GBPUSD TECHS: Trend Needle Points South
- RES 4: 1.3142 High Jul 14 and the bull trigger
- RES 3: 1.3045 High Jul 19
- RES 2: 1.2887/2996 High Jul 28 / 27 and a key resistance
- RES 1: 1.2819 High Aug 10
- PRICE: 1.2683 @ 05:48 BST Aug 11
- SUP 1: 1.2621 Low Aug 3 and the bear trigger
- SUP 2: 1.2591 Low Jun 29
- SUP 3: 1.2480 1.50 projection of the Jul 14 - 24 - 27 price swing
- SUP 4: 1.2439 1.618 projection of the Jul 14 - 24 - 27 price swing
GBPUSD failed to hold on to its rally yesterday and the reversal lower reinforces a bearish theme. The recent break of a key support highlighted by the 50-day EMA, at 1.2745 today, and the base of a bull channel drawn from the Mar 8 low - currently at 1.2800, signals potential for a continuation lower near-term. The focus is on 1.2591, the Jun 29 low and the next important support. First resistance is at 1.2819, the Aug 10 high.
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AUSSIE BONDS: Richer, RBA Gov. Lowe Announces Changes To RBA
ACGBs richened to Sydney session highs as RBA Governor Lowe’s commenced his speech to the Economic Society of Australia, but reversed part of the gains (YM +4.0 & XM +4.0) after the Q&A session revealed little that was new with respect to the policy outlook.
- Lowe did, however, announce changes in response to the recent review of the central bank, according to the ABC. Amongst other initiatives, from 2024, the RBA board will only meet eight times a year, rather than 11. He said the RBA governor will hold a press conference after every board meeting to explain the board's interest rate decision. (See link)
- Cash ACGBs are 4-5bp richer with the AU-US 10-year yield differential -4bp at +18bp.
- Swap rates are 4-6bp lower.
- Bills pricing is +2 to +6 with late whites leading.
- RBA dated OIS 7-8bp softer for meetings beyond December.
- Tomorrow the local calendar sees June MI Inflation Expectations.
- Attention now turns to the release of June US CPI data later. Consensus puts core CPI at 0.3% m/m. A higher-than-expected reading, particularly with robust details in ex-shelter services, would further solidify the "higher for longer" narrative. Conversely, if there is a miss, it would have the most significant impact on pricing expectations for September.
BOBL TECHS: (U3) Bearish Theme
- RES 4: 116.280 High Jun 29
- RES 3: 115.910 High Jul 3
- RES 2: 115.550 20-day EMA
- RES 1: 115.320 Low Jun 22
- PRICE: 114.740 @ 05:26 BST Jul 12
- SUP 1: 114.550 Low Jul 6
- SUP 2: 114.432 1.764 projection of the Jun 1 - 8 - 12 price swing
- SUP 3: 114.130 Low Mar 6 (cont) and a major support
- SUP 4: 114.090 2.00 projection of the Jun 1 - 8 - 12 price swing
Bobl futures are unchanged and remain soft following the move lower last week that confirmed a resumption of the downtrend. The break lower maintains the bearish price sequence of lower lows and lower highs and note that moving average studies are in a bear mode position, reinforcing current trend conditions. The focus is on 114.130, the Mar 6 low on the continuation chart. Initial firm resistance is at 115.320, the Jun 22 low.
BUND TECHS: (U3) Trend Needle Continues To Point South
- RES 4: 134.14/135.00 High Jul 3 / High Jun 27
- RES 3: 132.99 20-day EMA
- RES 2: 132.18/65 Low Jun 16 / High Jul 6
- RES 1: 131.58 High Nov 11
- PRICE: 131.02 @ 05:42 BST Jul 12
- SUP 1: 130.60 Low Jul 10
- SUP 2: 130.46 1.236 projection of the Jun 1 - 16 - 27 price swing
- SUP 3: 129.93 1.382 projection of the Jun 1 - 16 - 27 price swing
- SUP 4: 129.49 1.50 projection of the Jun 1 - 16 - 27 price swing
Bund futures are consolidating and maintain a softer tone following last week’s extension lower. Price has cleared key support and the bear trigger at 132.12, the May 26 low. The break strengthens bearish conditions and confirms a resumption of the downtrend. This opens 130.46, a Fibonacci projection. Moving average studies are in bear-mode position, reinforcing a bearish theme. Initial firm resistance is at 132.18, the Jun 16 low.
