EURGBP TECHS: Bearish Threat Still Present
- RES 4: 0.8624 High Oct 1 2021
- RES 3: 0.8600 High Dec 8 2022
- RES 2: 0.8512/59 High Mar 31 / 2.0% 10-dma envelope
- RES 1: 0.8377/8435 50-day EMA / High Apr 4
- PRICE: 0.8346 @ 19:46 BST Apr 8
- SUP 1: 0.8296 Low Mar 23 and a key support
- SUP 2: 0.8276 76.4% retracement of the Mar 7 - 31 rally
- SUP 3: 0.8203 Low Mar 7 and the bear trigger
- SUP 4: 0.8117 High Apr 7 2016
EURGBP remains vulnerable. Last week’s move lower marked an extension of the reversal from the 0.8512 high on Mar 31. This recent move lower, signals scope for a continuation of the bear leg and the cross has traded through both the 20- and 50-day EMAs. The focus is on 0.8296, the Mar 23 low. On the upside, initial resistance is seen at 0.8377, the 50-day EMA ahead of 0.8435, the Apr 4 high.
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CANADA: Hanging Onto Post-Jobs Report Moves
- FX: The loonie holds onto all its gains following the far stronger than expected labour market report earlier which saw the unemployment rate fall to just 0.1pt off lows at 5.5% (from 6.5%, consensus 6.2%).
- It’s up against all majors today, whilst USDCAD falls -0.4% to leave the pair at 1.2713, roughly in the middle of the post-invasion range and having earlier cleared the 50-day EMA of 1.2713. Next support is seen at 1.2587 (Mar 3 low).
- FI: GoC yields have moved higher since the initial reaction, with the 2YY extending to new highs, currently up +9.5bp at 1.64% and in turn closing some of the negative yield differential with the US to -10bps.
- The rest of the curve has been dragged higher more belatedly, with 10YY +6.2bps having briefly clearing 2% for the first time since 2019. This limits the flattening in 2s10s to leave it at 35bps, off lows of 25bps from last week but prior to that the flattest since Nov 2020.
EURGBP TECHS: Probes A Key Resistance
- RES 4: 0.8502 2.0% 10-dma envelope
- RES 3: 0.8498 High Dec 23
- RES 2: 0.8478 High Feb 7 and a bull trigger
- RES 1: 0.8436 Mar 10 High
- PRICE: 0.8376 @ 17:22 GMT Mar 11
- SUP 1: 0.8317 Low Mar 9
- SUP 2: 0.8278 Low Mar 7
- SUP 3: 0.8203 Low Mar 7 and the bear trigger
- SUP 4: 0.8131 Low Jun 27, 2016
EURGBP briefly traded higher Thursday, above the key resistance at the Feb 25 high of 0.8406. This week's strength completes a 100% retracement of the most recent downleg between Feb 25 - Mar 7 and strengthens short-term bullish conditions. The move higher signals scope for a climb towards the next resistance at the early February highs of 0.8478. Initial support is seen at 0.8317, the Mar 9 low.
US EURODLR OPTIONS: Midcurve Calls, Opener
- +15,000 short Jun 97.93 calls, 11.5 ref 97.58
