BUNDS: French PM Announcement and US Michigan are the Focus Today
* A small gap higher for Bund on the Overnight Open, the contract is underpinned into the Cash Ope...
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BRENT TECHS: (X5) Bear Threat Still Present
- RES 4: $79.16 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $77.28 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $76.39 - High Jun 23 and a bull trigger
- RES 1: $69.53/71.93 - High Sep 2 / High Jul 30 and a key resistance
- PRICE: $66.98 @ 07:10 BST Sep 10
- SUP 1: $64.50 - Low Jun 30 and a key short-term support
- SUP 2: $60.82 - Low May 30
- SUP 3: $58.37 - Low May 5
- SUP 4: $57.81 - Low Apr 9 and a key support
Recent short-term gains in Brent futures are for now, considered corrective and a bear cycle remains intact. A resumption of weakness would refocus attention on $64.50, the Jun 30 low, where a clear break would confirm a continuation of the bear leg. This would open $60.82, the May 30 low. Key short-term resistance has been defined at $71.93, the Jul 30 high. Clearance of this level would cancel a bear theme.
EGBS: Bulls In Control In Bunds, Supply & French Matters Eyed
An early blip higher in Bunds fades through the old futures open.
- Futures trade as high as 129.22 before fading back to 129.10, then stabilising.
- Bulls remain in technical control at this stage.
- Initial resistance located at the September 8 high (129.33), which protects key resistance at the August 5 high (129.50).
- Conversely, initial support comes in at the 20-day EMA (128.58)
- French political and fiscal matters continue to garner plenty of attention after President Macron appointed ally Lecornu as the new PM. While immediate uncertainty has reduced, structural political headwinds remain intact. Meanwhile, public demonstrations threaten to severely restrict France’s travel network today.
- In wider geopolitics, Israel has received criticism from both the U.S. & Germany after striking Hamas leaders in Doha on Tuesday.
- Little of note on the European macro calendar today, leaving focus on cross-market matters and set up ahead of tomorrow’s ECB decision.
- Our full ECB preview is here.
- On the supply front, Germany will come to market with EUR2.5bln of 15-Year paper (EUR1.0bln Jul-40 & EUR1.5bln May-41), Portugal will sell EUR1.0-1.25 across the Jun-35 and Apr-42 lines and Luxembourg will likely hold a syndication for a new 10-Year line.
- Also note that Eurex’s EU bond future launches today.
EURJPY TECHS: MA Studies Highlight A Dominant Uptrend
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 173.97 High Jul 28 and the bull trigger
- PRICE: 172.63 @ 07:17 BST Sep 10
- SUP 1: 171.20 50-day EMA
- SUP 2: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
- SUP 3: 168.46 Low Jul 1
- SUP 4: 167.46 Low Jun 23
The trend set-up in EURJPY is unchanged, it remains bullish and sights are on key resistance and the bull trigger at 173.97, the Jul 28 high. Clearance of this level would confirm a continuation of the bull phase. Note that moving average studies are in a bull-mode position too, highlighting a primary uptrend. A break of 173.97 would open 174.86, a Fibonacci projection. Key support to watch lies at the 50-day EMA at 171.20.
