BTP TECHS: (U5) Resistance Remains Exposed

• RES 4: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
• RES 3: $3500.1 - High Apr 22 and bull trigger
• RES 2: $3395.1/3451.3 - High Jun 23 / 16  
• RES 1: $3375.0 - High Jul 14           
• PRICE: $3340.6 @ 07:26 BST Jul 16 
• SUP 1: $3282.8/3248.7 - Low Jul 9 / Low Jun 30 and the bear trigger 
• SUP 2: $3204.7 - Low May 20
• SUP 3: $3121.0 - Low May 15 and key support
• SUP 4: $3085.0 - 76.4% retracement of the Apr 7 - 22 bull leg  

A bull cycle in Gold that started Jun 30, remains intact and the yellow metal is holding on to the bulk of its recent gains. Note that medium-term trend conditions are bullish - moving average studies are in a bull-mode position highlighting a dominant uptrend. An extension would expose $3395.1, the Jun 23 high, and $3451.3, the Jun 16 high. On the downside, the bear trigger is $3248.7, the Jun 30 low. First support to watch is 3282.8, the Jul 9 low.

• RES 4: $85.00 - Round number resistance 
• RES 3: $81.99 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $80.72 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
• RES 1: $72.66/79.40 - 50.0% of the Jun 23-30 range / High Jun 23
• PRICE: $68.86 @ 07:13 BST Jul 16
• SUP 1: $65.92 - Low Jun 30 
• SUP 2: $61.39 - Low May 30
• SUP 3: $58.00 - Low May 5
• SUP 4: $57.70 - Low Apr 9 and a key support   

Short-term conditions in Brent futures remain bearish and gains since Jun 30 appear corrective. The sharp sell-off on Jun 23 continues to highlight a bearish theme. Recent weakness has resulted in a print below the 50-day EMA and note too that $66.17, 61.8% of the May 5 - Jun 23 bull leg, has been pierced. A resumption of the downtrend would expose $61.39, the May 30 low. Initial resistance to watch is $72.66, a Fibonacci retracement point.

• Looking through, other than the air fares there's no one thing that is driving the beat for services. Core goods are likely driven by clothing and recording media. There were just a lot of categories that added 0.01ppt here and there - so it looks a relatively broad-based marginal increase in quite a few services categories here.
• This does put headline CPI 0.22ppt above the BOE's May MPR forecast with services 0.15ppt above forecast, core goods 0.07ppt below forecast, food 1.02ppt above forecast and energy 0.35ppt below forecast.
• Overall, we think the BOE will largely describe inflation in the August MPR as broadly in line with their forecast, albeit with food price inflation higher than expected.

Notable categories:

• Air fares were stronger than expected at 7.9%M/M (the consensus there was around 3%). That contributed 0.03ppt to headline CPI, and around 0.06ppt to services CPI.
• Clothing relatively strong, adding 0.04ppt to headline CPI.
• Recording media also added 0.03ppt to headline CPI.
• Accommodation actually detracted -0.04ppt from headline CPI.