BOBL TECHS: (U5) Support Remains Intact For Now

• RES 4: 1.3913 High Sep 14 2021
• RES 3: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3605 1.382 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 1: 1.3593 High May 26 and a bull trigger  
• PRICE: 1.3515 @ 06:15 BST Jun 4
• SUP 1: 1.3418 20-day EMA
• SUP 2: 1.3335/3255 Low May 20 / 50-day EMA
• SUP 3: 1.3140 Low May 12 and key support
• SUP 4: 1.3041 Low Apr 14

The trend structure in GBPUSD remains bullish and the pair is trading closer to its recent highs. Initial support to watch lies at 1.3418, the 20-day EMA. A clear break of this EMA would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3255. For bulls, sights are on resistance at 1.3593, the May 26 high and bull trigger. Clearance of this level would resume the uptrend.

Oil prices are lower after rising over 4% in the last two days as US 50% steel and aluminium tariffs come into effect. Rain is also helping to bring fires in Canada’s oil sands region under control. WTI is down 0.4% to $63.13/bbl, close to the intraday low, but still above the 5-day EMA at $62.47. Brent is 0.4% lower at $65.36/bbl, just above resistance at $65.28. The USD index is slightly higher. 

• Fires shut down around 350kbd or 7% of Canadian output, according to Bloomberg, which is close to the 411kbd increase OPEC agreed last weekend. The development helped drive oil prices higher this week but one producer has now reopened production.
• As the US increases its import tariffs on steel and aluminium today, the OECD revised down its 2025 growth forecast by 0.2pp to 2.9% a slowdown from 2024’s 3.3%. Oil markets have been concerned about the impact on global energy demand from the increase in trade protectionism.
• Bloomberg reported that there was a crude destocking of 3.29mn barrels last week, according to people familiar with the API data. Product inventories rose strongly with gasoline up 4.73mn and distillate +761k barrels. The official EIA data is out today.
• Later the Fed’s Cook & Bostic and ECB’s Machado appear. The BoC is expected to leave rates at 2.75%. US May services ISM/PMI, May ADP employment and May European services PMIs print. The focus remains on Friday’s US payrolls.

• RES 4: 119.960 High Apr 7 and the bull trigger
• RES 3: 119.780 High Apr 22          
• RES 2: 119.600 High May 7
• RES 1: 119.280 High May 30 and Jun 3 
• PRICE: 119.170 @ 05:53 BST Jun 4  
• SUP 1: 118.791/390 50-day EMA / Low May 22
• SUP 2: 118.060 Low May 14 and 15 and the bear trigger
• SUP 3: 117.680 Low Apr 9 and a key support
• SUP 4: 117.600 Low Mar 28     

Bobl futures remain in a bull cycle and continue to trade at their recent highs. The recovery since May 14  highlights a reversal and the end of the Apr 22 - May 15 corrective cycle. A continuation higher would pave the way for a move towards 119.600, the May 7 high. Further out, scope would be for an extension towards 119.960, the Apr 7 high and a key resistance. Key support and the bear trigger lies at 118.060, the May 14 / 15 low.