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    Wednesday, July 17, 2019

    Federal Reserve's George is crossing the wires. Key quotes: Downside risks to the economy primarily from trade uncertainty, slowing global growth. Exp

    Federal Reserve's George is crossing the wires. Key quotes: Downside risks to the economy primarily from trade uncertainty, slowing global growth. Expects to see continued econ. growth around trend. Trade, tariffs & world growth pose risks to outlook. Prepared to adjust view of appropriate monetary plicy if downside risks materialize. Not seeing much price pressure being generated by unemployment. Natural unemployment rate ‘could be lower’.          

    The Federal Reserve's Beige Book has stated that the economic activity continued to expand at a modest pace overall from mid-May through early July, w

    The Federal Reserve's Beige Book has stated that the economic activity continued to expand at a modest pace overall from mid-May through early July, with little change from the prior reporting period. In most Districts, sales of retail goods increased slightly overall, although vehicle sales were flat. Activity in the nonfinancial services sector rose further. Tourism activity was broadly solid, with Atlanta and Richmond recording robust growth in this sector. Although some Districts continued to report healthy expansion in the transportation sector, others noted that activity declined modestly. On balance, home sales picked up somewhat, but residential construction activity was flat. Nonresidential construction activity increased or remained strong in most reporting Districts, and commercial rents rose. Manufacturing production was generally flat, but a few Districts noted a modest pickup in activity since the last reporting period. Agricultural output declined modestly following unusually heavy rainfall in some areas, and oil and gas production fell somewhat. Increased demand for loans was broad-based, with all but two Districts noting some growth in financing activity. The outlook generally was positive for the coming months, with expectations of continued modest growth, despite widespread concerns about the possible negative impact of trade-related uncertainty.

    WTI (West Texas Intermediate) is declining sharply below $58.00 a barrel and its main daily simple moving averages (DSMAs). Oil 4-hour chart The marke

    Oil is sharply down for the second consecutive day.The level to beat for bears are seen at 56.40 and 56.00Oil daily chart WTI (West Texas Intermediate) is declining sharply below $58.00 a barrel and its main daily simple moving averages (DSMAs).
    Oil 4-hour chart The market is trading below 57.00 and the 50 and 100 SMAs. Bears likley intend to drive the market towards the 56.40 and 56.00 supports.
    Oil 30-minute chart Oil is trading below its main SMAs suggesting bearish momentum in the near term. Immediate resistancess are seen at 57.00, 57.40 and 58.50. 
    Additional key levels  

    EUR/JPY has been under pressure since July 11th but has made a series of higher lows in the near term. Risk appetite is slightly lower today as market

    EUR/JPY is currently trading at 121.31, travelling between a tight range of 121.19 and 121.48.EUR/JPY is basing on a technical basis albeit pressured by a series of lower tops. EUR/JPY has been under pressure since July 11th but has made a series of higher lows in the near term. Risk appetite is slightly lower today as markets weigh up the outlook in what appears to b a new easing cycle at the central banks, with much-depending on this month Federal Reserve outcome.  Stocks have been in consolidation this week but today's European stock indices have closed lower with the German DAX, -0.72%. As for data, the soft European June car sales figures highlighted the downside risk to the eurozone growth outlook, particularly in light of the openness of the eurozone economy and its exposure to car exports.   EUR/JPY levels Analysts at Commerzbank explained that EUR/JPY has started to erode the 2019 uptrend line at 121.42 and the 120.79 June low, is exposed: "A negative bias will remain entrenched while we are below the 55-day moving average and the 3-month downtrend at 122.34/42. It should head to the 119.91 78.6% Fibonacci retracement. This is the last defence for the 117.85 January spike low. Resistance is offered initially by the 55-day ma and downtrend at 122.34/42 and then 123.34/75 May 21, June and current July highs."  

    Gold continued to rally and printed a fresh 6-day high at $1424 and then pulled back modestly. As of writing, trades at $1421, up to $15 for the day a

    Yellow metal gains on economic outlook worries and lower US yields. XAU/USD holds above $1420, near the highest daily close since 2013. Gold continued to rally and printed a fresh 6-day high at $1424 and then pulled back modestly. As of writing, trades at $1421, up to $15 for the day and more than $20 above the daily lows.  The move higher took place amid a decline in US yields and also on lower equity prices on Wall Street. Crude oil prices turned negative, adding to yesterday’s losses. Overall, the decline in global yields continues to be a key support to gold prices. The anticipation of more stimulus from the Federal Reserve and the European Central Bank is pushing bond yields to the downside.  XAU/USD continues to move in a consolidation range, holding above the 20-day moving average and testing at the moment the upper limited. A daily close above $1425 would be the highest since 2013 and would point to more gains. While a retreat from current levels could find support at $1400/05 (psychological / 20-day moving average); below the decline is likely to extend to $1385.   
     

    AUD/USD is held up in its advance as markets dial down the prospects of deeper Federal Reserve cuts. The Fed seems most likely to cut rates once by 2

    AUD/USD is currently trading at 0.7022 between a range of 0.6996 and 0.7024.AUD/USD stalling in the July recovery at prior resistance. AUD/USD is held up in its advance as markets dial down the prospects of deeper Federal Reserve cuts. The Fed seems most likely to cut rates once by 25bp in 2019 and then leave rates on hold through 2020 rather than embarking on a series of rate cuts. There have been three rate cuts priced into futures markets by end-2019 which would entail the Fed undoing nearly all of the tightening enacted in 2018, which now seems quite unlikely unless the US economy slows down much more sharply than we (and the Fed) currently anticipate. Data of late has supported a less dovish bias. The focus in the immediate future, eyes now turns back to the Australian economy and jobs data. "We anticipate some give back in June from May's election driven boost to employment. We forecast +5k for headline Jun employment, the participation rate to remain at 66% and the unemployment rate to remain at 5.2%. The risk is for the unemployment rate to edge higher should more people be looking for work," analysts at TD Securities explained. AUD/USD levels On a technical basis, AUD/USD is approaching a very tough band of resistance, namely 0.7048/91, noted analysts at Commerzbank: "This is the May high and the July high so far, the 200-day ma and the downtrend. It is likely to hold the initial test and we note the 13 counts on the intraday charts, we would allow for failure here and a near term slide lower. Further up resistance can be spotted at the 0.7207 February high. The 0.6911 10th July low guards underlying support at 0.6865 the 17th May low and the mid June low at 0.6832."

    USD/CAD is under pressure near multi-month lows as the market is trading below 1.3100 and the main daily simple moving averages (DSMAs). USD/CAD 4-hou

    USD/CAD is trading close to multi-month lows. On a recovery scenario, the levels to beat for bulls are at 1.3050 and 1.3080/1.3100.
      USD/CAD daily chart USD/CAD is under pressure near multi-month lows as the market is trading below 1.3100 and the main daily simple moving averages (DSMAs). USD/CAD 4-hour chart
      The market is declining below its main SMAs as bears are trying to reach 1.3016 support If broken, further down lies 1.2770, according to the Technical Confluences Indicator.
    USD/CAD 30-minute chart
      The market is trading withing the ranfge of the last four days. Bulls have a lot of work as they have to overcome 1.3050 and the main SMAs. If the bulls can overcome 1.3050, the next resistances can become 1.3080, 1.3100 and 1.3150, according to the Technical Confluences Indicator. Additional key levels  

    The EUR/USD pair rose modestly during the American session and printed a fresh daily high at 1.1233. It is hovering near the top, recovering half of y

    The EUR/USD pair rose modestly during the American session and printed a fresh daily high at 1.1233. It is hovering near the top, recovering half of yesterday’s losses.  A weaker US Dollar boosted the pair to the upside. A decline in US yields pushed the greenback to the downside. The 10-year stands at 2.07%, the lowest since July 11 while the DXY is down 0.22%.  Data from the US today showed a decline in US housing starts and also in building permits to the lowest in two years. Housing starts fell 0.9% in June to a annual rate of 1.253 million units, below the 1.261 million expected. Building permits dropped 6.1% to a 1.220 million units in June, the lowest since May 2017.  Equity prices in Wall Street era lower on Wednesday with the DOW JONES down 0.20% amid comments from US President Trump on the lack of progress in US-China trade negotiations.  EUR/USD moving away from 1.1200  From a technical perspective, the EUR/USD pair is rebounding from near the 1.1200 area, like what happened last week. On the upside, the next strong resistance is seen around 1.1245/50 and above attention would turn to the weekly top at 1.1280/85. A slide below 1.1200 would expose, last week lows at 1.1190 and point to a test of the critical support at 1.1180.   

    GBP/USD is trading at 27-month lows as the market is having a small rebound above the 1.2400 figure. GBP/USD 4-hour chart Cable is challenging the 1.2

    GBP/USD is bouncing from the 1.2400 level. Resistances are seen at 1.2440 and 1.248, according to the Technical Confluences Indicator.GBP/USD daily chart GBP/USD is trading at 27-month lows as the market is having a small rebound above the 1.2400 figure. GBP/USD 4-hour chart
      Cable is challenging the 1.2440 resistance. If bulls manage to break above 1.2440 the next resistance can be seen at 1.2480, according to the Technical Confluences Indicator. GBP/USD 30-minute chart GBP/USD is trading between the 50 and 100 SMAs suggesting a correction in the medium term. Supports can be seen near 1.2414 and 1.2385
     
    Additional key levels  

    Analysts at NBF point out that the average of the three core measures stands in line with the mid-point target of the Bank of Canada at 2.0%...

    Analysts at NBF point out that the average of the three core measures stands in line with the mid-point target of the Bank of Canada at 2.0% on an annual basis.Key quotes"Headline CPI declined in June as gasoline prices dropped a massive 8.0%, the sharpest pullback on record for that month. That said, other categories also contributed to June’s weakness as shown by CPI excluding food & energy rising a modest 0.08%, following a 0.31% surge in May." "However, it is worth noting that the recent momentum is much stronger. Our in-house replications of CPI-Trim and CPI-median rose over the past 6 months at 2.4% and 2.5%, respectively." "This is the strongest pace for the first six months of the year since 2008."

    USD/JPY is trying to stabilize above 108.00 as the market is trading below the main daily simple moving average (DSMA). USD/JPY 4-hour chart USD/JPY i

    USD/JPY is finding some support above the 108.05 level.Targets to the upside can be seen at 108.56 and 108.85.USD/JPY daily chart
      USD/JPY is trying to stabilize above 108.00 as the market is trading below the main daily simple moving average (DSMA). USD/JPY 4-hour chart USD/JPY is consolidating above the 108.05 level near the 100 and 200 SMAs. Bulls should retake 108.26 to have a chance to reach 108.56 and 108.85 to the upside, according to the Technical Confluences Indicator.  USD/JPY 30-minute chart
    USD/JPY is challenging the 108.05 support and the 100/200 SMAs. If bears break below 108.08 the market could decline further towards 107.83 and 107.49 according to the Technical Confluences Indicator.
     
    Additional key levels  

    Data released today showed that Housing Starts dropped 0.9% in June. While still subdued, activity should steadily improve in the second half of the y

    Data released today showed that Housing Starts dropped 0.9% in June.  While still subdued, activity should steadily improve in the second half of the year, explained Wells Fargo analysts.Key Quotes: “New residential construction continues to be fairly sluggish. Total housing starts declined 0.9% during June, dragged down by a sharp 9.2% decline in the volatile multifamily segment. Single-family construction fared better and rose a solid 3.5%. Single-family building has now improved in three of the past four months.” “On a year-to-date basis, total starts are still running 3.7% below last year’s pace. Builders have contended with several weather-related challenges this year, which likely caused delays and depressed overall activity.” “We expect a slow and steady improvement in residential construction for the remainder of the year. Starts slowed markedly in the second half of 2018 alongside rising mortgage rates and sluggish new home sales.” “A steep 6.1% drop in total building permits during June may raise some eyebrows, however multifamily permits accounted for the entire decline.” “Builders steadily regaining confidence also points to further improvements in coming months. The NAHB Housing Market Index edged up to 65 during July, with both present and future sales, as well as prospective buyer traffic, gaining one point during the month. Despite remaining below the sky-high levels of last year, the topline index has improved in six of the past seven months, and gained nine points since last December’s collapse.”

    The USD/JPY pair dropped below Asian session lows and fell to 108.04. As of writing it was trading at 108.05/10 with the negative tone intact. Earlier

    US Dollar falls across the board as US yields hit fresh lows. USD/JPY turns negative after being unable to break 108.30 and the 20-day SMA. The USD/JPY pair dropped below Asian session lows and fell to 108.04. As of writing it was trading at 108.05/10 with the negative tone intact. Earlier today, the pair was unable to break above the 108.30 area that became a strong resistance.  The move lower took place amid a decline in US yields and also as equity prices in Wall Street extended losses. The 10-year yield fell to 2.07%, the lowest since July 11. The DOW JONES was falling 0.15% and the NASDAQ 0.17%.  Another driver was the decline of the US Dollar over the last hours across the board. The DXY was falling 0.18% at 97.20, trimming one-third of yesterday’s gains.  Levels to watch  If the decline in USD/JPY continues, it might test the 108.00 area. Below the next critical level is 107.80 (weekly lows); a break lower could clear the way to more losses. On the upside, the 20-day moving average at 108.20 and 108.30 (daily high) form a barrier that if broken, should lead to further USD strength.     

    The weekly report published by the U.S. Energy Information Administration showed that commercial crude oil inventories in the US decreased by 3.12 mil

    The weekly report published by the U.S. Energy Information Administration showed that commercial crude oil inventories in the US decreased by 3.12 million barrels in the week ending July 12 to 455.88 million. Market consensus pointed to a decline of 2.7 million.  According to the report, gasoline stocks rose 3.57 million barrels to 232.75 millon (against expectation of a 0.9 decline) and distillate stocks rose 5.69 million barrels to 136.2 million.  Crude oil prices turned lower after the report. WTI dropped toward $57.50 and then climbed back, approaching the level it had before the report. 
     

    United States EIA Crude Oil Stocks Change below forecasts (-2.694M) in July 12: Actual (-3.116M)

    The UK Prime Minister Theresa May said that she is worried about the state of politics, cited by Reuters. According to her the values “we enjoy, canno

    The UK Prime Minister Theresa May said that she is worried about the state of politics, cited by Reuters. According to her the values “we enjoy, cannot be taken for granted”. Landmark agreements that lead to the current international order will last “but we cannot be complacent”, the UK PM said.  May added that persuasion, teamwork and a willingness to make mutual concession are needed. She explained that the inability to compromise drove politics to the wrong path. 

    Sustained break through a support marked by 38.2% Fibo. retracement level of the 0.6910-0.7045 recent up-move will be seen as a key trigger for bearis

    The AUD/USD pair extended the previous session's retracement slide from near two-week tops and remained under some selling pressure for the second consecutive session on Wednesday.The downfall has now dragged the pair to 100-hour EMA, with bears now eyeing a follow-through selling below the key 0.70 psychological mark amid resurfacing US-China trade tensions.Sustained break through a support marked by 38.2% Fibo. retracement level of the 0.6910-0.7045 recent up-move will be seen as a key trigger for bearish traders and set the stage for a subsequent slide towards the 0.6975-70 region. Meanwhile, technical indicators on hourly charts have been gaining negative traction and support prospects for a further decline, albeit bullish oscillators on the daily chart warrant some caution before placing aggressive bets. A follow-through selling might turn the pair vulnerable to head towards challenging the 0.6900 handle before the pair eventually resumes its prior/well-established bearish trend and aim back towards testing support near mid-0.6800s. On the flip side, the 0.7045-50 region might continue to act as a strong resistance, which if cleared will negate any near-term bearish bias and set the stage for further appreciating move towards reclaiming the 0.7100 handle.AUD/USD 1-hourly chart 

    Gold is currently consolidating gains in a triangle above its main daily simple moving averages (DSMAs) Gold 4-hour chart The market is trading above

    Gold is spiking up and nearing 1,414.00 and 1,420.00 resistances. The main support is seen at the 1,400.00 figure.Gold daily chart Gold is currently consolidating gains in a triangle above its main daily simple moving averages (DSMAs) Gold 4-hour chart The market is trading above the 1,400.00 mark and the main SMAs suggesting bullish momentum in the medium term. Gold 30-minute chart Gold is having an intraday boost within its weekly range. Resistance can be seen at 1,1414.00 and 1,1420.00. On the other hand the main support is seen at the 1,1400.00 handle. Additional key levels to consider  

    Analysts at TD Securities note that the Canadian CPI edged lower by 0.2% m/m (-0.22% unrounded) which pulled inflation to 2.0% y/y from 2.4% in May (m

    Analysts at TD Securities note that the Canadian CPI edged lower by 0.2% m/m (-0.22% unrounded) which pulled inflation to 2.0% y/y from 2.4% in May (market: -0.3% m/m, 2.0% y/y).Key Quotes“As expected, gasoline was the main driver with the price at the pump falling by 8% m/m, which shaved 0.25pp from the headline print. Gasoline prices are also exerting a significant drag on a year-ago basis, which left the ex-energy measure sitting at 2.6% y/y, slightly below the 10-year high observed in May.” “The Bank of Canada's preferred core inflation measures slipped to 2.03% on average from 2.10% in May, reflecting a 0.2pp deceleration in the trimmed mean measure from 2.3% to 2.1% y/y. However, this was partially offset by upward revisions to the weighted-median while CPI-common was unchanged at 1.8% y/y.” “Headline inflation returning to the midpoint of the Bank of Canada's target range should come as a mild comfort to policymakers as they remain on the sidelines awaiting clarity on the global outlook, and the 2.1% y/y reading for Q2 is in line with revised projections from the July MPR.”

