JGB TECHS: (M5) Rallies Off Lows

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.95 - High Apr 7
• PRICE: 140.83 @ 16:32 GMT May 7
• SUP 1: 139.38 - 1.0% 10-dma envelope
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs are holding the bulk of the recent strong bullish reversal from early April, rejecting any test of fresh cycle lows for the M5 contract. This defies the bearish momentum studies drawn on the longer-term chart, clearing moving-average resistance to print 142.40 at the new upper level. To the downside, sights are on 136.57, a Fibonacci projection. 144.48 is the medium-term target on any recovery.

• Overnight the Federal Reserve maintained interest rates noting that the Central Bank is not in a rush to adjust interest rates and prefers to see how the trade war evolves and whether the tariffs feed through into inflation.  
• Gold had been on the backfoot prior to the FED decision anyway as the US and China confirmed trade talks which unwound some of the safe haven demand for gold.
• This gave a boost to the USD overnight which fed through to downward pressure on gold.  
• Gold fell by -1.96% to open the Asia trading day at US$3,364.60 and is modestly higher in early trading.
• Earlier in the week gold broke new highs reaching $3,431.77 before profit taking set in ahead of the FED.  
• Year to date gold remains up almost 30% with some market forecasters predicting it has more room to rally.
• Data released shows that the Chinese Central Bank continues to add to its gold reserves, adding 70,000 ounces in April, representing sixth consecutive months that the PBOC has increased gold holdings.  

• Bank of Thailand to Sell THB35 bn of 363-Days FRNs