WTI TECHS: (M5) Bear Threat Remains Present
- RES 4: $75.51 - High Jan 15 and a key resistance
- RES 3: $72.56 - High Feb 20
- RES 2: $71.76 - High Apr 2 and key resistance
- RES 1: $61.26/64.12 - 20- and 50-day EMA values
- PRICE: $59.87 @ 07:12 BST May 7
- SUP 1: $54.67 - Low April 9 and the bear trigger
- SUP 2: $53.72 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 3: $52.54 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $50.00 - Psychological round number
A medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a Fibonacci projection. Key resistance to watch is $64.12, the 50-day EMA.
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USD: The CHF and Yen lead the early gains in G10
- The Swiss Franc and the Yen are the best performer into the European session, a continuation of late and from the Overnight session, as they act as safer Haven Currencies give the huge Risk Off Tone.
- While the USDJPY fell all the way to print a 144.82 low overnight, it has since recovered some 70 pips, but still trades in a wide 230 pips.
- USDCHF is down 1.27% and is eyeing a test to 0.8477, Friday's low.
BTP TECHS: (M5) Bull Cycle Remains Intact
- RES 4: 120.39 High Feb 28 and a key resistance
- RES 3: 120.12 High High Mar 4
- RES 2: 119.31 Low Mar 4 and a gap high on the daily chart
- RES 1: 119.07 High Apr 4
- PRICE: 118.21 @ 07:12 BST Apr 7
- SUP 1: 117.73 20-day EMA
- SUP 2: 116.89 Low Mar 25 and a key short-term support
- SUP 3: 116.15 Low Mar 17
- SUP 4: 115.75 Low Mar 14
BTP futures maintain a firmer short-term tone. A continuation of the bull phase signals scope for an extension towards 119.31, the Mar 4 low and gap high on the daily chart. A breach of this level would open 120.39, the Feb 28 high and a key resistance. On the downside, initial firm support to watch is 117.73 the 20-day EMA. A break of this average would highlight a potential reversal.
CHINA: County Wraps: Chances of Stimulus Increase.
- The likelihood of China stimulus now coming sooner than later appear to be increasing as policymakers met over the weekend to discuss measures to stabilize the economy (source BBG).
- China’s People Daily now sees RRR cuts as likely to be announced sooner than expected and interest rates cut whilst China Central TV says China will fight resolutely against the US bullying (source BBG).
- China's end of March FX reserves were $3.240 trillion, versus $3.227tn as for February according to the PBOC release today. Forex reserves rose to $13.4bn. Gold reserves jumped to $229.5bn as the PBOC's buying program resumes and is the fifth successive month that they have risen. (source: MNI – Market News)
- China's Hang Seng lead the way today falling by -11.3% having been closed on Friday. The CSI 300 followed suit falling by -6.8% , with Shanghai down -6.8% and Shenzhen down -9.5%.
- CNY: Yuan Reference Rate at 7.1980 Per USD; Estimate 7.3122
- China’s 10YR dropped by 9bps to 1.63%, its largest drop in some time as equity markets fell.
