Better downside put trade continued to drive SOFR and Treasury option volumes Thursday, underlying futures broadly lower/near lows after late market chatter the BOJ will discuss yield curve control at tonight's policy meeting. Curves bear steepened, however, as projected rate moves through year end move closer to no change after Goldilocks nature of strong data w/ cooling recession expectations.
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The recent pullback in AUDUSD resulted in a break of the 20- and 50-day EMA values. The break of the 50-day average, at 0.6702, suggests potential for a deeper retracement. The next support lies at 0.6627, a Fibonacci retracement point. Clearance of this level would strengthen bearish conditions. Initial firm resistance is at 0.6806, the Jun 27 high. Clearance of this level would ease a bearish threat. Key resistance is 0.6900, Jun 16 high.
The EURJPY uptrend extended Tuesday to put the cross at a fresh multi-month high, taking out nearby resistance in the process. Tuesday’s price action reinforces the current bullish theme after the latest impulsive rally. Price has recently cleared key resistance at 151.61, the May 2 high and an important bull trigger. Moving average studies are in a bull mode position too, highlighting positive market sentiment. The focus is on 158.72, a Fibonacci projection. Initial key support is at 154.05, the Jun 20 low.