POLAND: Local Business Sentiment Mixed

• RES 4: $75.81 - High Feb 20 
• RES 3: $74.63 - High Apr 2 and a bull trigger
• RES 2: $68.28 - 61.8% retracement of the Apr 2 - 9 sell-off 
• RES 1: $66.37/81 - 50-day EMA / High May 13           
• PRICE: $66.09 @ 07:12 BST May 21
• SUP 1: $58.00 - Low April 9 and the bear trigger     
• SUP 2: $56.29 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 3: $55.10 - 2.382 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 4: $54.00 - Round number support

Brent futures are trading closer to their recent highs and the contract maintains a S/T bullish theme. However, the medium-term trend condition remains bearish and recent gains appear corrective. Attention is on $66.37, the 50-day EMA. It has been pierced. A clear break of it would highlight a stronger bull cycle and expose $68.28, a Fibonacci retracement. On the downside, a reversal lower would open $58.00, Apr 9 low.

• Overall comparing to the BOE's forecasts. It looks as though Easter effects from air fares, package holidays and sea transportation (and if they estimated the same way as the sellside) VED are the big upside surprises.
• Food also surprised meaningfully to the upside.
• Energy was marginally softer than expected. Water and sewerage were in line with the BOE's estimates (but probably a bit higher than sellside estimates).
• NEIG (core goods) was actually pretty soft (1.08%Y/Y vs BOE's 1.668%Y/Y forecast) with clothing and major household appliances relatively soft.
• Rents were relatively soft too at -0.07ppt.
• Outside of food, the parts that were a concern re employer NICs and minimum wages etc are not actually that high.
• So overall, the upside surprise is a lot less concerning than it originally appears.
• BUT even with all of the one-off components (and VED) the data would still have been uncomfortably high.
• A June cut looks off the table completely here. Quarterly cuts are probably still ok, but August is now more questionable than before this data release.

• RES 4: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)       
• RES 3: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing    
• RES 2: 121.00 High Feb 7 (cont) and a key resistance  
• RES 1: 120.72 High May 8 and the bull trigger               
• PRICE: 120.02 @ Close May 20 
• SUP 1: 119.18/00 50-day EMA / Low May 14       
• SUP 2: 118.76/09 Low Apr 15 / 14       
• SUP 3: 117.28 Low Apr 10 
• SUP 4: 116.06 Low Apr 9    

A bull cycle in BTP futures remains intact. However, near-term, a corrective phase continues to signal potential for a pullback. Key support at 119.21, the 50-day EMA, remains intact. A clear break of it would signal scope for a deeper retracement, and open 118.76 initially, the Apr 15 low. On the upside, a continuation of the latest bounce would refocus attention on key resistance at 120.72, the May 8 high. A break of this hurdle resumes the uptrend.