EURJPY TECHS: Trend Structure Remains Bullish

• RES 4: 175.43 High Jul 11 ‘24 and a key medium-term resistance  
• RES 3: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 2: 173.43 High Jul 12 ‘24
• RES 1: 173.24 High Jul 15
• PRICE: 172.40 @ 17:08 BST Jul 16
• SUP 1: 171.60  Low Jul 14  
• SUP 2: 170.03 20-day EMA 
• SUP 3: 169.32 Low Jul 3   
• SUP 4: 167.31 50-day EMA   

The trend condition in EURJPY is unchanged, a bull phase is in play and fresh cycle highs this week reinforce current conditions. The move higher also maintains the price sequence of higher highs and higher lows and note that moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 173.43, the Jul 12 ‘24 high. Support to watch lies at 170.03, the 20-day EMA.

July's Beige Book notes that "economic activity increased slightly from late May through early July."  Most Fed Districts reported flat growth: 7 were in that category (Boston, Cleveland, Atlanta, St Louis, Minneapolis, Kansas City, San Francisco), with 3 reporting slight/modest growth (Richmond, Chicago, Dallas) and 2 seeing modest declines (New York, Philadelphia). See table below for summary of current conditions.

• This is a notable improvement from June when 3 reported flat growth, 3 slight/mild growth, and 6 slight/modest/moderate slowdowns/declines (NY and Philly remain in the latter category).
• That said, there wasn't much positivity on a sector-by-sector basis amid "ongoing caution by businesses", with consumer spending declining in "most Districts" and flat/slowing activity in most other sectors. Additionally, only  2 districts saw an expected improvement in activity going forward.
• Per the Beige Book: "Uncertainty remained elevated, contributing to ongoing caution by businesses. Non auto consumer spending declined in most Districts, softening slightly overall. Auto sales receded modestly on average, after consumers had rushed to buy vehicles earlier this year to avoid tariffs. Tourism activity was mixed, manufacturing activity edged lower, and nonfinancial services activity was little changed on average but varied across Districts. Loan volume increased slightly in most Districts. Construction activity slowed somewhat, constrained by rising costs in some Districts. Home sales were flat or little changed in most Districts, and nonresidential real estate activity was also mostly steady. Activity in the agriculture sector remained weak. Energy sector activity declined slightly, and transportation activity was mixed. The outlook was neutral to slightly pessimistic, as only two Districts expected activity to increase, and others foresaw flat or slightly weaker activity."
   

• Spot gold has pared gains, but is still 0.8% higher on the session at $3,352/oz, as uncertainty remains over the position of Fed Chair Powell.
• Initial headlines suggested that President Trump will likely fire Powell soon, prompting a severe reversal lower for the dollar and spike in gold to $3,377.
• However, Trump later appeared to downplay these rumours, prompting the yellow metal to pare today’s gains.
• A bull cycle in gold that started Jun 30 remains intact, with sights on $3,395.1, the Jun 23 high. On the downside, first support to watch is $3,282.8, the Jul 9 low.
• Meanwhile, copper has fallen by 1.1% to $552/lb, as inventories in Asia rose ahead of the tariff deadline.
• Copper futures are holding on to the bulk of their recent gains, reinforcing the current uptrend. Sights are on a retest of $589.55, the Jul 8 high. Key short-term support has been defined at $497.25, the Jul 8 low.
• Crude markets unwound earlier losses after EIA data showed a larger than expected fall in stocks this week, down 3.9m bbl compared to the forecast 0.67m bbl.
• WTI Aug 25 is broadly unchanged at $66.5/bbl.
• WTI futures maintain a bearish tone, with support to watch at $65.54, the 50-day EMA, a clear break of which would expose $58.87, the May 30 low. Initial resistance is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range.