ASIA FX: CNH Steady Despite Trade Headlines, USD/KRW Supported On Dips

• RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1608 High Nov 9 2021
• RES 2: 1.1440/1573 High Apr 23 / 21 and the bull trigger
• RES 1: 1.1381 High May 2 - 6  
• PRICE: 1.1229 @ 06:03 BST May 12
• SUP 1: 1.1186 Intraday low 
• SUP 2: 1.1144 High Apr 3    
• SUP 3: 1.1075 50-day EMA and a pivot level     
• SUP 4: 1.0943 Low Apr 10  

EURUSD maintains a softer short-term tone and the pair is trading at its recent lows. Recent weakness appears corrective and key trend signals remain bullish. However, the pair has traded through the 20-day EMA and this exposes the next important support at 1.1082, the 50-day EMA. On the upside, initial resistance to watch is 1.1381, the May 2 - 6 high. Clearance of this level would signal the end of the correction.

ACGBs (YM -6.0 & XM -6.5) are sharply cheaper and near Sydney session lows.

• This move aligns with weaker US tsys, which are trading 2-4bps cheaper in today's Asia-Pac session, as risk bounces on US-China officials citing 'substantial progress' made from weekend trade talks.
• US Treasury Secretary Bessent said there had been 'substantial progress' in the two days of talks with China and that further details would be shared today.
• The US data calendar is light today, ahead of US CPI on Tuesday and Retail Sales on Thursday.
• (Bloomberg) -- “Hedge funds aggressively added to net short positioning in 10-year note futures, while asset managers boosted longs in the sector in the week up to May 6, CFTC data shows.”
• Cash ACGBs are 5bps cheaper with the AU-US 10-year yield differential at -6bps.
• The bills strip is cheaper with pricing -2 to -5 (late whites leading).
• RBA-dated OIS pricing is flat to 5bps firmer today, leaving meetings 2-24bps firmer than levels before the release of Q1 CPI data on April 30.
• Tomorrow, the local calendar will see Westpac Consumer and NAB Business Confidence measures.
• AOFM plans to sell A$1200mn of the 3.50% 21 December 2034 bond on Wednesday and A$800mn of the 2.50% 21 May 2030 bond on Friday.

• RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing                 
• RES 3: 133.00 round number resistance      
• RES 2: 132.56 High Feb 28 and a key resistance
• RES 1: 131.72/132.03 High May 7 / High Apr 7 and the bull trigger                    
• PRICE: 130.33 @ 05:40 BST May 12
• SUP 1: 130.30/129.92 Intraday low / Low Apr 11          
• SUP 2: 129.02 Low Apr 10            
• SUP 3: 128.60 Low Apr 9 and a key support   
• SUP 4: 128.47 Low Mar 28  

A bull cycle in Bund futures remains intact and short-term weakness is considered corrective. However, the contract maintains a softer tone and has traded through support at the 50-day EMA, at 130.61. This signals scope for a deeper retracement and opens 129.92, the Apr 11 low. A reversal higher would highlight the end of the corrective phase. Attention would turn to key resistance and the bull trigger, at 132.03, the Apr 7 high.