BUND TECHS: (H6) MOnitoring Resistance At The 50-Day EMA

• RES 4: 1.1779 High Oct 1   
• RES 3: 1.1747 50.0% retracement of the Sep 17 - Nov 5 bear leg
• RES 2: 1.1728 High Oct 17
• RES 1: 1.1694 50.0% retracement of the Sep 17 - Nov 5 bear leg 
• PRICE: 1.1630 @ 05:55 GMT Dec 10
• SUP 1: 1.1607 20-day EMA 
• SUP 2: 1.1547 Low Nov 26
• SUP 3: 1.1491/1469 Low Nov 21
• SUP 4: 1.1469 Low Nov 5 and the bear trigger  

EURUSD is in consolidation mode but continues to trade closer to its recent highs and a bull cycle remains intact. The recent breach of key short-term resistance at 1.1656, the Nov 13 high and a bull trigger, highlights a potential reversal and opens 1.1694 next, a Fibonacci retracement. A breach of this retracement point would strengthen the developing bull theme. Initial support to watch is 1.1607, the 20-day EMA. A breach of the EMA would be bearish.

• RES 4: 129.55 High Nov 26 and key resistance    
• RES 3: 129.24 High Dec 1    
• RES 2: 128.75 High Dec 3 and a key resistance 
• RES 1: 128.08/70 High Dec 8 / 20-day EMA           
• PRICE: 127.44 @ 05:22 GMT Dec 10 
• SUP 1: 127.26 Low Dec 9         
• SUP 2: 127.19 2.382 projection of the Nov 12 - 20 - 26 price swing 
• SUP 3: 127.00 Round number support
• SUP 4: 126.81 2.764 projection of the Nov 12 - 20 - 26 price swing

Bund futures remain in a bear-mode cycle following a recent impulsive sell-off and Monday’s downward acceleration. The contract has traded through the 128.00 handle, paving the way for an extension towards 127.19 next, a Fibonacci projection. Key short-term resistance is 128.75, the Dec 3 high. Note that the contract has entered oversold territory. A corrective bounce would allow the oversold condition to unwind.

US bond futures are flat to modestly better today in a low volume day.  As markets await the FOMC decision the US-10-Yr opened with a modest bid tone to reach 112-04+ before falling back to where it started around 112-03+.

Cash was better bid with yields 0.5bp - 1.0bps lower across the curve with 5-Yr and 7-Yr the outperformers.  

• The 2-Yr is down -0.8bps to 3.611%
• The 5-Yr is down -1.0bps to 3.78%
• The 10-yr is down -0.8bps to 4.182%
• The 30-Yr is down -0.7bps to 4.802

Tonight's auction will be a US$69 Bln 17-Week Bills.

SEP/Dot Plot:  The lack of major data since the September projections round portends only limited changes to the macro and rate forecasts in the December edition out Wednesday.

• None of the rate dot medians are expected to change, with 2025 confirmed at 3.6% (though with an unusual amount of disagreement in the dot distribution for an end-year SEP in a form of "soft dissent" against the cut), 2026 at 3.4% (implying one 25bp cut), with 2027 at 3.1% (another 25bp cut).
• In short, we expect most of the attention to be on the rate distribution. For 2026, the September dots were closely poised between 3.4% and 3.1% (10 above 3.25% vs 9 below 3.25%). We don't see much change here but if anything the risks to the median skew to the downside. For example, if one member who put their dot at 3.4% in September also saw rates ending 2025 at 3.9%, they might mark-to-market the rate view one notch lower.
• We'll also be watching for any dots implying a 2026 hike (we would expect at least one seeing rates higher than 3.6%) with the solidity of a 2026 "hold" also in focus.
• The longer-run dot is broadly expected to remain at 3.0%. But once again with 10 at 3.00% or below and 9 above that level, it would only take 1 moving from 3.00% or below to above 3.00% to move the median higher, likely to 3.1%. That shift will happen at some point and it wouldn't be a shock to see it come this week.