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This week is a busy week for bill issuance across the Eurozone. Germany, the Netherlands and France have issued bills for E14.4bln so far and Spain, Belgium, Finland, the ESM, Greece and Italy are still scheduled to sell bills for an estimated further E14.9bln. We look for issuance from first-round operations of E29.2bln, up from E25.4bln last week.
AUDUSD initially strengthened Monday, before slipping into the close. Yesterday’s price pattern is a bearish shooting star candle, highlighting a short-term top. Short-term weakness is likely a correction though and opens support at 0.7236/08, the 20- and 50-day EMA values. The trend outlook is bullish following recent gains and the break of resistance at 0.7314, Jan 13 high. This has reinforced bullish conditions, exposing 0.7471, the Nov 4 high.
EURJPY remains bearish. The downtrend accelerated Friday and the cross traded to a fresh cycle low once again on Monday. Last week’s move lower confirmed a resumption of the downtrend and highlights an acceleration of the current bear cycle. The focus is on 124.28 next, 50.0% of the 2020 - 2021 bulls cycle. On the upside, resistance is seen at 127.39, the Dec 3/6 low and a recent key breakout level.