EURGBP TECHS: Continues To Appreciate
- RES 4: 0.8715 The Dec 28 ‘23 high
- RES 3: 0.8700 Round number resistance
- RES 2: 0.8683 1.764 proj of the Mar 3 - 11 - 28 price swing
- RES 1: 0.8663 High Apr 09
- PRICE: 0.8649 @ 15:37 BST Apr 9
- SUP 1: 0.8470/0.8415 Low Apr 7 / 20-day EMA
- SUP 2: 0.8377 50-day EMA
- SUP 3: 0.8316 Low Mar 28 and a key near-term support
- SUP 4: 0.8299 Low Mar 5
EURGBP continues to appreciate as the impulsive bull rally accelerates further. A key resistance at 0.8625, the Aug 8 ‘24 high, has been cleared. The breach highlights another important technical break and strengthens a bullish condition. Sights are 0.8683 next, a Fibonacci projection. Firm support lies at 0.8415, the 20-day EMA. Note that the cross is in extreme overbought territory, a pullback would allow this condition to unwind.
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EURUSD: Bulls Remain In The Driver’s Seat
- RES 4: 1.1040 High Oct 4 2024
- RES 3: 1.0961 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg
- RES 2: 1.0937 High Nov 5 / 6 2024
- RES 1: 1.0889 High Mar 7
- PRICE: 1.0836 @ 16:11 GMT Mar 10
- SUP 1: 1.0766/1.0544 Low Mar 6 / 20-day EMA
- SUP 2: 1.0473 50-day EMA and a short-term pivot level
- SUP 3: 1.0360 Low Feb 28 and a key support
- SUP 4: 1.0317 Low Feb 12
EURUSD bulls remain in the driver’s seat. Last week’s gains mark a continuation of the reversal on Feb 3. The pair is trading at recent highs and note that moving average studies have crossed and are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.0937, the Nov 5 / 6 2024 high. Initial key support to watch lies at 1.0487, the 50-day EMA. The uptrend is overbought, a pullback would allow this set-up to unwind.
OPTIONS: Two-Way Plays In German Bonds Monday
Monday's Europe rates/bond options flow included:
- OEK5 116/114 1x1.5 put spread paper paid 26-26.5 on 5K
- RXJ5 126.50/125.50 put spread paper paid 18 on 10K
- RXJ5 130/131 call spread paper paid 11 on 4K
- RXK5 126.5/125/123.5 put fly paper paid 16.5 on 5K
- RXM5 126/125/124 put fly paper paid 7.5 on 5K
- ERM5 97.9375/98.0625 call spread bought for 2-2.25 in 20k
- SFIZ5 96.20/96.30 call spread v 95.75/95.65 put spread, bought the call spread for 1.25 in 4k
- 0NM5 96.30/96.50 call spread bought for 6.5 in 10k
US TSYS/OVERNIGHT REPO: ON RRP Takeup Remains Close To 2025 Average
Takeup of the Fed's Overnight Reverse Repo facility fell $7.3B to $129.1B Monday, slightly more than reversing Friday's $7B rise.
- This leaves the level at 5-session lows, but at fairly typical levels for the year so far (average: $132B in 2025).
- ON RRP takeup could rise Tuesday in line with the Treasury bill paydowns that we flagged in our earlier SOFR note.
