BRENT TECHS: (Z5) Bearish Theme

• RES 4: $79.16 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $77.28 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $76.39 - High Jun 23 and a bull trigger 
• RES 1: $69.53/71.93 - High Sep 2 / High Jul 30 and a key resistance 
• PRICE: $66.57 @ 07:06 BST Sep 9
• SUP 1: $64.50 - Low Jun 30 and a key short-term support
• SUP 2: $60.82 - Low May 30
• SUP 3: $58.37 - Low May 5
• SUP 4: $57.81 - Low Apr 9 and a key support   

Recent short-term gains in Brent futures are for now, considered corrective and a bear cycle remains intact. A resumption of weakness would refocus attention on $64.50, the Jun 30 low, where a clear break would confirm a continuation of the bear leg. This would open $60.82, the May 30 low. Key short-term resistance has been defined at $71.93, the Jul 30 high. Clearance of this level would cancel a bear theme.

• Bund futures traded in a tight 13 tick Asia-Pac range, currently -10 ticks at 129.21. The light pullback is considered corrective, with firm support not seen till 128.25 (Sep 4 low). In the interim, there may be some downside interest in the round-number 129.00 level, which shields the 50-day EMA (128.69) and 20-day EMA (128.53).
• As expected, French PM Bayrou was ousted by a no-confidence vote yesterday. There was little to no reaction in OAT futures (currently -2 ticks at 121.87). Macron’s office has said he will appoint a new PM in the “coming days”, once again pushing back on calling another legislative election.
• EGB supply picks up today, which may weigh on futures this morning: EU to hold a 5/30-year syndication (MNI expects a combined size of E9-14bln, skewed towards E11-12bln); The Netherlands to sell E1.5-2.0bln of the 4.00% Jan-37 DSL; Austria to sell E1.15bln of the 10-year 2.95% Feb-35 RAGB; Germany to sell E500mln of the 0% Aug-31 Green Bund and E1bln of the 2.50% Feb-35 Green Bund.
• French industrial production is due at 0745BST. It isn’t usually a huge market mover, but may come under more scrutiny today following the latest domestic political developments.
• ECB’s Villeroy and Nagel speak at a BIS summit this afternoon – don’t expect any monetary policy signals ahead of Thursday’s decision.
• MNI’s ECB preview will be released later today.

• RES 4: 121.00 Round number resistance
• RES 3: 120.74 High Aug 5 and the bull trigger
• RES 2: 120.61 High Aug 14
• RES 1: 120.42 High Sep 5
• PRICE: 120.35 @ Close Sep 8
• 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 and the direction remains up. The strong rally from last week’s low highlights a bullish development and signals the end of the recent 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 uptrend. Key support has been defined at 118.36, the Sep 3 low.