BUND TECHS: (M5) Trend Needle Points North
- RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing
- RES 3: 133.00 round number resistance
- RES 2: 132.56 High Feb 28 and a key resistance
- RES 1: 132.03 High Apr 7 and the bull trigger
- PRICE: 131.53 @ 06:43 BST May 8
- SUP 1: 130.58/129.92 50-day EMA / Low Apr 11
- SUP 2: 129.02 Low Apr 10
- SUP 3: 128.60 Low Apr 9 and a key support
- SUP 4: 128.47 Low Mar 28
Bund futures have recovered from their recent lows. A bull cycle is intact and the sell-off between Apr 7 - 9 is considered corrective. Sights are on resistance at 132.03, the Apr 7 high and a bull trigger. A clear break of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, Apr 9 low. A breach of it would alter the picture. First support is 130.58, the 50-day EMA.
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CHINA: Bond Futures Retrace
- After three days of significant rally, China's bond futures are lower today.
- China's 10Yr bond future is lower by -0.27 at 108.913, having risen +0.605 yesterday.
- The recent rally has seen the 10YR break above all major moving averages, the nearest being the 50-day EMA of 108.13.
- China's 2YR bond future is lower by -0.05 at 102.60, touching the 100-day EMA of 102.6073 with the next key technical level the 200-day EMA of 102.58.
- Cash bonds are off too with the CGB 10YR at 1.66%, +2.5bps higher today.
EURUSD TECHS: Support Remain Intact
- RES 4: 1.1276 High Jul 18 ‘23
- RES 3: 1.1214 High Sep 25 2024 and a key resistance
- RES 2: 1.1188 0.764 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 1: 1.1144 High Oct 1 2024 / High Apr 3 and the bull trigger
- PRICE: 1.0977 @ 05:38 BST Apr 8
- SUP 1: 1.0812 Low Apr 7
- SUP 2: 1.0833 20-day EMA
- SUP 3: 1.0733 Low Mar 27 and a key short-term support
- SUP 4: 1.0684 50-day EMA and a short-term pivot level
EURUSD has pulled back from its latest high. For now, the trend condition remains bullish and a pullback is considered corrective. A key resistance at 1.0955, the Mar 18 high, was breached last week, confirming a resumption of the uptrend. It paves the way for a climb towards 1.1188 next, a Fibonacci projection. MA studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support to watch lies at 1.0833, the 20-day EMA.
JGBS AUCTION: 30Y Supply Shows Very Poor Demand Metrics
The 30-year bond auction delivered disappointing results. The low price came in at 100.00, falling short of dealer expectations according to a Bloomberg poll. The cover ratio declined to 2.9582x from 3.4997x, while the auction tail widened significantly to 0.75 — the largest since 2023 — up from just 0.12 previously, all pointing to noticeably weaker demand.
- This follows a 10-year auction earlier in the week, which showed mixed demand metrics.
- As noted in our auction preview, today’s supply lands against a backdrop of elevated global market volatility, following President Trump’s announcement of reciprocal tariffs last week.
- With these dynamics in play, today’s 30-year auction was always going to be a key test for investor demand amid ongoing uncertainty.
- The 30-year JGB remains approximately 1bp cheaper than pre-auction levels in early afternoon trading.
