EURJPY has started the new year on a bearish note. Today’s move lower has resulted in a break of support at 138.81, the Dec 20 low and bear trigger. This confirms a resumption of the downtrend and paves the way for a test of key support at 137.40, the Sep 26 low. Clearance of this level would strengthen bearish conditions. On the upside, key short-term resistance has been defined at 142.94, the Dec 28 high.
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Bonds lead the rebound off post jobs data lows, rising steadily higher (read: narrow upward path) through the NY close. Gist: continued sale unwind/buy support operating under the premise this morning's higher than expected Nov jobs gain of +263k (+200k est) not high enough to seriously dampen expectations of a step-down to 50bp hike at Dec 14 FOMC.
The number of varied trades made up for modest overall volumes Friday. two-way flow as underlying futures steadily reversed post-NFP sell-off as 50bp hike in Dec still priced in (curves flatter as prospect of slower hikes in 2023 cooled, however).
JGB futures continue to trade below 149.75, the Nov 11 high. A resumption of weakness would expose support at 148.24, the Nov 4 low. If this level is cleared, scope would be seen for a move towards 147.38, the Oct 21 low and 147.07, the Jun 20 low (cont). For bulls, key resistance has been defined at 150.81, the Aug 5 high where a break is required to suggest a stronger medium-term reversal.