EU-RUSSIA: Belgian PM Demands Risk-Sharing On Using Frozen Russian Assets

• RES 4: 92.06 High Aug 14 
• RES 3: 91.45 High Aug 15      
• RES 2: 91.24 High Aug 18 and a key near-term resistance
• RES 1: 90.22/90.84 Low Aug 27 / High Aug 28 / 29 
• PRICE: 89.87 @ 08:37 BST Sep 2
• SUP 1: 89.84 1.00 proj of the Aug 21 - 27 - 28 price swing
• SUP 2: 89.68 Low Jan 15 (cont)
• SUP 3: 89.46 1.382 proj of the Aug 21 - 27 - 28 price swing   
• SUP 4: 89.22 1.618 proj of the Aug 21 - 27 - 28 price swing      

A bear cycle in Gilt futures is in play and a fresh cycle low Monday, and again today, reinforces current conditions. The continuation of the bear leg has resulted in a break of the 90.00 handle. Clearance of this level strengthens the downtrend and maintains the sequence of lower lows and lower highs. Sights are on 89.68, the Jan 15 low (cont). Initial firm resistance is at 90.84, the Aug 28 and 29 high.

Acute move in UK curve will be being carefully watched by the Chancellor and the Treasury this morning - particularly as Chancellor needs to give the OBR 10 weeks notice with which to prepare forecasts (which will incorporate the latest moves in yields).

• 5th November had previously been the most likely date for the Budget, in which case the 10 weeks notice would have to have been given last week, privately.
• As such, we see a November / December Budget looking more probable, with 12th November the earliest potential date (the date could be announced after parliament returns from recess this week).
• Worth noting, however, there is nothing to stop the Budget being later in the year either. For example, in 2020 the Autumn Statement was held on 25 November. Realistically 17th December is the latest possible date.

• RES 4: 1.3753 High High Jul 2   
• RES 3: 1.3681 High Jul 4 
• RES 2: 1.3636 76.4% retracement of the Jul 1 - Aug1 downleg
• RES 1: 1.3550/3595 High Sep 1 / High Aug 14
• PRICE: 1.3439 @ 08:44 BST Sep 2
• SUP 1: 1.3391 Low Aug 22 and the bear trigger  
• SUP 2: 1.3315 61.8% retracement of the Aug 1 - 14 bull leg
• SUP 3: 1.3249 76.4% retracement of the Aug 1 - 14 bull leg 
• SUP 4: 1.3142 Low Aug 1 and a key support      

The outlook in GBPUSD remains bullish and recent gains reinforce this theme. However, today’s sell-off undermines the bull theme and attention turns to key short-term support at 1.3391, the Aug 22 low. A break of this level would signal scope for a deeper retracement and expose 1.3315, a Fibonacci retracement. For bulls, a breach of 1.3595, the Aug 14 high, is required to signal scope for a strong rally.