COMMODITIES: Crude Extends Gains Amid Mounting Geopolitical Tensions
- Crude has extended gains after US administration rhetoric late in the day raised the prospects of US direct involvement in the Iran-Israel conflict.
- WTI Jul 25 is up by 4.9% at $76.8/bbl, taking gains over the last week to over 15%.
- Several military analysts and reporters have interpreted VP JD Vance's recent social media post as laying the groundwork for President Trump to authorise the use of 'bunker buster' bombs to strike Iran's Fordow nuclear facility.
- The sharp rally in WTI futures marks an acceleration of the current bull phase. Price action is likely to remain volatile near-term, and from a technical standpoint, the trend is currently in an extreme overbought position.
- A continuation higher would expose the $80.00 handle, followed by $81.93, a Fibonacci projection.
- Meanwhile, spot gold is little changed at $3,383/oz.
- A bullish theme in gold remains intact, with initial resistance at $3,451.3, the Jun 16 high. Initial key support to monitor is $3,271.7, the 50-day EMA.
- By contrast, silver has rallied by 2.0% today to $37.0/oz, taking the precious metal to a new multi-year high. As a result, the gold-silver cross has fallen to 91.4, close to recent 2-month lows.
- A bull wave in silver remains in play, with sights on $37.195 next, a Fibonacci projection, which was pierced earlier. A clear break would open $37.478, the March 2012 high.
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EURJPY TECHS: Monitoring Support At The 50-Day EMA
- RES 4: 167.40 61.8% retracement of the Jul 11 - Aug ‘24 sell-off
- RES 3: 166.69 High Oct 31 2024 and a key resistance
- RES 2: 166.10 High Nov 6
- RES 1: 165.21/43 High May 13 / High Nov 8 2024
- PRICE: 162.66 @ 19:43 GMT May 16
- SUP 1: 162.21 50-day EMA
- SUP 2: 161.60 Low May 6
- SUP 3: 160.99 Low Apr 22
- SUP 4: 159.48 Low Apr 9
EURJPY has pulled back from its recent high. The move down is for now, considered corrective. The latest bullish extension paves the way for a climb towards 165.43, the Nov 8 ‘24 high. Moving average studies are in a bull mode position, highlighting a dominant uptrend. Support to watch is 162.21, the 50-day EMA. A break of this level is required to signal a possible reversal. This would open 161.60 initially, the May 6 low.
USDJPY TECHS: Testing Support At The 20-Day EMA
- RES 4: 151.21 High Mar 28 and a key resistance
- RES 3: 150.49 High Apr 2
- RES 2: 149.28 High Apr 3
- RES 1: 148.54/65 76.4% of Mar 28 - Apr 22 bear leg / High May 12
- PRICE: 145.90 @ 19:39 BST May 16
- SUP 1: 144.92 Intraday low
- SUP 2: 142.36 Low May 6
- SUP 3: 141.97 Low Apr 29
- SUP 4: 139.89 Low Apr 22 and a bear trigger
USDJPY has remained below the May 12 high and the pair traded lower, Friday. The latest pullback underpins the view that gains since Apr 22 appear corrective. A stronger reversal lower would refocus attention on 142.36, the May 6 low. First support to watch is 145.16, the 20-day EMA. It has been pierced, a clear break would strengthen a bearish theme. On the upside, key short-term resistance has been defined at 148.65, the May 12 high.
EURGBP TECHS: Bear Cycle Remains In Play
- RES 4: 0.8768 High Nov 20 ‘23
- RES 3: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger
- RES 2: 0.8541/8557 High May 2 / High Apr 28
- RES 1: 0.8461 50-day EMA
- PRICE: 0.8399 @ 19:30 BST May 16
- SUP 1: 0.8394 Low May 16
- SUP 2: 0.8359 1.236 proj of the Apr 11 - 16 - 21 price swing
- SUP 3: 0.8316 Low Mar 28 and a key support
- SUP 4: 0.8277 1.618 proj of the Apr 11 - 16 - 21 price swing
A bearish theme is EURGBP remains in play - for now. The cross has recently cleared 0.8461, the 50-day EMA, signalling scope for a continuation lower near-term. Friday’s fresh cycle low strengthens the bearish theme. The 0.8400 handle has been pierced, a continuation lower would open 0.8359, a Fibonacci projection. Key near-term resistance to watch is 0.8541, the May 2 high. A break of this hurdle is required to signal a potential reversal.
