EURUSD TECHS: Bull Cycle Extends
Nov-11 10:25
- RES 4: 1.0450 1.764 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 3: 1.0368 High Aug 10
- RES 2: 1.0327 1.50 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 1: 1.0279 Intraday high
- PRICE: 1.0262 @ 10:24 GMT Nov 11
- SUP 1: 1.0094 High Oct 27 and a key near-term resistance
- SUP 2: 0.9936 Low Nov 10
- SUP 3: 0.9898 Low Nov 7
- SUP 4: 0.818 Trendline support drawn from the Sep 28 low
EURUSD surged Thursday to print a new weekly high, as a soft CPI release dented the dollar. The pair is firmer again today, reinforcing bullish conditions. Yesterday’s climb resulted in a break of key short-term resistance at 1.0094, the Oct 27 high and 1.0198, the Sep 12 high, strengthening the bullish case. This opens 1.0327 next, a Fibonacci projection. Initial firm support is at 1.0094 ahead of the firmer support at yesterday’s 0.9936 low.
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EQUITIES: Estoxx cash option
Oct-12 10:24
- Not only long dated, bur far OTM
- SX5E 915/12/28), 1500/1000ps, bought for 63 in 13..5k
- These would be levels last seen in 19952/1996
BOE: Pill to speak on the economy at 12:35BST
Oct-12 10:24
- The next big event for UK markets will be a "Speech on the economy" from BOE Chief Economist Huw Pill.
- Note that Pill last spoke on 29 September and noted that "Taken in conjunction with the macroeconomic impact of ensuing market developments, it is hard to avoid the conclusion that the fiscal easing announced last week will prompt a significant and necessary monetary policy response in November."
- We noted at the time that "significant" was a step up from "forceful" and left the door open to him voting for a larger than 50bp hike in November. Most analysts still look for a 75bp hike in November, but the market continues to price in more than 100bp (and there are some notable economists looking for a 100bp hike too).
- We will be watching closely to see if Pill continues to use this same language or whether he makes any further comments on the gilt purchase operations. We would expect him to reiterate Governor Bailey's comments from last night that purchases will end this week.
- External MPC member Catherine Mann will appear in a webinar later today (18:00BST) entitled "’Global macro conjuncture and challenges facing small open economies’.
OUTLOOK: Price Signal Summary - Trend Condition In FI Remains Bearish
Oct-12 10:20
- In the FI space, the broader bearish theme in Bund futures remains intact. The focus is on 135.52, the Sep 28 low and key support. A break would confirm a resumption of the downtrend and open 135.27, the Mar 2012 low (cont).
- Gilt futures remain bearish following the reversal from last week’s high. The focus is on 90.99, Sep 28 low and bear trigger. This level has been pierced, a clear break would open 90.57, 2.618 projection of the May 12 - Jun 16 - Aug 2 swing (cont).
