AUD: AUD/USD - Trying To Get A Foothold Above 0.6700, Needs To Clear 0.6730
The AUD/USD had a range overnight of 0.6675-0.6710, Asia is trading around {AUDUSD Curncy}. The AUD continues to struggle to get a foothold back above 0.6700, but its inability to push higher against the USD belies how it is outperforming in the crosses as the USD trades broadly stronger. The AUD price action remains constructive and its ability to shrug off the bounce in the USD does stand out. Technically while the AUD remains above 0.6600 dips should continue to find support. In the Asian session, the short-term range looks to be 0.6650-0.6730 a break either side and we could see a larger extension.
- Bloomberg - “The US and Taiwan struck a trade deal that would lower tariffs on goods from the island to 15% and see Taiwanese chip companies increase financing for American operations by $500 billion.”
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6600(AUD1.98b), 0.6640(AUD1.24b), 0.6800(AUD2.51b) . Upcoming Close Strikes : 0.6625(AUD833m Jan19), 0.6800(AUD860m Jan20) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 42 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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US TSYS: Back Near Highs After Rejecting Post-NFP Gap Bid
- Treasuries look to finish moderately higher, off post data highs as focus turned away from this morning's 4.6% unemployment rate with possible assistance from that heavy -105k in Oct NFP.
- Rounding and already known higher survey error saw Treasuries extend lows soon after, 10Y yield rising to 4.1939% high while the 2s10s curve climbed to new/near 4Y high of 69.086 - only to retreat to 66.624 after the bell.
- Retail sales growth was flat in October after rising 0.1% prior, a little softer than the expected 0.1% gain - core sales were significantly stronger than expected, implying strong retail momentum at the start of Q4.
- TYH6 currently trades 112-17 (+8) vs. 112-06 low / 112-22.5 high. Curves mildly flatter: 2s10s -.045 at 66.624 after climbing to new - near 4Y high of 69.086 this morning.
- US dollar index pullback to 97.87, the lowest level since October 03. However, the slightly messy release and associated uncertainty surrounding DOGE deferred resignations saw the Greenback rebound to 98.15.
- No Fed speakers during the session, Chicago Fed Pre Goolsbee will appear on CNN at 1600ET. Focus on Wednesday: several regional Fed economic measures, Fed speakers (Waller, Williams, Bostic) and $13B 20Y Bond re-open (912810UQ9).
AUDUSD TECHS: Bullish Wave Remains Intact
- RES 4: 0.6759 High Oct 11 ‘24
- RES 3: 0.6723 High Oct 21 ‘24
- RES 2: 0.6707 High Sep 17 and a key resistance
- RES 1: 0.6686 High Dec 10
- PRICE: 0.6636 @ 16:31 GMT Dec 16
- SUP 1: 0.6618/6592 Intraday low / 20-day EMA
- SUP 2: 0.6560 50-day EMA
- SUP 3: 0.6517 Low Nov 27
- SUP 4: 0.6466/21 Low Nov 26 / 21
A recent strong impulsive rally in AUDUSD strengthens the current bull cycle. Sights are on key resistance at 0.6707, the Sep 17 high and bull trigger. Note that moving average studies have recently crossed and are in a bull-mode position, reinforcing current conditions. A breach of 0.6707 would further strengthen the uptrend. Note that the trend is overbought. A pullback would allow this condition to unwind. First support is at 0.6592, the 20-day EMA.
US TSYS: Late SOFR/Treasury Option Roundup: Downside Put Grab
SOFR & Treasury option flow continued to revolve around downside put trade Wednesday. Projected rate cut pricing gains some momentum vs. early morning levels (*): Jan'26 steady at -6.1bp, Mar'26 at -15.2bp (-14.3bp), Apr'26 at -21.6bp (-20.8bp), Jun'26 at -36.1bp (-34.2bp).
- SOFR Options:
- Block, 5,000 SFRH6 96.37/96.43/96.50/96.68 broken call condors, 1.0 net
- -6,000 SFRM6 96.31/96.56/96.81 put flys, 8.0
- Block, +10,000 SFRZ6 97.00/98.00 call spds, 17.0 vs. 96.88/0.32%
- -8,500 0QZ6 96.62/96.75 put spds, 0.5 ref 96.75
- -2,000 SFRF6 96.56/96.68 call spds, 1.75 ref 96.48
- -5,000 SFRH6 96.75/96.87 call spds, 1.0 ref 96.505
- +3,000 SFRG6 96.50/96.62/96.75 call flys, 2.25
- +2,500 SFRH6 96.25/96.31/6.37/96.43 1x1x2x2 put condor 3.0 vs. 96.48
- -3,000 SFRH6 96.50/96.62 call spds 3.25 vs. 96.68/0.17%
- 4,500 SFRH6 96.56/96.68 call spds ref 96.47
- +2,000 SFRH6 96.37 puts, 3.75 vs. 96.46/0.30%
- +4,200 SFRF6 96.25/96.43/96.50 broken put flys, 0.25 ref 96.47
- +2,000 SFRG6 96.50/96.62 call spds, 3.0 ref 96.47
- +4,000 SFRF6 96.37 puts, 1.25
- +6,000 SFRU 96.37/96.81 2x3 put spds, 3.0-3.25 ref 96.835 to -.83
- 1,800 SFRF6 96.50 puts vs. 96.50/96.62 call spds ref 96.48
- 2,690 SFRU6 96.37/96.81/97.25 2x3x1 put flys ref 96.84
- Treasury Options:
- +67,185 USF6 108 puts at cab-7 ***
- 1,250 FVG6 108.75/109.25 5x4 put spd
- 1,800 TYG6 112/113 strangles, 50 ref 112-16
- 10,000 FVF6 109.5 calls, 7.5
- 4,000 TYG6 111/112 2x1 put spds, 7 net ref 112-11.5
- Block, +28,000 TYH6 110 puts, 11 vs. -15,000 TYG6 111 puts, 9
- +20,000 TYH6 110.5 puts, 15 ref 112-16.5
- 5,000 TYF6 113/113.5 1x2 call spds ref 112-11
- 6,000 TYG6 111/112/113 2x3x1 put flys ref 112-12.5
- +12,000 Weds Wkly 10Y 112 puts, 6-7
- -8,000 TYG6/TYH6 112.5 straddle spd, 33 vs. 112-09.5
- over 6,400 TYF6 113 calls, 9-10
- 7,000 TUH6 103.5/104/104.12/104.37 broken put condors, 2.5 vs. 104-09.75/0.04%
- +1,200 USF6 116.5 puts, 150 ref 114-30
- -3,000 TYF6 112.75 calls, 14-15 ref 112-12 to -13 /0.34%
- +2,000 TYF6 111.25 puts, 4
- +2,100 TYG6 111.5 puts, 21
- -1,065 FVG6 108/109 put spds, 16.5 ref 109-08/0.27%
- Expire today:
- over 19,000 Tue Wkly 10Y 112 puts ref 112-12.5
- over 15,000 Tue Wkly 1112.25 puts, 10-11
