EURJPY TECHS: Short-Term Bull Cycle Still In Play

• RES 4: 186.41 2.618 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 3: 186.31 Bull channel top drawn from the Feb 28 low
• RES 2: 185.77 2.5000 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 184.92 High Dec 22
• PRICE: 183.09 @ 15:29 GMT Jan 7
• SUP 1: 182.25 Low Dec 19
• SUP 2: 181.57 Low Dec 17 
• SUP 3: 181.25 50-day EMA
• SUP 4: 180.10 Low Dec 5 

The trend structure in EURJPY remains bullish despite this week’s fade off highs. The current flat correction appears to be a flag formation - a bullish continuation pattern. Sights are on 186.31, the top of a bull channel drawn from the Feb 28 low. This level also represents a key resistance point. Note that support at 183.17, the 20-day EMA, has been pierced. A clear breach of it would signal the start of a stronger corrective cycle.   

• Precious metals have pulled back on Wednesday, with gold falling by 0.8% to $4,457/oz and silver down by 3.5% at $78.4/oz. At the same time, platinum has also fallen by ~6%, while palladium is down by almost 4%.
• Despite the move, prices remain notably higher compared with levels a week ago, and bullish technical conditions remain in place, aided by geopolitical tensions stemming from US/Venezuela developments.
• For gold, initial resistance and the bull trigger is the Dec 26 all-time high of $4,550. A break of this level would open $4,578.3, a Fibonacci projection.
• First support at $4,361.7, the 20-day EMA, which has been pierced.
• Similarly, the trend set-up for silver remains bullish, with the bull trigger at $84.008, the Dec 29 high. Clearance of this level would confirm a resumption of the uptrend.
• The first important support to watch lies at $70.674, the 20-day EMA.
• Elsewhere, WTI crude is lower today after President Trump announced that Venezuela will ship up to 50m bbl of oil to the US. In addition, CNBC reported that such flows will continue in return for reduced sanctions on Venezuela.
• WTI Feb 26 is down by 1.6% at $56.2/bbl.
• From a technical perspective, a bearish theme for WTI futures remains in place, with initial support at $54.89, the Dec 16 low. Below here, a resumption of the bear leg would signal scope for a move towards $53.77, a Fibonacci projection.

• Our survey of primary dealer analyst expectations shows a median estimate of 75k nonfarm payroll gains in December after 64k in November and -105k in October.
• The private sector should drive this, with a median also of 75k across twelve estimates.
• Public sector payrolls are indeed for the most part seen broadly flat, with a range of -10k to +10k, but Jefferies are a clear standout at 65k owing to timing within the payrolls reference week.
• The unemployment rate is on balance seen rounding down to 4.5% in December from an unrounded 4.56% in November. There’s a wide range here of 4.3% (Jefferies) to 4.7% (Citi) although it’s broadly seen as between 4.5% or 4.6%, unsurprisingly owing to that unrounded 4.56%.
• Average hourly earnings growth is seen at 0.3% M/M after two volatile months with a surprisingly soft 0.14% in Nov and 0.44% in Oct, but with risks skewed lower including just 0.1% from Citi and multiple 0.2% estimates.
• We include selected excerpts of analyst previews in the full MNI US Payrolls Preview (found here).