EURUSD TECHS: Clears Support
- RES 4: 1.0943 High Mar 21
- RES 3: 1.0921 76.4% retracement of the Mar 8 - Apr 2 bear leg
- RES 2: 1.0818/85 20-day EMA / High Apr 09
- RES 1: 1.0757 High Apr 11
- PRICE: 1.677 @ 08:31 BST Apr 12
- SUP 1: 1.0656 Low Nov 10 ‘23
- SUP 2: 1.0611 76.4% retracement of the Oct - Dec bull rally
- SUP 3: 1.0568 Low Nov 2 ‘23
- SUP 4: 1.0517 Low Nov 1 ‘23
EURUSD is trading lower today as the pair extends this week’s bear cycle. The break lower this week reinstates a short-term bearish threat and confirms the end of the recent recovery between Apr 2 - 9. Key support at 1.0695, the Feb 14 low and bear trigger, has been cleared. The breach strengthens a bearish theme and opens 1.0656, the Nov 10 ‘23 low. Initial key resistance has been defined at 1.0885, the Apr 9 high.
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BUNDS: Pushing higher on the Cash open
- Bund trades closer to its lower part of Yesterday's range following the US CPI, but off Yesterday's low, and gaining 8 ticks as the German Wholesale price data came below expectation, but more of an unwind from Yesterday's price action for the contract.
- UK Data was mostly inline, although IP came below consensus, but no impact in the Pound.
- Initial support noted at 132.76 remains, while resistance moves down to 133.69, Yesterday's high, but better is seen at 134.18.
- There's no Tier 1 data left for the session, EU IP is unlikely to be a big market mover.
- The ECB will hold a virtual non-monetary policy meeting and will announce the outcome of its Operational Framework Review.
- SUPPLY: Early focus will again be on heavy Supply, Italy 2027 (equates to 34.8k short 2yr BTP), 2031s, and 2038 (equates to combined 61.7k BTP) will weigh, Portugal 8yr, 20yr, German €4.5bn Bund (equates to 37k Bund) could weigh, US sells $22bn of 30yr reopening.
- SPEAKERS: ECB Cippolone, Stournaras.
UK DATA: Not much to move the dial in UK activity data
- There's not really a lot in that UK activity data that will move markets...
- Consumer-facing services still remain weaker than non-consumer facing services in their rebound post-pandemic (we already knew that).
- The weakness in IP was driven by "water supply, sewerage, waste management and remediation activities" which fell by 2.2% in January 2024 (that could increase again in February as January was a dry month). The more stable manufacturing component was broadly in line with expectations.
- Construction possibly benefitted from the better January weather (so could fall back again in February).
BTP TECHS: (M4) Holding On To The Bulk Of Its Recent Gains
- RES 4: 121.65 2.618 proj of the Feb 22 - 26 - 29 price swing
- RES 3: 121.19 2.382 proj of the Feb 22 - 26 - 29 price swing
- RES 2: 120.65 High Dec 27 and the bull trigger
- RES 1: 120.05 High Mar 7
- PRICE: 119.35 @ Close Mar 12
- SUP 1: 118.22 20-day EMA
- SUP 2: 116.52 Low Feb 29
- SUP 3: 116.15 Low Feb 22 and the bear trigger
- SUP 4: 116.00 Round number support
BTP futures are holding on to the bulk of last week’s gains that resulted in a break of key short-term resistance at 118.81, the Jan 30 high. The clear break of this hurdle highlights a bullish reversal and signals scope for a continuation higher near-term. This has opened 120.65, the Dec 27 high and bull trigger. Clearance of this level would confirm a resumption of the medium-term uptrend. Initial firm support lies at 118.22, the 20-day EMA.
