BUND TECHS: (M5) Monitoring Resistance

• RES 4: 1.0677 50.0% retracement of the Sep 25 ‘24 - Feb 3 bear leg   
• RES 3: 1.0630 High Dec 6 ‘24
• RES 2: 1.0594 High Dec 9 ‘24
• RES 1: 1.0533 High Jan 27 and a reversal trigger
• PRICE: 1.0478 @ 05:55 GMT Feb 25
• SUP 1: 1.0437/01 50-day EMA / Low Feb 19
• SUP 2: 1.0373 Low Feb 13 
• SUP 3: 1.0317 Low Feb 12  
• SUP 4: 1.0280 Low Feb 10 and a key support 

EURUSD is unchanged. A bull cycle remains intact and the pair is trading closer to its recent highs. Sights are on resistance at 1.0533, the Jan 27 high and a reversal trigger. Clearance of this level would strengthen a bullish condition and pave the way for a climb towards 1.0630, the Dec 6 high. For bears, initial firm support to watch lies at 1.0401, the Feb 19 low. Clearance of this support would signal a potential reversal threat.

• RES 4: 134.54 61.8% retracement of the Dec 2 - Jan 14 bear leg           
• RES 3: 133.71 High Feb 5 and a reversal trigger  
• RES 2: 132.97 High Feb 13 and a key near-term resistance 
• RES 1: 132.60 High Feb 21                
• PRICE: 132.06 @ 05:37 GMT Feb 25
• SUP 1: 131.26 Low Feb 19 and the bear trigger 
• SUP 2: 131.00 Low Jan 24 and a key short-term support             
• SUP 3: 130.28 Low Jan 15 and the bear trigger
• SUP 4: 130.11 1.236 proj of the Oct 1 - Nov 6 - Dec 2 ‘24 price swing    

Recent gains in Bund futures appear corrective - for now. The contract has traded through the 20-day EMA and attention turns to key short-term resistance at 132.97, the Feb 13 high. Clearance of this level would signal a reversal. On the downside, the short-term bear trigger has been defined at 131.26, the Feb 19 low. A break of this level would resume the bear cycle that started Feb 5.

• All tsys futures contracts are trading above Monday's highs, trading volumes being largely linked to rolls. TU +00⅜ at 102-30¼, while TY is +03+ at 109-31+, we trade just below 110-00 (High Feb 7 and the bull trigger) a break here would strengthen a bullish theme and open 110-19, a Fibonacci retracement. On the downside, a break back below 108-21+ (Feb 19 lows) would open a move to key short-term support at 108-04 (Feb 12 low) with clearance of this support reinstating a bearish theme.
• Overnight, Tsys options were skewed towards upside protection, matching the risk-off bid in early US session. Key flows included a short-term play targeting a the 10yr to hit 4.2% within a couple of weeks
• Cash tsys are 2-3bps richer today, having traded in a narrow range post the open. The 2yr is -2.1bps at 4.153% while the 10yr yield is trading at ytd lows of 4.377%. The 2s10s continues to flatten, last -1bps at 21.504, however still off the ytd lows of 16bps, set Feb 7th
• The 5yr is -2.3bps at 4.216% ahead of the $70b 5yr auction later tonight, last night the 2yr auction drew record indirect bidders.
• Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).
• The Fed's Barr, Logan & Barkin are scheduled to speak later today
• Later today we have FHFA House Price Index, Conf. Board Consumer Confidence & Richmond Fed Manufact. Index