SCHATZ TECHS: (Z5) Bearish Trend Structure Intact

• RES 4: 107.300 Round number resistance  
• RES 3: 107.245 High Jul 24
• RES 2: 107.157 50-day EMA
• RES 1: 107.078 20-day EMA
• PRICE: 107.040 @ 06:13 BST Aug 26
• SUP 1: 106.970 Low Aug 25
• SUP 2: 107.964 1.618 proj of the Jul 7 - 11 - 22 price swing 
• SUP 3: 106.928 1.764 proj of the Jul 7 - 11 - 22 price swing
• SUP 4: 106.870 2.000 proj of the Jul 7 - 11 - 22 price swing

The trend outlook in Schatz futures remains bearish. The contract traded to a fresh short-term cycle low yesterday and 106.985, the Aug 15 low, has been pierced. A clear breach of this level would resume the downtrend and mark an extension of the price sequence of lower lows and lower highs. This would open 106.964, a Fibonacci projection. Initial resistance is 107.078, the 20-day EMA.

• China is sending Vice Commerce Minister Li Chenggang to the US, a move that indicates some degree of interaction between the two sides is resuming after they agreed on a truce in their trade dispute.  Li will meet with US deputy-level officials, US Trade Representative Jamieson Greer and Treasury Department officials, and US business figures, according to the Wall Street Journal, citing people familiar with the matter.  (source BBG)
• President Donald Trump said the US has more leverage over China on trade than the other way around, citing airplane parts as a key item Washington has to counter Beijing’s restrictions on rare earths.  “We have much bigger and better cards than they do,” he said Monday. “If I played those cards, that would destroy China. I’m not going to play those cards.”  China halted most shipments of rare-earth magnets to the US in April, weaponizing the nation’s 90% grip on global production to squeeze American factories. Beijing agreed to normalize flows as part of a trade truce negotiated with the Trump administration, with shipments to the US reaching a six-month high in July.  (source BBG)
• The major onshore bourses in China continuing to rally as most regional peers fell. In China yesterday, turnover reached 3.1 trillion yuan ($433 billion), the second highest ever. The CSI 300 Index is a regional top performer this month. This comes as P/Es start to look stretched, pointing to a disconnect with fundamentals.  Despite the positive trend onshore, the Hang Seng is down today by -0.22% whilst the CSI 300 is up +0.14%, Shanghai up +0.11% and Shenzhen the outperformer up +0.65%.
• Yuan Reference Rate at 7.1188 Per USD; Estimate 7.1682
• The 10-year CGB is softer today, higher by +1bp at 1.77%