-minis started the week on a softer note but have bounced from yesterday’s low of 4520.25. The sell-off late last week, signals potential for a deeper pullback. EUROSTOXX 50 futures last week failed to hold onto the high of 4234.00 on Dec 16. Futures traded sharply lower yesterday to a low of 4026.00 before rebounding.
• In FX, EURUSD continues to consolidate and remains rangebound with price trading above initial support at 1.1222, the Dec 15 low. Key resistance at 1.1383 remains intact, Nov 30 high. GBPUSD failed to hold onto last week’s gains. The reversal lower Friday and the move lower yesterday, highlights a potential resumption of the underlying downtrend and attention is on support at 1.3163, the Dec 8 low.
• On the commodity front, Gold traded higher last week, extending the recovery from $1753.7, the Dec 15 low. The yellow metal last week attempted to clear the base of its bull channel drawn from the Aug 9 low and it appears the move lower has been a false break. WTI futures weakened yesterday and despite bouncing off the day low, remains vulnerable. The move lower has resulted in a breach of support at $69.21 and this paves the way for a move towards $65.45, the Dec 3 low.
• In the FI space, Bund futures remain in an uptrend. The sharp move lower on Dec 16 failed to clear support at 173.40, the Dec 8 low. The print below the 20-day EMA however is potentially an early bearish signal and a break of 173.40 would reinforce this threat. Gilt futures traded sharply lower Dec 16, down to 126.34 before finding support. The move lower resulted in a print below the 20-day EMA currently at 126.61.

FOREIGN EXCHANGE

EURUSD TECHS: Consolidation Mode

• RES 4: 1.1518 Bear channel top from Jun 1 high
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1412 50-day EMA
• RES 1: 1.1360/83 High Dec 16 / High Nov 30
• PRICE: 1.1279 @ 06:04 GMT Dec 21
• SUP 1: 1.1222 Low Dec 15
• 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 continues to consolidate and remains rangebound with price trading above initial support at 1.1222, the Dec 15 low. Key resistance at 1.1383 remains intact, Nov 30 high. A break of this hurdle is required to signal potential for a stronger recovery towards 1.1412 the 50-day EMA. The trend remains down though and the trigger for a resumption of bearish activity is 1.1186/85 where a break would open 1.1128, a Fibonacci projection.

GBPUSD TECHS: Support Remains Exposed

• RES 4: 1.3607 High Nov 9
• RES 3: 1.3514 High Nov 18 and a key resistance
• RES 2: 1.3422 50-day EMA
• RES 1: 1.3374 High Dec 16
• PRICE: 1.3216 @ 06:11 GMT Dec 21
• SUP 1: 1.3163 Low Dec 08 and the bear trigger
• SUP 2: 1.3135 Low Dec 11 2020
• SUP 3: 1.3110 1.0% 10-dma envelope
• SUP 4: 1.3084 1.50 proj of the Sep 14 - 29 - Oct 20 price swing

GBPUSD failed to hold onto last week’s gains. The reversal lower Friday and the move lower yesterday, highlights a potential resumption of the underlying downtrend and attention is on support at 1.3163, the Dec 8 low and bear trigger. A breach of this level would confirm a resumption of the downtrend and open 1.3135, Dec 11 2020 low. On the upside, price needs to break 1.3374, Dec 16 high to suggest scope for a stronger bounce.

EURGBP TECHS: Watching Resistance

• RES 4: 0.8658 High Sep 29 and a key resistance
• RES 3: 0.8624 High Oct 1
• RES 2: 0.8600 High Dec 8
• RES 1: 0.8553 High Dec 10 / 14
• PRICE: 0.8534 @ 06:28 GMT Dec 21
• SUP 1: 0.8485/54 Low Dec 20 / Low Dec 16
• SUP 2: 0.8411 Low Nov 26
• SUP 3: 0.8381 Low Nov 22 and the bear trigger
• SUP 4: 0.8356 Low Feb 26, 2020

EURGBP sold off sharply Dec 16 but has rebounded from that day’s low of 0.8454. Support at 0.8486 has been cleared, Dec 15 low and this signals a potential strengthening of short-term bearish pressure. Further weakness would open 0.8411, Nov 26 low and the key support at 0.8381, Nov 22 low. The cross strengthened yesterday, initial firm resistance is at 0.8553, Dec 10 / 14 high. Clearance of this level would reinstate the recent bullish theme.

