MNI DAILY TECHNICAL ANALYSIS - Strong EUR Recovery Signals End of Corrective Pullback

Price Signal Summary – Strong EUR Recovery Signals End of Corrective Pullback

• S&P E-Minis trend signals remain bearish and the contract continues to trade in a range. Key resistance at 3917.50, the 50-day EMA, has been pierced. A clear break of this hurdle is required to suggest potential for a stronger recovery and this would also highlight a possible reversal. EUROSTOXX 50 futures traded higher Friday, extending the recent climb. The contract has pierced resistance at 4043.00, the Dec 13 high and a bull trigger. A clear breach of this hurdle would represent a key short-term bullish development and pave the way for gains towards the 4100.00 handle.
• A strong recovery Friday in EURUSD, signals the end of the recent corrective pullback. The pair has found support ahead of the 50-day EMA, at 1.0436 and Friday’s price pattern is an engulfing candle, signalling the return of bullish market sentiment. USDJPY failed to hold on to Friday’s high of 134.77, resulting in a close at the session low. This reinforces a bearish theme and suggests that recent gains have been part of a short-term corrective cycle. AUDUSD is trading higher today, extending Friday’s rally. The pair has cleared key resistance at 0.6893, Dec 13 high and this confirms a resumption of the uptrend that started on Oct 13.
• Trend conditions in Gold remain bullish and the yellow metal has started the week on a firm note as it extends the current uptrend. The move higher maintains the positive price sequence of higher highs and higher lows. WTI futures are trading closer to their recent lows. A bearish theme remains intact following the sell-off on Jan 3 and 4. Key support and the bear trigger lies at $70.31, the Dec 9 low. A break of this level would confirm a resumption of the broader downtrend.
• Bund futures traded higher last week and the contract remains closer to its recent highs. Price has cleared the 20-day EMA and short-term signals suggest potential for a continuation higher near-term. Gilt futures traded higher Friday, ending the week on a firm note as price extends the recovery from 99.18, the Dec 28 low. The contract has breached the 20-day EMA and sights are set on 103.12, a Fibonacci retracement.

FOREIGN EXCHANGE

EURUSD TECHS: Engulfing Candle Highlights Bullish Reversal

• RES 4: 1.0851 High Apr 25
• RES 3: 1.0836 2.0% 10-dma envelope
• RES 2: 1.0787 High May 30 and a key resistance
• RES 1: 1.0735 High Dec 15 / bull trigger
• PRICE: 1.0679 @ 05:28 GMT Jan 9
• SUP 1: 1.0585 20-day EMA
• SUP 2: 1.0484/83 Low Jan 6 / 3.0% Lower Bollinger Band
• SUP 3: 1.0436 50-day EMA
• SUP 4: 1.0394 Low Dec 1

A strong recovery Friday in EURUSD, signals the end of the recent corrective pullback. The pair has found support ahead of the 50-day EMA, at 1.0436 and Friday’s price pattern is an engulfing candle, signalling the return of bullish market sentiment. A continuation higher would expose the bull trigger at 1.0735, the Dec 15 high. A break of this level would resume the uptrend. The first key support to watch lies at 1.0484, Friday’s low.

GBPUSD TECHS: Starting The Week On A Firmer Note

• RES 4: 1.2506 1.382 proj of the Sep 26 - Oct 5 - Oct 12 price swing
• RES 3: 1.2446 High Dec 14 and the bull trigger
• RES 2: 1.2242/2303 High Dec 19 / 76.4% of Dec 14 - Jan 6 bear leg
• RES 1: 1.2192 High Dec 21
• PRICE: 1.2149 @ 05:50 GMT Jan 9
• SUP 1: 1.2059 20-day EMA
• SUP 2: 1.1957/11 50-day EMA / 1.0% 10-dma envelope
• SUP 3: 1.1842 Low Jan 6 and the bear trigger
• SUP 4: 1.1779 Low Nov 21

GBPUSD is trading higher today, adding to Friday’s strong bounce. The recovery from Friday’s low of 1.1842 highlights a potential reversal and if correct, signals the end of the recent bear cycle that started on Dec 14. Moving average studies remain in a bull-mode position and this suggests that a medium-term uptrend remains intact. Sights are on 1.2242 next, the Dec 19 high. Key support has been defined at 1.1842.

