MNI DAILY TECHNICAL ANALYSIS - Sterling Bear Cycle Is Intact

Price Signal Summary - GBPUSD Bear Cycle Extends      

• In the equity space, a bear threat in the S&P E-Minis contract remains present and the contract is trading lower today. 5866.00, the Dec 20 low and a key short-term support, has been cleared. This strengthens a bearish theme and sights are on 5784.00, the Nov 4 low and an important short-term support. Initial pivot resistance is seen at 5996.50, the 50-day EMA. A bull cycle in the EUROSTOXX 50 futures contract remains intact and for now, the latest pullback appears corrective. Initial support to watch is 4935.71, the 50-day EMA. It has been pierced, a clear break of it would undermine a bullish theme and signal scope for a deeper retracement, towards 4829.00, the Dec 20 low and key short-term support. For bulls, resistance at 5040.00, Dec 9 high, has recently been pierced. A clear break of it would resume the bull cycle that started on Nov 21 and open 5068.13, the 0.764 projection of the Nov 21 - Dec 9 - 20 price swing.              
• In FX, the trend condition in EURUSD remains bearish. Friday’s move lower resulted in a print below 1.0226, the Jan 2 low. The pair has also traded lower today. The break of 1.0226 confirms a resumption of the downtrend and marks an extension of the price sequence of lower lows and lower highs. Sights are on 1.0138 next, a 1.764 projection of the Sep 25 - Oct 23 - Nov 5 price swing. Resistance to watch is 1.0458, Dec 30 high. Resistance at the 20-day EMA, is at 1.0374. The trend condition in GBPUSD remains bearish and the pair is trading lower again, today. Last week’s move down confirmed a resumption of the downtrend. Note too that moving average studies are in a bear-mode position highlighting a dominant bear trend. Sights are on 1.2087 next, a 0.764 projection of the Sep 26 - Nov 22 - Dec 6 price swing. Initial firm resistance is at 1.2367, the Jan 9 high. USDJPY bulls remain in the driver’s seat and the pair is holding on to the bulk of its recent gains. Last 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 opens 159.45, the Jul 12 high. Initial firm support is 156.71, the 20-day EMA. 
• On the commodity front, recent gains in Gold appear corrective - for now. However, the yellow metal is holding on to the bulk of last week’s gains 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 $2642.1, the 50-day EMA. In the oil space, the trend structure in WTI futures remains bullish and the contract is again trading higher, today. The stronger reversal to the upside has resulted in a breach of key short-term resistance at $76.41, the Oct 8 high. Clearance of this hurdle strengthens a bull theme and opens $79.59, the Jul 5 ‘24 high. On the downside, a reversal lower would expose the 20-day EMA, at $72.05. This average is seen as a key short-term support.         
• In the FI space, the trend in Bund futures remains bearish and last week’s extension reinforces this theme. The contract has cleared key support at 132.00, the Nov 6 low. The breach strengthens a bearish theme and sights are on the 130.00 handle next. Key short-term resistance is at 133.26, the 20-day EMA. Gains would be considered corrective and allow an oversold condition to unwind. First resistance is at 131.71, the Jan 9 high. The trend condition in Gilt futures  is unchanged, it remains bearish and last week’s fresh cycle lows reinforce current conditions. The latest move down also highlights an acceleration of the trend. Sights are on 88.87 next, a 2.764 projection of the Dec 20 -27 - Jan 2 price swing. Initial resistance is at 90.31, last Thursday’s intraday high. Resistance at the 20-day EMA, is at 92.13. The EMA is seen as an important hurdle for bulls.

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