EURJPY TECHS: Bearish Outlook
- RES 4: 148.40/45 High Oct 21 and the bull trigger / High Dec 15 2014
- RES 3: 147.75 High Oct 31
- RES 2: 147.10 High Nov 9 and a key near-term resistance
- RES 1: 146.14 High Nov 24
- PRICE: 144.88 @ 15:53 GMT Nov 25
- SUP 1: 143.35 Low Nov 14
- SUP 2: 142.57 Low Nov 11 and the bear Trigger
- SUP 3: 141.60 61.8% retracement of the Sep 26 - Oct 21 bull leg
- SUP 4: 140.90 Low Oct 10
EURJPY remains below Wednesday’s high of 146.14. The cross has failed to confirm a clear break of short-term trendline resistance drawn from the Oct 21 high. Key near-term resistance at 141.10 also remains intact, Nov 9 high. This cements the underlying bearish threat, which holds as long as price remains below the short-term trendline resistance that intersects at 145.69 today. An extension lower would open the bear trigger at 142.57, Nov 11 low.
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USDCAD TECHS: Bears Watch The Close Below 20-Day EMA
- RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
- RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 2: 1.4000 Psychological round number
- RES 1: 1.3855/3977 High Oct 21 / 13 and the bull trigger
- PRICE: 1.3562 @ 15:58 BST Oct 26
- SUP 1: 1.3508 Low Oct 26
- SUP 2: 1.3503 Low Oct 4 and a key support
- SUP 3: 1.3448 50-day EMA
- SUP 4: 1.3358 Low Sep 21
USDCAD pierced the 20-day EMA support Tuesday, and is extending losses. Tuesday’s close is a bearish development and works against the broader uptrend. For now, the recovery from 1.3503, Oct 10 high, is reinforcing bullish conditions. Moving average studies also highlight an uptrend and 1.3838, Sep 30 high has been cleared. A clear break and close below the 20-day EMA would suggest scope for a pullback towards 1.3503, Oct 4 low.
US TSYS: Hawks Eat Crow After BOC Hikes Less Than Expected
Tsys holding strong gains after the close. Tsys had gapped to new session highs early Wed after the BOC hiked less than expected: 50bp to 3.75% vs. 75bp to 4.0% as "hikes beginning to weigh on growth" BOC Gov Macklem. Tsy yields were already extending lows as softer data cools expectations of more hawkish year end policy expectations - before 30YY fell to 4.1401% low on the annc.
- Tsy futures scaled back support slightly in the minutes post-BOC, see-sawed near highs amid debate over exogenous factor will really have on influencing the Fed's policy making over the next two meetings.
- Despite a 0.075 rally to 94.98 in Dec Eurodollar futures, expectations of a 75bp hike on Nov 2 remains intact, chances of another 75bp in Dec continue to cool.
- While last Fri's WSJ/Timiraos + Fed Daly comments over hiking too much have helped take the pressure off year end expectations, some pundits see risks swinging back towards hawkish again as Fed Chairman Powell likely to push back on less hawkish rate hike optimism and reiterate Sep messaging/DOT plot guidance.
- Reminder, the next employment report (covering October) is on November 4 - after the FOMC. An in-line read will likely tip the scales back toward 75bp hike in Dec.
EURJPY TECHS: Holding On To Monday’s Gains
- RES 4: 149.46 1.382 proj of the May 12 - Jun 28 - Aug 2 price swing
- RES 3: 148.88 High Dec 9 2014
- RES 2: 148.40/45 High Oct 21 and the bull trigger / High Dec 15 2014
- RES 1: 147.73 High Oct 25
- PRICE: 147.25 @ 15:48 BST Oct 26
- SUP 1: 145.64 / 143.80 High Sep 12 / Low Oct 24 and key support
- SUP 2: 141.99 50-day EMA
- SUP 3: 140.90 Low Oct 10
- SUP 4: 139.44/137.40 Low Sep 29 / 26 and key support
The EURJPY uptrend remains intact and the latest sharp pullback appears to be a correction. The cross has found strong support below 144.18, the 20-day EMA and key support has been defined at 143.80, Monday’s low. A continuation higher would open last Friday’s high of 148.40. This is the bull trigger and a break would confirm a resumption of the uptrend. Moving average studies continue to highlight a bullish backdrop.
