EURGBP TECHS: Support Remains Exposed

• RES 4: 1.0825 High Nov 7 
• RES 3: 1.0630 High Dec 06
• RES 2: 1.0543 50-day EMA 
• RES 1: 1.0458 High Dec 30 
• PRICE: 1.0382 @ 18:17 GMT Jan 6
• SUP 1: 1.0226 Low Jan 2
• SUP 2: 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg 
• SUP 3: 1.0198 3.0% Lower Bollinger Band 
• SUP 4: 1.0167 2.0% 10-dma envelope  

The trend condition in EURUSD remains bearish and Monday’s strong gains are - for now - considered corrective. Last Thursday’s sharp sell-off reinforces current conditions and note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0414, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The bear trigger has been defined at 1.0226, the Jan 2 low

• Date $MM Issuer (Priced *, Launch #)
• 01/06 $8.5B #Mexico $2B 5Y +170, $4B 12Y +230, $2.5B 30Y +255
• 01/06 $2.75B #NAB $750M 5Y +50, $750M 5Y SOFR+79, $1.25B 11NC10 +130
• 01/06 $1.75B #JBS $1B 10Y +135, $750M 30Y +162.5
• 01/06 $1.5B #Southern Cal Edison $850M 10Y +85, $650M 30Y +108
• 01/06 $1.5B #AerCap Aviation $750M 3Y +75, $750M 7Y +98
• 01/06 $1.5B #Williams Cos $1B 10Y +100, $500M 30Y +120
• 01/06 $1B #India Export-Import Bank 10Y +100
• 01/06 $900M #John Deere Capital 00M $2Y +25, $500M 3Y +35
• 01/06 $800M #Corebridge Funding $500M 3Y +58, 3Y SOFR+75
• 01/06 $750M #Sixth Street Lending 5Y +185
• 01/06 $600M #RGA Global Funding 5Y +85
• 01/06 $500M #Lincoln Financial 5Y +88

A recent report from Axios illustrates the 'historical headwinds' US President-elect Donald Trump is facing if he is to successfully reduce the US trade deficit with China, noting the trade deficit with China “has been larger than $200 billion since 2005."

• Axios: "It reached a record high of $418 billion in 2018, Trump's second year in office…. The tariffs imposed on China during the first Trump administration, which were then kept in place by President Biden, did relatively little to change that dynamic. During Trump's first term, when imports fell, exports fell too, blunting the effect on the trade deficit.”
• Axios adds: "For the time being, the market seems to be reasonably sanguine when it comes to the threat of a trade war. Maybe that's because no such thing has happened in the lifetimes of today's traders, and maybe it's because the sheer force of money flowing between China and the U.S. seems impossible to significantly disrupt..."

Figure 1: US Trade with China, 1992-2004

Source: Axios, USA Trade