BRENT TECHS: (J5) Tests Support
- RES 4: $85.20 - 1.382 proj of the Sep 9 - Oct 7 - 29 price swing
- RES 3: $83.97 - High Apr 12 ‘24 and a key M/T resistance
- RES 2: $83.28 - High Jul 5 and a key resistance
- RES 1: $77.34/81.20 - High Feb 3 / 15 and the bull trigger
- PRICE: $75.38 @ 07:16 GMT Feb 14
- SUP 1: $74.10/06 - Low Feb 6 / 13
- SUP 2: $71.25 - Low Dec 20
- SUP 3: $70.26 - Low Dec 6
- SUP 4: $69.65 - Low Oct 29 and a key support
Brent futures have pulled back from their recent highs and attention is on support at $74.10, the Feb 6 low. A clear break of this level would undermine a bullish theme and instead highlight a stronger reversal, signalling scope for a deeper pullback, towards $71.25, the Dec 20 low. Initial firm resistance has been defined at $77.34, the Feb 3 high. Clearance of this level would once again highlight a bullish development.
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BUNDS: Off the low Post UK CPI, a Busy day ahead
- It was a very tight range for Bund overnight, but this was quickly broken after the UK CPI came below expectation, helping the contract jump 19 ticks to test a new intraday high.
- Regardless of the early price action, the contract remains under serious pressure, after having lost 690 ticks from the 2nd of December high to Yesterday's low. a one way price action.
- The German 10yr yield has cleared the July high Yesterday, and should again be quoted close to that level, equated to 130.47 Yesterday.
- Investors will now be staring at the 2024 high printed in late May at 2.706%, this equated to 129.89 Yesterday.
- Resistance will be at Yesterday's high of 131.09 initially.
- Today sees, France, Spain Final CPIs, and of course the US CPI.
- SUPPLY: UK £4bn 10yr (equates to 30.5k Gilt) should weigh into the bidding deadline, Germany 2053, 2054 (equates combined to 17.6k Buxl) could weigh.
- SPEAKERS: ECB Lane, Guindos, Villeroy, Vujcic, Fed Kaskari, Williams, Goolsbee, BoE Taylor.
GOLD TECHS: Monitoring Resistance
- RES 4: $2762.3 - High Nov 1
- RES 3: $2730.4 - 76.4% retracement of the Oct 31 - Nov 14 bear leg
- RES 2: $2726.2 - High Dec 12
- RES 1: $2698.0 - High Jan 10
- PRICE: $2682.2 @ 07:19 GMT Jan 15
- SUP 1: $2644.3 - 50-day EMA
- SUP 2: $2596.2/2583.6 - Low Dec 30 / 19
- SUP 3: $2564.4 - Low Nov 18
- SUP 4: $2536.9 - Low Nov 14 and a key support
Recent gains in Gold appear corrective - for now. However, the yellow metal continues to hold on to the bulk of last week’s gains and scope is seen for a continuation higher near-term. A stronger recovery would open $2726.2, the Dec 12 high and an important resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2644.3, the 50-day EMA.
UK DATA: Volatile categories contribute to the negative surprise in UK CPI
Looking through the details here we have services notably softer than expected at 4.37%Y/Y. Core goods and food/alcohol a little higher than expected (so less of a surprise in core / headline).
- Air fares are soft. Only rising 16.2%M/M in December - the expectations we had seen for that were around 40-45%M/M (remember this is NSA data). They alone contributed to headline CPI falling 0.14ppt and around double that for services CPI.
- Accommodation services also soft - contributing -0.07ppt to headline CPI.
- Cultural services -0.04ppt contribution.
- Other than that clothing and tobacco (both expected to contribute negatively).
- At first glance this doesn't look very broad-based at all and is largely the most volatile components contributing almost entirely to the downside in services / core / headline CPI.
- GBPUSD hit a low of 1.2163 but is around 20 pips higher at the time of writing.
