GOLD TECHS: Pullback Considered Corrective

• RES 4: 5486.00 High May 20 and a key bull trigger  
• RES 3: 5456.00 High Jun 11 
• RES 2: 5403.00 High Jun 12 
• RES 1: 5364.00 High Jun 16   
• PRICE: 5336.00 @ 07:01 BST Jun 25 
• SUP 1: 5194.00 Lo Jun 23 and a bear trigger    
• SUP 2: 5182.00 Low May 2 
• SUP 3: 5100.94 38.2% retracement of the Apr 7 - May 20 bull leg
• SUP 4: 5078.00 Low Apr 30  

A short-term bear cycle in Eurostoxx 50 futures remains intact, however, the recovery from Monday’s low appears to be a potential reversal. The contract has traded above the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme and signal scope for a stronger recovery. This would open 5486.00, the May 20 high and bull trigger. On the downside, a breach of Monday’s 5194.00 low would reinstate a bearish theme.

Italy is scheduled to a conventional auction on Friday while Finland is due to hold an ORI auction tomorrow. Already this week, the EU, Belgium and Germany have held auctions while Slovenia held a syndication. We pencil in estimated gross issuance for the week of E29.2bln, a little lower than the E30.7bln last week.

For the full document with a summary of Q3/H2 funding updates, a recap of issuance so far this week and a look ahead to the rest of this week's and next week's issuance, click here.

• Finland will come to the market tomorrow to hold an ORI auction with up to E400mln on offer. Details are to be confirmed today.
• Italy will look to conclude issuance for the quarter on Friday with a 5/10-year BTP / CCTeu auction. On offer will be E1.25-1.5bln of the 5-year on-the-run 2.95% Jul-30 BTP (ISIN: IT0005637399) that was launched earlier this month via syndication alongside E1.25-1.5bln of the off-the-run 5-year 2.70% Oct-30 BTP (ISIN: IT0005654642). Also on offer will be E3.0-3.5bln of the on-the-run 10-year 3.60% Oct-35 BTP (ISIN: IT0005648149) and E1.5-2.0bln of the Apr-34 CCTeu (ISIN: IT0005652828) that was launched in last month’s auction.

• RES 4: 122.71 2.764proj of the May 14 - 20 - 21 price swing
• RES 3: 122.35 2.500 proj of the May 14 - 20 - 21 price swing 
• RES 2: 122.00 Round number resistance
• RES 1: 121.73 High Jun 13 and the bull trigger 
• PRICE: 121.13 @ Close Jun 24 
• SUP 1: 119.91 Low May 29      
• SUP 2: 119.48 Low May 26 
• SUP 3: 118.87 Low May 21  
• SUP 4: 118.51 Low May 14 and key support 

The trend condition in BTP futures is unchanged, it remains bullish and the latest pullback appears corrective. Gains earlier this month reinforce a bull theme and maintain the price sequence of higher highs and higher lows. Sights are on the 122.00 handle next. Key support to watch lies at 118.51, the May 14 low. A clear break of this level would highlight a reversal. First support is 119.91, the May 29 low.