STIR: Mix Of Short Setting & Long Cover As SOFR Futures Ticked Lower Thursday

OI data points to a mix of net long setting and short cover in SOFR futures on Tuesday.

• The single largest positioning swing came via net long setting in SFRU6, while the most meaningful probably came via net short cover in the late greens and entirety of the blues.

• In FX, EURUSD is trading closer to its recent lows. The latest pullback appears corrective. The trend remains bullish - MA studies are in a bull-mode position signalling a dominant uptrend. The latest move down has also allowed an overbought condition to unwind. A resumption of gains would open 1.1608, the Nov 9 2021 high. Initial key support to watch is the 20-day EMA, at 1.1279. A break of this average would signal scope for a deeper retracement.
• Recent weakness in GBPUSD appears corrective and the pair continues to trade inside a range with support at 1.3245, the 20-day EMA, intact. A clear break of this average would signal scope for a deeper retracement. Note that moving average studies remain in a bull-mode position, signalling a dominant underlying uptrend. A resumption of gains would open 1.3510, a 1.236 projection of the Feb 28 - Apr 3 - 7 price swing.
• The primary trend direction in USDJPY remains bearish and gains since Apr 22 appear corrective. Resistance at the 50-day EMA, at 146.33, remains intact. A clear break of this average would highlight a possible reversal. Moving average studies are in a bear-mode position and continue to highlight a dominant downtrend. A resumption of the trend would open 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing. First key support to watch is 141.97, the Apr 29 low.

OI data points to a mix of net long setting (FV, UXY, US & WN) and short cover (TU & TY) during Tuesday’s uptick in Tsy futures, with curve-wide positioning effectively neutral in DV01 equivalent terms.