GBPUSD rallied sharply higher yesterday and remains above this week’s lows. Gains are considered corrective and the primary trend direction remains down. A resumption of weakness would refocus attention on Tuesday’s low of 1.1934 that also marks the short-term bear trigger. A break would confirm a resumption of the downtrend. Initial firm resistance is seen at 1.2405, the 20-day EMA. Yesterday’s high was 1.2406.
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Some light cash Tsy demand around the Asia-Pac re-open, coupled with a downtick in Chinese equites & e-minis supported Tsys during Asia-Pac dealing, although the space is back from firmest levels of the session ahead of London hours, with e-minis off lows. TYM2 last deals -0-01+ at 118-26, 0-04 off the tip of its 0-09+ overnight range, with volume just above 90K. Cash Tsys have twist steepened, with the major benchmarks running 2bp richer (led by 2s) to 0.5bp cheaper (20s & 30s). Note that the long end lagged the front end in the early rally.
Event | Time | Country | Event |
18-May | 1000 | EU | HICP (f) |
18-May | ---- | EU | ECB Lagarde & Panetta in G7 Meeting |
19-May | 0900 | EU | EZ Current Acc |
19-May | 1000 | EU | Construction Production |
19-May | 1230 | EU | ECB April meeting Accounts |
19-May | ---- | EU | ECB Lagarde & Panetta in G7 Meeting |
19-May | 1330 | EU | ECB de Guindos Keynote Address at Harvard |
20-May | 0700 | DE | PPI |
20-May | ---- | EU | ECB Lagarde & Panetta in G7 Meeting |
20-May | 1300 | EU | ECB Lane in Discussion at Stockholm Uni |
20-May | 1500 | EU | Consumer Confidence Indicator (p) |
23-May | 0900 | DE | IFO Business Climate Index |
23-May | ---- | EU | ECB Lagarde & Panetta at Eurogroup Meeting |
23-May | 1400 | BE | BNB Business Sentiment |
EURUSD traded higher Tuesday as the pair extended the corrective bounce from last week’s low of 1.0350. The broader trend direction remains down and a break of 1.0350, May 13 low, would confirm a resumption of the downtrend. Moving average studies remain in a bear mode condition, highlighting current sentiment. The focus is on 1.0341 next, Jan 3 2017 low and key support. Key resistance is unchanged at 1.0642, May 5 high.