USDJPY TECHS: Corrective Cycle
- RES 4: 147.06 2.0% 10-dma envelope
- RES 3: 146.12 76.4% Oct-Jan Downleg
- RES 2: 145.66 1.50 proj of the Jan 16 - Mar 8 - Mar 24 price swing
- RES 1: 145.07 High Jun 30 and the bull trigger
- PRICE: 143.74 @ 06:41 BST Jul 6
- SUP 1: 142.73 20-day EMA
- SUP 2: 142.14 Former bull channel top drawn from the Jan 16 high
- SUP 3: 141.21 Low Jun 20
- SUP 4: 139.85 Low Jun 16
USDJPY is trading lower and has breached Monday’s 143.99 low. The primary trend direction remains up and short-term weakness is considered corrective. Support to watch is 142.73, the 20-day EMA and 142.14, the former bull channel top. A break of 142.14 would signal scope for a deeper correction. The bull trigger has been defined at 145.07, the Jun 30 high. A break would resume the uptrend and open 145.66, a Fibonacci projection.
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EUROZONE T-BILL ISSUANCE: W/C 5 June, 2023
Spain, Belgium, Finland, the ESM, Greece, the EU and Italy all still look to sell bills this week in a big week for bill issuance while Germany, the Netherlands and France came to the market yesterday. We look for issuance at first round operations of E35.6bln, up from last week's E14.6bln.
- This morning Spain will hold a 6/12-month letras auction for a combined E4.5-5.5bln, selling 6-month Dec 8, 2023 letras and new 12-month Jun 7, 2024 letras.
- Belgium will then look to sell a combined E2.0-2.4bln of 3/11-month TCs. On offer will be an indicative E1.0bln of the 3-month Sep 14, 2023 TC and an indicative E1.2bln of the 11-month May 9, 2024 TC.
- Also today, Finland will come to the market with up to E1bln of each of the 8-month Feb 13, 2024 RFTB and the new 11-month May 14, 2024 RFTB.
- The ESM will wrap up today's issuance with up to E1.1bln of the new 3-month Sep 7, 2023 bills on offer.
- Tomorrow, Greece will come to the market with E1.0bln of the new 52-week June 7, 2024 GTB on offer.
- The EU will then look to sell up to E1.0bln of the 3-month Sep 8, 2023 EU-bill and up to E1.5bln of the new 6-month Dec 8, 2023 EU-bill.
- Italy will conclude bill issuance for the week, with a new 12-month BOT on offer. The auction size will be announced later today.
EURGBP TECHS: Trend Needle Points South
- RES 4: 0.8814 High May 5
- RES 3: 0.8768 High May 5
- RES 2: 0.8726 50-day EMA
- RES 1: 0.8636/8671 High Jun 5 / 20-day EMA
- PRICE: 0.8616 @ 06:30 BST Jun 6
- SUP 1: 0.8567 Low Jun 1
- SUP 2: 0.8562 Low Dec 13 2022
- SUP 3: 0.8547 Low Dec 1 2022 and key support
- SUP 4: 0.8522 Low Aug 30 2022
Recent gains in EURGBP appear to be a correction and the primary downtrend remains intact. Moving average studies highlight a bearish condition - the 50-dma has crossed below the 200-dma highlighting a bearish death cross signal. The focus is on 0.8547, the Dec 1 2022 low and a key support. The trend is oversold - a price reversal would signal scope for a correction. Initial firm resistance is at 0.8671 the 20-day EMA.
GILT TECHS: (U3) Corrective Cycle Still In Play
- RES 4: 98.95 Low May 18
- RES 3: 98.80 High May 22
- RES 2: 98.00 Round number resistance
- RES 1: 97.78 High May 23
- PRICE: 96.44 @ Close Jun 5
- SUP 1: 95.93 50.0% retracement of the May 26 - Jun 1 rally
- SUP 2: 94.91/21 Low May 30 / 26 and the bear trigger
- SUP 3: 94.00 Round number support
- SUP 4: 93.45 1.618 projection of the Feb 2 - 28 - Mar 20 swing (cont)
Gilt futures have recently recovered from 94.21, the May 26 low, allowing an oversold trend condition to unwind. Gains are considered corrective and the primary short-term trend condition remains bearish. Moving average studies are in a bear-mode position highlighting a bear cycle. A resumption of weakness would open the 94.00 handle next. The bear trigger is 94.21, the May 26 low. Initial resistance to watch is at 97.78, the May 23 high.
