EURUSD TECHS: Corrective Cycle Extends
- 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: 1.1279 @ 15:44 BST May 9
- SUP 1: 1.1197 Low May 9
- 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 traded lower again early Friday, extending the bear cycle that started Apr 21. The move down appears corrective and key trend signals remain bullish. MA studies are in a bull-mode position signalling a dominant uptrend. The breach of the 20- day EMA does signal scope for a deeper retracement. The next key support is 1.1075, the 50-day EMA. Initial resistance to watch is 1.1381, the May 2 - 6 high. A break would signal the end of the correction.
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EURUSD TECHS: Trend Needle Points North
- RES 4: 1.1276 High Jul 18 ‘23
- RES 3: 1.1214 High Sep 25 2024 and a key resistance
- RES 2: 1.1188 0.764 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 1: 1.1144 High Oct 1 2024 / High Apr 3 and the bull trigger
- PRICE: 1.1048 @ 15:35 BST Apr 9
- SUP 1: 1.0882 Low Apr 7
- SUP 2: 1.0844 20-day EMA
- SUP 3: 1.0733 Low Mar 27 and a key short-term support
- SUP 4: 1.0713 50-day EMA and a short-term pivot level
The trend condition in EURUSD is bullish and the latest pullback is considered corrective. Key resistance at 1.0955, Mar 18 high, was breached last week, confirming a resumption of the uptrend and this maintains the price sequence of higher highs and higher lows. Sights are on 1.1188 next, a Fibonacci projection. MA studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support lies at 1.0844, the 20-day EMA.
FED: Barkin: DC Feels Like Texas In The 80s or Rust Belt In The 90s
Barkin on DOGE effects (with his district most impacted):
- Nationally the federal govt workforce is about 2% but in DC it’s ~25%. There’s a lot of worry of job losses going on.
- Some knock-on impacts: retail spending way down, commercial real estate was expected to rebound significantly but now concern on the other side about leases being canceled.
- Knock-on effect of additional sectors: federal spending roughly 90% checks written to state and local governments, universities, hospitals, contractors etc. There’s a lot of fear in the non-profit and university communities. It’s a little different in the contractor community, with some hit harder than others. From a local geography angle it feels a lot like Texas in the 80s and the Rust Belt in the 90s.
OPTIONS: Put Spread Selling Across German Futures And Euribor
Wednesday's Europe rates/bond options flow included:
- OEK5 118/117ps, sold at 13 in 9k
- RXK5 132/133 call spread, bought for 25 in 12k
- RXM5 129.5/127.5ps 1x2, bought for 7 in 2k
- ERM5 98.125c, bought for 4.5 in 17k
- ERU5 98.25/98.50/98.75c fly, bought for 3.75 in 8k
- 0RM5 98.125/97.9375ps, sold at 5.5 down to 5.25 in 10k
