GBPUSD TECHS: Support Stays Intact
- RES 4: 1.2977 0.764 proj of the Mar 8 - May 10 - May 25 price swing
- RES 3: 1.2877 High Apr 25 2022
- RES 2: 1.2849 0.618 proj of the Mar 8 - May 10 - May 25 price swing
- RES 1: 1.2760 High Jun 27
- PRICE: 1.2697 @ 16:21 BST Jul 6
- SUP 1: 1.2591 Low Jun 29
- SUP 2: 1.2569 50-day EMA and trendline drawn from the Mar 8 low
- SUP 3: 1.2433 Low Jun 8
- SUP 4: 1.2369 Low Jun 5 and a key support
GBPUSD is unchanged having erased the entirety of a mid-session rally. 1.2591, the Jun 29 low and a key support, remains intact. The recovery on Jun 30 could be an early reversal signal that suggests the recent corrective pullback is over. Resistance to watch is 1.2760, Jun 27 high. A break would expose key resistance at 1.2849, a Fibonacci projection. For bears, a break of 1.2591 would resume the recent downtrend and expose the 50-day EMA at 1.2569.
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GBPUSD TECHS: Key Short-Term Resistance Remains Intact - For Now
- RES 4: 1.2680 High May 10 and the bull trigger
- RES 3: 1.2641 High May 11
- RES 2: 1.2592 76.4% retracement of the May 10 - 25 bear cycle
- RES 1: 1.2461/2545 High Jun 5 / High Jun 2 and key resistance
- PRICE: 1.2410 @ 16:25 BST Jun 6
- SUP 1: 1.2348/2308 Low May 31 / 25 and the bear trigger
- SUP 2: 1.2275 Low Apr 3
- SUP 3: 1.2242 50.0% retracement of the Mar 8 - May 10 bull run
- SUP 4: 1.2213 Low Mar 27
GBPUSD traded lower Tuesday but did find support at the day low. The latest pullback highlights a bearish threat and key short-term resistance has been defined at Friday’s 1.2545 high. Note too that, despite a brief test above it last week, the 61.8% retracement of the May 10 - 25 downleg at 1.2538 remains intact. A continuation lower would open 1.2308, May 25 low and key support. Clearance of Friday’s high is required to reinstate the recent bull cycle.
OPTIONS: Larger FX Option Pipeline
- EUR/USD: Jun08 $1.0690-00(E1.6bln), $1.0800(E1.0bln)
- USD/JPY: Jun08 Y140.00($2.7bln)
- USD/CAD: Jun09 C$1.3450($1.5bln), C$1.3500($2.1bln)
STIR: Firming Fed June ‘Skip’ Narrative Whilst Trimming Cuts Later In The Year
- Fed Funds implied rates have seen a mixed session, with a June ‘skip’ seen increasingly likely (down to just +5.5bps) and still not fully pricing a July hike, but with subsequent meetings trimming cut expectations.
- Cumulative changes from 5.08% effective: +5.5bp Jun (-0.5bp on the day), +18.5bp Jul (unch), +16bp Sep (unch), +6bp Nov (+1.5bp), -9bp Dec (+2.5bp), -26bp Jan (+4.5bp).
- It leaves just 28bp of cuts from the implied July terminal to 4.99% at year-end, with the 9bp of cuts from current levels getting close to recent lows of just ~6bps in the period between Friday’s payrolls report and yesterday’s ISM services miss.
- UBS earlier called for a final 25bp hike in July after skipping June, having previously seen a peak with the May hike. They still see rate cuts starting this year but have pushed the start back to December (from September). Separately, JPM's Dimon has more recently said it's not particularly significant if the Fed raises 25bp.
- Tomorrow sees potential spillover from a BoC decision that could see a resumption of hikes having last hiked in January, in an otherwise light docket.