    James Knightley, chief international economist at ING, notes that the US housing starts and building permits were weaker than expected in June, but co

    James Knightley, chief international economist at ING, notes that the US housing starts and building permits were weaker than expected in June, but consumer fundamentals are in good shape and plummeting mortgage rates are stimulating demand, offering hope for a turnaround.Key Quotes“June US housing starts – the number of new residential construction projects started – have come in a little softer than expected. 1253k projects got underway last month, 0.9% down on May, versus the consensus forecast of 1260k. Building permits were down 6.1% month on month, leaving them at their weakest level since May 2017.” “We remain upbeat on the prospects for US housing. After all, the consumer is in great shape with employment at record levels, wages rising strongly in real terms and confidence remaining firm. Importantly, mortgage rates have plummeted in the wake of the plunge in Treasury yields.”

    Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canada’s manufacturing sales increased 1.6% in May and the increase extends re

    Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canada’s manufacturing sales increased 1.6% in May and the increase extends recent string of Canadian manufacturing outperformance relative to US.Key Quotes“The increase in manufacturing sales in May was, as expected, largely concentrated in the transportation sector.  Still, sales edged up 0.2% excluding transportation components, and have yet to decline on that basis in any month of this year.” “To be sure, growth in the Canadian manufacturing sector has not exactly been spectacular – but sales volumes (i.e. excluding price impacts) were still up 3.5% from a year ago in May and 2.0% year-to-date in 2019.” “For now, though, the domestic economic data continues to look a little better. And, with inflation also holding around 2%, is another reason the Bank of Canada won’t likely need to rush to follow the US Fed with a widely expected rate cut later this month.”

    The greenback stays within the daily range around the 97.30 region when measured by the US Dollar Index (DXY). US Dollar Index now looks to Fed’s data

    DXY remains sidelined around the 97.30 area.US housing sector figures disappointed estimates in June.The Fed will publish its Beige Book later in the day.The greenback stays within the daily range around the 97.30 region when measured by the US Dollar Index (DXY).US Dollar Index now looks to Fed’s dataThe index manages well to keep business in the area of weekly highs in the 97.30/40 band amidst a context of scarce volatility and broad-based consolidative trading. The greenback is holding on to the upper end of the range despite yields of the key US 10-year note are marching south, breaking below the key 2.10% level. All in all, it seems markets’ speculations of a larger rate cut by the Fed at the July meeting are losing some momentum, allowing for the ongoing recovery in DXY, particularly after the positive performance from Retail Sales during June, as per Tuesday’s report. In the data space, poor prints from the US housing sector did not dent the recovery in the buck after Housing Starts declined to 1.253M units during last month (-0.9%) and Building Permits also dropped 6.1% at 1.220M units. Closing the day, the EIA will report on the weekly variation of US crude oil supplies ahead of the publication of the Fed’s Beige Book.What to look for around USDDXY has recovered some composure after once again testing the vicinity of the 200-day SMA in the 96.70 region on Friday, all in response to the dovish message from Chief Powell and the FOMC minutes. Speculations among investors have already priced in a 25 bps rate cut hits month, although a bigger rate cut is not utterly ruled out just yet. Trade tensions and global growth concerns continue to cloud the US outlook while the lack of upside traction in inflation remains worrisome. Confronting this scenario, the greenback still looks underpinned by its safe have appeal, the status of ‘global reserve currency’, solid US fundamentals when compared to its G10 peers and the shift to a more accommodative stance from the rest of the central banks.US Dollar Index relevant levelsAt the moment, the pair is losing 0.06% at 97.32 and faces the next resistance at 97.59 (high Jul.9) followed by 97.80 (monthly high Jun.3) and finally 98.37 (2019 high May 23). On the flip side, a break below 96.73 (200-day SMA) would aim for 96.46 (low Jun.7) and then 96.04 (50% Fibo of the 2017-2018 drop).

    The GBP/USD pair struggled to capitalize on its mid-European session bounce from fresh 27-month lows, albeit has managed to hold its neck above the 1.

    Sliding US bond yields weighed on the USD and helped bounce off lows.Persistent fears of a no-deal Brexit hold investors from buying the GBP.The GBP/USD pair struggled to capitalize on its mid-European session bounce from fresh 27-month lows, albeit has managed to hold its neck above the 1.2400 handle. Having touched an intraday low level of 1.2382 - the lowest since April 2017, the pair witnessed some short-covering move in the wake of a subdued US Dollar price action, albeit struggled to attract any strong buying interest amid persistent fears of a no-deal Brexit. A fresh leg of a free fall in the US Treasury bond yields exerted some pressure on the greenback, which remained on the defensive following the disappointing release of US housing market data, and turned out to be one of the key factors behind the intraday rebound. Apart from Brexit woes, tempered expectations of aggressive easing by the Fed when it announces its latest monetary policy decision at the end of a two-day meeting on July 30-31 further collaborated towards capping the pair's attempted recovery move.  Hence, it would be prudent to wait for a strong follow-through before confirming that the pair might be in the process of forming a near-term bottom or positioning for any meaningful short-covering bounce back towards reclaiming the key 1.2500 psychological mark.Technical levels to watch 

    EUR/USD is hovering near the 1.1200 figure below its main daily simple moving average (DSMA). EUR/USD 4-hour chart EUR/USD is trading below 1.1250 res

    EUR/USD is consolidating the recent losses just below 1.1230 resistance.The level to beat for bears are at 1.1200 followed by 1.1164 to the downside.EUR/USD daily chart EUR/USD is hovering near the 1.1200 figure below its main daily simple moving average (DSMA). 
    EUR/USD 4-hour chart   EUR/USD is trading below 1.1250 resistance and its main SMAs. The bears want to break below 1.1200 to potentialy reach 1.1164 and 1.1120, according to the Technical Confluences Indicator.
    EUR/USD 30-minute chart EUR/USD is consolidating losses below 1.1230 resistance and the 100/200 SMAs, all-in-all suggesting a bearish bias. Immediate resistances are seen near 1.1230 and 1.1250, according to the Technical Confluences Indicator.
     
    Additional key levels  

    The shared currency manages to keep the buying interest intact so far today, with EUR/USD navigating the area above the 1.1200 handle for the time bei

    EUR/USD keeps holding on above the 1.1200 handle.EMU headline CPI surprised to the upside in June.US Housing Starts disappointed expectations last month.The shared currency manages to keep the buying interest intact so far today, with EUR/USD navigating the area above the 1.1200 handle for the time being.EUR/USD firmer on steady greenbackEUR met dip-buyers in the 1.1200 neighbourhood, or weekly lows, although gains appear so far limited around the 1.1280 region, area coincident with the 21-day SMA. The European currency has also derived upside pressure after final headline consumer prices in Euroland for the month of June came in a tad higher than the preliminary readings, rising 0.2% inter-month and 1.3% from a year earlier. The Core reading, however, matched previous prints at 1.1%. Somewhat collaborating with today’s tepid recovery, US Housing Starts and Building Permits disappointed expectations during last month, putting the greenback under some downside pressure.What to look for around EURThe inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets, triggering the ongoing leg lower. Furthermore, occasional bullish attempts in spot should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts (July/September), the resumption of the QE programme and changes in the forward guidance. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.EUR/USD levels to watchAt the moment, the pair is up 0.07% at 1.1217 and a break above 1.1286 (high Jul.11) would target 1.1320 (200-day SMA) en route to 1.1412 (high Jun.25). On the downside, the next support emerges at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).

    GBP/USD is trading at 27-month lows as the bears are challenging the 1.2400 figure. Earlier in London, the UK Indflation in June came in as expected

    GBP/USD is under bearish pressure near 27-month lows.Support can be seen near 1.2390 and 1.2340 according to the Technical Confluences Indicator.GBP/USD daily chart
     
    GBP/USD is trading at 27-month lows as the bears are challenging the 1.2400 figure. Earlier in London, the UK Indflation in June came in as expected by analysts at 2% (year-on-year) with a limited reaction on the GBP. GBP/USD 4-hour chart   Cable remains under selling pressure below 1.2440 and the main simple moving averages (SMAs). Bears likely intend to targets 1.2390 and 1.2340 levels to the downside, according to the Technical Confluences Indicator. GBP/USD 30-minute chart
     
    GBP/USD is challenging the 1.2414 resistance and the 50 SMA. The market remain under pressure however a corrective pullback above 1.2414 can lead to 1.2440 and 1.2480, according to the Technical Confluences Indicator.
    Additional key levels  

    The Russian currency has resumed the upside today and is now forcing USD/RUB to trade in the lower end of the daily range around 62.75. USD/RUB focuse

    USD/RUB fades yesterday’s advance and tests the 62.75 area.Russian Industrial Production expanded 3.3% YoY in June.Higher Brent prices lend support to RUB.The Russian currency has resumed the upside today and is now forcing USD/RUB to trade in the lower end of the daily range around 62.75.USD/RUB focused on dataThe upbeat momentum around the Russian currency remains unchanged, with spot navigating at shouting distance from the area of yearly lows near 62.50. RUB is deriving extra support today from the better tone in prices of the European reference Brent crude, up nearly 1% in the $65.00 area per barrel. In addition, and also supporting RUB, Industrial Production expanded at an annualized 3.3% during last month, while Producer Prices contracted 0.6% inter-month in June and rose 4.1% from a year earlier, markedly lower than May’s readings. Earlier in the day, the Ministry of Finance sold RUB 10.19 billion in OFZ bonds due in April 30 vs. a total demand for RUB 26.9 billion. Later in the day, Retail Sales are due along with the Unemployment Rate and monthly GDP figures. In the US calendar, Housing Starts and Building Permits are due along with the EIA weekly report on US crude oil stockpiles and the Fed’s Beige Book.What to look for around RUBDeclining inflation appears supportive of the easing cycle already triggered by the central bank, while Governor Nabiulina expects the economy to reach neutral rates at some point in mid-2020. Furthermore, healthy economic fundamentals and the increasing demand for domestic debt (OFZ) have been sustaining the rising appetite for Russian assets. Additionally, RUB derives extra buying interest from the carry-trade, expected higher oil prices, record-high speculative positioning and diminishing chances of US sanctions against the country.USD/RUB levels to watchAt the moment the pair is receding 0.36% at 62.77 and a breach of 62.56 (monthly low Jul.16) would open the door for 62.49 (2019 low Jun.25) and finally 61.63 (monthly low Jul.11 2018). On the upside, the next barrier emerges at 63.16 (21-day SMA) seconded by 63.99 (high Jul.8) and then 64.02 (55-day SMA).

    Josh Nye, senior economist at Royal Bank of Canada, notes that Canada’s headline CPI fell back to 2.0% in June with falling energy prices providing mo

    Josh Nye, senior economist at Royal Bank of Canada, notes that Canada’s headline CPI fell back to 2.0% in June with falling energy prices providing more offset against stronger food price inflation.Key Quotes“The average of the BoC’s core measures ticked slightly lower but remained in the middle of the 1.9-2.1% range seen since early last year. The longest period of near-target core inflation since the recession continues.” “The Bank of Canada’s dovish tone last week had nothing to do with current inflation trends and everything to do with global growth concerns and trade tensions. In fact, 2% core inflation is one of the key reasons the BoC doesn’t appear to be in any rush to follow the Fed in lowering interest rates.” “The BoC sees some scope for core readings to dip below target in the coming quarters (the lagged effect of the economy’s recent slowdown) but thinks inflation will be sustainably at 2% by the middle of next year. That is contingent on the economy returning to near-2% growth—which is where the BoC’s concerns about the global backdrop enter the picture. But for now, inflation is sitting pretty at the BoC’s target, giving it time to be patient and see how activity is impacted by uncertainty and global headwinds.”

    Russia Unemployment Rate came in at 4.4%, below expectations (4.5%) in June

    The USD/CAD pair quickly bounced around 25-pips in reaction to the latest Canadian consumer inflation figures, albeit remained well below the 1.3100 h

    Canadian headline CPI decelerated to 2.0% in June and weighed on the CAD.Rebounding Oil prices extended some support to Loonie and capped gains.The USD remains on the defensive amid sliding US bond yields and dismal data.The USD/CAD pair quickly bounced around 25-pips in reaction to the latest Canadian consumer inflation figures, albeit remained well below the 1.3100 handle. The pair managed to find some support near mid-1.3000s and the latest leg of a sudden pick up during the early North-American session was supported by softer Canadian consumer inflation report, showing that the headline CPI decelerated to 2.0% yearly rate as compared to 2.4% recorded in the previous month. Moreover, the BoC's core CPI remained flat on a monthly basis (0.1% rise expected) and unexpectedly ticked lower to 2.0% from 2.1% previous - worse than consensus estimates pointing to a rise to 2.6%, which was eventually seen as one of the key factors that exerted some pressure on the Canadian Dollar. Adding to the disappointment, Canadian monthly manufacturing sale - though posted a solid rebound in May, fell short of consensus estimates, which largely offset weaker US housing market data - building permits and housing starts, and remained supportive of the pair's uptick. Meanwhile, the ongoing downfall in the US Treasury bond yields held the US Dollar bulls on the defensive. This coupled with a solid rebound in Crude Oil prices extended some support to the commodity-linked currency - Loonie and kept a lid on any runaway rally for the major, at least for the time being. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have already bottomed out in the near-term and positioning for any further near-term appreciating move back towards the 1.3145-50 heavy supply zone.Technical levels to watch 

    Analysts at TD Securities are anticipating some give back in June from May's election driven boost to Australian employment. Key Quotes “We forecast +

    Analysts at TD Securities are anticipating some give back in June from May's election driven boost to Australian employment.Key Quotes“We forecast +5k for headline Jun employment, the participation rate to remain at 66% and the unemployment rate to remain at 5.2%. The risk is for the unemployment rate to edge higher should more people be looking for work.”

    Petr Krpata, chief EMEA FX and IR strategist at ING, suggests that GBP continues its descent as concerns about the Brexit outlook intensify and in the

    Petr Krpata, chief EMEA FX and IR strategist at ING, suggests that GBP continues its descent as concerns about the Brexit outlook intensify and in the month ahead, they expect headline news to continue to negatively impact sterling.Key Quotes“First, the likely confirmation of Boris Johnson as the next Conservative leader and thus prime minister next Tuesday won’t be helpful for GBP. The Conservative party conference in late September will also add pressure to GBP, with peak pressure building in October ahead of the 31 October Article 50 extension deadline.” “While the outlook for GBP does not look great, sterling has already moved considerably. Below we look at the technicals such as risk premium, positioning and the option market and conclude that despite the bad news already being reflected in sterling, there is still scope for further GBP decline. This is consistent with our forecast of EUR/GBP 0.92 and GBP/USD 1.22 this summer. Risks to our GBP forecasts remain on the downside, stemming from both risks of a hard Brexit or early elections.” “If elections are called early, we see EUR/GBP approaching the 0.95 level.”

    The data published by Statistics Canada this Wednesday revealed that inflation, as measured by the Consumer Price Index (CPI), decelerated to 2.0% yea

    The data published by Statistics Canada this Wednesday revealed that inflation, as measured by the Consumer Price Index (CPI), decelerated to 2.0% yearly rate in June from May's 2.4% but was in line with consensus estimates. On a monthly basis, the headline CPI fell 0.2% as against a rise of 0.4% recorded in the previous month. Meanwhile, the core CPI, which excludes volatile food and energy prices and published by the Bank of Canada (BOC), came in at 2.0% yearly and remained flat on a monthly basis, both missing consensus estimates and exerting some pressure on the Canadian Dollar.
     

    Canada Consumer Price Index (MoM) in line with forecasts (-0.2%) in June

    Canada BoC Consumer Price Index Core (YoY) came in at 2% below forecasts (2.6%) in June

    Canada Consumer Price Index - Core (MoM) declined to 0.1% in June from previous 0.3%

    Canada Consumer Price Index - Core (MoM) dipped from previous 0.3% to -0.1% in June

    Canada Manufacturing Shipments (MoM) registered at 1.6%, below expectations (2%) in May

    Canada Consumer Price Index (YoY) meets expectations (2%) in June

    United States Building Permits (MoM) came in at 1.22M, below expectations (1.3M) in June

    United States Housing Starts (MoM) registered at 1.253M, below expectations (1.261M) in June

    Canada BoC Consumer Price Index Core (MoM) below expectations (0.1%) in June: Actual (0%)

    United States Building Permits Change came in at -6.1% below forecasts (0.1%) in June

    United States Housing Starts Change registered at -0.9%, below expectations (1.9%) in June

    Gerard Burg, senior economist at National Australia Bank, notes that China’s economy grew by 6.2% yoy in Q2 2019, in line with their expectations and

    Gerard Burg, senior economist at National Australia Bank, notes that China’s economy grew by 6.2% yoy in Q2 2019, in line with their expectations and down from 6.4% yoy in both Q1 2019 and Q4 2018.Key Quotes“This rate of growth is softer than the trough recorded during the GFC, meaning that growth in Q2 was the slowest since 1990. Policy makers continue to send mixed messages regarding economic stimulus – however we believe that they are providing sufficient monetary and fiscal support to stabilise short term economic growth around these levels (although trade remains an uncertainty). Our growth forecasts remain unchanged, at 6.25% this year, 6.0% in 2020 and 5.8% in 2021.” “The provision of monetary support to China’s economy has been clearly evident in credit growth in the first half of 2019, and suggests that Chinese authorities have been more concerned this year with short term growth than medium term debt risks. New credit issuance increased by over 31% yoy in this period, to total RMB 13.2 trillion.” “Rumours in July suggest that the PBoC is set to cut the benchmark one-year lending rate. This move (should it happen) would be largely symbolic – the rate hasn’t changed since October 2015, and doesn’t appear to be particularly relevant since the switch in monetary policy from a quantity to a price based approach (which occurred in November 2015). In contrast, short term interbank lending rates are more important and these rates eased in late-June and early July.”

