MNI DAILY TECHNICAL ANALYSIS - Two-Way Risk in S&P E-Minis

Price Signal Summary – Two-Way Risk in S&P E-Minis

• In the equity space, S&P E-minis traded sharply lower yesterday before rebounding and retracing almost all of yesterday’s sell-off. The break below the 50-day EMA is a bearish development however, the fact that support has been found below this average is also a bullish development. EUROSTOXX 50 futures traded lower again yesterday. The recent pullback at this stage, is considered corrective with bullish conditions still intact following a strong recovery between Dec 20 - Jan 5.
• In FX, EURUSD continues to trade in a sideways direction and the pair remains inside its range and below key resistance at 1.1383/86, the Nov 30 and Dec 31 highs. The broader trend is bearish and the moving average set-up reinforces this theme. GBPUSD remains in an uptrend and further gains are likely near term. A bullish theme follows recent gains and a move above the 100-dma. A clear break of this average would strengthen the bullish outlook and maintain the current positive momentum structure. USDJPY is in a short-term corrective cycle and remains below last week’s high of 116.35. Trend conditions are unchanged and the outlook is bullish. This follows the recent break of 115.52, Nov 24 high, that confirmed a resumption of the trend and opens 117.08 next, a Fibonacci projection.
• On the commodity front, Gold has managed to remain inside its bull channel drawn from the Aug 9 low - Friday's low of $1782.8 and the recovery from this level means the channel base has provided support. WTI futures remain in an uptrend. The recovery from the Jan 3 low has resulted in a break of resistance at $77.44, the Dec 29 high and a Fibonacci retracement - 76.4% of the Oct - Dec downleg.
• In the FI space, the Bund futures trend direction is unchanged and a downtrend remains intact. Price has recently cleared the previous 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. Gilt futures remain in a downtrend and the contract weakened again yesterday. Last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Still Range Bound

• RES 4: 1.1608 High Nov 9
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1442 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1383/86 High Nov 30 / High Dec 31
• PRICE: 1.1342 @ 06:07 GMT Jan 11
• SUP 1: 1.1272/22 Low Jan 04 / Low Dec 15
• SUP 2: 1.1186/85 Low Nov 24 / Low Jul 1, 2020 and the bear trigger
• 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 trade in a sideways direction and the pair remains inside its range and below key resistance at 1.1383/86, the Nov 30 and Dec 31 highs. The broader trend is bearish and the moving average set-up reinforces this theme. An extension lower would open 1.1272/22, the Jan 04 and Dec 15 lows ahead of the bear trigger at 1.1186/85. For bulls, clearance of 1.13783/86 is required to suggest scope for a stronger recovery.

GBPUSD TECHS: Trend Outlook Still Bullish

• RES 4: 1.3835 High Oct 20 and a key resistance
• RES 3: 1.3792 2.0% 10-dma envelope
• RES 2: 1.3676 61.8% retracement of the Oct - Dec sell-off
• RES 1: 1.3607 High Nov 9
• PRICE: 1.3596 @ 06:15 GMT Jan 11
• SUP 1: 1.3490 Low Jan 6
• SUP 2: 1.3457 20-day EMA
• SUP 3: 1.3343 Low Dec 23
• SUP 4: 1.3240 Low Dec 22

GBPUSD remains in an uptrend and further gains are likely near term. A bullish theme follows recent gains and a move above the 100-dma. A clear break of this average would strengthen the bullish outlook and maintain the current positive momentum structure. Scope is seen for a climb to 1.3676 next, a Fibonacci retracement. Support to watch is at 1.3457, the 20-day EMA. A move below this average is required to threaten the trend.

EURGBP TECHS: Bear Flag

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8455 50-day EMA
• RES 2: 0.8412/19 20-day EMA / High Jan 3
• RES 1: 0.8381 Nov 22 low
• PRICE: 0.8342 @ 06:20 GMT Jan 11
• SUP 1: 0.8332 Low Jan 10
• SUP 3: 0.8291 1.0% 10-dma envelope
• SUP 4: 0.8282/77 Low Feb’20 / Dec’19 and key bear trigger
• SUP 4: 0.8242 50% Fib Retracement 2015-2020 Upleg

EURGBP remains vulnerable and the recent consolidation is likely a pause in the downtrend - a bear flag formation. Further weakness is likely and attention is on the major support and bear triggers at 0.8282/77, the Feb’20 and Dec’19 lows. Note that the cross is also approaching the base of a broad multi-year range at 0.8300. This level represents a key pivot chart point. Initial firm resistance is at 0.8419.

