BRENT TECHS: (Q5) Challenging Resistance
- 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: $65.29/66.30 - 50-day EMA / High May 13
- PRICE: $64.76 @ 07:05 BST Jun 3
- 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
Brent futures are trading at their recent highs. The medium-term trend condition is unchanged, it remains bearish and recent gains still appear to be corrective. Resistance at $65.29, the 50-day EMA, 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 confirmed reversal lower would open $57.78, the Apr 9 low. First support is $62.09, the May 30 low.
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CROSS ASSET: Bunds, USD softer to start Fed week, trade deals could be by Friday
- It's a UK market holiday today, however European and US markets are open as usual throughout. Newsflow over the weekend touches on familiar themes - with US trade deals potentially announced this week (deals with Japan and India are among the most advanced) and the President again voicing dissatisfaction in Fed's Powell ahead of this week's rate decision.
- The greenback is weaker against all others headed into the open, however pullbacks are shallow and markets still hold a decent part of last Friday's rally. Some nerves of the potential use of Japan's UST holdings in trade negotiations were allayed overnight, as the PM stated they would note use holdings as a bargaining chip.
- Meanwhile, Bunds are weaker in early Europe and have shown through last Friday's lows. Despite the latest move down, a bull cycle is in play, however weakness through 128.60 would change that outlook.
- US ISM Services data is the calendar highlight Monday. The Fed remain inside their pre-decision media blackout period.
BTP TECHS: (M5) Bullish Theme
- 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: 120.65 1.382 proj of the Mar 14 - Apr 4 - 9 price swing
- PRICE: 119.92 @ Close May 2
- SUP 1: 119.60/119.25 Low Apr 23 / 20-day EMA
- SUP 2: 117.28 Low Apr 10
- SUP 3: 116.06 Low Apr 9
- SUP 4: 115.75 Low Apr 14 and a bear trigger
BTP futures are in consolidation mode. A bull cycle remains intact and the contract is holding on to the bulk of its recent gains. The recent break of a key resistance at 120.39, the Feb 28 high, reinforces a bullish theme. Sights are on 120.65 next, a Fibonacci projection. Firm support to watch lies at 119.25, the 20-day EMA. The contract is overbought, a pullback would unwind this trend condition.
BRENT TECHS: (N5) Bearish Theme Despite Late Bounce
- RES 4: $78.10 - High Jan 15
- RES 3: $75.81 - High Feb 20
- RES 2: $74.63 - High Apr 2 and a bull trigger
- RES 1: $64.91/67.67 - 20- and 50-day EMA values
- PRICE: $59.43 @ 06:44 BST May 5
- SUP 1: $58.00 -Low April 9 and the bear trigger
- SUP 2: $56.29 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 3: $55.10 - 2.382 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 4: $54.00 - Round number support
A bearish theme in Brent futures remains intact and today’s fresh short-term cycle low reinforces current conditions. Last week’s price action confirms recent gains between Apr 9 - 23 as corrective that allowed an oversold condition to unwind. Sights are on $56.29 a Fibonacci projection. On the upside, key resistance to monitor is at the 50-day EMA, at $67.67. Initial resistance is at $64.91, the 20-day EMA.