USDJPY TECHS: Consolidating

• 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: 114.81 76.4% of the Nov 24 - 30 downleg
• RES 1: 114.26/38 High Dec 15 / 61.8% of the Nov 24 - 30 downleg
• PRICE: 113.73 @ 06:31 GMT Dec 21
• SUP 1: 113.14 Low Dec 17
• SUP 2: 112.53 Low Nov 30 and the bear trigger
• SUP 3: 112.08 High Sep 30 and a recent breakout level
• SUP 4: 111.32 61.8% retracement of the Aug - Nov rally

USDJPY remains in a consolation mode. The pair broke out of its recent tight range last week signalling potential for a stronger rally. However, the rally faltered Thursday and price is again inside its recent range and on Friday did probe support at 113.23, the Dec 10 / 13 low. A stronger sell-off would expose the key support at 112.53, Nov 30 low while on the upside, clearance of 114.26, Dec 15 high is needed to offset any developing bearish concerns.

EURJPY TECHS: Attention Is On Key Support

• RES 4: 131.59 High Nov 5
• RES 3: 130.43 50.0% retracement of the Oct 20 - Dec 3 downleg.
• RES 2: 129.99 High Nov 19
• RES 1: 128.98/129.64 High Dec 17 / High Dec 16
• PRICE: 128.26 @ 06:40 GMT Dec 21
• SUP 1: 127.52 Low Dec 20
• SUP 2: 127.39 Low Dec 3 / 6 and the bear trigger
• SUP 3: 127.28 1.00 proj of the Jun 1 - Sep 22 - Oct 20 price swing
• SUP 4: 127.04/126.65 Low Feb 15 / Low Feb 10

EURJPY sold off sharply Friday, resulting in an extension from Thursday’s high of 129.64. The break lower has exposed key support at 127.39, the Dec 3 / 6 low. A break of this level would strengthen the bearish threat and confirm a resumption of the underlying downtrend. Note that the recent move lower has canceled an inverted head and shoulders pattern. Price needs to get above Friday’s intraday high of 128.98 to ease the bearish threat.

AUDUSD TECHS: Probes First Support

• RES 4: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 3: 0.7305 Former channel base drawn from the Aug 20 low
• RES 2: 0.7242 50-day EMA
• RES 1: 0.7161/7224 20-day EMA / High Dec 16
• PRICE: 0.7116 @ 06:46 GMT Dec 21
• SUP 1: 0.7082/7040 Low Dec 20 / 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 traded higher Thursday and breached 0.7187, Dec 9 high. This appears to have been a false break - the Aussie failed to hold onto recent gains and has traded lower. Attention is on support at 0.7090, the Dec 14 low that was probed yesterday. A clear break would strengthen a short-term bearish threat and expose support at 0.7040, Dec 7 low. Clearance of last week's high of 0.7224 on Dec 16 is needed to reinstate a bullish theme.

USDCAD TECHS: Bull Cycle Extends

• RES 4: 1.3173 High Nov 13, 2020
• RES 3: 1.3091 High Nov 24, 2020
• RES 2: 1.3024/39 38.2% Mar ‘20-Jun ‘21 downleg / 2.0% 10-dma env
• RES 1: 1.2964 High Dec 20
• PRICE: 1.2925 @ 06:58 GMT Dec 21
• SUP 1: 1.2882/2764 Low Dec 20 , Dec 16 and key S/T support
• SUP 2: 1.2706 Low Dec 13
• SUP 3: 1.2608 Low Dec 8 and key support
• SUP 4: 1.2585 Low Nov 19

USDCAD traded higher yesterday, confirming a resumption of its current uptrend and probed the key resistance at 1.2949, Aug 20 high. Monday’s price action also negates the recent shooting star reversal pattern posted last week and this reinforces the current bull cycle. A clear breach of 1.2949 would open the 1.3020 level and 1.3091 beyond. To the downside, 1.2764, the Dec 16 low marks first support.

