OUTLOOK: Price Signal Summary - Gains In USDJPY Considered Corrective
Mar-12 11:31
- In FX, EURUSD traded higher Tuesday, extending the current bull cycle and once again, this marks a continuation of the reversal on Feb 3. Note that MA studies have recently crossed and are in a bull-mode position, highlighting a dominant uptrend. Bulls have their sights on 1.0961 next, the 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg. Initial key support to watch lies at 1.0517, the 50-day EMA. The uptrend is overbought, a pullback would allow this set-up to unwind. First support is 1.0766, the Mar 6 low.
- The trend in GBPUSD is unchanged, it remains bullish. 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. First support lies at 1.2768, the Mar 5 low.
- A bear cycle in USDJPY remains in play and this week’s fresh cycle lows strengthen a bearish theme. The move down has resulted in a print below 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. Sights are on 145.92 next, the Oct 4 2024 low. Moving average studies remain in a bear-mode set-up, highlighting a dominant downtrend. Key short-term resistance is unchanged at 151.30, the Mar 3 high. Clearance of this level is required to signal a base. Short-term gains are - for now - considered corrective.
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STIR: Fed Rate Path Consolidates NFP Hawkish Shift
Feb-10 11:30
- Fed Funds implied rates are little changed from Friday’s close, with little net impact from President Trump saying Sunday he will impose fresh 25% tariffs on all steel and aluminum imports.
- It does however help consolidate the hawkish shift seen on Friday’s NFP report. See a recap of it here and a summary of all the main macro developments of the week here.
- Cumulative cuts from 4.33% effective: 2bp Mar, 7.5bp May, 15bp Jun, 20bp Jul, 26.5bp Sep and 36.5bp Dec.
- Today sees a particularly light macro docket, with calendar focus on Chair Powell’s Senate testimony on Tue before CPI on Wed. Of course, politics will remain at the fore with Trump having pledged to announce reciprocal tariffs on Tue or Wed.
BUNDS: Block trade
Feb-10 11:26
Bund Block trade, suggest seller:
- RXH5 ~2.14k at 133.29.
LOOK AHEAD: Monday Data Calendar: NY Fed Inflation Expectations, Tsy Bill Sales
Feb-10 11:26
- US Data/Speaker Calendar (prior, estimate)
- 10-Feb 1100 NY Fed 1-Yr Inflation Expectations (3.0% prior, --)
- 10-Feb 1130 US Tsy $84B 13W & $72B 26W Bill auctions
