GBPUSD TECHS: Holding On To This Week’s Gains
- RES 4: 1.2448 High Jan 23 and a key medium-term resistance
- RES 3: 1.2420 2.0% 10-dma envelope
- RES 2: 1.2401 High Feb 2
- RES 1: 1.2344 High Mar 23
- PRICE: 1.2285 @ 05:50 GMT Mar 24
- SUP 1: 1.2262/1.2179 Low Mar 23 / 21
- SUP 2: 1.2128 20-day EMA
- SUP 3: 1.2101 50-day EMA
- SUP 4: 1.2011 Low Mar 15
GBPUSD maintains a short-term bullish tone and is trading closer to its recent highs. The pair has cleared a number of short-term resistance points this week signalling scope for an extension higher. This has opened 1.2401, the Feb 2 high and 1.2448, the Jan 23 high. The latter is a key medium-term resistance. On the downside, initial firm support lies at 1.2179, the Mar 21 low, ahead of 1.2128, the 20-day EMA.
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SCHATZ TECHS: (H3) Key Support Gives Way For Contract Lows
- RES 4: 106.296 61.8% retracement of the Dec 2 - Jan 2 bear leg
- RES 3: 106.130/106.155 High Feb 2 / High Jan 18 and bull trigger
- RES 2: 105.978 50-day EMA
- RES 1: 105.850 High Feb 7
- PRICE: 105.235 @ 15:15 GMT Feb 21
- SUP 1: 105.205 Low Feb 21
- SUP 2: 105.140 Low Oct 21 2008
- SUP 3: 105.051 Lower 3.0% Bollinger Band
- SUP 4: 104.656 1.0% 10-dma Envelope
Schatz futures started the week softer and retained the downside bias into the Tuesday close. Prices printed down at 105.205, a new contract low. This price action reinforces the current bearish theme and signals scope for weakness towards 105.140 - levels last seen in October 2008. On the upside, key resistance has been defined at 106.130, the Feb 2 high and 106.155, the Jan 18 high. Clearance of this resistance zone would reinstate a bullish condition.
GILT TECHS: (H3) Bearish Break Persists
- RES 4: 108.96 2.236 proj of the Jan 23 - 25 - 30 price swing
- RES 3: 108.44 2.00 proj of the Jan 23 - 25 - 30 price swing
- RES 2: 107.78 High Feb 2 and the bull trigger
- RES 1: 105.67/106.88 High Feb 9 / 6
- PRICE: 101.71 @ 15:18 GMT Feb 21
- SUP 1: 101.57 2.0% Lower Bollinger Band
- SUP 2: 101.50 Low Feb 21
- SUP 3: 101.31 2.0% 10-dma envelope
- SUP 4: 99.18 Low Dec 28
Gilt futures printed another pullback low Tuesday, marking another bearish break for the contract. This confirms a reversal of the late January bullish theme, and opens next support at 101.31 initially, vol band support. Initial resistance remains at 105.67, the Feb 9 high, but markets have opened a decent gap with that next upside level.
EQUITIES: Tracking Lower, HSI Recovers, As HK Budget Supports Households
(MNI Australia) Regional equities are mostly tracking lower, in line with sharp falls on Wall St from Tuesday's session. US futures are slightly higher so far today (+0.20% for eminis, +0.25% for the Nasdaq) but this hasn't aided sentiment.
- HK stocks have recovered from earlier losses, the headline index back to around flat currently. Headwinds persist as the index flirts with correction territory, but sweeteners in the HK budget, announced today, around consumption vouchers and homebuyer tax cuts, have turned sentiment around.
- China shares are tracking lower, the CSI 300 off by a little over 0.65% at this stage. Onshore China media reported China President Xi Jinping calling for more homegrown equipment and software, as well as basic subject research. Market concern around US-China tensions likely remains in the background.
- Tech sensitive plays are under pressure. The Kospi off by 1.60%, with offshore investors selling $339.2mn of local shares so far today. The Taiex is slightly better, at 0.87%, while the Nikkei 225 is down by 1.25%. This follows sharp moves lower in tech indices for Tuesday, as core yields rose.
- Other major markets are mostly tracking lower. The JCI and PSEI off by around 1.25% at this stage. NZ stocks also close slightly lower, as the RBNZ stayed the course raising rates by 50bps and keeping the terminal rate expectations at 5.50%.
