AUDUSD TECHS: Clears Key Resistance
- RES 4: 0.6921 High Feb 20
- RES 3: 0.6891 61.8% Feb - Jun Downleg
- RES 2: 0.6865 High Feb 22
- RES 1: 0.6836 High Jun 13
- PRICE: 0.6799 @ 08:06 BST Jun 15
- SUP 1: 0.6727 Low Jun 12
- SUP 2: 0.6670 20-day EMA
- SUP 3: 0.6610 Low Jun 6
- SUP 4: 0.6567/6458 Low May 31 and the bear trigger
The AUDUSD bull cycle from May 31 remains in play and the pair traded to a fresh high Wednesday. Price has now printed a higher low for ten consecutive sessions, a streak not seen since late 2017, where the streak extended to 16 trading days and spanned a ~5% rally. Yesterday’s rally put prices north of 0.6818, the May 10 high and a key resistance. A clear break would open 0.6865 and above. Initial firm support is seen at 0.6670, the 20-day EMA.
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USDCAD TECHS: Bull Rally Last Week Highlights A Short-Term Uptrend
- RES 4: 1.3695 High Mar 28
- RES 3: 1.3668 High Apr 28 and key resistance
- RES 2: 1.3640 High May 3
- RES 1: 1.3568 High May 15
- PRICE: 1.3478 @ 08:04 BST May 16
- SUP 1: 1.3459 Low May 15
- SUP 2: 1.3363/15 Low May 11 / 8
- SUP 3: 1.3302 Low Apr 14 and a key near-term support
- SUP 4: 1.3275 Low Feb 14
A strong rally in USDCAD last week has eased recent bearish pressure and the pair has traded through the 50-day EMA, at 1.3517. A clear break of this average would be seen as a short-term bullish development and signal scope for a climb towards resistance at 1.3668, the Apr 28 high. Key support lies at 1.3302, the Apr 14 low, where a break is required to reinstate the recent bearish theme.
BTP: Citi Flag Potential For Tactical Outperformance Window
Citi note that “10-Year BTP-Bund tightened by around 3bp following Friday’s decision by Fitch to keep the BBB stable rating unchanged (~188bp as of close). Still, the spread is near the top end of the 180-188bp range within which it has closed on 75% of the sessions since mid-January. Ahead, the next risk event for BTPs is the Moody’s review this Friday, with the current rating on the lowest IG-tier and a negative outlook. However, we do not expect Moody’s to change the rating or the outlook. In addition, there is little BTP supply for the next two weeks (apart from short-term and BTPei auctions next week) in contrast to the other three big issuers. We also do not expect any BTP syndication in May. Net, this could be a window of tactical outperformance of BTP spreads towards the 180bp mark in our view.”
