AUDUSD TECHS: Bulls Remain In The Driver’s Seat
- RES 4: 0.7137 High Aug 11
- RES 3: 0.7059 2.236 proj of the Oct 13 - 27 - Nov 3 price swing
- RES 2: 0.7009 High Aug 26
- RES 1: 0.6976 2.00 proj of the Oct 13 - 27 - Nov 3 price swing
- PRICE: 0.6915 @ 06:52 GMT Jan 10
- SUP 1: 0.6860 Low Jan 9
- SUP 2: 0.6786 20-day EMA
- SUP 3: 0.6688 Low Jan 3 and key support
- SUP 4: 0.6650 Low Dec 22
AUDUSD traded higher Monday and the pair is holding on to its gains. A bullish theme remains intact. The pair has cleared 0.6893, the Dec 13 high and this confirms a resumption of the uptrend that started Oct 13. The move higher maintains the bullish price sequence of higher highs and higher lows and moving average studies are in a bull mode position. The focus is on 0.6976, a Fibonacci projection. Key support lies at 0.6688, the Jan 3 low.
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EURJPY TECHS: Trendline Resistance Remains Exposed
- RES 4: 146.14 High Nov 23 and a key resistance
- RES 3: 145.23 High Nov 24
- RES 2: 144.58 High Dec 8
- RES 1: 144.50 Trendline drawn from the Oct 21 high
- PRICE: 144.15 @ 06:44 GMT Dec 12
- SUP 1: 143.10/140.77 Low Dec 6 / 2 and the bear trigger
- SUP 2: 140.00 76.4% retracement of the Sep 26 - Oct 21 bull leg
- SUP 3: 139.44 Low Sep 29
- SUP 4: 138.06 Low Sep 28
EURJPY is trading closer to last week’s highs. Attention is still on key short-term trendline resistance that intersects at 144.50. This trendline is drawn from the Oct 21 high and a clear break of it is required to signal a stronger bullish reversal. This would open 145.23, the Nov 24 high. On the downside, key support has been defined at 140.77, the Dec 2 low. A break of this level would resume bearish activity.
BOJ: Fixed Rate Operation Offer
The BoJ offers to buy an unlimited amount of 10-Year JGBs at a fixed rate of 0.25%.
EUROZONE ISSUANCE: EGB Supply - W/C 12 December, 2022
Italy and Belgium are the only countries due to come to the market this week. We look for estimated gross nominal issuance of E7.5bln, down from last week’s E12.0bln.
- Italy will come to the market tomorrow with 2/3/7-year BTPs on offer (but no 15+ year BTP). On offer will be E1.0-1.5bln of the off-the-run 0% Dec-24 BTP (ISIN: IT0005474330), E1.5-2.0bln of the on-the-run 3-year 3.50% Jan-26 BTP (ISIN: IT0005514473) and E3.0-3.5bln of the on-the-run 7-year 3.85% Dec-29 BTP (ISIN: IT0005519787). Italy also announced the cancellation of its 28 December BTP Short Term auction and its 29 December MT/LT auction.
- Belgium will complete 2022 EGB issuance on Friday with an ORI operation (likely for E500mln). The announcement will be made on Thursday.
NET NOMINAL FLOWS: This week will see a E27.7bln of redemptions: E14.0bln of a German Schatz and E13.7bln of an Italian CCTeu. Coupon payments of E0.3bln are expected. With estimated gross issuance of E7.5bln, MNI estimates net nominal issuance of negative E20.4bln this week, down from last week’s positive E10.7bln.
For a calendar of all announced EGB/EU/ESM/EFSF auctions see the MNI EZ/UK Bond Supply Calendar here.
