USDJPY TECHS: Bulls Cycle Remains In Play
- RES 4: 145.69 1.618 projection of the Jul 14 - 21 - 28 price swing
- RES 3: 145.07 High Jun 30 and a bull trigger
- RES 2: 144.20 High Jul 7
- RES 1: 143.55 High Aug 1
- PRICE: 142.86 @ 06:39 BST Aug 2
- SUP 1: 141.13/140.38 20- and 50-day EMA values
- SUP 2: 138.07 Low Jul 28
- SUP 3: 137.25 Low Jul 14 and key support
- SUP 4: 136.31 Low May 17
USDJPY bulls remain in the driver’s seat and the pair traded higher yesterday. Price is through 143.22, 76.4% of the Jun 30 - Jul 14 downleg. The break strengthens current bullish conditions and signals scope for a continuation higher. The focus is on 144.20 next, the Jul 7 high, and key resistance at 145.07, the Jun 30 high. On the downside, key support has been defined at 138.07, the Jul 28 low.
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RIKSBANK: MNI Riksbank Review - June 2023: Another 25bp to come
- The Riksbank hiked 25bp as expected, but also noted in their forward guidance that “The forecast is for the policy rate to be increased at least one more time this year.”
- Most analyst previews that we had read were looking for a 3.85-3.90% peak in the rate profile, but it actually came in at 4.05%.
- Active sales of government bonds were also accelerated to a pace of SEK5bln/month – however this was at the lower end of analyst expectations and below investor expectations of SEK5.75bln/month.
- Looking ahead it appears as though the Riksbank is committed to a 25bp hike in September and wants to keep its options open beyond then to see where the exchange rate settles, reassess the inflation outlook and to see whether other central banks such as the ECB are in approaching the end of their hiking cycle.
GILT TECHS: (U3) Trend Needle Points South
- RES 4: 98.00 Round number resistance
- RES 3: 97.64 High Jun 1 and the reversal trigger
- RES 2: 97.43 High Jun 2
- RES 1: 96.34/97.00 High Jun 27 / 23
- PRICE: 95.30 @ Close Jun 30
- SUP 1: 94.59/93.88 Low Jun 30 / 20 and the bear trigger
- SUP 2: 93.45 1.618 proj of the Feb 2 - 28 - Mar 20 price swing (cont)
- SUP 3: 93.00 Round number support
- SUP 4: 92.66 Low Oct 14 2022 (cont)
Recent gains in Gilt futures resulted in a break of resistance at the 20-day EMA. However, the contract has pulled back and continues to trade below 97.00, the Jun 23 high. The medium-term trend condition is bearish - a continuation lower and a break of 93.88, the Jun 20 low, would confirm a resumption of the trend. On the upside, a fresh recovery would expose key resistance at 97.64, the Jun 1 high.
EURGBP TECHS: Primary Trend Direction Remains Down
- RES 4: 0.8786 Trendline resistance drawn from the Feb 3 high
- RES 3: 0.8749 50.0% retracement of the Feb 3 - Jun 19 downleg
- RES 2: 0.8719 High May 23
- RES 1: 0.8658 High Jun 28 and a short-term bull trigger
- PRICE: 0.8595 @ 06:17 BST Jul 3
- SUP 1: 0.8576/36 Low Jun 30 / Low Jun 23
- SUP 2: 0.8518 Low Jun 19 and the bear trigger
- SUP 3: 0.8502 1.0% 10-dma envelope
- SUP 4: 0.8454 76.4% retracement of the Mar - Sep 2022 bull cycle
The primary trend direction in EURGBP is down and recent short-term gains are considered corrective. Key near-term resistance has been defined at 0.8658, the Jun 28 high. A break of this level would resume the recent uptrend and signal scope for a climb towards 0.8719, the May 23 high. On the downside, a deeper pullback would instead expose the bear trigger at 0.8518, where a break would confirm a resumption of the downtrend.
