GBPUSD TECHS: Trading Closer To Its Recent Lows
Dec-28 19:16
- RES 4: 1.2667 High May 27
- RES 3: 1.2599 High Jun 7
- RES 2: 1.2506 1.382 proj of the Sep 26 - Oct 5 - Oct 12 price swing
- RES 1: 1.2242/2446 High Dec 19 / 14 and the bull trigger
- PRICE: 1.2030 @ 19:12 GMT Dec 28
- SUP 1: 1.1993 Low Dec 22
- SUP 2: 1.1931 50-day EMA
- SUP 3: 1.1901 Low Nov 30 and a key support
- SUP 4: 1.1779 Low Nov 21
GBPUSD is trading closer to its recent lows. The short-term outlook remains bearish. This follows the move lower on Dec 15 and the subsequent follow through reinforces this theme. Attention is on the first key support at 1.1901, the Nov 30 low. On the upside, key short-term resistance has been defined at 1.2446, the Dec 14 high. A turn higher and a break of this hurdle, would confirm a resumption of the uptrend.
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US: Enthusiasm For DeSantis Recedes Slightly After Midterm Wave
Nov-28 19:06
A YouGov/Economist report has suggested that the initial wave of enthusiasm for Florida Governor Ron DeSantis (R-FL), which followed his strong performance at the US Midterm Elections, may have receded slightly.
- Former President Donald Trump is now slightly favoured by Republican voters to take the 2024 Presidential nomination.
- YouGov: “After announcing his 2024 candidacy last week, Donald Trump has gained in Republican assessment. This week, more Republicans say they want Trump to run in 2024 than did last week. A majority (56%) of Republicans now say he should run, up from 47% last week, just after the elections."
- YouGov: “Last week, in the wake of an easy re-election victory by Florida Governor Ron DeSantis and many criticisms of Trump for his endorsement choices, DeSantis beat Trump as Republicans' preferred GOP nominee, 46% to 39%, in a hypothetical matchup of the two current favorites. This week, Trump has an edge of 3 percentage points over DeSantis among Republicans, 45% to 42%.”
Chart 1: 2024 Republican Presidential Candidate
Source: Economist/YouGov
Source: Economist/YouGovUS: BBDXY Approaches Day Highs As Real Yields Climb On Fedspeak
Nov-28 18:39
- BBDXY approaching day highs, currently up 0.45% after a 0.8% intraday swing.
- The extension over the past 90 mins have been helped by push back from Williams and Bullard on 2023 rate cut expectations along with Mester earlier wanting to see a several more good inflation reports, pushing 10Y real yields 6.5bps higher on the day.
- Combines with earlier headlines on BlockFi Chapter 11 filing weighing on risk assets.
Source: Bloomberg
US EURODLR FUTURES: Williams and Bullard Push Back On 2023 Rate Cut Pricing
Nov-28 18:06
- The Williams/Bullard combo helped Eurodollars continue to unwind the earlier rally, back little changed on the day. EDZ3 for example is 95.195 (-0.015) off US session highs of 95.245.
- The comments don’t materially change the curve though, with almost 45bps of inversion through EDM3/Z3 and then EDZ3/Z4 only pulling back slightly off record lows of -1.235.
- Bullard re-iterated the need for rates at the bottom end of a 5-7% rate range and that the FOMC Fed may have to keep rates higher through 2023 and into 2024.
- Williams meanwhile can see a path to reducing nominal Fed rates in 2024, but prior to that expects the need to keep restrictive policy through 2023.
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