BOC: July Deliberations Cite Need For "More Clarity" Before Deciding On Cuts

• RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 3: 0.6688 High Nov 7 ‘24
• RES 2: 0.6603 High Nov 11 ‘24
• RES 1: 0.6595 High Jul 11 
• PRICE: 0.6556 @ 16:09 BST Jul 14
• SUP 1: 0.6534 20-day EMA
• SUP 2: 0.6485/6373 50-day EMA / Low Jun 23 and a reversal trigger
• SUP 3: 0.6357 Low May 12
• SUP 4: 0.6275 Low Apr 14

The trend set-up in AUDUSD is unchanged, it remains bullish and last week’s gains reinforces current conditions. Resistance at 0.6590 has been pierced. A clear break of this price point would confirm a resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Scope is seen for a climb towards 0.6603 next, the Nov 11 2024 high. Initial firm support to watch is 0.6485, the 50-day EMA.     

SOFR & Treasury option trade remained mixed Monday, SOFR leaning towards low delta calls & call spds (+50k Green Mar'26 call spd for instance). Underlying futures off midday lows, curves adding to Fri's steepening (2s10s +0.744 at 52.760). Projected rate cut pricing cooled slightly vs morning (*) levels: Jul'25 at -1.2bp (-1.7bp), Sep'25 at -16.2bp (-15.9bp), Oct'25 at -30.7bp, Dec'25 at -48.9bp (-49.1bp).

• SOFR Options:
  • +4,000 SFRZ5 95.62/SFRH6 95.75 put strip, 5.25 total
  • 6,000 SFRU5 96.50 calls ref 95.85
  • +10,000 2QZ5 97.00/97.50 call spds vs. 3QZ5 96.75/97.25 call spd, 0.0 net/steepener
  • +5,000 SFRZ5 95.56/95.62/95.68 put trees, ref 96.14/0.05
  • Block, +5,000 SFRZ5 95.75/95.87/96.25/96.37 put condors, 6.0 net ref 96.145
  • -2,500 SFRZ5 96.50 calls, 9.0 ref 96.145
  • +15,000 SFRQ5 95.81/95.93/96.00 put trees, 1.0
  • Block, 5,000 2QU5 97.00/97.50 call spds vs. 3QU5 96.75/97.25 call spds. 0.5 net Gr Sep over
  • Block, +50,000 2QH6 98.00/98.25 call spds, 1.0 ref 96.56
  • 2,400 0QV5 96.81 straddles ref 96.785
  • 4,000 0QQ5 96.87/97.00/97.12 call flys, 1.0 ref 96.735 to -.74
  • 1,000 SFRU5 95.81/95.87/96.18 broken call trees, 0.75 ref 95.855
  • Block/screen, +8,000 SFRU5 95.87/96.00/96.06/96.18 call condors, 2.75 ref 95.855
• Treasury Options:
  • 1,500 USV5 106/108 put spds 28 ref 112-06
  • 10,000 TYV5 113/115 call spds ref 110-19.5
  • 5,000 TYU5 112 calls, 25
  • 5,800 TYU5 109 puts, 15 ref 110-25 to -24.5
  • -2,000 TYV5 110.5 straddles, 218, ref 110-22
  • 2,300 wk3 FV 108.5/109 call spds, 4.5 ref 108-05.5 (exp 7/18)
  • +1,000 TYQ5 109/109.75/110.5 put flys, 9 vs. 110-23/0.11%
  • -2,100 TYQ5 110.75 calls, 26 ref 110-23.5/0.52%
  • -1,670 TYQ5 110/111 put spds, 25 ref 110-25.5/0.57%
  • 2,000 TYU5 110 puts, 31
  • +2,000 Wednesday wkly TY 112 calls, 1

• RES 4: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 3: 173.43 High Jul 12 ‘24
• RES 2: 172.92 High Jul 16 ‘24
• RES 1: 172.44 High Jul 14
• PRICE: 172.42 @ 16:08 BST Jul 14
• SUP 1: 170.81  Low Jul 11  
• SUP 2: 169.48 20-day EMA 
• SUP 3: 168.46 Low Jul 1   
• SUP 4: 166.88 50-day EMA   

The trend condition in EURJPY is unchanged, a bull cycle is in play and the cross continues to trade closer to its recent highs. Fresh gains last week confirm a resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Note that MA studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 172.92, the Jul 16 ‘24 high. Support to watch lies at 169.48, the 20-day EMA.