EURGBP TECHS: Broader Trend Direction Remains Up

• RES 4: 0.8992 61.8% Retracement of the Sep 26 - Dec 1 bear leg
• RES 3: 0.8980 High Sep 29
• RES 2: 0.8907 50.0% retracement of the Sep 26 - Dec 1 bear leg
• RES 1: 0.8877 High Dec 30
• PRICE: 0.8790 @ 05:59 GMT Jan 9
• SUP 1: 0.8783/77 Low Jan 3 / 20-day EMA
• SUP 2: 0.8727 50-day EMA
• SUP 3: 0.8646 High Dec 8
• SUP 4: 0.8593 Low Dec 15

EURGBP remains below the Dec 30 high of 0.8877 but is holding on to the bulk of its gains since early December. The outlook is bullish and last month's break of 0.8829, Nov 9 high, reinforced this theme. This opens 0.8907, a Fibonacci retracement point. Moving average studies highlight a bullish backdrop, reinforcing the current trend direction. Initial firm support is seen at 0.8727, the 50-day EMA. A clear break would be bearish.

USDJPY TECHS: Trend Direction Remains Down

• RES 4: 137.48 High Dec 20
• RES 3: 136.47 200-dma
• RES 2: 134.77/81 High Jan 6 / 23.6% Oct - Jan Downleg
• RES 1: 133.73 20-day EMA
• PRICE: 131.79 @ 06:15 GMT Jan 9
• SUP 1: 131.31 Intraday low
• SUP 2: 129.52 Low Jan 3 and the bear trigger
• SUP 3: 128.44 1.236 proj of the Oct 31 - Nov 15 - 21 price swing
• SUP 4: 127.53 Low May 31

USDJPY failed to hold on to Friday’s high of 134.77, resulting in a close at the session low. This reinforces a bearish theme and suggests that recent gains have been part of a short-term corrective cycle. Moving average studies are in a bear-mode position, highlighting a broader bearish backdrop. The key support and trigger for a resumption of the downtrend is 129.52, Jan 3 low. Initial key short-term resistance has been defined at 134.77.

EURJPY TECHS: Remains Below Key Resistance

• RES 4: 144.00 Round number resistance
• RES 3: 142.94 High Dec 28 and key resistance
• RES 2: 142.63 50-day EMA
• RES 1: 141.45 High Jan 6
• PRICE: 140.76 @ 06:38 GMT Jan 9
• SUP 1: 139.35/137.97 Low May 5 / 1.0% 10-dma envelope
• SUP 2: 137.39 Low Jan 3 and the bear trigger
• SUP 3: 137.03 Low Aug 29
• SUP 4: 136.09 Low Aug 26

EURJPY remains above the early January low of 137.39 and the cross is holding on to its recent gains. Near-term strength is deemed corrective while key resistance at 142.94 remains intact - the Dec 28 high. A move lower would refocus attention on 137.39, Jan 3 low, where a break would resume the downtrend. This would open 137.03, the Aug 29 low. For bulls, clearance of 142.94 would signal a reversal.

AUDUSD TECHS: Clears Key Resistance

• RES 4: 0.7137 High Aug 11
• RES 3: 0.7059 2.236 proj of the Oct 13 - 27 - Nov 3 price swing
• RES 2: 0.7009 High Aug 26
• RES 1: 0.6976 2.00 proj of the Oct 13 - 27 - Nov 3 price swing
• PRICE: 0.6937 @ 06:51 GMT Jan 9
• SUP 1: 0.6871 Intraday low
• SUP 2: 0.6760 20-day EMA
• SUP 3: 0.6688 Low Jan 3 and key support
• SUP 4: 0.6650 Low Dec 22

AUDUSD is trading higher today, extending Friday’s rally. The pair has cleared key resistance at 0.6893, Dec 13 high and this confirms a resumption of the uptrend that started on Oct 13. The break higher maintains the bullish price sequence of higher highs and higher lows and moving average studies remain in a bull mode position. Gains open 0.6976 next, a Fibonacci projection. Key short-term support has been defined at 0.6688, the Jan 3 low.

