MNI DAILY TECHNICAL ANALYSIS - USDJPY Tops Key Resistance

Price Signal Summary – USDJPY Tops Key Resistance

• In the equity space, S&P E-minis printed a fresh all-time high again yesterday and the contract traded above the 4800.00 handle. Trend conditions remain bullish and the break higher confirms a resumption of the uptrend towards 4854.19, a Fibonacci projection. EUROSTOXX 50 futures remain in an uptrend, trading higher again yesterday. The recent break of resistance at 4270.00, Dec 8 high, has strengthened bullish conditions and attention is on the key resistance at 4392.50, Nov 18 high.
• In FX, EURUSD remains below recent highs, having pulled back from the Dec 31 high of 1.1386. The move lower means resistance at 1.1383/86 is intact and that the pair continues to trade inside December’s range. GBPUSD traded higher Tuesday, topping the recent best levels and printed a high of 1.3557 in the process. The outlook is bullish and price remains above the 50-day EMA at 1.3431 - the recent breach of this average strengthened a bullish case. USDJPY trend conditions remain bullish. Tuesday’s climb resulted in a break of key resistance at 115.52, the Nov 24 high. This confirms a resumption of both the short and medium-term trends, paving the way for a climb towards 117.08 next
• On the commodity front, Gold traded sharply lower Monday. In terms of price patterns, the sell-off appears to be a bearish engulfing candle but it remains to be seen whether this pattern is an early sign of a stronger bearish reversal. WTI futures remain in an uptrend. The recovery from Monday’s low has resulted in a probe of resistance at $77.44, the Dec 29 high and a Fibonacci retracement, 76.4% of the Oct - Dec downleg.
• In the FI space, Bund futures remain vulnerable. Last week’s breach of support at 171.77, Nov 24 low strengthened a bearish case and the move lower has paved the way for weakness towards 170.19, Nov 2 low. Gilt futures are still in a downtrend and the contract traded lower Tuesday, starting the year on a bearish note. Price has cleared support at 124.35, Dec 29 low and 124.17, Nov 24 low.

FOREIGN EXCHANGE

EURUSD TECHS: Remains Below Recent Highs

• RES 4: 1.1608 High Nov 9
• RES 3: 1.1514 Low Nov 5
• RES 2: 1.1463 Bear channel top drawn from the Jun 1 high
• RES 1: 1.1383/86 High Nov 30 / High Dec 31
• PRICE: 1.1294 @ 05:58 GMT Jan 5
• 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 remains below recent highs, having pulled back from the Dec 31 high of 1.1386. The move lower means resistance at 1.1383/86 is intact and that the pair continues to trade inside December’s range. A deeper pullback would expose support at 1.1222, the Dec 15 low. The bear trigger lies just below, at the 1.1186/85 zone. For bulls, clearance of 1.13783/86 is required to suggest scope for a stronger short-term recovery.

GBPUSD TECHS: Northbound

• RES 4: 1.3676/3724 61.8% of Oct - Dec sell-off / 2.0% 10-dma env
• RES 3: 1.3607 High Nov 9
• RES 2: 1.3560/78 100-dma / 61.8% of the Oct - Dec sell-off
• RES 1: 1.3557 High Jan 04
• PRICE: 1.3528 @ 06:06 GMT Jan 5
• SUP 1: 1.3431 Low Jan 3
• SUP 2: 1.3404 20-day EMA
• SUP 3: 1.3343 Low Dec 23
• SUP 4: 1.3240 Low Dec 22

GBPUSD traded higher Tuesday, topping the recent best levels and printed a high of 1.3557 in the process. The outlook is bullish and price remains above the 50-day EMA at 1.3431 - the recent breach of this average strengthened a bullish case. The focus is on 1.3578 next, a Fibonacci retracement and 1.3607, the Nov 9 high. Note that 1.3560 the 100-dma also represents an important resistance. Firm support to watch is at 1.3404, the 20-day EMA.

EURGBP TECHS: Multi-Year Lows

• RES 4: 0.8498 High Dec 23
• RES 3: 0.8473 50-day EMA
• RES 2: 0.8444 20-day EMA
• RES 1: 0.8381/8419 Nov 22 low / High Jan 3
• PRICE: 0.8340 @ 16:31 GMT Jan 4
• SUP 1: 0.8335 Intraday low
• SUP 3: 0.8332 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 acutely weak and has printed a fresh multi-year low of 0.8335 today. Continued weakness has cemented the breach of key support at 0.8381, Nov 22 low and confirmed a resumption of the broader downtrend. This opens the major support and bear triggers at 0.8282/77. Note that the 0.8300 area marks the base of a broad multi-year range and a major support. Initial firm resistance is at 0.8419, Monday’s high.

