USDCAD TECHS: Eyeing The M/T Bull Trigger
- RES 4: 1.3024 38.2% retracement of the Mar ‘20 - Jun ‘21 downleg
- RES 3: 1.3010 2.0% 10-dma envelope
- RES 2: 1.2964 High Dec 20 2021 and a key bull trigger
- RES 1: 1.2914 High May 2
- PRICE: 1.2752 @ 20:09 BST May 4
- SUP 1: 1.2719/2671 Low Apr 29 / 50-day EMA
- SUP 2: 1.2568 Low Apr 22
- SUP 3: 1.2459 Low Apr 21
- SUP 4: 1.2403 Low Apr 5 and a key support
USDCAD slipped Wednesday, but the broader trend needle continues to point north. The pair traded higher Monday and probed resistance at 1.2901, Mar 8 high. The strong recovery from the Apr 29 low of 1.2719 reinforces a bullish theme. A clear break of 1.2901 would pave the way for a climb towards the Dec 20 2021 high of 1.2964 - a key medium-term bull trigger. On the downside, first support lies at 1.2719.
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EURJPY TECHS: Trend Needle Still Points North
- RES 4: 140.03 High Jun 23 2015
- RES 3: 139.00 High Aug 21 2015 and a key resistance
- RES 2: 138.62 High Aug 25 2015
- RES 1: 137.50/53 High Feb 2 ‘18 and major resistance / High Mar 28
- PRICE: 135.78 @ 17:43 BST Apr 4
- SUP 1: 133.94 Low Mar 28
- SUP 2: 132.95 Low Mar 24
- SUP 3: 132.78 20-day EMA
- SUP 4: 131.21 50-day EMA
The EURJPY outlook remains bullish and any near-term pullback is considered corrective. The cross traded to a fresh trend high on Mar 28 and breached a key resistance at 134.13, Jun 1 2021 high, on Mar 24. This strengthens bullish conditions. The trend is however in overbought territory although key short-term support levels remain intact for now. Initial firm support to watch is seen at 133.94, Mar 28 low. 137.50/53 is the bull trigger.
US TSYS: Week Opener: Risk-On
Rates trading weaker after the bell, near session lows -- long end underperforming after ECB Vasle headline that "negative rates may end by year end." Tsy 30YY hit 2.4882 high. Yield curves steeper but still inverted: 2s10s climbing +7.314 to -.717 while 5s30s climbed 3.499 to -14.188.
- Contributing Blocks: sales in 2s and 5s prior to ECB Vasle headline. Large 2s/ultra-Bond steepener late: +19,730 TUM2 105-22.62 vs. -2,484 WNM2 176-19.
- Stocks continued to extend session highs in late FI trade, SPX eminis back to late Thursday range amid ongoing focus on tech shares and micro bloggers.
- No react to data: Rates holding near lows after Feb factory orders -0.5, ex-trans +0.4, while equities holding decent gains (ESM2 +16.75 4556.0).
- On tap Tuesday:
- 0830 Trade Balance (-$89.7B, -$88.5B)
- 0945 S&P Global US Services PMI (58.9, 58.9); Comp PMI (58.5, 58.5)
- 1000 ISM Services Index (56.5, 58.5)
- 1005 Fed Gov Brainard virtual forum on inflation, text, Q&A
- 1230 SF Fed Daly on US economy, text, Q&A TBA
- 1400 NY Fed Williams virtual discussion on health & economy
- By the close, the 2-Yr yield is down 3bps at 2.4262%, 5-Yr is unchanged at 2.5587%, 10-Yr is up 3.1bps at 2.4135%, and 30-Yr is up 4.3bps at 2.4751%.
USDJPY TECHS: Corrective Cycle Still In Play
- RES 4: 126.26 3.382 proj of the Dec 3 ‘21 - Jan 4 -24 price swing
- RES 3: 125.86 High Jun 5 2015 and a major resistance
- RES 2: 125.28 High Aug 12 2015
- RES 1: 123.20/125.09 High Mar 30 / High Mar 28 and the bull trigger
- PRICE: 122.78 @ 17:40 BST Apr 4
- SUP 1: 121.28 Low Mar 31
- SUP 2: 120.95 Low Mar 24
- SUP 3: 120.10/00 20-day EMA / Round number support
- SUP 4: 119.44 Low Mar 22
USDJPY remains in a corrective cycle following last week’s pullback from 125.09, the Mar 28 high. Initial support to watch is at 121.28, the Mar 31 low. A break of this level would allow for an extension lower and open 120.95, the Mar 24 low ahead of the 120.00 handle. On the upside, initial resistance is seen at 123.20, the Mar 30 high with the bull trigger unchanged at 125.09. Clearance of 125.09 resumes the uptrend.
