USDJPY TECHS: Bear Cycle Remains In Play
- RES 4: 156.88 2.236 proj of the Sep 16 - 27 - 30 price swing
- RES 3: 155.89/156.75 High Nov 20 / 15 and the bull trigger
- RES 2: 154.49 High Nov 26
- RES 1: 151.30/152.13 50- and 20-day EMA values
- PRICE: 149.79 @ 07:08 GMT Dec 05
- SUP 1: 148.65 Low Dec 03
- SUP 2: 148.17 50.0% retracement of the Sep 16 - Nov 15 bull leg
- SUP 3: 147.80 3.0% 10-dma envelope
- SUP 4: 147.35 Low Oct 8
USDJPY remains in a bear cycle. The pair traded to a fresh short-term trend low on Tuesday, confirming a resumption of the downleg and the retracement of the Sep 16 - Nov 15 rally. Price has recently traded through the 20- and 50-day EMAs - a bearish development. Sights are on 148.17, a Fibonacci retracement. A reversal higher would refocus attention on the bull trigger at 156.75, the Nov 15 high. Initial firm resistance is 152.13, the 20-day EMA.
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BTP TECHS: (Z4) Reversal Threat Remains Present
- RES 4: 123.12 3.382 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 3: 122.78 3.236 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 2: 121.53/122.62 High Oct 25 / 1 and the bull trigger
- RES 1: 119.97 Low Oct 11 and a recent breakout level
- PRICE: 119.50 @ Close Nov 4
- SUP 1: 118.95 Low Oct 31
- SUP 2: 118.64 50.0% retracement of the Jun 11 - Oct 1 bull cycle
- SUP 3: 118.16 Low Sep 2 Low Jul 26
- SUP 4: 117.70 50.0% retracement of the Jun 11 - Oct 1 bull cycle
BTP futures maintains a softer tone, The contract traded sharply lower last week resulting in a breach of 119.97, the Oct 11 low. The break strengthens a bearish threat and highlights a possible reversal. The move down has exposed 118.64, a Fibonacci retracement point. Initial firm resistance has been defined at 121.53, the Oct 25 high, where a break is required to cancel the bearish threat. Short-term gains would be considered corrective.
EUROZONE ISSUANCE: EGB Supply - W/C 4 Nov
Austria, Germany, Spain, France, and Belgium all look to hold auctions this week, whilst the EU already held an auction yesterday. We pencil in estimated gross issuance for the week at E26.1bln, up from E16.0bln last week.
- Today, Austria will hold an RAGB auction to sell a combined E1.725bln (MNI had expected either E1.4375bln or E1.725bln) of the 2.90% Feb-34 RAGB (ISIN: AT0000A39UW5) and the 3.15% Jun-44 RAGB (ISIN: AT0000A0VRQ6).
- Tomorrow, Germany will hold a 15-year Bund auction. On offer will be E1bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) alongside E500mln of the 2.50% Aug-46 Bund (ISIN: DE0001102341).
- On Thursday, Spain will hold a Bono/Obli/ObliEi auction. On offer will be the new 2.70% Jan-30 Obli (ISIN: ES0000012O00), the 4.00% Oct-54 Obli (ISIN: ES0000012M93) and the 0.70% Nov-33 Obli-Ei (ISIN: ES0000012C12).
- Also on Thursday, France will hold its final LT OAT auction of the year, selling a combined E10.5-12.5bln: the on-the-run 3.00% Nov-34 OAT (ISIN: FR001400QMF9), the 4.75% Apr-35 OAT (ISIN: FR0010070060), the 3.25% May-55 OAT (ISIN: FR001400OHF4) and the 0.50% Jun-44 Green OAT (ISIN: FR0014002JM6).
- Finally, on Friday, Belgium will hold an ORI auction, likely for up to E500mln. The OLOs on offer will be announced the preceding day.
For more on this week's issuance and a look ahead to next week see the PDF here: EZ241105.pdf
EURJPY TECHS: Bullish Outlook
- RES 4: 169.20 High Jul 24
- RES 3: 168.01 High Jul 26
- RES 2: 167.40 61.8% retracement of the Nov 11 - Aug 5 bear leg
- RES 1: 166.69 High Oct 31
- PRICE: 165.73 @ 06:46 GMT Nov 5
- SUP 1: 164.11/163.06 20-and 50-day EMA values
- SUP 2: 161.85/161.01 Low Oct 17 / Low Oct 4
- SUP 3: 158.11 Low Sep 30
- SUP 4: 157.05/155.15 Low Sep 18 / 16
The EURJPY trend set-up is unchanged. A bullish theme remains intact and last week’s fresh cycle high reinforced current conditions. Initial support to watch lies at 164.11, the 20-day EMA. Recent gains suggest scope for a climb towards 167.40, the 61.8% retracement of the Nov 11 - Aug 5 bear leg. Clearance of this level would strengthen a bullish theme and open 168.01, the Jul 26 high.
