US TSYS: Late SOFR/Treasury Option Roundup

• Monday’s FX session was all about the Japanese yen coming under renewed pressure, and most crosses extending the recovery from the post-intervention lows. Higher energy prices and firmer dollar have resulted in USDJPY rising 0.95% on the session to trade at 159.25 approaching the APAC crossover.
• Despite an early blip lower for USDJPY following reports from Kyodo surrounding a likely BOJ hike in September, the pair steadily edged higher on Monday. Spot now stands 400 pips off the 155.23 lows put in just last week. The next resistance point is located at 159.61, the 50.0% retracement of the Jul 23 - Aug 3 bear leg.
• Steady gains for crude futures across the US session have culminated in daily gains extending to around 5%. Trump’s latest social media post on compensation between the US and Iran, while not a game changer, highlights the complicated backdrop for ‘future’ negotiations. The ongoing strength for the energy complex, continues to provide a headwind for the Japanese yen, while the USD index has also recovered to a post-NFP high of 99.80. Fed’s Hammack also struck her usual hawkish tone.
• Moves outside of the yen remain moderate, with the likes of EUR, AUD and NZD falling around 0.15% against the greenback, and GBP remaining a relative outperformer but trimming prior gains to just 0.12%.
• Focus on Tuesday shifts to the RBA rate decision, where all surveyed analysts expect an unchanged decision. The decision is still likely to be a hawkish hold given underlying inflation remains well above the top of the 2-3% target band. US CPI is then due on Wednesday.

• "*HAMMACK: DON'T WANT TO PREJUDGE NUMBER OF HIKES, WHERE WE END" (BBG)
• "DON'T SEE INFLATION COMING BACK DOWN ON ITS OWN"
• "STILL NOT SEEING A PROBLEM WITH THE JOB MARKET"
• "MARKETS ARE COMPLEMENT FOR FED, NOT A SUBSTITUTE"
• "WE HAVE TO STAND BEHIND OUR WORDS WITH ACTIONS"

• RES 4: 1.3658 High May 1 and a key resistance   
• RES 3: 1.3590 61.8% retracement of the Jan 27 - Jun 24 bear cycle
• RES 2: 1.3558 High Jul 15 and a key S/T resistance 
• RES 1: 1.3530 High Aug 10
• PRICE: 1.3510 @ 19:49 BST Aug 10
• SUP 1: 1.3395/3274 50-day EMA / Low Jul 28 
• SUP 2: 1.3239 76.4% retracement of the Jun 24 - Jul15 bull leg 
• SUP 3: 1.3191 Low Jun 29
• SUP 4: 1.3140 Low Jun 24 and a key support 

A bull cycle in GBPUSD remains in play. Price continues to trade above the 20- and 50-day EMAs and attention is on the key short-term resistance at 1.3558, the Jul 15 high. Clearance of this hurdle would strengthen a bullish theme. Key short-term support has been defined at 1.3274, the Jul 28 low. For bears, a reversal lower and a break of this support would reinstate a bearish theme. First support lies at  1.3395, the 50-day EMA.