EURUSD TECHS: Bearish Trend Structure
- RES 4: 1.0937 High Nov 5 / 6 and a key resistance
- RES 3: 1.0825 High Nov 7
- RES 2: 1.0689 50-day EMA
- RES 1: 1.0566/0630 20-day EMA / High Dec 06
- PRICE: 1.0508 @ 06:03 GMT Dec 12
- SUP 1: 1.0461/0335 Low Dec 2 / Low Nov 22 and the bear trigger
- SUP 2: 1.0311 1.382 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 3: 1.0258 1.500 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 4: 1.0201 61.8% retracement of the Sep 28 - Juk 18 bull leg
EURUSD continues to trade below 1.0630, the Dec 6 high. A resistance at 1.0566, the 20-day EMA, remains intact - for now. A close above this average would highlight a clear breach of it and signal scope for a stronger corrective recovery towards 1.0689, the 50-day EMA. An extension higher would also allow for an unwinding of the recent oversold condition. The medium-term trend direction is down. First support lies at 1.0461, the Dec 2 low.
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BUND TECHS: (Z4) Testing Resistance At The 20-Day EMA
- RES 4: 134.25 High Oct 16
- RES 3: 133.54 High Oct 24 and key resistance
- RES 2: 133.10 50-day EMA
- RES 1: 132.52/61 20-day EMA / High Nov 11
- PRICE: 132.53 @ 05:41 GMT Nov 12
- SUP 1: 131.39/130.58 Low Nov 8 / 6 and the bear trigger
- SUP 2 129.99 1.236 proj of the Oct 1 - 10 -16 price swing
- SUP 3: 129.48 1.382 proj of the Oct 1 - 10 -16 price swing
- SUP 4: 129.08 1.500 proj of the Oct 1 - 10 -16 price swing
Bund futures traded higher Monday and the contract remains above its recent lows. Gains are considered corrective. The trend direction is down and last Wednesday’s break to a fresh cycle low reinforces this theme. The 131.00 handle has been cleared, signalling potential for 129.99, a Fibonacci projection. Initial key resistance is at 132.52, the 20-day EMA (pierced). A clear break of this level would be seen as an early bullish development.
CHINA: Bond Wrap: Credit Growth Stagnates.
- Credit Growth Remains Stagnant (source: MNI – Market News).
- Central Bank Governor Seeks to Expand FDI. (source: MNI – Market News)
- Central Bank Injects Liquidity in OMO. (source: MNI – Market News)
- Tax Cut for Home Buyers Considered. (source: MNI – Market News)
- Mixed day for China equities with Hang Seng down -1.70%, CSI 300 +0.40%, Shanghai Comp -0.05%, Shenzhen Comp +0.70%
2yr 1.411% 5yr 1.736% 10yr 2.073% 30yr 2.255%
US TSYS: Tsys Futures Off Earlier Highs, Curve Ber-Flattens, Fed Speakers Later
- Tsys futures are off earlier session highs, although ranges remain narrow. TU is currently +00¾ at 102-22⅛, TY is +04+ is 110-01+. There has been little in the way of drivers through the session, USD continues to edge higher making new yearly highs as investors await remarks from Fed speaker tonight and inflation data due later in the week.
- Cash tsys have reopened after a three day break, with the curve bear-flattening, yields are -1bps to +4bps, with the 3yr yield underperforming. The 2yr is +3.2bps at 4.286%, while the 10yr is +1.8bps at 4.322%. The 2s10s continues to flatten is testing recent lows, at 4bps back at October 10 levels.
- The flattening move was supported earlier after a Block 2s10s flattener, DV01 $645k
- The market is no longer pricing in a full rate cut in December, projected rate cuts into early 2025 compared to early Monday levels (*): Dec'24 cumulative -16.3bp (-17.1bp), Jan'25 -24.3bp (-25.7bp), Mar'25 -37.6bp (-38.9bp), May'25 -45.0bp (-46.9bp).
- It is another slow session for US data, Fed speakers will be the focus with Waller, Barkin, Kashkari and Harker all speaking, while attention will turn to CPI on Wednesday
