US LABOR MARKET: MNI U.S. Payrolls Preview: Tailwinds Ebb As Storm Gathers

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 164.19 High Mar 18 and the bull trigger 
• PRICE: 161.68 @ 14:38 GMT Mar 31 
• SUP 1: 161.05 Low Mar 31
• SUP 2: 160.66 50-day EMA and a pivot support  
• SUP 3: 158.90 Low Mar 10  
• SUP 4: 158.00 Round number support 

A bull theme in EURJPY remains intact and recent weakness between Mar 18 - 20 appears corrective. This sell-off allowed an overbought condition to unwind. Pivot support to watch is 160.66, the 50-day EMA. A break of this level would signal potential for a deeper retracement. For bulls, sights are on resistance at 164.08, the Jan 24 high. It has been pierced, a clear break of it would strengthen a bullish condition and open 164.90, the Dec 30 ‘24 high.    

SOFR and Treasury option trade remained mixed late Monday, still leaning toward low delta/upside calls even as underlying futures have see-sawed off early morning highs to extending lows in late trade. Curves twisting flatter (5s30s -2.068 at 62.703 compared to 67.406 high (Jan'22 high). In turn - projected rate cuts through mid-2025 have retreated from this morning's levels (*) as follows: May'25 at -4.7bp (-6bp), Jun'25 at -20.1bp (-23.6bp), Jul'25 at -35.1bp (-40.6bp), Sep'25 -51.4bp (-58bp).

• SOFR Options:
  • 4,900 SFRZ5 96.37/96.75/97.12 call flys, ref 96.41
  • 2,000 SFRU5 96.25/96.50/96.75 call trees ref 96.225
  • Block, 5,000 SFRZ5 96.25/97.00 call spds, 24.0 vs. 96.435/0.30%
  • Block, 30,000 SFRZ5 96.25/96.50/96.75/97.00 call condors, 5.0 adds to 10,000 earlier at 4.5
  • +10,000 SFRM5 95.68/95.75/95.81 put flys, 0.75 vs. 95.93/0.05%
  • +2,500 SFRZ5/3QZ5 97.00 call spds, 2.5 net steepener
  • +3,500 SFRZ5 96.00/96.25 put spds, 10.5 ref 96.46/0.15%
  • 4,000 0QM5 97.00/97.50 call spds, 7.5 ref 96.62
  • 2,000 0QJ5 96.37/96.50 3x2 put spds ref 96.62
  • Block/screen, 10,000 SFRU5/SFRZ5 95.68/95.81 put spd spds, 0.0
  • Block, 5,000 SFRZ5 96.25/96.50/96.75/97.00 call condors, 4.5 ref 96.435
  • 2,000 2QM5 95.62/95.75/95.93 put flys ref 96.60
  • Block, 5,000 SFRU5/SFRZ5 95.62/95.87 put spd spds, 0.0
  • Block, 6,000 SFRM5 96.25/96.50 call spds, 2.0 ref 95.955
  • Block 5,000 SFRZ5 96.25/96.50/96.75 call trees, 13.0
  • 3,000 0QK5 95.75/95.87/96.00/96.12 put condors ref 96.635
  • 1,900 SFRN5 95.56/95.62/95.68 put flys ref 96.245
• Treasury Options:
  • 2,000 TYM5 109/111 2x1 put spds ref 111-12
  • 10,000 TYM5 112 calls, 57 ref 111-14
  • 1,600 FVK5 108.5/109 call spds
  • 4,500 TYM5 109/110 put spds ref 111-16.5
  • 1,150 FVM5 108.5/111 1x3 call spds, 19.5 ref 108-13.25
  • +15,000 TYK5 111.75/112.75/113 broken call trees, 0.0 ref 111-18.5
  • over 4,400 TYK5 110.5 puts, 21 last ref 111-19
  • 3,500 FVK5 108.25/109.25 call spds ref 108-14.5
  • 2,000 FVM5 110/111/112 call trees ref 108-13.75
  • 5,000 wk1 TY 110.5 puts, 6 ref 111-19
  • 12,000 TYK5 113.5/115 call spds ref 111-19 to -19.5
  • 1,750 TYK5 112/113 call spds ref 111-21.5
  • 3,000 FVM5 109.25/110 call spds, 10.5 ref 108-14.5
  • 8,000 TYK5 113/114.5 call spds, ref 111-14.5

• RES 4: 152.70 50.0% retracement of the Jan 10 - Mar 11 bear leg    
• RES 3: 151.30 High Mar 3  
• RES 2: 150.90/151.21 50-day EMA / High Mar 28  
• RES 1: 149.84 Intraday high 
• PRICE: 149.52 @ 14:37 BST Mar 31 
• SUP 1: 148.59 Low Mar 21    
• SUP 2: 148.18 Low Mar 20 and a key short-term support 
• SUP 3: 147.42 Low Mar 13   
• SUP 4: 146.54 Low Mar 11 nad the bear trigger 

USDJPY traded lower Monday. The primary trend direction is unchanged, it remains down and the latest recovery is considered corrective. A key short-term resistance at the 50-day EMA - at  150.90 - is intact. A clear break of this EMA would undermine the bearish theme and signal scope for a stronger rally towards 152.70, a Fibonacci retracement. For bears, the first key support to watch is 148.18, the Mar 20 low. A breach would be bearish.