AMERICAS OIL: Canada's Carney Keeps Door Open to Supporting New Crude Pipeline

• RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing 
• RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
• RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 1: 173.97 High Jul 28 and the bull trigger 
• PRICE: 172.76 @ 16:03 BST Aug 12
• SUP 1: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
• SUP 2: 169.71 50-day EMA
• SUP 3: 168.46 Low Jul 1  
• SUP 4: 167.46 Low Jun 23   

A bullish trend condition in EURJPY remains intact and for now the recent move down is considered corrective. Key support to watch lies at the 50-day EMA at 169.62. A clear break of the EMA is required to highlight a stronger short-term bearish threat. Moving average studies remain in a bull-mode position highlighting an uptrend. A break of the Jul 28 high of 173.97, would resume the bull cycle.  

Treasury reported a $291.1B federal budget deficit in July, larger than the $239B shortfall expected by Bloomberg consensus but almost exactly in line with the Congressional Budget Office's previously published $289B estimate.

• As MNI noted previously, while the year-to-date deficit is up 7% Y/Y to $1.629T with two months remaining in the 2025 fiscal year (which runs Oct-Sep), compared with $1.517T in the same period of FY2024, the difference is smaller when adjusting for timing changes.
• CBO estimated a $37B wider deficit when accounting for these changes, vs $109B "actual". The implied adjusted rise in the deficit is around 2% Y/Y, tracking lower than nominal GDP growth over that period.
• YTD revenue is up 6.4% Y/Y ($4.346T), with expenditure up 6.7% ($5.975T).
• At the start of 2025, CBO estimated a $1.9T deficit this fiscal year which remains plausible with August typically seeing a large deficit ahead of a better outturn in September in part on tax receipts, though looks on the high side at this point.
• That implies the FY2025 deficit looks closer to coming in below the 6.4% of GDP posted in FY2024, though is widely expected to re-expand in FY2026 largely on "One Big Beautiful Bill" effects.
• CBO will publish the Monthly Budget Review with its final projection next month.

• WTI has lost ground during US hours to be on track for its lowest close since early June. The EIA’s short-term energy outlook showed an upward revision in the expected supply surplus for 2025.
• The EIA now sees a supply surplus of 1.7m b/d this year, compared to a previous forecast for a 1.1m b/d surplus.
• WTI Sep 25 is down by 1.2% at $63.2/bbl.
• WTI futures remain below the 50-day EMA at $65.15, which keeps short-term momentum pointed lower. The clear break exposes $58.17, the May 30 low.
• Meanwhile, spot gold has edged up by 0.2% to $3,349/oz, with the yellow metal trading in a narrow range as US CPI data came in broadly in line with expectations.
• For now, a bull cycle in gold that started Jun 30 remains intact. Key near-term resistance is $3,439.0, the Jul 23 high.
• However, the yellow metal has previously traded through support at $3,334.0, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement and expose the next key support at $3,248.7, the Jun 30 low.
• Elsewhere, copper has bounced by 1.9% to $452/lb, bringing the red metal to its highest level since July 31.
• However, copper remains well below the Jul 30 high, which cancels the recent bullish theme and instead highlights a bearish threat.
• A continuation lower would signal scope for a test of key support at $411.75, the Apr 7 low. Initial resistance to watch is at $497.25, the Jul 8 low.