Forex News Timeline

Wednesday, August 4, 2021

The ISM service sector activity index released on Wednesday showed numbers above expectations. It hit a record high in July at 64.1. While stronger hi

The ISM service sector activity index released on Wednesday showed numbers above expectations. It hit a record high in July at 64.1. While stronger hiring suggests labor constraints eased at least slightly, supply problems extend well beyond the manufacturing sector, point out analysts at Wells Fargo.  Key Quotes:  “Business activity is humming, with the subindex adding 6.6 points to 67.0, just a few notches below the 69.4 print in March when stimulus checks burned a hole in consumers' pockets and drove this component to an all-time high.” “There are two seemingly contradictory problems occurring at the same time. The first is that demand for services has come back online faster than the ability of firms to staff-up and source needed parts and materials. The second is the slow realization that COVID has gone from something people thought was largely behind us to the problem that just won't go away. Rising case counts and the particularly virulent Delta variant are threatening to disrupt the recreation renaissance we have been counting on to drive a services spending boom this summer. Through July at least, the service sector is still cranking at full throttle.” “If there were some signs of supply constraints easing a bit in today's report, it was for labor. The employment index jumped 4.5 points in July. However, in comparison to readings on activity, new orders and supplier deliveries, the employment index remains well within its historical range at 53.8. In other words, businesses still seem to be having trouble finding workers to meet the rapid rise in services activity.” “We look for nonfarm payrolls in Friday's July jobs report to increase by 865K, which would be roughly on par with June. While there are some signs that momentum stalled in July such as a flattening trend in initial jobless claims, government hiring is likely to be lifted by favorable seasonal factors amid fewer layoffs this year.”
 

The GBP/USD pair rose to a daily high of 1.3958 in the early trading hours of the American session but failed to preserve its bullish momentum. With t

GBP/USD lost its traction after rising above 1.3950.US Dollar Index staged a decisive rebound following a decline below 92.00.Hawkish comments from Fed's Clarida seem to be providing a boost to the USD.The GBP/USD pair rose to a daily high of 1.3958 in the early trading hours of the American session but failed to preserve its bullish momentum. With the greenback regathering its strength, the pair reversed its direction and was last seen posting small daily losses at 1.3901. DXY erases ADP-inspired losses Earlier in the day, the disappointing labour market data from the US weighed on the USD. The Automatic Data Processing (ADP) Research Institute reported on Wednesday that the private sector employment increased by 330,000 in July, missing analysts' estimate of 692,000 by a wide margin. Although the US Dollar Index (DXY) declined to a daily low of 91.90 after the ADP data, hawkish comments by Fed Vice Chair Richard Clarida helped it regain its traction. Clarida noted that he can certainly see the Fed announcing tapering later in the year and added that he expects conditions for the Fed to start raising interest rates toward the end of 2022. Currently, the DXY is up 0.25% on the day at 92.30. On Thursday, the Bank of England (BoE) will announce its monetary policy decisions. Previewing this event, "a dovish decision that would consist of uncertainty and pledges to support the economy is not fully priced in," noted FXStreet analyst Yohay Elam. "There are good reasons for the BOE to convey a cautious message on its August "Super Thursday." That would weigh on GBP/USD but probably not for too long."Bank of England Preview: Five reasons the doves are set to win Super Thursday, GBP/USD may dip.Technical levels to watch for  

The EUR/USD reversed sharply amid a rally of the US dollar and fell from the highest level in three days to a one-week low in a few minutes. The pair

US dollar reverses sharply amid higher US yields, DXY turns decisively higher.EUR/USD extends losses, eyes the 20-day SMA.The EUR/USD reversed sharply amid a rally of the US dollar and fell from the highest level in three days to a one-week low in a few minutes. The pair peaked at 1.1899 after the beginning of the American session and was boosted by US data, and as of writing, it trades at 1.1833, the lowest level in a week. Clarida + ISM service sector offset ADP A weaker-than-expected reading of the ADP private employment report weakened the greenback across the board, sending EUR/USD toward 1.1900. When the pair was ready for a new break higher, two events favored the dollar: ISM service sector and Clarida’s comments. The ISM service sector surpassed expectation in July, coming in at 64.1 (consensus: 60.4). At the same time, Fed Vice Chair Clarida said the economy could warrant interest rate hikes by early 2023. His comments triggered a sell-off in Treasuries and pushed yields to the upside. The US 10-year yield rose from monthly lows at 1.12% to 1.21%. The DXY is now up by 0.25% on Wednesday, having the best day in weeks. Technical levels  

Fed Vice Chair Richard Clarida said on Wednesday that he can certainly see the Fed announcing tapering later this year, as reported by Reuters. Additi

Fed Vice Chair Richard Clarida said on Wednesday that he can certainly see the Fed announcing tapering later this year, as reported by Reuters. Additional takeaways "Would support announcing a moderation in asset purchases later this year." "Tapering and raising interest rates are completely separate decisions." "The threshold metrics for liftoff are serving the Fed well." "The Fed has no plans to surprise anyone on tapering." "Soft landings are something all central bankers aspire to; certainly feasible with the existing Fed toolkit." Market reaction The greenback preserves its strength against its major rivals following these remarks. As of writing, the US Dollar Index was up 0.17% on the day at 92.22.

Commercial crude oil inventories in the US increased by 3.6 million barrels in the week ending July 30, the weekly report published by the US Energy I

Commercial crude oil inventories in the US increased by 3.6 million barrels in the week ending July 30, the weekly report published by the US Energy Information Administration (EIA) revealed on Wednesday. Analysts' estimate was for a decrease of 3.1 million barrels. Market reaction Crude oil prices remain under heavy selling pressure after this report. As of writing, the barrel of West Texas Intermediate was down 2% on the day at $68.80. Additional takeaways "Total motor gasoline inventories decreased by 5.3 million barrels last week." "US crude oil refinery inputs averaged 15.9 million barrels per day during the week ending July 30, 2021, which was 46,000 barrels per day more than the previous week’s average." "US crude oil imports averaged 6.4 million barrels per day last week, down by 75,000 barrels per day from the previous week." "Total products supplied over the last four-week period averaged 20.5 million barrels a day, up by 12.4% from the same period last year."

United States EIA Crude Oil Stocks Change came in at 3.626M, above expectations (-3.102M) in July 30

Fed Vice Chair Richard Clarida noted on Wednesday that he has been surprised by the magnitude of the decline in the bond yields, as reported by Reuter

Fed Vice Chair Richard Clarida noted on Wednesday that he has been surprised by the magnitude of the decline in the bond yields, as reported by Reuters. Additional takeaways "Global move in bond yields is quite pronounced." "Bond moves are not driven by a drop in inflation expectations." "Bond moves could be due to fears about the virus, still analyzing it." "Too soon to embrace secular stagnation as the reason for the move in bond yields." "The reality check on inflation is measuring a wide range of measures." "Opening up of global economy is putting upward pressure on commodity prices." "More will become apparent about strength of labor market over next several months." "Baseline view is that there will be healthy increases in employment gains in the fall." Market reaction The US Dollar Index continues to push higher following these comments and was last seen rising 0.22% on the day at 92.26.

Fed Vice Chair Richard Clarida said on Wednesday that he expects conditions for raising interest rates to be met by the end of 2020 if inflation and e

Fed Vice Chair Richard Clarida said on Wednesday that he expects conditions for raising interest rates to be met by the end of 2020 if inflation and employment outcomes meet his forecasts, as reported by Reuters. Additional takeaways "Starting Fed rate hikes in 2023 is entirely consistent with US central bank’s framework." "My forecasts for inflation, employment are similar to median of Fed policymakers’ June forecasts." "Expecting assessment of maximum employment to be reached by end of 2022." "Made progress toward goals since setting ‘substantial further progress’ bar for taper of asset purchases in December 2020." "In coming meetings, Fed will again assess progress toward our goals, will give advance notice of taper." "Fed policy decisions will depend on outcomes, not outlook, which is uncertain." "If core inflation hits 3% this year, as expected, would consider it much more than a moderate overshoot of Fed’s goal." "Seeing upside risks to inflation forecast." "Under Summary of Economic Projections, median forecast inflation projected to average 2.6% through year-end 2022, 2.5% through year-end 2023." "Support from fiscal policy, along with monetary policy, can offset constraint of effective lower bound." Market reaction US Dollar Index continues to edge higher following these hawkish remarks and was last seen gaining 0.06% on the day at 92.12.

The economic activity in the US service sector expanded at an unprecedented pace in July with the Institute for Supply Management (ISM) Services PMI r

US ISM Services PMI reached a new record high in July.US Dollar Index recovered above 92.00 after upbeat report.The economic activity in the US service sector expanded at an unprecedented pace in July with the Institute for Supply Management (ISM) Services PMI rising to a new series-high of 64.1 from 60.1 in June. This reading came in better than the market expectation of 60.4. Further details of the publication revealed that the Prices Paid Index edged higher to 82.3 from 79.5, the Employment Index improved 53.8 from 49.3. Finally, the New Orders Index rose to 63.7 from 62.1. Commenting on the data, "the Employment Index reflected growth, even though the constrained labor pool continues to be an issue," said Anthony Nieves, Chair of the ISM Services Business Survey Committee. "Materials shortages, inflation and logistics continue to negatively impact the continuity of supply." Market reaction The US Dollar Index pared its losses after this data and was last seen trading flat on the day at 92.07.

United States ISM Services PMI above forecasts (60.4) in July: Actual (64.1)

United States ISM Services Employment Index climbed from previous 49.3 to 53.8 in July

United States ISM Services New Orders Index climbed from previous 62.1 to 63.7 in July

United States ISM Services Prices Paid: 82.3 (July) vs 79.5

The heavily offered tone surrounding the USD pushed the EUR/USD pair to the 1.1900 neighbourhood, back closer to one-month tops touched last Friday. T

EUR/USD attracted some dip-buying on Wednesday and rally back closer to the 1.1900 mark.The disappointing ADP report weighed heavily on the USD and provided a strong lift to the pair.A sustained move beyond the 1.1905-10 region will set the stage for a further appreciating move.The heavily offered tone surrounding the USD pushed the EUR/USD pair to the 1.1900 neighbourhood, back closer to one-month tops touched last Friday. The US dollar weakened across the board following the disappointing release of the ADP report, which showed that US private-sector employment rose by 330K in July. The data validated Fed Chair Jerome Powell's dovish stance that they were some ways away from substantial progress on jobs. This, in turn, weighed heavily on the greenback and provided a strong lift to the EUR/USD pair. From a technical perspective, the EUR/USD attracted some dip-buying in the vicinity of 200-hour SMA support, which coincided with the lower end of a four-day-old descending channel. Given the recent bounce from mid-1.1700s or multi-month lows, the mentioned channel constitutes the formation of a bullish continuation flag pattern on short-term charts. A sustained break through the channel resistance might have already set the stage for a further near-term appreciating move for the pair. Meanwhile, technical indicators on hour/daily charts have been gaining positive traction and add credence to the constructive setup. Some follow-through buying beyond the 1.1905-10 region will reaffirm the positive outlook and prompt some technical buying. The EUR/USD pair might then aim to surpass the 1.1935-40 intermediate resistance. The momentum could further get extended and allow bulls to challenge the very important 200-day SMA, around the key 1.2000 psychological mark. On the flip side, any meaningful pullback now seems to find decent support near the 1.1865-60 horizontal zone. Any subsequent slide might still be seen as a buying opportunity near the 1.1840 confluence region, comprising of 200-hour SMA and trend-channel support. A convincing break below will shift the near-term bias in favour of bearish traders. This, in turn, might turn the EUR/USD pair vulnerable to break below the 1.1800 mark and retest the recent swing lows, around mid-1.1700s. EUR/USD 1-hour chart Technical levels to watch  

The economic activity in the US services sector continued to expand in July, albeit at a softer pace than it did in June, with the Markit Services PMI

Markit Services PMI in US retreated slightly in July.US Dollar Index stays in the negative territory below 92.00.The economic activity in the US services sector continued to expand in July, albeit at a softer pace than it did in June, with the Markit Services PMI declining to 59.9 (final) from 64.6. Further details of the publication showed that the Composite PMI edged lower to 59.9 from 63.7 in June. Commenting on the data, "the pace of US economic growth cooled in July, according to the final PMI data, but remained impressively strong to suggest that GDP will rise robustly again in the third quarter," said Chris Williamson, Chief Business Economist at IHS Markit. “With the survey once again bringing signs that capacity is being constrained by a lack of raw materials and labour, inflationary pressures look set to persist in the coming months," Williamson added. "Though it is encouraging to note that the overall rate of increase of selling prices for goods and services continued to moderate from May’s recent peak." Market reaction The US Dollar Index showed no immediate reaction to this report and was last seen losing 0.23% on the day at 91.86.

United States Markit PMI Composite climbed from previous 59.7 to 59.9 in July

United States Markit Services PMI climbed from previous 59.8 to 59.9 in July

Major equity indexes in the US opened in the negative territory on Wednesday after the disappointing labour market data from the US. As of writing, th

Wall Street's main indexes opened in the negative territory.ADP Employment Change came in lower than expected in July.Energy shares continue to slide amid slumping crude oil prices.Major equity indexes in the US opened in the negative territory on Wednesday after the disappointing labour market data from the US. As of writing, the S&P 500 was down 0.33% at 4,408, the Dow Jones Industrial Average was losing 0.6% at 34,903 and the Nasdaq Composite was falling 0.07% at 15,054. The monthly data published by the Automatic Data Processing (ADP) Research Institute showed on Wednesday that private-sector employment increased by 330,000 in July, missing the market expectation of 695,000 by a wide margin.  Among the 11 major S&P 500 sectors, the Energy Index is down 2.5% pressured by a 2.7% decline seen in US crude oil prices. On the other hand, the defensive Real Estate Index is the only major sector trading in the green following the opening bell. S&P 500 chart (daily)

Economists at Société Générale expect the USD/IDR pair to edge higher in the coming months though high COVID-19 numbers have got limited market reacti

Economists at Société Générale expect the USD/IDR pair to edge higher in the coming months though high COVID-19 numbers have got limited market reaction. Overall, risks are skewed to upside for USD/IDR. Third wave and faltering growth recovery “Localised spikes in COVID-19 cases have had a diminishing impact on Asia FX, especially high yielders. That said, a worsening pandemic and slow vaccination should be interpreted as bearish for the currency. A faltering growth recovery is detrimental to the IDR.”  Monetary policy “Bank Indonesia (BI) kept its policy rate on hold at the July MPC, signalling a pro-growth policy into 2022. With BI foreseeing no policy normalisation until 2H22, monetary policy support for the IDR has peaked. We view possible faster Fed policy normalisation vs the BI as detrimental to the IDR in the medium-term.”  Dollar factor “The spread of the Delta variant and consequent risk-off sentiment should sustain the dollar’s strength and upside pressure on USD/IDR. Risk-on periods would be positive for the IDR, but any rallies should be limited by higher US yields and talk of tapering. With the DXY forecast at 94 one year ahead, we see room for USD/IDR to grind higher (~14,700).”  

The USD/JPY pair witnessed some aggressive selling during the early North American session and dived to the lowest level since May 26, around the 108.

A combination of factors dragged USD/JPY lower for the third successive day.The disappointing ADP report prompted aggressive selling around the USD.The risk-off mood benefitted the safe-haven JPY and contributed to the slide.The USD/JPY pair witnessed some aggressive selling during the early North American session and dived to the lowest level since May 26, around the 108.75 region in the last hour. The pair struggled to preserve its intraday gains, instead met with some fresh supply near the 109.20-25 region and prolonged this week's negative move for the third consecutive session. The latest leg of a sudden fall over the past hour or so followed the disappointing release of the US ADP report, which weighed heavily on the US dollar. The Automatic Data Processing (ADP) Research Institute reported that the US private-sector employers added 330K new jobs in July. This was well below consensus estimates pointing to a reading of 695K and June's downwardly revised reading of 680K. The data reinforced dovish Fed expectations, which was evident from a sharp fall in the US Treasury bond yields. The USD remained depressed and failed to gain any respite from St. Louis Fed President James Bullard's comments, saying that inflation is going to be more persistent than some people expect. Bullard further added that inflation will remain elevated near 2.5% to 3% in 2022 and is not going to come down as fast as some people want. Meanwhile, worries that the spread of the highly contagious Delta variant of the coronavirus disease could derail the global economic recovery took its toll on the global risk sentiment. The risk-off impulse – as depicted by a weaker tone around the equity markets – benefitted the safe-haven Japanese yen and exerted additional pressure on the USD/JPY pair. Apart from this, possibilities of some technical selling below the 109.00 mark further contributed to the ongoing downward trajectory. This could also be seen as a fresh trigger for bearish traders and might have set the stage for a slide towards the 108.60-55 region en-route May swing lows, around the 108.35 area. Wednesday's US economic docket also features the release of ISM Services PMI, which might influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, the broader market risk sentiment and the US bond yields will also be looked upon for some short-term trading opportunities. Technical levels to watch  

Economists at Société Générale expect the USD/KRW pair to edge higher towards 1,160 by end-2021 as the Korean won is no longer to benefit from strong

Economists at Société Générale expect the USD/KRW pair to edge higher towards 1,160 by end-2021 as the Korean won is no longer to benefit from strong exports as in the past year.  Buy USD/KRW on dips “We have revised up our USD/KRW forecast to 1,160 by year-end and 1,200 in 2Q22.” “The consumption shift in developed markets to services from goods will likely continue and be modestly negative for major exporters’ currencies, including the won.” “We also believe that the widening interest rate differential (IRDs) theme is unlikely to strengthen the won. The relationship between IRDs and USD/KRW is weak. Therefore, we do not think that the BoK hiking policy rates in advance of the Fed will strengthen the won.”  “If an imminent BoK hike lowers USD/KRW below 1,140, it would be an opportunity to buy USD/KRW on dips. Foreign equity flows tend to affect USD/KRW more, and we see no compelling reasons for foreign investors to aggressively accumulate Korean equities.”  “Without stronger growth momentum than in the US, it would be reasonable to expect USD/KRW to grind higher from current levels, in line with the CNY.”  