USDCAD TECHS: Bear Leg Extends

• RES 4: 1.3751 High Nov 4
• RES 3: 1.3705 Dec 16 and the bull trigger
• RES 2: 1.3665 High Jan 6
• RES 1: 1.3535 50-day EMA
• PRICE: 1.3391 @ 08:19 GMT Jan 9
• SUP 1: 1.3385 Low Dec 5 and a key near-term support
• SUP 2: 1.3317 Low Nov 24 / 25
• SUP 3: 1.3226 Low Nov 15 and bear trigger
• SUP 4: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally

USDCAD finished the week on a distinctly bearish note and the pair is trading lower today. The move lower has exposed key support at the 1.3385 level - the Dec 5 low. A clear break of this level would strengthen bearish conditions and open 1.3317, the Nov 24 / 25 low. The bear trigger lies at 1.3226, the Nov 15 low. On the upside, key resistance is far-off at 1.3705, the Dec 16 high. Initial firm resistance is seen at 1.3535, the 50-day EMA.

FIXED INCOME

BUND TECHS: (H3) Remains Above The 20-Day EMA

• RES 4: 140.00 Round number resistance
• RES 3: 138.97 61.8% retracement of the Dec 7 - Jan 3 bear leg
• RES 2: 138.62 High Dec 16
• RES 1: 137.76 50.0% retracement of the Dec 7 - Jan 3 bear leg
• PRICE: 137.30 @ 05:01 GMT Jan 9
• SUP 1: 135.74 Low Jan 6
• SUP 2: 135.08 Low Jan 4 and a key short-term support
• SUP 3: 133.79 Low Jan 3
• SUP 4: 132.60 Low Jan 2 and the bear trigger

Bund futures traded higher last week and the contract remains closer to its recent highs. Price has cleared the 20-day EMA and short-term signals suggest potential for a continuation higher near-term. Sights are on 137.76 next and if this level is cleared, it would open 138.97 further out - Fibonacci retracement levels. On the downside, initial firm support is at 135.08, the Jan 4 low.

BOBL TECHS: (H3) Bull Cycle Extends

• RES 4: 118.427 61.8% retracement of the Dec 7 - Jan 2 downleg
• RES 3: 118.000 Round number resistance
• RES 2: 117.895 50.0% retracement of the Dec 7 - Jan 2 downleg
• RES 1: 117.630 High Jan 6
• PRICE: 117.580 @ 05:18 GMT Jan 9
• SUP 1: 116.740 Low Jan 6
• SUP 2: 116.540 Low Jan 4 and a key short-term support
• SUP 3: 116.030 Low Jan 3
• SUP 4: 115.640 Low Jan 2 and the bear trigger

Bobl futures traded higher again Friday, ending the week on a firm note. The contract has cleared the 20-day EMA and this strengthens the current bull cycle, signalling potential for an extension higher near-term. Attention is on 117.895 next, a Fibonacci retracement. The current bull cycle is considered corrective. Initial firm support to watch lies at 116.540, the Jan 4 low. A break of this level would signal a reversal.

SCHATZ TECHS: (H3) Approaching The 20-Day EMA

• RES 4: 106.118 50.0% retracement of the Dec 2 - Jan 2 bear leg
• RES 3: 106.000 Round number resistance
• RES 2: 105.939 38.2% retracement of the Dec 2 - Jan 2 bear leg
• RES 1: 105.842 20-day EMA
• PRICE: 105.805 @ 05:36 GMT Jan 9
• SUP 1: 105.560 Low Jan 6
• SUP 2: 105.360 Low Jan 2 and the bear trigger
• SUP 3: 105.345 2.618 projection of the Dec 2 - 13 price swing
• SUP 4: 105.270 2.764 projection of the Dec 2 - 13 price swing

Schatz futures traded higher last week, bucking the recent downtrend. 105.842 remains a firm resistance, the 20-day EMA - a break would strengthen short-term bullish conditions. The latest recovery is considered corrective - for now. A reversal lower would refocus attention on 105.360, the Jan 2 trend low and bear trigger. A break of this support would confirm a resumption of the broader downtrend.

