USD: Notable overnight moves in the Yen
- The Dollar saw a flat session overnight across all G10s, although one Currency clearly sticks out, and that's the Volatile Yen, the push higher in Yields has clearly played its part, our Overnight desk pointed to BoJ Governor Ueda appearing before parliament earlier, noting there is a risk that higher food inflation impacts inflation expectations more broadly. Ueda reiterated that further hikes will depend on the economy and price developments.
- Also most importantly the Japanese Government has asked for an exemption on Steel and Aluminium Tariffs, with desks looking for this to be denied.
- Tariffs risks remain the main concerns Globally.
- USDJPY is down 0.70% post the European Cash Govie open, but USDJPY is 20 pips off the printed high right now.
- Technically, next upside target in USDJPY is at 154.17 20-day EMA.
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GOLD TECHS: Short-Term Bull Cycle Remains In Play
- RES 4: $2762.3 - High Nov 1
- RES 3: $2730.4 - 76.4% retracement of the Oct 31 - Nov 14 bear leg
- RES 2: $2726.2 - High Dec 12
- RES 1: $2698.0 - High Jan 10
- PRICE: $2688.8 @ 07:25 GMT Jan 13
- SUP 1: $2642.1 - 50-day EMA
- SUP 2: $2596.2/2583.6 - Low Dec 30 / 19
- SUP 3: $2564.4 - Low Nov 18
- SUP 4: $2536.9 - Low Nov 14 and a key support
Recent gains in Gold appear corrective - for now. However, the yellow metal is holding on to last week’s gains and scope is seen for a continuation higher near-term. A stronger recovery would open $2726.2, the Dec 12 high and an important short-term resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2642.1, the 50-day EMA.
BUNDS: Another very busy Week ahead
- Although off their lows, Bond futures continue to fall on both sides of the Atlantic, a continuation following Friday's data, Bund printed a fresh low overnight, and the Yield will be getting closer to the July high of 2.642%, equated to 130.56 on Friday, so far printed a 130.64 low Overnight.
- US 10yr Tnotes has lost close to a figure since the US NFP, next support will be seen at 107.04+, circa 4.80% next in Yield, ahead of the Psychological 107.00.
- For Bund, support is at the 130.56 area, while resistance moves down to 131.37 initially.
- It's another very busy Week ahead, UK, US CPIs, another Heavy supply Week, and the start of the US Earnings, which really kicks off on Wednesday.
- For Today, there's no real tier 1 Data, Portugal CPI will be final reading, and out of the US, sees NY Fed 1yr Inflation expectations.
- SUPPLY: Italy €2.75bn 2027 (equates to 31.3k short 2yr BTP) should weigh, Italy €3bn 2031 (equates to ~20.9k BTP) could weigh.
BTP TECHS: (H5) Approaching Key Support
- RES 4: 122.85 High Dec 12
- RES 3: 121.43 High Dec 16
- RES 2: 120.70 High Dec 20
- RES 1: 119.23/119.96 High Jan 8 / 20-day EMA
- PRICE: 1117.89 @ Close Jan 10
- SUP 1: 117.65 Low Jan 10
- SUP 2: 117.40 Low Nov 7 and a key support
- SUP 3: 116.59 76.4% retracement of the Jun - Dec ‘24 bull cycle
- SUP 4: 116.07 Low Jul 8 ‘24 (cont)
The current bear cycle in BTP futures remains in play and last week’s move down reinforces current conditions. The contract has recently breached the 20-day EMA and cleared 118.80, the 76.4% retracement of the Nov 7 - Dec 11 bull cycle. Sights are on 117.40, the Nov 7 low (cont) and a key support. Key resistance and the bull trigger has been defined at 123.34, the Dec 11 high. Initial firm resistance is seen at 119.96, the 20-day EMA.
