EURUSD TECHS: Trend Needle Points North
Jan-24 05:36
- RES 4: 1.1054 High Apr 4 2022
- RES 3: 1.1022 3.00 proj of the Sep 28 - Oct 4 - Oct 13 price swing
- RES 2: 1.0954 High Apr 11, 2022
- RES 1: 1.0927 High Jan 23
- PRICE: 1.0879 @ 05:35 GMT Jan 24
- SUP 1: 1.0767/40 Low Jan 18 / 20-day EMA
- SUP 2: 1.0634 Low Jan 9
- SUP 3: 1.0569/1.0484 50-day EMA / Low Jan 6
- SUP 4: 1.0410 3.0% Lower Bollinger Band
EURUSD remains in an uptrend and the pair traded slightly higher Monday to confirm a resumption of the primary uptrend. The trend extension maintains the bullish price sequence of higher highs and higher lows and moving average studies continue to highlight bullish market sentiment. The focus is on 1.0954, the Apr 11 2022 high. Initial firm support is at 1.0740, the 20-day EMA. A break of the average would signal the start of a correction.
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US TSYS: Cash Treasuries Close Early With Further Sizeable Cheapening
Dec-23 19:10
- Cash Tsys hold onto further cheapening today at the early close, with yields 5-8.5bps higher on the day but just remaining off pre-U.Mich session highs across 2-10Y tenors.
- Those session highs were also month to date highs from 5Y tenors onwards, with the 2Y at highs since the Nov CPI miss on Dec 13 and the subsequent fall in terminal Fed pricing from close to 5% to ~4.9% currently.
- 2YY +5.0bps at 4.321%, 5YY +5.4bps at 3.857%, 10YY +6.9bps at 3.747% and 30YY +8.5bps at 3.823%.
- The first wave of US data were broadly as expected with core PCE inflation moderating and a small beat for income growth, before more mixed 1000ET data with new home sales surprisingly bouncing but importantly U.Mich inflation expectations being revised lower.
- Treasury futures are still set for a full session, with TYH3 currently trading 15 ticks lower at 113-02+ having earlier touched 112-31. In the process it cleared support at 113-09+ (Dec 21 low) to open the key short-term 112-11+ (Nov 21 low).
CANADA: GoC Yields Extend Session Highs
Dec-23 17:20
- Hard to see latest drivers but GoC yields across 2-10Y tenors, now up 12bps in the front-end to belly and 10bps for 10Y.
- Can-US yield differentials continue to narrow: 2Y at -39bps, 10Y -56bps, both close to highs since the BoC’s surprise Oct downshift.
- Move coincides with USDCAD stepping to new session lows to lows since Dec 15 at 1.3563. Support seen 1.3519 (Dec 14 low).
US TSYS: Re-Cheapening Ahead Of Early Cash Close
Dec-23 17:05
- Treasuries are seeing a re-cheapening of late, with yields back to 5-7bps higher on the day but remaining off pre U.Mich session highs.
- Those session (yield) highs were also month to date highs from 5Y tenors onwards, with the 2Y at highs since the Nov CPI miss on Dec 13 and the subsequent fall in terminal Fed pricing from close to 5% to ~4.9% currently.
- Only modest steepening on the day with 2s10s +1bp at -57.5bp, within the week’s range of -52 to -70bps.
- SIFMA recommends cash close at 1400ET.
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