St. Louis Fed President James Bullard told the Washington Post on Wednesday that he doesn't think there is going to be a taper tantrum and argued that

St. Louis Fed President James Bullard told the Washington Post on Wednesday that he doesn't think there is going to be a taper tantrum and argued that markets are well prepared for it, as reported by Reuters. Additional takeaways "My idea is to move earlier and faster on the taper so the Fed could be in a better position to combat strong inflation in 2022." "The labor market is certainly improving and people will get matched up with jobs in the coming months." "It's very clear things have progressed quite rapidly than what the Fed was expecting in December 2020." "The Fed would be able to assess the situation in the first half of next year after taking asset purchases off the table." "Moderately concerned about the housing market." "We don't really need the asset purchases at this point, there is a lot of recovery going on." Market reaction These remarks failed to provide a boost to the greenback. As of writing, the US Dollar Index was down 0.22% on the day at 91.86.

After trading as high as 1.1150 in March, the rest of the year has been a disappointment for EUR/CHF. Economists at ING are closely watching if the Sw

After trading as high as 1.1150 in March, the rest of the year has been a disappointment for EUR/CHF. Economists at ING are closely watching if the Swiss National Bank (SNB) FX intervention does pick up now that EUR/CHF is trading in the low 1.07s. Testing the SNB’s tolerance “We had been bullish EUR/CHF this year on the more constructive global cycle, yet the more mixed global picture and increased ECB dovishness suggest that bullishness will have to be pushed back into 2022 and wait on the turn in the ECB cycle.” “We’ll be watching to see if SNB intervention picks up here at 1.07 – but last year’s low near 1.05 looks more of a line in the sand – and it could even be nearer 1.03 if the SNB is using the real trade-weighted CHF as a guide.” “The wild card would be the SNB doing something on rates – e.g. a surprise cut in rates to -1.00%, while protecting domestic banks with greater exemptions from negative rates. Yet SNB speeches are few and far between and such an event risk may not emerge until much closer to September’s SNB meeting.”  

"The last time we had a major run-up in the pandemic in December and January, it didn't affect the economy as much as predicted," St. Louis Fed Presid

"The last time we had a major run-up in the pandemic in December and January, it didn't affect the economy as much as predicted," St. Louis Fed President James Bullard told the Washington Post on Wednesday, as reported by Reuters. Additional takeaways "US firms and consumers have found ways to work, produce and consume while the pandemic is still going on." "There have been pretty good macroeconomic outcomes despite the pandemic." "For people in high physical contact jobs, there is still some hesitancy to go back to work because of the pandemic." "Delta variant has put a question mark on schools opening this fall." "We've had a major inflationary shock." "I think inflation is going to be more persistent than some people expect." "Expecting inflation of 2.5% to 3% in 2022." "Inflation is going to come down but not as fast as some people want." Market reaction The greenback remains on the back foot following these comments and the US Dollar Index was last seen losing 0.22% on the day at 91.87.

Gold is holding steady just above the $1791.45/$1790.85 mid to late July lows. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, maintains a

Gold is holding steady just above the $1791.45/$1790.85 mid to late July lows. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, maintains a bullish bias as the yellow metal remains above the 2019-2021 uptrend line at $1752 but warrants some caution. See – Gold Price Forecast: Four factors support a XAU/USD leg higher – ANZ XAU/USD sidelined near-term above $1791.45 “Gold really needs to overcome the $1834.16 mid-July high to regenerate upside interest and at current levels we are relatively neutral.”  “The daily Elliott wave count remains negative and below $1790 will target the $1752 2019-2021 uptrend line. While above there we will retain our longer term upside bias, however the lack of a sustained bounce is worrying.”  “Above $1834.16 lies the $1857.25 4th June low. This guards the June high at $1916.91 and Fibo at $1921.”  “Longer-term, we still target the $1959/65 November 2020 high and the 2021 high. These guard the $1989/78.6% retracement and the 2072 2020 peak.”  “The 78.6% retracement lies at $1728.90 and only below here will target the $1677.73/$1676.80 lows seen in March.”  

After closing in the positive territory on the back of the Reserve Bank of Australia's hawkish policy outlook on Tuesday, the AUD/USD pair preserved i

AUD/USD is edging higher for the third straight day.US Dollar Index struggles to hold above 92.00 ahead of ISM Services PMI data.US ADP Employment Change missed the market expectation by a wide margin in July.After closing in the positive territory on the back of the Reserve Bank of Australia's hawkish policy outlook on Tuesday, the AUD/USD pair preserved its bullish momentum and touched its highest level in three weeks at 0.7425. As of writing, the pair was up 0.3% on a daily basis at 0.7417. DXY drops below 92.00 after ADP data The renewed USD weakness in the early American session seems to be allowing AUD/USD to preserve its bullish momentum.  The data published by Automatic Data Processing (ADP) Research Institute revealed on Wednesday that employment in the US' private sector increased by 330,000 in July. This reading fell short of the market expectation of 695,000 and caused the greenback to come under modest selling pressure. Currently, the US Dollar Index (DXY) is down 0.15% at 91.93. On the other hand, the data from Australia showed that Retail Sales in June contracted by 1.8% as expected.  Later in the session, the IHS Markit's and the ISM's July Services PMI reports will be watched closely by market participants.  Meanwhile, US stocks futures turned negative on the day after the ADP data, suggesting that the DXY's downside could remain limited in the second half of the day if the market mood sours following Wall Street's opening bell. Technical levels to watch for  

Gold finally broke out of its intraday consolidation phase and shot to fresh weekly tops, just above the $1,825 level during the early North American

Gold caught some bids during the early North American session amid renewed USD selling bias.Disappointing ADP report reaffirmed dovish Fed expectations and provided an additional boost.The risk-off impulse in the markets extended some additional support to the safe-haven metal.Gold Price Forecast: XAU/USD awaits a range breakout but not so soon, NFP in focusGold finally broke out of its intraday consolidation phase and shot to fresh weekly tops, just above the $1,825 level during the early North American session. The latest leg of a sudden spike over the past hour or so could be attributed to the emergence of some selling around the US dollar, which tends to benefit the dollar-denominated commodity. The already weaker greenback lost some ground following the disappointing release of the ADP report, which showed that private-sector employment in the US rose by 330K in July. This was well below consensus estimates pointing to a reading of 695K and the previous month's downwardly revised reading of 680K. The data validated Fed Chair Jerome Powell's recent comments that they were some ways away from substantial progress on jobs. This, in turn, reinforced market expectations that the US central bank will wait for a longer period before slowing its massive monetary support. This was seen as another factor that provided an additional boost to the non-yielding gold. Apart from this, the risk-off impulse in the markets further acted as a tailwind for the safe-haven precious metal and contributed to the intraday positive move. Worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery continued weighing on investors' sentiment, which was evident from a generally softer tone around the equity markets. With the latest leg up, gold has now moved back above the very important 200-day SMA and within the striking distance of the double-top resistance near the $1,832-34 supply zone. A sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for additional gains. That said, investors might refrain from placing any aggressive bullish bets, rather prefer to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs report (NFP). This, in turn, might keep a lid on any further appreciating move for gold, at least for the time being. Technical levels to watch  

The GBP/USD pair continues to trade in a relatively tight range on Wednesday but manages to stay in the positive territory. As of writing, the pair wa

GBP/USD clings to small daily gains on Wednesday.Private sector employment in US rose less than expected in July.US Dollar Index stays near 92.00 ahead of US ISM data.The GBP/USD pair continues to trade in a relatively tight range on Wednesday but manages to stay in the positive territory. As of writing, the pair was up 0.18% on the day at 1.3939. USD struggles to find demand after ADP data The data published by the Automatic Data Processing (ADP) Research Institute showed on Wednesday that employment in the US private sector rose by 330,000 in July. This reading missed the market expectation of 695,000 by a wide margin and made it difficult for the greenback to gather strength. At the moment, the US Dollar Index is posting small daily gains at 91.98. Later in the session, the IHS Markit's and the ISM's Services PMI reports from the US will be looked upon for fresh impetus. However, ahead of the Bank of England's (BoE) monetary policy announcements on Thursday, GBP/USD's reaction is likely to remain muted. Previewing the BoE event, "there are good reasons for the BOE to convey a cautious message on its August Super Thursday," said FXStreet analyst Yohay Elam. "That would weigh on GBP/USD but probably not for too long."Bank of England Preview: Five reasons the doves are set to win Super Thursday, GBP/USD may dip.Technical levels to watch for  

Canada Building Permits (MoM) registered at 6.9% above expectations (5.5%) in June

The EUR/USD pair reversed an early dip to levels below mid-1.1800s, or multi-day lows and moved to the top end of its intraday trading range post-US A

EUR/USD attracted some dip-buying on Wednesday amid a subdued USD price action.The USD remained on the defensive following the disappointing release of the US ADP report.Private-sector employment rose by 330K July as against 695K expected and 680K previous.The EUR/USD pair reversed an early dip to levels below mid-1.1800s, or multi-day lows and moved to the top end of its intraday trading range post-US ADP report, though lacked any follow-through. The pair witnessed some selling in reaction to the downward revision of the Eurozone services PMIs for July but managed to attract some dip-buying amid a subdued US dollar price action. Firming market expectations that the Fed will stick to its ultra-lose monetary policy stance for a longer period continued acting as a headwind for the greenback. This, in turn, was seen as a key factor that extended some support to the EUR/USD pair. The USD bulls remained on the defensive following the disappointing release of the US ADP report, which showed that private-sector employers added 330K new jobs in July. This was well below consensus estimates of 695K and June's downwardly revised reading of 680K (692K reported previously). The data added to worries about the potential economic fallout from the fast-spreading Delta variant of the coronavirus and weighed on the greenback. That said, the prevalent cautious mood around the equity markets might extend some support to the greenback's relative safe-haven status and cap gains for the EUR/USD pair. Investors might also be reluctant to place any aggressive bullish bets ahead of Friday's release of the closely-watched US monthly jobs report. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move. Technical levels to watch  

Employment in the US' private sector increased by 330,000 in July, the monthly data published by the Automatic Data Processing (ADP) Research Institut

Employment in the US' private sector increased by 330,000 in July, the monthly data published by the Automatic Data Processing (ADP) Research Institute revealed on Wednesday. This reading followed June's increase of 680,000 (revised from 692,000) and missed the market expectation of 695,000 by a wide margin. Developing story... 

United States ADP Employment Change came in at 330K below forecasts (695K) in July

S&P 500 is expected to see a deeper push into the zone at 4436/56. Nevertheless, economists at Credit Suisse continue to look to not chase strength th

S&P 500 is expected to see a deeper push into the zone at 4436/56. Nevertheless, economists at Credit Suisse continue to look to not chase strength through here for now and look for a “summer consolidation/correction” to emerge.  Key near-term support remains seen at 4386/64 “Weakness has yet again been contained by high-level support from the recent low, the price gap from last Friday morning and 13-day exponential average at 4381/64. This keeps the immediate risk higher for a more concerted push into our Q3 objective zone at 4436/56, also trend resistance from April.”  “Whilst we continue to view the core trend as bullish, our bias remains not to chase strength through here for now and for a ‘summer consolidation/correction’ to emerge. We have to acknowledge though the strong underlying momentum and a close above 4456 would see the immediate risk stay higher for a move to the psychological 4500 level next.”  “Near-term support moves to 4410, then 4398, with key still the 4386/64 zone. Only a close below here would mark a near-term top for a corrective phase and a fall back to support at 4350, then 4331/21.”  

The USD/CAD pair closed the last three trading days in the positive territory as falling crude oil prices made it difficult for the commodity-related

USD/CAD staged a modest rebound after declining toward 1.2500.WTI trades below $70 ahead of EIA Crude Oil Stocks Change data.US Dollar Index stays calm near 92.00 as focus shifts to US data.The USD/CAD pair closed the last three trading days in the positive territory as falling crude oil prices made it difficult for the commodity-related CAD to find demand. Although the pair edged lower toward 1.2500 on Wednesday, it regained its traction and was last seen posting small daily gains at 1.2544. Eyes on high-tier US data Renewed concerns over the coronavirus Delta variant hurting the energy demand recovery in China continue to weigh on oil prices. As of writing, the barrel of West Texas Intermediate (WTI), which lost nearly 5% in the first two days of the week, was down 0.6% on the day at $69.75. Later in the session, June Building Permits will be the only data featured in the Canadian economic docket but it's not expected to receive a significant market reaction. On the other hand, the US Dollar Index extends its sideways grind around 92.00 ahead of key data releases, allowing the CAD's valuation to impact USD/CAD's movements. The IHS Markit and the ISM both will be publishing the Services PMI surveys for July later in the day. The ADP's private sector employment report will be looked upon for fresh impetus as well. Investors expect the ADP Employment Change to rise modestly to 695K in July from 692 in June. A stronger-than-expected reading could provide a boost to the USD and help USD/CAD gather additional bullish momentum. Technical levels to watch for  

United States MBA Mortgage Applications dipped from previous 5.7% to -1.7% in July 30

The USD/CHF pair extended its daily losing streak to seven on Tuesday and touched its lowest level since mid-June at 0.9022. Nevertheless, the pair se

USD/CHF close previous seven trading days in the red.US Dollar Index stays above 92.00 on Wednesday.Eyes on ADP Employment Change and ISM Services PMI data from US.The USD/CHF pair extended its daily losing streak to seven on Tuesday and touched its lowest level since mid-June at 0.9022. Nevertheless, the pair seems to have gone into a consolidation phase on Wednesday and was last seen gaining 0.15% on the day at 0.9050. 10-year US T-bond yield rebounds modestly  The sharp decline witnessed in the US Treasury bond yields weighed heavily on USD/CHF on Monday and Tuesday. After losing more than 7% in that two-day period, the benchmark 10-year US T-bond yield is up 0.5%, helping the pair stay in the positive territory. On the other hand, the greenback continues to stay resilient against its major rivals with the US Dollar Index clinging to small daily gains above 92.00.  Later in the session, the ADP's private-sector employment report for July will be looked upon for fresh impetus. The ISM's and the IHS Markit's July Services PMI will be featured in the US economic docket as well. However, ahead of Friday's Nonfarm Payrolls report, the market reaction to Wednesday's data is likely to be muted. Instead, investors will remain focused on the US T-bond yields. Technical levels to watch for  

Wednesday's US economic docket highlights the release of the ADP report on private-sector employment, scheduled at 12:15 GMT. Economists expect anothe

US ADP jobs report overview Wednesday's US economic docket highlights the release of the ADP report on private-sector employment, scheduled at 12:15 GMT. Economists expect another strong report, indicating that private-sector employers added nearly 700K new jobs for the second successive month in July. Eren Sengezer, Editor at FXStreet, offered his view on the report and explained: “Considering how the service sector employment made up the majority of job gains in June, an increase in manufacturing jobs might not be able to offset a decline in service sector jobs and cause the ADP Employment Change to post a lower-than-expected print.” How could the data affect EUR/USD? Ahead of the key release, the EUR/USD pair dropped to multi-day lows, though a subdued US dollar price action helped limit the downside. A disappointing report might be enough to prompt some selling around the USD. Conversely, a stronger-than-expected print is more likely to be overshadowed by firming expectations that the Fed will wait for a longer period before slowing its massive monetary support. This, in turn, suggests that the path of least resistance for the US is down, which should assist the pair to regain some positive traction. That said, any immediate market reaction should be limited as the focus remains on Friday's release of the closely-watched US monthly jobs report – popularly known as NFP. Yohay Elam, FXStreet's own analyst, offered a brief technical outlook for the major: “Momentum on the four-hour chart turned to the downside, a bearish sign. On the other hand, EUR/USD is holding above the 200 Simple Moving Average, which converges with the 1.1850 level – a resistance line from mid-July. That is the critical support line.” Yohay also offered important technical levels to trade the EUR/USD pair: “Below 1.1850, the next cushion is at 1.1830, which was a swing high in late July. It is followed by 1.1770 and 1.1750 – the latter being last month's low. Euro/dollar resistance is at 1.1910, the July high, followed by 1.1945, 1.1975 and 1.2015.” Key Notes   •  US ADP Employment Change July Preview: Jobs gains in service sector to slowdown   •  EUR/USD Forecast: Can the euro hold above support confluence? Three US events hold the key   •  EUR/USD Price Analysis: Something for everyone About the US ADP jobs report The Employment Change released by the Automatic Data Processing, Inc, Inc is a measure of the change in the number of employed people in the US. Generally speaking, a rise in this indicator has positive implications for consumer spending, stimulating economic growth. So a high reading is traditionally seen as positive, or bullish for the USD, while a low reading is seen as negative, or bearish.

