RENEWABLES: CWE Morning Solar Forecast

• RES 4: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
• RES 3: $3500.1 - High Apr 22 and bull trigger
• RES 2: $3451.3 - High Jun 16  
• RES 1: $3402.8 - High Jul 21           
• PRICE: 3385.3 @ 07:25 BST Jul 22 
• SUP 1: $3342.3 - 20-day EMA 
• SUP 2: $3282.8/3248.7 - Low Jul 9 / Low Jun 30 and the bear trigger
• SUP 3: $3204.7 - Low May 20
• SUP 4: $3121.0 - Low May 15 and key support 

A bull cycle in Gold that started Jun 30 remains intact, and Monday’s bullish start to the week marks an extension of the recovery. $3395.1, the Jun 23 high, has been pierced. A continuation would open $3451.3, the Jun 16 high. Note that moving average studies are in a bull-mode position highlighting a dominant uptrend. The bear trigger is $3248.7, the Jun 30 low. An initial firm support to watch is 3282.8, the Jul 9 low.

Yesterday’s notable rally in Bund futures resulted in a move through resistance around the 50-day EMA (131.22 today). A clear break of the EMA would undermine the recent bear theme and highlight a possible reversal. This would open 130.76 initially, the Jul 4 high. Initial support is yesterday’s 129.73 low, which shields key support and the bear trigger at 129.08 (Jul 14 low).

• This morning’s price action has been tilted to the downside, following another contained overnight range. Futures are currently -10 at 130.35.
• A higher-than-expected UK PSNB reading (GBP20.7bln vs GBP17.5bln cons) will have contributed to early pressure, leaving focus on the Gilt open at 0800BST.
• Despite yesterday’s bull flattening across core FI curves, the JGB curve twist steepened overnight, with 2-year yields now down 1bps and 40-year yields up 1.5bps. This was the first opportunity for domestic bond markets to react to Sunday’s Upper House election, following Monday’s public holiday.
• Japan PM Ishiba faces a period of significant political uncertainty following the poor performance of the governing coalition, and today’s twist steepening comes with 40-year supply and BOJ Deputy Governor Uchida scheduled tomorrow, keeping long-end yields underpinned.
• Germany will kick off EGB issuance for the week this morning with a Green auction. On offer will be E500mln of the 2.30% Feb-33 Green Bund alongside E1bln of the 2.50% Feb-35 Green Bund.
• The ECB’s Q2 Bank Lending Survey is due at 0900BST, while French June retail sales are also due today. 

• RES 4: $85.00 - Round number resistance 
• RES 3: $81.99 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $80.72 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
• RES 1: $72.66/79.40 - 50.0% of the Jun 23-30 range / High Jun 23
• PRICE: $69.78 @ 07:09 BST Jul 22
• SUP 1: $65.92 - Low Jun 30 
• SUP 2: $61.39 - Low May 30
• SUP 3: $58.00 - Low May 5
• SUP 4: $57.70 - Low Apr 9 and a key support   

A bearish theme in Brent futures remains present and the July recovery is considered corrective. The sell-off on Jun 23 continues to highlight a bearish threat. Recent weakness has resulted in a print below the 50-day EMA and note too that $66.17, 61.8% of the May 5 - Jun 23 bull leg, has been pierced. A resumption of the bear leg would expose $61.39, the May 30 low. Initial resistance to watch is $72.66, a Fibonacci retracement point.