CHINA RATES: China Repo Rates Diverge On Tuesday
The seven-day deposit reverse repo average across China's interbank market was at 1.7513% on Tuesday, higher than the close of 1.7436% on Monday, according to Wind Information. The overnight deposit reverse repo average was last at 1.4994%, lower than the previous 1.5176%.
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JGB TECHS: (U3) Bought-on-Dips Theme Hits Pause
- RES 3: 151.26 - High Mar 3 2022
- RES 2: 149.75/150.81 - High Nov 11 / High Aug 5 2022
- RES 1: 149.21/53 High May 12 / High Mar 22
- PRICE: 146.48 @ 15:27 BST Aug 04
- SUP 1: 146.23 - Low Aug 03
- SUP 2: 146.11 - Low Feb 22
- SUP 3: 144.15 - Low Jan 13
JGBs corrected lower again Thursday, hitting new pullback lows. The phase of weakness began Monday, narrowing the gap with key support at the 146.11 low on the continuation contract - last printed back in February. The previous buy-on-dips theme appears to have paused, but any return higher will initially target the May 12 high of 149.21. Clearance of these levels would highlight an important break.
USDCAD TECHS: Approaching Key Resistance
- RES 4: 1.3462 High Jun 5
- RES 3: 1.3441 61.8% retracement of the May 26 - Jul 14 downleg
- RES 2: 1.3427 High Jun 7
- RES 1: 1.3387 High Jul 7 and a key resistance
- PRICE: 1.3358 @ 15:50 BST Aug 4
- SUP 1: 1.3244 20-day EMA
- SUP 2: 1.3151/3093 Low Jul 31 / 14 and the bear trigger
- SUP 3: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 4: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
USDCAD short-term conditions have improved for bulls following this week’s strong recovery. Resistance at the 50-day EMA, which intersects at 1.3287, has been cleared. The move higher signals scope for a test of the next key resistance at 1.3387, the Jul 7 high. A break of this level would strengthen bullish conditions. Key support has been defined at 1.3093, the Jul 14 low. Initial support to watch lies at 1.3244, the 20-day EMA.
AUDUSD TECHS: Trading Closer To This Week’s Lows
- RES 4: 0.6900 High Jun 16 and a bull trigger
- RES 3: 0.6847 High Jul 20
- RES 2: 0.6821 High Jul 27
- RES 1: 0.6630/6703 High Aug 2 / 50-day EMA
- PRICE: 0.6592 @ 15:47 BST Aug 4
- SUP 1: 0.6514 Low Aug 3
- SUP 2: 0.6485 Low Jun 1
- SUP 3: 0.6458 Low May 31 and a bear trigger
- SUP 4: 0.6403 76.4% retracement of the Oct 13 ‘22 - Feb 2 bull leg
AUDUSD bears remain in the driver’s seat despite a Friday bounce. The pair is trading closer to this week’s lows. Price has recently breached both the 20- and 50-day EMAs, reinforcing current conditions. Wednesday’s move lower resulted in a break of support at 0.6596, the Jun 29 low, as well as 0.6562, 76.4% of the Oct 13 ‘22 - Feb 2 bull leg. This opens 0.6458, the May 31 low and bear trigger. Initial firm resistance is seen at 0.6703, the 50-day EMA.
