EUROZONE: Timeline of key events (Times BST)

• RES 4: 1.0852 High Apr 22
• RES 3: 1.0787 High May 30
• RES 2: 1.0680/0774 Bear channel top from Feb 10 high / High Jun 9
• RES 1: 1.0601 High Jun 16
• PRICE: 1.0527 @ 06:14 BST Jun 20
• SUP 1: 1.0359 Low Jun 15
• SUP 2: 1.0350 Low May 13 and bear trigger
• SUP 3: 1.0341 Low Jan 3 2017 and a key support
• SUP 4: 1.0142 Bear channel base, drawn from the Feb 10 high

EURUSD remains above recent lows however a bearish threat is still present. Recent weakness, following a reversal at the top of the bear channel drawn from the Feb 10 high, highlights a bearish condition. The channel top intersects at 1.0680 today. The reversal lower also signals a resumption of the primary downtrend and attention is on 1.0350, May 13 low. Initial firm resistance is at 1.0601, Jun 16 high.

• RES 4: 3902.00 High Mar 29
• RES 3: 3840.00 High Jun 6
• RES 2: 3676.00 50-day EMA
• RES 1: 3567.00 High Jun 16
• PRICE: 3146.00 @ 05:530 BST Jun 20
• SUP 1: 3384.00 Low Jun 17
• SUP 2: 3300.00 Round number support
• SUP 3: 3241.70 1.382 proj of the Mar 29 - May 10 - Jun 6 price swing
• SUP 4: 3189.10 1.50 proj of the Mar 29 - May 10 - Jun 6 price swing

The EUROSTOXX 50 futures primary trend direction remains down. The move lower last week resulted in a breach of key support at 3456.00, the May 10 low. This reinforces bearish conditions and signals potential for weakness towards the 3300.00 handle. Moving average studies are in a bear mode condition, highlighting current trend conditions. On the upside, initial firm resistance is seen at 3676.00, the 50-day EMA.

TYU2 trades 0-04 shy of the peak of its 0-18 Asia range, last dealing +0-00+ at 116-06+, on sub-average volume of ~65K. The modest volume came about on the observance of the Juneteenth holiday in the U.S., with cash Tsys closed until Tuesday’s Asia-Pac session, while Tsy futures will be subjected to curtailed trading hours on Monday.

• Weekend news flow was headlined by Fed Governor Waller’s latest round of hawkish rhetoric (pointing to support for a 75bp rate hike at the July FOMC), confirmation that U.S. President Biden aims to speak with Chinese President Xi “soon,” as well as utterances from U.S. Tsy Sec Yellen re: high inflation being “locked in” for the remainder of ’22 & the likelihood of a roll back of some of the tariffs levied on China by the Trump admin.
• These matters, coupled with an early uptick for e-mini futures, applied pressure to U.S. Tsy futures at the re-open.
• Cross-asset correlations were at the fore thereafter, with broader gyrations in e-minis and Chinese equities in the driving seat. Tsy futures recovered from intraday lows as e-minis briefly moved into negative territory and Chinese equities struggled in early dealing, before working away from best levels as a rebound in Chinese property developer stocks (aided by another round of localised policy support), some upbeat sell-side musings re: Chinese equities and suggestions that China may pursue “extraordinary” measures to combat the divergence in upstream and downstream manufacturers’ profitability came to the fore.
• Note that Monday will see St. Louis Fed President Bullard (’22 voter) comment on inflation and interest rates.