US TSY FUTURES: BLOCK: Jun'25 5Y Buy

• RES 4: 0.8530 76.4% retracement of the Aug 8 - Dec 19 ‘24 bear leg         
• RES 3: 0.8494 High Aug 26 ‘24 
• RES 2: 0.8474 High Jan 20 and a key resistance
• RES 1: 0.8462 High Jan 24   
• PRICE: 0.8430 @ 14:55 GMT Mar 12 
• SUP 1: 0.8378/8335 Low Mar 10 / 50-day EMA    
• SUP 2: 0.8299/41 Low Mar 5 / 3 and a near-term bear trigger 
• SUP 3: 0.8223 Low Dec 19 and a key support  
• SUP 4: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range

A bull cycle in EURGBP remains in play and this week’s extension reinforces the current bullish theme. The cross has breached 0.8419, 76.4% of the Jan 20 - Mar 3 bear leg. This paves the way for a climb towards 0.8474, the Jan 20 high and the next key resistance. On the downside, initial firm support is seen at 0.8335, the 50-day EMA. The short-term trend is in overbought territory. A pullback would allow this set-up to unwind.         

• RES 4: 1.3119 76.4% retracement of the Sep 26 ‘24 - Jan 13 bear leg
• RES 3: 1.3048 High Nov 6 ‘24
• RES 2: 1.2990 High Nov 8 2024
• RES 1: 1.2988 High Mar 12
• PRICE: 1.2939 @ 14:55 GMT Mar 12 
• SUP 1: 1.2768 Low Mar 5     
• SUP 2: 1.2718 20-day EMA
• SUP 3: 1.2605 50-day EMA and a short-term pivot support  
• SUP 4: 1.2559 Low Feb 28      

The trend in GBPUSD is unchanged, it remains bullish despite the fade off the intraday high. Moving average studies have recently crossed into a bull-mode position, highlighting a clear dominant uptrend. A Fibonacci retracement at 1.2924, 61.8% of the Sep 26 ‘24 - Jan 13 bear leg, has been pierced. A clear break of this level would open 1.2990, the Nov 8 2024 high. Initial firm support is 1.2618, the 50-day EMA. A pullback would be considered corrective.    

February's Federal budget balance came in almost exactly as expected at $307.0B ($308.0B survey), an increase from $296.3B in the same month of 2024. That brought the cumulative budget deficit through the first 5 months of the fiscal year (starting in Oct) to $1.147T - outpacing easily outpacing the previous year's total to this point of $828B, and exceeding even 2021's post-covid $1.05T for a new 5-month record.

• The wider February total is also despite a pickup in revenues ($296.4B vs $271.1B in Feb 2024), as expenditures maintained their strong recent record ($603.4B vs $567.4B in Feb 2024). February is seasonally one of if not the lowest revenue months of the year.
• Total receipts are up 1.9% Y/Y in the first 5 months of the current fiscal year compared with the same period a year earlier - but outlays are up 13.2% Y/Y.
• One of the categories causing expenditure to pick up is net interest, which came in at $74.2B, boosting the 12-month cumulative total to a fresh record $927B - roughly 3x the amount seen at the recent low in 2021.
• Absent a significant turnaround, the FY 2025 deficit is on pace to exceed the $1.9T projections made by the Congressional Budget Office's in mid-January, and the Office of Management and Budget's made in July 2024. Either way, it's set for an ex-Covid record.