EURUSD TECHS: Bull Leg Extends
- RES 4: 1.1276 High Jul 18 and a key resistance
- RES 3: 1.1229 High Jul 20
- RES 2: 1.1150 High Jul 27
- RES 1: 1.1109 High Dec 27
- PRICE: 1.1066 @ 15:20 GMT Dec 27
- SUP 1: 1.0921/1.0840 20- and 50-day EMA values
- SUP 2: 1.0724 Low Dec 8 and the bear trigger
- SUP 3: 1.0693 Low Nov 14
- SUP 4: 1.0665 61.8% retracement of the Oct 3 - Nov 29 rally
EURUSD maintains a positive tone and the pair continues to appreciate. Price has traded through key resistance at 1.1017, the Nov 29 high and a bull trigger as well as 1.1081 next, a Fibonacci retracement. This confirms the resumption of the uptrend, while moving average studies remain in a bull-mode set-up. Initial firm support is seen at 1.09221, the 20-day EMA.
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EURUSD TECHS: Outlook Remains Bullish
- RES 4: 1.1081 76.4% retracement of the Jul 18 - Oct 3 downleg
- RES 3: 1.1065 High Aug 10 and a key resistance
- RES 2: 1.1005 High Aug 11
- RES 1: 1.0965 High Nov 21 and the bull trigger
- PRICE: 1.0932 @ 16:07 GMT Nov 27
- SUP 1: 1.0825/0756 Low Nov 17 / High Nov 5, recent breakout level
- SUP 2: 1.0734 50-day EMA
- SUP 3: 1.0656 Low Nov 10 and key short-term support
- SUP 4: 1.0568 Low Nov 2
The trend outlook in EURUSD remains bullish and sights are on the recent 1.0965 high (Nov 21). A break of this level would confirm a resumption of the uptrend and open 1.1005, Aug 11 high and 1.1065, the Aug 10 high and a key resistance. MA studies are in a bull-mode set-up, highlighting positive market sentiment. The trend condition is overbought, a corrective pullback would unwind this condition. Initial support to watch is 1.0825, Nov 17 low.
OPTIONS: Limited Rates Trading To Start The Week
Monday's Europe rates / bond options flow included:
- ERM4 96.375/96.625/96.875 call fly paper paid 3 on 5K
- 0RZ3 97.12/97.50cs, sold at 1.5 in 7k
STIR: ECB / BoE Cut Pricing Increases After Dipping Last Week
Implied ECB/BoE rate cuts increased Monday despite few Europe-specific catalysts, partially reversing the 14-15bp decline in cut pricing last week which had been triggered by stronger-than-expected PMIs (among other factors).
- 85bp BoE Bank Rate cuts are seen in the year following the Feb/Mar 2024 peak, which is the most since the Nov 22 close; there are 90bp of ECB cuts seen in 2024 after the Dec 2023 peak, the most since Nov 21.
- That represents 11bp more ECB cuts and 6bp BoE cuts than seen at Friday's close.
- There's limited change in the timing tempo, with the first 25bp ECB cut fully priced by the June 2024 meeting, with the BoE's in August 2024.
- Focus for the week remains on the November round of Eurozone CPI which runs Wednesday-Thursday - our preview will be out Tuesday.
