EURJPY TECHS: Retracement Mode
- RES 4: 146.74 High Dec 30, 2014
- RES 3: 145.00/58 Round number resistance / High Dec 31 2014
- RES 2: 144.58 0.764 proj of Mar 7 - 28 - Apr 5 swing
- RES 1: 142.86/144.28 High Jun 30/28 and the bull trigger
- PRICE: 141.27 @ 06:58 BST Jul 1
- SUP 1: 140.94 Intraday low
- SUP 2: 139.45 Low Jun 17
- SUP 3: 139.24/137.85 50-day EMA / Low Jun 16 and key support
- SUP 4: 136.25 Low May 30
EURJPY traded higher Tuesday, reaching a fresh cycle high of 144.28. The cross has since found resistance and continues to pull back from Tuesday’s peak. The cross has traded through support at 141.40, Jun 24 low, and this signals scope for a deeper correction, potentially down to the 50-day EMA that intersects at 139.24. The bull trigger is 144.28 where a break would confirm a resumption of the uptrend.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CNH: USD/CNH Testing 6.7100
USD/CNH has recovered strongly today, up over 0.40% from yesterday's close to sit near 6.7100. This has been in line with broader USD strength and unwinds the recent run of CNH outperformance.
- Besides broader USD strength, there hasn't been a single catalyst that has turned USD/CNH higher. We have now had a number of bounces off the 6.65-6.66 region, so this looks to be a near term support zone.
- The Caixin PMI disappointed and China/HK shares have struggled today after a strong finish to May.
- Little signs that China is moving away from the covid-zero strategy is also weighed at the margin. A recent BBG report has highlighted that the Chinese authorities are continuing to invest in vast, seemingly permanent networks of testing infrastructure.
- Despite the recent sharp moves, implied volatility measures are still below recent highs. 1 month sits at 7%, versus above 8% in early May. So, the market may be expected a broad range trade in the near term. 1 month risk reversals sit close to recent lows as well (0.695).
EURJPY TECHS: Approaching Key Resistance Zone
- RES 4: 141.06 High Jun 4 2015 and a key resistance
- RES 3: 140.87 0.50 proj of the Mar 7 - 28 - Apr 5 price swing
- RES 2: 140.00 High Apr 21 and the bull trigger
- RES 1: 138.50 Intraday high
- PRICE: 137.87 @ 15:33 BST May 31
- SUP 1: 136.35 20-day EMA
- SUP 2: 135.44/133.93 50-day EMA / Low May 19
- SUP 3: 133.01 100-dma
- SUP 4: 132.66 Low May 12 and the bear trigger
EURJPY maintains a firmer tone and the cross has traded higher again today. Price is above initial resistance at 138.32, May 9 high and attention turns to the key resistance and the bull trigger at 140.00, Apr 21 high. Key support has been defined at 132.66, the May 12 low. A break of this support would be a bearish development. Initial firm support is at 135.44, the 50-day EMA.
EUROZONE ISSUANCE: EGB Supply For W/C May 30, 2022 (2/2): Upcoming
- In the "near future" the German 0% Aug-50 Green Bund (ISIN: DE0001030724) will be reopened via syndication in a E4bln WNG transaction. We expect the transaction to take place today.
- Tomorrow, Spain will look to sell off-the-run 3/9-year Oblis and an on-the-run 7-year Obli for a combined E3.5-4.5bln and E250-750mln of a 5-year Obli-Ei. On offer will be the 4.65% Jul-25 Obli (ISIN: ES00000122E5), the 0.80% Jul-29 Obli (ISIN: ES0000012K53), the 0.10% Apr-31 Obli (ISIN: ES0000012H41) and the 0.65% Nov-27 Obli-Ei (ISIN: ES00000128S2).
- Also tomorrow, France will offer E9.5-10.5bln of 10/15/30-year OATs: the 0% May-32 OAT, the 1.25% May-36 OAT and the 0.75% May-52 OAT.
- Belgium has an ORI operation scheduled for Friday, with details to be announced tomorrow afternoon. We expect a E500mln operation.
NET NOMINAL FLOWS: There will be E16.1bln of redemptions this week (E15.8bln of which are an Italian CTZ) and coupon payments of E1.8bln (of which E1.7bln are Spanish). This leaves estimated net flows for the week at positive E11.8bln (more than reversing the negative E9.1bln of last week).
For a calendar of all announced EGB/EU/ESM/EFSF auctions see the MNI EZ/UK Bond Supply Calendar here.
