USDJPY TECHS: Bear Cycle Remains In Play
- RES 4: 144.20 High Jul 7
- RES 3: 1143.01 High Jul 10
- RES 2: 142.06 20-day EMA
- RES 1: 140.27 50-day EMA
- PRICE: 138.23 @ 15:58 BST Jul 13
- SUP 1: 138.06 Low Jul 13
- SUP 2: 137.36 50.0% retracement of the Mar 24 - Jun 30 bull leg
- SUP 3: 137.22 4.0% 10-dma envelope
- SUP 4: 136.31 Low May 17
USDJPY cemented a bearish tone Wednesday, trading lower and extending the bear cycle that started Jun 30. The recent sell-off has resulted in a break of both the 20- and 50-day EMAs and price is again inside the bull channel drawn from the Jan 16 low. The move signals scope for an extension towards 137.36, a Fibonacci retracement and 137.22, the 4.0% 10-dma envelope. Initial firm resistance is at 140.27, the 50-day EMA.
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USDJPY TECHS: Key Resistance At The Channel Top Remains Intact
- RES 4: 142.51 61.8% of the Oct 16 2022 - Jan 16 bear leg
- RES 3: 142.25 High Nov 21 2022
- RES 2: 141.61 High Nov 23 2022
- RES 1: 140.45/141.30 High Jun 5 / Bull channel top from Jan 16 low
- PRICE: 139.82 @ 16:00 BST Jun 13
- SUP 1: 138.80/45 20-day EMA / Low Jun 1
- SUP 2: 137.43 Low May 19
- SUP 3: 137.00 50-day EMA
- SUP 4: 136.31 Low May 17
USDJPY is broadly unchanged. The trend condition remains bullish and attention is on key resistance at the top of a bull channel drawn from the Jan 16 low. The line intersects at 141.30 today. A clear break of this hurdle would reinforce a bullish theme and open 141.61, the Nov 23 2022 high. For bears, a strong reversal lower would instead highlight a potential top and signal scope for a deeper pullback inside the channel. Support is at 138.80, the 20-day EMA.
US STOCKS: Gains Stall After Post-CPI Push, But Further Resistance Eyed
- ESA has pulled back slightly off session highs and newfound initial resistance at 4423.25 but still sees solid gains after the CPI report helped breach the round 4400 tested prior to the data.
- The continued push higher has opened a string of resistance levels running off projections based on the May 4-19-24 price swing, with 4427.19 (1.618) and 4452.42 (1.764) next ahead.
- The 0.7% increase on the day is decent from a macro perspective considering a 5bp increase in 10Y Tsy real yields.
- SPX is also +0.7%, with banks (+2%) and energy (+1.3%) bouncing back after yesterday’s underperformance but with materials (+2.2%) leading gains. The latter is led by metals & mining (+3.7%) as part of sizeable gains for commodity producers generally after iron ore pushed higher overnight on China stimulus hopes.
- Away from SPX, the Nasdaq trades broadly in line whilst the Dow Jones lags with +0.5%, as does the TSX (+0.4%) north of the border despite strong energy gains on the day.
EURGBP TECHS: Primary Trend Direction Remains Down
- RES 4: 0.8768 High May 5
- RES 3: 0.8719 High May 23
- RES 2: 0.8701 50-day EMA
- RES 1: 0.8637 20-day EMA
- PRICE: 0.8610 @ 15:59 BST Jun 13
- SUP 1: 0.8541 Low Jun 9 / 12 low
- SUP 2: 0.8522 Low Aug 30 2022
- SUP 3: 0.8512/8499 1.0% 10-dma env / 3.0% Lower Bollinger Band
- SUP 4: 0.8454 76.4% retracement of the Mar - Sep 2022 bull cycle
EURGBP has recovered from its recent 0.8541 low. The primary trend direction remains down and short-term gains are considered corrective with initial resistance at 0.8637, the 20-day EMA. Moving average studies remain in a bear-mode condition, highlighting a downtrend and recent fresh lows have reinforced bearish conditions. A move lower and a break of 0.8541, the Jun 9 and 12 low, would confirm a resumption of the trend.