    India M3 Money Supply rose from previous 10.1% to 10.3% in July 12

    The USD/CHF pair spiked to one-week tops, levels beyond the 0.9900 handle in the last hour, albeit quickly retreated few pips thereafter. The pair add

    A sharp slide in the US bond yields undermined the USD demand and capped gains.The downside remains limited amid tempered expectations of aggressive Fed easing.The USD/CHF pair spiked to one-week tops, levels beyond the 0.9900 handle in the last hour, albeit quickly retreated few pips thereafter. The pair added to this week's modest gains and continued scaling higher for the third consecutive session on Wednesday, albeit a combination of factors kept a lid on any strong follow-through. A fresh leg of a sharp downfall in the US Treasury bond yields failed to assist the US Dollar to build on the overnight goodish up-move - supported by upbeat US retail sales data and kept a lid on the up-move. Adding to this, the prevalent cautious mood - amid resurfacing US-China trade tensions, extended some support to the Swiss Franc's safe-haven status and further collaborating towards capping the major. The US President Donald Trump's latest threat to impose tariffs on an additional $325 billion worth of Chinese goods weighed on investors' sentiment and boosted demand for traditional safe-haven assets. It would now be interesting to see if the pair is able to find any fresh buying at lower levels or witness some follow-through weakness as traders now look forward to the US housing market data for a fresh impetus.Technical levels to watch 

    Analysts at TD Securities suggest that the Canadian headline inflation is projected to edge lower by both TD and the wider market after printing at 2.

    Analysts at TD Securities suggest that the Canadian headline inflation is projected to edge lower by both TD and the wider market after printing at 2.4% y/y in May.Key Quotes“TD looks for CPI to soften to 2.1% y/y, reflecting a 0.2% m/m decline in the index, which is slightly above the market consensus (2.0%, -0.3%). Lower gasoline prices will provide the main catalyst for a pullback and are expected to shave roughly 0.3pp from the headline print.” “Due to the outsized drag from energy, we look for exclusion based core measures (ex food & energy) to hold stable but see downside risks to the Bank of Canada's preferred measures.” “Manufacturing sales will be released alongside CPI, with TD looking for a 1.6% advance (market: 2.0%) on a sharp increase in transportation shipments.”

    Wednesday's Canadian economic docket features the key release of consumer inflation figures for June, scheduled to be published at 12:30 GMT. The head

    Canadian CPI OverviewWednesday's Canadian economic docket features the key release of consumer inflation figures for June, scheduled to be published at 12:30 GMT. The headline CPI is anticipated to have fallen by 0.2% month-on-month (m-o-m), with the yearly falling to 2.0% from 2.4% previous. Meanwhile, the BoC's core CPI is expected to have edged higher by 0.1% m-o-m and rise to 2.6% yearly rate during the reported month. As Petr Krpata, chief EMEA FX and IR strategist at ING writes - “According to a Bloomberg survey, headline CPI should decelerate, although all core measures (preferred by the Bank of Canada) should stay above the 2% target range mid-point. This should allow the BoC to stick to a neutral stance, keeping any USD/CAD rebound broadly limited. Today, we expect the pair to stay range-bound and consolidate below 1.3050.”Deviation impact on USD/CADReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction on the pair is likely to be around 43-pips during the first 15-minutes and could get extended to 66-pips in the following 4-hours in case of a relative deviation of -0.86. Alternatively, the reaction to a higher than expected reading, with a relative deviation of +0.68 or higher could be around 61-pips in the first 15-minutes and 75-pips in the following 4-hours. How could it affect USD/CAD?Ahead of the key release, the USD/CAD pair was seen trading with modest losses just above mid-1.3000s and surprisingly stronger reading might trigger the resumption of the pair’s well-established bearish trend. The downfall could drag the pair back towards challenging the key 1.30 psychological mark, below which the downfall could further get extended towards 1.2970-65 intermediate support en-route the 1.2930 region.  Alternatively, softer readings might prompt some short-covering move, which should assist the pair to surpass the 1.3100 handle and aim towards weekly swing highs resistance near the 1.3145-50 region. A follow-through buying would suggest that the pair might have bottomed out in the near-term and pave the way for a further recovery towards the 1.3200 handle en-route the 200-day EMA – around mid-1.3200s.Key Notes   •  Canada: Headline inflation to decelerate to 2.1% y/y in June - TDS    •  Canadian CPI: Focus be to what extent May’s surge is reversed - Wells Fargo    •  USD/CAD slides back closer to mid-1.3000s, focus shifts to Canadian CPIAbout BoC's Core CPIConsumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator for inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.
     

    According to analysts at TD Securities, US housing starts are projected to fall a small 0.7% m/m in June lowering its level to 1,260k from 1,269k befo

    According to analysts at TD Securities, US housing starts are projected to fall a small 0.7% m/m in June lowering its level to 1,260k from 1,269k before.Key Quotes“Despite this decline, housing starts are likely to end the quarter at a solid level, registering an improvement over Q1 and Q4, as demand continues to gradually increase on the back of lower mortgage rates. On a similar note, building permits (a leading indicator for construction) likely rose marginally at 0.1% to 1,300k in June.”

    The Turkish Lira is trading on a firm note vs. the greenback on Wednesday and is now dragging USD/TRY to fresh weekly lows in the 5.6700 region. USD/T

    USD/TRY tumbles to 5.67, new weekly lows.Turkish Retail Sales expanded 0.3% MoM in May.Parts of the S-400 defence system keeps landing in Ankara.The Turkish Lira is trading on a firm note vs. the greenback on Wednesday and is now dragging USD/TRY to fresh weekly lows in the 5.6700 region.USD/TRY weaker after dataTRY is appreciating uninterruptedly since Monday, extending the rejection from last week’s tops in the vicinity of the 5.80 mark. The Lira is prolonging the upside momentum despite the latest Reuters Poll suggested the economy is expected to contract 1.5% this year vs. the government’s projection of a 2.3% expansion. Economists asked at the poll see the economy expanding 2.4% next year and 3.4% in 2021. In the meantime, parts of the Russian S-400 missile defence system continue to land in Ankara, although there is still no news regarding a potential escalation in tensions with the US and the probability of sanctions. Further news around the CBRT noted there will be no forex depo auction today. In the docket, Turkish Retail Sales expanded at a monthly 0.3% during May, reversing the previous 1.8% contraction, and led by an increase of 0.5% in non-food sales (excluding fuel). Further data saw the Total Turnover Index up by 1.1% inter-month during the same period.What to look for around TRYRecently, the newly appointed CBRT Governor M.Uysal left no doubts the central bank will continue to support price stability in a context of total independence. This view will surely be put to the test at the next monetary policy meeting later in the month. However, the enduring disinflation process looks unabated, as reflected in the performance of consumer prices during June and this could open the door to a potential shift from the central bank to a looser monetary stance, including the palpable chance of rate cuts despite this move on rates appears somewhat untimely in the near term. On another direction, the country needs to implement the much-needed structural reforms (announced in April) to bring in more stability and start a serious recovery in both economic activity and credibility.USD/TRY key levelsAt the moment the pair is losing 0.30% at 5.6841 and faces the next down barrier at 5.6758 (low Jul.17) followed by 5.5741 (monthly low Jul.4) and then 5.5685 (200-day SMA). On the upside, a surpass of 5.7500 (100-day SMA) would expose 5.7849 (high Jul.8) and finally 5.8653 (55-day SMA).

    South Africa Retail Sales (YoY) above forecasts (1.6%) in May: Actual (2.2%)

    United States MBA Mortgage Applications up to -1.1% in July 12 from previous -2.4%

    Analysts at TD Securities note that the Eurozone’s headline CPI was unexpectedly revised a tick higher to 1.3% y/y in June, although core CPI was unch

    Analysts at TD Securities note that the Eurozone’s headline CPI was unexpectedly revised a tick higher to 1.3% y/y in June, although core CPI was unchanged from the initial print at 1.1%.Key Quotes“This is unlikely to alter the ECB's thinking all that much heading into next week's meeting, as it's not like it really changes the trajectory for core inflation. But at the margin, it does reduce the urgency to act and gives us a bit more confidence that next week will just see a change/strengthening in forward guidance, and not an outright rate cut.”

    Petr Krpata, chief EMEA FX and IR strategist at ING, points out that the latest CFTC positioning data shows that net combined positions on the Canadia

    Petr Krpata, chief EMEA FX and IR strategist at ING, points out that the latest CFTC positioning data shows that net combined positions on the Canadian dollar have turned positive in July for the first time since 1Q18.Key Quotes“All eyes today will be on the Canadian inflation report for June. According to a Bloomberg survey, headline CPI should decelerate, although all core measures (preferred by the Bank of Canada) should stay above the 2% target range mid-point. This should allow the BoC to stick to a neutral stance, keeping any USD/CAD rebound broadly limited. Today, we expect the pair to stay range-bound and consolidate below 1.3050.”  

    The ongoing rebound in the demand for the single currency is now lifting EUR/JPY to the area of daily highs in the 121.40/454 band. EUR/JPY now target

    EUR/JPY reverses recent downside and tests 121.40.EMU final CPI came in at 1.3% YoY and 0.2% MoM.ECB’s Coeure said risks still tilted to the downside.The ongoing rebound in the demand for the single currency is now lifting EUR/JPY to the area of daily highs in the 121.40/454 band.EUR/JPY now targets the 121.72/86 bandAfter three consecutive daily pullbacks, the cross is now attempting a rebound from weekly lows in the vicinity of the 121.00 handle. US yields are bouncing off daily lows and are bolstering the selling mood in the Japanese safe haven, in turn lending support to the recovery in the EUR/JPY. In the same line, final June inflation figures in the euro area came in a tad higher than the preliminary readings, showing headline consumer prices now rose at a monthly 0.2% and 1.3% from a year earlier. Core CPI, instead, matched the advanced readings at 1.1%. Earlier in the day, ECB’s B.Coeure reiterated that risks in the euro region are still tilted to the downside. Later in the NA session, the Fed will publish its Beige Book, which should shed further details on the recent performance of US regions.EUR/JPY relevant levelsAt the moment the cross is advancing 0.08% at 121.42 and faces the next hurdle at 121.86 (21-day SMA) seconded by 122.32 (high Jul.10) and then 123.35 (monthly high Jul.1). On the other hand, a breakdown of 121.09 (monthly low Jul.16) would expose 120.95 (low Jun.21) and finally 120.78 (low Jun.3).

    Technical indicators on the mentioned chart have been gaining negative traction and support prospects for an eventual bearish breakdown. However, osci

    Gold remained under some selling pressure for the third consecutive session on Wednesday and dropped to one-week lows, around the key $1400 psychological mark in the last hour.The mentioned handle coincides with a key pivotal point - 200-period SMA on the 4-hourly chart, which if broken would set the stage for an extension of the ongoing downward trajectory.Technical indicators on the mentioned chart have been gaining negative traction and support prospects for an eventual bearish breakdown. However, oscillators on the daily charts - although have been losing positive momentum, maintained their bullish bias and warrant some caution before placing any aggressive bets. Meanwhile, a follow-through selling is likely to accelerate the fall further towards the $1390 region – marking near one-month-old ascending trend-line support. The said trend-line, along with another descending trend-line constitutes towards the formation of a symmetrical triangle on short-term charts The symmetrical triangle is seen as a continuation pattern - bullish in this case and represents a brief pause before the next leg of a directional move. Hence, any dips towards the triangle support, around the $1390 region might still be seen as a buying opportunity and should help limit further downside. On the flip side, the $1406-07 region now seems to act as an immediate resistance, above which the momentum could get extended towards $1415 supply zone. A follow-through up-tick might stall near the triangle resistance – around the $1421-22 region, which if cleared will set the stage for the resumption of the prior bullish trend.Gold 4-hourly chart 

    According to Petr Krpata, chief EMEA FX and IR strategist at ING, the soft European June car sales figures highlighted the downside risk to the eurozo

    According to Petr Krpata, chief EMEA FX and IR strategist at ING, the soft European June car sales figures highlighted the downside risk to the eurozone growth outlook, particularly in light of the openness of the eurozone economy and its exposure to car exports.Key Quotes“EUR/USD should continue testing the 1.1200 level today. By extension, this does not bode particularly well for the satellite central and eastern European economies exposed to (a) eurozone growth; and (b) the car industry. This is one of the key reasons why we remain negative on the overbought Czech koruna.”

    Portugal Current Account Balance dipped from previous €-1.582B to €-3.146B in May

    WTI (futures on Nymex) stalled its steady recovery from weekly lows and now consolidates just below the 58 handle, as the bulls await the US Energy In

    Bulls remain wary amid cautious sentiment, ahead of EIA crude stocks data.US-China trade stand-off and Iranian geopolitical tensions weigh. WTI (futures on Nymex) stalled its steady recovery from weekly lows and now consolidates just below the 58 handle, as the bulls await the US Energy Information Administration (EIA) crude stockpiles data for fresh trading impetus. A pause in the US dollar rally across its main competitors so far this Wednesday somewhat aided the steady recovery in the USD-sensitive oil. However, nervousness ahead of the EIA crude inventories report combined with cautious market sentiment keep the recovery in check. The barrel of WTI fell to fresh weekly lows of $ 57.08 after the latest data released by the American Petroleum Institute (API) showed a smaller-than-expected drop in the crude inventory levels. According to API data, the US crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million barrels, when compared with expectations for a drop of 2.7 million, Reuters reports. Further, a lack of progress on the US-China trade talks as well as the US-Iran geopolitical stand-off weighs down on the sentiment around oil. Attention now turns towards the official crude stocks data from the US government’s EIA, due on the cards at 1430 GMT for the next direction on the prices. Levels to watch 

    Germany 30-y Bond Auction rose from previous 0.26% to 0.3%

    The increasing selling bias around the British Pound is helping EUR/GBP to extend the breakout of the key 0.9000 handle. EUR/GBP bid after data, Brexi

    EUR/GBP clinches fresh multi-month peaks at 0.9051.GBP remains under pressure on Brexit woes.UK CPI rose in line with estimates during June, 2.0% YoY.The increasing selling bias around the British Pound is helping EUR/GBP to extend the breakout of the key 0.9000 handle.EUR/GBP bid after data, BrexitThe Sterling took another hit on Tuesday and its effects persist well and sound today after Tory candidates B.Johnson and J.Hunt said a ‘no deal’ scenario remains well on the table. This news adds to yesterday’s comments from both candidates to succeed Theresa May at Number 10 that the controversial Irish backstop is ‘dead’, all exacerbating the selling pressure in GBP. In the data space, UK inflation figures failed to ignite a meaningful positive reaction in the Sterling after consumer prices rose at an annualized 2.0% and came in flat from a month earlier (vs. a 0.3% gain forecasted). In Euroland, final June CPI figures matched the preliminary prints, leaving no room for surprised, as expected.What to look for around GBPRising uncertainty in the UK political scenario plus rising chances of a Brexit ‘no deal’ are expected to keep the downside pressure on the Sterling well and sound for the foreseeable future. In the UK economy, poor results from key fundamentals continue to add to the sour prospects for the economy in the months to come and collaborate further with the bearish view on the currency. On another direction, the overall tone from the BoE appears to have shifted towards a more dovish gear, while markets have started to price in the likeliness of a rate cut at some point in Q3/Q4.EUR/GBP key levelsThe cross is gaining 0.10% at 0.9043 facing the next hurdle at 0.9051 (monthly high Jul.17) seconded by 0.9062 (high Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, a break below 0.8961 (21-day SMA) would expose 0.8872 (low Jun.20) and then 0.8826 (low Jun.5).

    Analysts at Westpac are recommending to sell EUR/GBP at 0.9085 levels for the target price of 0.8845, while maintaining a stop loss of 0.9125. Key Quo

    Analysts at Westpac are recommending to sell EUR/GBP at 0.9085 levels for the target price of 0.8845, while maintaining a stop loss of 0.9125.Key Quotes“Rationale: A no-deal Brexit is taxing minds once again sending EUR/GBP to six-month highs through 0.90. However the pair is testing a key three-year resistance line and momentum indicators look very mature. Calls for the next UK leader to purge cabinet of “remainers” and pledges by both candidates to scrap the Northern Ireland backstop (even as the EU repeatedly rules out reopening May’s withdrawal agreement) have raised no-deal Brexit risks. However, Brexit pessimism may be overdone. We expect the next leader to have a more inclusive proBrussels cabinet, reducing fears of a no-deal Brexit. The ECB is likely to extend forward guidance and pre-commit to further easing measures at their next meeting (July 25); their list of easing options including further cuts to negative deposit rates and reintroduction of asset purchases. Calls for buying corporate bonds as well unsecured bank debt, in addition to sovereign debt, have been growing louder in recent days.”

    The UK Brexit Secretary, Stephen Barclay, notes that the European Union (EU) Chief Brexit Negotiator Barnier emphasised a strong desire to avoid a no-

    The UK Brexit Secretary, Stephen Barclay, notes that the European Union (EU) Chief Brexit Negotiator Barnier emphasised a strong desire to avoid a no-deal Brexit following their meeting. More Comments:  There has been misleading information/reports on their meeting. Told Barnier if withdrawal agreement remains unchanged, he believes that it won't pass through parliament.

    According to James Smith, developed markets economist at ING, UK inflation has hit the Bank of England’s 2% target for the second month in a row, whic

    According to James Smith, developed markets economist at ING, UK inflation has hit the Bank of England’s 2% target for the second month in a row, which offers little reason for policymakers to move interest rates any time soon.Key Quotes“As is often the case, energy was more of a drag following a modest fall in petrol prices during June, compared to a 2.2% increase at the same time last year. Once this is stripped out, core inflation inched slightly closer to target (1.8%) following a less pronounced fall in clothing/footwear costs compared to June 2018.” “Scratching beneath the surface though, we think the Bank of England will remain relatively relaxed about the inflation backdrop. While core inflation has now sat below target for 10 consecutive months, this is predominantly down to the waning impact of the pound’s post-Brexit slide.” “Stripping the CPI basket down by import intensity – the proportion of a goods/services that are deemed to have been produced abroad – shows that the contribution from items with a 25%-or-greater import share has fallen from around 1.2% at the start of 2018 to 0.5% in the latest figures.” “However, with the growth outlook continuing to be dominated by Brexit uncertainty, we think it is equally unlikely that policymakers will look to increase rates this year.”