After closing in the positive territory on Tuesday, the NZD/USD pair gained traction during the Asian trading hours on Wednesday and reached its highe

Upbeat employment data from New Zealand boosts NZD on Wednesday.US Dollar Index continues to fluctuate around 92.00 for the third straight day.Focus shifts to ADP Employment Change and ISM Services PMI data from US.After closing in the positive territory on Tuesday, the NZD/USD pair gained traction during the Asian trading hours on Wednesday and reached its highest level in nearly a month at 0.7084. As of writing, the pair was up 0.88% on the day at 0.7076. NZD capitalizes on strong labour market report The impressive jobs report from New Zealand provided a boost to the NZD. Statistics New Zealand reported on Wednesday that the Unemployment Rate declined to 4% in the second quarter from 4.6% in the first quarter. Additionally, the Employment Change in the same period rose by 1% on a yearly basis, surpassing the market expectation for an increase of 0.7%. On the other hand, the US Dollar Index continues to move sideways around 92.00 for the third straight day on Wednesday, allowing the kiwi's market valuation to drive NZD/USD's action.  Later in the session, the ADP Employment Changed and the ISM Services PMI data from the US will be looked upon for fresh impetus. In the meantime, S&P Futures are posting small daily losses, suggesting that the USD could continue to stay resilient against its rivals if the market mood remains cautious in the second half of the day. Technical levels to watch for  

The GBP/USD pair maintained its bid tone through the first half of the European session and was last seen trading near weekly tops, just below mid-1.3

GBP/USD gained some follow-through traction for the second straight session on Wednesday.A combination of factors acted as a tailwind for the British pound and remained supportive.Investors look forward to the US macro data for some impetus ahead of the BoE on Thursday.The GBP/USD pair maintained its bid tone through the first half of the European session and was last seen trading near weekly tops, just below mid-1.3900s. The pair built on the previous day's rebound from the 1.3875 support area and gained some follow-through traction for the second consecutive session on Wednesday. The British pound remained well supported by the optimism over the declining trend of new COVID-19 cases in the UK. Bulls further took cues from an upward revision of the UK Services PMI for July. The data provided further evidence of a more robust UK economic recovery, which has been fueling speculations about a possible hawkish shift from the Bank of England. This comes on the back of the European Union's decision to pause legal proceedings against the UK over the Northern Ireland protocol dispute, which further acted as a tailwind for the sterling. On the other hand, the US dollar, so far, has struggled to attract any meaningful buying amid expectations that the Fed will stick to its ultra-lose policy stance for a longer period. That said, concerns about the fast-spreading Delta variant of the coronavirus and a modest uptick in the US Treasury bond yields helped limit any deeper losses for the USD. Investors might also be reluctant to place any aggressive bets, rather prefer to wait on the sidelines ahead of the upcoming BoE monetary policy meeting on Thursday. The key focus will be on the BoE's inflation outlook, which, in turn, will play a key role in influencing the GBP price dynamics in the near term and provide a fresh directional impetus to the GBP/USD pair. In the meantime, Wednesday's US economic docket, highlighting the releases of the ADP report on private-sector employment and ISM Services PMI will be looked upon for some impetus. Apart from this, the US bond yields and the broader market risk sentiment will drive the greenback, allowing traders to grab some short-term opportunities around the GBP/USD pair. Technical levels to watch  

RBA’s Harper: Australia faces a deep third-quarter GDP contraction – WSJ AUD/USD sits near three-week tops, comfortably above 0.7400 mark more to come

The Australian economy braces for a deep contraction in the third quarter and heightened uncertainty for the fourth quarter due to lengthening lockdowns across major cities, the Reserve Bank of Australia (RBA) board member Ian Harper told the Wall Street Journal (WSJ) on Wednesday. AUD/USD sits near three-week tops, comfortably above 0.7400 mark more to come ...

The AUD/USD pair maintained its bid tone through the first half of the European session and was last seen trading around the 0.7415 region, just below

AUD/USD added to its weekly gains and continued scaling higher for the third successive day.The RBA's plan to taper the bond-buying program continued acting as a tailwind for the aussie.A subdued USD demand remained support, though COVID-19 woes might cap any further gains.The AUD/USD pair maintained its bid tone through the first half of the European session and was last seen trading around the 0.7415 region, just below the three-week tops set earlier this Wednesday. The pair built on the previous day's hawkish RBA-inspired gains and prolonged this week's positive move for the third successive session. It is worth recalling that the RBA stuck with its plan to taper its bond-buying programme, which, in turn, was seen as a key factor that continued acting as a tailwind for the Australian dollar. Apart from this, technical buying on a sustained move beyond the 0.7400 mark further contributed to the intraday positive move on Wednesday. That said, concerns about the economic fallout from the fast-spreading Delta variant of the coronavirus might hold traders from placing any aggressive bullish bets around the AUD/USD pair. On the other hand, the prevalent cautious mood around the equity markets drove some haven flows towards the US dollar. Apart from this, a modest uptick in the US Treasury bond yields further underpinned the greenback, which might further collaborate to keep a lid on any runaway rally for the AUD/USD pair, at least for now. Meanwhile, firming expectations that the Fed will retain its ultra-lose monetary policy stance for a longer period should cap gains for the USD. This, along with a near-term bullish breakout through the 0.7400 hurdle, supports prospects for a further near-term appreciating move, possibly towards testing the 0.7470-75 supply zone. Market participants now look forward to the US economic docket, highlighting the release of the ADP report on private-sector employment and ISM Services PMI. Apart from this, the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and produce some trading opportunities around the AUD/USD pair. Technical levels to watch  

Ahead of the Bank of England’s (BOE) Super Thursday events, the central bank’s former Monetary Policy Committee (MPC) member David Miles said that the

Ahead of the Bank of England’s (BOE) Super Thursday events, the central bank’s former Monetary Policy Committee (MPC) member David Miles said that the BOE should consider ending its current asset purchase programme early, in an interview with MNI on Wednesday. He added that the MPC should also consider dropping forward guidance to increase 'flexibility' to either ease or tighten policy as needed. Additional comments “See little justification for completing the QE programme and place a heavy weight on the MPC giving itself the freedom to adjust policy in response to changing economic circumstances.” “Relative to last November, when the current GBP150 billion of purchases was announced, economic circumstances have altered significantly.” "We hadn't seen inflation pick-up as much as it has, there was a projection that unemployment would be significantly higher by now than it turns out to be and that the bounce back in economic activity would not be as large as it has been." "A perfectly sensible reaction to this would be to say 'look, we announced in November 2020 what we thought the right thing to do and set off on a trajectory that would be to buy GBP150 billion until roughly the end of this year Now we have got to August 2021 and things have changed. To stick to the original trajectory is not required by some notion of consistency of action.” “See it as "hard to think" policy should be even more expansionary over the next 3 months.” Related readsGBP/USD carving out a bull flag ahead of BOE Super ThursdayBank of England Preview: Five reasons the doves are set to win Super Thursday

USD/INR is off the six-week lows of 74.08 but remains heavy for the third straight day on Wednesday. The Indian rupee gains strength on the back of th

USD/INR falls for the third day in a row after facing rejection at 21-DMA.The spot looks to challenge the 50-DMA support at 74.00.RSI edges lower below the midline, supporting USD/INR bears.USD/INR is off the six-week lows of 74.08 but remains heavy for the third straight day on Wednesday. The Indian rupee gains strength on the back of the domestic indices at record highs and IPO inflows. However, the spot trimmed losses amid a fresh jump seen in the US dollar across the board. The pair now awaits the US ADP and ISM Services PMI data for fresh trading opportunities. Technically, USD/INR almost tested the upward-sloping 50-Daily Moving Average (DMA) support at 74.00 on Wednesday, having faced rejection at the mildly bearish 21-DMA cap at 74.50 earlier this week. The latest leg lower has prompted a breach of the rising trendline support at 74.22. A daily closing below that level is needed to renew the downside momentum. If the bears manage to take out the 50-DMA barrier, then the spot could test the bullish 100-DMA at 73.85. Adding credence to the down move, the Relative Strength Index (RSI) looks south below the central line, currently at 45.10. A four-hourly closing below the 200-SMA is needed to expose the 74.00 mark. USD/INR: Daily chart On the flip side, the bulls need to crack a strong resistance zone around 74.40 to take on the 21-DMA upside hurdle. Recapturing the 21-DMA is critical to negating the bearish bias in the near term. USD/INR: Additional levels  

GBP/USD has been making its way higher after retreating from the peak earlier on as UK covid cases continue falling. Attack on 1.40 coming? Upbeat UK

GBP/USD has been making its way higher after retreating from the peak earlier on as UK covid cases continue falling. Attack on 1.40 coming? Upbeat UK data supports gains, in the view of FXStreet’s Analyst Yohay Elam. Cable trend is positive “UK COVID-19 cases have extended their decline, and seem to be on the verge of breaking below the 20,000 infections/day barrier. Despite the increase in deaths from the deadly disease, it seems that Britain's reopening had little effect on spreading the virus.”  “Another positive development is the upgrade to Markit's Services Purchasing Managers' Index. The final read shows a score of 59.6, up from 57.8 originally reported.” “The ADP Nonfarm Payrolls report provides a snapshot of private-sector hiring. An increase of 695,000 positions is expected. The ISM Services PMI is predicted to remain above 60, reflecting strong growth in America's largest sector. However, a miss in the ISM Manufacturing PMI implies the services gauge could also drop.” “Vice-Chair Richard Clarida is scheduled to speak about the economy and could provide insights into the bank's thinking about tapering its bond-buying scheme.”  “Some resistance awaits at the daily high of 1.3947, and it is followed by the July peak of 1.3980. Above the round 1.40 level, 1.4030 is eyed.”  “Support is at 1.3870, the weekly low, followed by 1.3850 and 1.3760.”  

The EUR/USD pair witnessed some selling during the first half of the European session and dropped to fresh weekly lows, around the 1.1840 region in th

EUR/USD witnessed some selling on Wednesday in reaction to softer Eurozone macro releases.A modest USD uptick further contributed to the intraday slide to levels just below mid-1.1800s.Dovish Fed expectations capped any meaningful USD gains and might help limit the downside.The EUR/USD pair witnessed some selling during the first half of the European session and dropped to fresh weekly lows, around the 1.1840 region in the last hour. The pair struggled to capitalize on its modest intraday gains, instead met with some fresh supply near the 1.1880 region in reaction to the downward revision of the Eurozone Services PMI readings for July. The data reaffirmed elevated growth conditions, though at a slightly slower pace than estimated previously. This was followed by the disappointing release of Eurozone Retail Sales, which recorded a growth of 1.5% MoM in June as against 1.7% expected. The momentum dragged the EUR/USD pair away from one-month tops – levels just above the 1.1900 mark touched on July 30 – and was further fueled by a modest US dollar rebound. Concerns that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery continued weighing on investors' sentiment. This was evident from the prevalent cautious mood around the equity markets, which along with a modest uptick in the US Treasury bond yields benefitted the safe-haven USD. That said, receding Fed rate hike expectations might hold the USD bulls from placing any aggressive bets and help limit deeper losses for the EUR/USD pair. Investors might also be reluctant ahead of Friday's release of the US monthly jobs report (NFP), warranting some caution before positioning for any further downfall. Market participants now look forward to the US economic docket, featuring the release of the ADP report on private-sector employment and ISM Services PMI. Apart from this, the broader market risk sentiment and the US bond yields will influence the USD, which might provide some trading impetus to the EUR/USD pair. Technical levels to watch  

Eurozone’s Retail Sales rose by 1.5% MoM in June versus 1.7% expected and 4.1% last, the official figures released by Eurostat showed on Wednesday. On

Eurozone Retail Sales increased by 1.5% MoM in June vs. +1.7% expected.Retail Sales in the bloc rose by 5.0% YoY in June vs. 4.5% expected.Eurozone’s Retail Sales rose by 1.5% MoM in June versus 1.7% expected and 4.1% last, the official figures released by Eurostat showed on Wednesday. On an annualized basis, the bloc’s Retail Sales increased by 5.0% in June versus 8.6% booked in May and 4.5% estimated. more to come .... About Eurozone Retail Sales The Retail Sales released by Eurostat is a measure of changes in sales of the Eurozone retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending. Usually, the positive economic growth anticipates "Bullish" for the EUR, while a low reading is seen as negative, or bearish, for the EUR.

Gold (XAU/USD) remains consistently capped at its 200-day average (DMA) at $1820 to leave it trapped in the sideways range of the past year, strategis

Gold (XAU/USD) remains consistently capped at its 200-day average (DMA) at $1820 to leave it trapped in the sideways range of the past year, strategists at Credit Suisse report. See – Gold Price Forecast: Four factors support a XAU/USD leg higher – ANZ XAU/USD stays sidelined “Gold stays sidelined in its broad neutral range, still capped at its 200-day average at $1820. A close above here and then the $1834 recent high stays needed to reassert an upward bias and open the door to a move back to more important resistance at $1917/66.”  “Key in-range price support remains seen at $1755/51 a close below which would warn of a retest of more important support at the $1682/71 YTD low and 38.2% retracement.”  

European Monetary Union Retail Sales (MoM) below forecasts (1.7%) in June: Actual (1.5%)

European Monetary Union Retail Sales (YoY) registered at 5% above expectations (4.5%) in June

Commenting on a likely withdrawal of the European Central Bank’s (ECB) Pandemic Emergency Purchase Programme (PEPP), the central bank’s Governing Coun

Commenting on a likely withdrawal of the European Central Bank’s (ECB) Pandemic Emergency Purchase Programme (PEPP), the central bank’s Governing Council member Martins Kazaks said that “it would be premature for ECB to make a judgment on PEPP future in September.” Additional comments “ECB will give reasonable warning before ending PEPP.” “Forward guidance is not tying ECB's hands.” “Guidance expected to enhance prices, minimise the required stimulus.”

The EUR/GBP cross dropped to fresh weekly lows during the first half of the European session, with bears now eyeing a sustained break below the key 0.

EUR/GBP added to the overnight losses and witnessed some selling for the second straight day.The improving COVID-19 situation in the UK underpinned the sterling and exerted some pressure.A weaker USD extended some support to the euro and might help limit the downside for the cross.The EUR/GBP cross dropped to fresh weekly lows during the first half of the European session, with bears now eyeing a sustained break below the key 0.8500 psychological mark. The cross struggled to capitalize on its modest intraday gains, instead met with some fresh supply near the 0.8530-35 area and drifted into the negative territory for the second successive day. The British pound's relative outperformance comes amid optimism over the declining trend of new COVID-19 cases in the UK. Apart from this, the European Union's decision to pause legal proceedings against the UK over the Northern Ireland protocol dispute further acted as a tailwind for the sterling. The GBP bulls further took cues from an upward revision of the UK Services PMI for July to 59.6 as against the flash estimate of 57.8. The data provided further evidence of a more robust UK economic recovery. This has been fueling speculations that the Bank of England (BoE) could be among the first major central banks to begin the process of weaning its economy off stimulus support. This, in turn, was also seen as another factor that underpinned the GBP. Hence, the key focus will be on the upcoming BoE monetary policy meeting on Thursday. The outcome will play a key role in determining the next leg of a directional move for the EUR/GBP cross. In the meantime, a modest pickup in demand for the shared currency – amid sustained US dollar selling – might help limit any deeper losses. Technical levels to watch  

The UK services sector activity expanded more than expected in July, the final report from IHS Markit confirmed this Monday. The seasonally adjusted I

UK Final Services PMI upwardly revised to 59.6 in July.GBP/USD remains uninspired near 1.3930 on the UK data.Eyes on US ISM Services PMI as the USD rebounds.The UK services sector activity expanded more than expected in July, the final report from IHS Markit confirmed this Monday.  The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised up to 59.6 in July versus 57.8 expected and a 57.8 – last month’s flash reading. Key points Weakest rise in business activity since March. Strongest input cost inflation in 25 years of data collection. Staff shortages constrain business capacity and recruitment. Tim Moore, Economics Director at IHS Markit, which compiles the survey “July data illustrates that recovery speed across the UK economy has slowed in comparison to the second quarter of 2021. More businesses are experiencing growth constraints from supply shortages of labor and materials, while on the demand side we've already seen the peak phase of pent-up consumer spending. "The full easing of pandemic restrictions appears to have helped limit the overall loss of momentum towards the end of July. At 59.6, the PMI reading for services output was much stronger than our earlier 'flash' figure of 57.8 in July, largely due to the final index covering an extra five working days since 'Freedom Day'.” FX implications GBP/USD was little changed on the upbeat UK data, keeping its range around 1.3930 following a retreat from the daily highs of 1.3947 seen in the last hour. The spot is still up 0.09% so far.

