EURGBP TECHS: Trend Needle Still Points North
- RES 4: 0.8852 50.0% retracement of the Mar ‘20 - Mar ‘22 bear leg
- RES 3: 0.8762 1.00 proj of the Apr 14 - May 12 - 17 price swing
- RES 2: 0.8721 High May 26 2021 and Jun 15 / bull trigger
- RES 1: 0.8646 High Jun 28
- PRICE: 0.8616 @ 06:31 BST Jun 29
- SUP 1: 0.8576 20-day EMA
- SUP 2: 0.8519 50-day EMA
- SUP 3: 0.8486 Low Jun 9
- SUP 4: 0.8433 Low May 23
The EURGBP trend needle continues to point north. Moving average studies are still in a bull mode condition and this clearly highlights positive market sentiment. The recent breach of resistance at 0.8619, May 12 high, confirmed a resumption of the uptrend and the focus is on a retest of 0.8721, Jun 15 high and the bull trigger. A break would resume the uptrend. Firm support is at the 50-day EMA - it intersects at 0.8519 today.
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RATINGS: Affirmations Across The Board On Friday
Sovereign credit rating reviews of note from after hours on Friday included:
- Fitch affirmed Italy at BBB; Outlook Stable
- Fitch affirmed Sweden at AAA; Outlook Stable
- DBRS Morningstar confirmed Poland at A, Stable Trend
AUD: Grinding Higher
AUD/USD has trended higher today, breaching above 0.7180, +0.30% on the day, in line with broad based USD weakness and positive risk appetite.
- The A$ has only seen modest outperformance in the G10 FX space today, with AUD/JPY up just 0.25% since the open (to 91.25). Focus has been more on USD/Asia pairs, with both USD/CNH and USD/KRW falling 1% or more.
- The cross-asset backdrop has been supportive from an equity standpoint, buoyed by easing Covid restrictions in China.
- Still, iron ore hasn't been able to build on gains from late last week. We are back to a $133/tonne handle from $135/tonne earlier. Copper has continued to push higher though, +0.70% on the day.
- Tomorrow, the data calendar swings back into gear, with the Q1 current account, net export contribution to GDP, Q1 inventories, April building approvals and April credit data all on tap. Note Q1 GDP prints on Wednesday.
- In local politics Peter Dutton was confirmed as the new Liberal party leader and will be the leader of the coalition against the Labor government.
BTP TECHS: (M2) Key Support Remains Intact
- RES 4: 135.23 High Apr 14
- RES 3: 133.53 High Apr 28
- RES 2: 132.67 50-day EMA
- RES 1: 131.24 High May 12
- PRICE: 129.33 @ Close May 27
- SUP 1: 127.24/125.54 Low May 11 and 24 / Low May 9
- SUP 2: 125.02 1.236 proj of the Mar 1 - 29 - 31 price swing
- SUP 3: 124.02 Low Mar 18 2020 (cont) and a major support
- SUP 4: 123.41 1.382 proj of the of the Mar 1 - 29 - 31 price swing
The primary trend condition in BTP futures remains bearish. A corrective (bullish) cycle has recently been established though and the contract did on May 12, manage to trade above a trendline resistance drawn from the Mar 1 high. Price has since pulled back however a resumption of strength would signal scope for a move towards 133.53, Apr 28 high. Key support is at 125.54, May 9 low. A break of this level would resume the downtrend.
