EURUSD TECHS: Shooting Star Candle Still In Play
- RES 4: 1.00774 High Jun 9
- RES 3: 1.0736 2.382 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 2: 1.0668 2.236 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 1: 1.0595/0615 High Dec 5 / High Jun 27
- PRICE: 1.0541 @ 15:43 GMT Dec 8
- SUP 1: 1.0394 Low Dec 1
- SUP 2: 1.0352/0291 20-day EMA / Low Nov 30
- SUP 3: 1.0223 Low Nov 21
- SUP 4: 1.0173 50-day EMA
EURUSD traded higher Wednesday and again today but price remains below Monday’s high print of 1.0595. The trend is up, however, Monday’s price action continues to highlight a bearish threat - a shooting star candle pattern was confirmed and this is a reversal signal. If correct, it suggests scope for a deeper short-term retracement towards 1.0352, the 20-day EMA. Clearance of Monday’s high would cancel this threat and resume the uptrend for 1.0615, the Jun 27 high.
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EURUSD TECHS: Bullish Price Action
- RES 4: 1.0273 1.382 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 3: 1.0198 High Sep 12 and a key resistance
- RES 2: 1.0094 High Oct 27 and a bull trigger
- RES 1: 1.0072 High Nov 08
- PRICE: 1.0061 @ 15:37 GMT Nov 08
- SUP 1: 0.9883/9730 20-day EMA / Low Nov 3
- SUP 2: 0.9705 Low Oct 21
- SUP 3: 0.9633 Low Oct 13 and a key support
- SUP 4: 0.9536 Low Sep 28 and the bear trigger
EURUSD rebounded Friday and traded higher again Tuesday. This highlights a bullish development and the pair has defined support at 0.9730, the Nov 3 low. Resistance at 0.9976, the Nov 3 high, has been cleared and this signals scope for an extension higher towards key resistance and the bull trigger at 1.0094, the Oct 27 high. On the downside, a reversal lower and a move through 0.9730 is required to reinstate a bearish theme.
US TSYS/SUPPLY: WI 3Y
WI inching higher heading into the $40B 3Y auction (91282CFW6) 1300ET cut-off.
- 3Y WI is currently running around 4.620% (4.607% earlier) vs. last month's tail: 4.318% high yield vs. 4.310% WI
US: Corporate Credit Update
Investment-grade corporate credit risk held lower levels at midday, near session lows as stocks, lead by mining shares, traded strong.
- Investment grade risk measured by Markit's CDXIG5 index is currently -1.275 at 87.242 vs. 89.373 high; CDXHY5 high yield index at 99.674 (+0.236).
- Outperforming credit sectors (tighter or least wide): subordinated Financials (-1.5), Consumer Staples (-1.0) and Energy (-0.9).
- Lagging sectors (wider or least narrow): Materials and Communications both +0.1, followed by Utilities and Health Care -0.1.
