BOBL TECHS: (M5) Trades Through The 20-Day EMA
- RES 4: 120.20 High Dec 12 ‘24 (cont)
- RES 3: 120.000 Psychological round number
- RES 2: 119.960 High Apr 7 and the bull trigger
- RES 1: 119.600/780 High May 7 / High Apr 22
- PRICE: 119.060 @ 05:45 BST May 9
- SUP 1: 119.010 Low May 5
- SUP 2: 118.723 50-day EMA
- SUP 3: 118.060 Low Apr 10
- SUP 4: 117.680 Low Apr 9 and a key support
A bull cycle in Bobl futures remains intact and the steep sell-off between Apr 7 - 9 is considered corrective. Gains in early April resulted in a break of key resistance at 119.040, the Feb 28 high, strengthening bullish conditions. A resumption of gains would open the 120.000 handle. Support at the 20-day EMA, at 119.149, has been pierced following the latest pullback. A deeper correction would expose 118.723, the 50-day EMA.
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GBPUSD TECHS: MA Studies Remain In Bull-Mode Position
- RES 4: 1.3274 High Oct 3 ‘24
- RES 3: 1.3207 High Apr 3 and the bull trigger
- RES 2: 1.3017 61.8% retracement of the Apr 3 - 7 sell-off
- RES 1: 1.2899 38.2% retracement of the Apr 3 - 7 sell-off
- PRICE: 1.2853 @ 06:01 BST Apr 9
- SUP 1: 1.2709 Low Apr 7
- SUP 2: 1.2654 50.0% retracement of the Jan 13 - Apr 3 bull cycle
- SUP 3: 1.2652 2.0% 10-dma envelope
- SUP 4: 1.2559 Low Feb 28
GBPUSD traded sharply lower Monday but is recovering from this week’s low. For now, the recent sell-off appears corrective. Price has traded below the 50-day EMA - a concern for bulls - however, MA studies remain in a bull mode position and this highlights a dominant uptrend. A continued recovery would open 1.2899 and 1.3017, Fibonacci retracement points. A move through Monday's 1.2709 low, would signal scope for a deeper retracement.
US TSYS: Haven Demand Under Threat From China Retaliation
TYM5 is 110-12, +1-02 from closing levels in today's Asia-Pac session.
- Cash US tsys have extended yesterday's decline during the Asia-Pac session. The sell-off reflects growing concerns that China may retaliate against tariffs by offloading US assets, including US tsys.
- Alongside the steepening of the curve, interest-rate swaps have extended their recent extreme outperformance of US tsy securities as traders sought to avoid costs associated with holding bonds.
- Cash US tsys are currently trading 2-17bps cheaper across benchmarks, with the curve steeper.
- Yesterday, Trump officials confirmed the 104% tariff on China went into effect at noon. Concurrently, China vowed to "fight to the end".
- On the local front, the focus turns to the March FOMC minute release at 1400ET today, CPI on Thursday and PPI on Friday morning.
- Reminder, banks kick off the latest earnings cycle this Friday with Bank of New York Mellon, Wells Fargo & Co, JPMorgan Chase and Morgan Stanley reporting.
BOBL TECHS: (M5) Trend Outlook Remains Bullish
- RES 4: 120.000 Psychological round number
- RES 3: 119.960 High Apr 7
- RES 2: 119.594 76.4% retracement of Monday’s high-low range
- RES 1: 119.368 61.8% retracement of Monday’s high-low range
- PRICE: 119.180 @ 05:42 BST Apr 9
- SUP 1: 118.410/117.971 Low Apr 7 / 20-day EMA
- SUP 2: 117.680 Low Apr 1
- SUP 3: 117.410 Low Mar 27
- SUP 4: 117.080 Low Mar 25 and a key short-term support
Bobl futures have pulled back from their recent highs - a correction. Last week’s gains resulted in a break of key resistance at 119.040, the Feb 28 high. This strengthens bullish conditions and signals scope for a continuation. The focus is on the 120.000 handle next. The contract is overbought, a deeper pullback would allow this condition to unwind. Initial firm support lies at 117.971, the 20-day EMA.
