BRENT TECHS: (Q5) Bull Cycle Still In Play

• 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: 120.20 @ Close May 19 
• 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 does signal potential for a pullback. Key support at 119.18, 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.

J.P.Morgan suggest that in light of Moody’ negative ratings action on the U.S. and “given trade and monetary policy uncertainty amid a structural shift in the demand landscape, the risks are skewed toward bearish steepening over the near term. To the extent the Moody’s announcement was not unexpected, and with investor positioning more neutral than it was in early-April, we would expect significantly smaller moves than experienced last month”. 

• RES 4: 93.00 Round number resistance 
• RES 3: 92.53 High May 9      
• RES 2: 92.20 20-day EMA
• RES 1: 92.03 High May 16                            
• PRICE: 91.50 @ Close May 17
• SUP 1: 90.86 Low May 19                                          
• SUP 2: 90.47 Low Apr 11
• SUP 3: 89.99 Low Apr 9 and a key support    
• SUP 4: 89.42 1.00 proj of the Apr 7 - 9 - May 2 price swing     

A bear cycle in Gilt futures remains in play and the recent impulsive sell-off strengthens a bearish theme. The move down exposed 90.92, 76.4% of the Apr 9 - May 2 rally. This level has been pierced, a clear break of it would pave the way for an extension towards 90.47, the Apr 11 low. Resistance to watch is 92.30, the 20-day EMA. Clearance of this level would be bullish and signal a potential reversal.