BTP TECHS: (H6) Sights Are On Key Resistance

• RES 4: 158.87 High Jan 10 and a key resistance
• RES 3: 158.29 2.618 projection of the Sep 17 - 26 - Oct 1 price swing
• RES 2: 158.00 Round number resistance 
• RES 1: 157.89 High Nov 20 and the bull trigger 
• PRICE: 156.04 @ 07:06 GMT Dec 30
• SUP 1: 155.56/154.71 Low Dec 24 / 50-day EMA
• SUP 2: 153.62 Low Nov 14  
• SUP 3: 152.82 Low Nov 7 
• SUP 4: 151.54 Low Oct 29 

The trend structure in USDJPY is bullish and the latest pullback - for now - appears corrective. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. Attention is on 157.89, the Nov 20 high and a bull trigger. Clearance of this hurdle would confirm a resumption of the uptrend. Support to watch lies at 154.71, the 50-day EMA. A clear breach of it would undermine the bull theme and signal scope for a deeper correction.

From our Eurozone inflation preview (full report here) - we get Spain's flash December inflation estimates on the early side of its Eurozone peers, today at 08:00 GMT / 09:00 CET (most including France and Germany come out next week). Reviewing expectations:

• Consensus standing at HICP: 3.0% Y/Y (vs 3.2% prior) /  CPI: 2.8% Y/Y (vs 3.0% prior) / Core: 2.5% Y/Y (vs 2.6% prior)
• Goldman Sachs see Spain 3.0% headline; “core inflation to move sideways at 3.0%yoy (0.25%mom seasonally adjusted). We expect a 15%mom nsa increase in the package holidays component and a 4%mom nsa increase in airfares. We see clothing and footwear printing broadly in line with their 2024 seasonality. Across the non-core categories, we look for energy inflation to decline to 4.0%yoy from 4.6%yoy in November, processed food inflation to increase to 1.4%yoy, and unprocessed food inflation to decrease to 5.8%yoy.”
• Morgan Stanley see 2.9% headline led by tobacco effects and lower core inflation, offsetting still elevated services.
• The Bank of Spain recently updated their quarterly projection, now seeing CPI of 2.7% in 2025, 2.1% in 2026 and 1.9% in 2027, these being revisions of +0.2pp, +0.4pp, and -0.5pp, respectively. More details in our preview.
• In November’s final reading, Spain HICP ticked up marginally from flash to 3.16% Y/Y (rounding to 3.2%, flash rounded to 3.1%). It was broadly unchanged from October (3.18% 2dp Oct), while the monthly rate was unrevised from flash at 0.0% M/M (vs 0.5% Oct). This continues the gradual upward trend since May. Broad COICOP categories mostly remained unchanged from flash and October. 

• RES 4: 5900.00 Round number resistance      
• RES 3: 5868.01 1.618 proj of the Aug 1 - 22 - Sep 2 price swing (cont)
• RES 2: 5847.00 High Nov 13 and a key resistance
• RES 1: 5822.00 High Dec 12         
• PRICE: 5773.00 @ 06:46 GMT Dec 30
• SUP 1: 5691.88 50-day EMA      
• SUP 2: 5622.00 Low Nov 26 
• SUP 3: 5546.00 Low Nov 25
• SUP 4: 5500.00 Low Nov 21 and a bear trigger       

A bull cycle in EUROSTOXX 50 futures remains intact and the latest pullback appears to have been a correction. The first key support to watch lies at 5691.88, the 50-day EMA. A clear break of the EMA would highlight a potential short-term reversal. This would open 5622.00, the Nov 26 low. For bulls, sights are on key resistance at 5847.00, the Nov 13 high. The price pattern on Dec 18 is a bullish engulfing candle - a reversal signal.