BRENT TECHS: (Z5) Short-Term Corrective Cycle Intact For Now

• As expected a Gap high for European Cash Equity on the Open, SX5E has printed its best level since late March, but still 48 points short of the all time record high printed in March at 5568.19.
• Equity Futures are now seeing some selling interest helping limit the upside momentum in Cash Markets.
• VGZ5 look to close the opening Gap down to 5514.00.

• The September flash inflation round headlines this week’s Eurozone data calendar. Spanish core data came in a little softer-than-expected this morning. MNI’s full preview for the Eurozone-wide print will be released today.
• Markets have been paring back expectations of another ECB rate cut steadily since the September decision, where President Lagarde expressed confidence in the medium-term inflation outlook and noted that growth risks are now “more balanced”.
• However, with just under 10bps of easing priced through July 2026, markets may still be sensitive to a downside Eurozone core surprise. Some more dovish ECB officials continue to stress that inflation risks are tilted to the downside.
• In an interview with the FT this morning, Irish central bank governor Makhlouf said the ECB was “near the bottom” of its easing cycle. However, he still called for vigilance amid uncertainty around tariff policy impacts. These were Makhlouf’s first comments since the September decision. Overall, we’d say they are broadly in line with the Governing Council median.
• Euribor futures are +0.5 to +3.0 ticks through the blues, with the strip bull flattening alongside the German bond curve. There wasn’t much incremental impact from the Spanish data.
• ECB’s Nagel and Lane are scheduled to speak later today, with the ECB’s September sentiment survey also due. 

• RES 4: 1.4111 High Apr 10 
• RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
• RES 2: 1.3968 High May 20 
• RES 1: 1.3959 High Sep 25  
• PRICE: 1.3925 @ 08:08 BST Sep 29
• SUP 1: 1.3885/3805 Low Sep 25 / 50-day EMA  
• SUP 2: 1.3727 Low Aug 29 and a bear trigger
• SUP 3: 1.3689 Low Jul 28  
• SUP 4: 1.3637 Low Jul 25  

Last week’s rally in USDCAD cancels a recent bearish theme and instead strengthens a bullish outlook. The pair has breached a key resistance at 1.3925, the May 20 high and bull trigger. The breach confirms a resumption of the bull cycle that started Jun 16. This paves the way for a climb towards 1.4019, a Fibonacci retracement point. On the downside, first key support lies at 1.3805, the 50-day EMA.