EURUSD TECHS: Bulls Pause For Breath
- RES 4: 1.1022 3.00 proj of the Sep 28 - Oct 4 - Oct 13 price swing
- RES 3: 1.0954 High Apr 11, 2022
- RES 2: 1.0913 2.764 proj of the Sep 28 - Oct 4 - Oct 13 price swing
- RES 1: 1.0887 High Jan 18
- PRICE: 1.0793 @ 05:46 GMT Jan 19
- SUP 1: 1.0700 20-day EMA
- SUP 2: 1.0634 Low Jan 9
- SUP 3: 1.0533/1.0484 50-day EMA / Low Jan 6
- SUP 4: 1.0406 3.0% Lower Bollinger Band
EURUSD pulled back again from another new high yesterday, maintaining the sell-on-rallies theme evident over the past week. Nonetheless, the recent move lower is likely a correction and the outlook remains bullish. The recent break of 1.0787, May 30 2022 high, maintains the bullish price sequence and MA studies continue to highlight a bullish backdrop. Sights are on 1.0913, a Fibonacci projection. Initial firm support is at 1.0700, the 20-day EMA.
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USDJPY TECHS: Heading South
- RES 4: 140.00 Round number resistance
- RES 3: 137.79 20-day EMA
- RES 2: 137.79 20-day EMA
- RES 1: 135.76 Low Dec 19
- PRICE: 133.21 @ 05:38 GMT Dec 20
- SUP 1: 132.95 Low Aug 16
- SUP 2: 132.56 Low Aug 15
- SUP 3: 131.74 Low Aug 11 and a key support
- SUP 4: 131.08 1.00 proj of the Oct 31 - Nov 15 - 21 price swing
USDJPY has traded sharply lower today and in the process cleared key support and the bear trigger at 133.63, the Dec 2 low. This confirms a resumption of the current downtrend and paves the way for weakness towards 132.56, the Aug 15 low. Moving averages studies are in a bear-mode position and price remains below the 20-day EMA. This average is a key resistance - it intersects at 137.79.
EQUITIES: Weakness Follows BoJ YCC Shift, Shanghai Property Index Back Below 200-Day MA
Regional equity markets are down across the board, with sentiment weighed by the BoJ surprise YCC shift. US and EU futures are down near -1/-1.2% at this stage across the major bourses.
- The Nikkei 225 is off by over 2.6%. The market was tracking higher prior to the lunch break, but the BoJ's shift on YCC saw push sharply lower when trading resumed. The high to low move was around 3.4%. All eyes will rest on Kuroda's press conference later.
- The HSI is down nearly 2%, with weakness fairly broad based. At 3pm HK time we will have a press conference with a further easing in Covid restrictions to be announced.
- The property sub-indices remain under pressure, as developers continue to raise cash through share placements. Onshore, the Shanghai Property sub-index is down a further 2.43% and is back below its simple 200-day MA.
- The Kospi and Taeix are both lower, with offshore tech leads also weighing in this space.
- The Philippines index is the only regional bourse higher at this stage, +0.35%.
BUND TECHS: (H3) Bear Cycle Extension
- RES 4: 140.78 High Dec 15
- RES 3: 139.68 20-day EMA
- RES 2: 138.62 High Dec 16
- RES 1: 137.76 High De 19
- PRICE: 135.92 @ 05:09 GMT Dec 20
- SUP 1: 135.83 Intraday low
- SUP 2: 135.00 Round number support
- SUP 3: 134.50 Low Nov 8 and a key support
- SUP 4: 134.00 Low Oct 1=24
Bund futures traded lower last week to extend the current bear phase that started Dec 7. The contract has also started this week on a softer note. Recent weakness resulted in a break of support at 139.13, Nov 28 low, strengthening a bearish threat. Furthermore, a number of additional support points have been cleared. The focus is on 135.00 next. On the upside, initial firm resistance is seen at 139.68, the 20-day EMA.
