MNI DAILY TECHNICAL ANALYSIS - USDJPY Short Covering Looks Corrective, Downtrend Persists

Price Signal Summary – USDJPY Short Covering Looks Corrective, Downtrend Persists

• USDJPY has rallied today following the BoJ decision and price is approaching resistance at the 20-day EMA - at 131.71. The primary downtrend remains intact and gains are considered corrective - for now. However, a continuation higher near-term is possible as the pair unwinds a recent oversold trend condition. A strong rally in EURJPY has resulted in a retracement of the recent Jan 11 -13 bear leg. The cross has traded above the 20-day EMA and attention turns to the 50-day EMA, at 142.04. A clear break of this average is required to strengthen a bullish condition and this would highlight a potential reversal. AUDUSD maintains a bullish theme and has traded higher today. The pair has recently cleared 0.6893, the Dec 13 high and this confirmed a resumption of the uptrend that started Oct 13. The move higher maintains the bullish price sequence of higher highs and higher lows.
• S&P E-Minis are trading at their recent highs and conditions remain bullish. The contract has cleared resistance at the 50-day EMA and this has strengthened the short-term bullish condition. EUROSTOXX 50 futures bullish conditions remain intact and the contract is trading holding on to its recent gains. Futures have recently cleared resistance at 4043.00, the Dec 13 high and a bull trigger.
• Trend conditions in Gold remain bullish and the yellow metal traded to a fresh trend high earlier this week. This confirms an extension on the current uptrend and maintains the positive price sequence of higher highs and higher lows. WTI futures traded higher last week and the bull theme remains intact as the contract extends its climb. The move higher has exposed resistance at $81.50, the Jan 3 high and a bull trigger. Clearance of this hurdle is required to strengthen a bullish theme and open $83.27, the Dec1 high.
• Bund futures remain in an uptrend and the contract has traded higher today to confirm a resumption of the bull cycle. The move higher maintains a bullish price sequence of higher highs and higher lows. Gilt futures remain in an uptrend. The contract has recently cleared resistance at 102.78, the Jan 6 high. The break maintains the current bullish price sequence of higher highs and higher lows and attention is on 105.20.

FOREIGN EXCHANGE

EURUSD TECHS: Corrective Pullback

• RES 4: 1.1022 3.00 proj of the Sep 28 - Oct 4 - Oct 13 price swing
• RES 3: 1.0954 High Apr 11, 2022
• RES 2: 1.0913 2.764 proj of the Sep 28 - Oct 4 - Oct 13 price swing
• RES 1: 1.0874 High Jan 16
• PRICE: 1.0784 @ 06:15 GMT Jan 18
• SUP 1: 1.0690 20-day EMA
• SUP 2: 1.0634 Low Jan 9
• SUP 3: 1.0522/1.0484 50-day EMA / Low Jan 6
• SUP 4: 1.0401 3.0% Lower Bollinger Band

EURUSD has pulled back from its recent highs. The move lower is likely a correction - the outlook remains bullish and trend signals continue to point north. The recent break of 1.0787, the May 30 2022 high and a key resistance, reinforces a bullish theme and note that moving average studies continue to highlight a bullish backdrop. Sights are on 1.0913, a Fibonacci projection. Initial firm support lies at 1.0690, the 20-day EMA.

GBPUSD TECHS: Bull Cycle Still In Play

• 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: 1.2430 High Dec 15
• RES 1: 1.2336 High Jan 17
• PRICE: 1.2314@ 08:12 GMT Jan 18
• SUP 1: 1.2133/2083 20-day EMA / Low Jan 9
• SUP 2: 1.2024/2017 1.0% 10-dma envelope / 50-day EMA
• SUP 3: 1.1842 Low Jan 6 and the bear trigger
• SUP 4: 1.1779 Low Nov 21

GBPUSD is holding on to its recent gains and a bullish condition remains intact. The pair has recently cleared resistance at 1.2242, the Dec 19 high and today, has breached 1.2303, the 76.4% retracement of the Dec 14 - Jan 6 bear leg. The clear breach exposes 1.2446, the Dec 14 high and a key resistance. On the downside, initial firm support is seen at 1.2083, the Jan 9 low. Key support lies at 1.1842, the Jan 6 low.

EURGBP TECHS: Watching Support At The 50-Day EMA

• 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: 0.8897 High Jan 13 and the bull trigger
• PRICE: 0.8776 @ 06:59 GMT Jan 18
• SUP 1: 0.8769 Low Jan 9
• SUP 2: 0.8756 50-day EMA
• SUP 3: 0.8691 Low Dec 19
• SUP 4: 0.8646 High Dec 8

EURGBP traded lower Tuesday. The outlook remains bullish, however, price is approaching support at 0.8756, the 50-day EMA. A clear break of this EAM would threaten the recent bullish theme and instead signal scope for a deeper retracement. This would open 0.8691 initially, the Dec 19 low. On the upside, clearance of 0.8897, the Jan 13 high, would confirm a resumption of the recent bull cycle.

