OUTLOOK: Price Signal Summary - Bear Threat In GBPUSD Remains Present
Oct-29 11:27
- In FX, support to watch in EURUSD is 1.1542, the Oct 9 low. Clearance of this level is required to cancel a recent bullish signal and this would confirm a resumption of the bear cycle that started Sep 17. A break would open 1.1516, the 76.4% retracement of the Aug 1 - Sep 17 bull leg, and clearance of 1.1516 would expose key support at 1.1392, the Aug 1 low. Price needs to trade above 1.1728, the Oct 17 high, to strengthen a bull theme.
- A bear threat in GBPUSD remains present and this week’s sell-off strengthens this theme. The pair has breached 1.3249, the Oct 14 low and a bear trigger. The break confirms a resumption of the downtrend that started Sep 17 and sights are on 1.3220 next (pierced), a 0.764 projection of the Sep 17 - 25 - Oct 1 price swing. The break lower has also exposed key support at 1.3142, Aug 1 low. Initial resistance is 1.3377, the 20-day EMA.
- The trend condition in USDJPY is unchanged, it remains bullish and recent weakness appears to have been a correction. Attention is on key resistance at 153.27, the Oct 10 high. A break of this level would confirm a resumption of the medium-term uptrend. This would open 153.82, a 1.618 projection of the Sep 17 - 26 - Oct 1 price swing. Note that MA studies are in a bull-mode position, highlighting a primary uptrend. First important support to watch lies at 151.19, the 20-day EMA.
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GBP: FX Exchange Traded Option, Rolling Call
Sep-29 11:13
FX Exchange traded Option, rolling call:
- GBPUSD (3rd Oct vs 9th Jan) 126.00c, bought the Jan for 0.02 in 1.2k.
UK: Chancellor Delivers Speech To Labour Conference
Sep-29 11:10
Chancellor of the Exchequer Rachel Reeves is delivering her keynote address to the Labour party conference in Liverpool. Livestream here. Early in her speech, Reeves is interrupted by a pro-Palestinian protester, but resumes after a short pause. As noted earlier (see 'GILTS: Bull Flattening, Ramsden & Reeves Eyed', 10:34BST), the chancellor has reiterated Labour's manifesto pledge not to raise income tax, VAT, or employee national insurance.
- With a refusal to rule out tax rises in the November budget, the chancellor's pledge on the 'big three' revenue raisers leaves fewer options in terms of where the gov't can look to bolster its coffers (see 'UK FISCAL: VAT increase impacts on fiscal, CPI, monetary policy', 09:40BST).
- At ~15:00BST, Home Secretary Shabana Mahmood is due to deliver her keynote address. Given the prominence of immigration as a hot-button political issue in the UK at present, the new Home Secretary's plans for combating small boat crossings of the English Channel will be closely scrutinised amid continued strong polling for the right-wing populist Reform UK.
OUTLOOK: Price Signal Summary - Bear Threat In Bunds Still Present
Sep-29 11:08
- In the FI space, Bund futures have recovered from their recent lows. However, key support and the bear trigger remains exposed, it lies at 127.61, the Sep 3 low. Clearance of this level would cancel a recent bullish theme and confirm a continuation of the medium-term bear cycle. For bulls, a reversal higher would refocus attention on key resistance at 129.44, the Sep 10 high. First resistance is at 128.61, the 50-day EMA.
- Gilt futures traded lower late last week. The move down strengthens a bearish theme and does suggest the end of the recent corrective phase between Sep 3 - 11. Note that on the continuation chart, moving average studies are in a bear-mode position, highlighting a dominant downtrend. A continuation lower would open 89.94, the 76.4% retracement of the Sep 3 - 11 corrective phase. Initial resistance to watch is 91.28, the Sep 24 high.
