PERU: Economic Activity Rises 4.5% Y/y In July, Marginally Below Expectations

• RES 4: 6402.44 1.382 proj of the May 23 - Jun 11 - 23 price swing
• RES 3: 6381.00 1.764 proj of the Apr 7 - 10 - 21 price swing 
• RES 2: 6356.12 1.236 proj of the May 23 - Jun 11 - 23 price swing
• RES 1: 6343.00 High Jul 15     
• PRICE: 6295.50 @ 14:32 BST Jul 16  
• SUP 1: 6246.25 Low Jul 7  
• SUP 2: 6218.56/6073.00 20- and 50-day EMA values   
• SUP 3: 5811.50 Low May 23 
• SUP 4: 5645.75 Low May 7 

S&P E-Minis are trading in a range, closer to their recent highs. The trend condition remains bullish. Recent activity has resulted in a break of resistance at 6128.75, the Jun 11 high. The breach confirmed a resumption of the uptrend that started Apr 7. This was followed by a break of key resistance and a bull trigger at 6277.50, the Feb 21 high. Sights are on 6356.12, a Fibonacci projection. Key support is at the 50-day EMA, at 6073.00.

Industrial production rose by 0.3% M/M in June (0.1% expected), a figure that looks even more solid when considering the upward revision to prior (May 0.0%, albeit very slightly negative unrounded at -0.03%, rev from -0.2%). 

• To be sure, the volatile utilities sector played an outsized role in the pickup, rising 2.8% after falling 2.5% in May. But manufacturing production was better than expected too - up 0.1% M/M (0.0% expected, with a 0.2pp upward revision to prior to 0.3%)), helping offset a 0.3% contraction in mining (+0.1% prior).
• Capacity utilization unexpectedly rose to 77.6% (expected unchanged at 77.4%, rev up to 77.5% in May).
• While momentum in the industrial sector remains weak, this was the biggest rise in IP since February. And all major market groups (consumer goods, business equipment, nonindustrial supplies, and materials) all saw expansions for the first time since February.
• On a 3M/3M annualized basis, IP is rising at just a 1.1% clip, the slowest since January; that's 2.1% for manufacturing, slowest since February. Both have slowed considerably since February/March in what seems to be tariff front-running effects dissipating.
• Overall, industrial / manufacturing production looks to be stabilizing at a weak level amid a period of considerable tariff policy-related uncertainty that has caused output to fluctuate. We note that motor vehicle and parts production fell 2.6% in June (+4.6% in May), with production of electrical equipment, appliances, and components down 2.5% (after +2.4%), suggesting mixed sectoral dynamics at best.
• ISM manufacturing picked up to a 3-month high 49.0 in June, while core durable goods orders picked up strongly in May (+1.7%), boding well for upcoming output/business investment. But momentum in the latter (0.4% 3M/3M annualized) remains very weak, and the ISM remains slightly contractionary.

• The modest dip lower for the greenback on the release of US PPI figures was well absorbed by the market, and the most recent stronger-than-expected IP data has helped propel the Dollar Index to the best levels of the session and fresh recovery highs.
• Latest price action concurrently sees EURUSD reach pullback lows, extending its recent downswing to print 1.1579 in recent minutes. This shifts the focus to the 50-day exponential moving average, intersecting just above the 1.15 handle. A clear break of the average is required to highlight a stronger reversal of the underlying trend.
• Underperforming on the session is the Swiss Franc, with USDCHF currently 0.4% higher on Wednesday and narrowing the gap to initial resistance at 0.8056, the June 13 low.