USDJPY TECHS: Corrective Pullback Extends

• RES 4: 118.66 High Dec 15, 2016
• RES 3: 118.07 2.236 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 2: 117.08 2.00 proj of Apr 23 - Jul 2 - Aug 4 price swing
• RES 1: 116.35 High Jan 4 and the bull trigger
• PRICE: 115.21 @ 06:26 GMT Jan 11
• SUP 1: 114.92 20-day EMA
• SUP 2: 114.16 50-day EMA
• SUP 3: 113.56 Low Dec 21
• SUP 4: 113.14 Low Dec 17

USDJPY is in a short-term corrective cycle and remains below last week’s high of 116.35. Trend conditions are unchanged and the outlook is bullish. This follows the recent break of 115.52, Nov 24 high, that confirmed a resumption of the trend and opens 117.08 next, a Fibonacci projection. Moving average conditions remain in a bull mode reinforcing the current positive sentiment. Initial firm support is seen at 114.92, the 20-day EMA.

EURJPY TECHS: Support Remains Intact

• RES 4: 133.04 3% Upper Bollinger Band
• RES 3: 132.56 High Nov 4
• RES 2: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 1: 131.60 High Jan 5 and the bull trigger
• PRICE: 130.69 @ 06:32 GMT Jan 11
• SUP 1: 130.16 Low Jan 10
• SUP 2: 130.09/129.81 20- and 50-day EMA levels
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

EURJPY pullbacks are still considered corrective and a bullish theme continues to dominate. The cross has recently cleared 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a recent vol-based resistance, signalling potential for an extension higher. Attention is on 132.04, a Fibonacci retracement. A firm support zone is seen at 130.09/129.81, the 20- and 50-day EMA levels.

AUDUSD TECHS: Remains Vulnerable

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 2: 0.7339 Former channel base drawn from the Aug 20 low
• RES 1: 0.7223/7278 High Jan 6 / High Dec 31
• PRICE: 0.7172 @ 06:48 GMT Jan 11
• SUP 1: 0.7121 Low Dec 22
• SUP 2: 0.7082 Low Dec 20 and a key support
• SUP 3: 0.7060 76.4% retracement of the Dec 3 - 31 upleg
• SUP 4: 0.6993 Low Dec 3 and key support

A bearish threat remains present in AUDUSD following last week’s move lower and despite the recovery from Friday’s low. An inability to hold onto levels above the 50-day EMA highlights the bearish threat and the potential for a deeper pullback with support at 0.7082 exposed, Dec 20 low. Clearance of this level would strengthen a bearish case. Key short-term resistance is unchanged at 0.7278, the Dec 31 high.

USDCAD TECHS: Probes Support

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2814 High Jan 6 and a key near-term resistance
• RES 1: 1.2742/2814 20-day EMA / High Jan 6
• PRICE: 1.2665 @ 06:55 GMT Jan 11
• SUP 1: 1.2610 Low Jan 10
• SUP 2: 1.2608 Low Dec 8 and key support
• SUP 3: 1.2546 Low 61.8% retracement of the Oct - Dec rally
• SUP 4: 1.2493 Low Nov 16

USDCAD traded sharply lower Friday and extended these losses to touch 1.2610 on Monday. This puts prices below key short-term support at 1.2621, the Dec 31 low and shifts the short-term outlook from bullish - a clear break of the 1.2621 level and 1.2608, Dec 8 low would strengthen a bearish case and open 1.2585 - the Nov 19, 2021 low. Key short-term resistance is at 1.2814, Jan 6 high. A break would be bullish.

FIXED INCOME

BUND TECHS: (H2) Eyeing Key Support

• RES 4: 173.19 High Dec 23
• RES 3: 172.05 20-day EMA
• RES 2: 171.77 Low Nov 24 and recent breakout level
• RES 1: 170.61/171.17 High Jan 6 / High Jan 4
• PRICE: 169.97 @ 05:22 GMT Jan 11
• SUP 1: 169.70 3.236 projection of the Dec 8 - 20 price swing
• SUP 2: 169.48 Low Nov 1
• SUP 3: 169.34 Low Oct 29 and major support
• SUP 4: 169.08 3.618 projection of the Dec 8 - 20 price swing

The Bund futures trend direction is unchanged and a downtrend remains intact. Price has recently cleared the previous 170.19 objective, Nov 2 low and attention is on the major support at 169.34, Oct 29 low. A break of this support level would strengthen bearish conditions. On the upside, initial firm resistance is seen at 171.77 where a break is required to ease bearish pressure. First resistance is at 170.61.

