EURIBOR OPTIONS: Call spread

WTI futures remain above last week’s low and the recent bear leg appears to be a correction. Recent cycle highs have reinforced bullish conditions, signalling scope for a continuation of the bull cycle near-term. Moving average studies are in a bull-mode set-up too, highlighting a rising trend. Sights are on $85.27, the Apr 12 high and a bull trigger. Initial firm support to watch is $80.07, the 50-day EMA. The trend condition in Gold remains bullish and recent gains reinforce this condition. The yellow metal last week breached $2387.8, the Jun 7 high. This undermineD a recent bearish theme and a clear break represents a bullish development that opens the key resistance at $2450.1, the May 20 high. Initial firm support to watch lies at the 50-day EMA, at 2339.3. A clear break of this average would alter the picture and expose $2277.4, May 3 low.

• WTI Crude down $0.72 or -0.88% at $81.18
• Natural Gas up $0.01 or +0.42% at $2.167
• Gold spot up $13.64 or +0.56% at $2436.01
• Copper down $3.3 or -0.73% at $449.2
• Silver up $0.08 or +0.27% at $30.7537
• Platinum down $6.81 or -0.68% at $991.58

A bull cycle in Eurostoxx 50 futures remains intact despite Monday’s move lower - a correction. 5039.84, 61.8% of the May 16 - Jun 14 sell-off, has been cleared. This resulted in a print above 5082.32, the 76.4% retracement. A clear break of it would be a positive development and suggest scope for an extension towards 5132.00, the Jun 6 high. The 50-day EMA has been pierced, the next support is at 4903.00, the Jul 2 low. The trend condition in S&P E-Minis is bullish and the contract is holding on to its recent gains. The continuation higher last week confirms a resumption of the uptrend and maintains the bullish sequence of higher highs and higher lows. Moving average studies are in a clear bull-mode set-up too and this continues to highlight positive market sentiment. Sights are on the 5713.31, a Fibonacci projection. Firm support is at 5569.65, the 20-day EMA.

• Japan's NIKKEI closed higher by 84.4 pts or +0.2% at 41275.08 and the TOPIX ended 9.94 pts higher or +0.34% at 2904.5.
• Elsewhere, in China the SHANGHAI closed higher by 2.293 pts or +0.08% at 2976.304 and the HANG SENG ended 287.96 pts lower or -1.6% at 17727.98.
• Across Europe, Germany's DAX trades lower by 100.18 pts or -0.54% at 18491.57, FTSE 100 lower by 32.69 pts or -0.4% at 8150.23, CAC 40 down 48.97 pts or -0.64% at 7583.46 and Euro Stoxx 50 down 34.08 pts or -0.68% at 4949.43.
• Dow Jones mini down 11 pts or -0.03% at 40499, S&P 500 mini down 3 pts or -0.05% at 5680, NASDAQ mini down 9.5 pts or -0.05% at 20575.25.

WTI crude futures have traded lower this morning, with our commodities team flagging concerns surrounding Chinese demand and a stronger USD as the main drivers for today’s pullback.

• Lows of $81.06 seen so far, with initial support coming in at the 50-day EMA ($80.07).
• Zooming out, our technical analyst notes that the contract remains above last week’s low ($80.81) and the recent bear leg appears to be a correction.