United Kingdom Markit Services PMI came in at 59.6, above forecasts (57.8) in July

The USD/JPY pair held on to its modest intraday gains through the early European session and was last seen trading near daily tops, around the 109.10-

USD/JPY gained some positive traction on Wednesday and recovered a part of the overnight losses.Dovish Fed expectations kept the USD bulls on the defensive and might cap any meaningful upside.COVID-19 woes might continue to benefit the safe-haven JPY, warranting caution for bullish traders.The USD/JPY pair held on to its modest intraday gains through the early European session and was last seen trading near daily tops, around the 109.10-15 region. Having shown some resilience below the 109.00 mark, the USD/JPY pair gained some positive traction on Wednesday and recovered a part of the overnight losses to the lowest level since May 26. The USD/JPY pair, for now, seems to have snapped two consecutive days of the losing streak, though any meaningful recovery remains elusive. The US dollar remained on the defensive amid firming market expectations that the Fed will wait for a longer period before slowing its massive monetary support. Apart from this, concerns about the fast-spreading Delta variant of the coronavirus might continue to underpin the safe-haven Japanese yen and further cap gains for the USD/JPY pair. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the USD/JPY pair has bottomed out and positioning for any further appreciating move. Market participants now look forward to the US economic docket, featuring the releases of the ADP report and ISM Services PMI for some short-term trading impetus. The key focus, however, will remain on the closely-watched US monthly jobs data. The popularly known NFP report is scheduled for release on Friday and will play a key role in influencing the near-term USD price dynamics. In the meantime, the broader market risk sentiment might produce some trading opportunities around the USD/JPY pair. Technical levels to watch  

The New Zealand dollar has continued to outperform following the release of the latest employment report from New Zealand. The report has helped lift

The New Zealand dollar has continued to outperform following the release of the latest employment report from New Zealand. The report has helped lift the NZD/USD rate back above 0.7050. According to economists at MUFG Bank, the labour market report reinforces Reserve Bank of New Zealand (RBNZ) rate hike expectations. Fully pricing a rate hike from the RBNZ  “The latest employment report revealed that the unemployment rate fell much more sharply than expected by 0.6 point to 4.0% in Q2. It is now far below the RBNZ’s own unemployment rate forecast of 4.7% and is likely close to levels judged as consistent with full employment. At the same time, there was evidence of a pick-up in wage growth. Headline wages increased by 0.7% QoQ in Q2 compared to 0.4% in Q1.” “The tightening labour market which is being exacerbated by closed borders, and building wage pressure will trigger greater concern from the RBNZ. We now expect the RBNZ to begin raising rates this month and to follow up with at least one more rate hike later this year.” “The domestic interest rate market is already pricing in that more hawkish scenario but the New Zealand dollar has failed to fully track the recent move higher in rates as spreads have moved sharply in its favour. Lingering concerns over the outlook for global growth have been weighing on commodity currencies more broadly even as global equity markets and commodity prices remain close to recent highs.”  

Italy Retail Sales s.a. (MoM) up to 0.7% in June from previous 0.2%

Italy Retail Sales n.s.a (YoY) fell from previous 13.3% to 7.7% in June

European Monetary Union Markit PMI Composite below forecasts (60.6) in July: Actual (60.2)

European Monetary Union Markit Services PMI below forecasts (60.4) in July: Actual (59.8)

The US Treasury and the State Bank of Vietnam have reached an agreement with respect to Vietnam’s FX management practices. Subsequently, economists at

The US Treasury and the State Bank of Vietnam have reached an agreement with respect to Vietnam’s FX management practices. Subsequently, economists at DBS Bank have revised their end-2021 USD/VND forecast to VND22,870 per USD. Implications of the currency truce with the US “Increased FX flexibility would allow for external adjustment during shocks, making a gradual step towards monetary policy reforms.” “Promising foreign investment and US export outlook as Vietnamese government pursuits increased manufacturing exposure.”  “We are revising our end-2021 FX forecast stronger to VND22,870 per USD (from VND23,070 per USD previously).” “The currency’s volatility is likely to be modest despite the central bank’s increased commitment to exchange rate flexibility.”   

Germany Markit Services PMI below expectations (62.2) in July: Actual (61.8)

Germany Markit PMI Composite came in at 62.4, below expectations (62.5) in July

France Markit Services PMI came in at 56.8 below forecasts (57) in July

France Markit PMI Composite below expectations (56.8) in July: Actual (56.6)

France Markit PMI Composite in line with forecasts (56.8) in July

USD/CHF's price profile is now under all key moving averages. Benjamin Wong, Strategist at DBS Bank, signals a bearish USD skew and, therefore, expect

USD/CHF's price profile is now under all key moving averages. Benjamin Wong, Strategist at DBS Bank, signals a bearish USD skew and, therefore, expects the pair to break below the 0.8984 mark.   USD bears are returning “Momentum is starting to pick up for USD/CHF to re-engage to the downside, which aligns to recent demand for the pair of safe haven currencies, JPY and CHF. USD/CHF is now under all key moving averages on the daily chart (a norm for trend behaviour), and has staged a test of the 200-day moving average (DMA) at 0.9074.” “The moving average convergence/divergence (MACD) signal is USD bearish, but there are two pertinent points to ponder over. Firstly, the tendency is now to sell rallies, referencing 0.9213 as the key resistance. On the downside, USD needs to stage a compression under the former neckline zone, and that means only an attack that busts under 0.9008 would turn out more muscular.” “A break under the support line from 0.8758 (in green, around 0.8984) is all the market needs to drive USD lower. Look out for a 0.8984 break as a bearish flick of the switch.”   

Italy Markit Services PMI came in at 58, below expectations (58.3) in July

Economists at ANZ Bank believe XAU/USD could see another leg up as key factors are turning in favour of gold investments. Record low US real-yield, i

Economists at ANZ Bank believe XAU/USD could see another leg up as key factors are turning in favour of gold investments. Record low US real-yield, inflation, expensive equity valuation and weaker dollar are likely to encourage strategic allocation in the yellow metal. See – Gold Price Forecast: Indecisive Fed to underpin XAU/USD above $1800 – HSBC US real yield “Record low yield again turning in favour of non-yielding gold investment.”  US dollar “Weakness should continue to be a key support for investor demand.”  Central banks’ gold buying  “Inflation and weaker USD are supporting central bank gold purchases. Meanwhile, physical demand in India should recover ahead of the festive season.” Monetary policy “Fading likelihood of monetary tightening looks supportive in the near-term.”

The USD/CAD pair remained on the defensive through the early European session and was last seen trading with modest losses, around the 1.2520-15 regio

USD/CAD edged lower on Wednesday and extended the overnight pullback from one-week tops.Dovish Fed expectations continued acting as a headwind for the USD and exerted some pressure.A softer tone around oil prices undermined the loonie and might help limit any meaningful slide.The USD/CAD pair remained on the defensive through the early European session and was last seen trading with modest losses, around the 1.2520-15 region. The pair edged lower during the early part of the trading action on Wednesday and moved further away from one-week lows, around the 1.2575 region touched in the previous session. The downtick was exclusively sponsored by a modest US dollar weakness, though lacked any follow-through selling. Investors now seem convinced that the Fed will retain its ultra-lose monetary policy stance for a longer period. This, in turn, continued acting as a headwind for the greenback and exerted some pressure on the USD/CAD pair. That said, a combination of factors helped limit the downside. Concerns that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery acted as a tailwind for the safe-haven USD. Apart from this, a softer tone surrounding oil prices undermined the commodity-linked loonie and extended some support to the USD/CAD pair. Worries that the continuous rise in new COVID-19 cases will limit fuel demand weighed on crude oil prices. However, geopolitical tensions in the Gulf, along with the overnight bullish report from the American Petroleum Institute, for now, seemed to have offset the demand concerns. Market participants now look forward to the US economic docket, featuring the releases of the ADP report and ISM Services PMI. Traders will also take cues from the official Energy Information Administration (EIA) report on US oil inventories for some opportunities around the USD/CAD pair. Technical levels to watch  

Until the Delta variant touches down in New Zealand, strategists at Credit Suisse believe NZ’s status as “the last one standing” could help NZD agains

Until the Delta variant touches down in New Zealand, strategists at Credit Suisse believe NZ’s status as “the last one standing” could help NZD against AUD. The narrowing monetary policy divergence leaves limited downside potential for AUD/NZD, therefore, a break below 1.0500 could pave the way for a move towards 1.0450. Narrowing monetary policy divergence leaves limited downside potential for AUD/NZD “Even with the hawkish RBA surprise, the RBNZ’s hawkish rhetoric suggests the monetary policy divergence play is alive and well. Until the Delta variant touches down in New Zealand, we are inclined to believe the country’s exceptional status as ‘the last one standing’ will help NZD against AUD.” “The narrowing monetary policy divergence, however, leaves limited downside potential in AUD/NZD: we think a break below 1.0500 could pave the way for a move towards 1.0450 levels last seen in Dec 2020. Any COVID-19 breakouts in New Zealand would lead us to quickly reassess these levels.”  

USD/CAD’s sharp rally from 1.2007 to 1.2807 over the last two months has seen a relief decline, likely masked within a minor correction. In the view o

USD/CAD’s sharp rally from 1.2007 to 1.2807 over the last two months has seen a relief decline, likely masked within a minor correction. In the view of Benjamin Wong, Strategist at DBS Bank, USD remains in a buy mode as long as the correction does not sustain losses under 1.2407 and 1.2356, which houses the moving averages support. Buy USD dips remains the play “The move to 1.2422 shied off an attack at 1.2407, that marks the Kijun support on the weekly Ichimoku charts – this should be a telling sign that USD/CAD is maintaining a bullish large base, as our prior guidance argued for a prolonged USD basing.” “What matters now is that USD holds support at 1.2407, as well as 1.2356 where it draws in support from the convergence of the 50-day moving average (DMA) and 100-DMA. That would place in play the projection of a neckline breach, which exposes a path towards the key moving average confluence zone around 1.3067 on the weekly charts.”  

Despite talk of a “growth scare,” the US economy and markets may be poised for steadier gains ahead. Lisa Shalett, Chief Investment Officer, Wealth Ma

Despite talk of a “growth scare,” the US economy and markets may be poised for steadier gains ahead. Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley explains why investors should not worry about slowing growth. Economic growth is slowing but remains solid  “Recently, preliminary estimates for second-quarter gross domestic product (GDP) growth came in at 6.5%. We forecast third-quarter annualized GDP growth at 6.1%, expecting that supply-chain pressures will continue to resolve and fiscal spending prospects will turn up. Strong fundamentals also underpin this forecast: Recent data updates saw US manufacturing activity grow, housing prices rebound and durable goods orders advance.” Second-quarter corporate earnings have been excellent so far “As of July 30, with 59% of S&P 500 companies having reported results, 88% of them have reported earnings that came in above analysts’ expectations, and 88% have reported a positive revenue surprise. Looking ahead, analysts are projecting double-digit earnings growth for the remaining two quarters of 2021.” The consumer remains strong  “US consumer confidence as measured by the Conference Board Consumer Confidence Index inched up slightly in July, to 129.1, the highest since February 2020. Stable confidence and rising wages, together with growing household wealth and ample savings, should keep consumer spending strong.”

Spain Markit Services PMI below forecasts (63) in July: Actual (61.9)

China has been contemplating a policy mix comprising diversified monetary tools, fiscal support and a firm commitment to the economy running within an

China has been contemplating a policy mix comprising diversified monetary tools, fiscal support and a firm commitment to the economy running within an appropriate range, per Xinhua News Agency. Key quotes “Owing to a low comparison base and consolidating recovery, China's economy expanded 12.7 percent year on year in the first half of 2021.” “But the evolving COVID-19 pandemic and unbalanced domestic rebound still call for more attention on downward pressures.” “The proactive fiscal policy should generate a greater effect, while the prudent monetary policy should maintain reasonably ample liquidity and support the continued recovery of small and medium-sized enterprises as well as industries under stress.” Related readsChinese Caixin Services PMI: Better from China as beats estimatesAsian Stock Market: China leads bulls amid stimulus hopes

There is a strong consensus expectation that the Banco Central do Brasil (BCB) will raise its policy interest rate by 100bps at today’s monetary polic

There is a strong consensus expectation that the Banco Central do Brasil (BCB) will raise its policy interest rate by 100bps at today’s monetary policy meeting. Economists at Credit Suisse agree with this consensus expectation and think that a 100bps rate hike and a hawkish stance should be supportive for the Brazilian real. On the other hand, political noise and fiscal policy uncertainty remain the main risks for the BRL. Focus on the Copom meeting “Most investors and analysts think the Copom will increase the pace of rate hikes to 100bps per meeting, starting with the policy meeting today.” “We think the Copom could, at today’s meeting, use its forward guidance to leave the door open for further hikes in clips of 100bps. This should be supportive for the BRL as it would suggest that the Copom thinks it will end up delivering the policy rate hikes that are currently priced into the curve.” “We still think our USD/BRL 5.00 near-term target, and 4.82 Q3 target look right given the likelihood of further major increases in the BRL carry. The biggest external risk to our view would be a China-related slump in global commodity prices/EM sentiment. A move above 5.40 in USD/BRL would force us to reconsider our thinking.”  

FX option expiries for August 4 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1830-35 857m 1.1845-55 2b 1.1875

FX option expiries for August 4 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1830-35 857m 1.1845-55 2b 1.1875 351m 1.1900 383m - GBP/USD: GBP amounts         1.3750 504m 1.3870 191m - USD/JPY: USD amounts          109.50 350m 110.00-15 562m 110.50 1.2b - EUR/GBP: EUR amounts 0.8450 310m  0.8550 871m 0.8605 419m

Austria Trade Balance increased to €-872.2M in May from previous €-886.9M

Yields made a U-turn in the second quarter, with US 10Y yields falling around 30bp. This trend has continued over summer and US 10Y yields are now dow

Yields made a U-turn in the second quarter, with US 10Y yields falling around 30bp. This trend has continued over summer and US 10Y yields are now down 50bp from their early April peak. Eurozone yields have also declined quite a lot. However, yields are set to tick up later in 2021 as the US labour market improves and the Fed starts tapering, according to economists at Danske Bank. 10-year US Treasury yields still set to move higher  “We expect US rates and yields to increase late in 2021 as growth really spreads to the labour market and the Fed starts tapering its asset purchases. The US 10Y yield will probably hit 1.7% (previous forecast: 2.0 %) by the end of 2021 and 2% (2.2 %) on a 12M horizon.” “In the coming months markets are likely to focus on 1) whether inflation is actually temporary, 2) whether the economic cycle and growth have topped, 3) whether the Delta variant prompts further hospitalisations and restrictions and 4) whether the US labour market improves, which is a focus for the Federal Reserve. Hence, we expect range trading in coming months – with a slight upside risk to both European and US long yields.” “We no longer expect markets to price early rate hikes from the ECB – not even as the first US rate hikes move very close. We have therefore lowered our forecast for eurozone 5Y yields for the next 12 months, which also feeds into our 10Y yield outlook for the eurozone. We now expect the German 10Y yield to increase to -0.25% (0.0 %) by the end of 2021 and to 0.1% (0.3 %) 12 months from now.”    

The NZD/USD pair consolidated its strong intraday gains to near one-month tops and was seen oscillating in a range above mid-0.7000s heading into the

NZD/USD gained strong follow-through positive traction for the second successive session.Upbeat NZ jobs data raised expectations for the RBNZ rate hike and provided a strong boost.A subdued USD demand remained supportive, though COVID-19 jitters might cap gains.The NZD/USD pair consolidated its strong intraday gains to near one-month tops and was seen oscillating in a range above mid-0.7000s heading into the European session. A combination of supporting factors assisted the NZD/USD pair to gain strong follow-through traction for the second successive day and surge past a key barrier near the 0.7015-20 horizontal zone. The kiwi got a strong boost after blockbuster domestic jobs data cemented expectations for a rate hike by the Reserve Bank of New Zealand. According to the official data released earlier this Wednesday, New Zealand’s jobless rate dropped sharply to 4.0% during the second quarter, well under market forecasts of 4.5%. Adding to this, the number of employed people rose 1% QoQ and wage growth also topped market expectations, indicating that the domestic economy is running hot. On the other hand, the US dollar remained on the defensive amid speculations that the Fed will wait for a longer period before slowing its massive monetary support. However, concerns about the economic fallout from the fast-spreading Delta variant of the coronavirus and a goodish bounce in the US Treasury bond yields helped limit the USD losses. Apart from this, the strong intraday positive move could further be attributed to some technical buying on a sustained breakthrough the 0.7015-20 supply zone. This might have already set the stage for additional gains. Hence, a subsequent strength towards the very important 200-day SMA, around the 0.7100 mark, now looks like a distinct possibility. Market participants now look forward to the US economic docket, highlighting the releases of the ADP report on private-sector employment and ISM Services PMI. This, along with the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and produce some short-term trading opportunities around the NZD/USD pair. Technical levels to watch  

Copper (LME) has been capped at key resistance at $10120 and support at 9205/9011 needs to hold to avoid a potential head-and-shoulders top, as report

Copper (LME) has been capped at key resistance at $10120 and support at 9205/9011 needs to hold to avoid a potential head-and-shoulders top, as reported by the Credit Suisse analyst team. Weekly RSI momentum already holds a top “Copper has been unable to stabilize above its 63-day average as well as being capped below key price resistance at $10120 and the subsequent retreat leaves the immediate outlook finely balanced, especially with a weekly RSI momentum top already in place.”  “Pivotal stays seen ‘neckline’ and price support at $9205/9011 and this needs to hold to suggest the broader trend stays higher with a break above $10120 needed to ease the threat of a top for a move back to the $10748 high, then the psychological $11000 mark.” “Below $9011 though would now see a ‘head-and-shoulders’ top complete to warn of a more significant turn lower with support seen next at the 200-day average at $8680, then the March low at $8570.”  

