US 10YR FUTURE TECHS: (Z5) Testing Recovery High

• US TSY 9Y-10M NOTE AUCTION: HIGH YLD 4.117%; ALLOTMENT 78.38%
• US TSY 9Y-10M NOTE AUCTION: DEALERS TAKE 9.09% OF COMPETITIVES
• US TSY 9Y-10M NOTE AUCTION: DIRECTS TAKE 24.10% OF COMPETITIVES
• US TSY 9Y-10M NOTE AUCTION: INDIRECTS TAKE 66.80% OF COMPETITIVES
• US TSY 9Y-10M AUCTION: BID/CVR 2.48

• RES 4: 1.1919 High Sep 17 and a bull trigger
• RES 3: 1.1820 High Sep 23
• RES 2: 1.1779 High Oct 1 and a key short-term resistance  
• RES 1: 1.1723 20-day EMA  
• PRICE: 1.1615 @ 16:18 BST Oct 8
• SUP 1: 1.1606 Low Oct 8
• SUP 2: 1.1574 Low Aug 27
• SUP 3: 1.1516 76.4% retracement of the Aug 1 - Sep 17 bull leg  
• SUP 4: 1.1392 Low Aug 1 and bear trigger.

EURUSD is trading lower as the current corrective cycle extends. This week’s move down has resulted in a breach of the 50-day EMA, and support at 1.1646, the Sep 25 low. The move paves the way for an extension towards 1.1574, the Aug 27 low. Note that moving average studies are in a bull-mode position highlighting a dominant medium-term uptrend. Initial firm resistance  is 1.1779, the Oct 1 high. A break of this level would signal a bull reversal.        

Wednesday's Europe rates/bond options flow included:

• ERZ5 98.00^ sold at 7.5 in 1.5k (had been sold at 7 / 7.25 Tuesday)
• ERF6 98.1875/98.3125cs vs ERM6 98.37/98.50cs, bought the June for half in 5k
• ERH6 98.25/98.37cs, bought for 1 in 20k
• ERH6 98.06/98.18cs, bought for 3 in 5k
• ERH6 98.00/98.06/98.12/98.18c condor, bought for 0.25 in 4k
• ERM6 98.31/98.43cs, bought for 1.75 in 10k
• ERM6 98.75c, bought for 1 in 23.3k
• ERM6 98.50/98.625/98.75/98.875c condor, bought for half in 7.5k (around 50k done this week)
• ERU6 97.93/97.81ps v ERM6 97.87p, bought the ps for half in 3k
• 0RM6 98.25 calls paper paid 5.25-5.5 on 9K (ref. 97.91)
• SFIM6 96.50/96.75cs, bought for 5.25 in 6k