OIL: *US ADDS VENEZUELA-LINKED OIL TANKERS TO SANCTIONS LIST

• -6,000 0QH6 96.75 puts 0.5 over 3QH6 96.37 puts/covered. 0.5 net cr bear steepener
• +5,500 SFRF6 96.43/96.56/96.68 call flys ref 96.245

• RES 4: 0.8893 2.000 proj of the Sep 15 - 25 - Oct 8 price swing    
• RES 3: 0.8875 High Apr 25 
• RES 2: 0.8868 61.8% retracement of the 2022 - 2024 bear leg
• RES 1: 0.8818/65 High Nov 16 / 14
• PRICE: 0.8784 @ 16:43 GMT Dec 1
• SUP 1: 0.8746 Low Nov 27
• SUP 2: 0.8726 Low Oct 28
• SUP 3: 0.8706 76.4% retracement of the Oct 8 - Nov 14 bull leg   
• SUP 4: 0.8656 Low Oct 8 and a key support  

The trend set-up in EURGBP is bullish and recent weakness appears corrective. Moving average studies are unchanged and remain in a bull-mode position, highlighting a dominant uptrend. Note that the cross has pierced the 50-day EMA, at 0.8752. A clear break of this average would signal scope for a deeper corrective pullback. For bulls, a resumption of gains would refocus attention on 0.8868, a Fibonacci retracement point.      

• USD: Dented risk sentiment only remains seen through the lens of the crypto markets Monday, as the bounce back for equity indices across the US session sees both the e-mini S&P and Nasdaq futures rise back into positive territory. Rather than providing a specific bid to risk-tied currencies in G10, the moves have bolstered a solid recovery for the US dollar. ISM manufacturing data came in a touch below expectations, not garnering any market reaction.
• JPY: Given the prior volatility for USDJPY, this has translated in a notable 80 pip bounce for the pair. Earlier, we noted how USDJPY had traded below its 20-day EMA and below the prior breakout point at 155.00. Despite this, the solid recovery may create some false breaks on the chart, keeping bullish conditions intact, for now.
  • Many had cited the yen’s outperformance as a reaction to BOJ Governor giving slightly more of a nod to a December rate hike. In our view, the slight adjustment between Jan and Dec pricing should have little impact on short-term yen sentiment, with domestic fiscal developments and China-Japan tensions more likely to drive he narrative.
• GBP: Elsewhere, GBPUSD has had a similar sized turnaround, falling sharply from 1.3275 post-budget highs to now edge closer to 1.32. The resignation of the head of the UK OBR, fiscal uncertainties and a likely December rate cut from the BOE remain headwinds for sterling, and could keep a move back towards 1.3010 for cable on the cards. In sympathy EURGBP, has traded in a constructive manner, edging back towards 0.88.
• Commodity currencies saw little interest to start the week, allowing NZDUSD to consolidate its recent rally back above 0.5700, still signalling scope for a stronger recovery to the medium-term pivot at 0.5800. For Aussie, Q3 GDP data are due on Wednesday.