BUND TECHS: (H5) Bull Phase Remains In Play
- RES 4: 134.94 High Dec 17
- RES 3: 134.54 61.8% retracement of the Dec 2 - Jan 14 bear leg
- RES 2: 134.29 High Dec 20
- RES 1: 133.73 50.0% retracement of the Dec 2 - Jan 14 bear leg
- PRICE: 133.44 @ 05:47 GMT Feb 6
- SUP 1: 132.36 20-day EMA
- SUP 2: 131.00 Low Jan 16 / 24
- SUP 3: 131.00/130.28 Low Jan 16 / Low Jan 15 and the bear trigger
- SUP 4: 130.44 Low Jul 5 ‘24 (cont)
Bund futures remain in a bull cycle and the contract traded higher yesterday. Price has recently cleared resistance at 132.22, the Jan 22 high, and is through both the 20- and 50-day EMAs. The break higher confirms a resumption of the corrective bull cycle that started Jan 14. Sights are on 133.73, a Fibonacci retracement point. Firm short-term support has been defined at 131.00, the Jan 16 / 24 low.
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EURUSD TECHS: Bounce Considered Corrective
- 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.
BUND TECHS: (H5) Key Support Remains Exposed
- 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.
JGBS: Little Changed After A Solid 10Y Auction Supports Market
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.