    European Monetary Union Construction Output s.a (MoM) above expectations (-0.7%) in May: Actual (-0.27%)

    European Monetary Union Construction Output w.d.a (YoY) registered at 2%, below expectations (2.4%) in May

    According to Eurostat’s final reading of Eurozone CPI report, the consumer prices came in at 1.3% on a yearly basis, bettering the flash estimate of 1

    According to Eurostat’s final reading of Eurozone CPI report, the consumer prices came in at 1.3% on a yearly basis, bettering the flash estimate of 1.2%. While the core figures rose 1.1% versus 0.8% previous.        On a monthly basis, the bloc’s CPI figure for June rose 0.2% versus 0.1% expectations and 0.1% previous. while the core CPI numbers arrived at 0.4% versus 0.3% expected and 0.3% last.

    Petr Krpata, chief EMEA FX and IR strategist at ING, suggests that although Federal Reserve Chairman Jerome Powell reiterated his message from his las

    Petr Krpata, chief EMEA FX and IR strategist at ING, suggests that although Federal Reserve Chairman Jerome Powell reiterated his message from his last week’s testimony (suggesting a July rate cut), the positive spillover into emerging market FX has been hampered by President Trump’s renewed threat of tariffs on China.Key Quotes“The high degree of unpredictability of US trade policy should keep a lid on EM FX gains, making EM local currency bonds a more attractive asset class in our view. This is because both scenarios of (a) more easing from major central banks; and (b) possible escalation of trade wars should be positive for EM fixed income, while in the case of EM FX, the asset class would only do well under the former.”

    European Monetary Union Consumer Price Index - Core (MoM) above forecasts (0.3%) in June: Actual (0.4%)

    European Monetary Union Consumer Price Index (YoY) above forecasts (1.2%) in June: Actual (1.3%)

    European Monetary Union Consumer Price Index (MoM) above forecasts (0.1%) in June: Actual (0.2%)

    European Monetary Union Consumer Price Index - Core (YoY) meets expectations (1.1%) in June

    The GBP/USD pair quickly reversed an early European session dip to fresh 27-month lows, albeit struggled to extend the recovery post-UK CPI. Data rele

    The latest UK consumer inflation figures match consensus estimates.Brexit uncertainty remained a key overhang and seemed to cap gains.Sliding US bond yields weigh on the USD and might help limit losses.The GBP/USD pair quickly reversed an early European session dip to fresh 27-month lows, albeit struggled to extend the recovery post-UK CPI. Data released this Wednesday showed that the UK headline CPI remained flat in June, with the yearly rate holding steady at 2.0% and the core reading edging up to 1.8% as compared to 1.7% previous. In absence of any big divergence from consensus estimates, the data failed to provide any meaningful impetus and investors still seemed reluctant to buy the British Pound amid persistent Brexit uncertainty. It is worth recalling that the UK PM candidates - Boris Johnson and Jeremy Hunt, both declaring the Irish backstop to be “dead” and adding that they will take it away from any future negotiation with the EU.  On the other hand, a subdued US Dollar demand, capped by a fresh leg of a downfall in the US Treasury bond yields, extended some support and might turn out to be the only factor helping limit deeper losses. With Wednesday's key UK macro data out of the way, traders now look forward to the US housing market data - building permits and housing starts, for some impetus later during the early North-American session.Technical levels to watch 

    Following are the latest comments by the Bank of England (BOE) Executive Director for Markets, Andrew Hauser, as reported by Reuters. BOE’s balance sh

    Following are the latest comments by the Bank of England (BOE) Executive Director for Markets, Andrew Hauser, as reported by Reuters. BOE’s balance sheet "will shrink materially" when quantitative easing reversed. Monetary Policy Committee (MPC) has said it will not start to reverse QE before bank rate reaches around 1.5%.

    United Kingdom Producer Price Index - Output (YoY) n.s.a came in at 1.6% below forecasts (1.7%) in June

    United Kingdom Core Consumer Price Index (YoY) meets forecasts (1.8%) in June

    United Kingdom DCLG House Price Index (YoY) meets forecasts (1.2%) in May

    The UK Consumer Prices Index (CPI) 12-month rate came in at 2.0% in June, when compared to 2.0% booked in May while coming in line with expectations o

    The UK Consumer Prices Index (CPI) 12-month rate came in at 2.0% in June, when compared to 2.0% booked in May while coming in line with expectations of a 2.0% print, the UK Office for National Statistics (ONS) reported on Wednesday.  Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at 1.8% y/y versus 1.7% booked in May while matching the consensus forecast of 1.8%. The monthly figures showed that the UK consumer prices arrived at 0.0% in June, meeting 0.0% expectations and 0.3% last.

    United Kingdom Producer Price Index - Output (MoM) n.s.a registered at -0.1%, below expectations (0.1%) in June

    United Kingdom PPI Core Output (YoY) n.s.a meets forecasts (1.7%) in June

    United Kingdom Producer Price Index - Input (MoM) n.s.a came in at -1.4% below forecasts (-0.8%) in June

    United Kingdom Retail Price Index (YoY) in line with expectations (2.9%) in June

    United Kingdom Consumer Price Index (YoY) meets expectations (2%) in June

    United Kingdom Retail Price Index (MoM) meets expectations (0.1%) in June

    United Kingdom PPI Core Output (MoM) n.s.a meets expectations (0.1%) in June

    United Kingdom Producer Price Index - Input (YoY) n.s.a below forecasts (0.5%) in June: Actual (-0.3%)

    The NZD/USD pair regained positive traction on Wednesday and recovered the previous session's retracement slide from three-month tops. Resurgent US Do

    The USD fails to capitalize on the overnight upswing amid sliding US bond yields.Tempered expectations for aggressive policy easing by the Fed might cap gains.Wednesday’s US housing market data eye for some short-term trading impetus.The NZD/USD pair regained positive traction on Wednesday and recovered the previous session's retracement slide from three-month tops. Resurgent US Dollar demand, which got an additional boost following the release of upbeat June US retail sales figures, prompted some long-unwinding trade on Tuesday and turned out to be one of the key factors behind the pair's intraday pullback.  The downtick, however, turned out to be short-lived in the wake of absent follow-through USD buying interest. Renewed weakness in the US Treasury bond yields kept the USD bulls on the defensive and assisted the pair to catch some fresh bids on Wednesday. The up-move - marking the fifth day of a positive move in the previous six, has now lifted the pair back closer to the 0.6725-30 supply zone, which if cleared will set the stage for a further near-term appreciating move, though tempered expectations for an aggressive policy easing by the Fed might cap gains. Moving ahead, Wednesday's US housing market data - building permits and housing starts, due for release later during the early North-American session, will now be looked upon for a fresh impetus and in order to grab some short-term trading opportunities.Technical levels to watch 

    The Bank of Japan (BOJ) Governor Kuroda was on the wires last minutes, with the key comments found below. There are various downside risks to the glob

    The Bank of Japan (BOJ) Governor Kuroda was on the wires last minutes, with the key comments found below. There are various downside risks to the global economic outlook. Global economy is expanding moderately. Domestic demand in the Japanese economy is holding firm. BOJ will mull additional easing if price momentum is lost. Japanese economy to also keep expanding moderately.

    Italy Industrial Orders s.a (MoM) above expectations (-1.4%) in May: Actual (2.5%)

    Italy Industrial Sales s.a. (MoM) registered at 1.6% above expectations (-0.5%) in May

    Italy Industrial Sales n.s.a. (YoY) registered at 0.3% above expectations (-2.5%) in May

    Italy Industrial Orders n.s.a (YoY) above expectations (-4.2%) in May: Actual (-2.5%)

    The USD/CAD pair came under some renewed selling pressure on Wednesday and eroded a part of the previous session's goodish up-move to one-week tops. A

    The USD fails to capitalize on the overnight up-move amid sliding US bond yields.Oil prices now seemed to have stabilized and extended some support to the Loonie.The focus now shifts to Canadian consumer inflation and US housing market data.The USD/CAD pair came under some renewed selling pressure on Wednesday and eroded a part of the previous session's goodish up-move to one-week tops. A combination of supporting factors helped the pair to build on its overnight bounce from yearly lows and post strong gains on Tuesday - marking its second consecutive day of a positive move.  Renewed US Dollar buying interest picked up the pace after June US retail sales figures surpassed market estimates and forced investors to scale back expectations for an aggressive policy easing by the Fed. This coupled with a selloff in Crude Oil prices weighed heavily on the commodity-linked currency - Loonie and further collaborated to the pair's strong intraday up-move of around 70-pips, closer to the 1.3100 handle. The positive momentum, however, started losing steam during the Asian session on Wednesday amid a fresh leg of a downfall in the US Treasury bond yields, which kept a lid on any subsequent up-move for the greenback. Currently hovering around the 1.3065-60 region, the slide could further be attributed to some repositioning trade ahead of Wednesday's important release of the latest consumer inflation figures from Canada. From the US, the release of housing market data - building permits and housing starts, might influence the USD price dynamics and further collaborate towards producing some meaningful trading opportunities.Technical levels to watch 

    Spain 9-Month Letras Auction down to -0.472% from previous -0.406%

    EUR/USD daily chart EUR/USD Overview Today last price 1.1209 Today Daily Change 18 Today Daily Change % -0.01 Today daily open 1.121 Trends Daily SMA2

    EUR/USD has intensified the leg lower and so far met decent contention in the 1.1200 neighbourhood, or weekly lows.A break below the 1.1200 handle should see July low at 1.1193 re-tested ahead of June 18 low at 1.1181.In the meantime, the pair’s outlook stay negative while below the key 200-day SMA at 1.1320.EUR/USD daily chart  

    Karen Jones, analyst at Commerzbank, notes that GBP/USD has sold off aggressively eroding the 1.2444/39 supports to fall into new 2 year lows. Key Quo

    Karen Jones, analyst at Commerzbank, notes that GBP/USD has sold off aggressively eroding the 1.2444/39 supports to fall into new 2 year lows.Key Quotes“We note the 13 count on the 60 minute chart and the TD support at 1.2359, and then we have very little until the 1.2108, the 78.6% retracement of the entire move up from the 2016 low. The market now stays offered below the 1.2605 downtrend.” “A rise above the June high at 1.2784 would indicate that a bottom is being formed (not favoured).”  

    Dollar Index Spot Overview Today last price 97.39 Today Daily Change 13 Today Daily Change % 0.01 Today daily open 97.38 Trends Daily SMA20 96.77 Dai

    The index remains in ‘recovery mode’ so far this week, extending the up move following the recent break above of the 97.00 barrier.Immediately to the upside emerges monthly peaks near 97.60 ahead of June tops near 97.80.Furthermore, above the 200-day SMA at 96.79 and the multi-month support line at 96.85, the constructive outlook remains unchanged.DXY daily chart 

    The UK June CPIs Overview The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT. The hea

    The UK June CPIs OverviewThe cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT. The headline CPI inflation is expected to arrive at 0.0% inter-month in June while the annualized figure is seen steady at 2.0%. The core inflation rate that excludes volatile food and energy items is likely to have ticked slightly higher to 1.8% last month.Deviation impact on GBP/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.How could it affect GBP/USD?The recovery in GBP/USD lost legs near 1.2420 region, as the sellers returned in early Europe, knocking-off the rates to fresh 27-month lows of 1.2383, where it now wavers. “From a technical perspective, the overnight slide confirmed a fresh bearish breakdown and might have already set the stage for a move towards challenging support marked by the lower end of a four-month-old descending trend-channel, currently near the 1.2365 region. With technical indicators moving on the verge of breaking into the oversold territory, bearish traders are more likely to take a brief pause, or even opt to cover their short positions near the mentioned support. Meanwhile, any attempted bounce now seems to confront some fresh supply near the 1.2465-70 horizontal zone, above which a fresh bout of short-covering should assist the pair to reclaim the key 1.2500 psychological mark,” FXStreet’s Analyst Haresh Menghani notes.Key NotesUK: Headline CPI likely to print 2.0% in June - TDS Sterling drops below important technical levels GBP Futures: scope for extra pullbacksAbout the UK CPIThe Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

    Bill Diviney, senior economist at ABN AMRO, points out that US activity data for June painted a broadly solid, if unspectacular, picture of the econo

    Bill Diviney, senior economist at ABN AMRO, points out that US activity data for June painted a broadly solid, if unspectacular, picture of the economy.Key Quotes“Retail sales expanded 0.4% mom, the same growth rate as the downwardly-revised May reading. Excluding volatile autos and gasoline components, underlying retail sales looked stronger, rising 0.7% mom. This suggests the consumer is back on track after a soft Q1, with 3m/3m annualised growth at 6.9%, up from 2.1% in Q1 (note that these are nominal figures, i.e. growth was essentially flat in Q1 when adjusting for inflation).” “Meanwhile, industrial production looked weak on the surface at 0.0% mom, but manufacturing production expanded a much healthier 0.4%, with the weakness in headline production explained by a fall in utility output due to cooler weather reducing demand for air conditioning. Momentum in manufacturing was still negative at -2.1% 3m/3m annualised, but looks to be bottoming out.” “Despite the apparently solid underlying readings in both production and consumption sides of the economy, we are much more optimistic about the prospects for the consumer than we are for the manufacturing sector. The fundamentals underpinning consumption remain strong in the US – jobs and wages continue to grow at a decent pace, albeit decelerating from 2018, while consumer confidence remains relatively elevated.” “By contrast, manufacturing looks notably weaker, with uncertainty over the trade war acting as a brake on business investment. This is visible in the ISM manufacturing new orders index – a highly reliable leading indicator for investment in the US – which fell to a 3.5 year low of 50.0 in June, suggesting flat to mildly negative fixed investment growth in the coming quarters.” “All told, while the strength in consumption gives us confidence the US will avoid a recession on our forecast horizon (to end 2020), we expect the weakness in manufacturing to keep growth below trend for the next few quarters. This, combined with the lack of inflationary pressure, should keep the Fed on track for rate cuts – the first 25bp of which we expect at the 30-31 July FOMC.”  

    EUR/JPY daily chart EUR/JPY Overview Today last price 121.26 Today Daily Change 22 Today Daily Change % -0.07 Today daily open 121.34 Trends Daily SMA

    EUR/JPY is prolonging the weekly downside and is now trading closer to the key support at 121.00 the figure.The cross has intensified the decline on the back of rising selling pressure around the European currency and after the breakdown of the 21-day and 10-day SMAs.Immediately down emerges the 120.95/73 band, June lows, which are considered the last defence for a test of YTD lows in sub 119.00 levels recorded back in January.EUR/JPY daily chart  

    The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, above the key 0.7000 psychological mark through the e

    The USD remains supported by tempered expectations for aggressive easing by the Fed.Resurfacing US-China trade tensions further undermine the China-proxy Australian Dollar.Traders now look forward to the US housing market data for some short-term opportunities.The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, above the key 0.7000 psychological mark through the early European session on Wednesday. The pair extended the previous session's pullback from the 0.7045-50 supply zone, or 1-1/2 week tops, and was further weighed down by resurfacing US-China trade tensions, especially after the US President Donald Trump trashed hopes for a quick resolution to the prolonged US-China trade tensions. Trump on Tuesday said that we have a long way to go before any deal and further added that he could impose tariffs on another $325 billion of Chinese imports. This coupled with a slight deterioration in the global risk sentiment exerted some fresh downward pressure on the perceived riskier, China-proxy Australian Dollar.  On the other hand, the US Dollar remained supported by Tuesday's upbeat US retail sales data for June, which forced investors to scale back possibilities of an aggressive monetary policy easing by the Fed when it announces its latest monetary policy decision following the conclusion of a two-day meeting on July 30-31. It would now be interesting to see if the pair can attract any fresh buying interest at lower levels or the current pullback reaffirms a strong barrier near mid-0.7000s, setting the stage for the resumption of the prior/well-established bearish trend. Market participants now look forward to the US economic docket, featuring the release of housing market data - building permits and housing starts, due later during the early North-American session, in order to grab some meaningful trading opportunities.Technical levels to watch 

    Rabobank analysts point out that the UK CPI is expected to print 2.0% and 1.8% for the headline and the core measure, respectively. Key Quotes “A nega

    Rabobank analysts point out that the UK CPI is expected to print 2.0% and 1.8% for the headline and the core measure, respectively.Key Quotes“A negative surprise due to lower fuel prices is however possible and this would push the headline measure just below the Bank’s official 2%-target. However, the 3+% growth seen in the wage numbers combined with a weak productivity record should eventually continue to produce some domestically generated price pressures, keeping the MPC on edge.”

    Reuters reports the latest comments by the European Central Bank (ECB) policymaker Benoit Coeure, with the key headlines found below. Looking ahead, t

    Reuters reports the latest comments by the European Central Bank (ECB) policymaker Benoit Coeure, with the key headlines found below. Looking ahead, the Governing Council is determined to act in case of adverse contingencies and also stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the Governing Council. Underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and stronger wage growth. On Euro zone economy, incoming economic data and survey information point to somewhat weaker growth in the second and third quarters of this year. Risks surrounding the Euro area growth outlook continue to be tilted to the downside.

