EURJPY TECHS: Maintains A Bearish Tone

• WTI has slumped today, as energy markets trade lower in conjunction with the decline in equity markets, following DeepSeek’s Chinese rollout that has undermined US tech stocks.
• WTI Mar 25 is down by 2.1% at $73.1/bbl.
• The trend structure in WTI futures is still bullish despite the recent pullback. The move down appears corrective and is allowing an overbought trend reading to unwind.
• Having pierced the 20-day EMA, next support is at the 50-day EMA, at $72.15.
• A reversal higher would highlight the end of the correction and refocus attention on $79.48, the Apr 12 ‘24 high and a key resistance.
• Meanwhile, Henry Hub is trading down today as indications for warmer weather spark a sell off.
• US Natgas Feb 25 is down by 9.0% at $3.67/mmbtu.
• Elsewhere, spot gold has fallen by 1.2% to $2,738/oz, as precious metals have been caught up in the sell-off in equity markets.
• A bull cycle for gold remains in play, with sights still on $2,790.1, the Oct 31 all-time high. On the downside, the first key support to watch is $2,671.4, the 50-day EMA.

• The below table is a summary of analysts reviewed by MNI ahead of Wednesday's BoC decision, unanimously expecting a 25bp cut to take the overnight rate target to 3.00%.  
• BoC-dated OIS rates have pushed lower recently but are still more hawkish than the median analyst, pricing a terminal between 2.6-2.7%.
• Please find the full MNI BoC Preview here. 

December's pickup in new home sales was larger than expected, reaching 698k (675k expected) on an seasonally-adjusted annualized rate basis, up from 674k in November (revised up from 664k). 

• That marked a 3-month high (and a 6.7% Y/Y gain), with inventories down to 8.5 months worth of sales (from 8.7 prior and a recent peak of 9.4). Median prices for single-family homes rose 2.1% Y/y ($427k, not seasonaly adjusted).
• As with the previous week's stronger-than-expected existing home sales report, this suggested a slight tightening in the housing market at end-year, albeit at subdued levels (especially for existing).
• Some of the improvement may have resulted from the pullback in mortgage rates in the summer, which started reversing  in September/October.
• New home sales have been relatively less afftected than those of existing homes, in part because of homebuilder-provided incentives to offset high mortgage costs for buyers.
• With inventories remaining relatively high by historic standards and mortgage rates rebounding, it's unclear how much further homebuilding activity has to pick up in coming quarters: the NAHB's sentiment index, a leading indicator of building permits acitivity, has stabilized since plummeting  in mid-2023 but remains below historic averages.