BOBL TECHS: (H2) Trend Needle Still Points South

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.530 High Dec 29
• RES 2: 133.488 20-day EMA
• RES 1: 133.110/260 High Jan 6 / High Jan 3 and 4
• PRICE: 132.780 @ 05:25 GMT Jan 11
• SUP 1: 132.730 Low Jan 10
• SUP 2: 132.566 2.236 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.447 2.382 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.350 2.50 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures remain bearish, with a fresh low print Friday and again yesterday, reinforcing current conditions. The break on Dec 23 of 133.710, Dec 8 low confirmed a resumption of bearish activity and bears haven’t looked back. Scope is seen for an extension lower with the focus on 132.566 next, a Fibonacci projection level. On the upside, firm resistance is seen at 133.530, the Dec 29 high. Initial resistance is at 133.110.

SCHATZ TECHS: (H2) Heading South

• RES 4: 112.185 High Dec 22
• RES 3: 112.155 High Dec 23
• RES 2: 112.120 High Dec 27
• RES 1: 112.078/080 20-day EMA / High Jan 6
• PRICE: 111.970 @ 05:21 GMT Jan 11
• SUP 1: 111.965 Low Jan 10
• SUP 2: 112.956 1.764 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 4: 111.869 3.0% Lower Bollinger Band

Schatz futures traded lower again yesterday. The S/T outlook remains bearish following last week’s extension lower and yesterday’s move confirmed a break of support at 111.985, Jan 3 low. This marks a resumption of the downtrend and paves the way for weakness towards 111.956 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.078. A break would ease bearish pressure.

GILT TECHS: (H2) Bearish Extension

• RES 4: 125.18 High Dec 31
• RES 3: 124.74 20-day EMA
• RES 2: 124.17 Low Nov 24 and recent breakout level
• RES 1: 123.73 Low Jan 5 and gap high
• PRICE: 122.91 @ Close Jan 10
• SUP 1: 122.78 Low Jan 10
• SUP 2: 122.66 3.618 proj of the Dec 8 - 16 - 20 price swing
• SUP 3: 122.46 3.764 proj of the Dec 8 - 16 - 20 price swing
• SUP 4: 121.45 3.0% Lower Bollinger Band

Gilt futures remain in a downtrend and the contract weakened again yesterday. Last week’s sell-off resulted in a break of support at 124.35, Dec 29 low and 124.17, Nov 24 low. The move below the latter support has strengthened bearish conditions signalling scope for further downside. MA conditions are bearish, reinforcing current conditions. The focus is on the 122.66 next, a Fibonacci projection. Initial resistance is seen at 123.73.

BTP TECHS: (H2) Probes Key Support

• RES 4: 149.22 High Dec 22
• RES 3: 148.02 High Dec 29
• RES 2: 147.49 20-day EMA
• RES 1: 146.11/147.00 High Jan 10 / High Jan 4
• PRICE: 145.80 @ Close Jan 10
• SUP 1: 145.12 Low Jan 10
• SUP 2: 144.90 2.618 proj of the Dec 6 - 18 - 14 price swing
• SUP 3: 144.59 2.764 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 144.00 round number support

BTP futures traded lower last week and registered a fresh low print yesterday before recovering. The downtrend remains intact. Futures recently cleared support at 148.25, Dec 1 low as well as the 147.36 key support, Nov 24 low. Yesterday, price also traded below key support at 145.29, the Nov 1 low. A clear break of this level would strengthen bearish conditions. Initial firm resistance is seen at 148.02, Dec 29 high.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Watching The 50-Day EMA

• RES 4: 4426.80 1.382 proj of the Nov 30 - Dec 8 - 20 price swing
• RES 3: 4400.00 Round number resistance
• RES 2: 4392.50 High Nov 18 and key resistance
• RES 1: 4381.50 High Jan 5 and the bull trigger
• PRICE: 4266.00 @ 05:59 GMT Jan 11
• SUP 1: 4223.10/4216.50 50-day EMA / Low Jan 10
• SUP 2: 4161.80 61.8% retracement of the Dec 20 - Jan 5 rally
• SUP 2: 4109.90 76.4% retracement of the Dec 20 - Jan 5 rally
• SUP 4: 4026.00 Low Dec 20

EUROSTOXX 50 futures traded lower again yesterday. The recent pullback at this stage, is considered corrective with bullish conditions still intact following a strong recovery between Dec 20 - Jan 5. Yesterday’s sell-off saw price trade through the 20-day EMA however support at the 50-day EMA remains intact. The EMA intersects at 4223.10. For bulls, a return higher would refocus attention on key resistance at 4392.50.

