BRENT TECHS: (K5) Bear Cycle Intact

• RES 4: 0.8474 High Jan 20 and a key resistance    
• RES 3: 0.8421 High Jan 27  
• RES 2: 0.8381 20-day EMA 
• RES 1: 0.8363 Intraday high  
• PRICE: 0.8335 @ 07:09 GMT Feb 3 
• SUP 1: 0.8325 Intraday low 
• SUP 2: 0.8223 Low Dec 19 and a key support  
• SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range   
• SUP 4: 0.8000 Round number support 

EURGBP is trading in a volatile manner. The bear cycle that started Jan 20 remains in play and today’s price activity has strengthened - for now - a bearish threat. A resumption of weakness would pave the way for a move towards the first key support at 0.8223, the Dec 19 low. On the upside, the 20-day EMA is seen as a key short-term resistance - at 0.8381. A breach of the EMA would highlight a bullish development.

Bunds rallied on growth worries after U.S. President Trump levied fresh tariffs on China, Canada & Mexico and pointed towards action against the EU.

• China has pledged corresponding action and a challenge at the WTO.
• Initial cross-market reaction to the tariffs has eased a little since a WSJ report pointed to “a sign that China is eager to get trade talks going.”
• Bund futures traded as high as 133.26 overnight, last +35 at 132.87.
• The contract is through resistance at 132.22 and has cleared the 20- and 50-day EMAs.
• The break higher confirms a resumption of the corrective bull cycle that started January 14.
• Bulls now target the January 3 high (133.48).
• Moves in futures point to BTP & OAT widening vs. Bunds at the cash open.
• Eurozone CPI and manufacturing PMIs (final PMIs for the Eurozone, Germany & France) are due this morning.
• The U.S. ISM manufacturing survey and Fedspeak could also provide some impetus.
• ECBspeak will come from Simkus.
• No EGB supply due today, although we remain on the lookout for syndications from Germany, Italy and Belgium (see previous bullet for greater details).
• Fallout from the U.S. tariffs will also be eyed, particularly with EU leaders meeting in Brussels.
• Finally, French PM Bayrou is set to use special constitutional powers as he looks to force through the ‘25 budget. This is set to trigger a no-confidence vote on Wednesday. Bayrou will hope his recent concessions to the socialist party prevent them from voting against him.

• MNI: TURKEY JAN CPI +5.03% M/M