BUND TECHS: (U5) Gains Appear Corrective

• RES 4: 1.1783 1.764 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 2: 1.1685 76.4% retracement of the Jan ‘21 - Sep ‘22 downleg
• RES 1: 1.1631 High Jun 12
• PRICE: 1.1504 @ 06:06 BST Jun 18
• SUP 1: 1.1425 20-day EMA
• SUP 2: 1.1286/1.1210 50-day EMA and a pivot level / Low May 29
• SUP 3: 1.1131 Low May 16 
• SUP 4: 1.1065 Low May 12 and a reversal trigger 

The trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. Recent gains have resulted in a breach of 1.1573, the Apr 21 high. This strengthens the bullish theme and confirms a resumption of this year's uptrend. Scope is seen for a climb towards 1.1696, a Fibonacci projection. Initial firm support is at 1.1425, the 20-day EMA. The 50-day EMA lies at 1.1286. Short-term weakness is considered corrective.

JGB futures are holding stronger, +24 compared to settlement levels, but sitting near the middle of today’s range.

• The primary focus of the BoJ decision was the pace of quantitative tightening (QT) beyond the near term. From the second quarter of 2026 through the first quarter of 2027, it will slow that pace to ¥200 billion per quarter. Overall, the BoJ signalled a gradual, data-dependent approach to policy normalisation, balancing market stability, inflation developments, and global uncertainties as it proceeds with cautious tapering into 2026 and beyond. (See MNI BoJ Review here)
• Japanese politician Shigeru Ishiba said he had frank discussions with former U.S. President Donald Trump on tariffs and aims to work toward a mutually beneficial trade deal. He emphasised that tariffs, particularly on autos, would significantly impact companies and stressed that Japan must not compromise its national interests to secure a deal. (BBG)
• The cash JGB curve has twist-steepened, with yields 2bps lower to 1bp higher. The benchmark 10-year yield is 0.3bps lower at 1.462%.
• The swaps curve has bear-steepened, with rates flat to 3bps higher.
• Tomorrow, the local calendar will see Weekly International Investment Flow and Tokyo Condominiums for Sale data alongside 5-year supply.

• RES 4: 132.42 2.000 proj of the May 14 - 20 - 22 price swing
• RES 3: 132.00 Round number resistance    
• RES 2: 131.85/95 High Apr 22 and the bull trigger / High Jun 13
• RES 1: 131.27 61.8% retracement of the Jun 13 - 16 downleg
• PRICE: 130.77 @ 05:45 BST Jun 18
• SUP 1: 130.17 Low Jun 16              
• SUP 2: 130.12 Low Jun 5 a key short-term support 
• SUP 3: 129.30 Low May 22   
• SUP 4: 128.97 Low May 14 and a reversal trigger  

Bund futures are unchanged and the contract continues to trade below last Friday’s high. For now, the latest move down is considered corrective and key short-term support to watch lies at 130.12, the Jun 5 low. A break of this level would highlight a stronger reversal and undermine the bullish theme. Key short-term resistance and the bull trigger, has been defined at 131.95, the Jun 13 high.