    Austria HICP (MoM) down to -0.1% in June from previous 0%

    Austria HICP (YoY) fell from previous 1.7% to 1.6% in June

    The USD/JPY pair failed to capitalize on the previous session's goodish up-move and edged lower on Wednesday, albeit has managed to hold above the 108

    Reviving safe-haven demand underpins JPY and exerts some pressure.Renewed weakness in the US bond yields further weighed on the USD.The downside remains limited amid tempered Fed rate cut expectations.The USD/JPY pair failed to capitalize on the previous session's goodish up-move and edged lower on Wednesday, albeit has managed to hold above the 108.00 handle. The pair caught some bids on Tuesday following the release of upbeat US retail sales data for June, which tempered expectations of aggressive policy easing by the Fed and provided a goodish lift to the US Dollar. However, a slight deterioration in the global risk sentiment - amid resurfacing US-China trade tensions, underpinned the Japanese Yen's perceived safe-haven demand and turned out to be one of the key factors capping gains. In the latest trade-related development, the US President Donald Trump said that the US could impose tariffs on an additional $325 billion worth of Chinese goods, if needed, and dented investors' appetite for riskier assets. The flight to safety was evident from some renewed weakness in the US Treasury bond yields, which further inspired bearish traders and exerted some downward pressure through the Asian session on Wednesday. Meanwhile, the downtick seemed limited, at least for the time being, as investors continue to scale back possibilities of 50bps rate cut by the Fed at its upcoming monetary policy meeting, scheduled on July 30-31.  Moving ahead, market participants now look forward to the US housing market data - building permits and housing starts, due later during the early North-American session for some short-term trading impetus.Technical levels to watch 

    Argentina Consumer Price Index (MoM): 2.6% (June) vs previous 3%

    FX option expiries for July 17 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1250 778m 1.1350 1.8bn - GBP/USD:

    FX option expiries for July 17 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1250 778m 1.1350 1.8bn  - GBP/USD: GBP amounts 1.2400 203m 1.2500 384m - USD/JPY: USD amounts 107.50 400m 108.00 1.5bn
    108.30 1.3bn 108.50 712m - AUD/USD: AUD amounts 0.7000 520m  - NZD/USD: NZD amounts 0.6710 230m 

    Danske Bank analysts note that yesterday Fed officials revealed further their preferences on how to support the US economy. Key Quotes “Jerome Powell

    Danske Bank analysts note that yesterday Fed officials revealed further their preferences on how to support the US economy.Key Quotes“Jerome Powell told a Paris audience that the Fed is "carefully monitoring" downside risks to U.S. growth and "will act as appropriate to sustain the expansion”, echoing his Congressional testimony.” “Chicago President Charles Evans predicted two reductions this year based on the need to lift inflation, although also saying it might not be enough. Dallas chief Robert Kaplan said a "tactical" cut might be warranted, but one should be enough. We are predicting the Fed will cut rates three times this fall, starting with a cut at the July meeting.”

    Analysts at TD Securities note that Singapore’s revealed another dire exports release, with non-oil domestic exports falling by -17.3% y/y (market -9.

    Analysts at TD Securities note that Singapore’s revealed another dire exports release, with non-oil domestic exports falling by -17.3% y/y (market -9.6% y/y) in June from a downwardly revised -16.3% y/y in May.Key Quotes“On a monthly basis exports dropped by a sharp -7.6% SA m/m. Electronics exports were once again very soft, falling -31.9% y/y (market -22%) from a downwardly revised -31.6% y/y in May.” “What does this all mean? Risks of a recession are rising, with the surprisingly large drop in GDP in Q1 (-3.4% q/q) highlighting that worsening global trade conditions are hitting Singapore’s economy hard. SGD looks vulnerable against this backdrop and we think MAS is increasingly likely to ease its policy stance in October.”

    The single currency is finally seeing some signs of relief in the middle of the week, taking EUR/USD to the 1.1215/20 band early in the European sessi

    EUR/USD met strong support near the 1.1200 handle.EMU final June CPI figures next on the docket.US housing sector data, Fed’s Beige Book of note across the pond.The single currency is finally seeing some signs of relief in the middle of the week, taking EUR/USD to the 1.1215/20 band early in the European session.EUR/USD focused on data, tradeThe pair challenged multi-day lows in the boundaries of the 1.1200 handle on Tuesday, where it has apparently met some decent contention and dip-buyers. Poor releases from the ZEW survey for the current month showed the German morale remains subdued and forced Economic Sentiment to deteriorate further, hurting the sentiment around EUR. In addition, renewed effervescence around the US-China protracted trade dispute re-emerged after President Trump’s comments, sparking some weakness in the risk-associated complex. Furthermore, upbeat results from the US docket seems to have removed some tailwinds from a larger rate cut by the Federal Reserve at its July meeting, lending extra wings to the buck and collaborating with the downside in spot. Later in Euroland, final CPI figures for the month of June are only due along with a speech by BuBa’s J.Weidmann. Across the ocean, the US housing sector will be in the limelight while the Fed is expected to release its Beige Book.What to look for around EURThe inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets, triggering the ongoing leg lower. Furthermore, occasional bullish attempts in spot should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts (July/September), the resumption of the QE programme and changes in the forward guidance. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.EUR/USD levels to watchAt the moment, the pair is up 0.02% at 1.1212 and a break above 1.1286 (high Jul.11) would target 1.1320 (200-day SMA) en route to 1.1412 (high Jun.25). On the downside, the next support emerges at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).

    Here is what you need to know to start your day on Wednesday, July 17th, European session: - Aussie fell from weekly highs on China’s Camsing fraud sc

    US dollar reverses a part of Tuesday’s US retail sales data-back rally. US-Japan working towards a trade deal by September.Bitcoin recovers, but remains below the 10k mark.Here is what you need to know to start your day on Wednesday, July 17th, European session:  - Aussie fell from weekly highs on China’s Camsing fraud scandal news, Kiwi emerged the strongest in Asia. - US-Japan eyeing a trade deal by September, Fitch affirmed Japan at ‘A’, outlook ‘Stable’, USD/JPY defended 108.00 amid mixed Asian equities. - US dollar index pulled back from overnight highs amid falling Treasury, Gold traded modestly flat. - UK: The Cable attempted recovery above 1.24 ahead of key UK CPI report, hard Brexit fears to remain a weight. - Oil prices stabilized following the overnight dip to weekly lows, EIA stocks data eyed. - Crypto bears took a breather. Bitcoin remained below 10k. US senators grilled Facebook on crypto plans, as political and regulatory scrutiny of coins intensified. Economic events to watch  

    Karen Jones, analyst at Commerzbank, points out that EUR/USD pair has sold off yesterday and attention has reverted to the March and mid-June lows at

    Karen Jones, analyst at Commerzbank, points out that EUR/USD pair has sold off yesterday and attention has reverted to the March and mid-June lows at 1.1181/76, while these hold the downside, an upside bias will prevail.Key Quotes“We should then see recovery towards the 200 day moving average and early June high at 1.1320/48. This guards the more important 1.1394/1.1412 55 week ma and recent high. Above the 1.1412 June high we look for resumption of the up move and a test of the 1.1570 2019 high. Slightly longer term we target 1.1815/54, the highs from June and September 2018.” “We regard the April and May lows at 1.1110/06 as a turning point and continue to view the market as based longer term and target 1.1990 (measurement higher from the wedge).”

    Even after declining to a fresh 27-month low, the GBP/USD pair is yet to slip beneath key support-line as it takes the rounds to 1.2418 on early Wednesday.

    A medium-term descending trend-line support seems capable enough to trigger GBP/USD pullback amid oversold RSI levels.1.2580/85 is likely immediate key resistance to watch.Even after declining to a fresh 27-month low, the GBP/USD pair is yet to slip beneath key support-line as it takes the rounds to 1.2418 while heading into the UK session on Wednesday. A downward sloping trend-line stretched since June 2017, at 1.2370, acts as nearby and crucial support for sellers to watch amid oversold levels of 14-bar relative strength index (RSI). If bears refrain from respecting 1.2370, late-March 2017 low surrounding 1.2335/40 and the same month bottom around 1.2110 could be on their radars. Meanwhile, lows marked during June 18 and July 12 near 1.2510 act as adjacent resistance, a break of which can trigger the pair’s recovery to weekly top close to 1.2580. On a broader view, 1.2785/90 area comprising June month high could be watched as a key to the upside. GBP/USD weekly chartTrend: Pullback expected  

    Danske Bank analysts point out that today the final euro area HICP figures for June will be released and will be a key release for markets. Key Quotes

    Danske Bank analysts point out that today the final euro area HICP figures for June will be released and will be a key release for markets.Key Quotes“The German figures point to a slight upward revision in the euro area headline figure to 1.3% (from 1.2% in the flash estimate), but core inflation will likely stay at 1.1% in a sign that underlying inflation pressures remain subdued ahead of the ECB's July meeting taking place next week.” “In the UK, we also get inflation data for June. Market consensus is for headline inflation to remain steady around the BOE target of 2% while core inflation is expected to increase slightly from 1.7% in May.”

    CME Group’s advanced figures for JPY futures markets noted investors added nearly 1.9K contracts to their open interest positions on Tuesday. Volume r

    CME Group’s advanced figures for JPY futures markets noted investors added nearly 1.9K contracts to their open interest positions on Tuesday. Volume rose by more than 29K contracts after two drops in a row.USD/JPY stays capped by the 109.00 handleThe weekly up move in USD/JPY found resistance in the 108.40 zone yesterday. Rising open interest and volume coupled with declining prices in the Japanese safe haven could trigger further upside in the near term with the next target at monthly highs in the 109.00 neighbourhood.

    Analysts at TD Securities continue to expect the UK inflation to come in roughly in line with the BoE's forecasts from the May IR, with headline CPI o

    Analysts at TD Securities continue to expect the UK inflation to come in roughly in line with the BoE's forecasts from the May IR, with headline CPI of 2.0% y/y in June (mkt also at 2.0%).Key Quotes“The fall in crude oil prices into June should weigh on the headline figure, and clothing discounts may have been steeper than normal in June with the poor weather for the first part of the month, though this could be balanced out by a boost in other areas from the steep depreciation of GBP through the spring.” “We look for core CPI to edge up from 1.7% to 1.8% y/y (mkt: 1.8%), back to where it was in Feb-Apr this year.”

    The Kiwi Dollar is expected to extend its move higher if NZD/USD close above 0.6740 in the near term. Key Quotes 24-hour view: “NZD traded between 0.6

    The Kiwi Dollar is expected to extend its move higher if NZD/USD close above 0.6740 in the near term.Key Quotes24-hour view: “NZD traded between 0.6696 and 0.6738 yesterday, relatively close to our expected range of 0.6700/0.6740. That said, the weak daily closing of 0.6698 suggests upward pressure has eased. From here, NZD is expected to trade sideways to slightly lower, likely within a 0.6685/0.6725 range”. Next 1-3 weeks: “NZD extended its advance and easily moved above the 0.6710 resistance (high of 0.6725). As indicated yesterday, NZD has to register a NY close above 0.6740 in order to indicate it is ready for a sustained advance. The prospect for such a scenario is not high for now but it would continue to rise if NZD can continue to hold above 0.6670 (level was at 0.6640 yesterday) within these few days”.

    Open interest in GBP futures markets from CME Group posted the largest increase so far this year on Tuesday, according to flash data from CME Group. I

    Open interest in GBP futures markets from CME Group posted the largest increase so far this year on Tuesday, according to flash data from CME Group. In the same direction, volume rose for the first time after three drops in a row, this time by around 55.5K contracts, the largest advance since June 12.GBP/USD risks a test of YTD lows near 1.2370Cable prolonged its move south in the first half of the week supported by rising open interest and volume, and is now exposing a visit to 2019 lows in the 1.2370 zone recorded in early January.

    Following immediate symmetrical triangle chart pattern, the USD/CHF pair takes the rounds to 0.9874 ahead of the Europe markets open on Wednesday.

    4-day old symmetrical triangle limits USD/CHF moves between 23.6% and 61.8% Fibonacci retracement levels.50-HMA strengthens the triangle support.Following immediate symmetrical triangle chart pattern, the USD/CHF pair takes the rounds to 0.9874 ahead of the Europe markets open on Wednesday. While 38.2% Fibonacci retracement of late-June to early July upside, at 0.9870, acts as immediate support, pair’s further downside could be restricted by 0.9857/55 support confluence including 50-hour moving average (HMA) and support-line of the triangle pattern. In a case where prices slip beneath 0.9855, 61.8% Fibonacci retracement level of 0.9820 can offer an intermediate halt to its downpour targeting sun-0.9800 area. Alternatively, the pair’s upside clearance of 0.9892 formation resistance level can quickly flash 0.9910 on the chart. However, current month high around 0.9952 and 1.0000 psychological magnet could question buyers afterward. USD/CHF hourly chartTrend: Sideways  

    The bearish view on the Sterling suggests Cable could slip further back and test the 1.2340 region in the short-term. Key Quotes 24-hour view: “While

    The bearish view on the Sterling suggests Cable could slip further back and test the 1.2340 region in the short-term.Key Quotes24-hour view: “While we expected GBP to weaken yesterday, the manner by which it crashed through several strong support levels with ease came as a surprise (overnight low of 1.2396). The rapid drop appears to be running ahead of itself but as there is no sign of stabilization just yet, GBP could weaken further to 1.2365. Only a move back above 1.2460 would indicate that the weakness in GBP has stabilized (minor resistance is at 1.2440)”. Next 1-3 weeks: “We indicated yesterday (16 Jul, spot at 1.2515) that “a dip below 1.2470 is not ruled but GBP has to register a NY closing below 1.2440 in order to indicate that it is ready to move below the year-to-date low near 1.2410”. However, the rapid pace of how the price action evolved was unexpected as GBP plunged to a 27-month low of 1.2396 (before closing -0.89% lower at 1.2405, the largest 1-day decline in almost 4 months). The sharp decline indicates that the ‘sideway-trading phase’ that started last Friday (12 Jul, spot at 1.2525) has ended earlier than expected. From here, GBP is deemed to have move into a ‘negative phase’ and could move to 1.2340. On the upside, only a break of the 1.2490 ‘key resistance’ would indicate that the current downward pressure has eased. On a shorter-term note, 1.2460 is already a strong resistance level”.

    According to preliminary figures for EUR futures markets from CME Group, investors added nearly 8.3K contracts on Tuesday, the largest single day buil

    According to preliminary figures for EUR futures markets from CME Group, investors added nearly 8.3K contracts on Tuesday, the largest single day build since June 10. In the same line, volume reversed three consecutive drops and gained around 46.5K contracts.EUR/USD keeps looking to 1.1200… and belowThe sell off in EUR/USD on Tuesday was on the back of rising interest and volume, noting that fresh sellers are returning to the markets. That said, the door is now open for extra downside in the near term with immediate target at the 1.1200 area and probably 1.1180.

    Analysts at TD Securities note that the US retail sales growth came in above expectations at 0.4% m/m in June, matching a similar expansion in May (mk

    Analysts at TD Securities note that the US retail sales growth came in above expectations at 0.4% m/m in June, matching a similar expansion in May (mkt: 0.2%).Key Quotes“The core measures were also solid during the month, with the ex-auto/gas series and control group sales up a robust 0.7% m/m each in June. On net, the retail sales report more than confirms the rebound in consumer spending in Q2 and points to a solid start for Q3.” “Industrial production growth printed flat for June, falling slightly below expectations at +0.1%. Most of the weakness stemmed from a sharper-than-expected decline in the utilities sector, which dropped -3.6%. Notably, however, manufacturing activity rose a strong 0.4% m/m — its fastest monthly pace this year. That said, we wouldn't read too much into this as the manufacturing sector is likely to remain downbeat in the near term, given trade woes. Nonetheless, this is a good end for the quarter and a better hand-off for production in Q3.”

    FX Strategists at UOB Group now see EUR/USD resuming the downside although a test of the 1.1100 neighbourhood looks unlikely for the time being. Key Q

    FX Strategists at UOB Group now see EUR/USD resuming the downside although a test of the 1.1100 neighbourhood looks unlikely for the time being.Key Quotes24-hour view: “Expectation for EUR to trade sideways was incorrect as it staged a surprisingly deep decline but the down-move was checked by the strong 1.1200 support (overnight low of 1.1200). Downward momentum has improved and from here, barring a move above 1.1245 (minor resistance is at 1.1225), the weakness in EUR is expected to extend lower but the major 1.1180 support is unlikely to yield so easily (next support is at 1.1155)”. Next 1-3 weeks: “After trading in a relatively subdued manner for a few days, EUR staged a surprisingly sudden and sharp decline and tested the bottom of our expected 1.1200/1.1310 sideway trading range (first indicated last Thursday,11 Jul, spot at 1.1255). From here, a move below 1.1200 and the mid-June low near 1.1180 would not be surprising. However, downward momentum is not as strong as we prefer and EUR is unlikely to ‘accelerate’ lower. Overall, EUR is expected to trade with a ‘downside bias’ for now but is unlikely to challenge the year-to-date low near 1.1100 (there is another support at 1.1155). On the upside, only a move above the strong 1.1260 resistance would indicate that the current downward pressure has eased”.

    The US Dollar Index (DXY), which tracks the greenback vs. its main rivals, is struggling for direction on Wednesday and returns to the 97.30 region. U

    DXY moved near 97.50 on Tuesday on upbeat data releases.US 10-year yields recede to the 2.10% area.US Housing Starts, Building Permits, Fed’s beige Book next on tap.The US Dollar Index (DXY), which tracks the greenback vs. its main rivals, is struggling for direction on Wednesday and returns to the 97.30 region.US Dollar Index looks to data, tradeThe index gathered extra steam on Tuesday following auspicious results from Retail Sales during June, expanding more than expected. Extra optimism came in later in the day with better-than-forecasted results from Manufacturing Production, the NAHB index and Business Inventories. There was no news from the speech by Chief Powell in Paris, where he reiterated the Fed will act to support the economic expansion, all amidst rising bets on a rate cut later this month. In addition, Powell noted that FOMC members remain concerned over global growth, Brexit uncertainty, the federal debt ceiling and persistent inflation below the Fed’s target. Also lending some wings to the buck, President Trump poured cold water over expectations of a US-China trade deal, noting that there is still a long way to go in negotiations. He even hinted at the likeliness of extra tariffs on Chinese products worth $325 billion. In the data space later today, the focus of attention will be on the US housing sector with the releases of June figures for Housing Starts and Building Permits seconded by the EIA weekly report on crude oil inventories and the publications of the Fed’s Beige Book.What to look for around USDDXY has recovered some composure after once again testing the vicinity of the 200-day SMA in the 96.70 region on Friday, all in response to the dovish message from Chief Powell and the FOMC minutes. Speculations among investors have already priced in a 25 bps rate cut hits month, although a bigger rate cut is not utterly ruled out just yet. Trade tensions and global growth concerns continue to cloud the US outlook while the lack of upside traction in inflation remains worrisome. Confronting this scenario, the greenback still looks underpinned by its safe have appeal, the status of ‘global reserve currency’, solid US fundamentals when compared to its G10 peers and the shift to a more accommodative stance from the rest of the central banks.US Dollar Index relevant levelsAt the moment, the pair is losing 0.06% at 97.31 and faces the next resistance at 97.59 (high Jul.9) followed by 97.80 (monthly high Jun.3) and finally 98.37 (2019 high May 23). On the flip side, a break below 96.73 (200-day SMA) would aim for 96.46 (low Jun.7) and then 96.04 (50% Fibo of the 2017-2018 drop).

