EURUSD TECHS: Pullback Considered Corrective
- RES 4: 1.0327 High Aug 12
- RES 3: 1.0273 1.382 proj of the Sep 28 - Oct 4 - 13 price swing
- RES 2: 1.0198 High Sep 12 and a key resistance
- RES 1: 0.9998/1.0094 High Oct 28 / 27
- PRICE: 0.9870 @ 15:43 GMT Nov 01
- SUP 1: 0.9860 Low Nov 01
- SUP 2: 0.9830 Former bear channel resistance-now-support
- SUP 3: 0.9807 Low Oct 24
- SUP 4: 0.9705 Low Oct 21
EURUSD trend conditions remain bullish and the recent pullback is considered corrective. Last week’s key technical development was the break of the top of a bear channel drawn from the Feb 10 high. The channel breakout highlights a stronger bull reversal and signals potential for an extension of the current cycle. The focus is on 1.0198 next, the Sep 12 high. The support to watch is 0.9830, the former bear channel resistance.
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USDCAD TECHS: Northbound
- RES 4: 1.4000 Psychological round number
- RES 3: 1.3970 3.236 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 2: 1.3896 3.00 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 1: 1.3833 High Sep 28
- PRICE: 1.3701 @ 15:49 BST Sep 30
- SUP 1: 1.3560/3468 Low Sep 26 / 23
- SUP 2: 1.3381 20-day EMA
- SUP 3: 1.3169 50-day EMA
- SUP 4: 1.2954 Low Sep 13 and a key support
USDCAD traded higher Wednesday and a bullish theme remains intact. The recent extension reinforces the uptrend and maintains the positive price sequence of higher highs and higher lows. Moving average studies are in a bull mode position, highlighting current market sentiment. Sights are set on 1.3896 next, a Fibonacci projection. On the downside, initial firm support is at 1.3381, the 20-day EMA.
US TSYS: FI Support Evaporates Amid Late Month End Selling
Trading higher for much of the session, Tsys extended session lows into the close, bids scarce in month end trade, yield curves bear steepening off deeper inverted lows in early trade (2s10 +1.044 at -40.259 vs. -49.174 low).
- Mixed early data reacts has rates holding inside session' range. Fast two-way trade saw Tsys and equities extended lows as inflation metric remains hot: Core PCE 0.6% MoM vs. 0.5% est, 4.9% YoY, unrounded +0.562%.
- Knee jerk bid in 10s before support evaporated after midmorning Chicago PMI came out lower than expected - contractionary w/ sub-50 business barometer read of 45.7 vs. 52.2 in August. The 6.5pt slide to 45.7 in the Chicago PMI, which has closely tracked recent ISM movements, adds support for a sub-50 ISM reading, contrary to consensus for a decline from 52.8 to 52.4 for Monday's report.
- Technical view for TYZ2 at 112-18 (+3.5): Treasuries remain vulnerable and short-term gains are considered corrective. Recent weakness has reinforced current bearish trend conditions w/ price sequence of lower lows and lower highs and bearish moving average studies clearly highlight the market's sentiment. The focus is on 109-20, a lower moving average band value. Initial resistance is 112-30+, the Sep 23 high.
- Late cross-asset snapshot: stocks near late session lows on same month-end positioning, SPX eminis -37.25 at 3617.00, Gold firmer +0.61 at 1661.15, Crude paring midweek gains w/ WTI -1.40 at 79.83, US$ index -.030 at 112.224 (while GBP sits at 1.1155 after tapping 1.1234 high).
AUDUSD TECHS: Remains Vulnerable
- RES 4: 0.6785 50-day EMA
- RES 3: 0.6705 High Sep 21
- RES 2: 0.6657 20-day EMA
- RES 1: 0.6550 High Sep 26
- PRICE: 0.6455 @ 15:48 BST Sep 30
- SUP 1: 0.6363 Low Sep 28
- SUP 2: 0.6337 Low Apr 24 2020
- SUP 3: 0.6283 Low Apr 23 2020
- SUP 4: 0.6255 1.236 proj of the Apr 5 - May 12 - Jun 3 price swing
AUDUSD remains in a downtrend and Wednesday's bounce is considered corrective. The recent break of support at 0.6682, the Jul 14 low and a bear trigger, strengthened bearish conditions and has maintained the broader downward price sequence of lower lows and lower highs. The focus is on 0.6337 next, the Apr 24 2020 low. Initial firm resistance has been defined at 0.6657, the 20-day EMA.
