US 10YR FUTURE TECHS: (M6) Maintains A Softer Tone
- RES 4: 114-19+ 2.236 projection of the Feb 19 - 23 - 25 price swing
- RES 3: 114-14 2.000 projection of the Feb 19 - 23 - 25 price swing
- RES 2: 114-08+ 1.764 projection of the Feb 19 - 23 - 25 price swing
- RES 1: 113-13+/114-06 Low Feb 27 / High Mar 2 and key resistance
- PRICE: 112-28 @ 11:12 GMT Mar 04
- SUP 1: 112-16+ Low Mar 03
- SUP 2: 112-16 50-day EMA
- SUP 3: 112-11 61.8% retracement of the Jan 20 - Mar 2 bull leg
- SUP 4: 111-03+ Low Feb 12
Treasuries reversed sharply lower on Tuesday and the contract maintains a softer tone. The move down is allowing a recent overbought condition to unwind. Price has traded through 112-26, the 20-day EMA.The clear break of this average exposes the 50-day EMA, at 112-16. Note that a clear breach of the 50-day average would highlight a stronger reversal threat. Key resistance is at 114-06, the Mar 2 high.
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EGBS: UBH6 Sold
UBH6 5K blocked at 109.86, recent downtick suggests a seller, despite being conducted above the prevailing offer at time quoted by BBG. DV01 ~EUR1.06mln.
AUD: AUDUSD Winning Streak Halted, RBA Tightening in Focus
- The weaker commodity complex, with oil also down ~5%, did weigh on the likes of AUD and NZD to start the week, although both have stabilised across the European morning. Positioning dynamics will also be a consideration for AUD as we approach the RBA decision tomorrow.
- The combination of a resilient labour market and stronger than expected Dec/Q4 inflation has the sell-side consensus expecting a 25bp RBA rate hike tomorrow. If delivered, focus will be on how much follow up action the central bank sees as needed to ensure inflation returns to target.
- For AUDUSD, the recent streak of consecutive winning sessions came to an end on Friday, and spot has subsequently stabilised around 0.6950. The latest pullback highlights the start of a corrective phase. If correct, it suggests potential for an extension towards support around the 20-day EMA, at 0.6835. This would also confirm an unwinding of the recent overbought trend condition.
- Key short-term resistance and the bull trigger have been defined at 0.7094, the Jan 29 high.
US 10YR FUTURE TECHS: (H6) Corrective Bounce Extends
- RES 4: 112-31 High Dec 18 and key short-term resistance
- RES 3: 112-22 High Jan 7
- RES 2: 112-08+ 50-day EMA
- RES 1: 112-02 Intraday high
- PRICE: 111-31+ @ 10:57 GMT Feb 2
- SUP 1: 111-15+/09 Low Jan 28 / 20 and the bear trigger
- SUP 2: 111-00 Round number support
- SUP 3: 110-30+ 1.618 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 4: 110-22+ 1.764 proj of the Oct 17 - Nov 5 - 25 price swing
Treasuries are firmer today. However, the trend condition remains bearish and short-term gains still appear corrective. The contract has traded through the 20-day EMA, at 111-31. The next important resistance to watch is 112-08+, the 50-day EMA. A clear break of the 50-day average is required to signal scope for a stronger recovery. For bears, a resumption of weakness would refocus attention on the bear trigger at 111-09, the Jan 20 low.
