GBP: GBPJPY Back Below 190.00, Downside Vulnerable to Dovish Developments (2/2)
Feb-06 11:20
- On the other hand, should the Agent’s annual pay settlement survey produce a number at the bottom of the 3-4% range, this could open up the possibility of potential changes to guidance as soon as the March meeting alongside potential additional members preferring sequential cuts.
- GBPJPY looks vulnerable in this scenario, having depreciated back below 190.00 this morning and now piercing the January lows at 189.34. Bearish momentum has been building for this cross since the start of the year, where fiscal worries prompted a clean break of trendline support around 195.00, a level we have not been back above since.
- Moving average indicators are in bear mode, with the 20-day EMA providing solid resistance in recent sessions. Positive Japanese wage data has also added to the hawkish BOJ narrative, assisting a 1.5% move lower for GBPJPY from last Friday’s close.
- Below here, the December low sits at 188.09 and a breach of this level would signal scope for a more significant retracement to 183.72 and 180.11, the lows seen following the global carry unwind episode in August last year.
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OAT: Block trade
Jan-07 11:18
French Block trade, suggest seller:
- OATH5 ~1.95k at 122.51.
BTP and OAT are slowly starting to underperform Germany (Bund), and all futures contract Hovers near their respective lows.
LOOK AHEAD: Tuesday Data Calendar: JOLTS, ISM Services, Tsy 10Y Re-Open
Jan-07 11:18
- US Data/Speaker Calendar (prior, estimate)
- 7-Jan 0800 Richmond Fed Barkin economic outlook, (text, Q&A)
- 7-Jan 0830 Trade Balance (-$73.8B, -$78.3B)
- 7-Jan 1000 JOLTS Job Openings (7.744M, 7.740M)
- 7-Jan 1000 JOLTS Job Openings Rate (4.6%, 4.6%)
- 7-Jan 1000 JOLTS Quits Level (3.326M, --), Rate (2.1%, --)
- 7-Jan 1000 JOLTS Layoffs Level (1.633M, --), Rate (1.0%, --)
- 7-Jan 1000 ISM Services Index (52.1, 53.5)
- 7-Jan 1000 ISM Services Prices Paid (58.2, 57.5)
- 7-Jan 1000 ISM Services Employment (51.5, 51.4)
- 7-Jan 1000 ISM Services New Orders (53.7, 54.2)
- 7-Jan 1130 US Tsy $85B 42D CMB auction
- 7-Jan 1300 US Tsy $39B 10Y Note re-open (91282CLW9)
US 10YR FUTURE TECHS: (H5) Bearish Trend Condition
Jan-07 11:16
- RES 4: 111-20+ High 6 and the bull trigger
- RES 3: 110-25 High Dec 12
- RES 2: 110-06+ 50-day EMA
- RES 1: 109-08 20-day EMA
- PRICE: 108-14 @ 11:05 GMT Jan 07
- SUP 1: 108-06+ Low Dec 26
- SUP 2: 108-00 1.500 proj of the Oct 1 - 14 - 16 price swing
- SUP 3: 107-19+ 1.618 proj of the Oct 1 - 14 - 16 price swing
- SUP 4: 107-04 1.764 proj of the Oct 1 - 14 - 16 price swing
The trend condition in Treasury futures is unchanged and remains bearish. Recent weakness reinforces the current bear cycle - the contract has traded through key short-term support and the bear trigger at 109-02+, the Nov 15 low. The breach confirms a resumption of the downtrend and opens 108.00, a Fibonacci projection. Short-term gains are considered corrective below 109-08, the 20-day EMA.
