OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat
Feb-07 11:59
- On the commodity front, a bull cycle in Gold remains in play. This week’s appreciation once again, confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on $2889.9 next, a 1.618 projection of the Nov 14 - Dec 12 - 19 price swing. The first key support to watch is $2711.0, the 50-day EMA. The 20-day EMA is at $2767.4.
- In the oil space, recent weakness in WTI futures marks an extension of the current corrective cycle. The 20-day EMA has been breached and attention is on support around the 50-day EMA, at $72.20. It has been pierced, a clear break of it would suggest scope for a deeper retracement. This would open $68.05, the Dec 20 ‘24 low. On the upside, a clear reversal higher would refocus attention on $79.48, the Apr 12 ‘24 high and a key resistance. Initial resistance is $75.18, the Feb 3 high.
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US TSYS: Gilts Pressure Weighs, Trump Tariff Deliberation Adds To Noise
Jan-08 11:58
Treasuries have sold off over the past hour as US desks join, lagging sharp downward pressure in Gilts after long end yields broke to fresh multi-decade high. CNN has more recently reported Trump is weighing an emergency declaration for new tariffs with TY futures mostly sideways since then.
- Today’s 30Y supply can also weigh, but with the recent large steepening offering strong outright concession (WI yield currently ~40bps above last month’s auction high yield).
- Cash yields are 1-2bp higher, bear steepening with 2s10s setting new recent highs of 40.6bps.
- 10Y yields have recently seen a session high of 4.7014%, with focus on 4.7351%, the 2024 high.
- 30Y yields at 4.936% earlier hit fresh highs since Oct/Nov 2023.
- TYH5 trades at 108-03 (-02+) whilst cumulative volumes of 370k are reasonable but not particularly elevated.
- The earlier low of 108-01+ matched yesterday’s fresh cycle low, and sees attention on the round 108-00 before 107-19+ (both Fibo projections). Moving average studies remain in a bear-mode position highlighting a dominant downtrend.
- Data: Headlined by weekly jobless claims brought forward a day early plus ADP employment.
- Fedspeak: Waller (0800ET), FOMC minutes (1400ET) – see STIR bullet.
- Note/bond issuance: US Tsy $22B 30Y re-open - 912810UE6 (1300ET)
- Bill issuance: US Tsy $64B 17W bill auction (1130ET)
PIPELINE: Corporate Debt Roundup: $6B World Bank 7Y Priced Earlier
Jan-08 11:56
- Date $MM Issuer (Priced *, Launch #)
- 01/08 $6B *World Bank 7Y +54
- 01/08 $Benchmark Ontario 5Y SOFR+58
- 01/08 $Benchmark Kommunalbanken 5Y +48
- 01/08 $Benchmark Indonesia 5Y 5.65%a, 10Y 5.95%a
- 01/08 $Benchmark Cncl of Europe Dev Bank 5Y SOFR+42
- 01/08 $Benchmark Inter-American Development Bank (IADB) 5Y SOFR+42
- $36.95B Priced Tuesday, record $96.5B since Monday
GBPUSD TECHS: Bear Cycle Extension
Jan-08 11:55
- RES 4: 1.2672 50-day EMA
- RES 3: 1.2607 High Dec 30
- RES 2: 1.2550/2576 20-day EMA / High Jan 7
- RES 1: 1.2476 Low Dec 20
- PRICE: 1.2371 @ 11:54 GMT Jan 8
- SUP 1: 1.2325/2300 Intraday low / Low Apr 22 ‘24 and a key support
- SUP 2: 1.2226 0.618 proj of the Sep 26 - Nov 22 - Dec 6 price swing
- SUP 3: 1.2187 Low Nov 10 2023
- SUP 4: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing
The trend condition in GBPUSD remains bearish and today’s sharp sell-off reinforces the bear trend. The move down has also confirmed a resumption of the bear leg and an extension of the price sequence of lower lows and lower highs. Sights are on 1.2300 next, a break of this level would open 1.2226, a Fibonacci projection. Initial firm trend resistance has been defined at 1.2576, the Jan 7 high.
