BUND TECHS: (Z5) Bull Cycle Intact

• RES 4: 1.3893 1.236 proj of the Aug 1 - 14 - Sep 3 price swing     
• RES 3: 1.3789 High Jul 1 and key resistance
• RES 2: 1.3753 High Jul 2
• RES 1: 1.3661/3726 High Sep 18 / 17 
• PRICE: 1.3508 @ 06:10 BST Sep 24
• SUP 1: 1.3458 Trendline support drawn from the Aug 1 low
• SUP 2: 1.3453 Low Sep 22
• SUP 3: 1.3333 Low Sep 3 and a key support 
• SUP 4: 1.3282 Low Aug 6      

A bullish theme in GBPUSD remains intact and the latest move down from the Sep 17 high is considered corrective - for now. However, the pair has traded through the 50-day EMA and this leaves support at 1.3458 exposed, a trendline drawn from the Aug 1 low. Clearance of this line would strengthen a bearish threat. For bulls, a resumption of gains would refocus attention on key short-term resistance at 1.3726, the Sep 17 high.

RBA-dated OIS pricing is sharply firmer across meetings after today’s CPI data. 

• The headline August CPI print was 3.0%y/y, against a 2.9% market consensus and 2.8% July outcome. The trimmed mean was 2.6% y/y, after printing 2.7% in July.
• Today's data will reinforce some caution for the RBA around further easing. It is likely to firm the no-change stance next week (although market pricing has priced in very little chance of a move).
• The Q3 CPI print is out on Oct 29, with the RBA outcome on Nov 4.
• A 25bp rate cut in September is given a 0% probability, with a cumulative 17bps (22bps pre-data) of easing priced by year-end.

Figure 1: RBA-Dated OIS – Post Vs. Pre-CPI

Source: Bloomberg Finance LP / MNI

• RES 4: 118.090 High Sep 17 and a key short-term resistance       
• RES 3: 117.922 20-day EMA  
• RES 2: 117.850 High Sep 19 
• RES 1: 117.810 High Sep 22   
• PRICE: 117.700 @ 05:47 BST Sep 24
• SUP 1: 117.601 0.764 proj of the Sep 8 - 12 - 17 price swing  
• SUP 2: 117.450 1.000 proj of the Sep 8 - 12 - 17 price swing  
• SUP 3: 117.299 1.236 proj of the Sep 8 - 12 - 17 price swing  
• SUP 4: 117.080 Low Sep 2 (cont.) 

Bobl futures continue to trade closer to their recent lows. The contract has breached support at 117.690 and 117.630, the Sep 2 and Aug 25 lows respectively. Clearance of these levels reinstates a bearish theme. Sights are on 117.450, a Fibonacci projection. On the upside, key short-term resistance has been defined at 118.090, the Sep 18 high. A move above this level would signal a potential reversal.