USDJPY TECHS: Sell-on-Rallies Theme Emerges

• RES 4: 0.8781 2.236 proj of the Mar 3 - 11 - 28 price swing     
• RES 3: 0.8768 High Nov 20 ‘23
• RES 2: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger
• RES 1: 0.8557 High Apr 28 
• PRICE: 0.8508 @ 16:24 BST Apr 29 
• SUP 1: 0.8487 Intraday low
• SUP 2: 0.8477 61.8% retracement of the Mar 28 - Apr 11 rally  
• SUP 3: 0.8459 50-day EMA  
• SUP 4: 0.8415 76.4% retracement of the Mar 28 - Apr 11 rally

EURGBP traded lower Monday, marking a continuation of the current bear cycle. Note too that the move down cancels the doji reversal signal on Apr 25. Sights are on 0.8477, a Fibonacci retracement point where a break would strengthen the bearish theme. It is still possible that short-term weakness is corrective. A reversal and a resumption of gains would open 0.8738, the Apr 11 high and bull trigger. 

From our preview of Wednesday's quarterly Refunding announcement, which is at 0830ET (PDF link): Recent market volatility has reduced the possibility that Treasury will adjust its guidance that it will keep nominal coupon auction sizes unchanged for “at least the next several quarters”, as changing this would signal an intention to increase bond supply in the near future. 

• A change could be unnecessarily disruptive for the long end of the Treasury curve which has already been under duress amid a tariff-related market selloff, and as we note below there doesn’t appear to be much conviction by the Treasury Secretary that an upsizing is necessary by year-end – such a shift would probably necessitate a change in guidance this month.
• That said, some analysts eye potential for a softening of this language in this round. In the MNI Markets Team’s view, any change would be seen with significant concern by market participants. Recall in February’s round, there had been split opinion over the guidance changing or not – when it wasn’t changed, it spurred a modest relief rally in Treasuries. This time, expectations are low, and a change could trigger an outsized reaction.
• There is no expectation that Treasury will change the composition of coupon auction sizes at this Refunding.

Future Coupon Upsizing: Treasury Secretary Bessent said in February that a terming out of the Treasury’s maturity profile was "a long way off, and we're going to see what the market wants". With the Treasury curve steepening sharply since then with term premia rising amid tariff-related market volatility, it doesn’t seem like an opportune time to test the waters. Additionally, fiscal dynamics don't yet make an upsizing urgent, and indeed some analysts think the next move for coupon sizes could be down, and not up. For now MNI is penciling in nominal coupon issuance rises in February 2026’s refunding – see table below.

• Trade war concerns have continued to weigh on energy markets today as China/US tensions drag on. High Kazakh supply and the unwinding of OPEC+ cuts add to the pressure of trade war demand fears.
• WTI Jun 25 is down by 2.8% at $60.3/bbl.
• Some positive news did at least come from reports that China has waived the 125% tariff on US ethane imports imposed earlier this month, Reuters said citing two sources.
• A medium-term bearish theme in WTI futures remains intact, with sights on initial support at $58.29, the April 10 low, followed by $54.67, the April 9 low and the bear trigger.
• Meanwhile, spot gold has also fallen by 0.8% to $3,316/oz, as the yellow metal continues to consolidate after hitting a fresh record high at $3,500 last week.
• Gold remains 6% higher MTD amid ongoing haven demand due to the trade war and associated dollar weakness.
• From a technical perspective, the trend needle for gold still points north, and the latest move down appears corrective. The retracement has allowed an overbought condition to unwind.
• Moving average studies are unchanged and remain in a bull-mode position, highlighting a dominant uptrend. The next objective is $3,547.9, a Fibonacci projection. Initial firm support to watch lies at $3,239.5, the 20-day EMA.