USDJPY TECHS: Bull Trend Intact

• 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
• PRICE: 115.99 @ 06:13 GMT Jan 5
• SUP 1: 114.95 Low Jan 3
• SUP 2: 114.57 20-day EMA
• SUP 3: 113.90 50-day EMA
• SUP 4: 113.33 Low Dec 20

USDJPY trend conditions remain bullish. Tuesday’s climb resulted in a break of key resistance at 115.52, the Nov 24 high. This confirms a resumption of both the short and medium-term trends, paving the way for a climb towards 117.08 next, a Fibonacci projection. Moving average conditions are also in a bull mode and this reinforces the current positive sentiment. Initial firm support is seen at 114.57, the 20-day EMA.

EURJPY TECHS: Holding Onto Recent Gains

• RES 4: 132.26 3% Upper Bollinger Band
• RES 3: 132.04 76.4% retracement of the Oct 20 - Dec 3 downleg
• RES 2: 131.59 High Nov 5
• RES 1: 131.46 High Jan 4
• PRICE: 131.07 @ 06:47 GMT Jan 5
• SUP 1: 130.02 Low Jan 3
• SUP 2: 129.66/61 20- and 50-day EMA levels
• SUP 3: 129.20 Low Dec 27
• SUP 4: 128.57 Low Dec 22

EURJPY trend needle points north. The cross traded through its December highs on Tuesday and solidified the bullish tone. The rally has cleared resistance at 131.15, 61.8% of the Oct - Dec bear leg and 131.20, a vol-based resistance - reinforcing the strength seen across the second half of December. This opens 132.04. On the downside, firm support is seen at 129.66/61, the 20- and 50-day EMA levels.

AUDUSD TECHS: Recovers From Monday’s Low

• RES 4: 0.7371 High Nov 15
• RES 3: 0.7341 61.8% retracement of the Oct 28 - Dec 3 downleg
• RES 2: 0.7330 Former channel base drawn from the Aug 20 low
• RES 1: 0.7278 High Dec 31
• PRICE: 0.7233 @ 06:51 GMT Jan 5
• SUP 1: 0.7184 Low Jan 3
• SUP 2: 0.7121 Low Dec 22
• SUP 3: 0.7082 Low Dec 20 and a key support
• SUP 4: 0.7040 Low ec 7

AUDUSD sold off sharply Monday but has recovered from the session low. Key short-term resistance is at 0.7278, the Dec 31 high where a break is would confirm a resumption of the recent uptrend and pave the way for a climb towards 0.7330/41, a former channel base drawn from the Aug 20 low and a Fibonacci retracement. A resumption of weakness would instead threaten the bullish theme and expose 0.7082, the Dec 20 low.

USDCAD TECHS: Holding Above Last Week’s Lows

• RES 4: 1.2964 High Dec 20 and the bull trigger
• RES 3: 1.2924 High Dec 22
• RES 2: 1.2848 High Dec 27 and a key near-term resistance
• RES 1: 1.2779 High Jan 4
• PRICE: 1.2711 @ 06:56 GMT Jan 5
• SUP 1: 1.2621 Low Dec 31 and the bear trigger
• SUP 2: 1.2608 Low Dec 8 and key support
• SUP 3: 1.2585 Low Nov 19
• SUP 4: 1.2546 Low 61.8% retracement of the Oct - Dec rally

USDCAD traded higher Monday, but has faded since. The pair however remains above last week’s low of 1.2621 on Dec 31. Looking at patterns, Monday’s rally appears to be a bullish engulfing candle. If correct, this signals a potential base at 1.2621. A resumption of strength would open 1.2848, Dec 27 high and a key near-term resistance. On the downside, sub 1.2621 levels would cancel the reversal pattern and instead open 1.2608, the Dec 8 low.

FIXED INCOME

BUND TECHS: (H2) Remains Vulnerable

• RES 4: 173.52 High Dec 22
• RES 3: 173.19 High Dec 23
• RES 2: 172.65 20-day EMA
• RES 1: 171.77 Low Nov 24 and recent breakout level
• PRICE: 170.86 @ 05:04 GMT Jan 5
• SUP 1: 170.50/19 Low Jan 4 / Low Nov 2
• 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

Bund futures remain vulnerable. Last week’s breach of support at 171.77, Nov 24 low strengthened a bearish case and the move lower has paved the way for weakness towards 170.19, Nov 2 low ahead of the major support at 169.34, the Oct 29 low. On the upside, initial resistance is seen at 171.77 where a break is required to ease bearish pressure. Short-term gains though would be considered corrective.