GILT TECHS: (H3) Holding On To Its Recent Gains

• RES 4: 104.35 High Dec 16
• RES 3: 103.67 High Dec 19
• RES 2: 103.12 50.0% retracement of the Nov 24 - Dec 28 low
• RES 1: 102.78 High Jan 6
• PRICE: 102.71 @ Close Jan 6
• SUP 1: 101.02 Low Dec 4
• SUP 2: 99.97 Low Jan 3
• SUP 3: 99.18 Low Dec 28 and the bear trigger
• SUP 4: 98.15 Low Oct 24 (cont)

Gilt futures traded higher Friday, ending the week on a firm note as price extends the recovery from 99.18, the Dec 28 low. The contract has breached the 20-day EMA and sights are set on 103.12, a Fibonacci retracement. Clearance of this hurdle would strengthen bullish conditions. On the downside, initial firm support lies at 101.02, the Jan 4 low. Key support and the bear trigger has been defined at 98.15, the Dec 28 low.

BTP TECHS: (H3) Bullish Tone Remains Intact

• RES 4: 116.46 76.4% retracement of the Dec 7 - Dec 30 bear leg
• RES 3: 114.91 61.8% retracement of the Dec 7 - Dec 30 bear leg
• RES 2: 114.00 Round number resistance
• RES 1: 113.65 High Jan 6
• PRICE: 113.49 @ Close Jan 6
• SUP 1: 111.59/110.77 Low Jan 6 / Low Jan 4
• SUP 2: 109.29 Low Jan 3
• SUP 3: 108.36 Low Dec 30 low and bear trigger
• SUP 4: 108.13 Low Sep 28 (cont) and a key support

The current bull cycle in BTP futures remains intact and the contract traded higher Friday to end the week on a bullish note. Price has cleared the 20-day EMA and sights are set on the 114.00 handle next. Clearance of this level would signal scope for a climb towards 114.91, a Fibonacci retracement. On the downside, initial firm support lies at 110.77, the Jan 4 low. Key support and the bear trigger has been defined at 108.36, the Dec 30 low.

EQUITIES

EUROSTOXX50 TECHS: (H3) Challenges Key Resistance

• RES 4: 4175.50 High Feb 16 (cont)
• RES 3: 4132.60 76.4/% of the Nov ‘21 - Oct ‘22 bear leg (cont)
• RES 2: 4100.00 Round number resistance
• RES 1: 4059.00 Intraday high
• PRICE: 4054.00 @ 06:04 GMT Jan 9
• SUP 1: 3894.60/3832.50 20- and 50-day EMA values
• SUP 2: 3753.00 Low Dec 20 and the bear trigger
• SUP 3: 3697.00 Low Nov 10
• SUP 4: 3580.00 Low Nov 3

EUROSTOXX 50 futures traded higher Friday, extending the recent climb. The contract has pierced resistance at 4043.00, the Dec 13 high and a bull trigger. A clear breach of this hurdle would represent a key short-term bullish development and pave the way for gains towards the 4100.00 handle. Moving average studies are in a bull-mode condition, reinforcing the current positive trend condition. Initial support lies at 3894.60, the 20-day EMA.

E-MINI S&P (H3): Pierces The 50-Day EMA

• RES 4: 4180.00 High Dec 13 and the bull trigger
• RES 3: 4043.00 High Dec 15
• RES 2: 4000.00 Round number resistance
• RES 1: 3931.00 Intraday high
• PRICE: 3927.00 @ 06:46 GMT Jan 9
• SUP 1: 3778.45 61.8% retracement of the Oct 13 - Dec 13 uptrend
• SUP 2: 3735.00 Low Nov 3
• SUP 3: 3670.00 76.4% retracement of the Oct 13 - Dec 13 uptrend
• SUP 4: 3735.00 Low Oct 21

S&P E-Minis trend signals remain bearish and the contract continues to trade in a range. Key resistance at 3917.50, the 50-day EMA, has been pierced. A clear break of this hurdle is required to suggest potential for a stronger recovery and this would also highlight a possible reversal. On the downside, a break lower would confirm a resumption of the downtrend and open 3778.45, a Fibonacci retracement.

