EURUSD TECHS: Off Highs, But Bull Theme Remains
Feb-21 18:00
- 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: 1.0456 @ 15:42 GMT Feb 21
- SUP 1: 1.0408 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
The bull cycle in EURUSD remains intact despite the fade off highs this week. The pair is trading closer to its recent highs and recent strength has reinforced current conditions to strengthen a short-term reversal signal. The Feb 3 candle resembles a hammer and suggests scope for an extension near-term. The pair has breached the 50-day EMA, at 1.0435, and sights are on 1.0533, the Jan 27 high. Initial firm support lies at 1.0280, the Feb 10 low.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS/SUPPLY: WI 20Y Re-Open
Jan-22 17:59
- WI 20Y remains stable at 4.910% going into the $13B 20Y bond auction re-open (912810UF3) cut-off, compares to last month's tail: 4.686% high yield vs. 4.671% WI.
CANADA: Yields Climb With US But Greater Likelihood Of 25bp BoC Cut Next Week
Jan-22 17:58
- GoC yields have continued to be dragged higher by Treasuries ahead of 20Y US supply after a mostly one-way move higher following President Trump threatening tariffs on Russia.
- CBC reports Ontario Premier Ford could call an early Ontario election as early as next week to help respond to potential US tariffs.
- Yields are 2.5-3.5bp higher across the curve, with increases led by the belly as is the case in Treasuries.
- Can-US yield differentials are unchanged on the day at -134.5bp having lifted off recent lows of -138bps. That low was still seen a few hours after yesterday’s mostly in-line CPI report, although one that included a further solid acceleration in three-month core inflation.
- Tomorrow’s retail sales data for November likely receives less focus than usual whilst tariff threats dominate.
- Next week’s BoC decision is also secondary, with 22bp of cuts priced for a very strong likelihood of a 25bp cut to 3.00% for a little more firmly within the Bank’s 2.25-3.25% estimated range for neutral policy.
OPTIONS: Seemingly No End To Europe Rate Upside
Jan-22 17:52
Wednesday's Europe rates/bond options flow included:
- DUG5 106.70/106.80cs, sold at 2.5 in 5k vs 1.25k at 106.675.
- DUH5 106.80/107.00/107.20c ladder, bought for 3 in 5k.
- RXH5 133.50/134.50cs, bought for 17.5 in 8.2k.
- RXH5 133.00/134.00/134.50/135.00c condor, bought for 18 in 1k.
- ERJ5 97.75/97.875/98.00c fly, bought for 2.5 in 3.9k.
- ERM5 98.00/98.25cs, bought for 2.75 in 3.4k.
- ERM5 97.87/97.75/97.62p fly bought for 2.5 in 14.8k, done straight and vs futures
- ERM5 98.00/98.50/99.00c fly, bought for 3 in 10k total
- ERM5 98.00/98.1875/98.375c fly 1x3x2, bought for 3.75 in 5k.
- ERM5 97.75/97.87/98.00c fly, bought for 1.25 in total 17k
- ERM5 97.875/98.00cs, bought for 4.5 in 5k.
- SFIK5 95.75/95.85/95.95c fly vs 95.50/95.40ps, bought the c fly for 0.75 in 5k.
