EUR: EUR/GBP Cements Bearish Breakout, Opens Levels Last Seen in Aug'22
EUR slipping alongside poor PMI data, with the Services sector across both France and Germany falling short of focus and showing more broad-based economic weakness. Markets press EUR/GBP to the lowest levels since last August, with prices piercing the key support at 0.8504 (the YTD low).
- A close at or below these levels would mark a bearish break and cement the downtrend posted off the mid-August high (with the 100-dma proving the key resistance in the cross).
- 0.8479 marks the next downside level, the 1.0% 10-dma envelope ahead of 0.8471, the Aug 29 '22 low.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
USDCAD TECHS: Key Support Remains Exposed
- RES 4: 1.3427 High Jun 7
- RES 3: 1.3387 High Jul 7 and a key resistance
- RES 2: 1.3304 50-day EMA
- RES 1: 1.3243 High Jul 18
- PRICE: 1.3209 @ 08:30 BST Jul 24
- SUP 1: 1.3093 Low Jul 14 and the bear trigger
- SUP 2: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 3: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 4: 1.2992 50.0% retracement of the 2021 - 2022 bull leg
USDCAD continues to trade above support at 1.3093, the Jul 14 low. Moving average studies are in a bear-mode position signalling a downtrend and a break of 1.3093 would confirm a resumption of the medium-term bear cycle. This would open 1.3084 and 1.3032, Fibonacci projection points. On the upside, clearance of the 50-day EMA, at 1.3304, is required to highlight a possible short-term reversal.
GILTS: Bid On Back Of French PMIs, domestic Readings & BoE QT due
Softer than expected preliminary PMI data out of France gives Gilts the first real catalyst to trade off this morning, after tracking core global FI markets cheaper at the open. The softer than expected French data pushes Gilt futures to the highest levels seen since Wednesday of last week, last running +10 or so, while the cash benchmarks are little changed to 2bp richer on the day, with some light outperformance for the belly/intermediates as the space operates a little shy of post-data bests.
- SONIA futures are flat to +4.0 through the greens, with the back end of the reds and front end of the greens outperforming.
- BoE-dated OIS pricing comes in by 1-2bp on the day, leaving a follow up 50bp hike at next month’s BoE meeting essentially 50% priced, while terminal policy rate pricing continues to show just above 5.90%.
- Flash PMI data headlines the domestic docket today, while the BoE will conduct long end Gilt sales as part of its QT scheme. The remainder of the flash Eurozone PMI readings will also garner attention.
AUDUSD TECHS: Bear Cycle Still In Play
- RES 4: 0.6993 76.4% retracement of the Feb 2 - May 31 bear leg
- RES 3: 0.6936 High Feb 16
- RES 2: 0.6900 High Jun 16 and key resistance
- RES 1: 0.67878/6847 High Jul 21 / 20
- PRICE: 0.6736 @ 08:19 BST Jul 24
- SUP 1: 0.6712 Intraday low
- SUP 2: 0.6651 Low Jul 11
- SUP 3: 0.6619 Low Jul 7
- SUP 4: 0.6596 Low Jun 29 and key support
AUDUSD remains in a bearish cycle. The pair has breached both the 20- and 50-day EMAs and an extension lower would pave the way for a move towards 0.6651, the Jul 11 low. Further out, the next key support level lies at 0.6596, the Jun 29 low. On the upside, a reversal higher would refocus attention initially on 0.6847, the Jul 20 high. The key bull trigger is at 0.6900, the Jun 26 high.
