BRENT TECHS: (K5) Bear Cycle Intact
- RES 4: $79.98 - High Jan 15 and a reversal trigger
- RES 3: $76.78 - High Feb 11 and a bull trigger
- RES 2: $74.36 - 50-day EMA and a pivot resistance
- RES 1: $71.92 Low Feb 26
- PRICE: $71.08 @ 07:02 GMT Mar 5
- SUP 1: $69.59 - Low Oct 29 ‘24 and a key support
- SUP 2: $69.41 - Low Oct 1 ‘24
- SUP 3: $67.87 - Low Sep 9 ‘24 and a key medium-term support
- SUP 4: $66.36 1.618 proj of the Jan 15 - Feb 4 - 11 price swing
Brent futures remain in a clear downtrend and this week’s bearish price action reinforces current conditions. The sharp sell-off has resulted in a breach of a number of support points and price has delivered a print below the $70.00 handle. The move down maintains the bear price sequence of lower lows and lower highs. The focus is on $69.59, the Oct 29 ‘24 low. On the upside, initial firm resistance is seen at $74.36, the 50-day EMA.
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EURGBP TECHS: Bear Threat Remains Present
- RES 4: 0.8474 High Jan 20 and a key resistance
- RES 3: 0.8421 High Jan 27
- RES 2: 0.8381 20-day EMA
- RES 1: 0.8363 Intraday high
- PRICE: 0.8335 @ 07:09 GMT Feb 3
- SUP 1: 0.8325 Intraday low
- SUP 2: 0.8223 Low Dec 19 and a key support
- SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
- SUP 4: 0.8000 Round number support
EURGBP is trading in a volatile manner. The bear cycle that started Jan 20 remains in play and today’s price activity has strengthened - for now - a bearish threat. A resumption of weakness would pave the way for a move towards the first key support at 0.8223, the Dec 19 low. On the upside, the 20-day EMA is seen as a key short-term resistance - at 0.8381. A breach of the EMA would highlight a bullish development.
EGBS: Bunds Outperform On Tariff Worry
Bunds rallied on growth worries after U.S. President Trump levied fresh tariffs on China, Canada & Mexico and pointed towards action against the EU.
- China has pledged corresponding action and a challenge at the WTO.
- Initial cross-market reaction to the tariffs has eased a little since a WSJ report pointed to “a sign that China is eager to get trade talks going.”
- Bund futures traded as high as 133.26 overnight, last +35 at 132.87.
- The contract is through resistance at 132.22 and has cleared the 20- and 50-day EMAs.
- The break higher confirms a resumption of the corrective bull cycle that started January 14.
- Bulls now target the January 3 high (133.48).
- Moves in futures point to BTP & OAT widening vs. Bunds at the cash open.
- Eurozone CPI and manufacturing PMIs (final PMIs for the Eurozone, Germany & France) are due this morning.
- The U.S. ISM manufacturing survey and Fedspeak could also provide some impetus.
- ECBspeak will come from Simkus.
- No EGB supply due today, although we remain on the lookout for syndications from Germany, Italy and Belgium (see previous bullet for greater details).
- Fallout from the U.S. tariffs will also be eyed, particularly with EU leaders meeting in Brussels.
- Finally, French PM Bayrou is set to use special constitutional powers as he looks to force through the ‘25 budget. This is set to trigger a no-confidence vote on Wednesday. Bayrou will hope his recent concessions to the socialist party prevent them from voting against him.
MNI: TURKEY JAN CPI +5.03% M/M
- MNI: TURKEY JAN CPI +5.03% M/M
