US TSYS: Tsys Buoyed Amid Ongoing Trade Tensions

• RES 4: 0.6793 1.500 proj of the Jun 23 - Jul 24 - Aug 21 price swing
• RES 3: 0.6763 1.382 proj of the Jun 23 - Jul 24 - Aug 21 price swing
• RES 2: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
• RES 1: 0.6660/6707 High Sep 18 / 17
• PRICE: 0.6599 @ 19:25 BST Sep 22
• SUP 1: 0.6575/6547 Low Sep 22 / 50-day EMA 
• SUP 2: 0.6527 61.8% retracement of the Aug 21 - Sep 17 bull leg  
• SUP 3: 0.6463/6415 Low Aug 27 / Low Aug 21 / 22 and a bear trigger 
• SUP 4: 0.6373 Low Jun 23

The AUDUSD uptrend remains intact and the current pullback is considered corrective - for now. The recent rally plus the breach of 0.6625, the Jul 24 high and bull trigger, confirms a resumption of the uptrend. The climb opens the 0.6726 next, a Fibonacci projection. MA studies are in a bull-mode position highlighting a dominant uptrend. Key support to watch is 0.6415, the Aug 21 / 22 low. Initial firm support to watch is 0.6547, the 50-day EMA.

• RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing 
• RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
• RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 1: 174.50 High Sep 19 
• PRICE: 174.24 @ 19:22 BST Sep 22
• SUP 1: 173.01/171.83 20- and 50-day EMA
• SUP 2: 170.97 Low Aug 14 
• SUP 3: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg 
• SUP 4: 168.46 Low Jul 1   

The trend set-up in EURJPY is unchanged, it remains bullish and last Thursday’s gains reinforce current conditions. The cross breached resistance at 173.97, the Jul 28 high and a bull trigger. This confirms a resumption of the medium-term uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 174.86, a Fibonacci projection. On the downside, first support to watch lies at 173.01, the 20-day EMA.

St Louis Fed President Musalem echoed his colleagues Monday that the Fed still sees reserves as "abundant", though highlighted market expectations of an end to QT in H1 2025:

• "The New York [Fed] monitors very carefully whether we are still in an abundant reserves situation, and they publish many indicators that suggest that we are still in an abundant reserve situation. Our balance sheet has been declining gradually. We reduced the rate of rolloff earlier this year, so it's declining gradually. I would expect at some point in the future the committee to make a decision before we, or as we, feel that we are reaching that transition point between abundant reserves and ample reserves to - at that point - potentially pause the balance sheet rolloff. I've seen some market surveys that suggest - and these are not, the committee still needs to decide - but I've seen market surveys that suggest that could happen somewhere in Q1 or Q2 of next year, and could happen at around $2.9 trillion in reserves, plus overnight RRP."
• He may be referencing the NY Fed's Survey of Market Expectations - the latest edition of which is July's. That showed a median expectation for the SOMA portfolio's decline to cease in January 2026, with reserves at $2.875T and ON RRP at $125B for a total $3T.
• That was at the beginning of the Treasury's post-debt limit cash rebuilding process and may be due an update. The deadline for the latest questionnaire (September) was two weeks ago, and the results should be released the same day as the September FOMC Minutes - Oct 8.
• While Fed Chair Powell suggested last week the FOMC remains comfortable with the pace of QT, as he notes they are inevitably "getting closer" to an "ample" reserve level. In the latest week, reserves fell $131B, and over the last 4 weeks have fallen $277B. With reverse repo facility takeup nearing zero, that leaves reserves + ON RRP at just above $3T ($3.034T) as of last Wednesday. That was the lowest since November 2020 and very close to the $3.0T implied by the NY Fed's survey.
• Musalem also commented that QE shouldn't combine cooperation with Treasury: "I think it's very important to only use QE to support the dual mandate and to not be perceived as direct or indirectly, be helping with debt management responsibilities."