EUROSTOXX50 TECHS: (H5) Testing Support AT The 50-Day EMA

In case you missed it overnight, the KPMG/REC Report on Jobs for January pointed to another downbeat assessment of the UK labour market.

• Most notable is probably that permanent salary growth eased to the "slowest in the current sequence of inflation" and was "well below the historical trend."
• Permanent placements continued to fall (at a relatively similar pace albeit slightly slower than in December). But perhaps more significantly, temporary placements fell at their fastest pace since mid-2020.
• Vacancies fell with the press release noting for permanent workers "the rate of contraction accelerating for the fifth successive month to a near four-and-a-half-year peak."
• Data was collected 9-27 January.
• In terms of implications for the MPC, this is a relatively closely watched release but we don't think it will be enough to really change any individual member's view. In many ways it just reinforces the signals seen in recent months. As we noted in our BOE Review, we think that we need one of Bailey, Breeden or Lombardelli to soften their stance if we are to see a March cut.

• RES 4: 107.233 76.4% retracement of the Dec 2 - Jan 15 bear leg
• RES 3: 107.170 High Dec 20    
• RES 2: 107.081 61.8% retracement of the Dec 2 - Jan 15 bear leg
• RES 1: 107.045 High Jan 3          
• PRICE: 106.910 @ 06:12 GMT Feb 10   
• SUP 1: 106.805 Low Jan 3               
• SUP 2: 106.772 20-day EMA
• SUP 3: 106.600/515 Low Jan 31 / 30 
• SUP 4: 106.435 Low Jan 15 and key support  

A bull cycle that began Jan 15 in Schatz futures remains in play. The contract has recently traded through a number of important resistance points and the latest impulsive gains highlight a stronger reversal. Furthermore, the recent pause appears to be a flag formation - a bullish continuation signal. The focus is on 107.081, a Fibonacci retracement point. Initial firm support to watch lies at 106.775, the 20-day EMA. First support is 106.805, the Feb 3 low.

• RES 4: 1.2667 High Dec 19
• RES 3: 1.2610 38.2% retracement of the Sep 26 ‘24 - Jan 13 bear leg   
• RES 2: 1.2576 High Jan 7 
• RES 1: 1.2550 High Feb 5
• PRICE: 1.2403 @ 06:23 GMT Feb 10
• SUP 1: 1.2361/2249 Low Jan 6 / 3   
• SUP 2: 1.2161 Low Jan 17 / 20
• SUP 3: 1.2100 Low Jan 10 and the bear trigger 
• SUP 4: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing    

GBPUSD is in consolidation mode and remains below the Feb 5 high. The pair has recently traded above the 20- and 50-day EMAs, and pierced 1.2523, the Jan 27 high. A resumption of gains would signal scope for a move towards 1.2610, a Fibonacci retracement. On the downside, key short-term support to watch has been defined at 1.2249, the Jan 3 low. Clearance of this level would instead highlight a reversal.