EURUSD TECHS: Corrective Pullback

• RES 4: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing 
• RES 3: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 2: 1.1608 High Nov 9 2021
• RES 1: 1.1573 High Apr 21 and the bull trigger  
• PRICE: 1.1376 @ 06:10 BST Apr 28
• SUP 1: 1.1308 Low Apr 23
• SUP 2: 1.1217 20-day EMA and a key support    
• SUP 3: 1.1144/0968 High Apr 3 / 50-day EMA and a pivot level     
• SUP 4: 1.0805 Low Apr 3  

The latest pullback in EURUSD is considered corrective and the trend structure remains bullish. Moving average studies are in a bull-mode position signalling a dominant uptrend, and the latest move down is allowing an overbought condition to unwind. A resumption of gains would open 1.1608 next, the Nov 9 2021 high. Key support is unchanged at the 20-day EMA, at 1.1217. A break of this average would signal scope for a deeper retracement.

ACGBs (YM +3.0 & XM +5.0) are richer and near Sydney session highs on a data-light day.

• Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session after Friday's solid gains.
• The focus of the week locally will be on Wednesday’s Q1 CPI, which is forecast to show the RBA’s preferred trimmed mean falling below the top of the 2-3% target band for the first time since Q4 2021. This should signal another 25bp cut on May 20. Retail sales are on Friday, and the Federal Election Saturday.
• Cash ACGBs are 4-7bps richer with the AU-US 10-year yield differential at -8bps.
• Swap rates are 6-8bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing -2 to +4.
• RBA-dated OIS pricing is flat to 5bps softer across meetings today. A 50bp rate cut in May is given a 12% probability, with a cumulative 118bps of easing priced by year-end.
• Tomorrow, the local calendar will see a speech from RBA Kent, Assistant Governor (Financial Markets) on Australia’s External Position and the Evolution of the FX Markets.
• The AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Friday.

• RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing                 
• RES 3: 133.00 round number resistance      
• RES 2: 132.56 High Feb 28 and a key resistance
• RES 1: 132.03 High Apr 7 and the bull trigger                    
• PRICE: 131.67 @ 05:49 BST Apr 28
• SUP 1: 130.64/129.92 20-day EMA / Low Apr 11          
• SUP 2: 129.02 Low Apr 10            
• SUP 3: 128.60 Low Apr 9 and a key support   
• SUP 4: 128.47 Low Mar 28  

Bund futures are in consolidation mode and continue to trade just below their recent highs. A bull cycle remains in play and the pullback between Apr 7 - 9 is considered corrective. Attention is on resistance at 132.03, the Apr 7 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, the Apr 9 low. A break of this level would alter the picture.