EQUITIES: Fresh Cycle Highs for E-Mini S&P Affirms Bullish Conditions
The trend condition in Eurostoxx 50 futures remains bullish and short-term weakness appears corrective. Support at 5281.00, the Jul 1 / 4 low, remains intact. A clear break of this level would strengthen a bearish threat. For bulls, a stronger resumption of gains would refocus attention on the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle and open 5500.00. The trend set-up in S&P E-Minis remains bullish. A fresh cycle high today confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6477.31, a Fibonacci projection. Key support is at the 50-day EMA, at 6181.96. Support at the 20-day EMA is at 6329.36.
- Japan's NIKKEI closed higher by 415.12 pts or +1.02% at 41069.82 and the TOPIX ended 22.89 pts higher or +0.78% at 2943.07.
- Elsewhere, in China the SHANGHAI closed lower by 42.509 pts or -1.18% at 3573.208 and the HANG SENG ended 403.6 pts lower or -1.6% at 24773.33.
- Across Europe, Germany's DAX trades higher by 116.6 pts or +0.48% at 24378.82, FTSE 100 higher by 31.89 pts or +0.35% at 9168.97, CAC 40 up 7.23 pts or +0.09% at 7869.19 and Euro Stoxx 50 up 10.08 pts or +0.19% at 5403.26.
- Dow Jones mini up 203 pts or +0.45% at 44836, S&P 500 mini up 68.5 pts or +1.07% at 6464.75, NASDAQ mini up 333 pts or +1.42% at 23813.25.
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MNI: EUROZONE JUN FLASH HICP +2% Y/Y
- MNI: EUROZONE JUN FLASH HICP +2% Y/Y
- MNI: EUROZONE JUN FLASH CORE HICP +2.3% Y/Y
FOREX: FX OPTION EXPIRY - Large EUR on Thursday
Big expiry in EUR Thursday at 1.1800.
Of note:
EURUSD 3.5bn at 1.1700 and 2.08bn at 1.1800.
EURUSD 2.05bn at 1.1700 and 1.47bn at 1.1800 (wed).
EURUSD 2.68bn at 1.1700 and 4.62bn at 1.1800 (thu).
USDCAD 1.07bn at 1.3600 (thu).
AUDUSD 2.55bn at 0.6600 (fri).
- EURUSD: 1.1700 (3.5bn), 1.1750 (951mln), 1.1800 (2.08bn).
- USDJPY: 143.00 (200mln), 143.40 (280mln), 143.50 (560mln), 143.60 (203mln), 143.65 (300mln).
- USDCAD: 1.3600 (360mln).
- AUDUSD: 0.6560 (874mln).
GBP: New Cycle Highs Expose Next Resistance
- Latest press lower for the USD has prompted GBP/USD to show to a new cycle high at 1.3773 - this is now the best marked levels since October 2021 and extends the bull cycle in the pair.
- USD is certainly the driver here, and while GBP is firmer against the EUR on the day, GBP/JPY is under pressure as the cross undergoes a corrective pullback off last week's highs.
- An uptick in futures volumes on the break to new highs clearly helping here, and shifts focus to 1.38 round number resistance and then the October 20th 2021 high beyond at 1.3835
- The difficulty of passage of today's welfare bill in the House of Commons may not be directly market relevant, but the scale of opposition will serve as a further reminder of the hurdles facing the PM's pro-growth agenda.
