BRAZIL: Trade Surplus Narrows To $6.1bn In August, Broadly As Expected

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance
• RES 2: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
• RES 1: 0.8735/8769 High Aug 3 / High Jul 27 and the bull trigger 
• PRICE: 0.8703 @ 16:48 BST Aug 5
• SUP 1: 0.8611 Low Jul 31 
• SUP 2: 0.8597 50-day EMA 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8508 Low Jun 27

The trend set-up in EURGBP is bullish and the latest recovery from Thursday's low signals the end of the short corrective pullback between Jul 28 - 31. Moving average studies remain in a bull-mode position highlighting a clear uptrend. Key resistance and the bull trigger is at 0.8769, the Jul 27 high. On the downside, support to watch lies at the 50-day EMA 0.8597. A clear break of it would strengthen a bear threat. 

Semafor reports: “Americans are starting to think more positively about China, according to new polling from the think tank Third Way... Since 2023, the share of Americans who view China as an “enemy” dropped by seven percentage points, while the share who see it as an “ally or trade partner” grew by eight percentage points.”

• Semafor notes: “A majority of respondents also said they wanted to cooperate and find “areas of agreement” with China, up from 32% in 2023. Third Way conducted the poll in May, after Trump had begun his first round of aggressive tariffs on Beijing.”
• Third Way wrote in a memo: “Americans aren’t softening on China because they hold the country and its leaders in high regard. But they have become more aware of the role China plays in their daily lives and, as a result, have become more hesitant to use blunt force.”

Figure 1: US Perceptions of China (Americans’ Preferences for Dealing with China) 

Source: Semafor, Third Way

RRP usage retreats to $84.356B (lowest levels since April 25) this afternoon from $125.730B yesterday, total number of counterparties at 23. Lowest usage of the year at $54.772B on Wednesday, April 16 -- in turn the lowest level since April 2021 - compares to July 1: $460.731B highest usage since December 31.