OUTLOOK: Price Signal Summary - EURUSD Bull Cycle Remains In Play
Jun-06 10:59
- In FX, EURUSD continues to trade closer to its recent highs. The breach of 1.1419, the May 26 high, confirmed a resumption of the trend and has opened 1.1573, the Apr 21 high and bull trigger. Thursday’s gains highlight an extension of the current bull leg and reinforce a bullish theme. Support to watch lies at 1.1208, the 50-day EMA. A clear break of this average would undermine the bull theme. Initial support is at 1.1334, the 20-day EMA.
- Trend signals in GBPUSD remain bullish. Thursday’s climb resulted in a fresh cycle high, confirming a resumption of the uptrend and an extension of the price sequence of higher highs and higher lows. This opens 1.3681 next, the 1.500 projection of the Feb 28 - Apr 3 - 7 price swing. Initial support to watch lies at 1.3445, the 20-day EMA. A clear break of this average would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3279.
- The trend condition in USDJPY remains bearish. Attention is on the next important support at 142.12, the May 27 low. A clear break of this level would confirm a resumption of the bear leg and open 139.89, the Apr 22 low. Moving average studies remain in a clear bear-mode position too, highlighting a dominant downtrend. Key short-term resistance has been defined at 146.28, the May 29 high.
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US TSYS: Bear Flatter With A Light Docket Ahead Of The Fed
May-07 10:57
- Treasuries trade bear flatter, with the front end paring some of yesterday’s gains as investors favor pricing a next 25bp cut in July and for now don't want to price in that much more than 75bp of cuts for 2025 as a whole.
- Risk sentiment was supported on early headlines of US-China trade talks scheduled in Switzerland for later this week. This was followed by PBoC easing but US equity futures and Tsy yields are subsequently off session highs.
- Cash yields are 0-3bp higher on the day, with increases led by 3s whilst 20s and 30s lag.
- 5s30s at 88bps is firmly off cycle highs of 100bps from May 1.
- TYM5 trades at 111-08+ (-01+) for close to yesterday’s highs of 111-12+, on another subdued overnight session with volumes at 230k despite no Japan holiday today.
- It hasn’t troubled resistance at 112-01+ (May 2 high) and the contract still trades close to recent lows, undermining the recent bull cycle. Support is seen at 110-27+ (May 6 low).
- Fed: FOMC announcement (1400ET), Chair Powell press conference (1430ET)
- Data: Weekly MBA mortgage data (0700ET), Consumer credit Mar (1500ET)
- Tsy Sec Bessent also sees day two of his Congressional testimony at 1000ET.
OPTIONS: Expiries for May07 NY cut 1000ET (Source DTCC)
May-07 10:56
- EUR/USD: $1.1400(E763mln)
- USD/JPY: Y142.50($804mln), Y143.00($595mln), Y143.20($746mln), Y145.50-55($1.1bln), Y145.85-00($1.6bln)
- EUR/GBP: Gbp0.8555-68(E501mln)
- AUD/USD: $0.6400(A$676mln), $0.6600(A$717mln)
- USD/CAD: C$1.3750-65825mln), C$1.3775-80($961mln)
- USD/CNY: Cny7.2000($500mln)
EQUITIES: Estoxx outright Put buyer
May-07 10:46
SX5E (16th May) 4650p, bought for 2.4 in 5k.
