USDJPY TECHS: Trend Conditions Remain Bullish

SOFR & Treasury options trade outlined below: two-way wing trade on moderate volumes. Reminder: July Treasury options expire today. Underlying futures modestly higher for the most part, curves twist steeper with the short end outperforming (2s10s +1.542 at 28.455; 5s30s +3.862 at 73.280). Projected rate hike pricing easing slightly vs. late Thursday levels (*): Jul'26 at +7.5bp (8bp), Sep'26 at +18.1bp (+18.9bp), Oct'26 at +23bp (+24.5bp), Dec'26 +30.5bp (+33bp).

• SOFR Options:
  • Block, +5,000 SFRZ6/SFRH7 96.00 put spds, 10.25 (Mar'27 bought over)
  • SFRZ6 95.9375/95.8125/95.6875/95.5625p condor +2.75/4k (96.025
  • -3,000 SFRM7 94.75/95.50/96.00 put tree 10.0 ref 96.05
  • +7,000 SFRU6 95.93/96.06/96.25/96.37 put condors, 5.75
  • over -10,000 SFRQ6 96.25/96.31 call spds, 1.25 ref 96.12
  • -10,000 SFRH7 95.62 puts, 15.25 ref 95.98
  • -2,000 SFRM7 96.25 straddles, 75.0 ref 96.01
  • +12,000 SFRM6 97.25/98.87 2x3 call spds, 10.0 ref 96.01
  • over 9,000 SFRZ6 96.31/96.37 call spds ref 96.00 to -.005
  • 4,000 SFRU6 96.25/96.31/96.37 call trees
  • over 6,000 0QN6 96.00/96.12/96.18 broken call trees ref 96.08
  • over 11,900 SFRU6 96.00 puts, 7.25 last
  • +3,000 SFRQ6 96.00/96.12/96.31 broken call fly, 1.25
  • +2,000 SFRV6 95.62/95.68 put spds, 1.5 vs 95.985/0.05%
  • Block, +10,000 SFRH7 96.37/96.62 call spd, 4.25
  • +2,500 SFRU6 96.31/96.37/96.43/96.50 call condor, 0.75
  • +2,000 SFRQ6 95.87/96.00 put spds, 3.0 vs 96.125/0.15%
  • Block, 2,500 2QZ6 97.00 calls vs. 2QU6 96.50 calls, 2.5 net/Sep over
• Treasury Options: Reminder, July serial options expire today
  • -3,500 TYQ6 110 straddles, 105
  • 5,400 TYQ6 106.5/107.5 2x1 put spds ref 110-07
  • 5,600 wk2 TY 106.5/107.752x1 put spds ref 110-07.5
  • over 13,800 TYU6 111 calls, 30 last
  • 11,500 TYQ6 109.5/110/112 broken call trees, 17 net ref 110-04
  • over +16,600 TYN6 110.5 calls, 1 vs 110-07.5/0.15%
  • +3,000 wk1 FV 106.5/106.75 put spds, 2 vs 107-06.5/0.08%
  • -8,000 FVU6 107.5/108/108.5 call fly, 4
  • +1,000 FVU6 106/108.5 strangle, 21.5
  • +3,500 TYQ6 109/109.5/110 put tree, 1
  • +4,000 TYN6 109.75 puts, 1 vs 110-02.5/0.08%
  • +2,000 wk2 TY 111 calls, 8 vs 110-09.5/0.22%
  • -3,500 TYN6 110/110.25 call spds, 17 vs 110-16.5/0.36%
  • -4,300 TYN6 109.75/110 call spds, 14 vs 110-05/0.20%
  • over +11,000 TYQ6 111/112 call spds, 10
  • over +12,500 TYN6 110/110.25 call over risk reversal, 8 vs 110-10.5/0.59%
  • -2,000 TYQ6 110 puts, 23 vs 110-13/0.45%
  • +2,500 wk1 TY 109.25/109.75 put spds, 5
  • +2,000 TYQ6 108 puts, 4 vs 110-05/0.08%

• RES 4: 187.95 High Apr 17 and the bull trigger   
• RES 3: 187.56 High Apr 30
• RES 2: 186.56 76.4% retracement of the Apr 17 - May 6 bear leg  
• RES 1: 185.40/186.32 High Jun 22 / High Jun 16 and 17
• PRICE: 184.30 @ 16:05 BST Jun 26
• SUP 1: 183.17 Low Jun 24
• SUP 2: 182.05 Low May 06 and a bear trigger
• SUP 3: 181.87 Low Mar 16
• SUP 4: 180.81 Low Feb 12 and a key M/T support  

EURJPY bounced into the Friday close, however weakness mid-week resulted in a breach of support at 184.01, the Jun 8 low. The clear break signals scope for a deeper retracement towards 182.05, the May 06 low. Initial firm resistance to watch is 185.40, Monday’s high. A reversal higher and a break of this level would reinstate the recent bullish theme and refocus attention on key short-term resistance at 186.32, the Jun 16 and 17 high.  

• Stocks are drifting sideways after climbing off early Friday lows, rather muted late afternoon trade with many plying the sidelines - wary of headline risk over the coming weekend.
• Risk sentiment was subdued after Pres Trump accused Iran of a ceasefire violation after Iran launched attack drones at ships attempting to transit the Strait of Hormuz. Markets drew more selling after a Trump social media post threatening European countries with "100% TARIFF on any and all Goods" sent to the US if they implement a Digital Services Tax.
• Chip stocks weighed heavily on the IT sector with ON Semiconductor leading the rout at more than 24% decline after announcing a $7B all stock deal to purchase Synaptics. Other laggers included Western Digital (-13.25%), Seagate Technology (-9.25%) and Sandisk Corp (-9.10%).
• On the positive side, pharmaceuticals led advances with Moderna rising 10.7% after the WSJ reported on new research efforts for autoimmune disorders. Other gainers included Eli Lilly (+7.1%), Veeva Systems (+7%), Biogen Inc (+5.35%) and Incyte Corp (+5.3%).