ICE EUA FUTURES TECHS: (Z5) Corrective Cycle
Apr-25 12:36
- RES 4: €77.40 - High Feb 18
- RES 3: €74.23 - High Mar 19 and key resistance
- RES 2: €68.96 - 50-day EMA
- RES 1: €67.95 - High Apr 15
- PRICE: €67.11 @ 13:24 BST Apr 25
- SUP 1: €60.07 - Low Apr 9 and the bear trigger
- SUP 2: €59.26 - Low Apr 3 ‘24
- SUP 3: €56.76 - 1.00 proj of the Feb 10 - Mar 7 - 19 price swing
- SUP 4: €52.64 - 1.236 proj of the Feb 10 - Mar 7 - 19 price swing
The trend in ICE EUA futures is unchanged, it remains bearish and the latest recovery is considered corrective. Recent fresh cycle lows reinforce a bearish theme. The sell-off earlier this month resulted in a breach of €61.98, the Oct 9 ‘24 low. Clearance of this level confirmed a resumption of the downtrend and opens €56.76, a Fibonacci projection. The 20-day EMA has been pierced. Resistance at the 50-day EMA is at €68.96.
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MNI:US FEB DURABLE NEW ORDERS +0.9%; EX-TRANSPORTATION +0.7%
Mar-26 12:30
- MNI:US FEB DURABLE NEW ORDERS +0.9%; EX-TRANSPORTATION +0.7%
- US JAN DURABLE GDS NEW ORDERS REV TO +3.3%
- US FEB NONDEF CAP GDS ORDERS EX-AIR -0.3% V JAN +0.9%
FOREX: AUDJPY Pressuring the 50-Day EMA Once More
Mar-26 12:27
- Major US equity benchmarks have been consolidating Monday’s solid recovery, and this dynamic has supported a 1.35% advance for AUDJPY from last Friday’s close, and a 3.3% bounce from the double bottom low ~92.00. Notably, the pair shrugged off the softer-than-expected Australia CPI data overnight, where the focus remains on the underlying trimmed mean which moderated 0.1pp to 2.7% y/y and has been under 3% now for three straight months.
- For AUDJPY specifically, today’s high of 95.19 matched closely with the 50-day exponential moving average, which has proved significant in recent months. Importantly, we have not closed above this average since January. Should a more optimistic tone for risk prevail and AUDJPY breach the 50-day on a closing basis, the cross would quickly encounter downtrend resistance (drawn from the July ’24 high) around 95.50, and the March high at 95.75.
- In Japan, BoJ’s Ueda said on Wednesday that the real short-term interest rate is below -2.0%, slightly lower than the latest BOJ estimate, and the bank will raise the policy rate to adjust the degree of accommodative financial conditions. Ueda told lawmakers that the BOJ is always paying attention to the risk that the pace of underlying CPI inflation will accelerate above forecasts.
- The Australia economic calendar remains very light until the Melbourne institute’s inflation gauge and retail sales, both due early next week.
COPPER TECHS: Price Remains Overbought, But History Shows it Can Go Further
Mar-26 12:22
- The copper price chart continues to shoot higher (printing higher highs in 11 of the past 12 sessions), with futures today again hitting a contract high of $518.85 to add additional pressure to the 2024 highs and key resistance at $519.90 - an alltime high on the COMEX-listed generic contract.
- Tariffs remain the key driver, with Bloomberg reporting overnight that US tariffs on copper imports headed to the US could be coming "within several weeks", far earlier than the likely delivery of a report into copper import practices, for which the White House allowed a 270 day turnaround. As a result, US-listed copper has outperformed London-listed copper considerably (COMEX contracts up over 30% YTD vs. 15% for LME contracts) on scarcity concerns.
- This leaves currencies and assets with a high correlation to copper prices considerably firmer on the year: CLP, COP and ZAR are higher by 8%, 7% and 3% respectively against the USD this year - and highly exposed to any subsequent tariffs-driven pullback in prices. Knowing the frequent occurrences of White House U-turns and tariff resets, this is likely already partially-baked into prices.
- While Copper prices are technically overbought - history shows the price can tolerate extended periods of stronger prices for a longer duration that the current rally. In the past 5 years there are 13 occasions of a higher RSI not subsequently followed by a material drawdown in prices.
