FOREX: EURUSD Support Remains Intact, New Cycle Highs for EURJPY
Oct-30 10:45
- EURUSD has recovered from the post fed lows of 1.1578, consolidating back above the 1.1600 mark as we approach the ECB decision and press conference later today. This meeting is likely seen as a stepping stone to December’s updated economic projections, which will include new forecasts for 2028. Any hints here will likely shape market reaction although we see Lagarde opting for a broadly neutral tone to maintain optionality.
- While EURUSD remains inside its current short-term range, importantly support at 1.1542 (Oct 09) has remained intact. The pair needs to trade above 1.1728, the Oct 17 high, to reinstate a bull theme. Of note ahead of the meeting and further Eurozone inflation releases to end the week, there are a number of EUR crosses that maintain a bullish tone:
- EURJPY: The Bank of Japan provided no guidance as to when it would next raise its policy interest rate, and EURJPY has surged to fresh cycle highs today as a result, marking a resumption of the primary uptrend. Spot has narrowed the gap significantly to 178.94, the 1.236 projection of the Jul 31 - Sep 29 - Oct 2 price swing. Initial support moves up to 176.23, the 20-day EMA.
- EURGBP: UK fiscal concerns continue to fuel renewed sterling pessimism, and EURGBP’s move above 0.8800 has placed the cross at its highest level since May 2023. Topside targets for the move include 0.8835 and 0.8875, the April 2023 high.
- EURCHF: It’s also worth highlighting that EURCHF held a significant medium-term support last week, now operating roughly 80 pips above the key 0.9206 level. A break back above 50-day EMA resistance at 0.9310 would be a bullish development, likely allowing the cross to re-establish the 0.93-0.94 range that was broadly in place between May/September.
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EGB FLOWS: A lot of activity in Block trades
Sep-30 10:41
A lot of activity in EGB Block trade, more than usual:
- RXZ5 ~2.91k at 128.60.
- UBZ5 ~1.28k at 114.50.
- IKZ5 950 at 119.87.
- IKZ5 518 at 119.84.
OUTLOOK: Price Signal Summary - Monitoring Support In USDJPY
Sep-30 10:40
- In FX, the trend theme in EURUSD remains bullish and the recent pullback appears corrective. Attention is on support at 1.1682. the 50-day EMA. It has been pierced, a clear break of this average would signal scope for a deeper retracement and expose 1.1574 initially, the Aug 27 low. For bulls, a clear resumption of gains would refocus attention on 1.1923, a 2.0 projection of Feb 28 - Mar 18-27 swing. Initial firm resistance to watch is 1.1820, the Sep 23 high.
- The bear cycle in GBPUSD that started Sep 17, remains in play. Recent weakness resulted in a break of 1.3491, a trendline support drawn from the Aug 1 low. This undermines a recent bullish theme. Note too that 1.3333, the Sep 3 low and a key support, has been pierced, opening 1.3282 next, the Aug 6 low. Initial key resistance to watch is 1.3537, the Sep 23 high. A break of this hurdle would signal a reversal.
- USDJPY has pulled back from last week’s high print. The move down - for now - appears corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Support to watch lies at 147.59, the 50-day EMA. Pivot support has been defined at 145.49, the Sep 17 low. A resumption of gains would signal scope for a climb towards key resistance at 150.92, the Aug 1 high.
US 10YR FUTURE TECHS: (Z5) Corrective Cycle Still In Play
Sep-30 10:28
- RES 4: 114-10 High Apr 7 (cont.)
- RES 3: 114-00 Round number resistance
- RES 2: 113-12/29 High Sep 18 / High Sep 11 and the bull trigger
- RES 1: 112-23/113-00 20-day EMA / High Sep 24
- PRICE: 112-20 @ 11:15 BST Sep 30
- SUP 1: 112-01 50.0% retracement of the Jul 15 - Sep 11 bull phase
- SUP 2: 111-26 Low Aug 26
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 111-01+ 76.4% retracement of the Jul 15 - Sep 11 bull phase
A short-term bear cycle in Treasury futures remains in play. Last Thursday’s sell-off resulted in a print below the 50-day EMA, currently at 112-10+. A clear break of this average would undermine a bull theme and signal scope for a deeper retracement. This would open 111-13+, the Aug 18 low and the next key support. On the upside, initial firm resistance to watch is 113-00, the Sep 24 high.
