AUDUSD TECHS: Testing Support

• Treasuries look to finish near session highs - after gapping higher following Fed Chairman Powell's dovish speech from the Jackson Hole, Wy symposium. Sep'25 10Y contract trades +19 at 112-04.5 after the bell vs. 112-08 high, 10Y yield -.0739 at 4.2537% vs. 4.2402% low.
• Technical resistance attention on 112-15+, the Aug 5 high and the bull trigger. Clearance of this hurdle would resume the uptrend and pave the way for a climb towards 112-23 initially, the May 1 high.
• The major near-term policy signal takeaway from Fed Chair Powell's Jackson Hole keynote (link) is that he only acknowledges that "with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance", but also that the risks appear to have shifted since the July meeting ("The balance of risks appears to be shifting"), as "downside risks to employment are rising.
• Boston Fed President Collins: Sep cut not a done deal as "risks on the two sides have come into rough balance. So, that is a really complex context for monetary policy, when you could see the unemployment rate rising and you could see higher inflation. You know, my baseline is not one that is as concerned about inflation expectations rising at the moment. Earlier in the year I had more concerns about that.
• Focus in the coming week shifts to any further policy signaling from central bank officials at Jackson Hole. BoE's Bailey, ECB's Lagarde, BoJ's Ueda, Riksbank's Thedeen and several more FOMC members are in attendence - meaning it should be a busy weekend for central bank commentary.

• RES 4: 0.6688 High Nov 7 ‘24
• RES 3: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
• RES 2: 0.6569/6625 High Aug 14 / 24 and the bull trigger 
• RES 1: 0.6494/0.6501 50-day EMA/High Aug 22
• PRICE: 0.6486 @ 16:51 BST Aug 22
• SUP 1: 0.6415 Low Aug 21
• SUP 2: 0.6373 Low Jun 23 
• SUP 3: 0.6354 38.2% retracement of the Apr 9 - Jul 24 upleg  
• SUP 4: 0.6323 Low Apr 16

AUDUSD surged Friday, reversing a large part of the week’s weakness and break of support. The correction higher is infitting with the underlying uptrend, with the medium-term condition remaining bullish for now. The first important resistance to watch is 0.6494, the 50-day EMA - a level pierced on Friday. The recent sell-off resulted in a print below support at 0.6419, the Aug 1 low and a bear trigger. A return lower and clear break back below this level would strengthen a bear theme and expose 0.6373, the Jun 23 low and an important support. 

SOFR & Treasury options continued to revolve around low delta/upside calls Friday, some profit taking/unwinds after the underlying surged higher following dovish comments from Fed Chair Powell at Jackson Hole symposium. Sep Tsy options expiring, pin risk evaporating as futures hold off strikes. Projected rate cuts gained vs. early morning (*) levels: Sep'25 at -21.2bp (-16.9bp), Oct'25 at -34.1bp (-29.6bp), Dec'25 at -55.1bp (-47.7bp), Jan'26 at -68.6bp (-58.6bp).

• SOFR Options:
  • Block, 13,125 SFRU5 96.06/96.12 call spds 0.75 vs. 95.925/0.06%
  • +5,000 0QU5 97.00/97.50 call spds .5 over 2QU5 97.00/97.37 call spds
  • -17,000 SFRZ5 95.75 puts, 0.75 ref 96.235
  • +8,000 SFRH6 96.56/97.06 call spds .5 over 2QH6 97.00/97.50 call spds
  • -4,000 SFRH6 97.00 calls, 9.5 vs. 96.48/0.24%
  • -3,000 SFRVB5 96.00 puts, 2.0 ref 96.24
  • -3,000 SFRZ5 96.50 calls, 7.0 vs. 96.23/0.28%
  • Block, 5,000 SFRZ5 95.75 puts, 0.75
  • -4,000 SFRU5 95.87 calls, 7.0
  • -20,000 0QZ5 96.75/97.00/97.50/97.75 call condors 8.75-9.0 (adds to appr 10k yesterday)
  • over 15,000 SFRU5 95.81/95.87/96.00 call flys ref 95.855
  • over 10,000 SFRU5 95.68/95.75/95.81 put trees
  • 2,000 SFRU5 96.00/96.12/96.25 call flys ref 95.855
  • 7,800 SFRU5 96.12/96.25 call spds ref 95.8525
  • 2,000 SFRZ5 95.93 puts ref 96.145
  • 3,200 0QU5 96.62/97.00 strangles ref 96.78
  • 3,200 SFRU5 96.06 calls
• Treasury Options: Reminder Sep Tsy options expire today
  • +15,000 wk4 Mon TY 111.5 puts, cab-7 exp Mon
  • 3,000 wk5 TY 112.5/113 2x1 put spds, 1 ref 112-05, exp 8/29
  • +67,000 TYV5 113.5 calls, 18 vs. 112-03/0.23%
  • over 3,400 TYU5 113 calls ref 111-17
  • 1,000 FVU5 108.5/108.75 call spds ref 108-18.5
  • 2,500 FVU5 108.5/109.25 call spds ref 108-19.5