    Gold carries the 3-week old lower high formation forward as it clings to 21-day moving average (DMA) during Wednesday’s less active market hours.

    Gold prices fail to portray USD pullback amid trade/political jitters.Lack of major data/news during the Asian session limits market moves.Gold carries the 3-week old lower high formation forward as it clings to 21-day moving average (DMA) during Wednesday’s less active market hours ahead of the European session. The US Dollar (USD) failed to hold previous strength, backed by upbeat data, as latest doubts surrounding the US-China trade deal and worsening relations between the US and Iran weigh on the greenback. Though, the bullion buyers remain cautious of further bets on the US Federal Reserve rate cuts amid recent improvement of data/lack of major catalysts. While the US President Donald Trump’s readiness to levy fresh tariffs on China and the US-Iran tensions can keep spicing up the risk aversion, further improvement in the US data and less dovish comments from the Fed may cap the safe-havens. On the economic calendar, inflation numbers will direct future monetary policies concerning the European Central Bank (ECB), the Bank of England (BOE) and the Bank of Canada (BOC) whereas housing market numbers from the US can act as a second-tier clue to follow. Technical Analysis FXStreet Analyst Ross J. Burland spots the bullion’s sustained trading beyond $1,400 as a key positive element favoring the bulls: The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing lows and highs could open up an onslaught to the downside. Below that level, the $1,373/76 zone meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. On a break back to the upside, 1410, 1419 and 1424 are all prior highs and lows which are guarding a run to the 1440 objective.

    In view of ANZ analysts, the New Zealand economy has been gradually slowing as key economic tailwinds and headwinds duke it out, and it’s still not en

    In view of ANZ analysts, the New Zealand economy has been gradually slowing as key economic tailwinds and headwinds duke it out, and it’s still not entirely clear which will be on top by year-end.Key Quotes“We expect the tailwinds will regain the upper hand, seeing growth bottom out shortly. While these two opponents are closely matched, help is undoubtedly on the way.” “The RBNZ has already cut the OCR, and we expect they’ll do so again in August and November; the NZD remains around 2% below late-March levels; and Budget 2019 included a little extra fiscal stimulus.” “All up, we see annual growth slowing to 2% in Q2, before gradually lifting towards 3% in 2021. That’s not going to drive a strong inflation pulse, but we expect it will be sufficient to keep core inflation elevated close to the target midpoint.”

    The Barclays Research Team expect the EUR/USD pair to trade neutral to lower in the coming months amid tempered expectations of aggressive rate cuts.

    The Barclays Research Team expect the EUR/USD pair to trade neutral to lower in the coming months amid tempered expectations of aggressive rate cuts. Key Quotes: “Expect a more or less flat EUR/USD the next quarter ahead. EUR/USD to move towards 1.08 by Q2 2020 vs. 1.06 previous forecast. Expect the Fed to ease in the face of persistently low inflation, sizeable external risks and moderation of US growth. The intensity of cuts and the risks to the path have moderated. Indefinite suspension of further US tariffs and technology sanctions on China - and likely retaliation - imply a modestly better growth path for both economies and for connected trading partners, reducing risks to the global economy. We now see a more persistent but shallower path of USD appreciation, as there is a less negative bite from US interest rates in the near term and less of a rise in non-US risk premia, given the improved global outlook".

    Bill Evans, analyst at Westpac, points out that the Australia’s six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, ro

    Bill Evans, analyst at Westpac, points out that the Australia’s six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, rose from –0.47% in May to –0.02% in June.Key Quotes“These monthly movements can be choppy. Nevertheless the index growth rate remains below trend for a sixth successive month. Over the month, commodity prices; the sharemarket and dwelling approvals explained the improvement. On the other hand these positives were partly offset by deteriorating consumer confidence both overall and in the jobs market in particular.” “With this big monthly turnaround, the Leading Index growth rate has lifted over the last six months from –0.36% in January to the current -0.02%.” “The Reserve Bank Board next meets on August 6. Evidence from the July Board minutes indicates the Bank is likely to pause next month in its current easing cycle. However we do see further easing coming later in the year.” “Westpac continues to expect a further 25bp rate cut, coinciding with a downgrade to the Bank’s growth and inflation forecasts in November.”

    According to analysts at ANZ, Indian economy continues to show weak growth momentum even as the extent of weakness has, however, softened compared to

    According to analysts at ANZ, Indian economy continues to show weak growth momentum even as the extent of weakness has, however, softened compared to the previous quarter.Key Quotes“While general activity and consumption indicators are still moribund, investment indicators are now showing signs of turning up.” “Exports stood out as the most prominent area of weakness. In June, exports recorded their weakest print in over three years. While India has been known to be fairly safe from global trade uncertainty, this print shows it is not immune to the global trade slowdown.” “That net exports have persistently been a drag on India’s growth is not new. However, the current export slowdown comes at a crucial juncture where the domestic growth narrative is, in itself, weak.” “We believe that while recovery is nascent, maturity is still a far way off. In the absence of a substantial fiscal push, however, more is needed on the monetary side.”

    Unless breaking 4H 100MA and 23.6% Fibonacci retracement of May-July downpour, USD/INR pullback remains less significant.

    The USD/INR pair’s recovery from 68.25 falls short of clearing near-term key resistances, indicating momentum weakness.9-week old descending trend-line can question buyers past-68.91.Unless breaking 100-bar moving average on the 4-hour chart (4H 100MA) and 23.6% Fibonacci retracement of May-July downpour, USD/INR pullback remains less significant as it trades near 68.77 heading into the European open on Wednesday. Even if the pair manage to clear 68.80 and 68.91 levels, carrying aforementioned indicators, a 9-week old descending resistance-line stretched since mid-May around 69.40 could challenge buyers. Though, pair’s rise past-69.40 enables it to aim for 70.00 psychological magnet. On the flip side, 68.45 can act as close support before the latest low surrounding 68.25 regains market attention. Also, pair’s sustained declines below 68.25 open the gate for fresh south-run to late-June 2018 bottom at 67.6850. USD/INR 4-hour chartTrend: Pullback expected  

    In its latest commentary, Reuters reported that the Bank Indonesia (BI), the Indonesian central time, will have a tough time justifying delaying a rat

    In its latest commentary, Reuters reported that the Bank Indonesia (BI), the Indonesian central time, will have a tough time justifying delaying a rate cut should it refrain from slashing rates this Thursday. Key Highlights: “Global bond yields have plunged this week after the Fed laid the groundwork for rate cuts in 2019 and the ECB hinted at more stimulus. This paves the way for more easing in Asia, leaving Bank Indonesia the outlier with its emphasis on financial market (primarily IDR) risks. BI's warning at its May 16 meeting that 2019 growth was expected to be below the midpoint of its 5.0%-5.4% range would also support a rate cut. Indeed, Indonesia's finance minister hinted in the latest Bloomberg interview that BI may ease monetary policy. Extra Reading:Indonesia central bank seen cutting rates before Fed moves - Reuters poll Indonesia: The time is ripe for a rate cut - TDS

    With the fresh risk-off dragging the greenback down, GBP/USD recovers from 27-month low while taking the bids to 1.2416 ahead of the London open on Wednesday.

    Buyers sneak in from 27-month low amid fresh risk-off dragging the US Dollar (USD) down.Monthly inflation numbers from the UK and the US housing market data can decorate today’s economic calendar.Trade/political headlines extend the watch-list.With the fresh risk-off dragging the greenback down, GBP/USD recovers from 27-month low while taking the bids to 1.2416 ahead of the London open on Wednesday. Iran’s rejection to the US statements signaling peace and on-going doubts surrounding the US-China trade deal continues to weigh on the US currency that piled gains yesterday after monthly Retail Sales data from the US argued for the dovish Fedspeak. During early Wednesday, Boris Johnson and Jeremy Hunt, the final two candidates to the UK Prime Minister (PM) post, appeared for their last political presence together at the fundraising event in London, attended by 100 Conservative donors. Both the leaders criticized the Irish backstop and pledged to remove it once in power. However, the EU, as conveyed by the BBC, is in no mood to renegotiate the condition. Elsewhere, the front runner Boris Johnson also said to highlight the possibilities of the early general election to oust opposition Labour party from the parliament if elected. The macro gauge of risk sentiment, the US 10-year treasury yield, weakens 2 basis points to 2.099% by the press time. While political/trade news can keep entertaining momentum traders, June readings of the UK inflation numbers and the US housing market data will also be up for a watch. British Consumer Price Index (CPI) is likely to remain unchanged at 2.0% on a yearly basis but may dip to 0.0% from 0.3% MoM. On the other hand, the US Building Permits (MoM) could rise to 1.300 million versus upwardly revised 1.299 million but Housing Starts bears the expectations to decline to 1.261 million versus 1.269 previous. Technical Analysis Oversold conditions of 14-day relative strength index (RSI) at the multi-year low favors the Cable’s pullback to 1.2440 and then towards Monday’s low close to 1.2510. In a case where prices rally past-1.2510, the weekly top surrounding 1.2580 could flash on bulls’ radar. Alternatively, pair’s decline below the latest lows of 1.2396 highlights late-March and April 2017 lows near 1.2330 and 1.2365 respectively.

    EUR/USD risks falling below key support at 1.1193 as markets seem to have scaled back expectations of Federal Reserve (Fed) rate cuts in the ovenright

    Overnight drop in Fed rate cut odds could bode well for USD. EUR/USD has charted a bearish lower high. A break below 1.1193 would confirm a lower low. EUR/USD risks falling below key support at 1.1193 as markets seem to have scaled back expectations of Federal Reserve (Fed) rate cuts in the ovenright trade.  The US reported a better-than-expected June retail sales data on Tuesday, alleviating fears of economic recession. As a result, the probability of a 50 basis point rate cut at July 31 now stands at 22%, compared to 26% seen before the release of the retail sales data.  Further, the odds of two rate cuts by September and three rate cuts by the year end have dropped from 80% and 62% to 73% and 56%, according to Fed funds futures.  Indeed, the market still expects the Fed to cut rates by 25 basis points on July 31. That move, however, has been priced in. Therefore, the US dollar could gain ground against the EUR and other majors during the day ahead.  As of writing, EUR/USD is trading at 1.1213, having dropped 0.43% on Tuesday.  The daily chart shows the pair has charted a bearish lower high along the resistance of the trendline connecting May 30 and June 18 lows over the last few days. Further, the 14-day relative strength index is biased bearish at 42, having faded rejection at 50.00 earlier this week.  Hence, the pair could retest the July 9 low of 1.1193 today. A break lower would add credence to bearish lower highs pattern and open the doors for a deeper drop toward 1.1116 (May 30 low). Technical Levels 

    Australian iron ore production will rise as much as 6% this fiscal year, according to BHP Group. Total output is expected to jump to 273-286 million t

    Australian iron ore production will rise as much as 6% this fiscal year, according to BHP Group.  Total output is expected to jump to 273-286 million tons in fiscal year 2020, having dropped to 369.6 million tones in the previous fiscal year 2019. That was the first annual decline since China’s steel boom, which began at the start of the century.  BHP also expects copper output to rise as much as 8% the fiscal year.  Both iron ore and copper are Australia’s top exports.  

    Analysts at Australia and New Zealand banking group (ANZ) offer a sneak peek at what to expect from Thursday’s Australian labor market report due to b

    Analysts at Australia and New Zealand banking group (ANZ) offer a sneak peek at what to expect from Thursday’s Australian labor market report due to be released at 0130 GMT. Key Quotes: “We expect zero growth in employment in June but the unemployment rate to steady at 5.2%. Given the weakness in leading indicators, and with the reversal of the temporary boost from election jobs in May added to the mix, we do not believe that the current strength in employment growth will be sustained.”

    Although 2-week old ascending triangle formation and rising RSI favor the USD/CNH pair’s additional recovery, the quote still trades below key resistances.

    RSI recovery/ascending triangle enables the USD/CNH pair to aim for key resistance confluence.Trade tussles join, fraud scandal at home weakens the Chinese currency off-late.6.85 offers strong downside support.Although 2-week old ascending triangle formation and rising RSI favor the USD/CNH pair’s additional recovery, the quote still trades below key resistances as it takes the rounds to 6.8825 on early Wednesday. On a separate note, the US-China trade stalemate intensified recently after the US President Donald Trump cited “a long way” to expect a deal with China while also threatening to levy fresh tariffs. Further, Camsing fraud scandal at home also drags China’s offshore Yuan (CNH). 50% Fibonacci retracement of June month declines, at 6.8894, acts as immediate resistances ahead of highlighting 6.88/90 confluence region comprising 200-bar moving average (4H 200MA) and a horizontal line stretched since early-month. In a case prices refrain from respecting 14-bar relative strength index (RSI) and rally beyond 6.90, June 19 high around 6.9103 and 6.9155 may lure buyers. On the downside, triangle pattern support around 6.8671 seems key to watch as the break of which can trigger fresh downpour to sub-6.8500 area. USD/CNH 4-hour chartTrend: Pullback expected  

    AUD/USD is feeling the pull of gravity, possibly due to losses in iron ore futures and news of financial fraud in China. At press time, the currency p

    AUD/USD is losing altitude after bearish outside day. Iron futures in China are down in early trade. The news of a financial fraud in China is likely weighing over the AUD. AUD/USD is feeling the pull of gravity, possibly due to losses in iron ore futures and news of financial fraud in China.  At press time, the currency pair is trading near session low of 0.7002 hit soon before press time, having hit a high of 0.7020 earlier today.  The decline could be associated with the drop in the iron ore futures listed in China. The most active contract for September delivery listed on Dalian Commodity Exchange dipped 15 Yuan to open at 895 Yuan per tonne.  Iron ore is one of Australia’s top exports. As a result, the AUD often takes cues from the action in the iron ore market.  Apart from the losses in the iron ore, the AUD is likely feeling the heat of a financial fraud in China. After all, the Australia currency is widely considered a proxy for the world’s second largest economy.  Large Chinese wealth manager Noah Holdings Ltd. said last week that 3.4 billion Yuan of asset management products backed by entertainment-to-health care conglomerate Camsing Global’s accounts receivables from JD.com were in danger of default, according to Caixin.  Also as per latest news, a number of fund management companies have exposure to financing projects related to Coming founder and CEO Lo Ching’s companies.  The AUD could take a bigger hit if the alleged fraud spreads, leading to sharp losses in China’s equity markets. Technical Levels 

    The latest story carried by Caixin warns of the spillover effects of the Camsing fraud scandal on other Chinese firms. Key Details: “Camsing Global fo

    The latest story carried by Caixin warns of the spillover effects of the Camsing fraud scandal on other Chinese firms. Key Details: “Camsing Global founder Lo Ching was detained over an alleged supply-chain financing fraud. The detention of Camsing Global found continued spreading through China’s finance sector as more institutions disclosed their exposure. Shenzhen-listed metal products manufacturer Jiangsu Fasten Co. Ltd. on Tuesday said its wholly owned subsidiary Shanghai Mosan Factoring Co. Ltd. held outstanding asset management products worth 2.9 billion yuan ($422 million) involving financing for Guangdong Zhongcheng Industrial Holdings Co., a Camsing subsidiary controlled by Lo, as of June 30. The detention sparked fears that billions of yuan raised by Camsing and affiliates through asset management products are backed by falsified transactions and accounts receivable with business partners including e-commerce giant JD.com and Suning.com.” The Aussie witnessed fresh selling on the above headlines, with the rates falling back to the 0.70 handle. 

    Shanghai Composite is better bid this Wednesday, having bounced up from the 50-day moving average line (MA) in early trade. The index is currently tra

    Shanghai Composite has printed intraday lows on key average. Asian stocks are trading mixed on trade tensions. Shanghai Composite is better bid this Wednesday, having bounced up from the 50-day moving average line (MA) in early trade.  The index is currently trading largely unchanged on the day at 2,938, having printed intraday lows on the 50-day MA of 2,925.  Other Asian indices are trading mixed with Japan’s Nikkei reporting a 0.46% drop and South Korea’s Kospi shedding 1%.  Stocks in Hong Kong are also down 0.47% while Australia’s S&P/ASX 200 is up 0.405 at press time.  The US stocks fell in the overnight trade with the S&P 500 index dropping by 10 points or 0.34%.  President Trump said Tuesday that Washington and Beijing have a long way to go on trade, adding that the US could impose tariffs on additional $325 billion with of Chinese goods.  Meanwhile, Federal Reserve President Powell reiterated the Pledge to “act as appropriate” to ensure sustained economic expansion. The central bank is widely expected to cut rates by 25 basis points later this month.  Dovish Fed expectations have helped markets remain bid over the last few weeks, despite the lingering Sino-Us trade tensions.   

