USD: USDJPY is down 1% going into the European session

• RES 4: 93.09 High Dec 20 
• RES 3: 92.75 50.0% retracement of the Dec 3 - Jan 13 bear leg     
• RES 2: 92.27 High Jan 6 
• RES 1: 91.96 High Jan 17               
• PRICE: 91.58 @ Close Jan 20
• SUP 1: 90.68 Low Jan 16                               
• SUP 2: 89.68/88.96 Low Jan 15 / 13 and the bear trigger 
• SUP 3: 88.87 2.764 proj of the Dec 20 -27 - Jan 2 price swing
• SUP 4: 88.53 3.000 proj of the Dec 20 -27 - Jan 2 price swing

The medium-term trend condition in Gilt futures is unchanged, the direction remains down. However, strong gains last week highlight a corrective phase and if correct, signals scope for a continuation higher near-term. Attention is resistance at the 20-day EMA, at 91.55. This average has been breached, a clear break would suggest scope for a stronger retracement. On the downside, the bear trigger has been defined at 88.96, the Jan 13 low.

• The importance of UK labour market data may have fallen a little for the MPC, but it is still incredibly important for the market, despite growth concerns having picked up recently and activity and PMI data increasingly watched.
• The scope for further revisions make this month’s print even more unpredictable.
• Rounded to 1dp, the majority (6/8) of analyst forecasts we have seen for private sector regular AWE look for a 5.8%Y/Y print in the 3months to November, up from 5.37%Y/Y in the 3-months to the end of October. The other two forecasts we have seen look for 5.7%.
• In terms of the “headline” whole economy AWE numbers, ex-bonus forecasts are generally 5.5%Y/Y in the 3-months to November (from 5.19%Y/Y in the 3-months to October) while the total (including bonus) whole economy AWE forecasts are split between 5.6-5.7%Y/Y in the 3-months to November (with one analyst looking for 5.5%).

For the full MNI preview including summaries of a dozen sellside views click here.

• 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: 156.56 20-day EMA    
• PRICE: 155.45 @ 06:50 GMT Jan 21
• SUP 1: 155.00/154.78 50-day EMA / Intraday low 
• SUP 2: 154.32Trendline support drawn from the Sep 16 ‘24 low
• SUP 3: 153.16 Low Dec 17
• SUP 4: 152.46 Low Dec 13   

The trend condition in USDJPY remains bullish and recent weakness appears corrective - for now. The pair has traded through the 20-day EMA and an extension lower would signal scope for a deeper retracement. Support to watch is 155.00, the 50-day EMA, and 154.32, a trendline drawn from the Sep 16 ‘24 high. A clear breach of both levels would highlight a stronger reversal. Key resistance and the bull trigger is 158.87, the Jan 10 high.