BOBL TECHS: (H2) Trading Near Recent Lows

• RES 4: 133.710 Low Dec 8 and recent breakout level
• RES 3: 133.667 20-day EMA
• RES 2: 133.530 High Dec 29
• RES 1: 133.260 High Jan 3
• PRICE: 133.150 @ 04:49 GMT Jan 5
• SUP 1: 133.00 Low Jan 3
• SUP 2: 132.954 1.764 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 3: 132.760 2.00 proj of the Nov 30 - Dec 8 - 20 price swing
• SUP 4: 132.566 2.236 proj of the Nov 30 - Dec 8 - 20 price swing

Bobl futures are trading closer to recent lows. The outlook is bearish and Monday’s extension lower has strengthened this theme. The recent breach of support at 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 132.954 and 132.760 next, Fibonacci projection levels. On the upside, initial firm resistance is seen at 133.530, the Dec 29 high.

SCHATZ TECHS: (H2) Corrective Bounce

• RES 4: 112.155 High Dec 23
• RES 3: 112.120 High Dec 27
• RES 2: 112.111 20-day EMA
• RES 1: 112.080 High Dec 29
• PRICE: 112.060 @ 05:25 GMT Jan 5
• SUP 1: 111.985 Low Jan 3 and the bear trigger
• SUP 2: 112.956 1.764 proj of the Nov 26 - Dec 16 - 20 price swing
• SUP 3: 111.927 3.0% Lower Bollinger Band
• SUP 4: 111.920 1.382 proj of the Nov 26 - Dec 16 - 20 price swing

The Schatz futures outlook remains bearish following last week’s extension of the downleg that started Dec 20. Short-term gains are considered corrective. Support at 112.055, Dec 16 low has recently given way, reinforcing a bearish theme and this has opened 111.956 next, a Fibonacci projection. On the upside, initial firm resistance is seen at the 20-day EMA that intersects at 112.111. A break would ease bearish pressure.

GILT TECHS: (H2) Bearish Extension

• RES 4: 126.76 High Dec 21
• RES 3: 125.93 High Dec 22
• RES 2: 125.49 20-day EMA
• RES 1: 124.46/125.18 High Jan 4 / High Dec 31
• PRICE: 123.94 @ Close Jan 4
• SUP 1: 123.79 2.764 proj of the Dec 8 - 16 - 20 price swing
• SUP 2: 123.48 3.00 proj of the Dec 8 - 16 - 20 price swing
• SUP 3: 123.06 3.0% Lower Bollinger Band
• SUP 4: 123.00 Round number support

Gilt futures are still in a downtrend and the contract traded lower Tuesday, starting the year on a bearish note. Price has cleared support at 124.35, Dec 29 low and 124.17, Nov 24 low. The break of this latter support strengthens bearish conditions and opens 123.48, a Fibonacci projection. On the upside, resistance is seen at 125.18, the Dec 31 high and 125.49, the 20-day EMA. Clearance of this zone is required to ease bearish pressure.

BTP TECHS: (H2) Heading South

• RES 4: 150.08 High Dec 21
• RES 3: 149.22 High Dec 22
• RES 2: 148.32 20-day EMA
• RES 1: 148.02 High Dec 29
• PRICE: 146.61 @ Close Jan 4
• SUP 1: 146.43 Low Jan 4
• SUP 2: 146.00 Round number support
• SUP 3: 145.72 2.236 proj of the Dec 6 - 18 - 14 price swing
• SUP 4: 145.29 Low Nov 1 and key support

BTP futures remain heavy following the sell-off since Dec 20 and this week’s extension lower. The contract recently breached support at 148.25, Dec 1 low as well as the 147.36 key support, Nov 24 low. 146.55, 76.4% of the Nov 1 - 22 rally has been probed. A clear break of this level would signal scope for an extension towards a key support at 145.29, the Nov 1 low. Initial firm resistance is seen at 148.02, the Dec 29 high.

EQUITIES

EUROSTOXX 50 TECHS: (H2) Eyeing The November High

• 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
• RES 1: 4375.50 High Jan 4
• PRICE: 4341.50 @ 05:51 GMT Jan 5
• SUP 1: 4253.50 Low Dec 29
• SUP 2: 4209.40 50-day EMA
• SUP 2: 4149.00 Low Dec 22
• SUP 4: 4108.50 Low Dec 21

EUROSTOXX 50 futures remain in an uptrend, trading higher again yesterday. The recent break of resistance at 4270.00, Dec 8 high, has strengthened bullish conditions and attention is on the key resistance at 4392.50, Nov 18 high. Clearance of this hurdle would reinforce bullish conditions. On the downside, initial support to watch is at 4253.50, the Dec 29 low. The 50-day EMA at 4209.40 also represents a key support area.

