EURJPY TECHS: Bulls Firm Grip

• RES 4: 166.69 High Oct 31 2024 and a key resistance
• RES 3: 166.10 High Nov 6         
• RES 2: 165.21/43 High May 13 / High Nov 8 2024 
• RES 1: 164.07 High May 15 
• PRICE: 162.99 @ 16:17 GMT May 21
• SUP 1: 162.28/15 50-day EMA / Low May 19      
• SUP 2: 161.60 Low May 6
• SUP 3: 160.99 Low Apr 22  
• SUP 4: 159.48 Low Apr 9  

EURJPY maintains a bearish tone following the pullback from its recent high and is trading closer to its latest lows. Recent weakness is considered corrective. However, the cross has tested a key support at 162.28, the 50-day EMA. A clear break of this level would undermine a bearish theme and signal scope for a deeper retracement. For bulls, a resumption of gains would refocus attention on the bull trigger at 165.21, the May 13 high.  

• Stocks retreated again after bouncing off early second half lows Wednesday, taking cues from higher Treasury Bond yield, not to mention a large sell program (1,891 names, largest since April 10). Trading desks had cited this morning's higher bond yields partly triggered by fiscal developments (or lack thereof) as lawmakers continue to discuss Pres Trump's tax/spending bill.
• Investor sentiment flagged amid concerns the "big beautiful" tax & spending deal will increase the deficit an estimated $3.3 trillion over 10 years, weighing on equities as well as the Greenback (Bbg US$ index -5.22 at 1217.49).
• Currently, the DJIA trades down 696.7 points (-1.63%) at 41980.32, S&P E-Minis down 74.75 points (-1.25%) at 5884.5, Nasdaq down 183.1 points (-1%) at 18959.6.
• Health Care and Real Estate sectors underperformed in late trade, pharmaceuticals companies continued to weigh on the former with Moderna -7.29%, Bio-Techne -6.02% and Charles River Laboratories -5.32%. Estate management and investment trust stocks weighed on the former with CBRE Group -4.84%, Alexandria Real Estate -4.38%, Iron Mountain -3.69% and Weyerhaeuser -3.62%.
• Communication Services and Consumer Staples sectors outperformed in late trade, interactive media and entertainment buoyed the Communication Services sector with Alphabet +3.68%, Match Group +0.34% and Netflix +0.32%. Limited gainers in Staples included Philip Morris International +0.34%, Monster Beverage +0.21% and Coca-Cola Co +0.14%.

• Spot gold has risen by a further 0.7% today amid concerns about US fiscal policy and ongoing geopolitical tensions in the middle east.
• The move has brought the yellow metal back above the $3,300/oz level, currently trading at $3,314/oz.
• The gains signal the end of the corrective phase for gold between Apr 22 - May 15. Medium-term trend signals remain bullish, with moving average studies in a bull-mode position, highlighting a dominant uptrend.
• A continuation higher would open $3,435.6 next, the May 7 high. Key support and the bear trigger has been defined at $3,121.0, the May 15 low.
• Similarly, silver has also rallied by another 0.9% to $33.4/oz today, bringing the precious metal to its highest level since April 29.
• A bullish theme in silver remains intact, with resistance to watch at $33.686, the Apr 25 high. Clearance of this level would confirm a resumption of the uptrend, opening $34.590, the Mar 28 high.
• Meanwhile, crude reversed earlier gains after an unexpected rise in US crude stocks in EIA data today.
• WTI Jul 25 is down by 0.9% at $61.5/bbl.
• For WTI futures, attention remains on support at $54.33, the Apr 9 low and bear trigger. Key resistance to watch is $62.82, the 50-day EMA, a clear break of which would highlight a stronger reversal, opening $65.82, the Apr 4 high.