USDJPY TECHS: Strong Bounce Exposes The 20-Day EMA

• RES 4: 135.12 50-day EMA
• RES 3: 134.77/81 High Jan 6 / 23.6% Oct - Jan downleg
• RES 2: 132.87 High Jan 11
• RES 1: 131.71 20-day EMA
• PRICE: 131.45 @ 05:13 GMT Jan 18
• SUP 1: 128.10/127.23 Intraday low / Low Jan 16 and the bear trigger
• SUP 2: 126.81 1.382 proj of the Oct 31 - Nov 15 - 21 price swing
• SUP 3: 126.36 Low May 24 and a key support
• SUP 4: 125.49 1.50 proj of the Oct 31 - Nov 15 - 21 price swing

USDJPY has rallied today following the BoJ decision and price is approaching resistance at the 20-day EMA - at 131.71. The primary downtrend remains intact and gains are considered corrective - for now. However, a continuation higher near-term is possible as the pair unwinds a recent oversold trend condition. A break of 131.71 would open 132.87, the Jan 11 high. Key support has been defined at 127.23, the Jan 16 low.

EURJPY TECHS: Rally Exposes Key Short-Term Resistance

• RES 4: 143.16 61.8% retracement of the Dec 15 - Jan 3 bear leg
• RES 3: 142.86/94 High Jan 11 / High Dec 28 and key resistance
• RES 2: 142.04 50-day EMA
• RES 1: 141.69 Intraday high
• PRICE: 141.25 @ 05:38 GMT Jan 18
• SUP 1: 139.62/138.01 High Jan 17 / Low Jan 13
• SUP 2: 137.39 Low Jan 3 and the bear trigger
• SUP 3: 137.03 Low Aug 29
• SUP 4: 136.02 Low Aug 25

A strong rally in EURJPY has resulted in a retracement of the recent Jan 11 -13 bear leg. The cross has traded above the 20-day EMA and attention turns to the 50-day EMA, at 142.04. A clear break of this average is required to strengthen a bullish condition and this would highlight a potential reversal. Clearance of resistance at 142.86, the Jan 11 high, would also represent a positive development. The key support and bear trigger is 137.39, Jan 3 low.

AUDUSD TECHS: Northbound

• RES 4: 0.7200 Round number resistance
• RES 3: 0.7137 High Aug 11
• RES 2: 0.7059 2.236 proj of the Oct 13 - 27 - Nov 3 price swing
• RES 1: 0.7032 Intraday high
• PRICE: 0.7018 @ 07:59 GMT Jan 18
• SUP 1: 0.6930/6860 Low Jan 17 / 9
• SUP 2: 0.6854 20-day EMA
• SUP 3: 0.6762 50-day EMA
• SUP 4: 0.6688 Low Jan 3 and key support

AUDUSD maintains a bullish theme and has traded higher today. The pair has recently cleared 0.6893, the Dec 13 high and this confirmed a resumption of the uptrend that started Oct 13. The move higher maintains the bullish price sequence of higher highs and higher lows and note that moving average studies are in a bull mode position. The focus is on 0.7059 next, a Fibonacci projection. Key support lies at 0.6688, Jan 3 low.

USDCAD TECHS: Bearish Threat Remains Present

• 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: 1.3502 50-day EMA
• PRICE: 1.3358 @ 08:03 GMT Jan 18
• SUP 1: 1.3322 Low Jan 13
• 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 is unchanged. A bearish threat remains present and the pair is trading closer to its recent lows. Price has recently breached a key support at the 1.3385 level - the Dec 5 low. This break strengthens bearish conditions and opens 1.3317, the Nov 24 / 25 low. The bear trigger lies at 1.3226, the Nov 15 low. On the upside, key resistance is at 1.3705, the Dec 16 high. Initial firm resistance is seen at 1.3502, the 50-day EMA.

FIXED INCOME

BUND TECHS: (H3) Resumes Its Uptrend

• RES 4: 142.55 High Dec 8
• RES 3: 141.06 High Dec 14
• RES 2: 140.48 76.4% retracement of the Dec 7 - Jan 3 bear leg
• RES 1: 140.00 Round number resistance
• PRICE: 139.77 @ 05:33 GMT Jan 18
• SUP 1: 139.00 Intraday low
• SUP 2: 137.53 Low Jan 16 and a key short-term support
• SUP 3: 136.46 Low Jan 11
• SUP 4: 136.04 Low Jan 10

Bund futures remain in an uptrend and the contract has traded higher today to confirm a resumption of the bull cycle. The move higher maintains a bullish price sequence of higher highs and higher lows. Furthermore, price has recently traded through the 20-day EMA - a positive development. Sights are on 140.48, 76.4% of the Dec 7 - Jan 3 bear leg. On the downside, initial firm support is at 137.53, the Jan 16 low.

