RENEWABLES: CWE Morning Solar Forecast

• RES 4: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)       
• RES 3: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing    
• RES 2: 121.00 High Feb 7 (cont) and a key resistance  
• RES 1: 120.72 High May 8 and the bull trigger               
• PRICE: 120.02 @ Close May 20 
• SUP 1: 119.18/00 50-day EMA / Low May 14       
• SUP 2: 118.76/09 Low Apr 15 / 14       
• SUP 3: 117.28 Low Apr 10 
• SUP 4: 116.06 Low Apr 9    

A bull cycle in BTP futures remains intact. However, near-term, a corrective phase continues to signal potential for a pullback. Key support at 119.21, the 50-day EMA, remains intact. A clear break of it would signal scope for a deeper retracement, and open 118.76 initially, the Apr 15 low. On the upside, a continuation of the latest bounce would refocus attention on key resistance at 120.72, the May 8 high. A break of this hurdle resumes the uptrend.

• It looks as though VED (road tax) is also a much bigger contributor here than expected - "OTHER SERVICES IN RESPECT OF PERSONAL TRANSPORT EQUIPMENT" contributed 0.23ppt to headline CPI. That's not the "fuels and lubricants" part. And again - around 0.45ppt to services CPI.
• That category rose 19.8%Y/Y - most of the sellside expectations we had seen had been for it to rise less than 10%Y/Y.
• That will largely remain in the Y/Y numbers for the entire year ahead, but will be looked through by the BOE to some extent as it's set by the government and not by supply/demand conditions.

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 148.54/65 76.4% of Mar 28 - Apr 22 bear leg / High May 12
• RES 1: 146.16 50-day EMA 
• PRICE: 143.76 @ 07:09 BST May 21
• SUP 1: 143.45 Low May 8      
• SUP 2: 142.36 Low May 6 
• SUP 3: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg  
• SUP 4: 139.89 Low Apr 22 and a bear trigger

USDJPY is trading lower today extending the reversal that started May 12. The pullback signals the end of the corrective cycle since Apr 22 and marks a resumption of the downtrend. A continuation lower would expose 142.36, the May 6 low. Note that the 20-day EMA, at 145.11, has been cleared, strengthening a bearish theme. Key short-term resistance has been defined at 148.65, the May 12 high. Initial firm resistance is 146.16, 50-day EMA.