AUDUSD TECHS: Trend Needle Points North
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6595 High Jul 11
- PRICE: 0.6525 @ 17:09 BST Jul 16
- SUP 1: 0.6495 Low Jul 16
- SUP 2: 0.6488/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the latest pullback - for now - appears corrective. Resistance at 0.6590 has recently been pierced. A clear break of this price point would strengthen a bullish condition and confirm a resumption of the uptrend plus maintain the price sequence of higher highs and higher lows. Scope is seen for a climb towards 0.6603 next, the Nov 11 2024 high. Initial firm support to watch is 0.6488, the 50-day EMA.
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US TSYS: Early Risk-On Evaporates, Stocks Just Don't Know it Yet
- Treasuries retreated from midday highs as early risk-on tone over easing geopol-tension hopes in turn retreated as Iran and Israel continued to trade missiles. Weaker Treasury futures are back near opening levels with the Sep'25 10Y contract at 110-15.5 (-4) vs. 110-26 overnight high - compares to early Friday high of 111-05 (111-13 overnight high).
- Earlier focus on key resistance and recent high at 111-14+, a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish and highlight a stronger reversal. Technical support below at 109-28 (Low Jun 6 / 11).
- Stocks firmer but off early highs, SPX eminis tapped highest levels since last Wednesday: 6055.25 (+76.0) with Financials and IT sectors leading gainers in early trade.
- Despite the breadth of moves, markets rather quiet ahead of Wednesday's FOMC annc. Projected rate cut pricing has cooled vs. morning levels (*) as follows: Jun'25 at 0.0bp, Jul'25 at -3.1bp (-4.1bp), Sep'25 at -17.4bp (-18.4bp), Oct'25 at -30.6bp (-34.9bp), Dec'25 at -46.4bp (-46.9bp).
- Busy Wednesday: addition to FOMC, markets see weekly/continuing claims, house starts/build permits & 3 bill auctions ahead Thursday's Juneteenth holiday. Cash Treasury and stock exchanges are closed Thursday, along with open outcry pits in Chicago but equity and debt futures will be open for an abbreviated trading session.
US TSY OPTIONS: Late BLOCK: Jul'5 5Y Calls
- 10,000 FVN5 108 calls, 10 vs. 107-29.5/0.44% at 1503:17ET - additional 10,000 trade on screen at 11
US TSYS: Lat e SOFR/Treasury Option Roundup: Forward Rate Cut Pricing cools
Option desks reported light SOFR & Tsy option flow Monday, mixed flow as underlying futures retreated from early session highs. Underlying futures trade weaker but off late overnight lows, projected rate cut pricing has cooled vs. morning levels (*) as follows: Jun'25 at 0.0bp, Jul'25 at -3.1bp (-4.1bp), Sep'25 at -17.4bp (-18.4bp), Oct'25 at -30.6bp (-34.9bp), Dec'25 at -46.4bp (-46.9bp).
- SOFR Options:
- Update, total 20,000 0QZ5 96.75/97.00/97.50/97.75 call condors, 6.0 ref 96.72/0.05%
- Block, 5,000 SFRV5 95.75/95.93/96.50 broken call trees, 2.5 net ref 96.125
- +4,000 0QV5 97.00/97.50/98.00 call flys, 5.5 vs. 96.695/0.10%
- +5,000 0QN5 96.75 calls, 8.5 ref 96.62/0.38%
- -1,500 2QZ5 96.50 straddles, 61.0-60.5
- 1,000 SFRU5 95.87/96.06 2x3 call spds, 1.25
- 3,000 SFRU5 95.37/95.62 put spds, 0.5 ref 95.88 to -.875
- 1,500 SFRN5 95.62/95.75/95.87 put flys, 4.5
- Treasury Options:
- -7,500 TYN5 110.25/112 1x2 risk reversals (-p) vs. 110-22.5/0.41%
- 1,200 TYQ5/TYU5 110.5 call spds, 16 ref 110-23
- 2,000 TYQ5 110/111 strangles, 1-19
- 2,000 TYN5 110.5/110.75/111/111.25 call condors
- 1,250 TYN5 109/109.5 put spds vs. 111.75/112.25 call spds ref 110-14.5
- +1,000 TYU5 107/108 put spds 9 vs. 110-21/0.08%