BOBL TECHS: (H3) Heading North

• RES 4: 119.490 High Dec 13
• RES 3: 119.310 High Dec 14
• RES 2: 119.086 76.4% retracement of the Dec 7 - Jan 2 downleg
• RES 1: 118.720 Intraday high
• PRICE: 118.600 @ 05:39 GMT Jan 18
• SUP 1: 118.00 Round number support
• SUP 2: 117.560 Low Jan 16 and a key support
• SUP 3: 117.170 Low Jan 11
• SUP 4: 116.950 Low Jan 10

Bobl futures trend conditions remain bullish and this week’s gains reinforce the current positive outlook. Price has recently cleared the 20-day EMA - a bullish development - signalling potential for a continuation higher near-term. Attention is on 119.086 next, 76.4% of the Dec 7 - Jan 2 downleg. Initial firm support to watch lies at 117.560, the Jan 16 low. A break of this level would signal a likely reversal.

SCHATZ TECHS: (H3) Bullish Extension

• RES 4: 106.517 76.4% retracement of the Dec 2 - Jan 2 bear leg
• RES 3: 106.370 Low Dec 12
• RES 2: 106.296 61.8% retracement of the Dec 2 - Jan 2 bear leg
• RES 1: 106.155 High Jan 13
• PRICE: 106.090 @ 05:48 GMT Jan 18
• SUP 1: 105.945 High Jan 13 and a recent break out level
• SUP 2: 105.735 Low Jan 16
• SUP 3: 105.375 Low Jan 11
• SUP 4: 105.625 Low Jan 10

Schatz futures maintain a positive short-term tone and the contract has traded higher this week, resuming the uptrend. Price has recently breached the 20-day EMA and this reinforced short-term bullish conditions. The focus is on 106.296, 61.8% of the Dec 2 - Jan 2 bear leg. On the downside, the firm support to watch lies at 105.735, the Jan 16 low. A break would signal a potential reversal.

GILT TECHS: (H3) Bullish Outlook

• RES 4: 106.18 High Dec 12
• RES 3: 106.00 Round number resistance
• RES 2: 105.20 76.4% retracement of the Nov 24 - Dec 28 bear leg
• RES 1: 104.94 High Jan 13
• PRICE: 104.45 @ Close Jan 17
• SUP 1: 103.21/102.78 Low Jan 17 / High Jan 6
• SUP 2: 102.19/101.40 Low Jan 11 / 10
• SUP 3: 99.97 Low Jan 3
• SUP 4: 99.18 Low Dec 28 and the bear trigger

Gilt futures remain in an uptrend. The contract has recently cleared resistance at 102.78, the Jan 6 high. The break maintains the current bullish price sequence of higher highs and higher lows and attention is on 105.20, the 76.4% retracement of the Nov 24 - Dec 28 bear leg. Clearance of this level would signal scope for a climb towards 106.00. Firm and key short-term support has been defined at 101.40, Oct 10 low.

BTP TECHS: (H3) Northbound

• RES 4: 120.00 Psychological round number
• RES 3: 118.96 High Dec 7 and a key resistance
• RES 2: 117.93 High Dec 13
• RES 1: 117.38 Intraday high
• PRICE: 116.53 @ 08:02 GMT Jan 18
• SUP 1: 114.46/113.63 Low Jan 16 / 20-day EMA
• SUP 2: 111.59 Low Jan 6
• SUP 3: 110.77 Low Jan 4
• SUP 4: 109.29 Low Jan 3

The current bull cycle in BTP futures remains intact and the contract traded higher Tuesday, breaching last week’s highs. Price has recently cleared the 20-day EMA and last week’s rally resulted in a break of the 114.00 and 116.00 handles. The acceleration higher signals scope for a climb towards 117.93, the Dec 13 high. On the downside, initial key support has been defined at 114.46, the Jan 16 low.

EQUITIES

EUROSTOXX50 TECHS: (H3) Holding On To Its Recent Gains

• RES 4: 4269.50 2.236 proj of the Sep 29 - Oct 4 rise from Dec 20 low
• RES 3: 4230.50 High Feb 10, 2022 (cont)
• RES 2: 4215.00 2.00 proj of the Sep 29 - Oct 4 rise from Dec 20 low
• RES 1: 4204.00 Intraday high
• PRICE: 4190.00 @ 06:17 GMT Jan 18
• SUP 1: 4043.00 High Dec 13
• SUP 2: 4015.70/3905.00 20- and 50-day EMA values
• SUP 3: 3753.00 Low Dec 20 and the bear trigger
• SUP 4: 3720.00 Low Nov 10

EUROSTOXX 50 futures bullish conditions remain intact and the contract is trading holding on to its recent gains. Futures have recently cleared resistance at 4043.00, the Dec 13 high and a bull trigger. The break marks a key short-term positive development and paves the way for gains towards 4215.00 next, a Fibonacci projection. Moving average studies are in a bull-mode condition, reinforcing the bull theme. Initial firm support is 4015.70.