COMMODITIES

BRENT TECHS: (H3) Bear Trigger Remains Exposed

• RES 4: $90.49 - High Nov 17
• RES 3: $89.18 - High Dec 1 and a key resistance
• RES 2: $87.00 - High Jan 3
• RES 1: $81.96/83.99 - 20- and 50-day EMA values
• PRICE: $79.67 @ 06:59 GMT Jan 9
• SUP 1: $77.61 - Low Jan 5
• SUP 2: $75.64 - Low Dec 9 and the bear trigger
• SUP 3: $73.73 - 1.00 proj of the Nov 7 - 28 - Dec 1 price swing
• SUP 4: $69.28 - Low Dec 20 2021 (cont)

Brent futures remain bearish following the sharp sell-off on Jan 3 and 4. A resumption of weakness would expose $75.64, the Dec 9 low and bear trigger, where a break would confirm a resumption of the downtrend that started on Nov 7. This would pave the way for weakness towards $75.00 and below. On the upside, key resistance has been defined at $87.00, the Jan 3 high.

WTI TECHS: (G3) Bearish Outlook

• RES 4: $84.10 - High Nov 17
• RES 3: $83.27 - High Dec 1 and a key resistance
• RES 2: $81.50 - High Jan 3 and the bull trigger
• RES 1: $76.69/78.80 - 20- and 50-day EMA values
• PRICE: $74.75 @ 07:07 GMT Jan 9
• SUP 1: $72.46 - Low Jan 5
• SUP 2: $70.31 - Low Dec 9 and the bear trigger
• SUP 3: $68.19 - 1.236 proj of the Aug 30 - Sep 28 - Nov 7 price swing
• SUP 4: $65.47 - 1.382 proj of the Aug 30 - Sep 28 - Nov 7 price swing

WTI futures are trading closer to their recent lows. A bearish theme remains intact following the sell-off on Jan 3 and 4. Key support and the bear trigger lies at $70.31, the Dec 9 low. A break of this level would confirm a resumption of the broader downtrend and maintain a bearish price sequence of lower lows and lower highs. This would open $68.19, a Fibonacci projection. On the upside, key resistance is at $81.50, the Jan 3 high.

GOLD TECHS: Bull Cycle Extends

• RES 4: $1934.4 - High Apr 25, 2022
• RES 3: $1919.9 - High Apr 29, 2022
• RES 2: $1909.8 - High May 5, 2022
• RES 1: $1896.5 - 61.8% retracement of the Mar - Sep bear leg
• PRICE: $1879.4 @ 07:28 GMT Jan 9
• SUP 1: $1825.2 - Low Jan 5 and key near-term support
• SUP 2: $1797.1 - Low Dec 28
• SUP 3: $1774.0 - Low Dec 15
• SUP 4: $1765.9 - Low Dec 5

Trend conditions in Gold remain bullish and the yellow metal has started the week on a firm note as it extends the current uptrend. The move higher maintains the positive price sequence of higher highs and higher lows and note that moving average studies remain in a bull mode position - reflecting the current trend condition. The focus is on $1896.5, a Fibonacci retracement. On the downside, support to watch lies at $1825.2, the Jn 5 low.

SILVER TECHS: Bullish Trend Conditions

• RES 4: $26.002 - High Apr 19
• RES 3: $25.293 - High Apr 20
• RES 2: $24.729 - 76.4% retracement of the Mar - Sep bear leg
• RES 1: $24.548 - High Jan 4
• PRICE: $23.923 @ 08:08 GMT Jan 9
• SUP 1: $22.557 - Low Dec 16 and key short-term support
• SUP 2: $22.382 - 50-day EMA
• SUP 3: $20.872 - Low Nov 28
• SUP 4: $20.585 - Low Nov 21

The trend condition in Silver remains bullish despite the recent pullback from trend highs. Moving average studies remain in a bull mode condition and fresh trend highs in December reinforce the uptrend. Furthermore, the move higher has maintained the positive price sequence of higher highs and higher lows. The focus is on $24.729, a Fibonacci retracement. Key short-term support has been defined at $22.557, the Dec 16 low.