AUD: Rare Extension of Consolidation, Which Usually Resolves in Weaker AUD
We noted yesterday the extended consolidation phase for AUD/USD, which has now stretched to 10 consecutive sessions of the price trading either side of $0.64.
- This is a relatively uncommon pattern that rarely extends beyond this streak, and historically resolves with a weaker AUD/USD and a break lower. Weakness from here would heighten focus on the 50-day EMA support at 0.6316.
Since the onset of COVID, price has only hugged a handle this closely on four other occasions - before breaking the pattern and moving lower:
- January 2024: 9 sessions either side of $0.6600 before moving lower
- April 2023: 10 sessions either side of $0.6700 before moving lower
- September 2022: 9 sessions either side of $0.6500 before moving lower
- June 2020: 10 sessions either side of $0.6900 before moving lower
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GERMAN AUCTION PREVIEW: 2.50% Feb-35 Bund
This morning, Germany will hold its sixth 10-year Bund auction of the year. On offer will be E4.5bln of the 2.50% Feb-35 Bund.
- The size is in line with the last re-open of the 2.50% Feb-35 Bund on March 12.
- Recent auctions in the German 10y segment have passed smoothly, with solid bid-to-covers (in a 1.83x to 4.87x range since July), bid-to-offers (1.52x to 3.98x range since July) and the low prices above the secondary market mid-prices throughout 2024/5.
- For the last 2.50% Feb-35 Bund auction on March 12, the bid-to-cover stood at 2.12x, while the bid-to-offer came in at 1.62x.
- The next German auction will be E2bln of a (yet unspecified) Green line on April 8, while the 2.50% Feb-35 Bund will be reopened next on April 23, for E4.0bln.
- Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.
EQUITIES: Estoxx outright call seller
SX5E (20th June) 5300c, sold at 127.60 in 6.5k vs 2.86k at 5225.00.
COMMODITIES: Gold Trend Remains Bullish Following Sequence of Record Highs
WTI futures traded sharply higher Monday. This undermines the medium-term bearish condition and instead signals scope for a continuation higher near-term. The rally has exposed the next key resistance at $72.91, the Feb 11 high. Clearance of this level would strengthen the bullish theme. On the downside, initial firm support to watch lies at $69.01, the 20-day EMA. A breach of this level would signal a potential reversal. The trend condition in Gold is unchanged, it remains bullish. The latest rally reinforces current conditions and confirms a continuation of the primary uptrend. The rally also once again, highlights fresh all-time highs for the yellow metal. Sights are on the $3151.5, a Fibonacci projection. Support to watch lies at $3004.9, the 20-day EMA. A pullback would be considered corrective.
- WTI Crude down $0.2 or -0.28% at $71.09
- Natural Gas up $0.02 or +0.48% at $3.967
- Gold spot up $20.3 or +0.65% at $3133.08
- Copper up $3.7 or +0.73% at $505.7
- Silver up $0.31 or +0.93% at $34.0041
- Platinum down $6.15 or -0.62% at $985.32
