EURJPY TECHS: Watching Support

• RES 4: 161.52 2.618 proj of the May 11 - 29 - 31 price swing
• RES 3: 160.94 2.50 proj of the May 11 - 29 - 31 price swing
• RES 2: 160.36 2.382 proj of the May 11 - 29 - 31 price swing
• RES 1: 159.92 High Oct 24 and key short-term resistance
• PRICE: 158.12 @ 16:46 BST Oct 30
• SUP 1: 157.69 50-day EMA
• SUP 2: 156.98 Low Oct 16
• SUP 3: 155.83 Low Oct 4
• SUP 4: 154.46 Oct 3 and the bear trigger

The trend outlook in EURJPY remains bullish and the latest pullback is considered corrective. Key short-term resistance and the bull trigger has been defined at 159.92, Oct 24 high. Last week’s gains resulted in a print above 159.76, Aug 30 high. A clear break would confirm a resumption of the uptrend and open 160.36, a Fibonacci projection. Initial firm support lies at 157.69, the 50-day EMA. Key support is far off at 154.46, the Oct 3 low.

Option desks reported better Treasury put trade on net Monday, while SOFR options leaned toward calls on lighter volumes as traders plied the sidelines to await Wednesday's FOMC policy annc, NFP employment data on Friday. Underlying futures weaker, but off lows after US Tsy borrowing estimates came out appr $75B less than estimated ($776B vs. $852B). Meanwhile, projected rate hikes into early 2024 gain slightly: November steady at 0% to 5.325%, December cumulative of 5.8bp at 5.387%, January 2024 cumulative 8.4bp at 5.413%, March 2024 at 4.3bp at 5.371%. Fed terminal at 5.415% in Feb'24.

• SOFR Options:
  • 2,000 2QH4 96.75/97.00/94.75 call flys ref 95.85
  • +7,500 0QM4/2QM4 96.00 call spds, 1.5 net short Jun over
  • 9,000 0QZ3 95.68/96.37 call spds ref 95.375
  • 1,000 2QZ3 96.00/96.25/96.50/96.75 call condors ref 95.865
  • 1,000 0QF4 95.12 puts vs. 2,000 2QF4 95.00/95.25 put spds
  • 2,000 0QX3 94.87/95.18/95.37 broken put fly ref 95.42
  • 1,250 SFRF4 94.75 straddles, 37.75 ref 94.67
• Treasury Options:
  • +12,000 wk2 10Y 104.5 puts, 12 to 11 ref 106-02.5
  • 2,500 TYZ3 109 calls, 11
  • 5,300 FVZ3 104/104.25 put spds ref 104-13.5
  • +15,000 TYZ3 104.75/105/106 put trees, 2 cr ref 106-08.5
  • 1,500 TYZ3 103/104.5 3x1 put spds vs. TYZ3 108/109 1x3 call spds ref 106-00
  • over 65,000 TYZ3 105 puts, 33-35 ref 106-02
  • over 8,900 weekly 10Y 107 calls, 9-10 ref 106-11.5 to -12.5
  • 2,500 FVZ3 103/103.5 put spds ref 104-18.75
  • 3,500 TYZ3 105/106 put spds 4 over TYZ3 108 calls ref 106-08.5

• RES 4: 153.52 2.236 proj of the Jan 16 - Mar 8 - Mar 24 price swing
• RES 3: 152.20 3.00 proj of the Jul 14 - 21 - 28 price swing
• RES 2: 151.95 High Oct 21 and a major resistance
• RES 1: 150.78/151.09 High Oct 26 / 2.764 proj of Jul 14-21 - 28 swing
• PRICE: 149.08 @ 16:44 BST Oct 30
• SUP 1: 148.81/147.98 Low Oct 30 / 50-day EMA
• SUP 2: 147.43 Low Oct 3 and key support
• SUP 3: 146.44 Low Sep 12
• SUP 4: 145.91 Low Sep 11

USDJPY has pulled back from last week’s 150.78 trend high on Oct 26. The move lower is considered corrective and the uptrend remains intact. Last week’s breach of 150.16, the Oct 3 high, marks a resumption of the uptrend. MA studies are in a bull-mode position and this reflects the market's positive sentiment. Sights are on 151.09 next, a Fibonacci projection. The 20-day EMA has been breached, exposing the 50-day EMA, at 147.98.