OUTLOOK: Price Signal Summary - Bull Cycle In Gold Remains In Play

TD Securities have pushed back their call for a September ECB cut to December, while noting that “the risk is there are no further cuts at all if the hard data proves to be resilient to US trade policy”.

• They believe this morning’s GDP print “feeds into President Lagarde's narrative of domestic demand superseding trade policy uncertainty”.
• Meanwhile, they view the recent EU-US trade agreement as a “plausible best case” scenario, writing that “though the 15% base tariff rate is above ECB's base case, the sectoral carve outs and removal of uncertainty is likely to feed more positively into future growth prospects”.
• Based on their new ECB call, they “expect 10y Bunds to end the year in the 2.40-2.50% range”.

• On the commodity front, Gold has pulled back from its Jul 23 high. Short-term weakness is considered corrective - for now - and a bull cycle that started Jun 30 remains intact. However, the yellow metal has traded through support at $3323.0, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement and expose the next key support at $3282.8, the Jul 9 low. Key near-term resistance is $3439.0, the Jul 23 high.
• In the oil space, WTI futures traded higher yesterday highlighting an extension of the current corrective cycle. $69.41, 50.0% of the Jun 23-24 downleg, has been pierced. A continuation higher would open $70.96 next, the 61.8% retracement point. On the downside, support to watch is the 50-day EMA, at $65.02. The average has been pierced, a clear break of it would expose $58.17, the May 30 low.

• RES 4: 112-15   61.8% retracement of the Apr 7 - 11 sell-off
• RES 3: 112-12+ High Jul 1 and a bull trigger
• RES 2: 111-28   High Jul 3 
• RES 1: 111-14+ High Jul 22 
• PRICE:‌‌ 111-12 @ 11:30 BST Jul 30
• SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16        
• SUP 2: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 3: 109-28   Low Jun 6 and 11
• SUP 4: 109.25   Low May 27

Treasury futures traded higher on Tuesday. Recent gains resulted in a break of the 20-day EMA, strengthening the recovery that began mid-July. Note too that resistance at 111-13+, the Jul 10 high, has been pierced. A clear break of it would highlight a stronger reversal and open 111-28, the Jul 3 high. Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low.