    Japanese Government Spokesman Suga is out on the wires now, strongly urging South Korea to take appropriate steps over wartime laborer issue. The issu

    Japanese Government Spokesman Suga is out on the wires now, strongly urging South Korea to take appropriate steps over wartime laborer issue. The issue over the wartime laborers is the crux of the ongoing trade spat between both the Asian countries. Japan imposed curbs on tech materials exports to South Korea last month. Extra Reading: S. Korea FinMIn Hong: Will unveil plans to ease dependence on Japan industries Japan’s Seko blasts South Korea for 'mistaken' explanation after bilateral meeting - Reuters

    Amid looming Japan-South Korea trade dispute, the South’s Finance Minister Hong Nam-ki announced that his government will soon unveil plans to reduce

    Amid looming Japan-South Korea trade dispute, the South’s Finance Minister Hong Nam-ki announced that his government will soon unveil plans to reduce its economy’s dependence on Japanese industries. Hong reiterated his plea that Japan should end the export curbs. “The government is working on comprehensive plans to reduce the country’s dependence on Japan’s materials, components and equipment industries and will announce them soon,” the Finance Minister said.

    In the view of the analysts at Deutsche Bank, the best bet in the times of a currency war is likely to go long Gold. Key Quotes: “With a currency war

    In the view of the analysts at Deutsche Bank, the best bet in the times of a currency war is likely to go long Gold. Key Quotes: “With a currency war most likely to be fought on USD/CNY and EUR/USD terrain, one approach would be to steer clear of the direct conflict. By far the most direct and simple way to trade the complexities of a currency war is by going long gold. The U.S. attempt to weaken the dollar and the response from other nations was to combat such intervention … sparking a "true currency war."

    USD/JPY is currently trading at 108.17, having faced rejection at the 200-hour moving average of 108.33 earlier today. The anti-risk JPY may have foun

    USD/JPY failed to take out key MA hurdle. JPY is bid, possibly due to losses in equities. USD/JPY will likely pick up a bid if US yields rise. USD/JPY is currently trading at 108.17, having faced rejection at the 200-hour moving average of 108.33 earlier today.  The anti-risk JPY may have found love due to losses in the Asian equities. As of writing, Japan’s Nikkei is down 0.48% and South Korea’s Kospi is shedding 1.08%. Further, shares in Hong Kong and China are reporting marginal losses.  Also, decision by the ratings agency Fitch to retain Japan’s Long-Term Foreign Currency Issuer Default Rating at A may have added to the bid tone around the JPY.  The drop in the USD/JPY pair, however, could be short-lived and the 200-hour MA hurdle will likely be scaled if treasury yields rise.  At press time, the US 10-year yield is flatlined at 2.10% and the two-year yield, which is sensitive to short-term interest rate expectations, is trading largely unchanged on the day at 1.85%. Technical levels 

    Despite witnessing a mild pullback from 6-month low, GBP/JPY carries its weakness as it takes the rounds to 134.28 during early Wednesday.

    Fears of hard Brexit keep driving the British Pound (GBP) downward despite upbeat employment data at home.News of US-Japan trade deal, Fitch rating and recent risk-off also weigh on the pair.British inflation numbers, trade/political headlines are in the spotlight for now.Despite witnessing a mild pullback from 6-month low, GBP/JPY carries its weakness as it takes the rounds to 134.28 during early Wednesday. In addition to constant uncertainty factor surrounding the Brexit, recent improvement of the Japanese Yen (JPY) also weighs on the prices. During his latest public appearances, Boris Johnson, who leads the UK Prime Minister’s (PM) race, continues to disrespect the EU’s previous deal concerning the Irish border issue. Mr. Johnson also raised prospects of the early general election, if elected, to remove the opposition Labour party leader Jeremy Corbyn’s political dominance. It should also be noted that upbeat reports from the UK employment front and absence of any fresh bearish threats from the Bank of England (BOE) Governor Mark Carney were largely being ignored by the British Pound (GBP) traders. On the contrary, the JPY benefited from the latest news of the Fitch affirming Japan’s credit rating ‘A’ amid stable outlook and the US and Japan trade deal. Also adding the Yen strength could be the doubts relating to the US-China trade deal and the political tussle between the US and Iran. Global barometer of risk sentiment, the US 10-year treasury yield, declines nearly 2 basis points to 2.103% by the press time. While Japanese economic calendar has no major data/events scheduled for release from now, investors can concentrate on macro news in addition to the UK Consumer Price Index (CPI) data for fresh impulse. Technical Analysis Chances of pair’s drop to January month low surrounding 131.80 remains on the cards as far as the quote traders beneath 61.8% Fibonacci retracement of 2016 – 2018 upside, at 136.10 now.  

    Reuters reported earlier today that the US and Japan are working to reach a trade deal by September. The deal is said to cover agricultural products a

    Reuters reported earlier today that the US and Japan are working to reach a trade deal by September. The deal is said to cover agricultural products and autos, Reuters added. Nothing further was reported on the same.

    EUR/USD dropped from 1.1260 to just above 1.1200 overnight. US Retail Sales kept the Dollar lit. Following disappointing GDP data out of China at the

    EUR/USD is currently trading at 1.1212, between a range of 1.1207 and 1.1215.Bearish pressure could ease on a recovery above 1.1245.EUR/USD dropped from 1.1260 to just above 1.1200 overnight. US Retail Sales kept the Dollar lit. Following disappointing GDP data out of China at the start of the week, the U.S. data, consumer spending forged ahead solidly in June, retail sales posting a stronger than expected 0.4% increase. "The control group grew at a 7.5% annualised pace, the strongest pace in 14 years, underscoring a very buoyant consumer as a key counterbalance to elevated global and international trade risk, substantially reducing the odds that the Fed is dragged into a larger easing cycle beyond a couple of insurance cuts,"  analysts at Westpac explained. Never the less, markets continued to price 31bp of easing at the 31st July meeting though Fed funds futures for 2020 rose about 3bp in implied yield. Fed's Powell  Federal Reserve Chairman Jerome Powell was delivering a speech on "Aspects of Monetary Policy in the Post-Crisis Era" at the "French G7 Presidency 2019 - Bretton Woods: 75 Years Later, Thinking About the Next 75" event in Paris, France.  Key quotes: In our baseline outlook, we expect growth in the United States to remain solid, labor markets to stay strong, and inflation to move back up and run near 2 percent. Uncertainties about this outlook have increased, however, particularly regarding trade developments and global growth. US growth appears to have moderated. Uncertainties are viewed around trade and global growth. In addition, issues such as the U.S. federal debt ceiling and Brexit remain unresolved. Fed saw core PCE running at 1.7% y/y in June. Baseline Fed outlook is for US growth to remain solid but uncertainties have increased. FOMC participants have also raised concerns about a more prolonged shortfall in inflation below our 2 percent target. Long-run factors contributing to lower interest rates, growth and inflation likely to persist. The manufacturing sector has been weak since the start of the year. Market-based measures of inflation compensation have shifted down, and some survey-based expectations measures are near the bottom of their historical ranges. Many FOMC participants judged at the time of our most recent meeting in June that the combination of these factors strengthens the case for a somewhat more accommodative stance of policy. We are carefully monitoring these developments and assessing their implications for the U.S economic outlook and inflation, and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective. Growth in US consumer spending appears to have bounced back but business investment growth has slowed notably. We will also assess these developments in the context of the broader structural changes monetary policymakers have been facing since the Great Recession. I will focus on three tonight: the changed macroeconomic backdrop, the expanded toolkit, and the heightened focus on communication and transparency.   EUR/USD levelsValeria Bednarik, Chief Analyst at FXStreet explained that "technical indicators have lost their bearish strength but hold around their daily lows, also near oversold levels. A break through the mentioned monthly low should open doors for a retest of the year bottom at 1.1106, while the bearish pressure could ease on a recovery above 1.1245, the mentioned Fibonacci resistance."

    Speaking at a conference on Tuesday to mark the 75th anniversary of Bretton Woods, the French Finance Minister Bruno Le Maire said the international m

    Speaking at a conference on Tuesday to mark the 75th anniversary of Bretton Woods, the French Finance Minister Bruno Le Maire said the international monetary order needs to be reinvented or will become increasingly dominated by China. Additional Quotes (via Reuters): "The Bretton Woods order as we know it has reached its limits."  "The alternative we have is now clear - either we reinvent Bretton Woods or it risks losing relevance and eventually disappearing." "Unless we are able to reinvent Bretton Woods, The New Silk Roads might become the new world order."

    Fitch Ratings has affirmed Japan's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'A' with a stable outlook. The ratings agency expects the

    Fitch Ratings has affirmed Japan's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'A' with a stable outlook.  The ratings agency expects the Japanese economy to expand 0.8% in 2019, the same outcome as in 2018, despite an unexpectedly robust 2.1% growth in 1Q19 (seasonally adjusted, annualised). GDP growth, however, is expected to lose steam through the rest of the year and early 2020, courtesy of weakening exports and industrial production.Key points (Source: Fitch Ratings) Japan's ratings balance the strengths of an advanced and wealthy economy, with high governance standards and strong public institutions, against weak medium-term growth prospects and high public debt. Japan has strong external finances, underpinned by a persistent current account surplus as well as large net external credit and international investment positions relative to peer.  Japan's high level of gross general government debt (GGGD), at over 230% of GDP, is the highest among Fitch-rated sovereigns, and poses a key rating constraint.

    Even after bouncing off 5-day old support-line, NZD/USD is yet to offer a successful rise past key EMAs as it trades near 0.6710 during early Wednesday.

    5-day long support-line triggered the NZD/USD pair’s pullback.Short-term exponential moving averages (EMAs) limit the upside.RSI on the recovery mode from oversold conditions.Even after bouncing off 5-day old support-line, NZD/USD is yet to offer a successful rise past key immediate EMAs as it trades near 0.6710 during early Wednesday morning in Asia. With the 14-bar relative strength index (RSI) rising from oversold conditions, odds are in favor of the pair’s extended recovery towards latest high surrounding 0.6740. However, sustained trading beyond 0.6709/11 resistance confluence is a must for buyers to follow. During the pair’s further upside beyond 0.6740, mid-April tops near 0.6785 can become bulls’ favorite. Alternatively, a downside break of 0.6700 support-line can fetch the quote to 50% and 61.8% Fibonacci retracement of last one-week up-moves, around 0.6653 and 0.6633 respectively. In case sellers dominate after 0.6633, 0.6600 and previous week low near 0.6570 could lure them. NZD/USD hourly chartTrend: Bullish  

    The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing

    23.6% Fibo of the latest swing lows and highs could open up lower levels.The $1,373/76 zone meets the 19th June spike correction low.The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing lows and highs could open up an onslaught to the downside. Below that level, the $1,373/76 zone meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. On a break back to the upside, 1410, 1419 and 1424 are all prior highs and lows which are guarding a run to the 1440 objective.     

    The People's Bank of China (PBOC) has set the Yuan reference rate 6.8827 vs Tuesday's fix of 6.8760.

    The People's Bank of China (PBOC) has set the Yuan reference rate 6.8827 vs Tuesday's fix of 6.8760.

    AUD/USD snapped a four-day winning streak on Tuesday with a bearish outside day candle. A bearish outside day is created when the day begins with opti

    AUD/USD created bearish outside day on Tuesday.A close below 0.7010 needed to validate Monday’s bearish outside day. AUD/USD snapped a four-day winning streak on Tuesday with a bearish outside day candle.  A bearish outside day is created when the day begins with optimism but ended on a pessimistic note, engulfing the preceding day’s high and low.  It is widely considered an early sign of bearish reversal and its success rate is high when it appears following after a notable rally.  In AUD’s case, the candlestick patter has appeared following a four-day rally from 0.6910 to 0.7040.  A trend change, however, would be confirmed only if the spot closes today below the outside day’s low of 0.7010. That would open the doors for retest of 0.6910.  On the other hand, a close above 0.7045 (outside day’s high) would signal a continuation of the rally from the recent low of 0.6910 and allow a test of the 200-day moving average, currently at 0.7091. As of writing, the pair is trading at 0.7018.  Daily chartTrend: Bearish below 0.7010Pivot points 

    With the global investors continue cheering the US Dollar (USD) strength, the USD/CAD pair recovers to 5-day high, at 1.3090, during early Wednesday.

    Oil price slump added strength to USD/CAD recovery amid overall greenback strength.Canadian CPI, Manufacturing Shipments and the US housing market statistics will be in focus for now.With the global investors continue cheering the US Dollar (USD) strength, the USD/CAD pair recovers to 5-day high, at 1.3090, during early Wednesday. The pair gained traction on Tuesday after upbeat prints of the US Retail Sales dimmed the charm of dovish Fedspeak. Also strengthening the momentum were the oil price slump and uncertainty surrounding the US-China trade deal. Canada relies heavily on crude for it's export earnings and hence developments surrounding trade/energy have direct impacts on the Canadian Dollar (CAD). WTI declined heavily after the US Secretary to State Mike Pompeo said that Iran showed readiness to talk. However, Iran rejected the claims afterward, as per the BBC, which doesn’t get major attention off-late. Traders look forward to the June month Consumer Price Index (CPI) and Manufacturing Shipments from Canada for fresh impulse in addition to the US housing market indicators for the same month. Canadian Manufacturing Shipments are likely to reverse previous -0.6% contraction with +1.6% rise but the CPI YoY is expected to soften to 2.0% from 2.4% prior. Further, Bank of Canada’s (BOC) core CPI also directs the pair moves and is likely to increase to 2.6% from 2.1% on a yearly format with MoM reading likely flashing 0.1% versus 0.4% earlier. On the other hand, the US Housing Starts could weaken to 1.261 million from 1.269 million but Building Permits might rise to 1.300 million from upwardly revised 1.299 million prior. Technical Analysis 21-day simple moving average (SMA) level of 1.3116 acts as nearby resistance for buyers to watch ahead of targeting monthly high close to 1.3145/50. Meanwhile, 1.3050, 1.3018 and 1.3000 can keep pleasing sellers during a fresh downpour.

    USD/JPY was supported overnight and rallied to a weekly high of 108.37 on solid U.S. data, The US 2-year treasury yields climbed from 1.84% to 1.87% o

    USD/JPY has stuck to a tight range on the 108 handle between 108.19 and 108.32.U.S. Retail Sales support the U.S. Dollar, dialling down Fed cut expectations. USD/JPY was supported overnight and rallied to a weekly high of 108.37 on solid U.S. data, The US 2-year treasury yields climbed from 1.84% to 1.87% on the Retail Sales, (see below), while 10-year yields climbed from 2.09% to 2.14% before falling back to 2.10% as U.S. stocks stumbled, unable to attract further demand following yesterday's closing record highs.  As for US data, US Retail Rales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected):  "US retail sales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected). On a 3-month annualised basis, sales are up 7.5% with ex-auto and gas up 6.0%. The gains were fairly broad-based with only electronics seeing a small pullback, suggesting that the consumer is alive and well. Factories were looking less rosy in June though, with industrial production flat on the month, a bit weaker than expected," analysts at Westpac explained.  Powell rinses and repeats:  Federal Reserve Chairman Jerome Powell was delivering a speech on "Aspects of Monetary Policy in the Post-Crisis Era" at the "French G7 Presidency 2019 - Bretton Woods: 75 Years Later, Thinking About the Next 75" event in Paris, France.  He said that the FOMC participants have raised concerns about a more prolonged shortfall in inflation below our 2 percent target and argued that US growth appears to have moderated.Federal Reserve Chairman Jerome Powell: We expect growth to remain solid, labour markets to stay strong  USD/JPY levelsValeria Bednarik, the Chief Analyst at FXStreet, explained that the USD/JPY pair has recovered up to a 50% retracement: "USD/JPY pair has recovered up to the 50% retracement of its latest daily slide at 108.38 but remains within familiar levels. In the 4 hours chart, the pair has settled above all of its moving averages, which remain directionless and confined to a tight range, reflecting the lack of directional conviction."  "Technical indicators in the mentioned chart recovered up to their mid-lines, losing upward strength around them. The pair peaked last Friday at 108.60 the level to surpass to build a more solid bullish case in the upcoming sessions."

    Brent oil fell 2.72% on Monday, having carved out a bearish doji reversal pattern in the preceding two trading days, as discussed yesterday. With the

    Brent’s daily chart shows a bearish doji reversal. Daily chart indicators are biased bearish. Oil risks falling to key support sat $63.75. Brent oil fell 2.72% on Monday, having carved out a bearish doji reversal pattern in the preceding two trading days, as discussed yesterday.  With the price drop, the 14-day relative strength index has dived out of the ascending trendline, confirming an end of the rally from June lows near $59.50.  More importantly, the RSI is now reporting bearish conditions with a below-50 print.  The moving average convergence divergence (MACD) histogram is also teasing a bearish crossover (drop bellow zero).  All-in-all, Brent looks set to test the support of the trendline connecting June 12 and July 3 lows. As of writing, that trendline support is located at 63..75 and a barrel of Brent is changing hands at $64.50.  Daily chartTrend: BearishPivot points 

    Not only its U-turn from 1.1285/87 horizontal-line but a dip beneath 61.8% Fibonacci retracement of May-June increase also portrays the EUR/USD pair’s weakness.

    Failure to rise past-1.1285/87 drags the EUR/USD pair towards near-term support-line.Oversold RSI conditions can trigger pullback towards 61.8% Fibonacci retracement.Not only its U-turn from 1.1285/87 horizontal-line but a dip beneath 61.8% Fibonacci retracement of May-June increase also portrays the EUR/USD pair’s latest downpour that presently prints 1.1208 during the early Asian session on Wednesday. Considering oversold conditions of 14-bar relative strength index (RSI), an upward sloping trend-line since June 18, at 1.1197, can trigger the pair’s U-turn, if not then sellers can aim for late-June low surrounding 1.1180. In a case where bears dominate past-1.1180, May month bottom around 1.1110 could become their favorite. Alternatively, 61.8% Fibonacci retracement level of 1.1224 acts as an immediate upside barrier to watch during the pair’s recovery, a break of which can escalate the moves to 1.1240 and then towards 1.1285/87 horizontal-line. It should also be noted that the quote’s run-up above 1.1287 enables it to question 1.1345 comprising 23.6% Fibonacci retracement. EUR/USD 4-hour chartTrend: Pullback expected  

    Australia Westpac Leading Index (MoM): -0.08% (June)

    Australia Westpac Leading Index (MoM) declined to -0.1% in June from previous -0.08%

    Having plummeted to a 27-month low, GBP/USD recovers to 1.2410 during early Wednesday amid lack of fresh catalysts.

