OUTLOOK: Price Signal Summary - Corrective Cycle In S&P E-Minis

Little in the way of a clear fundamental driver to flag as gilt futures hit fresh session highs.

• The previously covered block buy seems to have driven the move, although a block seller (in the exact same size) then appears to limit the follow through, with the contract peaking at 93.10. Fibonacci resistance at 93.44 now eyed, as bulls look to regain some momentum.
• 10-Year yields register fresh session lows, although super-long yields respect this morning’s lowest levels.
• 10s are struggling to push meaningfully below 4.50% given the lack of fresh fundamental catalysts.
• Twist flattening bias still evident on the curve.
• BoE chief economist Pill will speak imminently.

• In FX, the trend in EURUSD remains bullish and the pullback from Monday’s cycle high is considered corrective. A bullish price sequence of higher highs and higher lows remains intact and note that moving average studies are in a bull-mode position too, signalling a continued dominant uptrend. The focus is on 1.1608 next, the Nov 9 2021 high. Key support is unchanged at the 20-day EMA, at 1.1167.
• The trend condition in GBPUSD remains up and fresh cycle highs this week reinforces current conditions. The pair has recently breached 1.3207, the Apr 3 high and a bull trigger. This highlights a resumption of the uptrend. Note that moving average studies are in a bull-mode position, signalling a dominant uptrend. Sights are on 1.3434 next, the Sep 26 ‘24 high. Support to watch is 1.3099, the 20-day EMA. The latest pullback appears corrective.
• The trend condition in USDJPY remains bearish and the bounce from Tuesday’s low is considered corrective. Recent fresh cycle lows confirm a resumption of the downtrend and maintain the price sequence of lower lows and lower highs. Note too that MA studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing. Initial firm resistance to watch is the 20-day EMA, at 144.90.

OI data points to a mix of net long cover and short setting through the SOFR blues on Tuesday, with the former slightly more prominent.