Foreign Exchange
US Dollar Index has based near term and we look for a challenge of the 2010-2011 downtrend at 75.83. A close above here will add weight to the idea that the US dollar has based. EUR/USD – outlook bearish. Initial target 200 week ma at 1.4018. Even USD/CHF is attempting to turn from the base of its 8 year channel. GBP/USD has severed the 2010-2011 uptrend and is poised to break below 1.6050
The Euro is under pressure. EUR/CHF lies at the base of its 3 year channel support at 1.1950 and is showing few signs of reversal. We continue to regard the EUR/TRY chart as an interim top.
Fixed Income
Bund futures – Has reached medium term target of 126.52/69 (200 week ma) and we would allow for some profit taking. EU 2-10 swap curve – Downtrend breached, the market is widening short term – – target 1.32/33.
EU 10Y asset spread. Has reached 2 year highs at 39.70, beyond some profit taking – risk remains for extension to top of channel at 46.68
US 2-10 swap curve – The 2.425 support level is exposed, failure here targets 2.3680. GBP 2-10 swap curve – flattening is back on the radar
Bund, T-Note JGB all at significant resistance and we are wary of profit taking here. US T- Note – September 10Y T-Notes now trade within the significant 124-035/15 resistance area. JGB – Trying to break through the 140.80/141.23 resistance area
Commodities and Other Markets
NYMEX Crude oil – approaching its 2 year uptrend at 90.64, allow for some near term profit taking
Commodity Markets tend to come under pressure in the latter half of the year. Seasonality declines after July, markets are sidelined at best
The ITRAXX 5Y crossover nears the 200 day moving average at 419.12, allow for consolidation. VIX – volatility set to move higher still.
Commerzbank Corporates & Markets
Technical Research