BTP TECHS: (Z5) Resistance Remains Exposed
- RES 4: 122.56 0.764 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 3: 121.88 0.618 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 2: 121.00 Round number resistance
- RES 1: 120.74 High Aug 5 and the bull trigger
- PRICE: 120.34 @ Close Sep 17
- SUP 1: 119.06/118.36 Low Sep 4 / 3
- SUP 2: 118.00 Round number support
- SUP 3: 117.70 2.236 proj of the Aug 5 - 12 - 14 price swing
- SUP 4: 117.36 2.500 proj of the Aug 5 - 12 - 14 price swing
The primary trend condition in BTP futures is unchanged, it remains bullish. The strong rally that started Sep 3 reinforces this theme and signals the end of the recent corrective pullback between Aug 5 - Sep 3. Key resistance and the bull trigger is 120.74, the Aug 5 high. A break of this hurdle would confirm a resumption of the uptrend. Key support has been defined at 118.36, the Sep 3 low.
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GILT TECHS: (U5) Bear Cycle Extends
- RES 4: 92.84 High Aug 5 and a bull trigger
- RES 3: 92.37 High Aug 11
- RES 2: 91.99 50-day EMA
- RES 1: 91.32/68 High Aug 18 / 15
- PRICE: 90.59 @ Close Aug 18
- SUP 1: 90.52 Low Aug 18
- SUP 2: 90.46 Low May 23
- SUP 3: 90.11 Low May 22 and a key support
- SUP 4: 90.00 Psychological round number
Gilt futures traded sharply lower Friday and yesterday’s sell-off confirmed a bearish start to the week, strengthening current conditions. The contract has breached key short-term support and a bear trigger at 91.08, the Jul 18 low. This signals scope for an extension towards 90.11, the May 22 low. On the upside, resistance to watch is seen at 91.99, the 50-day EMA. Clearance of this average is required to highlight a potential reversal.
USDJPY TECHS: Outlook Remains Bearish
- RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 3: 151.21 High Mar 28
- RES 2: 150.92 High Aug 1 and a key resistance
- RES 1: 148.52 High Aug 12
- PRICE: 147.66 @ 07:00 BST Aug 19
- SUP 1: 146.21 Low Aug 14
- SUP 2: 145.86 Low Jul 24
- SUP 3: 145.51 100-dma
- SUP 4: 145.40 50% retracement Apr - Aug Upleg
USDJPY is in consolidation mode. A bearish threat remains present and the pair is trading closer to its recent lows. Sights are on support at 145.86, the Jul 24 low. Clearance of this level would highlight a stronger reversal and strengthen the bearish engulfing signal from Aug 1. This would open 144.63, a trendline drawn from the Apr 22 low. Initial firm resistance to watch is 148.52, the Aug 12 high. A breach of it would be viewed as a S/T bull signal.
EUROZONE ISSUANCE: EGB Supply
Germany and France are due to hold auctions this week, while we pencil a Finnish syndication either this or next week. We look for issuance of E21.6bln for the week, up from E6.6bln last week.
For the full MNI EGB Supply Daily with a look ahead to the next two weeks of issuance, click here.
- Germany will kick off issuance for the week this morning with E4.5bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059) on offer.
- Germany will return to the market tomorrow to hold a 30-year Bund auction. On offer will be E1bln of the 2.50% Aug-46 Bund (ISIN: DE0001102341) alongside E1.5bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004).
- France will come to the market on Thursday to hold a MT OAT auction. On offer will be a combined E8.5-10.5bln of the two on-the-run issues: the 2.40% Sep-28 OAT (ISIN: FR001400XLW2) and the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7) alongside the 2.50% May-30 OAT (ISIN: FR0011883966).
- France will conclude issuance for the week later on Thursday with an IL OAT auction. On offer will be a combined E0.75-1.25bln of the 3.15% Jul-32 OATei (ISIN: FR0000188799), the 1.80% Jul-40 OATei (ISIN: FR0010447367), and the 0.10% Jul-53 OATei (ISIN: FR0014008181).
