EURIBOR: Large Basis trade

• RES 4: 1.3845 High Jan 22    
• RES 3: 1.3800 High Jan 23 
• RES 2: 1.3753 High Mar 03 and key resistance 
• RES 1: 1.3748 High Mar 19
• PRICE: 1.3714 @ 17:00 GMT Mar 20
• SUP 1: 1.3670/3526 20-day EMA / Low Mar 09
• SUP 2: 1.3482 Low Jan 30 and the bear trigger 
• SUP 3: 1.3420 Low Sep 25 ‘24
• SUP 4: 1.3400 50.0% retracement of the 2021 - 2025 uptrend

Attention in USDCAD is on key near-term resistance and a bull trigger at 1.3753, the Mar 3 high. A clear break of this hurdle would confirm a range breakout, highlight a stronger bull cycle and confirm a clear breach of the 20- and 50-day EMAs. This would open 1.3800 initially, the Jan 23 high. For bears, a reversal would refocus attention on 1.3482, the Jan 30 low and bear trigger. 

• RES 4: 0.7284 High Jun’22
• RES 3: 0.7256 2.500 proj of the Nov 21 - Dec 10 - 18 price swing   
• RES 2: 0.7208 61.8% of the Feb 25 ‘21 - Apr 9 ‘25 bear leg
• RES 1: 0.7187 High Mar 11 and the bull trigger
• PRICE: 0.7039 @ 16:59 GMT Mar 20
• SUP 1: 0.6979 50-day EMA and key support
• SUP 2: 0.6944 Low Mar 3  
• SUP 3: 0.6897 Low Feb 6
• SUP 4: 0.6834 Low Jan 23

The trend condition in AUDUSD is unchanged, it remains bullish and the pair continues to trade above key support at 0.6979, the 50-day EMA. A clear break of this average would undermine the current bullish theme. The moving average set-up is in a bull mode position and this continues to highlight a dominant medium-term uptrend. A resumption of the trend would open 0.7208 next, a Fibonacci retracement point. 

• Just over half (11/21) of the analyst reviews that we have read still look for the next move from the MPC to be a cut. 4/21 look for a hike while 6/21 look for the Bank to remain on hold for their forecast horizon.
• In terms of those expecting hikes Daiwa, JP Morgan and Rabobank all look for the first hike in April with the former two looking for a 4.25% peak and Rabobank looking for a one-and-done. NatWest Markets look for the first hike in Q4-26 but then expect two further hikes in Spring 2027 to the highest peak of 4.50% seen in any analyst base case that we have seen.
• Note that of these analysts, 3/4 (all except NatWest Markets) expect cuts back to a least current levels within their forecast horizon.
• In terms of those looking for the next move to be a cut, none look for a move in April with 5 analysts expecting a June cut, 1 for July, 2 for November and the remaining 3 looking for cuts to begin in 2027.
• UniCredit has the lowest terminal rate, continuing to look for 2.75% while 4/21 analysts look for 3.00% terminal, 6/21 analysts look for 3.25% and 1/21 analyst looks for 3.50%. As noted above, NatWest Markets looks for hikes with no reversal but the remaining 8/21 analysts look for no moves from 3.75% throughout the forecast horizon.