FIXED INCOME

BUND TECHS: (H2) Eyeing The Bull Trigger

• 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: 174.16 @ 05:01 GMT Dec 21
• SUP 1: 173.90/40 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 sharp move lower on Dec 16 failed to clear support at 173.40, the Dec 8 low. The print below the 20-day EMA however is potentially an early bearish signal and a break of 173.40 would reinforce this threat. A move lower would open 172.70, initially, the Nov 26 low. On the upside, the bull trigger is unchanged at 175.02, Dec 8 high. A break would confirm a resumption of the uptrend.

BOBL TECHS: (H2) Support Remains Intact

• 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: 134.400/530 High Dec 13 / High Nov 30 and the bull trigger
• PRICE: 134.170 @ 05:13 GMT Dec 21
• 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 remain inside its recent range. The contract is also holding above the Dec 8 low of 133.710. A clear breach of this level would strengthen a bearish case and open 133.410, the Nov 11 low. Following recent gains, attention is on 134.530, the Nov 30 high and bull trigger. Clearance of this hurdle would resume bullish activity and pave the way for a climb towards 134.740. A Fibonacci projection.

SCHATZ TECHS: (H2) Trades Above Initial Resistance

• 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: 112.265 High Dec 20
• PRICE: 112.225 @ 05:21 GMT Dec 21
• SUP 1: 112.145 Low Dec 17
• SUP 2: 112.055 Low Dec 16
• 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 Dec 16 trading to 112.055 before rebounding. The contract is holding onto recent gains and is back inside its recent range. Attention is on resistance at 112.235, the Dec 2 / 3 high that was breached yesterday. A clear break would be a bullish development and open the hurdle at 112.305, Nov 26 high. 112.055 has been defined as a key support, a breach is required to see bearish pressure return.

GILT TECHS: (H2) Outlook Remains 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: 127.47/67 High Dec 20 / High Dec 8
• PRICE: 126.82 @ Close Dec 20
• SUP 1: 126.34 Low Dec 16
• 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 sharply lower Dec 16, down to 126.34 before finding support. The move lower resulted in a print below the 20-day EMA currently at 126.61. A clear break of this EMA would signal potential for a deeper sell-off below the 126.00 handle. On the upside the recent high of 127.67 on Dec 8 marks the bull trigger. The trend remains up and a break of this hurdle would confirm a resumption of the uptrend.

BTP TECHS: (H2) Focus Is On Resistance

• 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: 150.02 @ Close Dec 21
• 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 attention remains on resistance at 150.64, the Nov 22 high. A clear break of this hurdle (probed on Dec 6) would reinstate a bullish theme and open the 151.00 handle. On the downside, support lies at 148.51, the Dec 8 low. Clearance of this support would threaten the bullish theme and instead expose support at 148.25, the Dec 1 low and a firmer support at 147.36, Nov 24 low.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Finds Support At Yesterday’s Low

• RES 4: 4305.00 High Nov 23
• RES 3: 4270.00 High Dec 8 and a key resistance
• RES 2: 4234.00 High Dec 16
• RES 1: 4171.90 20-day EMA
• PRICE: 4138.00 @ 05:54 GMT Dec 21
• SUP 1: 4026.00 Low Dec 20
• SUP 2: 3980.00 Low Nov 30 and the bear trigger
• SUP 2: 3935.00 Low Oct 6
• SUP 4: 3857.50 1.00 proj of the Nov 18 - 30 - Dec 8 price swing

EUROSTOXX 50 futures last week failed to hold onto the high of 4234.00 on Dec 16. Futures traded sharply lower yesterday to a low of 4026.00 before rebounding. The recent bearish pressure has exposed the key support handle at 3980.00, the Nov 30 low and the bear trigger. A breach of this level would strengthen a bearish theme and signal scope for a deeper sell-off. A move above 4171.90, the 20-day EMA, is required to ease bearish pressure.

