GBPUSD TECHS: Clears Resistance
Feb-05 18:30
- RES 4: 1.2667 High Dec 19
- RES 3: 1.2610 38.2% retracement of the Sep 26 ‘24 - Jan 13 swing
- RES 2: 1.2576 High Jan 7
- RES 1: 1.2550 High Feb 5
- PRICE: 1.2517 @ 16:00 GMT Feb 5
- SUP 1: 1.2411/2249 20-day EMA / Low Jan 3
- SUP 2: 1.2161 Low Jan 17 / 20
- SUP 3: 1.2100 Low Jan 10 and the bear trigger
- SUP 4: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing
Resistance levels in GBPUSD at 1.2503, the 50-day EMA, and 1.2523, the Jan 27 high, have been cleared. This cancels a recent bearish threat and instead reinstates the bull cycle that started Jan 13. The break higher paves the way for a climb towards 1.2610, a Fibonacci retracement. Key short-term support has been defined at 1.2249, the Jan 3 low. A break of this level would highlight a reversal.
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FOREX: Greenback Settles Lower Following Tariff Report Induced Volatility
Jan-06 18:29
- FX volatility was stoked Monday on the back of a Washington Post report suggesting that US President-elect Donald Trump’s aides are "exploring plans" to apply tariffs to every country “but only cover critical imports”. The potential for slightly less protectionist trade policy bolstered the existing direction of travel for the greenback, with the USD index extending session lows and briefly bringing the DXY’s pullback to around 1.5% from last week’s highs.
- However, President-Elect trump later claimed the article to be fake news and the US dollar partially recovered from its lowest levels. The USD index is currently down 0.64% ~108.30 as we approach the APAC crossover.
- EURUSD surged through 1.0400, and notably rose above the 20-day EMA resistance to print a 1.0437 high, recovering over 200 pips from the 1.0226 lows on Jan 02. The rally was supported by higher-than-expected inflation figures from Germany, substantially narrowing the gap to resistance at the Dec 30 high of 1.0458. Spot has since slipped back to 1.0380.
- Similar strength seen across higher beta currencies such as GBP (+0.76%), which has risen back above 1.25 and will look to initial firm resistance at 1.2562, the 20-day EMA. Similarly in emerging markets, USDMXN is 1.3% lower on the day at 20.35.
- USDJPY volatility was in focus, as the pair slipped from a 157.96 high to a 156.24 low after the news. However, we have recovered roughly 1% from the lows, as the Dec 26 high at 158.08 remains in sight.
- CAD is also 0.6% higher and has received particular attention given PM Trudeau has decided to resign. USDCAD’s pullback is seen as technically corrective at this juncture, with initial firm support only briefly being pierced at 1.4320, the 20-day EMA.
- Swiss and Eurozone inflation data are due early Tuesday, before US ISM Services PMI and JOLTS data headline the docket in the US.
US 10YR FUTURE TECHS: (H5) Trend Needle Points South
Jan-06 18:28
- RES 4: 111-20+ High 6 and the bull trigger
- RES 3: 110-25 High Dec 12
- RES 2: 110-09 50-day EMA
- RES 1: 109-10+ 20-day EMA
- PRICE: 108-16 @ 18:15 GMT Jan 06
- SUP 1: 108-06+ Low Dec 26
- SUP 2: 108-00 1.500 proj of the Oct 1 - 14 - 16 price swing
- SUP 3: 107-19+ 1.618 proj of the Oct 1 - 14 - 16 price swing
- SUP 4: 107-04 1.764 proj of the Oct 1 - 14 - 16 price swing
The trend condition in Treasury futures remains bearish. Recent weakness reinforces the current bear cycle - the contract has traded through key short-term support and the bear trigger at 109-02+, the Nov 15 low. The breach confirms a resumption of the downtrend and opens 108.00, a Fibonacci projection. Short-term gains are considered corrective below the 109-10+ 20-day EMA.
PIPELINE: Corporate Debt Issuance Starting to Launch, Updated Guidance
Jan-06 18:10
- Date $MM Issuer (Priced *, Launch #)
- 01/06 $1B #India Export-Import Bank 10Y +100
- 01/06 $750M #Sixth Street Lending 5Y +185
- 01/06 $500M #Lincoln Financial 5Y +88
- 01/06 $Benchmark Societe Generale 4.25NC3.25 +120, 4.25NC3.25 SOFR+141, 8.25NC7.25 +160
- 01/06 $Benchmark National Australia Bank (NAB) 5Y +75a, 5Y SOFR, 11NC10 +150a
- 01/06 $Benchmark Toyota Motor Cr 2Y +55a, 2Y SOFR, 5Y +80a, 10Y +100a
- 01/06 $Benchmark CRH SMW Finance 5Y +75, 10Y +90, 30Y +105
- 01/06 $Benchmark Hyundai Cap Am 3Y +75, 3Y SOFR+95, 5Y +93
- 01/06 $Benchmark CIBC 3NC2 +60, 3NC2 SOFR+72, 6NC5 +83
- 01/06 $Benchmark EDF 10Y +145a, 30Y +180a, 2064 Tap +195a
- 01/06 $Benchmark NAB 5Y +50, 5Y SOFR+79, 11NC10 +130
- 01/06 $Benchmark Saudi Arabia 3Y +85, 6Y +100, 10Y +110
- 01/06 $Benchmark Southern Cal Edison 10Y +85, 30Y +108
- 01/06 $Benchmark Jackson National Life 2Y +65, 5Y +95a
- 01/06 $Benchmark Broadcom +3Y +53, +5Y +63, +7Y +70
- 01/06 $Benchmark Mexico 5Y +170, 12Y +230, 30Y +255
- 01/06 $Benchmark Caterpillar 2Y +25, 2Y SOFR, 5Y +42
- 01/06 $Benchmark AerCap Aviation 3Y +75, 7Y +98
- 01/06 $Benchmark John Deere Capital 2Y +25, 3Y +35
- 01/06 $Benchmark Williams Cos 10Y +100, 30Y +120
- 01/06 $Benchmark MUFG 6NC5 +78, 11NC10 +95
- 01/06 $Benchmark JBS 10Y +135, 30Y +162.5
- 01/06 $Benchmark BNP Paribas 8NC7 +127
- 01/06 $500M DBJ WNG 10Y SOFR+78a
- 01/06 $Benchmark Kexim investor calls
- 01/06 $Benchmark World Bank 7Y +57a
- 01/06 $Benchmark UBS 3NC2 +85a
- Expected Tuesday:
- 01/07 $Benchmark EIB 5Y SOFR+45a
