GOLD: Gold Off New Record High As Waits US Price Data

Oil prices have fallen every trading day in August over supply concerns as OPEC raised output again, US tariffs came into effect and Presidents Trump and Putin are due to meet in Alaska on Friday. Trump is happy to include Ukraine President Zelensky but Russia requested a Trump-Putin meeting. Europe is insisting Ukraine be involved in talks. Any move towards peace in Ukraine would reduce the risk of further restrictions on Russian energy exports.  

• WTI fell 0.8% to $63.35/bbl after reaching a low of $62.77 following hawkish comments from the Fed’s Musalem. It didn’t hold below the bear trigger at $62.84 for long though. It had a reached a high of $64.58 before the drop. The benchmark is 8.5% lower in August with short-term momentum down. It has started the week slightly higher at $63.59.
• Brent was down 0.2% to $66.32 to be 7.5% lower this month. It rose to $67.22 before falling to $65.53, below initial support at $65.80, 8 August low. The bear trigger is at $65.06. Initial resistance is at $72.89.
• Ukraine’s allies are increasing the pressure on Russia with Canada, the EU and the UK reducing the price cap for Russian oil to $47.60/bbl from $60.00. Ukraine has said that it won’t cede territory but that is likely to be the focus of peace talks.
• Ukraine said that it hit a major refinery in Russia’s Saratov region as it continues to target energy infrastructure.
• Bloomberg reported that algorithmic traders are now net-short WTI and that trend is rising, according to Bridgeton Research Group. 

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 141.48/142.95 - High May 2 / High Apr 7
• PRICE: 138.55 @ 14:37 BST Aug 8
• SUP 1: 137.32 - Low Jul 25
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs rallied sharply alongside global bond markets on the back of the NFP print, piercing mid-week resistance in the process. The first important resistance to watch remains 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal. A return lower would signal scope for an extension towards 136.57, a Fibonacci projection. 

The Friday night range was 147.14 - 147.90, Asia is currently trading around 147.75. USD/JPY is consolidating within a 146.50-148.00 range. Price has moved very quickly away from the pivotal 151/152 area much to the relief of Institutional Yen longs and the BOJ. Price is holding above the support area between 146.00/147.00, a move sub 145.00 is needed to turn momentum lower once more, until then the 145.00-151-00 range should dominate.

• MNI JAPAN: Ishiba Maintains Intention To Remain PM As LDP Critics Threaten Recall. The governing Liberal Democratic Party (LDP) has concluded a two-hour meeting of lawmakers from both houses of the National Diet. The formal reason for the assembly was to assess the fallout from the 20 July House of Councillors election, in which the LDP-Komeito governing coalition lost its majority in the upper chamber. However, the meeting was also a chance for LDP lawmakers to voice their displeasure with PM Shigeru Ishiba, whose critics blame for the party's poor performance.
• Bloomberg - “(Bloomberg) -- Data on Japanese bond buying show a “deliberate realignment of Japanese portfolio investment away from US sovereign debt and toward the sovereign markets of the eurozone,” according to strategists at Mizuho.”
• “Carry traders are piling into high-yielding EM currencies as wagers on Fed rate cuts weaken the dollar.” - BBG
• Options : Close significant option expiries for NY cut, based on DTCC data: 147.00($470m).Upcoming Close Strikes : 150.25($1.47b Aug 13) - BBG.
• CFTC data shows asset managers reduced their JPY longs +60532( Last +75119), leveraged funds slightly reduced their newly built short JPY position -29308(Last -31280).
• Data/Event : 

Fig 1 : JPY CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P