E-MINI S&P (H2): Still Vulnerable Despite Bounce

• 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: 4668.00/4743.25 High Dec 17 / High Dec 16 and the ATH
• PRICE: 4597.00 @ 07:05 GMT Dec 21
• SUP 1: 4520.25 Low Dec 20
• 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 started the week on a softer note but have bounced from yesterday’s low of 4520.25. The sell-off late last week, signals potential for a deeper pullback. Note that futures have traded below the 50-day EMA. This is an important technical development as it strengthens a bearish threat and exposes key support at 4485.75, Dec 3 low. A break of this support would reinforce a bearish threat. Major resistance has been defined at 4743.25.

COMMODITIES

BRENT TECHS: (G2) Bearish Threat Remains Present

• RES 4: $81.88 - High Nov 24
• RES 3: $80.42 - High Nov 26
• RES 2: $76.49/70 -50-day EMA / High Dec 9
• RES 1: $74.68 20-day EMA
• PRICE: $72.17 @ 06:59 GMT Dec 21
• SUP 1: $69.24 - Low Dec 3
• SUP 2: $65.72 - 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 started the week on a bearish note - futures cleared support at $72.50, Dec 15 low yesterday and confirmed an extension of the pullback from $76.70, the Dec 9 high. The move lower has exposed $69.24, the Dec 3 low where a break would pave the way for a retest of key support at $65.72, Dec 2 low. On the upside, initial resistance is seen at $74.68, the 20-day EMA. A breach would ease the current bearish threat.

WTI TECHS: (G2) Remains Vulnerable

• RES 4: $77.59 - High Nov 26
• RES 3: $74.54 - 61.8% retracement of the Oct - Dec sell-off
• RES 2: $73.13/14- High Dec 9 / 50-day EMA
• RES 1: $69.98 - High Dec 20
• PRICE: $69.46 @ 07:06 GMT Dec 21
• SUP 1: $66.12 - Low Dec 20
• SUP 2: $65.45 - Low Dec 3
• SUP 3: $62.26 - Low Dec 2 and the bear trigger
• SUP 4: $60.52 - Low Aug 20 and a key support

WTI futures weakened yesterday and despite bouncing off the day low, remains vulnerable. The move lower has resulted in a breach of support at $69.21 and this paves the way for a move towards $65.45, the Dec 3 low and more importantly towards the key support at $62.26, the Dec 2 low. Clearance of the latter level would reinforce the current bearish threat. On the upside, yesterday’s intraday high of $69.98 marks initial resistance.

GOLD TECHS: Corrective Pullback

• RES 4: $1877.2/97.1 High Nov 16 / Bull channel top
• RES 3: $1849.1 - High Nov 22
• RES 2: $1830.0 - 61.8% retracement of the Nov 16 - Dec 15 downleg
• RES 1: $1815.6 - High Nov 26 and the near-term bull trigger
• PRICE: $1790.7 @ 07:21 GMT Dec 21
• SUP 1: $1771.4 - Bull channel base drawn from the Aug 9 low
• SUP 2: $1753.7 - Low Dec 15 and a key support
• SUP 3: $1746.0 - Oct 6 low
• SUP 4: $1721.7 - Low Sep 29

Gold traded higher last week, extending the recovery from $1753.7, the Dec 15 low. The yellow metal last week attempted to clear the base of its bull channel drawn from the Aug 9 low and it appears the move lower has been a false break. Resistance at $1794.5, Dec 1 high has been cleared and attention is on $1815.6, the Nov 26 high. The most recent pullback is considered corrective, initial support is seen at $1771.4, the channel base.

SILVER TECHS: Hammer Reversal Highlights Reversal

• RES 4: $24.323 - High Nov 23
• RES 3: $23.772 - High Nov 24
• RES 2: $23.030/206 - High Dec 1 / 50-day EMA
• RES 1: $22.680 - High Dec 17
• PRICE: $22.416 @ 07:24 GMT Dec 21
• 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 rebounded from last week’s low of $21.427 on Dec 15. In pattern terms, price action that day is a bullish hammer formation and Thursday’s gains have reinforced this reversal signal. Attention is on $22.609, Dec 6 high that was probed Friday. A clear break would strengthen the developing bullish condition and signal scope for an extension higher. Key support lies at $21.427 and $21.423. A break of this zone would resume bearish pressure.