RENEWABLES: CWE Morning Solar Forecast

• RES 4: $77.85 - 2.794 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $75.65 - 2.500 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $74.25 - High Jun 23 and a bull trigger 
• RES 1: $69.36 - High Jul 30 and key resistance   
• PRICE: $62.28 @ 07:20 BST Aug 20
• SUP 1: $61.29 - Low Aug 13
• SUP 2: $57.71 - Low May 30
• SUP 3: $54.80 - Low May 5
• SUP 4: $54.03 - Low Apr 9 and a key support

WTI futures remain in a clear bear cycle and the contract continues to trade closer to its recent lows. A key support at $61.99, the Jun 30 low, has been breached, strengthening a bearish theme. A continuation lower would open $57.71, the May 30 low. Key short-term resistance has been defined at $69.36, the Jul 30 high. Clearance of this level would cancel a bear theme. Initial resistance to watch is $63.91, the 50-day EMA.

• What will the MPC make of the data? We had already argued following the August meeting that the 4 hawkish dissenters were unlikely to change their vote until December at the earliest.
• The peak unlikely to be changing is likely to be the key for the remaining members so we don't think today's data changes things too much. But Ramsden is very focused on the labour market (which wasn't quite as soft as expected last week) so his vote for November already had a small question mark against it. And given that the surprise today was caused by food price inflation that will factor into the thinking of Bailey and Breeden, who we think are the true swing voters here.
• The market was already only pricing in 7bp for November as of yesterday's close, however, and cumulatively 12bp by December.
• We still think both meetings are in play albeit far from certain. And we will have the Budget before the December meeting, more detail on whether the inflation peak is likely to influence 2026 pay settlements and know the level of the peak of CPI by then too.
• So overall we don't think today's data will realistically push back expectations of cuts substantially.

• 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: $3409.2/3439.0 - High Aug 8 / 23             
• PRICE: $3324.2 @ 07:25 BST Aug 20
• SUP 1: $3268.2 - Low Jul 30 
• SUP 2: $3248.7 - Low Jun 30 and the bear trigger
• SUP 3: $3204.7 - Low May 20
• SUP 4: $3121.0 - Low May 15 and key support 

Despite the latest pullback, a bull cycle in Gold remains intact. Moving average studies are in a bull-mode position. The sideways trend that has been in place since the Apr peak appears to be a corrective phase - a pause in the uptrend. A resumption of gains would open $3439.0, the Aug 23 high. Key resistance and the bull trigger is at $3500.1, the Apr 22 low. On the downside, first support to watch lies at $3268.2, the Jul 30 low.