BRENT TECHS: (J6) Corrective Phase Still In Play

• RES 4: $4600.00 - Round number resistance
• RES 3: $4578.3 - 1.618 proj of the Oct 28 - Nov 13 - Nov 18 swing
• RES 2: $4549.9 - High Dec 26 and the bull trigger 
• RES 1: $4474.2 - Intraday high                     
• PRICE: $4468.3 @ 07:15 GMT Jan 6 
• SUP 1: $4274.7 - Low Dec 31 
• SUP 2: $4204.5 - 50-day EMA 
• SUP 3: $4109.7 - Low Nov 25 
• SUP 4: $3998.1 - Low Nov 18

The trend structure in Gold is unchanged, it remains bullish and a sharp sell-off late December appears corrective - for now. The trend is overbought and a deeper retracement would allow this condition to unwind. First support at $4336.9, the 20-day EMA, has been pierced. A clear break of the average would expose the 50-day EMA at $4204.5. For bulls, a resumption of gains would open $4578.3, a Fibonacci projection.

• RES 4: $70.06 - High Jul 30 
• RES 3: $68.58 - High Sep 26 
• RES 2: $64.81 - High Oct 24 and a key resistance 
• RES 1: $62.05 - 50-day EMA 
• PRICE: $61.62 @ 06:54 GMT Jan 6 
• SUP 1: $58.53 - Low Dec 16   
• SUP 2: $58.27 - Low Apr 9 and a key support
• SUP 3: $57.87 - 1.764 proj of the Jul 30 - Aug 13 - Sep 26 price swing
• SUP 4: $56.44 - 2.000 proj of the Jul 30 - Aug 13 - Sep 26 price swing 

The trend condition in Brent futures remains bearish and the latest strong recovery is considered corrective. Note that moving average studies remain in a bear-mode condition, highlighting a dominant downtrend. A resumption of the bear cycle would open $58.27, the Apr 9 low. On the upside, key short-term resistance to watch is $64.81, the Oct 24 high. First resistance is $62.05, the 50-day EMA. 

France will kick off the main week for the Eurozone December flash inflation release today at 07:45 GMT / 08:45 CET, following Spain, Belgium and Portugal data from last week. Consensus for HICP currently sits at 0.7% Y/Y, down from 0.79% seen in November vs the initially reported 0.83%. 

Analyst views:

• Goldman Sachs see France 0.7% headline; “core inflation to tick up to 1.3%yoy, reflecting broadly sideways services but higher goods inflation on a year-over-year basis. We expect a 20%mom nsa increase in airfares, a -5%mom nsa drop for package holidays, and broadly stable accommodation services. We see both garments and footwear stronger in sequential terms compared to last December. Outside of core, we look for energy inflation to fall to -6.0%yoy from -4.4% in November, processed food inflation to stay at 1.6%yoy and unprocessed food inflation stay unchanged at 1.3% as well.”
• Morgan Stanley see 0.8% headline as energy disinflation from lower pump prices offsets a modest rebound in services after weak airfares and accommodation in November.

The December flash PMI noted:

• “The latest survey data signalled an easing of cost pressures across France’s private sector economy. The rate of input price inflation eased on the month and was well below its long-term trend."
• "On the other hand, prices charged were virtually unchanged once again as strong competition for work reportedly restricted company pricing power. This was despite a renewed increase in factory gate charges, which rose at the quickest pace in 16 months.”

Bank of France December macroeconomic projections:

• Headline and core inflation seen at 1.2% and 1.4% in 2026 respectively, when factoring in government bills passed after the official projection deadline.
• “In 2027, headline inflation and inflation excluding energy and food are expected to remain unchanged at 1.3% and 1.6%, respectively. Inflation excluding energy and food should reflect private services prices, pushed up by growth in nominal wages. These projections also take account of the postponement until early 2028 of the introduction of EU ETS-2, leading to a downward revision of headline inflation for that year.”
• “The uncertainties surrounding inflation stem in particular from import prices (raw materials, exchange rates, increase in Chinese imports, etc.) in an uncertain international context.”