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West Texas Intermediate (WTI) futures surged to a fresh high of 74.80 since November 2014 as it is recording a sharp bullish run over the last five days. Prices broke above the 72.20 level and are trading above their moving averages. The bullish picture in the short term is kindly supported by the technical indicators.

From the technical point of view, in the 4-hour chart, the RSI is holding slightly above the 70 level, suggesting an overstretched rally, while, the MACD oscillator is moving above the zero line but is losing some of its strong momentum.

In the event of an extension of the bullish bias, the 161.8% Fibonacci level of the downleg from 72.87 to 63.37, near 78.70, is the next strong resistance hurdle to have in mind. There are no significant obstacles before that barrier.

In case of a bearish correction, the 20-simple moving average (SMA) would act as support level near 73.53. A break below this level would turn investors’ attention to the downside until the 72.20 support, identified by the June 28 lows.

To sum up, the crude oil futures in the bigger picture, recorded two straight positive weeks, following the rebound on 63.37. Furthermore, in the daily chart, the 20- and 40-SMAs are ready to post a bullish crossover.

BoE policymaker Michael Saunders warned the markets that their the central bank's tightening path could be faster then they expected. Saunders is known hawk that started voting for a hike since March meeting. He refers to market pricing of a little bit more than one hike over the next twelve months, and said "if the economy plays out as I expect, it may be that rates need to go up a little faster than that."

He also laid out his expectations for the developments in UK. On the condition that "Brexit unfolding in sort of a smooth and gradual way", "the economy will continue to grow at around the pace we have seen over the last couple of years ... (I) expect the jobless rate to fall a little further; and pay growth will pick up a bit."

Against that background, Saunders believed that "rates might need to rise a little faster". Still he emphasized that "the general picture is still limited and gradual, not too far and not too fast."

USDJPY - The pair looks to recover further higher following its Monday price strength. On the downside, support lies at the 110.50 level where a break if seen will aim at the 110.00 level. A cut through here will turn focus to the 1099.50 level and possibly lower towards the 109.00 level. On the upside, resistance resides at the 111.00 level. Further out, we envisage a possible move towards the 111.50 level. Further out, resistance resides at the 112.00 level with a turn above here aiming at the 112.50 level. On the whole, USDJPY faces further upside pressure.

UK PMI construction rose to 53.1 in June, up from 52.5 and beat expectation of 52.0. Markit noted in the release that house building remains best performing area of activity. Also, new orders rise at fastest pace since May 2017 and input cost inflation accelerates in the month.

Tim Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS Construction PMI® :

"The latest increase in UK construction output marks three months of sustained recovery from the snow-related disruption seen back in March. A solid contribution from house building helped to drive up overall construction activity in June, while a lack of new work to replace completed civil engineering projects continued to hold back growth.

"Of the three main categories of construction work, commercial building was sandwiched in the middle of the performance table during June. Survey respondents suggested that improved opportunities for industrial and distribution work were the main bright spots, which helped to offset some of the slowdown in retail and office development.

"Stretched supply chains and stronger input buying resulted in longer delivery times for construction materials during June. At the same time, higher transportation costs and rising prices for steel-related inputs led to the fastest increase in cost burdens across the construction sector since September 2017."

Full UK PMI construction release.

Pivot (invalidation): 73.75

Our preference Long positions above 73.75 with targets at 75.20 & 76.00 in extension.

Alternative scenario Below 73.75 look for further downside with 73.00 & 72.60 as targets.

Comment The RSI shows upside momentum.

Pivot (invalidation): 15.9100

Our preference Short positions below 15.9100 with targets at 15.7500 & 15.7000 in extension.

Alternative scenario Above 15.9100 look for further upside with 15.9800 & 16.0800 as targets.

Comment The RSI is bearish and calls for further decline.

Pivot (invalidation): 1243.00

Our preference Short positions below 1243.00 with targets at 1235.50 & 1232.00 in extension.

Alternative scenario Above 1243.00 look for further upside with 1247.50 & 1251.00 as targets.

Comment The RSI has broken down its 30 level.

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Pivot (invalidation): 0.8845

Our preference Long positions above 0.8845 with targets at 0.8870 & 0.8880 in extension.

Alternative scenario Below 0.8845 look for further downside with 0.8835 & 0.8815 as targets.

Comment The RSI advocates for further upside.

Pivot (invalidation): 0.7350

Our preference Short positions below 0.7350 with targets at 0.7325 & 0.7310 in extension.

Alternative scenario Above 0.7350 look for further upside with 0.7370 & 0.7385 as targets.

Comment The upward potential is likely to be limited by the resistance at 0.7350.

Pivot (invalidation): 1.3220

Our preference Short positions below 1.3220 with targets at 1.3175 & 1.3160 in extension.

Alternative scenario Above 1.3220 look for further upside with 1.3270 & 1.3305 as targets.

Comment As Long as the resistance at 1.3220 is not surpassed, the risk of the break below 1.3175 remains high.