BOBL TECHS: (Z5) Bear Cycle Still In Play
- RES 4: 119.000 Round number resistance
- RES 3: 118.970 High Oct 17 and key resistance
- RES 2: 118.770 High Oct 22
- RES 1: 118.360/600 High Oct 28 / 24
- PRICE: 118.190 @ 05:59 GMT Nov 5
- SUP 1: 118.010 Low Nov 3
- SUP 2: 118.043 61.8% retracement of the Sep 25 - Oct 17 bull cycle
- SUP 3: 117.900 Low Oct 10
- SUP 4: 117.824 76.4% retracement of the Sep 25 - Oct 17 bull cycle
A bear cycle in Bobl futures remains intact for now and the contract is trading at its recent lows.The move down that started Oct 17 still appears corrective and has allowed a recent overbought trend condition to unwind. However, support around the 50-day EMA, at 118.158, has been breached. This signals scope for a deeper retracement and opens 117.900, the Oct 10 low. Initial resistance is at 118.360, the Oct 28 high.
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BRENT TECHS: (Z5) Bear Theme Intact
- RES 4: $78.63 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $76.82 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $75.43 - High Jun 23 and a bull trigger
- RES 1: $69.87/71.20 - High Sep 26 / High Jul 30 and key resistance
- PRICE: $65.72 @ 07:07 BST Oct 7
- SUP 1: $64.00 - Low Oct 2
- SUP 2: $60.85 - Low May 30
- SUP 3: $58.50 - Low May 5
- SUP 4: $57.88 - Low Apr 9 and a key support
A bearish theme in Brent futures remains intact and short-term gains are considered corrective. Last week’s sell-off saw the contract trade through key support and the bear trigger at $64.20, the Jun 30 low. Clearance of this level strengthens a bearish theme and paves the way for an extension towards $60.85, the May 30 low. Initial firm resistance has been defined at $69.87, the Sep 26 high. A break of this level would instead signal a reversal.
BUNDS: The Supply are in Focus Today
- It is now seven sessions in a row that the German Bund still trades within the confines of the gap support of 128.26, did close it to print a 128.24 low last Week, and the Initial resistance of 128.82, the top of the last Week's range stands at 128.80.
- Nor the US Shutdown or the French Political uncertainty have push the contract passed that tight boundary as of Yet.
- The German Factory Orders was a miss, but saw a small better revision, this is not a known market mover.
- Instead some selling interest on the Cash open in the German 10yr, keeps Bund at the bottom of a tight 15 ticks range.
- There are no Tier 1 Data for the session, US Trade Balance will not be released during the Government Shutdown, Redbook retail sales, NY Fed Consumer Confidence and Consumer Credit on the other hand will, but again, not known market movers.
- SUPPLY: Focus will on Supply Today, UK £1.25bn 2028 (equates to 3k Gilt) won't have an impact, Austria 2053 (won't Impact Bund), Germany €4.5bn Bobl (equates to 28k Bobl) should weigh, US Sells $58bn of 3yr Notes.
- SPEAKERS: Fed Bostic, Bowman, Miran (x2), Kashkari, ECB Nagel, Lagarde.
BTP TECHS: (Z5) Still Looking For Gains
- RES 4: 122.56 0.764 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 3: 121.88 0.618 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 2: 121.00 Round number resistance
- RES 1: 120.74 High Aug 5 and the bull trigger
- PRICE: 119.79 @ Close Oct 6
- SUP 1: 119.06/118.36 Low Sep 4 / 3
- SUP 2: 118.00 Round number support
- SUP 3: 117.70 2.236 proj of the Aug 5 - 12 - 14 price swing
- SUP 4: 117.36 2.500 proj of the Aug 5 - 12 - 14 price swing
The primary trend condition in BTP futures is unchanged, it remains bullish and the most recent pullback appears to have been a correction. The strong rally that started Sep 3 reinforces a bull theme and signals the end of the larger corrective pullback between Aug 5 - Sep 3. Key resistance and the bull trigger is 120.74, the Aug 5 high. A break of this hurdle would confirm a resumption of the trend. Key support to watch lies at 118.36, the Sep 3 low.
