EURUSD TECHS: Corrective Cycle
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1548/1617 50-and 20-day EMA values
- PRICE: 1.1547 @ 17:30 BST Aug 1
- SUP 1: 1.1401 Low Jul 30 and a bear trigger
- SUP 2: 1.1373 Low Jun 10
- SUP 3: 1.1313 Low May 30
- SUP 4: 1.1184 38.2% retracement of the Feb 3 - Jul 1 bull cycle
Despite Friday's rally, EURUSD maintains a bearish tone. The recent breach of key support at the 50-day EMA, at 1.1548, highlights a stronger reversal and the start of a correction. This opens 1.1373 next, the Jun 10 low. Firm resistance is seen at 1.1617, the 20-day EMA, where a break is required to signal a reversal. Today’s gains highlight a key short-term support and bear trigger at 1.1401, Jul 30 low. A break would resume the downtrend.
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EURUSD TECHS: Trend Needle Points North
- RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1868 2.0% 10-dma envelope
- RES 2: 1.1851 High Sep 10 2021
- RES 1: 1.1829 High Jul 01
- PRICE: 1.1768 @ 16:07 BST Jul 2
- SUP 1: 1.1631 High Jun 12 and a recent breakout level
- SUP 2: 1.1578 20-day EMA
- SUP 3: 1.1446 Low Jun 19
- SUP 4: 1.1405 50-day EMA
The trend needle in EURUSD continues to point north and the pair is holding on to its latest gains. The breach last week of 1.1631, the Jun 12 high and a bull trigger, confirmed a resumption of the uptrend. The 1.1800 handle has been pierced, sights are on 1.1851, the Sep 10 2021 high. Key short-term support to watch lies at 1.1578, the 20-day EMA. A clear break of this average is required to signal scope for a deeper retracement.
OPTIONS: UK Rate Selloff Meets With Upside Plays
Wednesday's Europe rates/bond options flow included:
- ERQ5 98.125/98.25cs 1x2, bought the 1 for 2 in 5k
- ERQ5 98.125/98.1875/98.25c ladder, bought for 1.25 in 4k
- SFIZ5 96.40/96.50cs, bought for 3.5 in 8k
- SFIZ5 96.60c, bought for 5.5 in 7.5k
- SFIZ5 96.50/96.75/97.00c fly, bought for 3 in 6k
US TSYS: Midday Update: Extending Lows
- Treasuries are extending midday lows currently, no obvious headline driver, more flow driven amid robust volumes (TYU5 over 1.2M).
- The Sep'25 10Y contract trades -10 at 111-17.5, session and 1W lows at the moment. First key support to watch is 111.07.5, the 20-day EMA.
- Curves remain steeper but off highs: 2s10s +4.251 at 50.964 (52.814H), 5s30s +3.403 at 96.167 (98.661H).
- Cross asset: Bbg US$ index off midmorning high: 1190.19 (+0.68), stocks mildly firmer (SPX eminis +15.00 at 6263.75, crude firmer (WTI +1.0 at 66.45), Gold firmer at 3345.58.
