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Price Signal Summary - USDJPY Rally Accelerates, 125.00 Beckons

  • In the equity space, S&P E-Minis remain in a short-term uptrend. The contract continues to trade at levels above the 50-day EMA that intersects at 44166.83 today. Scope is seen for a climb towards 4578.50, the Feb 9 high. Initial support is at the 20-day EMA, at 4390.96. EUROSTOXX 50 futures continue to trade inside its current range and the recent consolidation still appears to be a bull flag - a continuation pattern that reinforces current bullish conditions. Attention is on the 50-day EMA at 3863.20. This average represents an important resistance. If cleared, it would further strengthen a bullish S/T theme and open 3965.50., the Feb 23 high.
  • In FX, EURUSD breached support at 1.0961 earlier, the Mar 22 low. The break lower reinforces short-term bearish conditions following the recent pullback from 1.1137, Mar 17 high. An extension lower would open 1.0890, the Mar 9 low and 1.0806, the Mar 7 low and bear trigger. Key short-term resistance is at 1.1137, Mar 17 high. GBPUSD has failed to hold on to recent highs. The pullback means key resistance at 1.3331, the 50-day EMA, remains intact. Watch support at 1.3120, the Mar 22 low. A break would be bearish. USDJPY has started the week on a bullish note as today’s impulsive rally extends. The pair is through 124.00 and in the process has also cleared a number of short-term resistance levels. Current momentum suggests the USD still has the potential to extend this bull cycle, although it is worth noting that the pair is extremely overbought on the daily frequency. The focus is on the 125.00 psychological handle.
  • On the commodity front, Gold remains bearish following the recent sharp pullback from the Mar 8 high of $2070.4. The move lower is allowing a recent overbought condition to unwind. Key support is seen at the 50-day EMA that intersects at $1901.9 - just ahead of the recent low of $1895.3 on Mar 15. Oil markets remain bullish despite the recent pullback. The next objective in WTI is $118.34, 76.4% of the Mar 7 - 15 downleg. Support to watch is at $104.70, the 20-day EMA.
  • In the FI space, Bund futures remain bearish and have traded to a fresh cycle low today. The focus is on 157.33, the Oct 10 2018 low (cont). Gilts have also traded lower and the contract is through last week’s low 120.26 (Mar 24). The psychological 120.00 handle has been probed. This opens 119.75 next, the 123.6% retracement of the Feb 15 - Mar 1 climb.

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