USDJPY TECHS: Trend Outlook Remains Bullish
- RES 4: 152.43 0.764 proj of the Dec 28 - Jan 19 - Feb 1 price swing
- RES 3: 151.91/95 High Nov 13 / High Oct 1 ‘22 and major resistance
- RES 2: 151.43 High Nov 16
- RES 1: 150.89 High Feb 13 and bull trigger
- PRICE: 150.36 @ 07:43 GMT Mar 1
- SUP 1: 149.21/148.28 Low Feb 29 / 50-day EMA
- SUP 2: 147.63 Low Feb 7
- SUP 3: 145.90 Low Feb 1 and key support
- SUP 4: 145.59 Low Jan 16
The USDJPY trend outlook remains bullish and yesterday’s sell-off appears to have been a correction. The pair pierced support at 149.66, the 20-day EMA. A clear break of this average is required to signal potential for a deeper retracement, potentially towards the 50-day EMA, at 148.28. For bulls, a resumption of the trend would open 151.91/95, the Nov 13 ‘23 high and the Oct 1 ‘22 high and major resistance. The bull trigger is 150.89, Feb 13 high.
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GILT TECHS: (H4) Watching Resistance Around The 20-Day EMA
- RES 4: 101.98 High Jan 3
- RES 3: 100.81 High Jan 5
- RES 2: 100.00 Round number resistance
- RES 1: 99.34/55 20-day EMA / High Jan 30
- PRICE: 98.88 @ Close Jan 30
- SUP 1: 97.57 Low Jan 25
- SUP 2: 97.39 Low Dec 11 and a key support
- SUP 3: 96.67 Low Dec 5
- SUP 4: 96.10 Low Nov 30
The trend needle in Gilt futures continues to point south and recent gains appear - for now - to be a correction. The contract has cleared support at 99.60, the Jan 5 low. This confirmed a resumption of the downtrend that started Dec 27, signalling scope for a continuation lower towards 97.39, the Dec 11 low. Firm resistance to watch is 99.34, the 20-day EMA. It has been pierced, a clear break of the average would ease bearish pressure.
EUROZONE T-BILL ISSUANCE: W/C January 29, 2024
Greece is due to sell bills today, while Germany, France, and Belgium have already come to the market this week. We expect issuance to be E15.1bln in first round operations, down from E23.2bln last week.
- Today, Greece will look to sell E625mln of the new 13-week May 7, 2024 GTB.
BOE: MNI BOE Preview - February 2024: The end of the tightening bias?
- The February MPC meeting will almost certainly see Bank Rate left on hold at 5.25% but there are three significant aspects of the decision that will be closely watched by markets – the vote split, the guidance and the forecasts.
- The Bank continues to reiterate that it is data dependent, and the story in the data has changed since both the November MPR forecasts were made and also since the December MPC meeting.
- On the vote: We still look for 1-2 hawkish dissenters and assign a 40% probability to Dhingra voting for a cut at this meeting.
- We expect the tightening bias to be removed from the Monetary Policy Statement, while “finely balanced” is likely to be erased from the Minutes. But the rest of the guidance is likely to stay intact.
- We have read through and summarised over 20 analyst previews. There is a huge split of opinion on what could happen to both the vote, guidance and the forecasts at this meeting.
