USDJPY TECHS: Oversold But Bears Remain In The Driver’s Seat
- RES 4: 155.89 High Feb 3
- RES 3: 154.70 50-day EMA
- RES 2: 153.72 Low Jan 27
- RES 1: 152.89 High Jan 6
- PRICE: 152.33 @ 16:13 GMT Feb 11
- SUP 1: 150.93 Low Feb 07
- SUP 2: 149.69 Low Dec 9
- SUP 3: 148.65 Low Dec 3 ‘24 and a key support
- SUP 4: 148.01 Low Oct 9 ‘24
The pair is off lows, but retains a bearish theme in USDJPY. Last week’s move down reinforces current conditions. 151.06, 76.4% of the Dec 3 - Jan 10 bull leg, has been pierced. A clear break of it would open 149.69, the Dec 9 low. Firm resistance is seen at 154.70, the 50-day EMA. Note that the pair has entered oversold territory. A recovery would be considered corrective and would allow the oversold condition to unwind.
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GBPUSD TECHS: Bearish Trend Sequence
- 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.
EURUSD TECHS: Bearish Trend Sequence
- 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.
US TSYS: Strong Jobs & Unemployment Rate Dip Dashes Rate Cut Hopes
- 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.
