GBPUSD TECHS: Approaching The Bear Trigger
- RES 4: 1.2406 High Jun 16 and a key resistance
- RES 3: 1.2332 High Jun 27
- RES 2: 1.2166/2293 50-day EMA / High Aug 01
- RES 1: 1.2004/1.2088 Low Aug 5 / 20-day EMA
- PRICE: 1.1815 @ 17:13 BST Aug 19
- SUP 1: 1.1792 Low Aug 19
- SUP 2: 1.1760 Low Jul 14 and the bear trigger
- SUP 3: 1.1673 1.00 proj of the May 27 - Jun 14 - 16 price swing
- SUP 4: 1.1600 round number support
GBPUSD remains soft and the pair continued to weaken Friday. Thursday’s sell-off resulted in a move below support at 1.2004, Aug 5 low. The break lower strengthens a short-term bearish condition and the focus is on the key support and bear trigger at 1.1760, the Jul 14 low. A break would confirm a resumption of the broader downtrend. Key short-term resistance is unchanged at 1.2293, Aug 1 high. Initial firm resistance is at 1.2004.
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ECB: Lagarde: Will Hike As Much As Needed To Tame Prices
Bloomberg reports the following headlines from ECB President Lagarde in an op-ed for Funke Mediengruppe.
* ECB'S LAGARDE: WILL HIKE RATES AS MUCH AS NEEDED TO TAME PRICES
*ECB’S LAGARDE VOWS RECORD INFLATION WILL RETURN TO 2% TARGET
*LAGARDE: NEW ECB TOOL TO HELP KEEP PRICES STABLE IN MEDIUM TERM
“We will raise interest rates for as long as it takes to bring inflation back to our target,” Lagarde added. The Governing Council will “decide on the right pace for our next steps based on the newly available data.”
We note that this comes the day after the ECB surprisingly hiked 50bps (markets had been torn between a 25bp and 50bp hike) but also, depending on when it was written, shows little worry for the miss in the Eurozone PMIs this morning with both the manufacturing survey and composite falling into contraction territory.
US TSY OPTIONS: Second Half Option Roundup
Much better Tsy option volumes on the day, bullish tone as underlying futures hold strong gains since weaker than exp Services sector PMI, long put unwinds and pick-up in call buying:
- over 35,000 TYU 120 calls, wide range from 1-10
- 10,300 TYQ 120.5 calls, 1
- 5,000 TYU 118/120 put spds, 46
- 1,500 TYU 120 straddles, 222
- 10,700 FVQ 112.5 puts, 0.5-2
- 7,600 FVQ 112.75 puts, 2
- 5,000 TYU 114.5 puts, 6
- 5,900 TYU 116.5/118/118.5/120 put condors
EURGBP TECHS: Bearish Focus
- RES 4: 0.8762 1.00 proj of the Apr 14 - May 12 - 17 price swing
- RES 3: 0.8721 High May 26 2021 and Jun 15 / bull trigger
- RES 2: 0.8627/79 High Jul 4 / High Jul 1
- RES 1: 0.8585 High Jul 21
- PRICE: 0.8499 @ 16:12 BST Jul 22
- SUP 1: 0.8403 Low Jul 13
- SUP 2: 0.8393 Low May 17 and a key support
- SUP 3: 0.8367 Low May 2
- SUP 4: 0.8313 Low Apr 22
EURGBP conditions still appear bearish, with the cross’ failure to hold an intraday rally the latest sign of the negative outlook. The cross holds below the 50-day EMA and scope is seen for a deeper retracement with attention on support at 0.8393, the May 17 low. Clearance of this level would strengthen a bearish case. On the upside, initial resistance is seen at 0.8627, the May 26 2021 and Jun 15 high. A clear breach here is required to signal a possible reversal.
