AMERICAS OIL: WTI Crude Oil has returned to losses today

• RES 4: 160.00 Round number resistance   
• RES 3: 159.45 High Jul 12
• RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing  
• RES 1: 158.42 High Jan 7  
• PRICE: 157.80 @ 19:35 GMT Jan 7
• SUP 1: 156.05 20-day EMA
• SUP 2: 154.44 Low Dec 19  
• SUP 3: 154.00 50-day EMA
• SUP 4: 153.16 Low Dec 17  

USDJPY bulls remain in the driver’s seat and Tuesday’s fresh cycle high reinforces current bullish conditions. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and this has paved the way for a move towards 159.45, the Jul 12 high. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support is 156.05, the 20-day EMA. 

The minutes to the December 2024 FOMC meeting are released Wednesday at 1400ET. A few sell-side expectations:

• Citi: “The objective hawkishness of the mid-December FOMC meeting should also be reflected in minutes from the meeting… This would include discussion of concerns that inflation could remain persistently elevated if policy rates do not remain suitably restrictive. In this context there could be some hawkish discussion of the idea that the neutral rate of interest has moved higher and that policy rates may be closer to that rate than previously thought. That would be part of the rationale for the committee now planning to slow the pace of rate cuts…“Most” will continue to characterize the labor market as “solid” although some will likely note (as Powell did) that it is still “very gradually” softening…we are interested in any discussion of balance sheet policy. Liquidity is still likely to be characterized as more than ample, but officials may have discussed winding down balance sheet reduction at an upcoming meeting to ensure it stays that way.”
• Deutsche: “Given Powell’s description of the meeting and the dissent from Cleveland’s Hammack, we suspect that the minutes will detail a divergence in views on the appropriate action at the meeting. We will also look for clues about how officials reflected upcoming changes to fiscal, trade and immigration policies in their forecasts. While Powell noted that some participants began to incorporate “highly conditional estimates of economic effects” of President-elect Trump’s policies, the extent of the upward revision to the inflation forecasts at the meeting – core PCE was revised from 2.2% to 2.5% in 2025 as sixteen out of nineteen officials now see inflation at or above 2.5% this year, up from just one official in September – suggests that the incorporation of policy changes could have been broader.”

• RES 4: 0.8448 High Oct 31 and reversal trigger
• RES 3: 0.8376 High Nov 19 and a bull trigger 
• RES 2: 0.8356 High Nov 27
• RES 1: 0.8312/29 50-day EMA / High Dec 27 
• PRICE: 0.8290 @ 19:22 GMT Jan 7
• SUP 1: 0.8263/23 Low Dec 31 / 19
• SUP 2: 0.8203 Low Mar 7 2022 and a major support 
• SUP 3: 0.8200 Round number support
• SUP 4: 0.8188 1.00 proj of the Oct 31 - Nov 11 - 19 price swing

EURGBP is unchanged and remains in consolidation mode. Resistance at 0.8312, the 50-day EMA, has recently been pierced. A clear breach of the average would undermine the dominant bear theme and highlight a stronger reversal. A resumption of the primary downtrend would pave the way for a move towards major support at 0.8203, the Mar 7 ‘22 low and the lowest point of a multi-year range.