EURGBP TECHS: Bullish Trend Sequence

OAT futures briefly take another leg lower as comments from Socialist Leader Faure get more widespread attention.

• The contract reached a session low of 121.00, matching last Wednesday's low, before recovering to 121.12 at typing (-43 ticks today).
• A reminder that Lecornu will provide an address to the National Assembly tomorrow, which risks a censure vote.

Ongoing/heightened domestic & political risks stemming from the lack of clear avenues to resolve the French Budget situation pressure OATs this morning, OAT/Bund spread ~3.5bp wider at 84.5bp, on track for the highest close since January 13 (84.8bp the target there).

• PM Lecornu has stressed that he will not use article 49.3, while seemingly looking to implement extra taxes on super high earners),
• Fresh headlines from French Socialist leader Faure note that he doesn't see how the party could not vote against the government in a confidence vote, add further widening pressure.
• Against this backdrop Commerzbank note that “Lecornu's efforts to find consensus on a 2026 budget remain an uphill struggle ahead of tomorrow's key address, with latest headlines suggesting a wealth-tax and additional income tax on the wealthy to win support from left-leaning lawmakers. The clock is ticking though as Lecornu has to present a budget to parliament by 13 October. With rising odds for no agreement and rating risks looming over coming weeks, we would stay away from OAT risk for now”.

• RES 4: $76.89 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $74.79- 2.500 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $73.39 - High Jun 23 and a bull trigger 
• RES 1: $66.42/68.43 - High Sep 29 and key resistance / High Jul 30   
• PRICE: $61.56 @ 07:21 BST Oct 6
• SUP 1: $60.40 - Low Oct 2 
• SUP 2: $57.50 - Low May 30
• SUP 3: $54.89 - Low May 5
• SUP 4: $54.10 - Low Apr 9 and a key support

WTI futures remain in a bear-mode condition. Last week’s sell-off resulted in a move through key support and the bear trigger at $60.85, the Aug 13 low. Clearance of this level strengthens a bearish theme and paves the way for an extension towards $57.50, the May 30 low. Initial firm resistance has been defined at $66.42, the Sep 29 high. Clearance of this level would highlight a reversal.