EUROPEAN INFLATION: August Final Details Suggest Inflation Is In A "Good Place"

• RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
• RES 3: 122.00 Round number resistance 
• RES 2: 121.73 High Jun 13 and the bull trigger 
• RES 1: 121.13 High Aug 15
• PRICE: 120.26 @ Close Aug 18
• SUP 1: 119.59 Low Jul 25 and key short-term support         
• SUP 2: 119.48 Low May 26 
• SUP 3: 118.87 Low May 21  
• SUP 4: 118.51 Low May 14 and key support 

The primary trend condition in BTP futures is unchanged and remains bullish. However, for now, the contract is trading inside a range and last Friday’s sell-off signals scope for a move towards the lower end of the range. Key support to watch lies at 119.59, the Jul 25 low. A clear break of this level would mark a range breakout and highlight a bearish threat. Key resistance is unchanged at 121.73, the Jun 13 high.

• RES 4: 92.84 High Aug 5 and a bull trigger  
• RES 3: 92.37 High Aug 11       
• RES 2: 91.99 50-day EMA
• RES 1: 91.32/68 High Aug 18 / 15
• PRICE: 90.59 @ Close Aug 18
• SUP 1: 90.52 Low Aug 18
• SUP 2: 90.46 Low May 23
• SUP 3: 90.11 Low May 22 and a key support  
• SUP 4: 90.00 Psychological round number       

Gilt futures traded sharply lower Friday and yesterday’s sell-off confirmed a bearish start to the week, strengthening current conditions. The contract has breached key short-term support and a bear trigger at 91.08, the Jul 18 low. This signals scope for an extension towards 90.11, the May 22 low. On the upside, resistance to watch is seen at 91.99, the 50-day EMA. Clearance of this average is required to highlight a potential reversal.

• RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
• RES 3: 151.21 High Mar 28 
• RES 2: 150.92 High Aug 1 and a key resistance 
• RES 1: 148.52 High Aug 12 
• PRICE: 147.66 @ 07:00 BST Aug 19
• SUP 1: 146.21 Low Aug 14
• SUP 2: 145.86 Low Jul 24
• SUP 3: 145.51 100-dma
• SUP 4: 145.40 50% retracement Apr - Aug Upleg

USDJPY is in consolidation mode. A bearish threat remains present and the pair is trading closer to its recent lows. Sights are on support at 145.86, the Jul 24 low. Clearance of this level would highlight a stronger reversal and strengthen the bearish engulfing signal from Aug 1. This would open 144.63, a trendline drawn from the Apr 22 low. Initial firm resistance to watch is 148.52, the Aug 12 high. A breach of it would be viewed as a S/T bull signal.