EURJPY TECHS: Corrective Cycle Remains In Play
- RES 4: 166.69 50-day EMA
- RES 3: 163.74 20-day EMA
- RES 2: 162.89 High Aug 1
- RES 1: 162.59 High Aug 14
- PRICE: 162.13 @ 15:32 BST Aug 14
- SUP 1: 157.30/154.42 Low Aug 6 / 5 and the bear trigger
- SUP 2: 153.87 Low Dec 14 ‘23
- SUP 3: 153.23 Low Dec 7 ‘23 and a key support
- SUP 4: 151.42 Low Jul 28 ‘23
The trend outlook in EURJPY is bearish and the recent impulsive sell-off reinforced this theme. The move down signals scope for an extension towards the next key support at 153.23, the Dec 7 ‘23 low. A break of this price point would strengthen a bearish theme. Note that the cross is oversold. A continuation of the latest recovery - a correction - would allow this set-up to continue unwinding. Initial firm resistance is 163.74, the 20-day EMA.
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US TSYS: Late SOFR/Treasury Option Roundup: Call/Put Unwinds/Projected Cuts Rise
Larger SOFR and Treasury option volume appeared mixed with several unwinds in call and put skew plays Monday as underlying futures bear steepened, short end outperforming. As a result, projected rate cut pricing into year end have gained vs. this morning's levels (*): July'24 at -6.5% w/ cumulative at -1.6bp at 5.313%, Sep'24 cumulative -27.5bp (-24.8bp), Nov'24 cumulative -44.1bp (-41.6bp), Dec'24 -65.8bp (-63.3bp). Salient flow includes:
- SOFR Options:
- +8,000 SFRZ4 94.87/95.00 put spds, 1..5 ref 95.38
- Block, 7,000 SFRQ4 95.12/95.31 call spds, 1.25 ref 94.975
- -10,000 SFRV4 95.37/95.50 call spds, 4.0 ref 95.38
- Block, 5,000 SFRZ4 94.87/95.37 call over risk reversals, 17.0 ref 95.37
- Block, +5,000 0QU4 96.25/96.50/96.75/97.00 call condors, 7.0 vs. 96.285/0.05%
- Block, 5,000 2QV4 96.37/96.87/97.37 call flys, 13.0 net ref 96.51
- Block, 5,000 SFRH5 95.50/95.75/96.00/96.25 call condors, 6.5 ref 95.725
- Block, -7,000 SFRU4 95.00 1.0 over SFRV4 95.43/95.56 call spds
- -25,000 SFRH5 95.50/95.75/95.81/96.00 broken call condors, 5.5
- -15,000 SFRH5 94.75/95.00/95.12/95.43 call condors, 6.0-6.25
- +5,000 SFRZ4 95.43/95.62 call spds, 4.5 vs. 95.35/0.13%
- -2,000 SFRZ4 94.87/95.37 strangle, 17.0 ref 95.355
- -10,000 SFRZ4 94.75/95.12 put spds , 4.75 ref 95.35
- +6,000 SFRZ4 95.25/0QZ4 96.75 call spds 2.75
- -20,000 SFRZ4 94.75 puts, 1.0 ref 95.34/0.07%
- Block/screen, 8,000 SFRU4 95.12/95.25 call spds 1.0
- +5,000 SFRH5 96.00/96.75 1x2 call spds, 4.25
- 2,000 SFRV4 95.12/95.31/95.37 broken put trees
- +3,500 SFRU4 94.87/94.93/95.00 call flys, 2.25 ref 94.945
- 4,000 0QU4 96.00/96.50 call spds vs. 3QU4 96.50/96.87 call spds
- 3,600 SFRH5 94.75 puts, 1.5 ref 95.735
- +5,000 SFRH5 96.00/96.75 1x2 call spds 4.25
- +18,500 SFRV4 95.12/95.25/95.31/95.43 call condors, 3.75 ref 95.345
- Treasury Options:
- +30,000 wk1 TY 111.25 puts, 46 (expire Aug 2)
- +54,000 wk3 Wednesday FV 107 puts, 1 (expires this Wednesday)
- 2,600 TUU4 102.12/102.62 put spds, 15
- 6,600 TYU4 112 calls, 25 ref 111-02
- 7,500 TYV4 114 calls, 21 ref 111-14.5
- 2,500 USU4 116 puts, 37 ref 119-09
- +10,000 TYQ4 110 puts, 5 ref 111-03.5 to -04
- 2,000 TYU4 110.5/111.5 strangles ref 111-03
- 3,600 TYQ4 110.25 puts vs. 111/111.5 call spds 0.0 ref 110-29
- 1,900 TYV4 109 puts ref 111-10
EURUSD TECHS: Pierces Key Resistance
- RES 4: 1.0981 High Mar 3
- RES 3: 1.0943 High Jan 21
- RES 2: 1.0916 High Jun 04 and the bull trigger
- RES 1: 1.0922 High Jul 15
- PRICE: 1.0899 @ 19:53 BST Jul 15
- SUP 1: 1.0798/10 20-day EMA / Low Jul 2
- SUP 2: 1.0666 Low Jun 26 and the bear trigger
- SUP 3: 1.0650 Low May 1
- SUP 4: 1.0601 Low Apr 16 and a key support
EURUSD maintains a bullish theme following last week’s gain. The move higher confirmed a resumption of the current short-term bull cycle that started Jun 26. Note too that resistance at 1.0852 has been cleared, the clear break signalled scope for an extension towards 1.0916, Jun 4 high and the next key hurdle for bulls. It has been pierced, a clear break would open 1.0943, the Jan 21 high. Initial support to watch is unchanged at 1.0798, the 20-day EMA.
US STOCKS: Late Equity Roundup: Energy, Financials Continue to Lead Gainers
- Stocks are firmer in late trade, well off first half highs amid steady profit taking over the last three hours after the Dow climb to a new record high of 40,342.22 earlier. S&P eminis and Nasdaq indexes still off Friday's highs. Currently, the DJIA up 257.15 points (0.64%) at 40256.48, S&P E-Minis up 24.75 points (0.44%) at 5690.25, Nasdaq up 78.3 points (0.4%) at 18477.32.
- Energy and Financial sector shares continue to lead gainers in late trade, equipment and services shares buoyed the former: Haliburton +5.19%, Schlumberger +4.63%, Baker Hughes +4.46%. Banks continue to buoy the Financial sector: Regions Financial +2.91%, JP Morgan +2.54%, M&T Bank +2.36%.
- Note, Wells and JPM rebounded after consolidating following last Friday's earnings. Blackrock and Goldman Sachs both announced early Monday, GS +1.85%, Blackrock +0.41%.
- Conversely, Utilities and Health Care sectors underperformed in late trade, electricity and independent power providers underperforming: AES Corp -9.26%, Centerpoint energy -6.83%, NextEra Energy -5.43%. Meanwhile, equipment and service providers weighed on the Health Care sector: Baxter -3.47%, DaVita -3.10%, Stryker -2.79%.
- Upcoming earnings: Bank of America, Charles Schwab, State Street and Morgan Stanley on Tuesday; Citizens Financial, US Bancorp, Discover Financial and Ally Financial on Wednesday; KeyCorp, M&T Bank and Blackstone on Thursday; Fifth Third, Regions Financial, Comerica, American Express and Huntington next Friday.
