EURUSD TECHS: Short-Term Trend Needle Points North
- RES 4: 1.0862 50.0% retracement of the Jul 18 - Oct 3 bear leg
- RES 3: 1.0809 High Sep 4
- RES 2: 1.0764 38.2% retracement of the Jul 18 - Oct 3 bear leg
- RES 1: 1.0756 High Nov 6
- PRICE: 1.0694 @ 05:48 GMT Nov 14
- SUP 1: 1.0662 50- day EMA
- SUP 2: 1.0644 20-day EMA
- SUP 3: 1.0517/0496 Low Nov 1/ 13
- SUP 4: 1.0448 Low Oct 03 and the bear trigger
A bullish theme in EURUSD remains intact and the latest pullback appears to be a shallow correction and a flag formation - a bullish continuation pattern. A resumption of gains would expose 1.0764, a Fibonacci retracement, and a break of this level would open 1.0809, the Sep 4 high. Firm support is at 1.0517, the Nov 1 low, a break would be bearish. The pair is currently trading above Initial firm support at 1.0644, the 20-day EMA.
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USDCAD TECHS: Bearish Outlook Pauses
- RES 4: 1.3862 High Mar 10 and a key resistance
- RES 3: 1.3857 2.0% 10-dma envelope
- RES 2: 1.3805 High Mar 24
- RES 1: 1.3786 High Oct 5
- PRICE: 1.3660 @ 16:23 BST Oct 13
- SUP 1: 1.3569 Low Oct 10
- SUP 2: 1.3514 50-day EMA
- SUP 3: 1.3417 Low Sep 29
- SUP 4: 1.3381 Low Sep 19 and a key support
USDCAD traded higher into the Friday close after a solid Thursday rally. Last week, price breached key resistance at 1.3695, the Sep 7 high. This highlights a bullish theme and a reversal of the recent bearish phase. The break also confirms a resumption of the uptrend that started mid-July. Trendline resistance - at 1.3699 and drawn from the Oct 13 ‘22 high, has also been cleared and is a bullish development. Support is at 1.3514, the 50-day EMA.
US TSYS: Geopol Risk, Mixed UofM Data Buoy Rates
- Middle East conflict lent to Friday morning's risk-off/safe haven bid in US rates. Meanwhile, Russia war with Ukraine enters day 597. Dec'23 10Y futures marked an early session high of 108-00 before slipping back to 107-23.5 ((+16) after the bell; curves bull flattening: 2Y10Y -5.299 at -42.896.
- Tsys pare gains briefly, rebound slightly after University of Michigan data comes out mixed: Sentiment lower (63.0 vs. 67.0 est, 68.1 prior), Current Conditions (66.7 vs. 70.3 est, 71.4 prior), Expectations (60.7 vs. 65.7 est, 66.0 prior). Inflation expectations higher 1 Yr Inflation (3.8% vs. 3.2% est, 3.2% prior), 5-10Y (3.0% vs. 2.8% est, 2.8% prior).
- "After stabilizing earlier this year, concerns about inflation have grown again. These concerns underpin the sharp 15% deterioration in consumers’ assessments of their personal finances in this month. About 49% of consumers reported that high prices are eroding their living standards, up substantially from 39% last month and matching the all-time high last recorded in July 2022. Consumers pointed specifically to prices of food and groceries (highest share in over a year) as well as gas and fuel (highest in 2023)."
- Projected rate hikes into early 2024 consolidating: November holding at 7.8%, w/ implied rate change of +1.9bp to 5.348%, December cumulative of 8.3bp (10.6bp late Thu) at 5.412%, January 2024 cumulative 8.1bp (10.6bp late Thu) at 5.410%. Fed terminal at 5.438% in Jan'24. Fed terminal at 5.41% in Jan'24-Feb'24.
- Focus on Monday Data Calendar: Empire Mfg, Fed Speak, Tsy Bill Sales. Q4 equity earnings resume with Charles Schwab Monday; Bank of NY Mellon, Bank of America, Goldman Sachs on Tuesday.
AUDUSD TECHS: Trend Outlook Remains Bearish
- RES 4: 0.6630 High Aug 2
- RES 3: 0.6616 High Aug 16
- RES 2: 0.6522 High Aug 30 and Sep 1, and the key resistance
- RES 1: 0.6445/6501 High Oct 11 / High Sep 29
- PRICE: 0.6294 @ 16:22 BST Oct 13
- SUP 1: 0.6287 2.00 proj of the Jun 16 - Jun 29 - Jul 13 price swing
- SUP 2: 0.6272 Low Nov 3 2022 and a key support
- SUP 3: 0.6215 2.236 proj of the Jun 16 - Jun 29 - Jul 13 price swing
- SUP 4: 0.6170 Low Oct 13 2022 and a key support
AUDUSD remains bearish following the recent breach of support at 0.6331, despite the broad strength posted across the early half of the week. Last week’s break of support confirmed a range breakout and a resumption of the downtrend that started early February. This signals scope for 0.6215 next, a Fibonacci projection. On the upside, key trend resistance is at 0.6522, the Aug 30 and Sep 1 high. Short-term gains are considered corrective.
