BRENT TECHS: (X5) Bear Threat Remains Present

• Food price inflation coming in higher than expected will be a bit of a concern. Note that the BOE's forecasts for the next 2-3 months are already above consensus though, with a number of analysts in their previews noting the potential that we are close to the peak.
• The September peak is unlikely to be meaningfully different to where it was expected before this data, however, with air fares likely to have normalised by then (albeit they are so volatile it's hard to say that with much certainty!)
• Note that cultural services also contributed 5 hundredths positively this month (double that for services). That's where concert prices etc goes into. There is also potential for that to be reversed out.
• So that's 25 hundredths of upside pressure from accommodation (which is partly base effects), air fares (which are timing related) and cultural services this month.
• On the positive side rents fell to 4.54% from 5.84%Y/Y which took 10 tenths off of headline CPI (a fall was expected but that seems a little larger than expected to us).

• RES 4: $81.07 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $79.86 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $77.73 - High Jun 23 and a bull trigger 
• RES 1: $72.83 - High Jul 30 and a key resistance 
• PRICE: $66.26 @ 07:05 BST Aug 20
• SUP 1: $65.01 - Low Aug 13
• SUP 2: $60.96 - Low May 30
• SUP 3: $58.18 - Low May 5
• SUP 4: $57.74 - Low Apr 9 and a key support   

Brent futures remain in a bear cycle and the contract is trading just above its recent lows. Sights are on $65.01, the Aug 13 low, where a clear break would confirm a resumption of the bear leg and pave the way for an extension lower. A clear breach would open $60.96, the May 30 low. Key short-term resistance has been defined at $72.83, the Jul 30 high. Clearance of this level would cancel a bear theme.

• RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
• RES 3: 151.21 High Mar 28 
• RES 2: 150.92 High Aug 1 and a key resistance 
• RES 1: 148.52 High Aug 12 
• PRICE: 147.31 @ 07:13 BST Aug 20
• SUP 1: 146.21 Low Aug 14
• SUP 2: 145.86 Low Jul 24
• SUP 3: 145.47 100-dma
• SUP 4: 145.40 50% retracement of the Apr - Aug Upleg

USDJPY remains in consolidation mode. A bearish threat is present as the pair trades closer to its recent lows. Sights are on support at 145.86, the Jul 24 low. Clearance of this level would highlight a stronger S/T reversal and strengthen the bearish engulfing signal on Aug 1. This would open 144.69, a trendline drawn from the Apr 22 low. Initial firm resistance to watch is 148.52, the Aug 12 high. A breach of it would be viewed as a bull signal.