GBPUSD TECHS: Trend Structure Remains Bullish
- RES 4: 1.2894 High Mar 8 and a key resistance
- RES 3: 1.2823 High Mar 14
- RES 2: 1.2803 High Mar 21
- RES 1: 1.2761 High May 22
- PRICE: 1.2691 @ 06:21 BST May 24
- SUP 1: 1.2643/1.2596 Low May 16 / 50-day EMA
- SUP 2: 1.2510 Low May 14
- SUP 3: 1.2446 Low May 9 and a key near-term support
- SUP 4: 1.2423 Low Apr 24
A bullish trend condition in GBPUSD remains intact following recent gains and a short-term pullback would be considered corrective. The recent breach of 1.2634, the May 3 high, confirmed a resumption of the current bull cycle and this opened 1.2754, 76.4% of the Mar 8 - Apr 22 bear leg. 1.2754 was pierced Wednesday, a clear break would expose 1.2803, the Mar 21 high. Initial firm support to watch lies at 1.2596, the 50-day EMA.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 24-Apr | 835 | EU | ECB's Cipollone at ECB retail payments conference |
| 24-Apr | 900 | IT | ISTAT Business/Consumer Confidence |
| 24-Apr | 900 | DE | IFO Business Climate Index |
| 24-Apr | 1010 | EU | ECB's Cipollone at ECB Retail Payments Conference |
| 24-Apr | 1400 | BE | BNB Business Sentiment |
| 24-Apr | 1500 | EU | ECB's Schnabel remarks at '"Frankfurt liest ein Buch" |
| 25-Apr | 700 | DE | GFK Consumer Climate |
| 25-Apr | 745 | FR | Manufacturing Sentiment |
| 25-Apr | 800 | ES | PPI |
| 25-Apr | 800 | EU | ECB's Schnabel Speech for 'ChaMP' |
| 26-Apr | 745 | FR | Consumer Sentiment |
| 26-Apr | 900 | EU | M3 |
| 26-Apr | 900 | EU | ECB Consumer Expectations Survey |
| 26-Apr | 900 | EU | ECB's De Guindos at Academia Europea Leadership |
| 29-Apr | 800 | ES | HICP (p) |
| 29-Apr | 900 | DE | North Rhine Westphalia/ Bavaria CPI |
| 29-Apr | 1300 | DE | HICP (p) |
EUROSTOXX50 TECHS: (M4) Reversal Extends
- RES 4: 5127.70 1.382 proj of the Jan 17 - Feb 12 - 13 price swing
- RES 3: 5079.00 High Apr 2 and the bull trigger
- RES 2: 5043.00 High Apr 4
- RES 1: 5002.00 Intraday high
- PRICE: 4995.00 @ 05:59 BST Apr 24
- SUP 1: 4865.00/4762.00 50-day EMA / Low Apr 19 and bear trigger
- SUP 2: 4711.00 Low Feb 19
- SUP 3: 4700.00 Round number support
- SUP 4: 4626.00 Low Feb 13
Eurostoxx 50 futures traded higher Tuesday, extending the recovery from 4762.00, the Apr 19 low. The contract has cleared the 20-day EMA and breached resistance at 4990.00, the Apr 15 high. This highlights a stronger reversal and signals the end of the correction between Apr 2 - 19. A continuation higher would expose the bull trigger at 5079.00, the Apr 2 high. Key support lies at 4762.00.
AUSTRALIA: Fiscal Tightening Expected In NZ, May Budget To Clarify Australia’s Stance
After the April release of the IMF’s Fiscal Monitor, MNI has published a Macro Deep Dive on the projected global tightening. In terms of Australia-NZ, NZ’s fiscal position is not as robust as Australia’s with both Treasuries forecasting a 2pp difference in the budget deficit for the current financial year. The IMF’s forecasts in the April Fiscal Monitor are consistent with this. There is considerable uncertainty regarding the fiscal outlook in both countries, as budgets will be announced on May 14 for Australia and May 30 for NZ.
- NZ had a change of government last October from Labour to a centre-right coalition, which has promised tax cuts to be financed through spending reductions. This will be their first budget. Whereas in Australia, the current government faces elections in around a year and so this is likely to be their last budget before then. In terms of the general government balance, both countries are also facing a weak economic outlook, which will weigh on revenues, and higher interest rates which boost interest payments on debt.
- The IMF’s cyclically adjusted primary balance gives a good indication of the fiscal stance. It shows NZ’s deficit shrinking to 2.5% of GDP this year and then to 1.1% in 2025, consistent with the idea that the new government will be more focused on fiscal consolidation.
- Australia’s is expected to move from balance to -0.2% of GDP in 2024, a slight easing of policy, but then the IMF has it in balance again in 2025. There seem downside risks to this forecast, as 2025 is an election year and the Treasurer has said the focus will shift from inflation to growth. The stance should become clearer after the May budget.
