GBPUSD TECHS: Monitoring Support

• RES 4: 1.3913 High Sep 14 2021
• RES 3: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3605 1.382 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 1: 1.3593 High May 26 and a bull trigger  
• PRICE: 1.3548 @ 16:33 BST Jun 2
• SUP 1: 1.3394 20-day EMA
• SUP 2: 1.3335/3232 Low May 20 / 50-day EMA
• SUP 3: 1.3140 Low May 12 and key support
• SUP 4: 1.3041 Low Apr 14

The trend condition in GBPUSD remains bullish and the latest shallow retracement is considered corrective. First key support lies at 1.3394, the 20-day EMA. A clear break of this average would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3232. For bulls, a  resumption of gains would refocus attention on 1.3593, the May 26 high and bull trigger. Clearance of this level would resume the uptrend.    

European curves lightly bear steepened to open the week.

• Core FI opened the week on the back foot, hitting the session's highs in mid-morning trade as weekend news was digested including Ukranian attacks on Russian military equipment and the US's announcement that it would raise tariffs on aluminium and steel to 50%.
• Also adding to the early bearish tone were EU bond suppply and Spanish manufacturing PMI coming in above expected.
• But yields would pare their rises over most of the rest of the session, as equities stabilized and US desks came in.
• In futures, rolling activity was heavy, with most Eurex contracts now around 40% through the Jun/Sep roll.
• Gilts mildly outperformed Bunds; periphery/semi-core EGB spreads traded mixed, closing off the early session wides.
• Tuesday brings Eurozone flash inflation and BOE appearances at the Parliamentary Treasury Committee, with the week's focus remaining on Thursday's ECB decision.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.3bps at 1.789%, 5-Yr is up 1.9bps at 2.083%, 10-Yr is up 2.4bps at 2.524%, and 30-Yr is up 3.2bps at 3.012%.
• UK: The 2-Yr yield is up 0.6bps at 4.029%, 5-Yr is up 1.9bps at 4.163%, 10-Yr is up 2bps at 4.667%, and 30-Yr is up 3.8bps at 5.41%.
• Italian BTP spread down 0.4bps at 97.6bps  / French OAT unchanged at 66.4bps  

A new survey from YouGov has found that US President Donald Trump’s "three weakest issues are all linked to the economy.”

• YouGov notes that Trump, “is now 19 points underwater on the economy in general (37% approve to 56% disapprove); 22 points underwater on trade and tariffs (35% approve to 57% disapprove); and 27 points underwater on the cost of living (32% approve to 59% disapprove).”
• “To put those numbers in perspective, Trump’s average approval rating on the economy was 49% in the middle of 2020 — at the height of the COVID-19 crash. His average disapproval rating was 45%,” adds YouGov.
• Silver Bulletin notes on recent polls, "Trump ends up with a 45.9 percent approval rating and a 51.3 percent disapproval rating. That -5.4 net approval rating is his worst showing since May 18th. But it’s still much better than his second term low of -9.7 back in April."

Figure 1: Trump Approval on Issues

Source: Silver Bulletin