EURJPY TECHS: Bullish Trend Signals

• RES 4: 0.8530 76.4% retracement of the Aug 8 - Dec 19 ‘24 bear leg         
• RES 3: 0.8494 High Aug 26 ‘24 
• RES 2: 0.8474 High Jan 20 and a key resistance
• RES 1: 0.8450 High Mar 11    
• PRICE: 0.8413 @ 16:31 GMT Mar 18 
• SUP 1: 0.8369/8345 Low Mar 14 / 50-day EMA    
• SUP 2: 0.8299/41 Low Mar 5 / 3 and a near-term bear trigger 
• SUP 3: 0.8223 Low Dec 19 and a key support  
• SUP 4: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range

A bull cycle in EURGBP remains in play. Friday’s bullish engulfing candle - a reversal pattern - signals a resumption of the trend and the end of the recent corrective pullback. Initial firm support to watch lies at 0.8345, the 50-day EMA. For bulls, a continuation higher and a break of 0.8450, the Mar 11 high, would open 0.8474, the Jan 20 high and the next key resistance. Clearance of this level would strengthen bullish conditions.          

• US Data/Speaker Calendar (prior, estimate)
• 19-Mar 0700 MBA Mortgage Applications (11.2%, --)
• 19-Mar 1130 US Tsy $60B 17W bill auction
• 19-Mar 1400 FOMC Rate Decision
• 19-Mar 1600 Net Long-term TIC Flows ($72B, --)
• 19-Mar 1600 Total Net TIC Flows ($87.1B, --)

Analysts on the hawkish side of the distribution/medians (analysts see unchanged 2025-27 medians vs Dec unless noted otherwise):

• Barclays (25bp increase to a 4.1% 2025 median): Barclays also sees the Statement changing to add to the language on inflation "Inflation remains somewhat elevated" "and some market- and survey-based measures of near-term inflation expectations have moved up. Surveys of households and businesses point to heightened uncertainty about the economic outlook.*
• UBS (25bp increase to a 4.1% 2025 median): “As long as the risk of higher prices from trade policy looms, and the risks to inflation expectations look this worrisome, and the apparent costs to standing pat appear low, the FOMC seems unlikely to resume lowering interest rates."
• BofA (Unchanged dots in 2025-26, 2027 upped to 3.4% and longer-run to 3.25%) writes that “Markets could interpret the Fed's message as hawkish because they are focused on downside risks to activity. But in our view, the "Powell put" is not forthcoming.”
• Deutsche: "we expect some upward drift in individual dots with risks the median shows only one reduction in 2025. Motivating this slightly hawkish signal will be economic projections that show higher inflation, somewhat weaker growth, and an unchanged forecast for the unemployment rate this year. Finally, we expect the long-run dot to continue drifting slowly higher"
• Goldman Sachs: "Both elevated policy uncertainty and the likelihood of higher tariffs and higher inflation this year mean that the normalization cuts that FOMC participants penciled into the dot plot in December now look further off. Some participants will likely acknowledge this reality by writing down fewer cuts this year than they did previously.”