JGBS: Cash Curve Flatter, BoJ Seen On Hold, Focus on Dec/Jan Hike Risks

• RES 4: 1.2063 2.236 proj of the Feb 28 - Mar 18 - 247 price swing
• RES 3: 1.2000 Round number resistance 
• RES 2: 1.1919/23 High Sep 17 / 2.0 proj of Feb 28 - Mar 18-27 swing
• RES 1: 1.1754/1820 High Sep 25 / 23  
• PRICE: 1.1731 @ 06:04 BST Sep 29
• SUP 1: 1.1646 Low Sep 25 
• SUP 2: 1.1574 Low Aug 27
• SUP 3: 1.1528 Low Aug 5
• SUP 4: 1.1392 Low Aug 1 and bear trigger.

The trend theme in EURUSD is unchanged, it remains bullish and recent weakness is considered corrective. However, support at 1.1681. the 50-day EMA, has been breached. A clear break of this average would signal scope for a deeper retracement and expose 1.1574 initially, the Aug 27 low. For bulls, a resumption of gains would refocus attention on 1.1923, a Fibonacci projection. Initial firm resistance to watch is 1.1820, the Sep 23 high.

• ACGBs have staged a decent rally today ahead of tomorrow's RBA decision and on headlines that the budget deficit has narrowed.
• Market consensus remains for no change from all of the estimates on BBG currently, with rates set to remain at 3.60%.  
• A rally across the yield curve sees lower yields by 3.5-4.5bps with the 10-Yr and 15-Yr the best performers.
• Australia's 10-Yr bond future is up +0.04 to 95.61, below all major moving averages with the 20-day EMA at 95.66.
• The 3-Yr bond future is up +0.04 at 96.42 and is also below all major moving averages.  
• This week sees Australia sell A$1.2bn of 2034 bonds on Oct 1, A$1bn 133-day bills and A$1bn 70-day bills on October 2 and A$1bn of 2032 bills on October 3rd.
• There remains only 6bps of cuts priced in over the next month with 16bps over the next three. 

• RES 4: 129.50 High Aug 5  
• RES 3: 129.44 High Sep 10 and key short-term resistance     
• RES 2: 129.13 High Sep 17 
• RES 1: 128.45 20-day EMA   
• PRICE: 128.32 @ 05:38 BST Sep 29
• SUP 1: 127.88 Low Sep 25       
• SUP 2: 127.61 Low Sep 3 and the bear trigger
• SUP 3: 127.46 1.00 proj of the Aug 14 - 15 - 28 price swing  
• SUP 4: 127.13 1.236 proj of the Aug 14 - 15 - 28 price swing  

Bund futures are in consolidation mode and are trading closer to their recent lows. Key support and the bear trigger remains exposed, it lies at 127.61, the Sep 3 low. Clearance of this level would cancel a recent bullish theme and confirm a continuation of the medium-term bear cycle. For bulls, a reversal higher would refocus attention on key resistance at 129.44, the Sep 10 high. First resistance is at 128.45, the 20-day EMA.