MNI DAILY TECHNICAL ANALYSIS - USDJPY Trend Points North

Price Signal Summary - USDJPY Bulls Remain In The Driver’s Seat     

• In the equity space, a bear threat in the S&P E-Minis contract remains present despite the most recent gains. Attention is on 5866.00, the Dec 20 low and a key S/T support. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, the Dec 26 high. A breach of this hurdle would highlight a bull reversal and open key resistance at 6178.75, the Dec 6 high. A bull cycle in the EUROSTOXX 50 futures contract remains intact. Yesterday’s strong rally highlights a reversal of the recent corrective pullback and attention is on resistance at 5040.00, the Dec 9 high. Clearance of this level would confirm a resumption of the bull cycle that started on Nov 21 last year. Initial firm support lies at 4921.43, the 50-day EMA.             
• In FX, the trend condition in EURUSD remains bearish and Monday’s strong gains appear - for now - corrective. Last Thursday’s sharp sell-off reinforces current conditions and note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0412, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The sharp sell-off in GBPUSD last Thursday confirmed a resumption of the medium-term downtrend. The move down maintains the bearish price sequence of lower lows and lower highs and note that moving average studies are in a bear-mode position, highlighting a clear downtrend. Monday’s strong gains are - for now - considered corrective. Initial firm resistance at 1.2558, the 20-day EMA, has been pierced. The 50-day EMA is at 1.2680. USDJPY bulls remain in the driver’s seat and today’s fresh cycle high reinforces current bullish conditions. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and has paved the way for a move towards 159.45, the Jul 12 high. Initial firm support is 156.05, the 20-day EMA.  
• On the commodity front, Gold is unchanged. A bear threat remains present despite the latest recovery. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low. The first firm support to watch is $2583.6, the Dec 19 low. On the upside, a resumption of gains would instead signal scope for a climb towards resistance at $2726.2, the Dec 12 high. In the oil space WTI futures are holding on to the bulk of their recent gains. A stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. On the downside, a reversal lower would expose key support at the 20-day EMA, at $70.78.        
• In the FI space, the trend cycle in Bund futures remains bearish and last Friday’s sell-off plus Monday’s extension, reinforces this theme. Sights are on key support at 132.00, the Nov 6 low. Clearance of this level would strengthen a bearish theme. Initial resistance is seen at 133.48, last Friday’s high. Key short-term resistance is at 134.10, the 20-day EMA. The trend condition in Gilt futures is unchanged, it remains bearish and recent short-term gains appear to have been corrective. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.

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