FOREX: AUD and NZD Consolidate Significant Losses, EURUSD Extends Pullback

• US TSY 52W BILL AUCTION: HIGH 4.050%(ALLOT 6.53%)
• US TSY 52W BILL AUCTION: DEALERS TAKE 31.76% OF COMPETITIVES
• US TSY 52W BILL AUCTION: DIRECTS TAKE 1.68% OF COMPETITIVES
• US TSY 52W BILL AUCTION: INDIRECTS TAKE 66.56% OF COMPETITIVES
• US TSY 52W AUCTION: BID/CVR 3.03

• RES 4: 1.0630 High Dec 6   
• RES 3: 1.0594 Dec 9 ‘24
• RES 2: 1.0533 High Jan 27 and a reversal trigger
• RES 1: 1.0514 High Feb 14
• PRICE: 1.0467 @ 16:07 GMT Feb 18
• SUP 1: 1.0402 20-day EMA
• SUP 2: 1.0280/0141 Low Feb 10 / 3 and the bear trigger
• SUP 3: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
• SUP 4: 1.0031 2.00 proj of the Sep 25 - Oct 23 - Nov 5 price swing

A bull cycle in EURUSD remains intact and the pair is trading closer to its recent highs. Last week’s gains have reinforced current conditions and  strengthened a short-term reversal signal on Feb 3 - a hammer. This suggests scope for an extension near-term. The pair has breached the 50-day EMA, at 1.0432, and sights are on 1.0533, the Jan 27 high. Initial firm support lies at 1.0280, the Feb 10 low.   

Gilts underperformed Bunds Tuesday, fully unwinding Monday's outperformance.

• UK labour market data early in the session set the tone: the implications of stronger-than-expected signals from the quantity side were weighed against broadly in-line pay growth.
• Gov Bailey said later that the labour market data did not fundamentally change the outlook.
• ECB's Cipollone said at an MNI event that he believes the move away from scarce collateral conditions is not yet having a major impact on Eurozone money markets.
• The UK curve bear flattened on the day, while the German curve leaned steeper though was mixed throughout.
• Periphery/semi-core EGB spreads tightened moderately, with European equities gaining.
• Wednesday's schedule is highlighted by UK inflation data - MNI's preview is here.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.8bps at 2.132%, 5-Yr is unchanged at 2.267%, 10-Yr is up 0.4bps at 2.493%, and 30-Yr is down 0.1bps at 2.745%.
• UK: The 2-Yr yield is up 3.9bps at 4.243%, 5-Yr is up 3.3bps at 4.253%, 10-Yr is up 3.1bps at 4.558%, and 30-Yr is up 2.8bps at 5.146%.
• Italian BTP spread down 0.4bps at 105.4bps / French OAT down 1.6bps at 71.2bps