EURUSD TECHS: Strong Close
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1730/32 High Aug 20 / 22
- PRICE: 1.1729 @ 16:27 BST Aug 22
- SUP 1: 1.1528 Low Aug 5
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
EURUSD posted a strong Friday close on the back of Powell’s speech, reversing any bearish undertone from the pierce of support at the 50-day EMA of 1.1591. A clear break of it would signal scope for a deeper retracement and potentially expose key support at 1.1392, the Aug 1 low. The first support to watch lies at 1.1528, the Aug 5 low. A resumption of gains from here would expose key resistance and the bull trigger at 1.1829, the Jul 1 high.
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EURUSD TECHS: Approaching The Bull Trigger
- RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1899 2.0% 10-dma envelope
- RES 2: 1.1851 High Sep 10 2021
- RES 1: 1.1760/1829 High Jul 22 / 01 and the bull trigger
- PRICE: 1.1734 @ 16:02 BST Jul 23
- SUP 1: 1.1660/1557 20-day EMA / Low Jul 17
- SUP 2: 1.1534 50-day EMA
- SUP 3: 1.1446 Low Jun 19
- SUP 4: 1.1405 Low Jun 11
EURUSD maintains a firmer tone having recovered from 1.1557, the Jul 17 low. Recent weakness between Jul 1 - 17 appears to have been a correction. Support to watch lies at the 50-day EMA , at 1.1534. A clear break of this average is required to signal a stronger reversal. Note that trend indicators continue to highlight a dominant uptrend. A continuation higher would open 1.1829, the Jul 1 high and the bull trigger.
US TSYS/SUPPLY: WI 20Y Re-Open
Tsy futures remain weaker/near session lows (TYU5 at 111-01, -12) ahead of the $13B 20Y bond auction re-open (912810UL0) at 1300ET, WI is currently at 4.950%, .8bp cheap to last month's (small) tail.
OPTIONS: Schatz, Euribor / Sonia Call Structures Feature Wednesday
Wednesday's Europe rates/bond options flow included:
- DUQ5 107.40/107.50/107.60 call fly paper paid 0.75 on 2K
- DUU5 107.00/107.20/107.40 call fly paper paid 5.5 on 4K
- ERZ5 98.25/37/50/62 call condor paper paid 3 on +6.5K
- SFIZ5 96.60/96.85/97.10 call fly vs. SFIZ5 96.05 puts paper buys the puts back vs. selling the calls fly package trades for 1.00 & 1.25 on 10K
