EURUSD TECHS: Bearish Threat Still Present
- RES 4: 1.0615 High Jun 27
- RES 3: 1.0559 1.764 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 2: 1.0536 High Nov 24 / Jun 29
- RES 1: 1.0497 High Nov 28
- PRICE: 1.0325 @ 19:52 GMT Nov 29
- SUP 1: 1.0297 Low Nov 23
- SUP 2: 1.0223/0198 Low Nov 21 / High Sep 12
- SUP 3: 1.0094 High Oct 27 and a key near-term resistance
- SUP 4: 1.0095 50-day EMA
EURUSD remains below this week’s high. The weak close Monday is a potential bearish development that points to a possible top. In pattern terms, Monday is a shooting star candle - a reversal signal. An extension lower would expose key support at 1.0223, Nov 21 low. Clearance of this level would confirm a reversal and signal scope for a deeper pullback. A break of 1.0497, Nov 28 high, is required to resume recent bullish price action.
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USDCAD TECHS: Key Support Zone Holds - For Now
- RES 4: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 3: 1.4000 Psychological round number
- RES 2: 1.3855/3977 High Oct 21 / 13 and the bull trigger
- RES 1: 1.3748 High Oct 25
- PRICE: 1.3609 @ 15:38 BST Oct 28
- SUP 1: 1.3496 Low Oct 27
- SUP 2: 1.3462 50-day EMA
- SUP 3: 1.3358 Low Sep 21
- SUP 4: 1.3227 Low Sep 20
USDCAD remains below the 20-day EMA and maintains a bearish tone as the reversal from 1.3977, Oct 13 high, extends. Support at 1.3503, the Oct 4 high, has been pierced. Note that the 50-day EMA intersects at 1.3462. Clearance of these two chart points (a key support zone) would signal scope for a deeper pullback. The broader trend direction is up and the pullback is considered corrective. Initial firm resistance is 1.3855, Oct 21 high.
US TSYS: Tsy Yields Grind Higher, Focus on Next Week's fOMC
Tsys remain weaker after the bell - near early session lows after some choppy first half trade. Tsys bounced after latest Employment Cost Index came out in-line w/ estimates at 1.2% (1.3% prior) but with a relatively larger moderation in private sector wages within, PCE in-line as well at +0.4%. (down-revision to core PCE weaker than expected but was all rounding).
- Futures reverse course, extend lows following 10Y Block sale at 0836:03: -8,700 TYZ2 111-05.5, sell through 111-07 post-time bid.
- Protracted round of support followed, yields fell from 4.1681% high to 4.0791% low in lead-up to U-Mich sentiment (1Y inflation exp up to 5% from 4.7% prior) while Much weaker than expected pending home sales in Sept (-10% M/M vs cons -4.0%), suggesting the slide in existing home sales isn't done yet.
- Tsy gradually retreated from midmorning highs through the second half with no obvious headline driver as 30YY climbed back around 4.1287%, yield curves bear flattening (2s10s -5.893 at -42.050).
- Deferred Eurodollar calendar spds extend inversion to new cycle lows this morning: indicating a larger ease in current hikes over the latter half of 2023: Mar'23/Jun'23 -0.095; Dec'22/Red Dec'23 at -0.415, Mar'23/Red Mar'24 at -0.725, Jun'23/Red Jun'24 at -0.815.
AUDUSD TECHS: Watching The 50-Day EMA
- RES 4: 0.6682 Low Jul 14 and a recent breakout level
- RES 3: 0.6656 High Sep 23
- RES 2: 0.6550 50-day EMA
- RES 1: 0.6547 High Oct 4 and key resistance
- PRICE: 0.6407 @ 15:37 BST Oct 28
- SUP 1: 0.6401/6303 20-day EMA / Low Oct 25
- SUP 2: 0.6210/6170 Low Oct 21 / 13 and the bear trigger
- SUP 3: 0.6133 1.382 proj of the Apr 5 - May 12 - Jun 3 price swing
- SUP 4: 0.6099 76.4% retracement of the 2020 - 2021 bull cycle
AUDUSD is trading closer to this week’s highs. The outlook is bullish following the reversal from 0.6170, the Oct 13 low. The focus is on 6547, Oct 4 high and the 50-day EMA, a key short-term hurdle that intersects at 0.6550. A break of this EMA would strengthen current bullish conditions. Note that gains are still considered corrective and the broader trend direction remains down. Initial support to watch lies at 0.6401, the 20-day EMA.
