OUTLOOK: Price Signal Summary - GBPUSD Remains Above Support For Now
May-08 10:27
- In FX, EURUSD is in consolidation mode and is still trading closer to its recent lows. The trend remains bullish - MA studies are in a bull-mode position signalling a dominant uptrend. The latest move down has allowed an overbought condition to unwind. A resumption of the uptrend would open 1.1608, the Nov 9 2021 high. Initial key support to watch is the 20-day EMA, at 1.1279 (pierced). A clear break of this average would signal scope for a deeper retracement and open 1.1144, the Apr 3 high.
- Recent weakness in GBPUSD appears corrective and the pair continues to trade inside a range with support at 1.3249, the 20-day EMA, intact. A clear break of this average would signal scope for a deeper retracement. Moving average studies remain in a bull-mode position, signalling a dominant underlying uptrend. A resumption of the trend would open 1.3510, a 1.236 projection of the Feb 28 - Apr 3 - 7 price swing.
- The primary trend direction in USDJPY is bearish and gains since Apr 22 appear corrective. Resistance at the 50-day EMA, at 146.23, remains intact. A clear break of this EMA would highlight a possible reversal. Moving average studies are in a bear-mode position and continue to highlight a dominant downtrend. A resumption of the trend would open 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing. First key support to watch is 141.97, the Apr 29 low.
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LOOK AHEAD: Tuesday Data Calendar: SF Fed Daly Outlook, Tsy 3Y Note Auction
Apr-08 10:25
- US Data/Speaker Calendar (prior, estimate)
- 08-Apr 0600 NFIB Small Business Optimism -- reported 97.4 vs. 100.7 prior
- 08-Apr 1130 US Tsy $70B 6W Bill auction
- 08-Apr 1300 US Tsy $58B 3Y Note auction (91282CMW8)
- 08-Apr 1400 SF Fed Daly economic outlook
US DATA: Small Business Optimism Reverses Further, Price Plans Drifting Higher
Apr-08 10:21
- The NFIB small business optimism index fell by more than expected in March, to 97.4 (cons 99.0) from 100.7 as it continues to unwind gains seen since the presidential election in November.
- It’s still above the 93.7 in October and readings around the 90 mark since mid-2022 prior to the election, but it’s nevertheless the sharpest monthly drop since Jun 2022. Further, it’s a marked contrast to small business confidence under the first Trump administration which held onto its surge higher following the 2016 election results.
- The share expecting better business conditions in the next six months fell 16pts (sharpest since Dec 2020) for its third monthly decline.
- The uncertainty index meanwhile pulled back to 96 from 104 after what had been its second highest reading in the series history (the highest being 110 in Oct ahead of the presidential election).
- Within the price details, whilst somewhat stale as they ‘only’ capture the initial China tariffs and steel & aluminum more broadly (stopping before Apr 2 “Liberation Day tariffs”), the share who increased prices compared to three months ago fell back to 26% from 32% in Feb (highest since May 2023).
- The share expecting to increase prices over the next three months meanwhile edged 1pp higher to 30% for a fresh high since Mar 2024. It steadily pulls further away from pre-pandemic averages of 21/22 readings and offers a continued headwind against a full returning to the 2% inflation target even prior to larger tariffs in the pipeline.
US 10YR FUTURE TECHS: (M5) Corrective Pullback
Apr-08 10:13
- RES 4: 115-00+ High Oct 1 ‘24
- RES 3: 114-29+ 2.000 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 2: 114-16 2.000 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 1: 112-29/114-10 50.0% of Apr 7 high-low range / High Apr 7
- PRICE: 112-01+ @ 11:02 BST Apr 8
- SUP 1: 111-15+ Low Apr 7l
- SUP 2: 111-10+ 20-day EMA
- SUP 3: 110-20+ 50-day EMA
- SUP 4: 110-06 Low Mar 27
The strong sell-off from yesterday’s high in Treasury futures is considered corrective and this is allowing an overbought condition to unwind. Recent gains resulted in the break of resistance at 112-01, the Mar 4 high, to confirm a resumption of the uptrend that started mid-January. The move higher sets the scene for an extension towards the 114-16 next, a Fibonacci projection. Initial firm support to watch lies at 111-10+, the 20-day EMA.
