OUTLOOK: Price Signal Summary - Bull Cycle In Oil Futures Remains Intact
Jun-19 10:49
- On the commodity front, a bullish theme in Gold remains intact and short-term weakness is considered corrective. Medium-term trend signals are bullish too - moving average studies are in a bull-mode position, highlighting a dominant uptrend. Resistance at $3435.6, the May 7 high, has been pierced. A clear break of this level would strengthen the uptrend and open $3500.1, the Apr 22 all-time high. Initial key support to monitor is $3275.5, the 50-day EMA. The 20-day EMA is at $3347.1.
- In the oil space, WTI futures traded sharply higher last week and last Friday’s early rally marked an acceleration of the current bull phase. Price action is likely to remain volatile near-term, and from a technical standpoint, the trend is in an extreme overbought position. A continuation higher would expose the $80.00 handle. A firm support is noted $67.11, the Jun 13 low. A breach of this level would signal scope for a deeper retracement.
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GBP: GBP/USD Still Struggling Above 1.34 Pre-CPI
May-20 10:47
The GBP trend condition is undoubtedly positive, with the pick-up in the S/T upside trend for spot evident in the growing premium of the 50-dma over the 200-dma - which now sits at its widest since October last year. This keeps the $1.3400 handle in focus, a level that markets have had difficulty in sustaining a move above on several occasions this year, as well as in 2019, 2020 and 2024. The keeps focus on the bearish tweezer candle formation printed on April 28/29, which could mark a near-term top.
- Overnight GBP vols have ticked higher ahead of the print, and now clear 10 vol points against the USD and 7 points against the EUR - although outright implied remains well below recent tariff-tripped highs. We see EUR/GBP vols as a cleaner read, which post a near 3 point vol premium into the CPI print - the largest pre-UK CPI premium of the year so far.
- As a result, a downside surprise for CPI tomorrow could see a correction lower of decent size, particularly as the market maintains a net long GBP position which, while off the year's best levels, still accounts for a net of 14.0% of open interest.
- 1.3342 undercuts as first support, ahead of the more meaningful 50-day EMA at 1.3126. A move through here would challenge the near-term bullish trend narrative.
LOOK AHEAD: Tuesday Data Calendar: Fed Speakers, Philly Fed Non-Mfg Activity
May-20 10:47
- US Data/Speaker Calendar (prior, estimate)
- 20-May 0830 Philadelphia Fed Non-Manufacturing Activity (-42.7, --)
- 20-May 0900 Atlanta Fed Bostic opening remarks financial conf
- 20-May 0900 Richmond Fed Barkin speech, Richmond Fed conf (text, no Q&A)
- 20-May 0930 Boston Fed Collins Fed listens event - no policy discussion exp
- 20-May 1130 US Tsy $70B 6W Bill auction
- 20-May 1300 StL Fed Musalem on economy, policy (text, Q&A)
- 20-May 1700 Fed Gov Kugler, Berkley commencement address (text, no Q&A)
- 20-May 1900 Cleveland Fed Hammack, SF Daly panel discussion, Atl Fed Bostic moderates
OUTLOOK: Price Signal Summary - WTI Resistance Still Intact
May-20 10:47
- On the commodity front, a bearish corrective cycle in Gold remains in play and price is trading closer to its recent lows. A key support at $3202.0, the May 1 low, has been breached. The break of this level signals scope for a deeper retracement, towards $3085.0, 76.4% of the Apr 7 - Apr 22 upleg. Note that the 50-day EMA at $3171.7, has also been breached, strengthening a bearish threat. Initial resistance is $3256.6, the 20-day EMA.
- In the oil space, a downtrend in WTI futures remains intact and recent gains are considered corrective. Key resistance to watch is $62.90, the 50-day EMA. It has recently been pierced, a clear break of it would highlight a stronger reversal. This would open $65.82, the Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. Clearance of this support would confirm a resumption of the downtrend.
