BUND TECHS: (H5) Bull Phase Remains In Play

• RES 4: 1.0825 High Nov 7 
• RES 3: 1.0630 High Dec 06
• RES 2: 1.0537 50-day EMA 
• RES 1: 1.0458 High Dec 30 
• PRICE: 1.0398 @ 06:01 GMT Jan 7
• SUP 1: 1.0226 Low Jan 2
• SUP 2: 1.0209 3.0% Lower Bollinger Band
• SUP 3: 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg 
• SUP 4: 1.0166 2.0% 10-dma envelope  

The trend condition in EURUSD remains bearish and Monday’s strong gains appear - for now - corrective. Last Thursday’s sharp sell-off reinforces current conditions and note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. The 20-day EMA, at 1.0412, has been pierced. The next resistance to watch is 1.0458, the Dec 30 high. The bear trigger has been defined at 1.0226, the Jan 2 low.

• RES 4: 137.75 Low Dec 10            
• RES 3: 135.15 High Dec 13 
• RES 2: 134.10 20-day EMA
• RES 1: 133.48 High Jan 3                
• PRICE: 132.39 05:36 GMT Jan 7
• SUP 1: 132.11 Intraday low    
• SUP 2  132.00 Low Nov 6 and key support               
• SUP 3: 130.78 123..6% retracement of the Nov 6 - Dec 2 bull leg
• SUP 4: 130.00 Psychological round number     

The trend cycle in Bund futures remains bearish and last Friday’s sell-off plus Monday’s extension, reinforces this theme. The contract has recently traded through 133.22, 76.4% of the Nov 6 - Dec 2 bull cycle. This has opened key support at 132.00, the Nov 6 low. Clearance of this level would strengthen a bearish theme. Initial resistance is seen at 133.48, last Friday’s high. Key short-term resistance is at 134.10, the 20-day EMA.

JGB futures are in slight positive territory, +2 compared to the settlement levels.

• Outside of the previously outlined Monetary Base date, there hasn't been much by way of domestic drivers to flag.
• Cash bonds are 1-2bps richer in today’s Asia-Pac session after yesterday’s modest bear-steepener. Tuesday’s US data calendar includes JOLTS, ISM Services and Tsy 10Y Re-Open.
• Cash JGBs are flat to 1bp cheaper across benchmarks beyond the 1-year but richer than pre-10-year auction levels. The benchmark 10-year yield is 0.2bps lower at 1.134% after dealing as high as 1.143% earlier.
• The 10-year JGB auction delivered solid results, with the low price beating expectations, the cover ratio nudging higher and the tail shortening. Weaker sentiment toward global long-end bonds and expectations of further near-term tightening by the BoJ didn’t appear to weigh significantly on demand.
• The swaps curve has twist-steepened, pivoting at the 10-year, with rates 1bp lower to 3bps higher.
• Tomorrow, the local calendar will see the Consumer Confidence Index alongside BoJ Rinban Operations covering 1-25-year JGBs.