EURGBP TECHS: Northbound

Spain, Belgium, the ESM and the EU are still due to sell bills this week, whilst Germany, the Netherlands and France have already issued. We expect issuance to be E25.5bln in first round operations, up from E19.3bln last week.

• This morning, Spain will sell a combined E5.5-6.5bln of the 6-month Aug 8, 2025 letras and the new 12-month Feb 6, 2026 letras.
• Also today, Belgium will look to sell E2.2-2.6bln of 3/6/11-month TCs: an indicative E0.8bln each of the May 8, 2025 TC, the Aug 14, 2025 TC and the Jan 15, 2026 TC.
• Thirdly today, the ESM will issue up to E1.1bln of the new 3-month May 8, 2025 bills.
• Finally tomorrow, the EU will come to the market to sell up to E1.5bln of the 3-month May 9, 2025 EU-bill, up to E1.5bln of the new 6-month Aug 8, 2025 EU-bill and up to E1.5bln of the new 12-month Feb 6, 2026 EU-bill.

For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.

• RES 4: 5381.13 1.764 proj of the Nov 21 - Dec 9 - 20 price swing 
• RES 3: 5335.43 1.618 proj of the Nov 21 - Dec 9 - 20 price swing     
• RES 2: 5327.00 High Jan 31 and the bull trigger 
• RES 1: 5245.00 Intraday high           
• PRICE: 5215.00 @ 06:20 GMT Feb 4   
• SUP 1: 5112.00 Low Jan 3            
• SUP 2: 5056.82 50-day EMA
• SUP 3: 4991.00 Low Jan 15  
• SUP 4: 4931.00 Low Jan 13 and a key short-term support  

A sharp reversal lower in the Eurostoxx 50 futures contract on Monday signals the end of the recent bull run - for now - and the start of a corrective cycle. Price gapped lower and traded through the 20-day EMA, at 5159.26. A continuation of the bear leg would pave the way for a move towards the 50-day EMA, at 5056.82. On the upside, key resistance and the bull trigger has been defined at 5327.00, the Jan 31 high.

• RES 4: 0.8474 High Jan 20 and a key resistance    
• RES 3: 0.8421 High Jan 27  
• RES 2: 0.8374 20-day EMA 
• RES 1: 0.8363 High Jan 3  
• PRICE: 0.8305 @ 06:30 GMT Feb 4 
• SUP 1: 0.8248 Low Feb 3
• SUP 2: 0.8223 Low Dec 19 and a key support  
• SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range   
• SUP 4: 0.8163 123.6% retracement of the Dec 19 - Jan 20 bull leg 

EURGBP traded in a volatile manner on Monday. The bear cycle that started Jan 20 remains in play and Monday’s initial sell-off has strengthened a bearish threat. A resumption of weakness would pave the way for a move towards the first key support at 0.8223, the Dec 19 low. On the upside, the 20-day EMA is seen as a key short-term resistance - at 0.8374. A breach of the average would highlight a bullish development.