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Price Signal Summary - Yen Weakness Extends, USDJPY Clears A Key Resistance

MARKET INSIGHT
  • A firmer week so far in the equity space. S&P E-Minis traded higher Wednesday and in the process, breached the 20-day EMA. This suggests scope for a stronger short-term recovery and attention turns to the 50-day EMA at 4397.83. This average marks a key resistance and a clear break of it is required to further strengthen short-term bullish conditions. EUROSTOXX 50 futures traded higher yesterday and this has also resulted in a break of the 20-day EMA. The move higher has exposed the 50-day EMA, at 3964.00 and a key resistance.
  • In FX, EURUSD is holding onto the bulk of this week’s gains. The pair however remains below its key short-term resistance of 1.1121, the Jan 28 low. Conditions remain bearish while this resistance remains intact. The bear trigger is unchanged at 1.0806, the Mar 7 low. GBPUSD remains in a downtrend and short-term gains are considered corrective. A resumption of weakness would open; 1.2954, the 1.764 projection of the Jan 13 - 27 - Feb 10 price swing and 1.2933, the Nov 5 2020 low. Resistance is seen at 1.3195, the Mar 10 high and 1.3250, 20-day EMA. USDJPY has cleared key resistance at 118.60/66, the Jan 3 ‘17 and Dec 15 ‘16 highs. This strengthens bullish conditions and opens 119.18 next - the 3.236 projection of the Feb 24 - Mar 3 - 4 price swing. Further out, 120.00 beckons. EURJPY has cleared all key retracements of the recent Feb - Mar downleg. This opens 131.91, the Feb 16 high and key resistance at 133.15, Feb 10 high.
  • On the commodity front, Gold is off its recent lows. Short-term conditions remain bearish following the recent pullback from $2070.4, Mar 8 high. The 20-day EMA has been breached and this opens $1889.2 next, the 50-day EMA. The broader trend condition is bullish though and the recent pullback is considered corrective. Initial resistance is at $1954.7, the Mar 15 high. Oil markets remain in a short-term corrective bear cycle. The 20-day EMA has been breached and this exposes the 50-day EMA, currently at $93.52. This EMA highlights a key area of support. Initial firm resistance is at $110.29, the Mar 11 high.
  • In the FI space, Bund futures maintain a bearish tone and have this week breached key support at 161.50, the Feb 10 low and a medium-term bear trigger. The break confirms a resumption of this year’s downtrend and opens the 160.00 handle. Gilts yesterday probed the key support at 121.10, Feb 16 low. A clear break would open 120.00 and confirm a resumption of the broader downtrend.
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