USDJPY TECHS: Resistance Remains Intact For Now

Just a reminder that the UK's consumer energy "price cap" is due to be published at 7:00GMT. Cornwall Insight expect the annual cost to rise to £1823 from £1738, but this should already be largely baked into the BOE's February MPC forecasts.

• RES 4: 154.80 High Dec 12 ‘24 and a key resistance     
• RES 3: 153.54 50-day EMA 
• RES 2: 152.34 20-day EMA 
• RES 1: 150.74 High Feb 21         
• PRICE: 149.79 @ 06:54 GMT Feb 25
• SUP 1: 148.85 Low Feb 24
• SUP 2: 148.65 Low Dec 3 ‘24 and a key support 
• SUP 3: 148.01 Low Oct 9 ‘24
• SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg  

USDJPY bears remain in the driver’s seat and the pair is trading just above its recent lows. Recent weakness has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.34, the 20-day EMA.

Spain has announced a mandate for a syndication, while Italy and Germany are both due to hold auctions this week, and the EU and Belgium already held auctions. We look for estimated gross issuance for the week of E32.0bln, down from E43.8bln last week.

For the full document including more details on issuance this week and next week click here.

• Spain is likely to hold a syndication today after it announced a mandate for a new 15-year Obli maturing 31 January 2041 to take place in the “near future”. We pencil in a wide E5-10bln range for the transaction. The lower end of the range in line with previous issues, the upper end more consistent with the large syndications we have seen both in Spain more recently and in EGBs more generally this year.
  • The syndication was in line with our expectations as we wrote in our EGB Issuance, Redemption and Cash Flow Matrix that we looked for a Spanish syndication this week with either a long 15-year (2041) or 20-year maturity.
• This morning, Italy will hold a BTP Short Term and BTPei auction. On offer will be E2.50-2.75bln of the 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794) - in line with our expectations - and E1.25-1.50bln of the 1.80% May-36 BTPei (ISIN: IT0005588881).
• Also today, Germany will hold a Green auction selling E1.5bln of the 1.80% Aug-53 Green Bund (ISIN: DE0001030757).
• Tomorrow, Germany will return to the market to hold a 15-year Bund auction. On offer will be E500mln of the 0% May-36 Bund (ISIN: DE0001102549) alongside E1.5bln of the 1.00% May-38 Bund (ISIN: DE0001102598).
• Finally on Thursday, Italy will return to the market to hold a 5/10-year BTP and CCTeu auction. On offer will be E3.25-3.75bln of the new 5-year 2.95% Jul-30 BTP (ISIN: IT0005637399), E2.5-3.0bln of the 10-year 3.65% Aug-35 BTP (ISIN: IT0005631590) and E2.5-2.75bln of the 1.10% Apr-33 CCTeu (ISIN: IT0005620460).
  • The launch of the new 5-year BTP and the 10-year on offer are both in-line with our expectations.