GBP/USD is heading towards July highs at 1.3985, extending its bounce from near the 1.3875 region The bulls remain in control above 1.3900 amid a broa

GBP/USD extends Tuesday’s bounce above 1.3900 amid weaker US dollar. The cable carves out a bull flag formation on the daily sticks. UK/ US PMIs eyed, BOE decision and US NFP could yield an upside break. GBP/USD is heading towards July highs at 1.3985, extending its bounce from near the 1.3875 region The bulls remain in control above 1.3900 amid a broadly softer US dollar, divided between looming coronavirus worries, progress on US infrastructure bill and dovish Fed expectations. On the GBP side of the equation, falling covid cases in the UK and its relative success in the vaccination campaigns underpin the pound. Meanwhile, the GBP bulls also cheer the Brexit optimism, especially after the European Union (EU) has backed off a threat of imminent legal action against the UK over breaches of the Northern Ireland (NI) protocol of the Brexit agreement as the two sides try to work through their differences. BOE in focus The immediate focus is now on the US ADP and ISM Services PMI data while the UK Final Services PMI could also offer some trading incentives to the pair. However, the main event risks for the cable are the BOE ‘Super Thursday’ and Friday’s NFP report. The UK central bank is likely to maintain its monetary policy settings while the focus will be on the economic forecasts, with rising concerns on inflation, which may prompt the BOE to hint at tapering sooner than expected. However, amidst ongoing certainty over the economic recovery, in light of the Delta covid variant flareups, the central bank could refrain from offering any hawkish signals. GBP/USD technical outlook With the recent rally that followed a brief consolidative mode, GBP/USD price has taken the shape of a bull flag. The upcoming events are likely to determine whether the cable will yield the upside breakout from the bullish continuation formation or lead to a pattern failure. GBP bulls need a firm break above the falling trendline resistance at 1.3958 for the bull flag validation. Meanwhile, acceptance below the falling trendline support at 1.3857 will revive the bearish interests, with the corrective downside to resume towards the 21-Daily Moving Average (DMA) at 1.3826 The 14-day Relative Strength Index (RSI) is pointing north above the midline, supporting the potential move higher. GBP/USD daily chart GBP/USD additional levels to watch  

The RBA’s hawkish surprise decision to move forward with tapering suggests that the bottom of the 0.7350-0.7730 Q3 target range of analysts at Credit

The RBA’s hawkish surprise decision to move forward with tapering suggests that the bottom of the 0.7350-0.7730 Q3 target range of analysts at Credit Suisse for AUD/USD is a valid floor for the pair. What’s more, they are unwilling to take on a more AUD-bullish approach given lingering risks of lockdown escalations. Surprising hawkish outcome “Although we acknowledge that yesterday’s meeting represented a hawkish surprise, we are reluctant to outright favour AUD/USD upside. It is likely that dovish central bank risks will persist as long as the COVID-19 situation continues to deteriorate.” “The RBA’s hawkish surprise suggests that the bottom of our 0.7350-0.7730 Q3 target range should represent a valid floor for the pair. The relatively tame reaction in the currency and in Australia’s sovereign yields likely emboldens the RBA to continue tapering.”  “We are unwilling to take on a more bullish approach given lingering risks of lockdown escalations. We also flag that the external environment remains unconducive to gains for commodity currencies.”  

The EUR/CHF pair has hit 1.0739/36, the December 2020 and January 2021 lows. Mid-October low, which sits at 1.0689, is the next stop on the downside,

The EUR/CHF pair has hit 1.0739/36, the December 2020 and January 2021 lows. Mid-October low, which sits at 1.0689, is the next stop on the downside, as reported by Commerzbank. Resistance is seen at the 1.0786/1.0805 region “EUR/CHF fell through support at 1.0739/36, the December and January lows, with the mid-October low at 1.0689 being next in line. Further down sits the 1.0629 November low.”  “Nearby resistance is seen at the 1.0786/1.0805 February and midJuly lows. Further resistance comes in at the June low at 1.0872 and also at the May 11 and 24 lows at 1.0925/27.”  

The Brent Crude Oil rally has stalled again, with weekly momentum deteriorating sharply. Nonetheless, strategists at Credit Suisse expect the black go

The Brent Crude Oil rally has stalled again, with weekly momentum deteriorating sharply. Nonetheless, strategists at Credit Suisse expect the black gold to eventually resume its rise to test the $77.84 at first. Momentum picture warns of a top  “The deterioration in weekly RSI momentum is now of growing concern, but our bias remains to view consolidation as a temporary pause ahead of an eventual break higher.”  “A quick move back above $76.38 though is needed to stabilize the market for a test of the $77.84 high. Beyond here can curtail thoughts of a more prolonged correction with resistance seen next at our original bull ‘flag’ target at $79.10, then the ‘measured triangle objective’ at $82.50.” “Below $71.74 would see bearish pressure start to increase further in line with the momentum picture for a test of the $68.3/67.44 recent low and trend support. Removal of here would warn of a more serious break lower, for a move to $64.57 next, with scope for the 200-day average at $61.65.” “Weekly RSI momentum holds a top and a bearish divergence, increasing the risk for a potential top in the market also.”  

Heading into a busy docket this Wednesday, gold is attempting a comeback. As FXStreet’s Dhwani Mehta notes, XAU/USD awaits a range breakout but not so

Heading into a busy docket this Wednesday, gold is attempting a comeback. As FXStreet’s Dhwani Mehta notes, XAU/USD awaits a range breakout but not so soon while US NFP is in focus. See – Gold Price Forecast: Indecisive Fed to underpin XAU/USD above $1800 – HSBC US NFP holds the key but ADP and ISM Services PMI eyed in the meantime “From a broader perspective, the greenback remains pressured amid the dovish Fed and weak US economic data while covid concerns help put a floor under the buck.” “Looking forward, gold price is likely to waver in a narrow range as investors await fresh hints from the US ADP jobs data on the labor market recovery. Also, of note remains the US ISM Services PMI data, impacting the dollar valuations, in turn, gold price.” “The downward-sloping 21-Simple Moving Average (SMA) at $1815 is testing the bulls’ commitment, as the range play above $1800 extends. On the other hand, the mildly bullish 50-SMA at $1810 is protecting the downside.” “A sustained break above the 21-SMA could boost the buying interest, with gold bulls targeting the August 2 highs at $1820. However, the 50-SMA support caves in on a sustained basis, then XAU/USD could see a sharp drop towards the ascending 200-SMA at $1799. Ahead of that the August 2 lows of $1806 could be put at test.”  

West Texas Crude Oil (WTI) edges higher Wednesday in the European trading session. The prices took shelter near the multi-month support near $70.00. A

WTI prints fresh gains on Wednesday in the European trading hours.Additional gains for the WTI if price decisively breaks $70.00.Momentum oscillator remains in the overbought zone with stretched buying conditions.West Texas Crude Oil (WTI) edges higher Wednesday in the European trading session. The prices took shelter near the multi-month support near $70.00. At the time of writing, WTI is trading at $70.03, up 0.08% for the day. WTI daily chart On the daily chart, after testing a low of $64.99 on July 20, which also coincides with the 100-day Simple Moving Average (SMA), WTI roses sharply and touched the high of $73.88. A sustained move above the intraday high would allow WTI bulls to retest the $71.00 horizontal resistance level. The Moving Average Convergence Divergence (MACD) indicator trades in the overbought zone. Any uptick in the MACD could accelerate the buying pressure.  That said, the WTI bulls could meet the next upside target at a $72.00 horizontal support level. Alternatively, if prices move lower, it could retrace back to the previous day’s low at $68.89 followed by the $67.90 horizontal support level. Next, the bears would attempt to meet the 100-day SMA at 66.77 on the downside. WTI additional levels  

Here is what you need to know on Wednesday, August 4: Markets are cautiously optimistic despite the spread of coronavirus in China and the ongoing tec

Here is what you need to know on Wednesday, August 4: Markets are cautiously optimistic despite the spread of coronavirus in China and the ongoing techlash. China is facing its worst COVID-19 spread since the disease originated in it back in late 2019. Worries about significant lockdowns somewhat weighed on Asian stocks but S&P 500 futures remain positive. Investors in the region are also worried about Beijing's ongoing persecution of large tech firms, with the current ire focused on the gaming sector.  On the other hand, the Caixin Services Purchasing Managers' Index (PMI) beat estimates with 54.9 points, showing growth expectations remain robust.  The dollar is relatively stable across the board, with NZD/USD standing out with a rise of 0.5% after reporting an increase of 1% in employment and a drop of the unemployment rate to 4%. ADP's private-sector jobs report is projected to show an increase of around 695,000 in July, similar to 692,000 reported in June. While the figures are not always well-correlated to the official Nonfarm Payrolls figure, it tends to rock markets.  US ADP Employment Change July Preview: Jobs gains in service sector to slowdown The second significant publication is the ISM Services PMI, which is forecast to remain stable above 60, but could disappoint like the Manufacturing PMI. The Employment component is of high importance, serving as a hint toward Friday's jobs report. ISM Services PMI Preview: Business psychology begins to deteriorate Federal Reserve Vice-Chair Richard Clarida is set to speak later in the day, and he could provide hints about how close the bank is to tapering its bond-buying scheme. Last week, the Fed seemed to be in no rush to act. Bitcoin has been extending its gradual slide, dipping below $38,000, while Ethereum is hovering around $2,500 amid the upcoming change in the way Ether conducts transactions.  Three reasons why Bitcoin can suddenly explode to a new $50K-$65K range

The EUR/USD pair edged higher during the Asian session and was last seen trading near the 1.1870-75 region, or daily tops, though lacked any follow-th

A subdued USD price action helped EUR/USD to regain some positive traction on Wednesday.COVID-19 jitters helped limit losses for the safe-haven USD and capped gains for the major.Investors now look forward to final Eurozone PMI prints and US macro data for some impetus.The EUR/USD pair edged higher during the Asian session and was last seen trading near the 1.1870-75 region, or daily tops, though lacked any follow-through buying. Following the previous day's pullback from the vicinity of the 1.1900 mark, the EUR/USD pair attracted some dip-buying near the lower end of a multi-day-old trading range amid a subdued US dollar demand. Investors now seem convinced that the Fed will stick to its ultra-lose monetary policy stance for a longer period. This was reinforced by the recent sharp fall in the US Treasury bond yields to fresh multi-month lows, which continued acting as a headwind for the greenback. Meanwhile, concerns about the economic fallout from the highly contagious Delta variant of the coronavirus overshadowed the optimism over a $1-trillion US infrastructure investment bill. This was evident from the prevalent cautious mood around the equity markets, which extended some support to the safe-haven greenback and kept a lid on any strong gains for the EUR/USD pair. Investors also seemed reluctant ahead of Friday's release of the US monthly jobs report (NFP). In the meantime, Wednesday's release of the final Eurozone Services PMI prints for July will be looked upon for some impetus. Traders might further take cues from the US economic docket – highlighting the releases of ADP report on private-sector employment and ISM Services PMI. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics and produce some short-term trading opportunities around the EUR/USD pair. Technical levels to watch  

Copper futures on Comex print mild losses around $4.3790 as European traders await Wednesday’s bell. The red metal bounced off 100-DMA the previous da

Copper bears take a breather after three-day downtrend to weekly low.Downbeat MACD, sustained trading below three-month-old horizontal resistance favor sellers.Ascending trend line from January adds to the downside filters.Copper futures on Comex print mild losses around $4.3790 as European traders await Wednesday’s bell. The red metal bounced off 100-DMA the previous day but failed to keep the rebound amid downbeat MACD conditions. The bearish impulse also takes clues from the commodity’s late July U-turn from a three-month-old horizontal resistance. However, an upward sloping support line from January 28, near $4.2700, becomes a tough nut to crack for the bears. Hence, copper sellers attack 100-DMA level of $4.3520 on their way down to the stated trend line support. In doing so, the $4.3000 threshold may offer an intermediate halt. Should the quote successfully breaks the $4.2700 support line, lows marked during July and June, respectively around $4.1660 and $4.0880, will be in focus. On the contrary, the corrective pullback will be considered less important until staying below the $4.4420 level, comprising the upper end of the horizontal area including multiple stops from late April. Even if the copper prices rally beyond $4.4420, the previously mentioned resistance line around $4.6050 will be the key.Price of Copper: Four-hour chart Trend: Further recovery expected

Russia Purchasing Manager Index Services fell from previous 56.5 to 53.5 in July

US Dollar Index loses momentum in the early European session on Wednesday. As of writing, DXY is trading at 91.98, down 0.07% for the day. DXY daily c

DXY continues to consolidate near the 92.00 mark for the past four sessions.A sustained break of the ascending trendline confirms more downside.Momentum oscillator also favors the downside momentum.US Dollar Index loses momentum in the early European session on Wednesday. As of writing, DXY is trading at 91.98, down 0.07% for the day. DXY daily chart On the daily chart, DXY has been consolidating near the 92.00 mark for the past four sessions. The ascending trendline from the lows of 89.66 acts as a defensive for the bulls. A sustained break of the bullish sloping line would result in more downside movement. The first downside target in line is placed at the 91.75 horizontal support level. The Moving Average Convergence Divergence (MACD) indicator holds in the overbought zone with a bearish cross over. Any downtick in the MACD would intensify the selling opportunity toward the low of June 25 at 91.52. Bears would further be encouraged to test the 91.25 horizontal support level. Alternatively, If it reverses the direction, then the first upside target is located at the 92.25 horizontal resistance level.  A move toward the 20-day Simple Moving Average (SMA) at 92.48 will further strengthen the upside outlook. Next, the market participant would like to aim for the July 27 high of 92.75. DXY additional levels
 

Analysts at Goldman Sachs offer their afterthoughts on the second quarter New Zealand’s employment data, which has fanned RBNZ rate hike bets as soon

Analysts at Goldman Sachs offer their afterthoughts on the second quarter New Zealand’s employment data, which has fanned RBNZ rate hike bets as soon as next week. Key quotes "Q221 labor market report was very strong. In context, the labor market has now returned to conditions comparable to late 2019 which the RBNZ then characterized as "around maximum sustainable employment." “On any measure, this recovery to pre-pandemic conditions has been much faster than we and the RBNZ expected. On the latter, for example, we note that the latest RBNZ forecasts projected only a gradual fall in the unemployment rate to 4.3% by Q224." "In light of this and the RBNZ's comment yesterday that it needs to "think about when and how we would return interest rates to more normal levels", we front-load our forecast tightening cycle to include +25bp hikes in August, October and November 2021 - taking the official cash rate to 1.0% by end-2021 (previously 0.5% by end-2021).” “This will take the OCR back to the pre-pandemic level of late 2019 when the RBNZ described conditions as "employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range", and see rates returning to our estimated terminal rate of 2.0% by end-2023 (6 months earlier than the previous forecast). We note the risk that the RBNZ hikes by 50bp at the August meeting, although we think a series of back-to-back 25bp hikes is more likely." NZD/USD Price Analysis: Bulls target 0.7100 amid falling wedge breakout, NZ jobs blowout  

Gold (XAU/USD) snaps a three-day downtrend, up 0.14% intraday near $1,813, as European traders brace for Wednesday’s work. In doing so, the yellow met

Gold consolidates weekly losses during first positive day in four, picks up bids of late.Market’s indecision amid covid woes, stimulus deadlock and pre-data anxiety weigh on the US dollar.Wall Street closed positive on upbeat earnings, growth expectations but stock futures stay mildly offered, Treasury yield remain steady.Gold Weekly Forecast: XAU/USD bulls hesitate as focus shift to NFPGold (XAU/USD) snaps a three-day downtrend, up 0.14% intraday near $1,813, as European traders brace for Wednesday’s work. In doing so, the yellow metal benefits from the downbeat US dollar but the commodity buyers remain cautious ahead of the day’s key data, namely US ISM Services PMI and ADP Employment Change. That said, the US Dollar Index (DXY) drops the most in the week, down 0.05% on a day near 92.00, by the press time. Although the previous day’s strong Factory Orders and hawkish Fedspeak tried to recall the greenback bulls, the fresh covid fears at home and the Senate deadlock over stimulus tested the USD bulls on Tuesday. Also weighing on the US currency was the upbeat closing of Wall Street amid strong earnings and growth expectations. Though, the US Centres for Disease Control and Prevention’s (CDC) temporary moratorium, expiring on October 03, after noting the heaviest jump in infections since February exert additional downside pressure on the USD afterward. Also challenging the greenback, favoring gold prices, was the market’s cautious mood before the early signal for Friday’s Nonfarm Payrolls. It should be noted that the coronavirus numbers from Japan, India, China and Australia were also worrisome while the UK’s infection slowed down of late. Amid these plays, US stock futures and Asia-Pacific shares remain mildly offered whereas the US 10-year Treasury yields remain steady around 1.18%. Given the mixed sentiment and the US dollar weakness, gold prices may keep the recent recovery prior to the US data. ISM Services PMI for July, expected 60.4 versus 60.1, coupled with the ADP Employment Change for the said month, market consensus 695K versus 692K prior, will be the key data to watch. Additionally, covid headlines and stimulus news, not to forget geopolitical updates concerning Iran and China, can also entertain gold traders. Technical analysis Gold extends rebound from 50-SMA amid gradually improving RSI conditions and receding bearish bias of the MACD histogram, suggesting further advances targeting July 25 high near $1,825. However, double-top formation near $1,832-34 becomes a tough nut to crack for the metal buyers, which if crossed won’t hesitate to challenge late May’s low near $1,872. During the rise, early June’s bottom surrounding $1,856 may offer an intermediate halt. Alternatively, a downside break of 50-SMA, near $1,809, will be challenged by an ascending support line from June 29, close to $1,801, as well as the $1,800 round figure. Overall, gold buyers remain unconvinced below $1,834 but intermediate consolidation can’t be ruled out. Gold: Four-hour chart Trend: Further upside expected  

Most of the Asia-pacific stocks trade higher following the overnight Wall Street’s gain. Investors cheered up US corporate earnings despite the Delta

Asian stocks post gains on Wednesday follows their US counterparts record gains.China Service Growth accelerates sharply for the 15th straight month.US Stock Futures point to a higher opening in the day.Most of the Asia-pacific stocks trade higher following the overnight Wall Street’s gain. Investors cheered up US corporate earnings despite the Delta variant woes. MSCI’s broadest index of Asia-pacific shares outside Japan rose 0.1%.  The Shanghai Composite Index gained 0.5% after closing 0.5% lower on Tuesday. The sentiment improved after Chinese service growth climbed in July from a 14-month low in the last month. China on Wednesday field 96 new confirmed coronavirus infections. There were also concerns that home vaccines are known to be less effective against the delta variant. Japan’s Nikkei 225 fell 0.4% on profit-booking, further selloff was supported after Prime Minister Yoshihide Suga showed concerns on the rapid spread of the delta variant in the 20-30 age group.  Hong Kong’s Hang Seng Index climbed 1.47%, Kospi gained 1.29%. The ASX 200 rose marginally by 0.2% on downbeat economic data.  The Retails Sales declined by 1.8% in June. The IHS Markit Australia Services PMI fell 44.2 in July from the previous 56.8 in June.

