EURJPY TECHS: Bull Channel Support Intact

The October/November inflation PCE inflation releases (2.7% Y/Y in October, 2.8% in November) point strongly to a quarterly year-year core rate of 2.8% in Q4, even if December's sequential print proves unusually robust (eg 0.4% M/M after 2 months at 0.2%). 

• That virtually guarantees the eventual print will come in below the FOMC's December SEP which saw a median for core PCE of 3.0% in Q4 2025 Y/Y (central tendency range of 2.9-3.0%).
• Reminder that there is no update to forecasts in January - the next edition is in March.
• The BEA has scheduled the Personal Income and Outlays reports (with PCE  readings) for January and February, on March 13/April 9 respectively. These  were originally due out Feb 26 / Mar 27. The December data is scheduled for  February 20.
• This means that in forming their forecasts, FOMC participants will have PCE data through January as  well as a 2nd reading of GDP by the time of its March decision (Mar 16).
• The FOMC is already sharpening its pencils for end-2026 forecasts of course, with the last edition showing a 2.5% core PCE median within a central range of 2.4-2.6%. In other words, still slow progress in underlying inflation below target.

• Stocks remain mixed in late Friday trade, the Nasdaq outperforming weaker DJIA prices while SPX eminis drifts near steady to marginally higher. Currently, the DJIA trades down 312.07 points (-0.63%) at 49071.57, S&P E-Mini Futures up 0.25 points (0%) at 6945.5, Nasdaq up 66.9 points (0.3%) at 23503.46.
• A mix of IT, Financials, Materials and Health Care sector shares continued to lead individual advances in the second half, chip makers buoyed earlier after headlines announced China told it's "biggest tech firms they can prep NVIDIA H200 orders", off initial highs, Nvidia trades +1.46%. That said, Intel fell a whopping 17.75% on soft guidance.
• Leading advances: Live Nation Entertainment +6.13%, Fortinet +4.96%, Microsoft +4.03%, CF Industries +4.01%, Gilead Sciences +3.79%, CSX +3.33%, Freeport-McMoRan +3.11%, TKO Group +2.96%, Smurfit WestRock +2.92%, Amcor +2.83% and International Paper +2.77%.
• On the flipside, sector underperformers included Financials, Health Care and Utilities:
  • Capital One Financial -6.96%, Goldman Sachs Group -3.61%, Ares Management -3.41%, Northern Trust -3.32% and Blackstone -3.29%.
  • Moderna -7.69%, West Pharmaceutical Services -5.14%, Insulet Corp -4.60%, Waters Corp -3.51% and Bio-Techne -3.19%
  • NRG Energy -2.45%, AES Corp -2.43%, PG&E Corp -1.82% and Exelon Corp -1.73%.

• RES 4: 188.65 3.236 proj of the Oct 17 - Oct 30 - Nov 5 price swing
• RES 3: 187.71 3.000 proj of the Oct 17 - Oct 30 - Nov 5 price swing
• RES 2: 187.57 Bull channel top drawn from the Feb 28 ‘25 low
• RES 1: 186.87 High Jan 23
• PRICE: 185.79 @ 15:59 GMT Jan 23
• SUP 1: 184.17 20-day EMA
• SUP 2: 182.47 50-day EMA
• SUP 3: 181.57 Low Dec 17 
• SUP 4: 180.50 Low Dec 8 

This week’s gains in EURJPY have confirmed a resumption of the medium-term uptrend. The cross is appreciating inside a bull channel drawn from the Feb 28 2025 low. The top of the channel is at 187.57 today and marks the next objective plus the next key resistance point. Initial support to watch lies at 184.17, the 20-day EMA. Support at the 50-day EMA, is at 182.47.