EURGBP TECHS: Bears Remain In The Driver’s Seat
- RES 4: 0.8768 High May 5
- RES 3: 0.8719 High May 23
- RES 2: 0.8695 50-day EMA
- RES 1: 0.8630 20-day EMA
- PRICE: 0.8550 @ 16:09 BST Jun 14
- SUP 1: 0.8541 Low Jun 9 / 12 low
- SUP 2: 0.8522 Low Aug 30 2022
- SUP 3: 0.8503/8487 1.0% 10-dma env / 3.0% Lower Bollinger Band
- SUP 4: 0.8454 76.4% retracement of the Mar - Sep 2022 bull cycle
The primary trend direction in EURGBP remains down and short-term gains are considered corrective, with initial resistance at 0.8630, the 20-day EMA. Moving average studies are in a bear-mode condition, highlighting a downtrend and recent fresh lows have reinforced bearish conditions. Clearance of 0.8541, the Jun 9 and 12 lows, would confirm a resumption of the trend. This would open 0.8522, the Aug 30 2022 low.
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US: Adeyemo: Default Would Have Implications For Years To Come
Deputy Treasury Secretary Wally Adeyemo has told NPR that, "any US default on debt would have implications for years to come," and urged Congress to "act on debt as soon as possible."
- Adeyemo said in the interview, "the only thing that will work to prevent a US default will be congressional action," appearing to quash suggestions that the White House might use the 14th Amendment or mint a platinum coin to raise the debt limit unilaterally.
- Biden told reporters last week that he was considering 14th Amendment option but Treasury Secretary Janet Yellen acknowledged using the untested measure would be “legally questionable.”
- Adeyemo futher states that, "US treasuries would be put in question if congress does not act on debt limit," adding that default would make people "less willing to invest in dollar assets," and raise the cost of borrowing.
US 10YR FUTURE TECHS: (M3) Trading Above Support
- RES 4: 117-29+ High Aug 26 2022 (cont)
- RES 3: 117-01+ High Mar 24 and bull trigger
- RES 2: 117-00 High May 4
- RES 1: 116-16 High May 11
- PRICE: 115-07+ @ 16:20 BST May 15
- SUP 1: 115-01+/114-30 Low May 9 / 50-day EMA
- SUP 2: 114-10 Low May 1
- SUP 3: 113-30+ Low Apr 19 and a key support
- SUP 4: 113-26 Low Mar 22
Treasury futures are lower Monday but for now, continue to trade above support at 115-01+, the May 9 low and 114-30, the 50-day EMA. A clear break of this average would signal scope for a deeper retracement towards 114-10 initially, May 1 low. For bulls, a recovery would refocus attention on resistance at 117-01+, the Mar 24 high. This is the bull trigger and a break would highlight an important bullish development.
US STOCKS: Equities Roundup: Off Early Lows, Bank Shares Outperforming
Stocks have recovered from midmorning lows, near middle of narrow range. S&P E-Mini Future currently up 2.75 points (0.07%) at 4141; Nasdaq up 40.7 points (0.3%) at 12325.02; DJIA down 2.32 points (-0.01%) at 33298.79.
- Stocks had ignored this morning's weaker than expected Empire Mfg index (-31.8 (cons -4.0) in May from +10.8) and generally hawkish comments from Atlanta Fed Bostic (nonvoter) on sticky inflation. Stocks extended lows after the bell, apparently fixated on downbeat assessment from House sp McCarthy over the debt ceiling.
- Leading laggers: Utilities, Consumer Staples and Health Care sectors underperformed while Financials, industrials and Energy shares outperformed.
- From a technical point of view S&P E-minis remain in consolidation mode and continue to trade above the 50-day EMA, which intersects at 4107.61.
- An extension higher would refocus attention on key resistance and the bull trigger at 4206.25, the May 1 high. A break of this level would confirm a resumption of the bull trend that started Mar 13.
- Key support has been defined at 4062.25, the May 4 low. A move through this support would instead highlight a bearish threat.
