EURJPY TECHS: Builds On Latest Gains
- RES 4: 166.18 2.0% 10-dma envelope
- RES 3: 166.10 High Nov 6
- RES 2: 165.04 High Nov 15 and a key short-term resistance
- RES 1: 164.83 High Dec 27
- PRICE: 164.50 @ 16:06 GMT Dec 27
- SUP 1: 161.29/159.82 20-day EMA / Low Dec 18
- SUP 2: 158.67 Low Dec 11
- SUP 3: 157.87 Low Dec 09
- SUP 4: 156.18 Low Dec 03 and the bear trigger
EURJPY is holding on to its recent gains and a bullish theme remains intact. The cross has traded through 162.48 the Dec 17 high, to confirm a resumption of the recovery that started on Dec 3. The continuation higher saw 164.21, the 76.4% retracement of the Oct 31 - Dec 3 bear leg, taken out - opening 165.04 for direction. Key short-term support has been defined at 159.82, the Dec 18 low. A break of this level is required to signal a possible reversal.
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EURJPY TECHS: Retracement Mode
- RES 4: 167.40 61.8% retracement of the Nov 11 - Aug 5 bear leg
- RES 3: 165.04/166.69 High Nov 15 / High Oct 31 and the bull trigger
- RES 2: 164.76 High Nov 20 and a key short-term resistance
- RES 1: 160.71/163.20 Intraday high / 20-day EMA
- PRICE: 159.70 @ 16:29 GMT Nov 27
- SUP 1: 159.10 Low Nov 27
- SUP 2: 158.71 Low Oct 2
- SUP 3: 157.87 76.4% retracement of the Sep 16 - Oct 31 bull cycle
- SUP 4: 157.05 Low Sep 18
EURJPY remains soft and the cross again traded lower Wednesday. The latest move down cancels a recent short-term bullish reversal signal and suggests scope for a deeper retracement. Potential is seen for an extension towards 157.87, a Fibonacci retracement. Key short-term resistance has been defined at 164.76, the Nov 20 high. Clearance of this hurdle would highlight a possible reversal. Initial firm resistance to watch is 163.20, the 20-day EMA.
COMMODITIES: Crude Rangebound Following Ceasefire, Henry Hub Falls
- Crude front month has eased back to near rangebound today, as the market weighs a larger US stock draw against the Israel-Hezbollah ceasefire.
- WTI Jan 25 is 0.1% lower at $68.7/bbl.
- The ceasefire between Israel and Hezbollah will be monitored closely with both sides attacking in the hours before the truce was due to begin.
- With a bearish theme in WTI futures still intact, attention remains on $65.74 next, the Oct 1 low.
- Meanwhile, Henry Hub has lost ground today amid a largely expected, but below-average US storage withdrawal last week.
- US Natgas Jan 25 is down by 7.5% at $3.21/mmbtu.
- Spot gold has edged up by 0.1% today to $2,635/oz, keeping the yellow metal around 3% below Monday’s high.
- Monday’s move lower is - for now - considered corrective, despite it being a very sharp pullback. Resistance to watch is $2,721.4, Monday’s high, while key support to monitor is $2,536.9, the Nov 14 low.
- Silver is underperforming today, currently 1.3% lower at $30.0/oz. As a result, the gold-silver ratio has risen to its highest level since Sept 12.
- The corrective cycle in silver that started on Oct 23 remains in play, with focus on $28.446, a Fibonacci retracement.
CANADA: USDCAD Reverses Most Of Tariff Jump, CAD Underperforms Other Majors
- USDCAD has trended slightly lower today, currently at 1.4031 (session low 1.4010) having reversed most of Monday’s jump from 1.3985 to a multi-year high of 1.4178 on President-elect Trump’s tariff threats.
- CAD significantly underperforms most G10 peers today. The impact from the tariffs threat still clearly lingers along with typical underperformance owing to its US-linkages amidst broader USD weakness plus equity futures giving back yesterday’s gains.
- The technical trend points to further increases from current levels, with resistance drawn at that multi-year high, whilst support is seen at 1.3952 (20-day EMA).
- Tomorrow is likely to see a quieter session with Thanksgiving but there is still the CFIB business barometer, current account and SEPH employment data. That’s before GDP data on Friday in one of the last two major releases before the BoC decision on Dec 11.
- Tariff concerns have modestly weighed on near-term BoC pricing this week, with implied cuts building to 33bp for Dec from closer to 30-31bp after some stronger than expected recent data.
- Can-US 2Y yield differentials at -102bps are little changed from yesterday's close off a low of -107bps, close to levels seen pre-tariff talk.
