US TSYS: On The Front Foot Into Europe
Tsys tick higher into London hours, with TYM3 currently +-0-08+ at 110-24+, which represents a fresh session high. Cash Tsys run 2-3bp richer across the curve. Headline flow remains light, with perhaps some focus on the outperformance of the intermediate zone of the JGB curve after adjustments seemingly linked to the reduction in expectations for a hawkish tweak from the BoJ next week. A fresh downtick for the USD will also be helping. Pockets of screen lifts in TY futures have been seen in recent trade, as have light lfits of upside FV options expressions.
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USDJPY TECHS: Bear Threat Remains Present
- RES 4: 134.77/81 High Jan 6 / 23.6% Oct - Jan downleg
- RES 3: 133.38 50-day EMA
- RES 2: 132.87 High Jan 11
- RES 1: 130.57/131.58 20-day EMA / High Jan 18
- PRICE: 130.28 @ 06:48 GMT Feb 1
- SUP 1: 128.36/127.23 Low Jan 20 / 16 and the bear trigger
- SUP 2: 126.81 1.382 proj of the Oct 31 - Nov 15 - 21 price swing
- SUP 3: 126.36 Low May 24 and a key support
- SUP 4: 125.49 1.50 proj of the Oct 31 - Nov 15 - 21 price swing
USDJPY is unchanged and remains in consolidation mode. The trend direction is down. Price is still trading below key short-term resistance at 131.58, the Jan 18 high and below the 20-day EMA, at 130.57. A resumption of weakness would open 126.81, a Fibonacci projection - the bear trigger is 127.23, Jan 16 low. For bulls, clearance of 131.58 would be a positive development, signal a short-term reversal and open 133.38, the 50-day EMA.
EURGBP TECHS: Trend Condition Remains Bullish
- RES 4: 0.8992 61.8% Retracement of the Sep 26 - Dec 1 bear leg
- RES 3: 0.8980 High Sep 29
- RES 2: 0.8907 50.0% retracement of the Sep 26 - Dec 1 bear leg
- RES 1: 0.8852/97 High Jan 25 / 13 and the bull trigger
- PRICE: 0.8823 @ 06:41 GMT Feb 1
- SUP 1: 0.8764/22 50-day EMA / Low Jan 19 and a key support
- SUP 2: 0.8691 Low Dec 19
- SUP 3: 0.8630 76.4% retracement of the Dec 1 - Jan 13 bull cycle
- SUP 4: 0.8593 Low Dec 15
EURGBP traded slightly higher Tuesday, but remains below last week’s highs. Key short-term support lies at 0.8722, the Jan 19 low. A break of this level is required to reinstate a recent bearish threat. For bulls, a continuation higher would expose resistance at 0.8897, the Jan 13 high and a bull trigger. Clearance of this hurdle would confirm a resumption of the uptrend that started early December last year.
EUROZONE T-BILL ISSUANCE: W/C Jan 30, 2022
Greece and the EU both look to issue bills today while Germany, France and Belgium have already sold bills this week. We look for issuance of E15.9bln at first round operations, down from E18.9bln last week.
- This morning, Greece will look to sell E625mln of the new 13-week May 5, 2023 GTB.
- The EU will conclude issuance later today with E1.0bln of the 3-month May 5, 2023 EU-bill and E1.5bln of the new 6-month Aug 4, 2023 EU-bill on offer.
