EURUSD TECHS: Bear Channel Top Still Intact
- RES 4: 1.0954 High Apr 11
- RES 3: 1.0936 High Apr 21
- RES 2: 1.0795 Bear channel resistance drawn from the Feb 10 high
- RES 1: 1.0787 High May 30
- PRICE: 1.0711 @ 06:18 BST June 1
- SUP 1: 1.0643/0533 Low May 25 / Low May 20
- SUP 2: 1.0461 Low May 18 and19
- SUP 3: 1.0350 Low May 13 and bear trigger
- SUP 4: 1.0341 Low Jan 3 2017 and a key support
EURUSD edged off recent highs Tuesday and has so far reversed a challenge on the top of the bear channel drawn from the Feb 10 high. The channel top intersects at 1.0795 today. This level marks a key short-term resistance where a break would strengthen bullish conditions and highlight a stronger short-term reversal. The primary trend is down though and a reversal lower would reinforce a bearish theme and open 1.0533 initially.
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EUROZONE: Timeline of key events (Times BST)
| Event | Time | Country | Event |
| 02-May | 800 | DE | Retail Sales |
| 02-May | 815 | ES | IHS Markit Manufacturing PMI (f) |
| 02-May | 845 | IT | IHS Markit Manufacturing PMI (f) |
| 02-May | 850 | FR | IHS Markit Manufacturing PMI (f) |
| 02-May | 855 | DE | IHS Markit Manufacturing PMI (f) |
| 02-May | 900 | EU | IHS Markit Manufacturing PMI (f) |
| 02-May | 1000 | EU | Economic/Industrial Sentiment/Consumer Confidence |
| 03-May | ---- | EU | ECB Lagarde & Panetta in Eurogroup Meeting |
| 03-May | 0855 | DE | Unemployment |
| 03-May | 1000 | EU | PPI / Unemployment |
| 03-May | 1400 | EU | ECB Lagarde High School Q&A |
EURUSD TECHS: Path of Least Resistance Remains Down
- RES 4: 1.0936 High Apr 21 and a key resistance
- RES 3: 1.0852 High Apr 22
- RES 2: 1.0767 20-day EMA
- RES 1: 1.0655/0758 High Apr 27 / Low Apr 14 - recent breakout level
- PRICE: 1.0517 @ 06:13 BST May 2
- SUP 1: 1.0472/54 Low Apr 28 / Low Jan 1 2017
- SUP 2: 1.0390 Low Jan 4 2017
- SUP 3: 1.0341 Low Jan 3 2017 and a key support
- SUP 4: 1.0333 1.236 proj of the Feb 10 - Mar 7 - 31 price swing
The EURUSD trend direction is unchanged and conditions remain bearish. The pair has recently probed 1.0494, Feb 22 2017 low. The move to fresh trend lows last week, confirms an extension of the bearish price sequence of lower lows and lower highs. Further weakness is likely and the focus is on 1.0454 next, the Feb 22 2017 low. Key short-term resistance has been defined at 1.0936, the Apr 21 high. Initial firm resistance is seen at 1.0758.
JGBS: One-Way Traffic
Friday’s weakness in U.S. Tsys seeped through into JGBs, with JGB futures opening lower and moving in a downward direction for the bulk of the Tokyo session. The contract sits 35 ticks below Thursday’s settlement levels at typing, after Japanese participants returned from their elongated weekend.
- Meanwhile, cash JGBs sit little changed to ~3bp cheaper across the curve. 10s provide the firmest point on the JGB curve (aided by the presence of the BoJ’s fixed rate operations), while 7s and 30+-Year paper provide the weakest points, the former on the weakness in futures and the latter on the relative lack of BoJ control in that area of the curve.
- Domestic headline flow has been light, with wider affairs driving price action.
- This has left little to counter the offshore-driven weakness, as Tokyo participants prepare for a three-day break, which will be observed from Tuesday through Thursday.
