EURJPY TECHS: Maintains A Bearish Tone
Feb-26 20:00
- RES 4: 161.35 61.8% retracement of the Dec 30 - Feb 10 bear leg
- RES 3: 161.19 High Feb 13
- RES 2: 160.09 50-day EMA and key short-term resistance
- RES 1: 158.61 20-day EMA
- PRICE: 156.90 @ 16:21 GMT Feb 26
- SUP 1: 155.82/155.61 Low Feb 21 / 10 and the bear trigger
- SUP 2: 155.15 Low Sep 16 ‘24
- SUP 3: 154.42 Low Aug 5 ‘24 and key medium-term support
- SUP 4: 153.87 Low Dec 14 ‘23
EURJPY is unchanged and the cross maintains a softer tone. Sights are on key short-term support at 155.61, the Feb 10 low. Clearance of this level would highlight an important bearish break and set the scene for an extension towards 155.15, the Sep 16 ‘24 low, and 154.42, the Aug 5 ‘24 low and a key medium-term bear trigger. Initial firm resistance to watch is 158.61, the 20-day EMA. Key resistance is 160.09, the 50-day EMA.
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COMMODITIES: WTI Slumps, Precious Metals Decline Amid Equity Market Sell-Off
Jan-27 19:56
- 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.
CANADA: Median Analyst Eyes 2.5% Terminal For BoC
Jan-27 19:52
- 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.
US DATA: New Home Sales Pick Up, But Outlook Remains Subdued
Jan-27 19:40
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.
