EURUSD TECHS: Remains Vulnerable
- RES 4: 1.1076 High Apr 1
- RES 3: 1.0948 50-day EMA
- RES 2: 1.0790/0936 20-day EMA / High Apr 21
- RES 1: 1.0655/0758 High Apr 27 / Low Apr 14 - recent breakout level
- PRICE: 1.0544 @ 16:50 BST Apr 29
- SUP 1: 1.0472/54 Low Apr 28 / Low Jan 1 2017
- SUP 2: 1.0390 Low Jan 4 2017
- SUP 3: 1.0341 Low Jan 3 2017 and a key support
- SUP 4: 1.0333 1.236 proj of the Feb 10 - Mar 7 - 31 price swing
EURUSD remains vulnerable following this week’s selling pressure. The pair has traded below 1.0494, the Feb 22 2017 low. The move to fresh trend lows, confirms an extension of the bearish price sequence of lower lows and lower highs, that defines a downtrend. Further weakness is likely and the focus is on 1.0454 next, the Feb 22 2017 low. Key short-term resistance has been defined at 1.0936, the Apr 21 high. Initial firm resistance is seen at 1.0758.
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EURUSD TECHS: Tops 50-day EMA
- RES 4: 1.1274 High Feb 25
- RES 3: 1.1261 2.0% 10-dma envelope
- RES 2: 1.1232 61.8% of Feb 10-Mar 7 sell-off
- RES 1: 1.1222 3.0% Upper Bollinger Band
- PRICE: 1.1157 @ 16:18 GMT Mar 30
- SUP 1: 1.0945 Low Mar 28
- SUP 2: 1.0890/06 Low Mar 9 / Low Mar 7 and the bear trigger
- SUP 3: 1.0767 Low May 7 2020
- SUP 4: 1.0727 Low Apr 24, 2020
EURUSD rallied further Wednesday, topping key near-term resistance of 1.1137, Mar 17 high. The break here eases recent bearish threats and highlights a developing bullish theme. Prices topped the 50-day EMA at 1.1150, opening 1.1232 initially ahead of 1.1261. Initial support is at 1.0945, Monday’s low.
US: Corporate Credit Risk: Wider With a Couple Anomalies
Corporate credit risk mildly higher, near middle of narrow session range as equities see-saw lower. Stocks extended session lows ahead midday after holding relatively narrow session range since the open. Headline risk focus: RIA headline quoting defense minister: ARMY IS REGROUPING AT KYIV AND CHERNIHIV FRONTS AS PLANNED. While Bbg reports UKRAINE'S KULEBA: RUSSIA HAS NOT CEASED HOSTILITIES.
- Investment grade risk measured by Markit's CDXIG5 index currently +0.378 to 66.42; CDXHY5 high yield index mildly lower at 105.602 (-.175).
- Outperforming credit sectors (tighter or least wide): Financials (Sr) net +0.3 -- rather deceiving as broad swath of large banks/financial inst debt underperofming (GS, Blackstone, BGC< Prudential, Sumitomo). Subordinated Financials tied w/ Technology and Communications sector +0.7.
- Lagging sectors (wider or least narrow): Health Care (+7.07) largely due to anomaly Boston Scientific (BSX) 5Y debt surging wider. Utilities a distant second (+1.4), Entergy Gulf States Louisiana debt underperforming.
CANADA: BAX Futures Yields Fall Back Modestly
- BAX futures are led higher by the white pack today, in contrast to Eurodollars led by reds and then from blues onwards.
- BAZ2 is 4.5 ticks higher as implied yields moderate further. The curve remains firmly higher from a week ago though, with implied yields peaking at 3.365% in the U3.
- Eurodollars continue to see an earlier peak with 3.165% in M3 before a more aggressive inversion thereafter.
- There was little impact from largely in-line data earlier. Ahead, Canadian GDP for January plus US PCE inflation and personal incomes tomorrow before NFP on Friday.
