USDJPY TECHS: Pullback Considered Corrective

• RES 4: 7000.00 Psychological round number 
• RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing 
• RES 1: 6953.75 High Oct 30 and the bull trigger  
• PRICE: 6818.75 @ 06:42 GMT Nov 4
• SUP 1: 6804.03 20-day EMA
• SUP 2: 6698.11 50-day EMA 
• SUP 3: 6571.25 Low Oct 17 
• SUP 4: 6540.25 Low Oct 10 and a key short-term support

The trend condition in S&P E-Minis is unchanged, it remains bullish and the latest pullback appears corrective. Attention is on support at the 20-day EMA, at 6804.03. A clear break of this level average would signal scope for a deeper retracement and expose the 50-day EMA at 6698.11 - a key pivot support. The bull trigger has been defined at 6953.75, the Oct 30 high. Clearance of this hurdle would confirm a resumption of the uptrend. 

The EFSF is likely to hold a syndication today while Austria and Germany will hold auctions. Germany, Spain, France and Belgium will all look to hold auctions later in the week too while Italy will hold a buyback auction tomorrow. The EU held an auction yesterday. We pencil in issuance of E34.1bln for the week, up from E31.0bln last week.

For the full MNI EGB Supply Daily with a recap of issuance this week and a look ahead to rest of the week's issuance as well as next week, click here.

• The EFSF announced a mandate for a dual-tranche 5/10-year transaction to be held in the “near future” (we expect the transaction today). On offer will be a new bond maturing 11 November 2030 (ISIN: TBC) alongside a tap of the 2.875% Jan-35 EFSF (ISIN: EU000A2SCAS8).
  • We expect this to be the last transaction of the year and to raise the remaining E4.5bln from the EFSF's 2025 funding plan – with E2.5-3.5bln of the new Nov-30 bond sold alongside E1.0-2.0bln of the 2.875% Jan-35 bond.
• Austria will look to hold an RAGB auction this morning. As expected, the on-the-run 10-year 2.95% Feb-35 RAGB (ISIN: AT0000A3HU25) will be on offer, but the auction size is smaller than we had pencilled in at E862.5mln (E750mln to be allotted). This will be another single line auction.
• Germany will come to the market this morning with E5bln of the 2.00% Dec-27 Schatz (ISIN: DE000BU22114) on offer.

• RES 4: 5804.00 Bull channel top drawn from the Aug 1 low
• RES 3: 5800.00 Round number resistance  
• RES 2: 5777.41 1.382 proj of the Aug 1 - 22 - Sep 2 price swing
• RES 1: 5742.00 High Oct 29 and the bull trigger       
• PRICE: 5633.00 @ 06:31 GMT Nov 4
• SUP 1: 5611.00 Low Oct 22   
• SUP 2: 5567.19 50-day EMA  
• SUP 3: 5549.50 Bear channel base drawn from the Aug 1 low  
• SUP 4: 5497.00 Low Oct 14       

Short-term weakness in Eurostoxx 50 futures is considered corrective. The contract has breached the 20-day EMA, signalling scope for a deeper retracement towards support at the 50-day EMA, at 5567.19. Support below the EMA lies at 5549.50, the base of a bull channel drawn from the Aug 1 low. A breach of this level and the 50-day EMA, is required to highlight a stronger reversal. Key resistance and bull trigger is 5742.00, the Oct 29 high.