USDJPY TECHS: Bullish Focus
- RES 4: 138.56 1.618 proj of the Feb 24 - Mar 28 - 31 price swing
- RES 3: 137.30 1.50 proj of the Feb 24 - Mar 28 - 31 price swing
- RES 2: 136.04 1.382 proj of the Feb 24 - Mar 28 - 31 price swing
- RES 1: 135.59 Intraday high
- PRICE: 135.05 @ 06:37 BST Jun 15
- SUP 1: 133.19/131.87 Low Jun 9 / Low Jun 7
- SUP 2: 131.39 20-day EMA
- SUP 3: 128.46 50-day EMA
- SUP 4: 126.36 Low May 24 and key support
USDJPY has traded above 135.00 again. The move higher maintains the current bullish theme and the positive price sequence of higher highs and higher lows. Moving average studies are pointing north and indications are that the USD has further to go, despite being overbought. The focus is on the 136.04, a Fibonacci projection. Initial firm support is seen at 131.39, the 20-day EMA. Any short-term retracement would be considered corrective.
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RATINGS: Affirmations Across The Board On Friday
Sovereign rating reviews of note from Friday include:
- Fitch affirmed Malta at A+; Outlook Stable
- Fitch affirmed Switzerland at AAA; Outlook Stable
- DBRS Morningstar confirmed the United Kingdom at AA (high), Stable Trend
USDJPY TECHS: Remains Above Last Thursday’s Low
- RES 4: 133.11 High Apr 4 2002
- RES 3: 132.39 High Apr 15 2002
- RES 2: 131.96 1.00 proj of the Feb 24 - Mar 28 - 31 price swing
- RES 1: 130.05/131.35 High May 12 / High May 9 and the bull trigger
- PRICE: 128.87 @ 06:29 BST May 16
- SUP 1: 127.52 Low May 12
- SUP 2: 126.95 Low Apr 27 and a key support
- SUP 3: 125.09 Low Apr 14
- SUP 4: 124.01 Low Apr 11
The USDJPY outlook is bullish and the pair remains above last Thursday’s low of 127.52. This level represents the first key support. A resumption of gains and a break above 131.35, May 9 high, would clear the path for 131.96, a Fibonacci projection. A move higher would also maintain a bullish price sequence of higher highs and higher lows and confirm a resumption of the downtrend. Key trend support is unchanged at 126.95, Apr 27 low.
AUSSIE BONDS: Flatter, All Things China In The Driving Seat
Aussie bond futures were better bid than their U.S. counterparts during early Sydney dealing, even as wider risk assets benefitted from the latest supportive steps drawn up for the Chinese property market (analysts have questioned the impact that the move will have) & confirmation that Shanghai will start (gradually) easing COVID restrictions from today. That was before the wider, China- inspired defensive flows provided some fresh support for the space, with the longer end leading the bid.
- The pace has since eased back from best levels, akin to the move in U.S. Tsys, leaving YM +0.5 & XM +4.0 at typing. Cash ACGB trade sees 30s outperform, richening by ~5bp as of typing.
- The 3-/10-Year EFP box has twist flattened on the day.
- Note that the IR strip has also seen some twist flattening, with contracts running -1 to +3 through the reds. 3-month BBSW set ~3bp higher today, which helped the front end underperform.
- While the ruling coalition’s property policy proposals garnered plenty of headline interest they weren’t seen as a meaningful driver for the ACGB space. A quick reminder that the ruling coalition trailed the opposition Labor Party in the most recent opinion polls, with the Federal election set to take place on 21 May.
- Looking ahead, the minutes of the RBA’s most recent monetary policy decision are set to headline domestic matters on Tuesday. They will be combed for any guidance re: the future path of tightening after the RBA surprised markets with a 25bp hike in May, although the deluge of communique that dropped around and after the May decision may limit the scope for surprise.
