BUND TECHS: (Z5) Bull Cycle Intact
- RES 4: 130.99 76.4% retracement of Jun 13 - Sep 25 bear leg (cont)
- RES 3: 130.80 High Jun 13 and key resistance
- RES 2: 130.63 1.500 proj of the Sep 3 - 10 - 25 price swing
- RES 1: 130.59 High Oct 17 and the bull trigger
- PRICE: 129.90 @ 05:37 BST Oct 24
- SUP 1: 129.76 Low Oct 20
- SUP 2: 129.43 20-day EMA
- SUP 3: 129.04 50-day EMA
- SUP 4: 128.25 Low Oct 7
Bund futures continue to trade below their recent highs. A bull cycle remains in place following recent strong impulsive gains. A resumption of the uptrend would open key resistance at 130.80, the Jun 13 high. Clearance of this level would strengthen the bullish condition. Note that the contract remains in overbought territory, a deeper retracement would allow this condition to unwind. Initial key support is 129.43, the 20-day EMA.
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GBPUSD TECHS: Trendline Support Remains Exposed
- 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.
STIR: RBA Dated OIS Sharply Firmer After August CPI Beat
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
BOBL TECHS: (Z5) Bearish Theme Intact
- 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.