AUD/USD bulls flirt with the 0.7400 threshold, up 0.13% intraday during a three-day advance, ahead of Wednesday’s European session. The Aussie pair cr

AUD/USD eases from monthly horizontal resistance during three-day uptrend.Clear break of five-week-old resistance line, bullish MACD favor buyers.Bears may wait for 0.7317 breakdown for fresh entries.AUD/USD bulls flirt with the 0.7400 threshold, up 0.13% intraday during a three-day advance, ahead of Wednesday’s European session. The Aussie pair crossed a downward sloping trend line from June 11 the previous day but 21-DMA and a horizontal area comprising multiple levels marked since early July guard immediate around 0.7410. Given the bullish MACD signal and a sustained trend line breakout, AUD/USD buyers may remain hopeful until the quote stays beyond 0.7378. Even if the quote drops below 0.7378, lows marked during July 19 and 28 could restrict the pair’s further weakness around 0.7320-17 before highlighting the yearly low of 0.7288 for the bears. Meanwhile, an upside break of 0.7410 will push the AUD/USD buyers toward June’s bottom ear 0.7480. Though, multiple levels since early July, surrounding the 0.7500 round figure, could challenge the pair’s rise afterward. Should the Aussie bulls remain dominant past 0.7500, 50-DMA and a downward sloping trend line from May 10, respectively around 0.7535 and 0.7590 will be crucial to watch. AUD/USD: Daily chart Trend: Further recovery expected  

USD/JPY licks its wounds around 109.00 after testing the lowest level since May 26 the previous day. That said, the Japanese yen (JPY) pair declined d

USD/JPY bears take a breather around the lowest level in 10 weeks.Japan reports second-highest daily infections, teases national emergency.US CDC issues temporary moratorium on witnessing higher jump in cases since February.US data, covid headlines become the key, stimulus news may also entertain traders.USD/JPY licks its wounds around 109.00 after testing the lowest level since May 26 the previous day. That said, the Japanese yen (JPY) pair declined during the last two days before recently sluggish performance tracking the US Treasury yields. It’s worth noting that the escalating Delta covid variant woes in the US and Japan, as well as indecision over the Fed’s next moves and cautious sentiment before the key US data, could be linked as the major catalysts behind the quote latest moves. The US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February. On the other hand, Japan’s Kyodo News conveyed 12,017 new covid cases, the second-highest on record. It’s worth noting that an anonymous senior health official from Japan was quoted favoring the national emergency after the covid data. Not only in Japan and the US, the latest virus numbers from China, India and Australia also backed the concerns that the pandemic may slow down economic recovery. Even so, worries over the Fed’s next moves ahead of the key US Nonfarm Payrolls, not to forget today’s ADP Employment Change and ISM Services PMI, keep the US Dollar Index (DXY) pressured. That said, the US 10-year Treasury yields stay sidelined near 1.18% whereas the US stock futures and Japan’s Nikkei 225 print mild losses by the press time. While sour sentiment could weigh on the USD/JPY prices, today’s US data will be crucial as the pair already refrains to refresh the multi-day low of late. Technical analysis A clear downside break of an ascending trend line from late April, around 109.40, directs USD/JPY towards a five-month-old horizontal area around 108.35.  

USD/INR takes offers around 74.16, down 0.08 intraday, to refresh the multi-day low amid early Wednesday. In doing so, the Indian rupee (INR) pair dro

USD/INR drops for third consecutive day to test the lowest levels since June 28.India’s covid infections register biggest daily jump since May 13.RBI expected to take back-end measures to infuse liquidity, government up for telecom sector stimulus.US ISM Services PMI, ADP Employment Change eyed for intraday moves, risk catalysts are important too.USD/INR takes offers around 74.16, down 0.08 intraday, to refresh the multi-day low amid early Wednesday. In doing so, the Indian rupee (INR) pair drops for the third day in a row amid broad US dollar weakness. The US Dollar Index (DXY) declines the most in the week as market players brace for the key data amid stimulus deadlock. Also challenging the greenback are the covid fears as the US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February. On the other hand, Indian Health Ministry recently conveyed the biggest daily jump in the active covid cases since May 13. The country reports a 42,625 daily rise in coronavirus infections, taking a total to 31.77 million, per Reuters, whereas the death toll grew 562 to 425,757. It’s worth noting that the recently improving economy from the Asian nation, coupled with the hopes of the Reserve Bank of India’s (RBI) likely qualitative policy moves to tame the inflation, seem to offer a tailwind to the USD/INR. Additionally, the Economic Times came out with news suggesting the country’s planning of stimulus for the telecom sector, which also strengthened the INR. On a broader scale, market sentiment remains mixed with the stock futures being mildly offered and the US 10-year Treasury yields staying firmer ahead of the busy economic calendar. Among the key data, an early signal for Friday’s US Nonfarm Payrolls (NFP), namely US ADP Employment Change, will be the key. Also important will be the US ISM Services PMI for July. As both the figures are likely to print positives, offering an additional reason to the Fed hawks, USD/INR may witness a pullback should the US dollar consolidate recent losses. It should be noted, however, that the RBI meeting on Thursday and Friday’s US NFP becomes crucial events for the USD/INR pair, ahead of which the cautious mood may extend the established downtrend in absence of any surprises. Technical analysis A clear break of July’s low directs USD/INR bears towards late June’s bottom surrounding 74.15 but any further weakness will be challenged by June 22 swing lows near 74.05 and the 74.00 threshold. On the contrary, 74.21 and 10-DMA level near 74.36 guard the pair’s short-term recovery moves.  

After testing the high of 1.2575 in the previous session, the USD/CAD pair subsidies all gains on Wednesday. The pair opened higher albeit fizzled out

USD/CAD prints losses on Wednesday in the Asian session.Bulls fail to cross 1.2550 decisively and surrender all the gains.Momentum oscillator holds onto overbought zone with a neutral stance.After testing the high of 1.2575 in the previous session, the USD/CAD pair subsidies all gains on Wednesday. The pair opened higher albeit fizzled out rather quickly to trade lower. At the time of writing, USD/CAD is trading at 1.2521, down 0.12% for the day. USD/CAD daily chart On the daily chart, the USD/CAD pair has formed a Head & Shoulders ( H&S) technical pattern, which is a bearish reversal formation. A break of the neckline confirmed near 1.2515 resulted in quick downside momentum. If price breaks intraday’s low, it could move lower toward the previous day’s low of 1.2489. The receding Moving Average Convergence Divergence (MACD) indicator reflects the opportunities for further downside movement. Any downtick in the MACD would bring the 1.2460 horizontal support level back into action. Next, the bears would capture the low of July 30 at 1.2422. Alternatively, if price breaks the 20-day Simple Moving Average (SMA) at 1.2547, which coincides with the neckline of the H&S pattern would reverse the downside trend. A daily close above the mentioned level would invite USD/CAD bulls to test the psychological mark of 1.2600. The next area of resistance for the market participant would be the July 16 high of 1.2620 followed by the 1.2675 horizontal resistance level. USD/CAD additional levels
 

EUR/GBP remains on the back foot around 0.8525 ahead of Wednesday’s European session. The cross-currency pair broke an ascending trend line from July

EUR/GBP edges lower below 200-HMA after breaking one-week-old support, now resistance.Downbeat RSI conditions add strength to the bearish momentum.Short-term horizontal support restricts immediate downside ahead of July’s low.EUR/GBP remains on the back foot around 0.8525 ahead of Wednesday’s European session. The cross-currency pair broke an ascending trend line from July 29, as well as 200-HMA, the previous day. Given the weak RSI line, not oversold, as well as the quote’s break of short-term important supports, EUR/GBP bears remain hopeful to retest the previous month’s low near the 0.8500 threshold. However, the weekly horizontal line surrounding 0.8520 could offer rest to the intraday sellers. During the quote’s weakness past 0.8500, the yearly bottom surrounding 0.8470 will be crucial to watch. Alternatively, an upside clearance of 200-HMA, around 0.8535, will escalate the corrective pullback towards the previous support line near 0.8540 and the weekly peak surrounding 0.8560. In a case where the EUR/GBP bulls remain dominant past 0.8560, 50% Fibonacci retracement of July 20–28 declines, near 0.8585, should gain the market’s attention before directing the pair to July 22 high near 0.8607. EUR/GBP: Hourly chart Trend: Bearish  

GBP/USD edges higher on Wednesday’s Asian trading session. The pair bounced quickly from the low of 1.3883 in the overnight session. At the time of wr

GBP/USD extends the previous session’s upside momentum.US Dollar Index slips below 92.00 to trade lower amid mixed economic data and Fed officials views.The sterling gains ahead of the BOE meeting due on Thursday.GBP/USD edges higher on Wednesday’s Asian trading session. The pair bounced quickly from the low of 1.3883 in the overnight session.  At the time of writing, GBP/USD is trading at 1.3934, up 0.14% for the day. The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals, trades below 92.00 and losses traction in the Asia-pacific timings. Investors rushed to safe-haven assets in view of the rapid spread of the delta variant and its impact on the global economic recovery. The US Factory Orders jumped 1.5% in July, beating the market forecast by 1%. Meanwhile, the US Senate committed to formalizing a $1 trillion infrastructure bill, despite some Republicans began complaining about the details of the plan.
 
On the other hand, the sterling gained from an encouraging end to coronavirus infections in highly-vaccinated Britain.  Meantime, the Brexit red tape held up the supply chain, which could adversely affect the UK manufacturing of goods from cars to fridges. A limiting factor for the pound’s upside momentum. Investors anticipate Thursday’s Bank of England (BOE) Monetary Policy Committee (MPC) to assess the forward guidance on inflation and interests rates. As for now, investors await the US ADP Employment Change to take fresh trading impetus. GBP/USD additional levels  

EUR/USD reverses weekly losses, refreshing the daily top to 1.1875 heading into Wednesday’s European session. In doing so, the major currency pair sna

EUR/USD takes the bids to refresh daily high, consolidates weekly loss.DXY remains offered for third day amid mixed sentiment ahead of the key data/events.EU Retail Sales, US ADP Employment Change and ISM Services PMI to decorate today’s calendar.Fedspeak, covid updates and stimulus news also need trader’s attention.EUR/USD reverses weekly losses, refreshing the daily top to 1.1875 heading into Wednesday’s European session. In doing so, the major currency pair snaps a three-day fall with a 0.10% intraday upside amid broad US dollar weakness ahead of important Eurozone and the US data. EUR/USD seems to prepare for a long heavy economic line while consolidating the latest losses even as the stock futures and Treasury yields portray the market’s indecision. That said, the S&P 500 Futures drop 0.10% intraday whereas the US 10-year Treasury yields add one basis point (bp) to 1.18% by the press time. The escalating Delta covid variant woes in the US and deadlock over President Joe Biden’s infrastructure spending plan in the Senate sours the risk appetite of late. Also in the line were the hawkish Fed chatters following the stronger-than-expected US Factory Orders. Furthermore, the recent jump in virus infections in China and Australia battles the easy COVID-19 data from the UK to trouble the traders. Additionally, geopolitical concerns over Iran and China, as well as Beijing’s crackdown on technology stocks offer an extra burden on the mood. On the contrary, New York Times’ news suggesting the US Food & Drug Administration’s (FDA) readiness to give final approval to the Pfizer covid vaccine keeps the traders hopeful. Also, recently positive data from the US and the EU, as well as broad optimism that the Western economies, coupled with the Asia-Pacific ones, will be able to overcome the pandemic favor the bulls. It should be noted, however, that today’s Composite PMI for Germany and the bloc, as well as EU Retail Sales, for July and June respectively, will offer immediate direction to the EUR/USD prices. While a reduction in the region’s Retail Sales from 9.0% to 4.5% YoY could probe the pair buyers, anticipated strength in the US ADP Employment Change and ISM Services PMI for July can recall the pair sellers afterward. Above all, risk catalysts can keep directing short-term EUR/USD moves, mostly to the south, ahead of Friday’s US Nonfarm Payrolls (NFP), for which ADP data serves as an early signal. Technical analysis EUR/USD grinds higher towards a 200-day EMA level of 1.1916 until staying beyond 1.1850–35 support-zone established since June 18.  

NZD/USD is flirting with monthly tops near 0.7067, rallying hard on stronger-than-expected New Zealand’s employment data for the second quarter. The j

NZD/USD yields a big technical breakout on the daily chart. NZD bulls gear up for a test of 0.7100 as 50-DMA resistance caves in. New Zealand’s jobless rate drops sharply to 4% in Q2, seals an RBNZ rate hike this year. NZD/USD is flirting with monthly tops near 0.7067, rallying hard on stronger-than-expected New Zealand’s employment data for the second quarter. The jobless rate in the South Pacific Island nation dropped sharply to 4% in Q2 vs. 4.5% expected, confirming an RBNZ rate hike later this year. Further, an improvement in the risk sentiment also lends support to the kiwi bulls, as all eyes now turn towards the US ADP and ISM Services PMI report for fresh trading incentives. Looking at the daily technical graph for the kiwi, the price confirmed a falling wedge breakout on closing Tuesday above 0.7014, with the jobs blowout offering extra zest to the NZD bulls, as they storm through the bearish 50-Daily Moving Average (DMA) at 0.7054. The 14-day Relative Strength Index (RSI) is pointing higher above the midline, suggesting that there is more room for the upside. Therefore, the buyers target the confluence of the 100 and 200-DMAs at 0.7100. The upside breakout has defied a warning of a bear cross, as 100-DMA cut through the 200-DMA from above a day before. NZD/USD daily chart Alternatively, if the bulls fail to find acceptance above 50-DMA, then a retracement towards the wedge resistance now support, now at 0.7010, cannot be ruled out. The next relevant downside target for kiwi sellers is seen at the horizontal 21-DMA at 0.6981. NZD/USD additional levels to watch  

Analysts at Bank of America Global Research (BofA) offer their expectations from 'Super Thursday’s' Bank of England (BOE) monetary policy meeting. Key

Analysts at Bank of America Global Research (BofA) offer their expectations from 'Super Thursday’s' Bank of England (BOE) monetary policy meeting. Key quotes “The Bank of England (BoE) doesn't provide guidance anymore, so we do not expect any clear signals from this week's BoE policy meeting.”  “The BoE's inflation forecast is the best signal we will get. We expect the BoE to raise near-term inflation a lot but medium-term inflation only little.”  “The story would be, we think, inflation is mostly transitory so the modest rate hikes priced by the market should deliver 2% inflation in the medium term.” “In the absence of changes in guidance to watch for, we suspect market focus will be on how many rate-setters vote to end-QE early - QE purchases are currently scheduled to run until year-end - and whether the BoE publishes its policy sequencing review, which will explain when Quantitative Tightening (QT) starts.”  “We expect a 6-2 vote in favor of continuing QE purchases as scheduled. The bar for a hawkish BoE surprise seems high.” 

US Dollar Index (DXY) refreshes intraday low near 92.00 threshold, down 0.05% on a day during early Wednesday. In doing so, the greenback gauge forms

DXY stays pressured for third consecutive day, refreshes intraday low.Lower high formation, bearish MACD keep sellers hopeful.Key EMAs challenge sellers, bulls remain unconvinced below June’s top.US Dollar Index (DXY) refreshes intraday low near 92.00 threshold, down 0.05% on a day during early Wednesday. In doing so, the greenback gauge forms a lower-high bearish pattern while also portraying a three-day downtrend. In addition to the bearish chart pattern, downbeat MACD conditions also direct DXY sellers to mark another battle with the 50-day EMA level of 91.92 in search of testing 91.65 support comprising 100-day EMA. Following the downside break of 91.65, late June’s swing low near 91.50 becomes the key. Alternatively, an upside clearance of the immediate resistance line, near 92.15, could defy the bearish move and trigger a corrective pullback targeting June’s high surrounding 92.45. It should be noted, however, that a clear run-up beyond 92.45 will push DXY towards 92.80 and the recent top, also the highest since April, near 93.20. Overall, DXY remains in a bearish consolidation mode above strong EMA support levels. DXY: Daily chart Trend: Further weakness expected  

Caixin Services PMI has been released as follows: Caixin China PMI Services (Jul): 54.9 (est 50.5, prev 50.3). Caixin China PMI Composite (Jul): 53.1

Caixin Services PMI has been released as follows: Caixin China PMI Services (Jul): 54.9 (est 50.5, prev 50.3).
Caixin China PMI Composite (Jul): 53.1 (prev 50.6). This is more soft data following the manufacturing disappointment earlier in the week.  AUD/USD impact and update  AUD/USD has not reacted to the data which has sat in a tight range for the entire day between 0.7388 and 0.7401.  traders are taking a breather following the Reserve Bank of Australia that was a surprise with a hawkish hold yesterday. Aussie rallied across the board in a soft environment for the greenback that struggles to break higher within its shallow correction: About Caixin Services PMI The Caixin Services PMI™, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.

