OIL: Crude Under Pressure Ahead of Expected OPEC+ Hike

• RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1608 High Nov 9 2021
• RES 2: 1.1573 High Apr 21 and the bull trigger
• RES 1: 1.1455 High Jun 03
• PRICE: 1.1424 @ 16:20 BST Jun 4
• SUP 1: 1.1313 20-day EMA
• SUP 2: 1.1190/1.1065 50-day EMA and a pivot level / Low May 12
• SUP 3: 1.1026 38.2% retracement of the Feb 3 - Apr 21 bull cycle
• SUP 4: 1.0943 Low Apr 10

A bullish theme in EURUSD remains intact despite yesterday’s pullback. The recent breach of  1.1419, the May 26 high, confirms a resumption of the trend and opens 1.1573, the Apr 21 high and bull trigger. Moving average studies remain in a bull-mode position, highlighting a clear uptrend. Support to watch lies at 1.1190, the 50-day EMA. A clear break of this average would undermine the bull theme and signal scope for a deeper retracement.    

Wednesday's Europe rates/bond options flow included:

• ERM5 98.00c, sold at 2.5 in 4k.
• ERU5 98.12/98.00ps 1x2, sold the 1 at 2.75 in 5k (downside unwind).
• ERU5 98.375/98.50 1x2 call spread paper pays 0.375 synthetic on 10K.
• 0RM5 98.25p, bought for 3.7 in 5k.

• Weaker-than-expected ADP employment data in the US set a negative tone for the US dollar on Wednesday, sentiment that was exacerbated by a soft ISM services print. With an associated move lower for US yields, notorious safe havens such as JPY and CHF are outperforming on Tuesday.
• USDJPY sits 0.85% lower on the session, having had a punchy 165 pip turnaround from the overnight highs. A bear cycle for the pair remains in play and sights remain on the next important support at 142.12, the May 27 low. Clearance of this level would confirm a resumption of the bear leg and open 139.89, the Apr 22 low. In similar vein, USDCHF (-0.76%) has gravitated back below the 0.82 handle, although spot remains just shy of the week’s lows at 0.8157.
• A moderately hawkish lean to the BOC decision is providing an additional tailwind for the Canadian dollar, with communications keeping the door open to a cut but not emphatically (Macklem's opening statement: "We also discussed the path ahead for the policy interest rate. Here, there was more diversity of views.”)
• USDCAD reaches fresh cycle lows below 1.3675, keeping bearish technical conditions firmly intact for the pair. Sights are on 1.3643 next, the Oct 9 low/Sep high. Below here, attention will be on 1.3579, the 1.5 Fibonacci projection of the Feb 3 - 14 - Mar 4 price swing, before the September lows at 1.3420 will garner attention.
• EURUSD regained the 1.14 handle amid the broad dollar weakness, but remains below the week’s best levels ahead of the ECB meeting on Thursday, where a 25bp rate cut is widely expected and forecast revisions will be of particular interest. Attention will then swiftly turn to Friday’s release of US employment data.