E-MINI S&P (H2): Finds Support Below The 50-Day EMA

• RES 4: 4900.00 Round number resistance
• RES 3: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 2: 4808.25 High Jan 4 and the bull trigger
• RES 1: 4715.75 High Jan 6
• PRICE: 4658.00 @ 07:03 GMT Jan 11
• SUP 1: 4572.75 Low Jan 10
• SUP 2: 4565.75 Low Dec 21
• SUP 3: 4520.25 Low Dec 20 and a key support
• SUP 4: 4485.75 Low Dec 3

S&P E-minis traded sharply lower yesterday before rebounding and retracing almost all of yesterday’s sell-off. The break below the 50-day EMA is a bearish development however, the fact that support has been found below this average is also a bullish development. Bulls will be watching support on 4572, 75, yesterday’s low and initial resistance at 4715.75, Jan 6 high. Weakness below yesterday’s low would again expose a bearish threat.

COMMODITIES

BRENT TECHS: (H2) Trend Needle Still Points North

• RES 4: $84.50 - 1.382 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $84.00 - Round number resistance
• RES 2: $83.69 - High Oct 10 and a major resistance
• RES 1: $83.11 - High Nov 10
• PRICE: $81.25 @ 06:57 GMT Jan 11
• SUP 1: $78.36 - 20-day EMA
• SUP 2: $77.04 - Low Jan 3 and key support
• SUP 3: $75.38 - Low Dec 27
• SUP 4: $74.75 - Low Dec 23

Brent futures remain in an uptrend and last week’s gains reinforced the current bullish theme. The break of resistance at $80.03, Dec 29 high, confirmed a resumption of the bull cycle and this has opened $83.11 next, the Nov 10 high ahead of the key resistance at $83.69, Oct 10 high. On the downside, the Jan 3 low of $77.04 represents the key short-term support. A break of this level would threaten the trend.

WTI TECHS: (G2) Uptrend Intact

• RES 4: $85.29 - 1.764 proj of the Dec 2 - 9 - 20 price swing
• RES 3: $83.71 - 1.618 proj of the Dec 2 - 9 - 20 price swing
• RES 2: $82.13 - High Oct 25 and a major resistance
• RES 1: $81.73 - High Nov 10
• PRICE: $78.72 @ 06:59 GMT Jan 11
• SUP 1: $75.54 - 20-day EMA
• SUP 2: $74.55/27 - 50-day EMA / Low Jan 3 and key S/T support
• SUP 3: $72.57 - Low Dec 27
• SUP 4: $70.80 - Low Dec 22

WTI futures remain in an uptrend. The recovery from the Jan 3 low has resulted in a break of resistance at $77.44, the Dec 29 high and a Fibonacci retracement - 76.4% of the Oct - Dec downleg. The break confirmed a resumption of the uptrend and has opened $81.73 next, the Nov 10 high ahead of the key resistance at $82.13, Oct 25 high. On the downside, the Jan 3 low of $74.27 represents a key short-term support.

GOLD TECHS: Remains Inside Its Bull Channel

• RES 4: $1877.2 - High Nov 16 and key resistance
• RES 3: $1871.0 - High Nov 18
• RES 2: $1849.1 - High Nov 22
• RES 1: $1811.6/31.9 - High Jan 6 / High Jan 3 and key resistance
• PRICE: $1809.7 @ 07:17 GMT Jan 11
• SUP 1: $1784.0/82.8 - Channel base from Aug 9 low / Low Jan 7
• SUP 2: $1753.7 - Low Dec 15 and a key support
• SUP 3: $1746.0 - Low Oct 6
• SUP 4: $1721.7 - Low Sep 29

Gold has managed to remain inside its bull channel drawn from the Aug 9 low - Friday's low of $1782.8 and the recovery from this level means the channel base has provided support. The subsequent recovery and today’s gains signal scope for a climb towards key near-term resistance at $1831.9, the Jan 3 high. A reversal lower and a move below Friday’s low would instead highlight a bearish threat and a channel breakout.

SILVER TECHS: Bearish Threat Remains Present

• RES 4: $23.886 - 61.8% retracement of the Nov 16 - Dec 15 sell-off
• RES 3: $23.772 - High Nov 24
• RES 2: $23.436 - High Dec 28 and key resistance
• RES 1: $22.829 - High Jan 6
• PRICE: $22.587 @ 07:20 GMT Jan 11
• 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 traded lower last week and cleared $22.593, Dec 29 low. The move lower highlights the fact that the metal has failed to remain above the 50-day EMA and bearish price action suggests scope for a deeper short-term sell-off. The focus is on $21.918, Dec 16 low. A break would expose $21.427/423, the Dec 15 and Sep 29 lows. Key resistance is at $23.436, Dec 28 high where a break is required to alter the picture.