USDJPY TECHS: Bearish Outlook
- RES 4: 153.39 3.764 proj of the May 24 - Jul 14 - Aug 2 price swing
- RES 3: 152.30 High Jul 1990
- RES 2: 151.95 High Oct 21
- RES 1: 149.71 High Oct 24
- PRICE: 147.10 @ 15:35 GMT Nov 4
- SUP 1: 145.68/145.11 Low Nov 2 / Low Oct 27
- SUP 2: 144.66 50-day EMA
- SUP 3: 143.53 Low Oct 5
- SUP 4: 141.77 Low Sep 23
USDJPY traded lower into the Friday close, keeping prices within range of the post-Fed low at 145.68. The pair still appears vulnerable and continues to trade below resistance at 149.71. A resumption of weakness would refocus attention on the 50-day EMA at 144.66 - a key support. Clearance of the average would signal scope for a deeper pullback. Momentum studies continue to trend down. For bulls, a break of 149.71 would be a positive development and this would expose the bull trigger at 151.95, Oct 21 high.
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AUDUSD TECHS: Bear Flag Formation
- RES 4: 0.6750 50-day EMA
- RES 3: 0.6671 High Sep 22
- RES 2: 0.6610 20-day EMA
- RES 1: 0.6550 High Sep 26
- PRICE: 0.6491 @ 15:34 BST Oct 5
- SUP 1: 0.6363 Low Sep 28 and the bear trigger
- SUP 2: 0.6337 Low Apr 24 2020
- SUP 3: 0.6283 Low Apr 23 2020
- SUP 4: 0.6255 1.236 proj of the Apr 5 - May 12 - Jun 3 price swing
AUDUSD continues to consolidate and this pause in the downtrend appears to be a bear flag, reinforcing bearish trend conditions. The recent break of support at 0.6682, Jul 14 low and a bear trigger strengthened a bearish case and this maintains the broader downward price sequence of lower lows and lower highs. The focus is on 0.6337 next, the Apr 24 2020 low. Initial firm resistance has been defined at 0.6610, the 20-day EMA.
US: President Biden To Deliver Remarks On Hurricane Ian
President Biden is shortly due to deliver remarks on the federal hurricane relief effort from Fort Meyer, Florida.
- Livestream here: https://www.youtube.com/watch?v=J2Ri0-uob0M
- Ahead of the remarks Biden held a brief meeting with Florida governor Ron DeSantis (R-FL).
- Earlier today, DeSantis accused "regime media" of wanting Hurricane Ian to cause destruction "because they thought that would be worse for Florida."
- Biden and DeSantis have set aside political differences for the week but the period of cooperation is not expected to long, with DeSantis expected to resume his role as the most vocal critic of the Biden administration.
US TSYS: Late Rally Doesn’t Materially Change Sizeable Re-Cheapening
- Cash Tsys see some late unwinding of the day’s cheapening, extending as SPX reversed a nearly 2% intraday drop.
- Moves help more than unwind the additional sell-off after ISM services strength but front end yields are still +5.5bps with solid increases in 2023 Fed rate expectations, especially in 2H23 with terminal at 4.5% and Dec’23 at 4.2%.
- Largest increases are seen in 10YY, currently +11.5bps and with strong increases in real yields seeing a notable retracement of Monday’s rally with breakevens modestly dipping and remaining relatively close to YTD lows.
- TYZ2 trades -29 at 112-19, off lows of 112-08+ that didn’t trouble support at 111-20+ (Sep 21 low).
- Multiple Fed speakers headline tomorrow’s docket including Governors Cook and Waller.
