BTP TECHS: (U5) Corrective Cycle

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 147.67/148.65 High May 14 / 12 and a reversal trigger
• RES 1: 145.46/146.28 High Jun 11 / High May 29 and key resistance
• PRICE: 144.07 @ 07:04 BST Jun 16
• SUP 1: 142.12 Low May 27 and a key support
• SUP 2: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg
• SUP 3: 139.89 Low Apr 22 and a bear trigger 
• SUP 4: 138.82 1.50 proj of the Feb 12 - Mar 11 - 28 price swing 

USDJPY is trading in a range and remains below last week’s high. Recent weakness suggests the correction between Jun 3 - 11, is over. The trend remains bearish - moving average studies are in a clear bear-mode position too, highlighting a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low. Key short-term resistance is 146.28, the May 29 high. First resistance is 145.46, Jun 11 high.

• RES 4: 5565.23 1.618 proj of the Apr 7 - 9 - 10 price swing   
• RES 3: 5516.00 High Mar 3 and the key bull trigger
• RES 2: 5475.00 High May 20
• RES 1: 5365.98 20-day EMA  
• PRICE: 5286.00 @ 06:43 BST Jun 16 
• SUP 1: 5242.00 Low Jun 13  
• SUP 2: 5178.00 Low May 6 
• SUP 3: 5081.61 38.2% retracement of the Apr 7 - May 20 bull leg
• SUP 4: 5055.00 Low Apr 30  

The latest pullback in the Eurostoxx 50 futures contract has resulted in a breach of the 50-day EMA at 5297.58. Price has also pierced 5255.00, the May 23 low. A clear break of both support points would highlight a short-term top and signal scope for a deeper retracement. This would open 5178.00, the May 6 low and 5081.16, a Fibonacci retracement. Initial resistance to watch is 5365.98, the 20-day EMA.

• Spain will come to the market on Thursday to hold a Bono/Obli auction. As expected the 10-year 3.20% Oct-35 Obli (ISIN: ES0000012P33) that was launched via syndication on 28 May will be reopened for the first time. Alongside this the 1.95% Jul-30 Obli (ISIN: ES00000127A2) and the 3.15% Apr-33 Obli (ISIN: ES0000012L52) will be on offer. The auction size will be confirmed this afternoon.
• France will then look to hold an MT OAT auction with E10-12bln on offer. As expected both on-the-run issues will be on offer: the 2.40% Sep-28 OAT (ISIN: FR001400XLW2) and the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7) alongside the 2.75% Feb-30 OAT (ISIN: FR001400PM68).
• France will conclude issuance for the week on Thursday with an IL OAT auction with a combined E1.25-1.75bln on offer of the 0.10% Mar-28 OATi (ISIN: FR0013238268), the 0.60% Jul-34 OATei (ISIN: FR001400JI88) and the 0.10% Jul-38 Green OATei (ISIN: FR001400AQH0).

NOMINAL FLOWS: This  week sees no redemptions and coupon payments totalling E3.9bln of which E1.2bln are Italian, E1.0bln are Greek, E0.6bln are Portuguese, E0.6bln are German and E0.3bln are Austrian. This leaves estimated net flows for the week at positive E30.6bln, notably higher than last week’s positive E3.0bln.