FOREX: EURGBP Rises Above 0.8700, Approaches 2025 Highs
Jul-24 17:02
- Currency markets have had a lacklustre tone on Thursday, with a lack of meaningful macro developments potentially underpinning a subdued summer tone. With that said, the ECB holding interest rates and sounding notably constructive on euro area growth combined with poorer-than-expected UK PMI data have elevated EURGBP to a fresh 3-month high above the 0.8700 handle.
- EURGBP price action built momentum after breaking above a cluster of daily highs across July, just below the 0.8700 mark, placing the focus on key resistance at 0.8738, the Apr 11 high. Above here, 0.8781 would be the next chart point of note, the 2.236 projection of the Mar 3 - 11 - 28 price swing. Sterling has been the standout underperformer in G10, prompting GBPUSD to trade back below 1.3550, currently down 0.2% on the session at 1.3510 as we approach the APAC crossover.
- The US dollar index trades on a slightly firmer footing Thursday, and was supported at the margin by the lower-than-expected jobless claims data and a firm July services PMI. This has particularly helped USDJPY to extend its intra-day bounce to over 100 pips. It is worth noting that overnight, USDJPY’s low at 145.85 broadly matched the pair’s 50-day EMA, which will have likely been influential in the subsequent bounce. Overall, a technical bull cycle in USDJPY does remain in place, with the recent phase of weakness appearing to be a corrective retracement from recent highs. A sustained break of the 50-day is needed to highlight a stronger bearish reversal.
- This more stable backdrop for the dollar has prompted AUDUSD to edge lower from the cycle highs printed earlier in the session at 0.6625. Constructive domestic data and comments from RBA Governor Bullock helped propel AUDUSD above key resistance and the 0.66 handle to register fresh 8-month highs. Above here, resistance is scant until 0.6688, the Nov 07 high, printed shortly after the US election last year.
- Tokyo CPI kicks off Friday’s economic calendar, before UK retail sales, German IFO and US durable goods.
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FED: US TSY 2Y NOTE AUCTION: HIGH YLD 3.786%; ALLOTMENT 4.18%
Jun-24 17:02
- US TSY 2Y NOTE AUCTION: HIGH YLD 3.786%; ALLOTMENT 4.18%
- US TSY 2Y NOTE AUCTION: DEALERS TAKE 13.17% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: DIRECTS TAKE 26.33% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: INDIRECTS TAKE 60.50% OF COMPETITIVES
- US TSY 2Y AUCTION: BID/CVR 2.58
EURUSD TECHS: Trend Structure Cemented Bullish
Jun-24 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: 1.1622 @ 16:34 BST Jun 24
- SUP 1: 1.1457 20-day EMA
- SUP 2: 1.1321/1.1210 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 remains bullish, reinforced by Monday’s gains. The recovery highlights the fact that the latest correction has been a shallow one and that support at the 20-day EMA - at 1.1457 - remains intact. Moving average studies continue to highlight a dominant uptrend and the breach of 1.1631 confirms a resumption of the trend. This opens 1.1685, a Fibonacci retracement.
US TSYS/SUPPLY: 2Y WI
Jun-24 16:54
- The 2Y WI slips to 3.779% from 3.792% earlier, 17.6bp rich to last month's stop (3.955% high yield vs. 3.965% WI).