E-MINI S&P (H2): Trend Conditions Remain Bullish

• RES 4: 4968.50 1.00 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 3: 4900.00 Round number resistance
• RES 2: 4854.19 0.764 proj of the Oct 1 - Nov 22 - Dec 3 price swing
• RES 1: 4808.25 High Jan 4
• PRICE: 4775.00 @ 07:03 GMT Jan 5
• SUP 1: 4747.50 Low Jan 3
• SUP 2: 4711.67 20-day EMA
• SUP 3: 4643.39 50-day EMA
• SUP 4: 4520.25 Low Dec 20

S&P E-minis printed a fresh all-time high again yesterday and the contract traded above the 4800.00 handle. Trend conditions remain bullish and the break higher confirms a resumption of the uptrend towards 4854.19, a Fibonacci projection. Initial support is seen at 4745.50, Jan 3 low. The 50-day EMA at 4634.39 remains a key pivot support parameter. A break of this EMA would threaten the trend.

COMMODITIES

BRENT TECHS: (H2) Clears Initial Resistance

• RES 4: $83.69 - High Oct 10 and a major resistance
• RES 3: $83.11 - High Nov 10
• RES 2: $81.17 - High Nov 24
• RES 1: $80.55 - High Jan 4
• PRICE: $80.13 @ 06:58 GMT Jan 5
• SUP 1: $77.04 - Low Jan 3
• SUP 2: $76.52 - 50-day EMA
• SUP 3: $75.38 - Low Dec 27
• SUP 4: $73.55 - Low Dec 22

Brent futures remain in an uptrend and recent weakness proved to be a correction. The break of resistance at $80.03, the Dec 29 high, confirms a resumption of the current bull cycle and opens $81.17, the Nov 24 high. On the downside, Monday’s low of $77.04 represents a key short-term support. A break of this level would instead suggest scope for a deeper corrective pullback.

WTI TECHS: (G2) Probes The Fibonacci Retracement And Resistance

• RES 4: $81.73 - High Nov 10
• RES 3: $79.40 - High Nov 16
• RES 2: $78.59 - High N0v 24
• RES 1: $77.64 - High Jan 4
• PRICE: $77.04 @ 07:08 GMT Jan 5
• SUP 1: $74.27 - Low Jan 3 and key short-term support
• SUP 2: $73.85 - 50-day EMA
• SUP 3: $72.57 - Low Dec 27
• SUP 4: $70.80 - Low Dec 22

WTI futures remain in an uptrend. The recovery from Monday’s low has resulted in a probe of resistance at $77.44, the Dec 29 high and a Fibonacci retracement, 76.4% of the Oct - Dec downleg. A clear break would confirm a resumption of the uptrend and open $78.59, Nov 24 high. On the downside, Monday’s low of $74.27 represents a key short-term support. A break would instead suggest scope for a deeper pullback.

GOLD TECHS: Bearish Engulfing Candle?

• 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: $1831.9 - High Jan 3 and key near-term resistance
• PRICE: $1814.9 @ 07:11 GMT Jan 5
• SUP 1: $1798.5 - Low Jan 3
• SUP 2: $1780.6 - Channel base from Aug 9 low
• SUP 3: $1753.7 - Low Dec 15 and a key support
• SUP 4: $1746.0 - Low Oct 6

Gold traded sharply lower Monday. In terms of price patterns, the sell-off appears to be a bearish engulfing candle but it remains to be seen whether this pattern is an early sign of a stronger bearish reversal that would result in a break of support at $1753.7, Dec 15 low. For now, Monday’s high of $1831.9 and 1780.6, the channel base drawn from the Aug 9 low, mark the key short-term directional triggers.

SILVER TECHS: Holding Above Support

• 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
• RES 1: $23.352/360 - 100- / 50-DMA
• PRICE: $22.916 @ 07:24 GMT Jan 5
• SUP 1: $22.593 - Low Dec 29
• SUP 2: $22.182/21.918 - Low Dec 21 / Low Dec 16
• SUP 3: $21.427/423 - Low Dec 15 / Low Sep 29 and key support
• SUP 4: $20.871 - 50.0% retracement of the Mar ‘20 - Feb ‘21 rally

Silver maintains a bullish tone following the rebound from $21.427, Dec 15 low. In pattern terms, price action on Dec 15 was a bullish hammer formation and the subsequent rally has reinforced this reversal signal. Attention is on the 100- and 50-dmas at $23.352/360 that have been probed. A clear break would strengthen the bullish condition and signal scope for an extension higher. Watch initial support at $22.593, Dec 29 low.