BUND TECHS: (U4) Strong Tuesday Close, Exposes Resistance
- RES 4: 133.42 1.764 projection of the May 31 - Jun 5 - 1 price swing
- RES 3: 133.21 High Jun 14 and the bull trigger
- RES 2: 132.80 High Jun 25
- RES 1: 132.66 High Jul 17
- PRICE: 132.18 @ 07:26 BST Jul 25
- SUP 1: 131.76 50-day EMA
- SUP 2: 130.95/23 Low Jul 10 / 3 and key short-term support
- SUP 3: 129.52 Low Jun 10
- SUP 4: 129.37 Low May 31 and the bear trigger
Bund futures saw support across Tuesday trade, rallying well off the 50-day EMA to secure a strong close. That filtered through to Wednesday morning, and similarly on Thursday morning. Resistance at 132.66 - the Jul 17 high - is in focus. Last week, the 76.4% retracement of the Jun 14 - Jul 3 bear leg, was pierced, opening 133.21, the Jun 14 high. For bears, a resumption of weakness would refocus attention on key support at 130.23, the Jul 3 low. First support is 131.76, the 50-day EMA.
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EUROZONE ISSUANCE: EGB Supply
The EU and Italy both released updated funding plans yesterday (summarised in the PDF). Finland looks to hold a USD syndication while Italy and Germany look to hold auctions. We pencil in an estimated gross issuance for the week at E24.7bln, down from E28.7bln this week.
- On Monday, a mandate was announced for Finland to launch a new 10-year USD EMTN maturing 2 July 2034. The transaction is expected to take place on Tuesday, with IPT of SOFR + 55bp area (CT10 + 16bp area). We look for a transaction size of USD1-2bln.
- Italy on Tuesday will look to hold a BTP Short Term and BTPei auction. On offer will be E2.0-2.5bln of the on-the-run 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302) alongside E0.5-1.5bln of the 0.40% May-30 BTPei (ISIN: IT0005387052) and E0.75-1.25bln of the 2.40% May-39 BTPei (ISIN: IT0005547812).
- Germany on Tuesday, will issue E4.5bln of the 2.90% Jun-26 Schatz (ISIN: DE000BU22056).
- Italy will return to the market on Thursday, to hold a 5/10-year BTP / CCTeu auction. On offer will be E3.0-3.5bln of the on-the-run 5-year 3.35% Jul-29 BTP (ISIN: IT0005584849), E3.0-3.5bln of the on-the-run 10-year 3.85% Jul-34 BTP (ISIN: IT0005584856) and E1.25-1.75bln of the Apr-32 CCTeu (ISIN: IT0005594467). We had thought there was a risk of a new 10-year BTP being launched at this auction, but we think that will now happen in July.
EQUITY TECHS: E-MINI S&P TECHS: (U4) Trend Needle Points North
- RES 4: 5622.69 2.764 proj of the Apr 19 - 29 - May 2 price swing
- RES 3: 5600.00 Round number resistance
- RES 2: 5594.66 2.618 proj of the Apr 19 - 29 - May 2 price swing
- RES 1: 5588.00 High Jun 20
- PRICE: 5521.25 @ 07:14 BST Jun 25
- SUP 1: 5458.51/5366.69 20- and 50-day EMA values
- SUP 2: 5267.75 Low May 31 and key support
- SUP 3: 5213.25 Low May 6
- SUP 4: 5155.75 Low May 3
The uptrend in S&P E-Minis remains intact and the contract continues to trade closer to its recent highs. Price has recently cleared 5430.75, the May 23 high and bull trigger. This confirmed a resumption of the uptrend. Note that moving average studies remain in a bull-mode position too, highlighting positive market sentiment. Sights are on 5594.66 next, a Fibonacci projection. Initial support to watch lies at 5458.51, the 20-day EMA.
USDCAD TECHS: Trades Through Support
- RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
- RES 3: 1.3899 High Nov 1 and a key resistance
- RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
- RES 1: 1.3699/3792 20-day EMA / High Jun 11
- PRICE: 1.3653 @ 07:21 BST Jun 25
- SUP 1: 1.3641/3590 Intraday low / Low May 16 and a key support
- SUP 2: 1.3547 Low Apr 9
- SUP 3: 1.3512 50.0% retracement of the Dec 27 - Apr 16 bull cycle
- SUP 4: 1.3478 Low Apr 4
USDCAD traded lower last week and has started this week on a bearish note. The pair has traded through the Jun 12 low of 1.3680, and 1.3676, the 50-day EMA. The break signals scope for a continuation lower, towards key support at 1.3590, the May 16 low. Clearance of this level would threaten a bullish theme. The trend outlook remains bullish, a resumption of gains would refocus attention on key resistance at 1.3846, the Apr 16 high.
