AUDUSD TECHS: Oversold But Remains Bearish
- RES 4: 0.6409 High Dec 9 and a key resistance
- RES 3: 0.6389 High Apr 3
- RES 2: 0.6270 50-day EMA
- RES 1: 0.6127/0.6187 High Apr 7 / Low Mar 4
- PRICE: 0.6018 @ 15:46 BST Apr 9
- SUP 1: 0.5915 Intraday low
- SUP 2: 0.5900 Round number support
- SUP 3: 0.5830 2.000 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 4: 0.5729 2.236 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD maintains a bearish tone following the latest steep sell-off. The move down confirms a resumption of the downtrend that started late September last year. A key support at 0.6088, the Feb 3 low, has been broken. This paves the way for an extension towards the 0.5900 handle next. On the upside, resistance to watch is at 0.6187, the Mar 4 low. The trend is oversold, a recovery would allow this set-up to unwind.
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STIR: End-2025 Implied Fed Rates Set For 4+ Month Low Close
Futures markets have added about a half a cumulative 25bp rate cut to the Fed's easing path through the end of the year as equities are set to post their worst session in over 2 years.
- The end-2025 futures-implied rate is down a little more than 12bp to 3.50%, which would be the lowest at the close since October 24, implying 83bp of cuts.
- While a cut next week is still not seen as realistic (under 5% implied probability), a cut by May is better than 50/50 with a full cut priced no later than June.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Mar 07) | Chg Since Then (bp) |
| Mar 19 2025 | 4.32 | -1.2 | -1.2 | 4.32 | -0.5 |
| May 07 2025 | 4.20 | -13.5 | -12.3 | 4.23 | -3.7 |
| Jun 18 2025 | 4.00 | -33.1 | -19.6 | 4.08 | -7.6 |
| Jul 30 2025 | 3.88 | -45.5 | -12.4 | 3.96 | -8.3 |
| Sep 17 2025 | 3.71 | -62.4 | -16.9 | 3.80 | -9.8 |
| Oct 29 2025 | 3.61 | -71.8 | -9.4 | 3.72 | -11.1 |
| Dec 10 2025 | 3.50 | -82.6 | -9.8 | 3.63 | -11.2 |
| Jan 28 2026 | 3.48 | -85.3 | -3.7 | 3.60 | -12.1 |
US TSYS: Short End Leads Rally As Equities Sink
The Treasury curve has been resolving in a bull steepening direction over the last hour as equities look on track to mark the worst session since Sep 13 2022 (front Nasdaq futures -4.4%, SPX -3.2%).
- 2Y Tsy yields break through last Wednesday/Friday's lows for an 11bp drop to 3.8895% - the next major low is last Tuesday's 5-month intraday low 3.8403%.
- While most of the action has been at the front end, meanwhile TYM1 is retesting the session high of 111-12+; the key resistance level to watch on the upside remains 111-22+ (briefly pierced last week).
EURGBP TECHS: Impulsive Bull Cycle Still In Play
- RES 4: 0.8530 76.4% retracement of the Aug 8 - Dec 19 ‘24 bear leg
- RES 3: 0.8474 High Jan 20 and a key resistance
- RES 2: 0.8462 High Jan 24
- RES 1: 0.8419 76.4% retracement of the Jan 20 - Mar 3 bear leg
- PRICE: 0.8399 @ 16:13 GMT Mar 10
- SUP 1: 0.8360/8328 Low Mar 6 / 50-day EMA
- SUP 2: 0.8299/41 Low Mar 5 / 3 and a near-term bear trigger
- SUP 3: 0.8223 Low Dec 19 and a key support
- SUP 4: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
A strong rally in EURGBP last week highlights a clear short-term reversal. The cross is trading above both the 20- and 50-day EMAs. The latest impulsive rally signals scope for an extension towards 0.8419, a Fibonacci retracement point. On the downside, initial firm support is seen at 0.8328, the 50-day EMA. Key short-term support is unchanged at 0.8241, the Mar 3 low. For now, a pullback would be considered corrective.
