STIR: Recent SOFR Options

• US TSY 19Y-10M BOND AUCTION: HIGH YLD 4.810%; ALLOT 6.47%
• US TSY 19Y-10M BOND AUCTION: DEALERS TAKE 16.99% OF COMPETITIVES
• US TSY 19Y-10M BOND AUCTION: DIRECTS TAKE 12.32% OF COMPETITIVES
• US TSY 19Y-10M BOND AUCTION: INDIRECTS TAKE 70.68% OF COMPETITIVES
• US TSY 19Y-10M BOND AUCTION: BID/COV 2.63

• RES 4: 1.1608 High Nov 9 2021
• RES 3: 1.1555 1.382 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 2: 1.1495 High Feb 10 2022 
• RES 1: 1.1473 High Apr 11 
• PRICE: 1.1375 @ 15:56 BST Apr 16
• SUP 1: 1.1144 High Apr 3 and a recent breakout level     
• SUP 2: 1.1001 20-day EMA     
• SUP 3: 1.0788 50-day EMA and a short-term pivot level     
• SUP 4: 1.0733 Low Mar 27 and a key short-term support

The trend outlook in EURUSD remains bullish and the pair is holding on to the bulk of its recent gains. The recent breach of 1.1144, the Apr 3 high and a bull trigger, confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 1.1555 next, a Fibonacci projection. Initial support lies at the 1.1144 breakout level. Key support is unchanged at the 20-day EMA, at 1.1001.

• Wednesday’s US session has witnessed relatively tight ranges in G10 currency markets, allowing the USD index to consolidate its initial move lower across APAC and early European trade. The ICE dollar index currently tracks at 99.50, just 50 pips from the 99.01 cycle lows that were printed last Friday.
• Weakness has been broad based against G10 peers, although the Swiss Franc and Swedish Krona have outperformed. For USDCHF specifically, the pair erased the entirety of the prior session’s bounce and leaves the pair vulnerable to a break below the 0.8100 mark, which would place the pair at fresh ten-year lows. A softer risk backdrop across global markets appears to have resumed the souring sentiment towards the dollar, and USDSEK’s 1% move lower has no idiosyncratic driver behind the move.
• The likes of EUR, AUD and NZD are all rising in line with the adjustment for the greenback, with EURUSD pushing back towards 1.14 and keeping bullish conditions firmly intact. Key focus remains on 1.1495, the Feb 10 2022 high. For AUDUSD, spot continues to edge back towards 0.6400, and a breach of 0.6409 (Feb 21 high) would likely prompt some further short covering for the pair. This may signal scope for a stronger recovery towards the US election highs at 0.6550.
• The Bank of Canada kept rates unchanged at 2.75%, in line with a slender majority of analysts. Together with higher crude prices, the CAD has been a beneficiary which has allowed USDCAD to edge back towards its recent lows. It is worth noting that Monday’s low came within 7 pips of the US election lows, located at 1.3822, a level of key short-term significance. Moving average studies are in a bear -mode position, highlighting a dominant downtrend. Below here, 1.3744 marks the next target, a Fibonacci retracement.
• GBP remains a relative underperformer on Wednesday, reflective of a softer-than-expected set of March inflation data. Although GBPUSD hovers around unchanged on the session, spot remains above the prior breakout level of 1.3207, an important bull trigger for the pair.
• Thursday’s data highlights include New Zealand CPI and Australian unemployment, before the focus turns to the ECB decision, where a 25bp cut of its three key rates is widely expected.