EUROPEAN INFLATION: ECB Underlying Inflation Metrics Show Broad Progress In Aug

• 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: 172.13 @ 07:16 BST Aug 19
• SUP 1: 170.19 50-day EMA
• SUP 2: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
• SUP 3: 168.46 Low Jul 1  
• SUP 4: 167.46 Low Jun 23   

The underlying bull trend in EURJPY is intact and for now the recent move down appears to have been a correction. Key support to watch lies at the 50-day EMA at 170.19. 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 a primary uptrend. A break of the Jul 28 high of 173.97, would resume the bull cycle.

• Ahead of the publication of the Blue Book on 31 October, the ONS has released some advance aggregate estimates for GDP revisions up to 2023 which will be incorporated into the GDP release on 30 September.
• The level of nominal GDP is estimated to be 1.5% higher in 2023 than previously, albeit a large part of this was due to pre-2019 changes.
• At the end of 2023 GDP is now estimated to be 2.2% above the pre-Covid peak (revised up from 1.9%). In per capita terms, it is now 1.0% below the pre-Covid peak (revised from 1.4% below the pre-Covid peak).
• Some of the largest changes are to the methodology for R&D which increased to be 2.4% of GDP in 2023 from the previous estimate of 1.7%. As the chart below shows, this changes the UK's cross-country comparison quite considerably.
• There's not much in here that is market moving. Full release here.

• 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.