USDJPY TECHS: Turns Lower
- RES 4: 152.31 High Feb 19
- RES 3: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 151.21 High Mar 28
- RES 1: 150.92 High Aug 1
- PRICE: 147.20 @ 08:30 BST Aug 15
- SUP 1: 146.21 Low Aug 14
- SUP 2: 145.94/86 1.0% 10-dma envelope / Low Jul 24
- SUP 3: 145.53 100-dma
- SUP 4: 145.40 50% retracement Apr - Aug Upleg
Despite a brief rally into the Thursday close, USDJPY has turned lower, ending the consolidation phase that dictated play last week. Recent weakness puts the price through support drawn off the early August lows as well as 146.71, a key retracement. Price action this week marks a full reversal of the previously overbought condition, keeping the downside argument in focus. The inability of markets to build a base above the 20-day EMA was also a concern and opens 145.86-94 support. A break of last week’s 150.92 high would resume the uptrend.
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STIR: Still Uncertainty Around The Timing of The Next ECB Cut
ECB-dated OIS pricing remains consistent with one more 25bp cut this cycle, but there is still some uncertainty as to whether this cut will be delivered at the September or December macroeconomic projection meetings. Recall the MNI Policy Team’s post-Sintra forum sources piece, which said “officials are virtually unanimous that their June projections are so far being confirmed by incoming data, despite ongoing risks from global trade tensions, paving the way to a likely September cut, though some more cautious policymakers would prefer to wait until December”.
- US President Trump’s 30% tariff threat against the EU over the weekend hasn’t done much to change that narrative, with focus still on the outcome of negotiations between the two parties.
- OIS currently price virtually no implied probability of a cut at next week’s meeting. Meanwhile, there are 11bps of sequential cuts priced between July and September, 3bps between September and October, and 9bps between October and December.
- Interestingly, the curvature of the OIS curve around the two upcoming projection meetings is identical – butterfly spreads centred on the September and December projection meetings are both -7.4bps.
- Yesterday evening, ECB’s Nagel re-iterated his preference for a “steady hand” in setting rates, in line with previous comments and his hawkish leaning view.
- Today’s regional calendar includes final Italian June HICP and May Eurozone trade data. Wider focus will be on the US PPI report following yesterday’s CPI reading, which started to show some tariff impact in core goods categories.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jul-25 | 1.921 | -0.2 |
| Sep-25 | 1.816 | -10.7 |
| Oct-25 | 1.785 | -13.8 |
| Dec-25 | 1.695 | -22.8 |
| Feb-26 | 1.679 | -24.4 |
| Mar-26 | 1.653 | -27.1 |
| Apr-26 | 1.660 | -26.3 |
| Jun-26 | 1.667 | -25.6 |
| Source: MNI/Bloomberg Finance L.P. | ||
GILT TECHS: (U5) Fresh Short-Term trend Low
- RES 4: 93.41 High Jul 2
- RES 3: 93.00 Round number resistance
- RES 2: 92.79 High Jul 4
- RES 1: 92.22/24 20-day EMA / HIgh Jul 15
- PRICE: 91.36 @ 08:12 BST Jul 16
- SUP 1: 91.25 Intraday low
- SUP 2: 91.16 Low Jun 2
- SUP 3: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 4: 90.59 Low May 29
A bear cycle in Gilt futures remains in play and Tuesday’s volatile bearish session reinforces this theme. The contract has recently breached support at 91.63, the Jul 2 low. Price has also traded through 91.50, the 61.8% retracement of the May 22 - Jul 1 bull leg. The move down exposes 90.97, the 76.4% retracement point. Clearance of this level would strengthen a bearish theme. Initial firm resistance is at 92.29, the 20-day EMA.
SILVER TECHS: Bullish Trend Condition
- RES 4: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $40.000 - Psychological round number
- RES 2: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
- RES 1: $39.132 - High Jul 14
- PRICE: $37.9133 @ 08:15 BST Jul 16
- SUP 1: $36.750 - 20-day EMA
- SUP 2: $35.531 - 50-day EMA
- SUP 3: $33.967 - Low Jun 3
- SUP 4: $32.615 - Low May 22
Trend conditions in Silver are unchanged, a strong impulsive bull cycle remains intact and recent gains reinforce current conditions. The metal on Jul 11 cleared key short-term resistance at $37.317, the Jun 18 high. This confirms a resumption of the uptrend and sights are on the $39.655 next, a Fibonacci projection. On the downside, initial support to watch lies at $36.750, the 20-day EMA.
