EURJPY TECHS: Trend Set-Up remains Bullish
- RES 4: 180.37 1.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 3: 180.00 Psychological round number
- RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 1: 178.82 High Oct 30 and the bull trigger
- PRICE: 177.03 @ 08:01 GMT Nov 6
- SUP 1: 175.71 Low Nov 5
- SUP 2: 175.13/174.82 50-day EMA / Low Oct 17
- SUP 3: 173.92 Low Oct 6 and a gap high on the daily chart
- SUP 4: 173.57 Bull channel support drawn from the Feb 28 low
The trend in EURJPY is bullish and recent weakness is considered corrective. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Recent gains signal scope for an extension towards 178.94 next, a 1.236 projection of the Jul 31 - Sep 29 - Oct 2 price swing. Support to watch lies at the 50-day EMA, at 175.13. A clear break of this EMA is required to signal scope for a deeper retracement.
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Historical bullets
GILTS: Bear Steepening
Gilts sell off on the global cues detailed in recent bullets covering weakness in wider core global FI markets before stabilising off lows.
- Futures respect yesterday’s low ta 90.41, last -20 at 90.45.
- Bears remain in technical control, with initial support and resistance still located at 90.26 & 91.28.
- Yields 0.5-2.0bp higher, curve steeper.
- 10s last ~4.75%, still operating within the multi-week 4.60-4.80% closing range.
- Light hawkish moves in GBP STIRs given moves further out the curve, SONIA futures flat to 2.0 lower, BoE-dated OIS pricing just under 5bp of easing through year-end.
- The DMO will sell GBP1.25bln of the 0.125% Jan-28 gilt via PGT this morning.
- Little else of note on the UK calendar.
- Fiscal matters continue to dominate domestic news flow.
- Former BoE MPC member Saunders told BBG that inflation will provide the government with a net GBP5bln of additional revenue, although that is hardly positive news for households.
EQUITY OPTIONS: BNP Rolling Put
BNP (17th Oct) 80p vs (21st Nov) 76p, bought the Oct for 1.55 in 1.25k.
FOREX: FX OPTION EXPIRY
Of note:
EURUSD 2.2bn at 1.1650/1.1665 (could act as magnet).
EURUSD 1.07bn at 1.1700 (wed).
EURUSD 5.76bn between 1.1600/1.1700 (fri).
- EURUSD: 1.1650 (1.83bn), 1.1665 (406mln), 1.1700 (220mln), 1.1705 (382mln), 1.1710 (282mln), 1.1750 (1.27bn).
- USDJPY: 150.00 (79mln), 150.60 (525mln), 151.00 (676mln).
- NZDUSD: 0.5810 (276mln), 0.5820 (305mln).
