OIL PRODUCTS: KSA’s Gasoline Exports Hit 6-Year High in 2024: Argus

• RES 4: 159.45 High Jul 12  
• RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
• RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger 
• RES 1: 156.75 High Jan 23       
• PRICE: 153.87 @ 11:20 GMT Jan 27
• SUP 1: 153.34 Low Dec 18  
• SUP 2: 152.55 61.8% retracement of the Dec 3 - Jan 10 bull leg
• SUP 3: 151.81 Low Dec 12   
• SUP 4: 151.06 76.4% retracement of the Dec 3 - Jan 10 bull leg   

The primary trend condition in USDJPY remains bullish, however, today’s move down suggests scope for a stronger short-term bearish cycle. The pair has cleared two important support points; 155.15, the 50-day EMA (pierced), and 154.97, a trendline drawn from the Sep 16 ‘24 high. This paves the way for an extension towards 152.55, a Fibonacci retracement point. Initial firm resistance has been defined at 156.75, the Jan 23 high.

• Fed Funds implied rates are sharply lower from Friday’s close on broad risk-off on the back of the tech-led equity sell-off.
• This week’s decision is still seen as a lock-in for a pause, but a 25bp cut in March is starting to be seen as closer to 50/50 call with 10bp priced. June is still the next meeting with a 25bp cut fully priced though.
• Fed Funds last priced >50bp of cuts for 2025 briefly before the hawkish Dec 18 FOMC decision and before that Dec 13. It leaves the end-2025 point back in line with the median FOMC dot from that decision, having climbed from the 32bp priced before CPI less than two weeks ago.
• Cumulative cuts from 4.33% effective: 0.5bp Jan, 10bp Mar, 18.5bp May, 31bp Jun, 35.5bp Jul and 51bp Dec. 

• In FX, EURUSD remains in a short-term bull cycle - a correction. Last week’s gains resulted in a breach of the 50-day EMA, at 1.0457. The break higher strengthens short-term bullish conditions and sights are on 1.0574, 38.2% of the Sep 25 - Jan 13 bear leg. Initial support to watch is 1.0377, the 20-day EMA. A move through the EMA would signal a possible reversal.
• Friday’s gains in GBPUSD reinforces current bullish conditions. The pair has traded cleanly through the 20-day EMA, marking an extension of the reversal that started Jan 13. The break higher exposes the 50-day EMA, at 1.2520 and an important resistance. Clearance of the average would highlight a stronger bull cycle. First support lies at 1.2294, the Jan 23 low.
• The primary trend condition in USDJPY remains bullish, however, today’s move down suggests scope for a stronger short-term bearish cycle. The pair has cleared two important support points; 155.15, the 50-day EMA (pierced), and 154.97, a trendline drawn from the Sep 16 ‘24 high. This paves the way for an extension towards 152.55, 61.8% retracement of the Dec 3 - Jan 10 bull leg. Initial firm resistance has been defined at 156.75, the Jan 23 high.