GBPUSD TECHS: Has Cleared Support
- RES 4: 1.3527 High Oct 1
- RES 3: 1.3471 High Oct 17 and a key short-term resistance
- RES 2: 1.3403 50-day EMA
- RES 1: 1.3249/3340 Low Oct 14 / 20-day EMA
- PRICE: 1.3152 @ 06:21 GMT Oct 31
- SUP 1: 1.3117 Low Oct 30
- SUP 2: 1.3041 Low Apr 14
- SUP 3: 1.2971 1.382 proj of the Sep 17 - 25 - Oct 1 price swing
- SUP 4: 1.2945 50.0% retracement of the Jan 13 - Jul 1 bull leg
A bear cycle in GBPUSD remains intact and this week’s bearish price action strengthens current conditions. The pair has breached 1.3249, the Oct 14 low and a bear trigger. The break confirms a resumption of the downtrend that started Sep 17. Note too that key support at 1.3142, the Aug 1 low, has also been breached. A clear break of this level strengthens a bearish theme. Initial firm resistance is 1.3340, the 20-day EMA.
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BRENT TECHS: (Z5) Bearish Threat
- RES 4: $78.63 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $76.82 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $75.43 - High Jun 23 and a bull trigger
- RES 1: $69.87/71.20 - High Sep 26 / High Jul 30 and key resistance
- PRICE: $66.12 @ 07:09 BST Oct 1
- SUP 1: $64.20 - Low Jun 30 and a key short-term support
- SUP 2: $58.50 - Low May 5
- SUP 4: $57.88 - Low Apr 9 and a key support
Brent futures traded higher last week, however, the contract has pulled back from its recent peak. A resumption of gains would suggest scope for a continuation of a bullish corrective cycle and expose key resistance at $71.93, the Jul 30 high. The medium-term outlook remains bearish and sights are on key support and the bear trigger at $64.50, the Jun 30 low. Clearance of this level would strengthen a bearish theme.
BUNDS: US Governemnt is in Shutdown
- Bund is steady with {us} US Treasuries going into the European session as the US Government shuts down, and as expected Month End provided no afternoon bids Yesterday, since these were small to a non event for the EU, US, and UK.
- Given the US Debacle, now there will be plenty of Questions regarding exact timing on future Data releases, but for right now, Today's Data is at the forefront.
- For the German Bund, the Technicals are unchanged, support is still at the 128.26 gap initially. Below the latter, opens to 127.88 and 127.61.
- Resistance is still eyed at 128.82 and more importantly that 129.13 gap.
- Today's Manufacturing PMIs will be final readings for France, Germany, EU, UK and US and wouldn't expect too much of a big market movers, EU Prelim CPI is also due. But the main focus is now clearly on the US ADP and ISM Mfg Data.
- SUPPLY: UK £1.6bn 10yr Linker (won't impact Gilt), Germany €5bn Bund 10yr (equates to 42.2k Bund) should weigh into the contract into the bidding deadline.
- SPEAKERS: It's another busy day for Speakers, but since CB's message is clearly on Data dependency, don't expect too much of a new rhetoric.
- Today includes, ECB Kazimir, Kocher, Simkus, Guindos, BoE Mann, Fed Barkin, Goolsbee.
EUROPEAN INFLATION: Portugal HICP Decreases In September
Portugal HICP decreased to 1.9% Y/Y in September according to the Statistics Portugal flash release, out yesterday (2.5% August).
- The national-level CPI (non-HICP) decelerated to 2.39% (2.76% August), meanwhile.
- The slowdown was driven by the 'core' measure (CPI excl. unprocessed food and energy), which came in at 1.96% Y/Y (2.44% August).
- Energy CPI accelerated, meanwhile, to 0.33% Y/Y (-0.18% August). A higher Y/Y rate in the category is also expected for the Eurozone-wide print scheduled for release later today. The energy M/M reading was 0.31% in Portugal this time.
- Food saw relatively little change this time, with unprocessed food unchanged at 6.99% and processed food at 1.03% (0.81% prior).
- For reference, Portugal contributes 2.6% to the overall Eurozone HICP 2025 basket.
