USDJPY TECHS: Outlook Remains Bearish
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.20 50-day EMA
- RES 2: 151.75 20-day EMA
- RES 1: 150.30 High Feb 25
- PRICE: 149.27 @ 07:01 GMT Feb 27
- SUP 1: 148.57 Low Feb 25
- SUP 2: 148.01 Low Oct 9 ‘24
- SUP 3: 147.68 2.0% 10-dma envelope
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears have paused for breath. The trend needle points south and the pair is trading at its recent lows. Note that support at 148.65, the Dec 3 ‘24 low, has been pierced. A clear break of this level would strengthen the bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 151.75, the 20-day EMA.
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EURJPY TECHS: Bullish Outlook
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 and a key short-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 164.08 High Jan 24
- PRICE: 162.60 @ 06:52 GMT Jan 28
- SUP 1: 160.96/159.73 Low Jan 21 / 17 and key short-term support
- SUP 2: 159.51 61.8% retracement of the Dec 3 - 30 bull cycle
- SUP 3: 158.67 Low Dec 11
- SUP 4: 158.24 76.4% retracement of the Dec 3 - 30 bull cycle
Despite the latest pullback, EURJPY is trading closer to last week’s highs. Recent gains resulted in breach of 162.89, the Jan 15 high. This undermines a recent bearish theme and highlights scope for an extension higher near term, towards key resistance at 164.90, the Dec 30 high. Key short-term support has been defined at 159.73, the Jan 17 low. A reversal lower and a break of this level would reinstate the recent bearish threat.
EUROZONE ISSUANCE: EGB Supply
Austria has announced it will hold a syndication, whilst the Netherlands, Italy, and Germany are all due to hold auctions this week. We pencil in a further syndication from Germany while the EU has held an auction already this week. We look for estimated gross issuance for the week of E42.8bln, down from E57.3bln last week.
- Yesterday, Austria announced a dual-tranche mandate for a new 10-year Feb-25 RAGB maturing 20 February 2035 alongside a tap of the 1.85% May-49 Green RAGB (ISIN: AT0000A2Y8G4). We expect the transaction to take place on Tuesday.
- Both bonds are as expected (see Friday’s EGB Issuance, Redemption and Cash Flow Matrix), with the timing having been uncertain due to the budget. We look for the Feb-35 tranche to be sized between E4.5-5.0bln (including E250-500mln retention) with a tap of E1.0-2.0bln of the 1.85% May-49 Green RAGB.
- Also today, the Netherlands will hold an auction to sell E2.0-2.5bln of the 5-year 2.50% Jan-30 DSL (ISIN: NL0015001DQ7).
- Following this later today, Italy will hold a BTP Short Term and BTPei auction. As we expected, the new 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794) will be launched for E2.75-3.00bln. Alongside this, E1.00-1.25bln of the 1.50% May-29 BTPei (ISIN: IT0005543803) and E1.00-1.25bln of the 1.80% May-36 BTPei (ISIN: IT0005588881) will be on offer.
- Also today, Germany will sell E5bln of the new 2.20% Mar-27 Schatz (ISIN: DE000BU22080).
For more details on issuance this week and next week see the full document here: EZ250128.pdf
