EM CEEMEA CREDIT: National Bank of Ras Ak-Khaimah: IPT $ AT1

• RES 4: $75.33 - High Feb 20 
• RES 3: $73.88 - High Apr 2 and a bull trigger
• RES 2: $69.73 - 61.8% retracement of the Apr 2 - 9 sell-off 
• RES 1: $65.31/66.30 - 50-day EMA / High May 13
• PRICE: $64.17 @ 07:06 BST Jun 2
• SUP 1: $62.09/57.78 - Low May 30 / Low April 9 and the bear trigger
• SUP 2: $55.88 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 3: $54.70 - 2.382 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 4: $54.00 - Round number support

The medium-term trend condition in Brent futures is unchanged and remains bearish - recent gains still appear to have been a correction. Attention is on $65.31, the 50-day EMA. It has been pierced. A clear break of the EMA would highlight a stronger bull cycle and expose $67.73, a Fibonacci retracement. On the downside, a stronger reversal lower from recent highs would open $57.78, the Apr 9 low.

The April trade surplus narrowed sharply and by a lot more than consensus expected due to a large jump in imports. The merchandise surplus stood at $150mn after $4327mn in March as imports rose 21.8% y/y up from 5.3% while exports rose only 5.8% y/y but still up from 3.2%. This was the worst balance since the Covid-impacted April 2020 deficit. 

• The YTD surplus was higher than the same period last year at $11.07bn compared to $10.13bn. YTD export growth just outpaced imports at +6.7% y/y compared to +6.3% y/y.
• The surge in goods import growth was broad based with capex +36.3% y/y, raw materials +18.9% y/y and consumer goods +18.5% y/y, signalling solid domestic demand.
• Annual export growth was driven by strong shipments of agricultural & fish products +59.8% y/y and manufacturing +13.9%, while mining & other fell sharply 20.7% y/y, as coal fell. The data is nominal and so is also impacted by price changes.
• Non-oil exports to the US sank 20.9% m/m with the annual rate rising 18.4% y/y due to earlier frontloading of shipments to beat tariff deadlines. Indonesia posted at $1.3bn surplus with the US. Exports to China are up 12.9% y/y but down 15% y/y to Japan.
• In terms of services exports, April tourist arrivals rose 9.2% y/y.

• RES 4: 122.70 2.000 proj of the Mar 14 - Apr 4 - 9 price swing
• RES 3: 122.00 Round number resistance
• RES 2: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)
• RES 1: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing        
• PRICE: 121.15 @ Close May 30 
• SUP 1: 120.22 20-day EMA      
• SUP 2: 119.58/00 50-day EMA / Low May 14
• SUP 3: 118.76/09 Low Apr 15 / 14
• SUP 4: 117.28 Low Apr 10

A bull cycle in BTP futures remains intact and last week’s gains reinforce current conditions. Key resistance and the bull trigger at 120.72, the May 8 high, has been cleared. This confirms a resumption of the uptrend and opens 121.43 next, a Fibonacci projection. Key support to watch lies at 119.58, the 50-day EMA. A clear break of the average would signal scope for a deeper retracement. First support lies at 120.22, the 20-day EMA.