JGB TECHS: (U5) Bear Threat

• RES 4: 112-15   61.8% retracement of the Apr 7 - 11 sell-off
• RES 3: 112-12+ High Jul 1 and a bull trigger
• RES 2: 111-28   High Jul 3 
• RES 1: 111-14+ High Jul 22 & Jul 30
• PRICE:‌‌ 110-31+ @ 20:21 BST Jul 30
• SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16        
• SUP 2: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 3: 109-28   Low Jun 6 and 11
• SUP 4: 109.25   Low May 27

Treasury futures traded higher Tuesday, but faltered into the Wednesday close on the Fed decision. Recent gains resulted in a break of the 20-day EMA, strengthening the recovery that began mid-July. Note too that resistance at 111-13+, the Jul 10 high, has been pierced. A clear break of it would highlight a stronger reversal and open 111-28, the Jul 3 high. Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low.   

Rough Transcript of Fed Chair Powell's post-July FOMC press conference is  here(PDF)

• The hawkish reaction in Fed rates extended throughout Powell’s conference, comfortably more than reversing the small dovish reaction to the initial decision statement.
• Fed Funds cumulative cuts from 4.33% effective: 12.5bp Sep (vs 16bp pre-Powell and 15.5bp pre decision), 21.5bp Oct, 37.5bp Dec (vs 44bp per decision), 46bp Jan and 58bp Mar (vs 65bp pre decision)
• Largest increases in SOFR implied yields through Powell’s press conference are in the H6, +8bp for the same move on the day and +5.5bp since the FOMC decision.
• The terminal implied yield remains in the H7, at 3.225% (+5.5bp on the day) but still easily within the 3.1-3.3% range seen through July.
• The moves were initially driven by Powell seeing modestly restrictive policy as appropriate, saying we have made no decisions about the September meeting and we’re still a ways from seeing where things settle down. Adding to this rhetoric, he later said it’s really hard to say whether will have enough information to cut in September.