AUD/USD remains directed to the 0.7400 resistance, recently bounces off the day’s low, amid early Wednesday. In doing so, the quote ignores downbeat A

AUD/USD keeps bounces off intraday low after Aussie Retail Sales release.Australia Retail Sales confirm -1.8% preliminary forecasts for June, China Caixin Services PMI crosses prior readouts in July.NSW infections reverse the previous two-day downtrend, risk appetite sours.US ADP Employment Change, ISM Services PMI to decorate calendar, qualitative factors will be the key.AUD/USD remains directed to the 0.7400 resistance, recently bounces off the day’s low, amid early Wednesday. In doing so, the quote ignores downbeat Aussie Retail Sales and firmer Chinese PMI figures, amid dull markets, while keeping the post-RBA optimism ahead of important US data. Aussie Retail Sales confirmed -1.8% MoM preliminary figures for July, versus +0.4% prior, during the latest release. The data failed to offer any notable AUD/USD moves by matching previous forecasts. On the contrary, China’s Services PMI for July rose past 50.3 to 54.9. Market sentiment sours as covid woes escalate in the US, China and Australia. The US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February. On the other hand, China also marked higher covid numbers, 96 versus 90, whereas Australia’s New South Wales (NSW) snaps the previous two-day fall in the virus figures with the latest 233 level. Also challenging the market sentiment were the geopolitical tussles between the Western allies and Iran, as well as China. Additionally, deadlock over US President Joe Biden’s $1.0 trillion infrastructure spending plan in the Senate and uncertainty over the Fed’s next moves also weigh on the risk appetite and AUD/USD. That said, S&P 500 Futures print mild losses despite upbeat Wall Street close whereas the US 10-year Treasury yields stay firmer around 1.18% by the press time. Looking forward, early signal for Friday’s US Nonfarm Payrolls (NFP), namely US ADP Employment Change for July, will join the ISM Services PMI for the said month to direct short-term AUD/USD moves. Above all, pre-NFP mood battles RBA’s hawkish tilt to challenge the pair’s short-term performance. Technical analysis Multiple levels marked since early July, also challenged in August–September 2020 period, questions AUD/USD upside momentum around 0.7000-7010. The resistance area draws additional strength from 21-DMA. Hence, the pair remains directed towards the yearly low near 0.7290 until crossing the 0.7010 hurdle.  

China Caixin Services PMI rose from previous 50.3 to 54.9 in July

Silver has been recovering of late as the US dollar struggles to pick up bids above 92.20: The following is an analysis on the weekly charts for silve

Silver is on the brink of a significant recovery if the dollar stays down.DXY is lacking conviction as it attempts to correct, but 92.20 is key. Silver has been recovering of late as the US dollar struggles to pick up bids above 92.20: The following is an analysis on the weekly charts for silver: XAG/USD's price is making a case for further gains back towards the 50% mark if the weekly drop near $25.70. However, only a break above the 61.8% Fibo near $25.90 of the weekly bearish impulse will leave the bulls in good stead for higher highs. Bulls could then seek to target back above the weekly counter trendline and within the bullish trend. On the flip side, a break of $24.50 will open levels on the way to test the $22 area.

Australia's final June nominal Retail Sales and second-quarter sales volumes have been released as follows: Australia Retail Sales (JunF): -1.8% (est

Australia's final June nominal Retail Sales and second-quarter sales volumes have been released as follows: Australia Retail Sales (JunF): -1.8% (est -1.8%, prev -1.8%). Q2 retail sales +0.8% QoQ vs +0.9% expected.  AUD/USD impact and update AUD/USD has not reacted to the data. The Reserve Bank of Australia was a surprise with a hawkish hold yesterday. This sent the Aussie higher across the board in a soft environment for the greenback that struggles to break higher within its shallow correction: Why it matters to traders? The primary gauge of Australia’s consumer spending, the Retail Sales, is released by the Australian Bureau of Statistics (ABS) about 35 days after the month ends. It accounts for approximately 80% of total retail turnover in the country and, therefore, has a significant bearing on inflation and GDP. This leading indicator has a direct correlation with inflation and the growth prospects, impacting the Reserve Bank of Australia’s (RBA) interest rates decision and AUD valuation. The stats bureau uses the forward factor method, ensuring that the seasonal factors are not distorted by COVID-19 impacts.

The selling tone surrounding the US dollar amid falling US Treasury yields keeps EUR/USD on the verge of daily gains. After touching the low of 1.1753

EUR/USD continues to notch higher levels on Thursday. US Treasury yields undermine the demand for the US dollar. US Dollar Index falls near the 92.00 level. The selling tone surrounding the US dollar amid falling US Treasury yields keeps EUR/USD on the verge of daily gains. After touching the low of 1.1753, the pair continues to march higher since the beginning of the week  At the time of writing, the EUR/USD is trading at 1.1869, up 0.08% on the day. .The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, remains on the backfoot amid falling US Treasury yields.  The Fed in its latest momentary policy meeting kept the target range for its federal rates unchanged at 0-0.25% and assets purchasing also remained unchanged at the current pace of  $120 billion. In addition to that, Fed Chair Jerome Powell dovish outlook growth and inflation took a toll on the US dollar. On the other hand, the single currency is boosted by the upbeat economic data. The Eurozone Producer Price rose 1.4% in June, in line with the market expectations. The IHS Markit Eurozone Manufacturing PMI came at 62.8 in July slightly above the market expectations of 62.6.  Being said, the stronger economic data in the US and eurozone improved the risk appetite and drove market participants towards riskier assets. The risk-on market sentiment favors EUR/USD upside gains. The important data on the economic calendar to look out for would be the Euro Retails Sales data and US ADP Employment  Change to take fresh trading impetus. EUR/USD additional levels
 

Australia Retail Sales s.a. (MoM) meets forecasts (-1.8%) in June

USD/CHF gains in the Asian trading session on Wednesday. The pair hovers in a narrow trade band with no meaningful traction. At the time of writing, U

USD/CHF prints some fresh gains on Wednesday in the Asian session.US Dollar Index remains steady at 92.00 despite softer economic data.The Swiss franc remains in demand amid market uncertainty on its safe-haven appeal.USD/CHF gains in the Asian trading session on Wednesday. The pair hovers in a narrow trade band with no meaningful traction. At the time of writing, USD/CHF is trading at 0.9041, up 0.06% for the day. The US dollar index trades at 92.08, with 0.02 gains in the Asia-pacific timings. The greenback remains under selling pressure after the Fed’s less hawkish tone and the mixed economic data. The US ISM Manufacturing Purchase Manager Index (PMI) fell to 59.5 in July, below the market forecasts of 60.9, the weakest reading in the previous six months.  On the other hand, the Swiss franc gained on its strong economic data. The Swiss Consumer Confidence jumped 7.8 in Q3. It is the highest reading since 2010. There was also the anticipation of an improvement in unemployment data, with the readings at 29 slightly below the pre-pandemic level. As for now, traders are waiting for the US ADP Employment Change to gauge the market sentiment. USD/CHF additional levels
 

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) reference rate at 6.4655 vs the last close of 6.4700. About the fix China

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) reference rate at 6.4655 vs the last close of 6.4700. About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

AUD/JPY takes offers around 80.55, down 0.15% intraday amid Wednesday’s Asian session. In doing so, the cross-currency pair remains inside a two-week-

AUD/JPY stays depressed around intraday low inside a bearish chart pattern.Steady Momentum line, failures to keep recovery moves signal slow grind to the yearly low.Key Fibonacci retracement levels, 200-SMA add to the upside barriers.AUD/JPY takes offers around 80.55, down 0.15% intraday amid Wednesday’s Asian session. In doing so, the cross-currency pair remains inside a two-week-old descending trend channel while refreshing the day’s low. Given the pair’s repeated failures to rise further towards the 81.00 threshold, coupled with the steady Momentum line and a bearish formation on the four-hour (4H) play, AUD/JPY sellers are likely to keep the reins. During the anticipated fall, the support line of the stated channel, near 80.25 and the 80.00 psychological magnet could test the bears ahead of directing them to the last month’s low near 79.80. It’s worth mentioning that the yearly bottom surrounding 79.20 will be crucial to watch afterward. On the flip side, a clear upside break of the channel’s resistance, around 81.10, becomes necessary for the bulls to aim for 38.2% and 50% Fibonacci retracement levels of July’s fall, respectively near 81.50 and 82.00. However, the pair’s further upside will be challenged by 200-SMA and July 13 swing high near 82.80. AUD/JPY: Four-hour chart Trend: Bearish  

New Zealand ANZ Commodity Price dipped from previous 0.8% to -1.4% in July

The price of gold on Tuesday was a touch softer within familiar ranges. XAU/USD ended down some 0.17% at $1,810.45 and had ranged between a high of $1

Gold is stuck in familiar ranges, needs a break of daily support resistance. US dollar correcting recent sell-off and covid risks are a headwind.The price of gold on Tuesday was a touch softer within familiar ranges. XAU/USD ended down some 0.17% at $1,810.45 and had ranged between a high of $1,815.06 and a low of $1,807.17.   At the time of writing in Asia, it is flat at $1,810. The greenback steadied on Tuesday and is holding in familiar ranges as bulls seek a break of 92.20 resistance.  The US dollar was struggling against the risk-off bloc including the Japanese yen and Swiss franc, as questions about slowing US economic growth and the COVID-19 Delta variant challenged risk appetite.  The divergence between central banks has been a support for the greenback in recent months and a headwind for gold. This makes Nonfarm Payrolls data key. The event could seal the deal for dollar bulls if the data comes in hot and enough to persuade the markets into a buying spree in expectations of a tapering announcement as soon as the Jackson Hole Symposium, Aug 26-28. The event and US data leading up to it will be critical for both the US dollar and precious metal prices.  US dollar smile theory Meanwhile, the Fed's Flexible Average Inflation Targeting gives rise to the prospects of a bullish foundation for gold in the medium term. The prolonged era of negative real rates, historically, has prompted idle investor capital to seek shelter in gold as a store of value. However,  melting real rates are failing to inspire a speculative boost to the precious metals complex. Instead, the dollar smile theory is in play as covid risks help to keep the greenback in demand as a safe haven while economic data is forecasted to continue improving.  Reports of a recently leaked document from the CDC was partly to blame. According to the New York Times, the reports said that the Delta variant is more transmissible than the common cold, 1918 Spanish flu, smallpox, Ebola, MERS, and SARS. Also, in China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control  Gold technical analysis From a technical stance, gold as it hovers around critical 21 and 50 EMA convergence on the daily charts and between familiar support and resistance. A break of either side, 1,834, 1,790, would be a significant development. A break of 1,834 will help to chalk out the weekly bullish reverse head & shoulders in development. This will be a compelling feature for the foreseeable future. A 61.8% Fibonacci target of the weekly bearish impulse comes in near 1,850 as the first port of call. However, a break below 1,790 will open prospects of the 1,730s.
 

Yields on the two-year New Zealand (NZ) government bond rose 2.5 basis points (bps), or 3.36%, to 0.77% after strong NZ Q2 employment figures, publish

Yields on the two-year New Zealand (NZ) government bond rose 2.5 basis points (bps), or 3.36%, to 0.77% after strong NZ Q2 employment figures, published during the early Asian session on Wednesday. Among the key details, the headline NZ Employment Change crossed 0.7% market consensus and 0.6% prior to 1.0% whereas the Unemployment Rate dropped to a one-year low of 4.0% versus 4.5% forecast and 4.7% previous readouts. Read: NZD/USD: Bulls attack 0.7050 on strong NZ Q2 Employment data The data propelled bets for the Reserve Bank of New Zealand (RBNZ) rate hike during 2021, also favored the NZD/USD bulls to refresh weekly top around 0.7050 before recently easing to 0.7038. It’s worth noting that multiple research houses including the Australia and New Zealand Banking Group (ANZ), Westpac and the Bank of New Zealand (BNZ), raised their RBNZ rate hike forecasts following the data release. The banks now expect benchmark rates to go up from August, which in turn suggests further upside for the NZD/USD prices.

Japan Jibun Bank Services PMI came in at 47.4, above expectations (46.4) in July

Hong Kong SAR Nikkei Manufacturing PMI dipped from previous 51.4 to 51.3 in July

GBP/JPY takes offers around 151.55, down 0.15% intraday, as bears jostle with fortnight-old support during Wednesday’s Asian session. With the pair’s

GBP/JPY remains pressured around short-term key support zone.Sustained trading below 200-SMA, downbeat RSI favor sellers.Bulls require 153.50 break out to retake controls.GBP/JPY takes offers around 151.55, down 0.15% intraday, as bears jostle with fortnight-old support during Wednesday’s Asian session. With the pair’s failures to stay beyond 61.8% Fibonacci retracement of the early July’s downtrend, not to forget sustained trading below 200-SMA, GBP/JPY sellers are likely to keep the reins. However, a clear downside break of 151.50 becomes necessary for the pair’s downside towards July 08 swing low near 150.65. Following that, the 150.00 threshold and the last month’s bottom surrounding 148.50 should return to the chart. Alternatively, 61.8% Fibonacci retracement and the recent high, respectively around 152.00 and 152.20, guard the quote’s immediate recovery moves ahead of 200-SMA near 152.60. If at all the GBP/JPY prices remain firm beyond 152.60, a monthly horizontal area near 153.50 will be a tough nut to crack for the bulls. GBP/JPY: Four-hour chart Trend: Further weakness expected  

USD/CAD seesaws around 1.2530, following a three-day rebound from the monthly low, amid Wednesday’s Asian session. In doing so, the loonie pair follow

USD/CAD bulls take a breather around weekly top after three-day uptrend.Oil fails to justify geopolitical concerns relating to Iran amid downbeat inventories, covid woes.Easy Canadian PMI, firmer US Factory Orders favored bulls on late Tuesday.US ISM Services PMI, ADP Employment Change will be crucial to watch.USD/CAD seesaws around 1.2530, following a three-day rebound from the monthly low, amid Wednesday’s Asian session. In doing so, the loonie pair follows the sidelined oil prices during a quiet Asian session ahead of the key US data. That said, the quote refreshed weekly top the previous day following the second day of downbeat oil prices, not to forget softer activity data at home versus better-than-forecast US Factory Orders. Prices of Canada’s main export, WTI crude oil, have dropped around 5.0% so far during the week as concerns over economic recovery, due to the Delta covid variant’s spread, weigh on energy demand. In addition to the virus fears, downbeat inventory data from the American Petroleum Institute (API) also weigh on the quote as the stockpiles improved from -4.728M versus -0.879M prior. It should be noted, however, that the Western tussles with Iran and China should have ideally helped the black gold but did not. It’s worth noting that the COVID-19 woes battle stimulus hopes and pre-data caution to add extra filters to the USD/CAD moves amid an inactive session. That said, S&P 500 Futures drop 0.16% despite Wall Street’s upbeat close whereas the US 10-year Treasury yields remain sluggish around 1.18%. Moving on, US ADP Employment Change  for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow. Further, China’s Caixin Services PMI and EIA’s Weekly Oil Stock Change numbers offer extra catalysts to watch for fresh impulse. Technical analysis Although the monthly horizontal area surrounding 1.2420 restricts short-term USD/CAD downside, bulls need a clear break of the 200-DMA, near 1.2590 by the press time, to keep the reins.  

GBP/USD seesaws around 1.3920-15 amid the initial Asian session on Wednesday. In doing so, the cable takes rounds to 50.0% Fibonacci retracement (Fibo

GBP/USD struggles to extend recovery moves from previous resistance line.100-DMA guards immediate upside, 50-DMA and 61.8% Fibonacci retracement follow the line.Bullish MACD, sustained break of the key resistance line favor buyers.GBP/USD seesaws around 1.3920-15 amid the initial Asian session on Wednesday. In doing so, the cable takes rounds to 50.0% Fibonacci retracement (Fibo.) of June–July downturn while keeping the previous day’s rebound from the resistance-turned-support line from June 01. Given the bullish MACD and the pair’s ability to stay firmer past the earlier resistance line, GBP/USD may overcome the immediate hurdle, namely 100-DMA level of 1.3925 and 50-DMA close to 1.3935. However, the pair’s further upside will be challenged by July’s top of 1.3983, 61.8% Fibo. near 1.3990 and mid-June top near 1.4010. Meanwhile, the stated falling trend line, around 1.3865, restricts short-term GBP/USD downside ahead of June’s low near 1.3785. If at all GBP/USD bears keep reins past 1.3785, 23.6% Fibo. surrounding 1.3730 and 1.3690 support level could challenge the fall towards the last month’s low of 1.3572. GBP/USD: Daily chart Trend: Pullback expected  

AUD/NZD remains on the back foot, taking offers around 1.0500 amid Wednesday’s initial Asian session. Although the Reserve Bank of Australia’s (RBA) h

AUD/NZD sellers renew 2021 low during second day of losses on strong NZ employment data.NZ Unemployment Rate dropped to 4.0%, Employment Change rose 1.0% in Q2.Mixed market sentiment tests traders, data from Australia, China eyed for fresh impulse.AUD/NZD remains on the back foot, taking offers around 1.0500 amid Wednesday’s initial Asian session. Although the Reserve Bank of Australia’s (RBA) hawkish tilt tried to save the bears the previous day, New Zealand’s (NZ) strong employment figures for the second quarter (Q2) weighed on the quote of late. NZ Employment Change crossed past 0.7% market consensus and 0.6% prior to 1.0% whereas the Unemployment Rate dropped to 4.0% versus 4.5% forecast and 4.7% previous readouts. Read: NZ jobs data beats expectatons, NZD/USD marginally higher Other than New Zealand data that amplifies concerns over the Reserve Bank of New Zealand’s (RBNZ) rate hike in 2021, Auckland’s victory to control the pandemic despite resurgence around the globe also exerts downside pressure on the quote. Furthermore, the RBNZ’s moves to curb property prices and hawkish outlook weigh on the AUD/NZD prices as well. Meanwhile, the market’s indecision over US stimulus and recent geopolitical jitters concerning Iran and China challenge the pair’s moves. On the same line is the cautious mood ahead of the key US data/events as well as mixed covid updates from Australia, the UK and the US. Amid these plays, Wall Street marked notable gains but the S&P 500 Futures drop 0.10% by the press time. Looking forward, AUD/NZD bears may wait for Australia’s June Retail Sales and China’s Caixin Services PMI for July for fresh impulse. Should these data join the recently downbeat risk appetite, AUD/NZD may pause the downtrend for now. Additionally,  ADP Employment Change  for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow. Technical analysis A three-week-old descending trend line around 1.0495 challenges AUD/NZD bears targeting the December 2020 low of 1.0412. On the contrary, recovery moves are capped by weekly resistance line and 21-DMA, respectively around 1.0580 and 1.0600.  

