EURJPY TECHS: Bullish Theme
- RES 4: 180.54 Top of a bull channel drawn from the Feb 28 low
- RES 3: 180.00 Psychological round number
- RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 1: 177.94 High Oct 10 and the bull trigger
- PRICE: 176.25 @ 15:36 BST Oct 22
- SUP 1: 175.31 20-day EMA
- SUP 2: 173.92 Low Oct 6 and a gap high on the daily chart
- SUP 3: 173.24 High Oct 3 and a gap low on the daily chart
- SUP 4: 172.27 Low Oct 2 and a key medium-term support
The trend structure in EURJPY is unchanged, it remains bullish and moving average studies continue to highlight a dominant uptrend. Recent strength above resistance at 175.13, the Sep 29 high, confirmed a resumption of the uptrend. A continuation higher would open 178.94, a Fibonacci projection. First key support to watch lies at 175.31, the 20-day EMA. It has been pierced, a clear breach of it would signal scope for a deeper retracement.
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PIPELINE: Corporate Bond Update: $5B Broadcom 3Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 09/22 $5B #Broadcom $1B 5Y +53, $2.25B +10Y +68, $1.75B +12Y +78
USDJPY TECHS: Holding On To The Bulk Its Latest Gains
- RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 3: 150.92 High Aug 1 and a key resistance
- RES 2: 149.64 76.4% retracement of the Aug 1 - Sep 17 bear leg
- RES 1: 148.38/149.14 High Sep 22 / High Sep 3
- PRICE: 147.73 @ 19:16 BST Sep 22
- SUP 1: 146.77/145.49 Low Sep 18 / 17 and a pivot support
- SUP 2: 145.40 50% retracement of the Apr - Aug upleg
- SUP 3: 144.10 61.8% retracement of the Apr - Aug upleg
- SUP 4: 143.45 Low Jul 3
USDJPY recovered sharply from last week’s low and the pair is holding onto the bulk of its latest gains. A bullish candle pattern on Sep 17 - a hammer formation - provided an early reversal signal. Last Wednesday, the pair breached a number of important short-term support levels, however, this has not confirmed a bearish threat. A continuation higher would open 149.14, the Sep 3 high. Pivot support is 145.49, the Sep 17 low.
BONDS: EGBs-GILTS CASH CLOSE: Mixed Curves Ahead Of PMIs
European yields were little changed Monday, with longer-end Gilts slightly outperforming their German counterparts.
- Yields opened the session a little higher coming in from the weekend, carrying on from a bond-bearish tone late last week, but gradually descended to session lows by mid-day London time with few immediate macro/headline movers in evidence.
- 10Y Gilt yields briefly hit a post-Sept 4 high (4.724%) but otherwise trade was largely within last week's ranges.
- Comments from BOE's Pill and Bailey didn't prove impactful. MNI's Macro team noted however that all seven of the non-dissenting MPC members are due to make public appearances before the end of September.
- On the day, the UK curve bull flattened, with Germany's twist steepening.
- Periphery/semi-core EGB spreads widened slightly. BTP spreads were a little wider, despite Friday's one-notch rating upgrade to Italy from Fitch; France's were little changed following Friday's one-notch downgrade from Morningstar DBRS.
- Tuesday's schedule includes flash September PMIs, and another appearance by BOE's Pill.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.5bps at 2.018%, 5-Yr is down 0.6bps at 2.32%, 10-Yr is unchanged at 2.748%, and 30-Yr is up 2bps at 3.357%.
- UK: The 2-Yr yield is down 0.2bps at 3.98%, 5-Yr is down 0.2bps at 4.13%, 10-Yr is down 0.3bps at 4.712%, and 30-Yr is down 1.1bps at 5.548%.
- Italian BTP spread up 1.2bps at 79.7bps / Spanish up 0.3bps at 55.1bps
