BOBL TECHS: (U5) Tops First Resistance

• RES 4: 5500.00 Round number resistance  
• RES 3: 5486.00 High May 20 and a key bull trigger 
• RES 2: 5456.00 High Jun 11
• RES 1: 5408.00 High Jul 8    
• PRICE: 5396.00 @ 06:54 BST Jul 9 
• SUP 1: 5281.00/5194.00 Low Jul 1 & 4 / Low Jun 23 and bear trigger    
• SUP 2: 5182.00 Low May 2 
• SUP 3: 5100.94 38.2% retracement of the Apr 7 - May 20 bull leg
• SUP 4: 5078.00 Low Apr 30  

Recent gains in Eurostoxx 50 futures from the Jun 23 low still appear to be a potential bull reversal and the contract is holding on to its most recent gains. Price has traded through both the 20- and 50-day EMAs. The clear break of both averages strengthens a reversal theme. This opens 5486.00, the May 20 high and a bull trigger. On the downside, a break of 5194.00, the Jun 23 low, would reinstate a bearish theme.

Germany and Portugal look to hold auctions today while Italy looks to come to the market Friday. Already this week, the EU has held a syndication, while the Netherlands, Austria and Germany held auctions. We pencil in estimated gross issuance for the week of E30.2bln, up from E29.1bln last week.

For the full MNI EGB Supply Daily publication with a look ahead to the next two weeks of issuance and a recap of issuance so far this week and Q3 issuance plans, click here.

• Germany will return to the market today to hold a 15-year Bund auction. E1.5bln of the on-the-run long 15-year 2.60% May-41 Bund ISIN (DE000BU2F009) will be on offer alongside E1.0bln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
• Portugal will also come to the market today with a combined E1.00-1.25bln of the long 6-year 0.30% Oct-31 OT (ISIN: PTOTEOOE0033) on offer alongside the off-the-run short 30-year 1.00% Apr-52 OT (ISIN: PTOTECOE0037).
• Italy will look to hold a 3/7/15+ year BTP auction on Friday, selling E3.25-3.50bln of the new long 3-year 2.35% Jan-29 BTP (ISIN TBA; the launch was as expected) alongside a reopening of the on-the-run 7-year 3.25% Jul-32 BTP (ISIN: IT0005647265) for E3.0-3.5bln and E1.25-1.75bln of the on-the-run 15-year 3.85% Oct-40 BTP (ISIN: IT0005635583).
  • The launch of a new 3-year BTP was expected at this auction. This will also be the first reopening of the 15-year 3.85% Oct-40 BTP since its syndicated launch for E13.0bln in February.

• RES 4: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing 
• RES 3: 0.8738 High Apr 11 high and a key resistance
• RES 2: 0.8694 High Apr 14 
• RES 1: 0.8670 High Jul 02
• PRICE: 0.8621 @ 06:48 BST Jul 9
• SUP 1: 0.8597 Low Jul 7 
• SUP 2: 0.8562/8511 20- and 50-day EMA values 
• SUP 3: 0.8459 Low Jun 11
• SUP 4: 0.8407 Low Jun 4

The trend condition in EURGBP remains bullish and the cross is holding on to the bulk of its recent gains. Recent activity appears to be a bull flag formation - a bullish continuation pattern. 0.8648, 76.4% of the Apr 11 - May 29 downleg, has been pierced. A continuation higher and a confirmation of the flag would strengthen bullish conditions and open 0.8738, the Apr 11 high and a key resistance. Support to watch lies at 0.8562, the 20-day EMA.