BOBL TECHS: (Z5) Bear Cycle Still In Play
- RES 4: 118.970 High Oct 17 and key resistance
- RES 3: 118.770 High Oct 22
- RES 2: 118.360/600 High Oct 28 / 24
- RES 1: 118.190 20-day EMA.
- PRICE: 118.120 @ 05:50 GMT Nov 13
- SUP 1: 117.960/900 Low Nov 10 / Low Oct 10
- SUP 2: 117.824 76.4% retracement of the Sep 25 - Oct 17 bull cycle
- SUP 3: 117.710 Low Oct 6
- SUP 4: 117.630 Low Oct 1
The short-term trend condition in Bobl futures is unchanged, it remains bearish for now. The contract traded to a fresh cycle low on Monday, reinforcing a bear theme. Price is through 118.043, 61.8% of the Sep 25 - Oct 17 bull cycle. This signals scope for an extension towards 117.824, the 76.4% Fibonacci projection. Initial resistance is seen at 118.190, the 20-day EMA. A clear break of the average would signal a possible reversal.
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GILT TECHS: (Z5) Bullish Theme
- RES 4: 92.06 High Aug 14
- RES 3: 92.00 Round number resistance
- RES 2: 91.82 High Sep 24 and a key resistance
- RES 1: 91.39 High Oct 13
- PRICE: 91.24 @ Close Oct 13
- SUP 1: 90.61 Low Oct 10
- SUP 2: 90.26/89.94 Low Sep 26 / 76.4% of the Sep 3 - 11 correction
- SUP 3: 89.36 Low Sep 3 and a key support
- SUP 4: 89.00 Round number support
Gilt futures rallied sharply higher on Friday confirming a resumption of the recovery that started Sep 25. Recent gains reinforce a bullish theme and note that Monday’s climb resulted in a breach of a key short-term resistance at 91.28, the Sep 24 high. A continuation higher would pave the way for an extension towards key resistance at 91.82, the Sep 11 high. Price needs to trade below support at 90.26, the Sep 26 low, to reinstate a bearish theme.
UK DATA: Labour market data broadly disappoints but payrolls revised higher
- Private regular AWE lower than expected, unemployment higher, a smaller 3-month LFS employment employment growth number and lower vacancies.
- All in all a disappointing UK labour market report - likely increasing the probability that Governor Bailey wants to keep optionality for voting for a Q4 cut.
- The brighter points were: Public sector bonuses were higher than expected (bringing up the total whole economy pay number) while there were some upward revisions to payroll growth so the 3-month fall in payrolls is only 0.2k (from 38k fall to the 3-months of Aug that was revised to -12.6k).
USDJPY TECHS: Corrective Pullback
- RES 4: 154.80 High Feb 12
- RES 3: 154.39 76.4% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 153.82 1.618 proj of the Sep 17 - 26 - Oct 1 price swing
- RES 1: 153.27 High Oct 10
- PRICE: 151.74 @ 07:03 BST Oct 14
- SUP 1: 150.92 High Sep 26
- SUP 2: 149.72 20-day EMA
- SUP 3: 148.50 50-day EMA
- SUP 4: 146.86 Trendline support drawn from the Apr 22 low
A bullish trend condition in USDJPY remains intact and Friday’s pullback is considered corrective - for now. Note that the trend is overbought and a deeper retracement would allow this overbought set-up to unwind. The next important support lies at 149.72, the 20-day EMA. On the upside, clearance of last Friday’s 153.27 high, would resume the uptrend and open 154.39, a Fibonacci retracement point.
