STIR: Effective Fed Funds Rate

• RES 4: 1.3695 High Mar 28
• RES 3: 1.3668 High Apr 28 and key resistance
• RES 2: 1.3640 High May 3
• RES 1: 1.3568 High May 15
• PRICE: 1.3520 @ 16:33 BST May 19
• SUP 1: 1.3404 Low May 16
• SUP 2: 1.3363/15 Low May 11 / 8
• SUP 3: 1.3302 Low Apr 14 and a key near-term support
• SUP 4: 1.3275 Low Feb 14

USDCAD remains above Tuesday’s low. The recovery from the May 8 low eased recent bearish pressure and the pair has traded through the 50-day EMA, currently at 1.3513. A clear break of this average would strengthen the case for bulls and signal scope for a climb towards resistance at 1.3668, the Apr 28 high. Key support lies at 1.3302, the Apr 14 low. A break would reinstate the recent bearish theme.

Stocks see-sawing in modestly weaker territory after posting the best levels since early February in the first half as debt ceiling negotiations hit a snag in late morning trade.

• "GOP DEBT NEGOTIATORS SAY WHITE HOUSE NOT BEING REASONABLE .. and GOP NEGOTIATORS LEAVE DEBT TALKS" Bbg have triggered late morning unwinds with SPX E-Mini Futures down 11.25 points (-0.27%) at 4205; DJIA down 131.31 points (-0.39%) at 33457.23; Nasdaq down 44.1 points (-0.3%) at 12652.15.
  
  
• No substantive reaction to a policy panel event with Fed Chairman Powell, former chair Bernanke highlighting "key issues in monetary policy and the economy and facilitate discussions on the challenges faced by monetary policymakers.
  
  
• Echoing previous comments - tighter credit conditions "weigh on economic growth hiring and inflation. As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals."
• At the moment: Emini futures have breached key resistance and the bull trigger at 4206.25, the May 1 high. Clearance of this level confirms an extension of the bull trend from Mar 13. This opens 4244.00, the Feb 2 high and the next key short-term resistance. Key support is at 4062.25, the May 4 low. A move through this level would highlight a bearish threat.

• RES 4: 0.6921 High Feb 20
• RES 3: 0.6861 50.0% retracement of the Feb 2 - Mar 10 bear leg
• RES 2: 0.6824 High Feb 24
• RES 1: 0.6705/6818 50-day EMA / High May 10
• PRICE: 0.6664 @ 16:26 BST May 19
• SUP 1: 0.6605 Low May 18
• SUP 2: 0.6565 Low May 10 and the bear trigger
• SUP 3: 0.6547 61.8% of the Oct - Feb bull cycle
• SUP 4: 0.6403 76.4% of the Oct - Feb bull cycle

AUDUSD maintains a softer tone following the pullback from 0.6818, the May 10 high, and price is trading closer to this week’s lows. A bearish continuation would expose key support at 0.6565, the Mar 10 low. Clearance of this level would confirm a resumption of the bear cycle that started Feb 2 and highlight a range breakout. On the upside, a breach of 0.6818 is required to reinstate a bullish theme and this would expose 0.6861, a Fibonacci retracement.