EURJPY TECHS: Trend Needle Points North
- RES 4: 166.10 High Nov 6
- RES 3: 165.04 High Nov 15 and a key short-term resistance
- RES 2: 164.21 76.4% retracement of the Oct 31 - Dec 3 bear leg
- RES 1: 163.80 High Dec 19
- PRICE: 162.72 @ 07:24 GMT Dec 20
- SUP 1: 160.83/159.82 20-day EMA / Low Dec 18
- SUP 2: 158.67/157.87 Low Dec 11 / 09
- SUP 3: 156.18 Low Dec 03 and the bear trigger
- SUP 4: 155.15 Low Sep 16 and a key support
Thursday’s strong gains in EURJPY reinforce the current bullish condition. The cross has traded through Tuesday’s 162.48 high, to confirm a resumption of the recovery that started on Dec 3. A continuation higher would signal scope for an extension towards 164.21, the 76.4% retracement of the Oct 31 - Dec 3 bear leg. Key short-term support has been defined at 159.82, the Dec 18 low. A break of this level is required to signal a possible reversal.
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BUNDS: Edging lower post Cash open
- The German Bund has edged below Yesterday's low, fully reversing the Safe Haven price action seen Yesterday's following escalation in War risks.
- While the UK CPI was a beat, helping the Pound higher, the German contract actually jumped 10 ticks, with the move driven by the Cash open, ignoring the UK Data as the CBs (fed, BoE, ECB) rate outlook look to diverge.
- The German contract has since reversed the early bid post Cash open, to break through session low and the 132.00 figure. this should see the German 10yr Yield, when it is quoted, back above Yesterday's high of 2.355%.
- Support in Bund are at 131.68, 131.28, and 131.66 (circa 2.50% in Yield).
- Small resistance moves down to 132.54.
- There are no Tier 1 Data left for the Session, ECB will Publish Euro area Wages.
- SUPPLY: Greece €250mln 2034, too small, won't impact Bund, Germany 2052, 2053 (Equates combined 19.9k Buxl) will weigh, US Sells $16bn of 20yr.
SPEAKERS: ECB Escriva, Guindos, Stournaras, Makhlouf, BoE Ramsden, Fed Barr, Cook, Bowman, Collins.
GOLD TECHS: Finds Support
- RES 4: $2790.1 - High Oct 31 and the bull trigger
- RES 3: $2710.4/2750.0 - High Nov 11 / 5
- RES 2: $2651.3 - 20-day EMA
- RES 1: $2641.8 - Intraday high
- PRICE: $2629.5 @ 07:19 GMT Nov 20
- SUP 1: $2536.9 - Low Nov 14
- SUP 2: $2511.1 - Low Sep 12
- SUP 3: $2472.0 - Low Sep 4
- SUP 4: $2415.9 - 38.2% retracement of the Oct 6 ‘23 - Oct 31 bull leg
The long-term trend condition in Gold is unchanged, it remains bullish and the latest move down is considered corrective. Price has recovered from its recent lows. The 20-day EMA is at $2651.3. A clear break above it would highlight a possible reversal and signal and the end of the recent bearish corrective cycle. This would open $2710.4, the Nov 11 high. Key short-term support lies at $2536.9, Nov 14 high. A break would resume the bear cycle.
UK DATA: UK CPI Driver Details
- Comparing that to the forecasts services is a tenth higher than consensus but only 0.05ppt above the BOE unrounded forecast.
- Core goods was also higher than forecast, 0.15ppt about the MNI median and 0.07ppt above the BOE forecast.
- Going into the data, we had flagged upside risks from air fares, second hand cars and clothing - the first two of these saw larger upside surprises than expected while clothing increased more in line with expectations.
- Air fares contributed 0.07ppt to the change in headline CPI (and about double this contribution to services). Package holidays partially offset this, contributing -0.03ppt.
- Second hand cars we had expected to add 0.05ppt to headline CPI, but they were even stronger than we expected, adding 0.08ppt.
- Clothing and footwear increased from 0.84%Y/Y to 1.03%Y/Y (in line with our expectations).
- The biggest downside contributor was "recreation and culture", which contributed -0.11ppt to headline CPI, with cultural services contributing -0.06ppt of that alone.
- Energy was the big contributor - but that was almost exactly in line with expectations.