E-MINI S&P (H3): Trend Needle Points North

• RES 4: 4194.25 High Sep 13
• RES 3: 4180.00 High Dec 13 and the bull trigger
• RES 2: 4090.75 High Dec 14
• RES 1: 4043.00 High Dec 15
• PRICE: 4018.25 @ 07:00 GMT Jan 18
• SUP 1: 3891.50 Low Jan 10
• SUP 2: 3788.50/78.45 Low Dec 22 / 61.8% of Oct 13-Dec 13 uptrend
• SUP 3: 3735.00 Low Nov 3
• SUP 4: 3670.00 76.4% retracement of the Oct 13 - Dec 13 uptrend

S&P E-Minis are trading at their recent highs and conditions remain bullish. The contract has cleared resistance at the 50-day EMA and this has strengthened the short-term bullish condition. Price has also traded above the 4000.00 handle to open 4043.00 next, the Dec 15 high. Key support and the bear trigger has been defined at 3788.50, the Dec 22 low. A reversal lower and a break of this support would resume bearish activity.

COMMODITIES

BRENT TECHS: (H3) Tests Key Resistance

• RES 4: $92.43 - High Nov 16
• RES 3: $90.49 - High Nov 17
• RES 2: $89.18 - High Dec 1
• RES 1: $87.00 - High Jan 3 and intraday high
• PRICE: $86.68 @ 06:57 GMT Jan 18
• SUP 1: $82.78/77.61 - 20-day EMA / 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 maintain a short-term bullish tone and the contract continues to appreciate. Price has tested resistance at $87.00, the Jan 3 high. Clearance of this hurdle would strengthen current bullish conditions and signal scope for a climb towards $89.18, the Dec 1 high. On the downside, initial firm support lies at $82.78, the 20-day EMA. A break would potentially open $77.61, the Jan 5 low and the first key support.

WTI TECHS: (G3) Corrective Bounce Extends

• RES 4: $86.26 - 76.4% retracement of the Nov 7 - Dec 9 bear leg
• RES 3: $84.10 - High Nov 17
• RES 2: $83.27 - High Dec 1 and a key resistance
• RES 1: $81.50 - High Jan 3 and the bull trigger
• PRICE: $81.13 @ 07:10 GMT Jan 18
• SUP 1: $77.26/72.46 - 20-day EMA / 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 traded higher last week and the bull theme remains intact as the contract extends its climb. The move higher has exposed resistance at $81.50, the Jan 3 high and a bull trigger. Clearance of this hurdle is required to strengthen a bullish theme and open $83.27, the Dec1 high. The broader trend outlook still appears bearish. A reversal lower would expose the bear trigger that has been defined at $70.31, the Dec 9 low.

GOLD TECHS: Bulls Remain In The Driver’s Seat

• RES 4: $1998.4 - High Apr 18, 2022
• RES 3: $1982.0 - High Apr 19, 2022
• RES 2: $1963.0 - 76.4% retracement of the Mar - Sep 2022 bear leg
• RES 1: $1934.4 - High Apr 25, 2022
• PRICE: $1904.8 @ 07:14 GMT Jan 18
• SUP 1: $1874.4/55.9 - Low Jan 12 / 20-day EMA
• SUP 2: $1825.2 - Low Jan 5 and key near-term support
• SUP 3: $1797.1 - Low Dec 28
• SUP 4: $1774.0 - Low Dec 15

Trend conditions in Gold remain bullish and the yellow metal traded to a fresh trend high earlier this week. This confirms an extension on the current uptrend and maintains the positive price sequence of higher highs and higher lows. Note that moving average studies are in a bull mode position - reflecting the uptrend. The focus is on $1934.4 next, the Apr 25, 2022 high. Support to watch lies at $1855.9, the 20-day EMA.

SILVER TECHS: Bullish Trend Structure

• 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 3 and the bull trigger
• PRICE: $24.037 @ 07:23 GMT Jan 18
• SUP 1: $22.741 - 50-day EMA
• SUP 2: $22.557 - Low Dec 16 and key short-term support
• SUP 3: $20.872 - Low Nov 28
• SUP 4: $20.585 - Low Nov 21

The uptrend in Silver remains bullish. Moving average studies are in a bull mode position and fresh trend highs in December reinforced the positive theme. 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.