Australia Commonwealth Bank Composite PMI remains unchanged at 45.2 in July

Australia Commonwealth Bank Services PMI remains at 44.2 in July

NZD/USD holds on to the weekly gains while taking the bids around 0.7035, 0.26% intraday, during early Wednesday morning in Asia. The kiwi pair recent

NZD/USD remains on the front foot on upbeat employment data from home.New Zealand Q2 jobs report amplified concerns over RBNZ rate hike in 2021.Market sentiment dwindles amid fresh geopolitical woes, mixed covid and stimulus headlines.Aussie-China data, risk catalysts can offer immediate direction ahead of the key US ADP and ISM PMI figures.NZD/USD holds on to the weekly gains while taking the bids around 0.7035, 0.26% intraday, during early Wednesday morning in Asia. The kiwi pair recently gained on firmer second quarter (Q2) employment report from New Zealand (NZ). NZ Employment Change rose past 0.7% market consensus and 0.6% previous readouts to 1.0% whereas the Unemployment Rate slumped below 4.5% forecast and 4.7% prior to 4.0%. Read: NZ jobs data beats expectatons, NZD/USD marginally higher Other than the positive data, the Reserve Bank of Australia’s (RBA) readiness to keep the September tapering on the table despite covid woes at home also backs the odds of the Reserve Bank of New Zealand’s (RBNZ) rate hike in 2021. Recently easy covid numbers from Australia and the UK, versus a spike in the US infections, joins the RBNZ’s steps to curb the lending for homes while offering additional motivation to the NZD/USD bulls. On the contrary, fresh geopolitical tussles between the West and Iran, as well as with China, test the pair buyers. Additionally, uncertainty over US President Joe Biden’s infrastructure spending bill passage in the Senate and cautious sentiment ahead of the key data/events of the week also probe the pair’s upside momentum. It’s worth noting that a -0.10% print of the S&P 500 Futures, despite Wall Street’s upbeat performance, also challenges the NZD/USD bulls. Having witnessed the initial reaction to the NZ data, the pair traders should keep their eyes on the Australian Retail Sales for June and China’s Caixin Services PMI for July for further direction. However, major attention will be given to the risk catalysts and the US data. Among them, ADP Employment Change  for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow. Technical analysis NZD/USD battles 200-day EMA around 0.7020 ahead of confronting a downward sloping trend line from June 15, near 0.7030. Even if the bulls manage to cross the 0.7030 hurdle, a confluence of 100-day and 200-day SMA, near 0.7100 will be the key to watch. On the contrary, failures to stay beyond 0.7000 may recall the bears targeting the 0.6920 horizontal support.  

Employment data for the second quarter that was expected to show a tighter labour market has been released as follows: NZ Q2 Unemployment rate 4.0% (v

Employment data for the second quarter that was expected to show a tighter labour market has been released as follows: NZ Q2 Unemployment rate 4.0% (vs. expected 4.5%). Employment Change +1.0% QoQ (vs. expected +0.7%) NZD/USD reaction and update NZD/USD has spiked 13 pips shortly after the release to a fresh high of 0.7037. The kiwi was better bid into the data following a surprise hawkish hold from the Reserve bank of Australia and announcements in a press release from the Reserve Bank of New Zealand. The central bank's press release was floating the idea of tighter lending standards which the market read to mean an August hike was a done deal. The write-up, published on the RBNZ site, said, “House prices are above their sustainable level and the Reserve Bank of New Zealand – Te Pūtea Matua – is now considering tighter lending standards to reduce the risks associated with excessive mortgage borrowing.” ''In truth, the RBNZ was just pointing out that August was when they next have the opportunity to hike, but it got a reaction anyway,'' analysts at ANZ Bank argued. Kiwi house prices were meanwhile up 24.8% YoY which is more than ten times its inflation target. ''Indeed, it underlines the dilemma that central banks can’t hit all the varied, wonderful targets we want them to. In fact, they can’t even hit just one – inflation: or if they do, it is only at the price of just about everything else going wrong in the background,'' analysts at Rabobank said on the matter.  About NZ jobs data The Unemployment Rate released by the Statistics New Zealand is the number of unemployed workers divided by the total civilian labor force.  Why it matters to traders? Statistics New Zealand releases employment data on a quarterly basis. The statistics shed a light on New Zealand’s labor market, including unemployment and employment rates, demand for labor and changes in wages and salaries. These employment indicators tend to have an impact on the country’s inflation and Reserve Bank of New Zealand’s (RBNZ) interest rate decision, eventually affecting the NZD. A better-than-expected print could turn out to be NZD bullish.

New Zealand Labour Cost Index (YoY) came in at 2.2%, above expectations (2.1%) in 2Q

New Zealand Participation Rate came in at 70.5%, below expectations (70.6%) in 2Q

New Zealand Employment Change above expectations (0.7%) in 2Q: Actual (1%)

New Zealand Unemployment Rate registered at 4%, below expectations (4.5%) in 2Q

New Zealand Labour Cost Index (QoQ) above expectations (0.4%) in 2Q: Actual (0.9%)

Australia AiG Performance of Construction Index dipped from previous 55.5 to 48.7 in July

At the time of writing, US West Texas Intermediate (WTI) crude is higher by some 0.22% at the start of Wednesday's trading following a terrible day ov

WTI is in the hands of the bulls for the open in Asia following a down day in European and US markets. Covid risks are at the centre of oils decline from recent demand expectation highs. At the time of writing, US West Texas Intermediate (WTI) crude is higher by some 0.22% at the start of Wednesday's trading following a terrible day overnight. WTI dropped from a high of $71.92 to a low of $69.22 as concerns of the delta variant gripped.  In more recent trade, however, a private oil survey showed a smaller than expected headline draw in crude oil inventory Official data follows Wednesday in the morning of the US session.  Crude -0.879M. Cushing +0.659M.  Gasoline -5.751M.  Distillate -0.717M. Concerns over the spread of Delta variant in the United States and China, the top oil consumers, weighed on prices on Tuesday. Both benchmarks were falling more than 3% at one point. Brent crude oil futures settled down 48 cents, or 0.66% at $72.41 a barre. WTI crude settled down 70 cents, or 0.98% at $70.56 a barrel. Reports of a recently leaked document from the CDC was partly to blame. According to the New York Times, the reports said that the Delta variant is more transmissible than the common cold, 1918 Spanish flu, smallpox, Ebola, MERS, and SARS. Also, in China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control which has dented the demand side case for energy markets.  Looking beyond covid, rising energy demand risk should continue to support higher prices. The OPEC+ supply increases of 400,000 barrels per day of new production that have started this month are still seen to be underwhelming.  

Shares in the US reversed the previous day’s losses, actually added more, by the end of Tuesday’s North American trading session. While mildly positiv

US equity benchmarks post gains amid strong company results, firmer US data.Stimulus hopes battle covid concerns, pre-NFP caution and geopolitical risks.Under Armour, Ralph Lauren lead the earnings beat, IPG Photonics bucks the trend.Apple pleases bulls with multiple announcements relating to product offerings.Shares in the US reversed the previous day’s losses, actually added more, by the end of Tuesday’s North American trading session. While mildly positive sentiment could be linked to Wall Street’s positive performance, welcome results and US data also favored the bulls. Read: Forex Today: Sentiment leads the way Dow Jones Industrial Average (DJIA) added 0.80% or 278.24 points whereas S&P 500 marked 35.99 points of a daily gain, or 0.82% upside, by the press time. The tech-heavy Nasdaq rose 0.55% or 80.20 points at the end of Tuesday’s trading. Under Armour joined Ralph Lauren to post strong Q2 earnings whereas the IPG Photonic marked the heaviest drop among S&P 500 members after missing the market consensus and announcing a downbeat outlook. Apple acquired headlines with its hint to launch the buy-now-pay-later program in Canada, as well as likely price changes for in-App purchases and App-store products. Elsewhere, firmer US Factory Orders and optimism over President Joe Biden’s infrastructure stimulus favored the bulls. On the same line was the International Monetary Fund’s (IMF) historical allocation to the Special Drawing Rights (SDR) to battle the pandemic. It’s worth noting that the jump in the US covid cases to the early February levels, per the US Centers for Disease Control and Prevention (CDC) data, as well as the geopolitical jitters concerning Iran and China, challenge the bulls. Amid these plays, US 10-year Treasury yields remain mostly unchanged around 1.17% after posting the lowest daily closing since February whereas the S&P Futures printing mild losses by the press time. Looking forward, ISM Services PMI for July, expected 60.4 versus 60.1, coupled with the ADP Employment Change for the said month, market consensus 695K versus 692K prior, will be the key data to watch. However, the pre-NFP sentiment and risk catalysts will be more important to follow.

USD/JPY extends the losses in the initial Asian trading session on Wednesday. The sluggish movement in the US dollar sponsors the lacklustre performan

USD/JPY continues to decline on Wednesday for the straight second day.US Dollar Index remains pressurized near 92.00 on mixed economic data, Fed’s dovish outlook.The yen gains on its safe-haven appeal despite rising coronavirus cases in Japan.USD/JPY extends the losses in the initial Asian trading session on Wednesday. The sluggish movement in the US dollar sponsors the lacklustre performance of the pair. At the time of writing, USD/JPY is trading at 109.05, down 0.01 % for the day. The US Dollar Index, which tracks the performance of the greenback against its six major rivals, trades near 92.00 and hovering in the same trading range since the beginning of the August month series. Fed’s dovish outlook and fears of slowing US economic growth negatively impacts the USD’s valuation. The rapid spread of the Delta variant offset strong corporate results.  As per the latest reports, the COVID-19 hospitalization in the US reached 50k for the first time since February.
The ISM Manufacturing Purchase Manager Index (PMI) came lower at 59.5 in July, whereas the Factory Orders surged 1.5% in June, beating the market consensus of 1%. On the other hand, the Japanese yen held the ground on its safe-haven appeal as investor’s risk appetite dampens on rising coronavirus infections. The Japanese government imposed a state of emergency in Tokyo until after the Olympics games end on August 8. Meanwhile, the escalating geopolitical tension in middle-east after a tanker ship in the Gulf of Oman was seized by suspected Iranian gunmen spooked investors. This, in turn, results in the fund flow toward safer yen. As for now, investors wait for US ADP Employment change to gauge the market sentiment. USD/JPY additional levels  

Early Wednesday in Asia, at 22:45 GMT Tuesday the world over, the global market sees the second-quarter (Q2) 2021 employment data from the Statistics

New Zealand quarterly employment report overview Early Wednesday in Asia, at 22:45 GMT Tuesday the world over, the global market sees the second-quarter (Q2) 2021 employment data from the Statistics New Zealand. Considering New Zealand’s (NZ) ability to tame the coronavirus outbreak at home, also keeping it safe from the global Delta covid variant, joins firmer economics and heating property prices to push the Reserve Bank of New Zealand (RBNZ) towards a rate hike in late 2021. Also amplifying the concerns was the Reserve Bank of Australia’s (RBA) latest hawkish title. Hence, today’s NZ jobs report will be the key for RBNZ hawks. Market consensus suggests a reduction in the headline Unemployment Rate to 4.5% from 4.7% and a firmer Employment Change figure of 0.7% versus 0.6% previous readouts. Further, the Participation Rate may also inch up from 70.4% to 70.6%, per forecasts. Ahead of the data, TD Securities said, We expect NZ's unemployment rate to fall to 4.3% in Q2 from 4.7% in Q1, which is more optimistic than the street and RBNZ forecasts (market consensus: 4.4%, RBNZ's May MPS: 4.7%). Employment growth likely rose 0.9% q/q (Q1:0.6%) as Stats NZ's monthly employment indicator shows filled jobs rose strongly by 1.7% q/q at the end of Q2. From the Q2 NZIER survey, the skilled labor shortage is the most acute since the series began, pointing to further wage pressures in the private sector. Accordingly, we expect wages to rise by 0.8% q/q, 2.1% y/y (market forecast: 0.7%, 2.0% y/y). A strong Q2 labor market outcome should confirm our call for the RBNZ to begin policy normalization at the Aug meeting. On the same line, FXStreet’s Dhwani Mehta said, Upbeat fundamentals and the central bank’s efforts to curb the hot property market combined with higher inflation and improvement in the country’s labor market are likely to confirm the hawkish Reserve Bank of New Zealand (RBNZ) expectations. Economists at the country’s four largest banks expect the RBNZ to begin hiking rates in November. How could it affect the NZD/USD? NZD/USD edges higher past 0.7000, around 0.7015-20, ahead of the key NZ data during Wednesday’s Asian session. While mild optimism in the market, led by easing covid concerns in the West and amid stimulus hope, favor the bulls, the pre-data caution seems to limit the pair’s upside momentum of late. The RBNZ’s move to alter lending terms for housing markets and the RBA’s readiness to keep the September tapering despite covid woes at home signal brighter chances of the New Zealand central bank to announce a rate hike during 2021. The optimists are likely to take clues from today’s NZ jobs report if matching/surpassing upbeat forecasts. However, the intermediate pullback can be expected in case of a negative surprise. Technically, NZD/USD battles 200-day EMA around 0.7020 ahead of confronting a downward sloping trend line from June 15, near 0.7030. Even if the bulls manage to cross the 0.7030 hurdle, a confluence of 100-day and 200-day SMA, near 0.7100 will be the key to watch. On the contrary, failures to stay beyond 0.7000 may recall the bears targeting the 0.6920 horizontal support. Key Notes New Zealand Employment Preview: Upbeat jobs data to open RBNZ rate-hike door NZD/USD bulls firm their grip into jobs report   About New Zealand unemployment rate and employment change The quarterly report on New Zealand unemployment rate and employment change is being released by the Statistics New Zealand. The unemployment rate is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand labor market. As a result, a rise leads to weaken the New Zealand economy. A decrease of the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish). On the other hand, employment change is a measure of the change in the number of employed people in New Zealand. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. A high reading is seen as positive (or bullish) for the NZ dollar, while a low reading is seen as negative (or bearish).

AUD/USD struggles to extend the heaviest daily gains in a month, led by the RBA’s hawkish tilt, beyond the 0.7000 round-figure. That said, the Aussie

AUD/USD recovery remains capped by one-month-old horizontal resistance.Market sentiment improves amid stimulus hopes, slight relief in covid concerns.Hawkish RBA adds to the bullish catalysts confronting recent geopolitical threats.Aussie Retail Sales, China Services PMI can entertain pair traders in Asia.AUD/USD struggles to extend the heaviest daily gains in a month, led by the RBA’s hawkish tilt, beyond the 0.7000 round-figure. That said, the Aussie pair seesaws around 0.7390 as Asian traders brace for Wednesday’s work. The Reserve Bank of Australia (RBA) offered a positive surprise to the markets by keeping the September tapering on the table despite the covid woes at home. The same fuelled AUD/USD prices by nearly 40 pips immediately on the announcement even as the Australian central bank did reiterate the rate-hike rejection until 2024, not to forget mentioning of holding the benchmark rate and three-year yield target unchanged per market consensus. The mildly positive mood of investors offered additional strength to the AUD/USD pair’s upside momentum as the International Monetary Fund (IMF) announced historical allocation to the Special Drawing Rights (SDRs) to battle the pandemic whereas the US Senators also sounding optimistic over President Joe Biden’s infrastructures spending plan’s passage this week. Moody’s optimism over the Asia–Pacific region’s economic growth and softer virus-led figures for the second consecutive day was extra positives that helped the quote keep the post RBA gains. On the contrary, firmer US Factory Orders and Middle East jitters, not to ignore Republicans’ battle lines for stimulus, challenge the pair’s upside momentum. On the same line could be the market’s cautious sentiment ahead of the week’s key events, namely Thursday’s Bank of England (BOE) meeting and Friday’s US Nonfarm Payrolls (NFP). Against this backdrop, Wall Street benchmarks end Tuesday on a positive side while the US 10-year Treasury yields remain mostly unchanged around 1.18%. The AUD/USD pair’s struggle to overcome the 0.7000 hurdle will seek clues from Australia’s Retail Sales data for June, likely confirming -1.8% initial forecast, as well as China’s Caixin Services PMI, prior 50.3. Following that, US ISM Services PMI for July, market consensus 60.4 versus 60.1 prior, may entertain the pair traders. Above all, covid headlines and stimulus updates could offer key directions to the pair. Technical analysis Multiple levels marked since early July, also challenged in August–September 2020 period, questions AUD/USD upside momentum. The resistance area draws additional strength from 21-DMA.  

United States API Weekly Crude Oil Stock up to -0.879M in July 30 from previous -4.728M

South Korea FX Reserves increased to 458.68B in July from previous 454.11B

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