USDJPY TECHS: Oversold But Bears Remain In The Driver’s Seat

• RES 4: 1.2672 50-day EMA
• RES 3: 1.2607 High Dec 30     
• RES 2: 1.2533/2576 20-day EMA / High Jan 7 
• RES 1: 1.2367 High Jan 9 
• PRICE: 1.2208 @ 19:13 GMT Jan 10
• SUP 1: 1.2187 Low Nov 10 2023
• SUP 2: 1.2138 Low Nov 2 ‘23 
• SUP 3: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing  
• SUP 4:  1.2037 Low Oct 4 ‘23 and a key support    

The trend condition in GBPUSD remains bearish and last week’s sell-off reinforces the bear trend - the break lower confirms a resumption of the downtrend. The move down also marks an extension of the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant bear trend. Sights are on 1.2187 next, the Nov 10 2023 low. Initial resistance is at 1.2367, the Jan 9 high.

• RES 4: 1.0630 High Dec 06
• RES 3: 1.0513 50-day EMA
• RES 2: 1.0437/58 High Jan 6 / High Dec 30
• RES 1: 1.0358 High Jan 8
• PRICE: 1.0239 @ 18:56 GMT Jan 10
• SUP 1: 1.0215 Intraday low 
• SUP 2: 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg
• SUP 3: 1.0151 2.0% 10-dma envelope
• SUP 4: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing    

The trend condition in EURUSD remains bearish and recent short-term gains have proved to be a correction. Friday’s move lower resulted in a print below 1.0226, the Jan 2 low. A clear break of this level would confirm a resumption of the downtrend and mark an extension of the price sequence of lower lows and lower highs. Sights are on 1.0201 next, a Fibonacci retracement point. Resistance to watch is 1.0458, the Dec 30 high.

• Treasuries gapped lower after Friday morning's larger than expected December non-farm and private payroll gains while unemployment dipped slightly.
• The 256k in December leaves a strong recent trend, with 255k in Sep, an average of 128k for those two months (initially 132k) before surprisingly reaccelerating again. Unemployment rate: 4.086% in Dec after very small downward revisions in the prior two months, with 4.23% in Nov (initially 4.246%) and 4.14% in Oct (initially 4.15%).
• The Dec'24 10Y contract traded down to 107-12 low (-27) well through technical support of 107-19.5 (1.618 proj of the Oct 1 - 14 - 16 price swing) next level: 107-04 (Low Apr 25 ‘24 and a key support). Curves bear flattened but finished off lows, 2s10s -3.937 at 38.383 vs. 36.572 low, 5s30s -9.612 at 37.484. 10Y yield taps 4.7860 - highest since May 2022.
• Futures retreated towards post data lows late in the session while projected rate cuts through mid-2025 have retreated since this morning's data, current vs. morning levels* as follows: Jan'25 at -0.7bp (-1.7bp), Mar'25 -6.3bp (-10.1bp), May'25 -10.5bp (-15.9bp), Jun'25 -18.2bp (-25.6bp), Jul'25 -20.2bp (25.5bp).
• Next week brings CPI and PPI inflation measures on Wednesday and Thursday respectively, the scheduled Fed speaker docket rather muted with the Fed Blackout next Friday.