FOREX: EURGBP Highest Since Nov 2023, USD Firms Ahead of Key Data
Jul-25 17:02
- The combination of weaker-than-expected UK retail sales data and the disappointing composite and services PMIs yesterday have continued to weigh on GBP. This dynamic has allowed EURGBP (+0.50%) to extend its recent rally following the break above a cluster of daily highs near 0.8700, eventually bridging the gap to key resistance at 0.8738, the Apr 11 high. This places the cross at the highest level since Nov 2023, signalling scope for a move towards 0.8781, the 2.236 projection of the Mar 3 - 11 - 28 price swing.
- A firmer dollar has also seen GBPUSD fall 0.68%, edging back towards the 1.3400 handle as we approach the weekend close. Broad greenback strength might be reflective of President’s Trump relatively more benign stance on Fed Chair Powell late Thursday. Initially, higher treasury yields on Friday had also supported the dollar, which remained immune to the subsequent turn lower for yields late in the session.
- USDJPY has risen 0.5% to trade back toward 148.00 as the cautious yen optimism following the upper house lection dissipates and concerns linger surrounding the short-term future of PM Ishiba. USDJPY has extended its powerful bounce off the 50-day EMA, rising over 200 pips from Thursday’s session low.
- EURJPY has also printed fresh 12-month highs in the process. Today’s move above 173.43 provides another bullish technical development for EURJPY, and a close at current levels would cement a ninth consecutive week of gains, the longest winning streak since 2008. Above here, 174.86 (Fib projection) provides the next target before 175.43, the July 11 ‘24 high and a key medium-term resistance
- Next week’s central bank calendar is stacked, with decisions from the Fed, BOC and the BOJ all scheduled. US Q2 advance GDP and July employment are data highlights.
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FED: US TSY 5Y NOTE AUCTION: HIGH YLD 3.879%; ALLOTMENT 6.32%
Jun-25 17:02
- US TSY 5Y NOTE AUCTION: HIGH YLD 3.879%; ALLOTMENT 6.32%
- US TSY 5Y NOTE AUCTION: DEALERS TAKE 10.88% OF COMPETITIVES
- US TSY 5Y NOTE AUCTION: DIRECTS TAKE 24.44% OF COMPETITIVES
- US TSY 5Y NOTE AUCTION: INDIRECTS TAKE 64.68% OF COMPETITIVES
- US TSY 5Y AUCTION: BID/CVR 2.36
EURUSD TECHS: Pierces The Bull Trigger
Jun-25 17:00
- RES 4: 1.1783 1.764 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1685 76.4% retracement of the Jan ‘21 - Sep ‘22 downleg
- RES 1: 1.1641 High Jun 24
- PRICE: 1.1625 @ 16:24 BST Jun 25
- SUP 1: 1.1472 20-day EMA
- SUP 2: 1.1332/1.1210 50-day EMA and a pivot level / Low May 29
- SUP 3: 1.1131 Low May 16
- SUP 4: 1.1065 Low May 12 and a reversal trigger
The trend set-up in EURUSD is unchanged, it remains bullish. Resistance and a bull trigger at 1.1631, the Jun 12 high, has been pierced confirming a resumption of the trend. This opens 1.1685, a Fibonacci retracement. Key short-term support to watch lies at 1.1472, the 20-day EMA. A clear break of this average is required to signal scope for a deeper retracement that would expose the 50-day EMA, at 1.1332.
OPTIONS: Dovish Euribor Skew Persists, With Sonia Activity Picking Up
Jun-25 16:52
Wednesday's Europe rates/bond options flow included:
- ERQ5 98.1875/98.3125/98.4375 call fly 8K sold down to 1
- ERZ5 98.25c vs 2RZ5 98.0625c, bought the front for -1 in 15k
- ERZ5 98.125/98.25/98.375c fly x2 with ERZ5 98.375/98.50/98.625c fly vs 0RV5 98.0625p x1, bought the Flies strip for -0.5 in 8k
- ERZ5 98.375/98.50/98.625 call fly paper paid 1.5 on 5K.
- ERH6 98.125/98.25/98.50/98.625 c condor vs 97.9375p, bought for 1 in 5k
- SFIU5 95.90/96.00/96.15/96.25c condor, sold at 6.25 in 10.5k
- SFIU5 96.20/96.40 1x2 call spread paper paid 1.25 on 3K
- SFIX5 96.60/96.70cs, bought for 1.5 in 8k
- SFIZ5 96.10/96.25/96.40/96.55c condor, bought for 6 up to 6.25 in 30k