    Brexit woes keep weighing on the GBP/USD pair despite upbeat UK jobs report.British inflation numbers, political plays should be followed by fresh impulse.Having plummeted to a 27-month low, GBP/USD recovers to 1.2410 during early Wednesday. The pair couldn’t take advantage of better than forecast Average Earnings from the UK as runners to the UK Prime Minister’s (PM) post continue showing their hard stand against Irish backstop that the EU insists during its previous deal with Theresa May. Additionally, Boris Johnson’s readiness to announce the early election, if he becomes the PM, in order to avoid hardships from the opposition Labour party leader Jeremy Corbyn, also weighed on the British Pound. Investors showed little attention to the US-China trade tussle, that should help the Cable, while giving higher importance to the overall US Dollar (USD) strength at the time of praising bears. June month Consumer Price Index (CPI) from the UK becomes the key for the pair traders for now. The headline inflation number is likely to remain unchanged at 2.0% on a yearly basis but may dip to 0.0% from 0.3% MoM. Technical Analysis A sustained downturn beneath latest lows of 1.2396 can fetch prices to late-March and April 2017 lows surrounding 1.2330 and 1.2365 respectively. However, oversold conditions of 14-day relative strength index (RSI) favors the quote’s pullback towards Monday’s low of 1.2510 if 1.2440 is conquered successfully.

    In Forex today, the U.S. Dollar gained, (DXY 97.405 highs), led the market overnight as retail sales beat expectations. Treasury yields rose following

    In Forex today, the U.S. Dollar gained, (DXY 97.405 highs), led the market overnight as retail sales beat expectations. Treasury yields rose following solid US data, while markets await a speech from Federal Reserve's Chair Powell who repeated the mantra and made no shakes in FX specifically, although gold rallied then dropped significantly, as did WTI nin improvements in the Iran saga - Links below to both stories, but with respect to the Fed', we are all priced in for 31bp worth of easing at the 31 July meeting.  the US 2-year treasury yields climbed from 1.84% to 1.87% on the Retail Sales, (see below), while 10-year yields climbed from 2.09% to 2.14% before falling back to 2.10% as U.s. stocks stumbled, unable to attract further demand following yesterday's closing record highs.  As for US data, US retail sales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected). "On a three-month annualised basis, sales are up 7.5% with ex-auto and gas up 6.0%. The gains were broad-based with only electronics seeing a small pull back, suggesting that the consumer is alive and well. Factories were looking less rosy in June though, with industrial production flat on the month, a bit weaker than expected," analysts at ANZ Bank explained. Currency action Amid Brexit uncertainties, whereby Boris Johnson and Jeremy Hunt said overnight that they were prepared to abandon the Irish backstop plan and that they will not accept a five-year time limit or a unilateral exit clause from the backstop, the labour market showed that the unemployment rate remained at 3.8%, which was its lowest level since the mid-1970s. However, the employment growth did slow and GBP/USD dropped from 1.2517 to 1.24 the figure.  Elsewhere, EUR/USD lost ground from 1.1260 to just above 1.1200, with plenty of talk about the ECB’s easing options.  USD/JPY rallied from 107.95 to 108.25 on the retail sales data.  AUD/USD dropped to 0.7010 as President Trump turned up the trade war heat again saying he could impose more tariffs on China whenever he wanted to. NZD/USD dropped from 0.6735 to 0.6696 while the GDT dairy auction resulted in a 2.7% gain in prices overall. Key notes from overnight:Gold bears back in control on dialled back Fed cuts expectations, targets below $1,400Federal Reserve Chairman Jerome Powell: We expect growth to remain solid, labor markets to stay strongWall Street's benchmarks advances nipped in the bud

    Having bounced off 23.6% Fibonacci retracement June month slump, USD/IDR trades near 14,012 during early Asian morning on Wednesday.

    The USD/IDR pair’s bounce from 23.6% Fibonacci retracement has key immediate resistances to clear.February low can gain sellers’ attention during additional declines.Having bounced off 23.6% Fibonacci retracement June month slump, USD/IDR trades near 14,012 during early Asian morning on Wednesday. 50% Fibonacci retracement level of 14,080 and 100-bar moving average on the 4-hour chart (4H 100MA), at 14,106, can question the pair’s additional recovery at the momentum. Should prices rally past-14,106, a month old descending trend-line around 14,190 may please buyers. On the downside break of 23.6% Fibonacci retracement level of 13,900, February month low close to 13,860 may entertain bears ahead of highlighting 13,750 on their radar. USD/IDR 4-hour chartTrend: Pullback expected  

    The price of EUR/JPY is heading back to the downside, unable to get above the 122.20s and the 23.6% of the late Sep 2018 highs to Jan lows with eyes n

    The price of EUR/JPY is heading back to the downside, unable to get above the 122.20s and the 23.6% of the late Sep 2018 highs to Jan lows with eyes now set on a sustained break below 2019 uptrend line at 121.40 and the 120.79 June low. Bears can then target the 119.91 78.6% Fibonacci retracement level ahead of a run towards the 117.85 January lows. On the upside, and beyond the said resistance, bulls can target a run to a break of the 50-day moving average at 122.40 ahead of the 123..80s. Bulls need to get above 200-day moving average at 125.30s.    

    With Iran pouring cold water on the face of the US efforts to find peace, WTI witnesses short covering moves to $57.60 amid initial Asian session on Wednesday.

    WTI previously dropped amid rising USD and comments from the US lawmakers to placate Iran.Short covering activates on Iran rejecting the US suggestion to negotiate its missile program.EIA data, trade/political news in the spotlight.With Iran pouring cold water on the face of the US efforts to find peace, WTI witnesses short covering moves to $57.60 amid initial Asian session on Wednesday. The energy benchmark previously declined after the US Secretary of State Mike Pompeo said that Iran had "for the first time" shown its willingness to discuss its missile program. The US lawmaker’s statements came after Iran’s Foreign Minister Mohammad Javad Zarif’s comments showing readiness for discussions with the US, provided the removal of sanctions. Adding to the price slump was the improvement in weekly inventory levels revealed by the American Petroleum Institute (API) that recovered to -1.401 million barrels versus the previous decline of -8.129 million barrels. Furthermore, market support for the US Dollar (USD), on the back upbeat data, coupled with the on-going US-China trade tussle also pleased bears. Recently, the BBC released a news report quoting a spokesman for Iran’s UN Mission, Alireza Miryousefi, that the nation rejects the US suggestion concerning its missile program’s negotiable status. Energy buyers took advantage of the recent price slump to trade the news and triggered the black gold’s U-turn towards confronting 200-day simple moving average (200-DMA) following its slip beneath the key moving average (MA) during the previous day. In addition to following the trade/political news, investors will also keep an eye over the Energy Information Administration’s (EIA) US Crude Oil Stocks Change for the week ended on July 12. The forecast suggests -3.375 million barrels of stockpile versus -9.499 million barrels prior. Technical Analysis Not only 200-DMA level of $58.00 but 100-DMA level of $59.30, followed by $60.00, could also challenge oil buyers, which in turn highlights the importance of current month low around $56.00, a break of which can fetch the quote to early-June top surrounding $54.80.

    San Francisco Federal Reserve Bank President Mary Daly has crossed the wries with the following comments: She is not leaning one way or the other on J

    San Francisco Federal Reserve Bank President Mary Daly has crossed the wries with the following comments: She is not leaning one way or the other on July interest rate decision. Too early to tell if economy needs additional stimulus to get to above-trend growth. US economy needs above-trend growth to boost inflation. 'Real-side' data has come in a little bit stronger than expected. She sees no clouds looming on consumer spending, healthy labour market. Her business contacts feel uncertain, but have not switched to 'storm cloud' plan. Sees potpourri of headwinds, including trade, mood, uncertainty, global slowdown. Jury still out on whether headwinds are strong enough to knock economy to below-trend growth. Business behaviour is leading indicator on where economy is heading. Asked if rates will be lower by year's end, says she will learn a lot in next two months. FX implications None at all. The market is comfortably pricing in a rate cut - But the question is whether it will be a one and done scenario and how deep it will be this time around. Earlier today, we had yet further evidence that the Fed is only likely to cut by a 25 basis point reduction in July (rather than 50bp) which should be sufficient as a first insurance move to offset the negative effect of trade wars. US consumer spending moved ahead solidly in June, with Retail Sales posting a stronger than expected 0.4% increase.  

    Following today's news, where, at a cabinet meeting on Tuesday, US Secretary of State Mike Pompeo said Iran had "for the first time" shown its willing

    Following today's news, where, at a cabinet meeting on Tuesday, US Secretary of State Mike Pompeo said Iran had "for the first time" shown its willingness to discuss the weaponry, the BBC has reported headlines quite to the contrary.  A spokesman for Iran's UN Mission said the weapons "are absolutely and under no condition negotiable". His denial comes after Foreign Minister Mohammad Javad Zarif suggested in an interview the missiles could be up for discussion if sanctions are lifted.  Alireza Miryousefi, a spokesman for Iran's UN Mission, said Iran "categorically rejects" the "characterization" of their foreign minister's interview, and attacked media reports of his words. "Drawing a false conclusion in pursuit of headlines, when what was said in the context was obvious, only leads to a diminution of the standing of the press with the public," he tweeted.This news comes after a bloodbath for the oil traders out there where the price plummeted following reports that U.S. Secretary of State Mike Pompeo said Iran is ready to enter negotiations over its missile program.         

    With its another U-turn from the 50-day EMA, AUD/JPY declines to 75.90 during the early Asian session on Wednesday.

    Lower highs since late-May, failures to clear near-term key moving average (MA), portrays the AUD/JPY pair’s weakness.Sellers can aim for 75.58/54 as immediate support ahead of targeting a month-long support-line.With its another U-turn from the 50-day exponential moving average (EMA), AUD/JPY declines to 75.90 during the early Asian session on Wednesday. As a result, 75.58/54 support-zone comprising 23.6% Fibonacci retracement of April – June downpour and 21-day EMA gains market attention. However, pair’s further declines can be challenged by an upward sloping trend-line stretched since June 18, at 75.45 now. In a case where prices slip beneath 75.45, 74.80 and June month low near 73.92 could lure bears. Alternatively, a successful break beyond 50-day EMA level of 75.93 can have multiple upside barriers around 76.20, 76.40 and 38.2% Fibonacci retracement level of 76.54. It should, however, be noted that the quote’s sustained rise past 76.54 may not refrain from questioning the strength 76.83 resistance including 100-day EMA. AUD/JPY daily chartTrend: Pullback expected  

    Like other Antipodeans, AUD/USD also remains on a back foot while taking the rounds to 0.7012 on early Wednesday morning in Asia.

    AUD/USD sellers cheered the US data after dovish RBA minutes.Improvement in risk sentiment has little strength over the US-China trade tussle.Qualitative catalysts to dominate the market moves amid the lack of data on the economic calendar.Like other Antipodeans, AUD/USD also remains on a back foot while taking the rounds to 0.7012 on early Wednesday morning in Asia. Having witnessed initial declines on the back of the minutes from the Reserve Bank of Australia’s (RBA) latest monetary policy meeting, the Australian Dollar (AUD) had to bear the buyers’ shift towards the US Dollar (USD) amid upbeat Retail Sales data. Pessimism surrounding the US-China trade deal also weighs on the Aussie pair as it includes Australia’s largest customer. Recently, the US President Donald Trump reiterated his hard stand against China by saying that there is a long way to go for a deal and the US could levy fresh tariffs. With the US Retail Sales following the footsteps of early-week manufacturing gauge from the world’s largest economy, investors showed little reaction to the recently bearish Fedspeak. The US 10-year treasury yield recovers to 2.106% by the press time. Looking forward, Australia’s June month Leading Index and the US Building Permits, Housing Starts for the same month are likely second-tier details on the economic calendar worth observing ahead of the key Australian jobs report up for publishing tomorrow. The Australian gauge dropped -0.08% in its previous reading whereas the US housing market indicators show mixed signals. The Building Permits (MoM) could rise to 1.300 million from upwardly revised 1.299 million but Housing Starts might soften to 1.261 million versus 1.269 previous readouts. Technical Analysis Pair’s dip beneath 100-day exponential moving average (EMA) highlights the importance of 0.6983/80 support confluence comprising 21 and 50-day EMAs, a break of which can fetch prices further down to current month low around 0.6910. Meanwhile, 0.7045/50 and 0.7070 act as nearby resistances for the quote to clear ahead of pushing buyers in the direction to 0.7100 round-figure.

    Having refrained from a general election till the Brexit, the UK Prime Minister (PM) hopeful Boris Johnson took a U-turn at a fundraising dinner.

    Having refrained from a general election till the Brexit, the UK Prime Minister (PM) hopeful Boris Johnson took a U-turn at a fundraising dinner with his rival, Jeremy Hunt, as reported by the UK Times on early Wednesday. The news report quotes some senior Tory allies while saying that Mr. Johnson wants to hold an early general election “while Jeremy Corbyn is still around”, as his team plans to overhaul the Conservative Party’s campaign machine. The fundraising event, attended by 100 Conservative donors, targeted £1,000-a-head was the last public appearance together by the UK PM candidates.

    With the renewed US data strength questioning the dovish Fed speakers, the NZD/USD pair remains soft around 0.6700 at the start of Wednesday's Asian session.

    Greenback benefited from the US Retail Sales, showed little attention to now normally dovish Fedspeak.Kiwi buyers booked profits, earned through upbeat NZ inflation data, after the GDT Price Index.Trade tensions remain elevated, exerting downside pressure on the pair.A lack of data highlights political/trade headlines for fresh impulse.With the renewed US data strength questioning the dovish Fed speakers, the NZD/USD pair remains soft around 0.6700 at the start of the Asian session on Wednesday. Despite most policymakers from the US Federal Reserve setting up for a rate cut later this month, traders preferred the US Dollar (USD) as latest Retail Sales data buoyed sentiment following upbeat prints of NY Empire State Manufacturing Index posted earlier during the week. The New Zealand Dollar (NZD) couldn’t hold on previous gains earned through welcome inflation numbers at home as the US-China trade tussles heated after the US President Donald Trump signaled a long-way to go for a deal and hinted that they could levy fresh tariffs on China. Recently, New Zealand’s GDT Price Index for the first half of July beat -2.5% market expectations with +2.7% while Whole Milk Powder (WMP) rose beyond the central bank’s medium-term assumption with a solid 3.6% increase to USD3074. Given the lack of data, except for second-tier housing numbers from the US, investors might keep an eye over the news flow for fresh impulse. Technical Analysis Having registered another failure to sustain a break of the 200-day exponential moving average (EMA), the Kiwi pair is expected to stretch its latest pullback a bit more towards 100-day EMA level of 0.6665 with July 09 top surrounding 0.6632 being a follow-on level to watch. On the other hand, buyers would prefer a successful break of the latest high surrounding 0.6740 in order to aim for mid-April tops near 0.6785.

    Wall Street's benchmarks were a little lower on Tuesday following record closes on Monday and President Donald Trump said an agreement with China on t

    DJIA dropped 23.5 points to 27,335.6, a loss of 0.1%.The S&P 500 index fell 0.3% to 3,004.0, shedding 10.3 points.The Nasdaq Composite index lost 0.4% low, or a 35.4 point drop, to 8,222.8.Wall Street's benchmarks were a little lower on Tuesday following record closes on Monday and President Donald Trump said an agreement with China on trade tariffs had “a long way to go. After setting a new intraday high of 27,398.68.9, rising 39.6 points Tuesday morning before paring those gains, the Dow Jones Industrial Average, DJIA, dropped 23.5 points to 27,335.6, a loss of 0.1%. On Monday, the Dow gained 27.1 points, or 0.1% record of 27,359. On Tuesday, the S&P 500 index fell 0.3% to 3,004.0, shedding 10.3 points and the Nasdaq Composite index lost 0.4% low, or a 35.4 point drop, to 8,222.8. Bank earnings painted a mixed picture of the economy and financial services sector although US data was solid which showed the continued health of the consumer, reflected through Retails Sales data.  Earnings reports from major banks JPMorgan Chase & Co. JPM, +1.07% Goldman Sachs GS, +1.86% and Wells Fargo & Co. WFC, -3.02%  were in the mix. Shares of Goldman Sach climbed  1.9% after the bank reported second-quarter earnings and revenue that surprised to the upside while raising its dividend by 47%. On the flip side, the shares of Wells Fargo dropped 3.0%, even after the bank reported second-quarter earnings and revenue that surpassed analyst forecasts. U.S. data  US Retail Sales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected)" "On a 3-month annualised basis, sales are up 7.5% with ex-auto and gas up 6.0%. The gains were fairly broad based with only electronics seeing a small pull back, suggesting that the consumer is alive and well. Factories were looking less rosy in June though, with industrial production flat on the month, a bit weaker than expected," analysts at ANZ Bank explained DJIA levels  On a technical basis, the DJIA’s bulls have shied away again and on a bearish correction, the Fibo' targets with the confluence of stop territories come into play. The 23.6% retracement of the 3rd June low to 12th July recently printed high falls in at 26706 which meets April 23rd and 1st May double-top highs. The 38.2% retracement of the same range falls in at 26324 and meets 25th Feb and 11th June highs. The 50% meets the 3rd Dec spike high and mid-June lows. On the flipside, the 28500s remains as a key target.       

    S&P500 daily chart The S&P500 is trading in a bull trend above its main SMAs. The market is retrearting below the 3,010.00 level. S&P500 4-hour chart

    The S&P500 Index is retreating below the 3,010.00 resistance.Supports can be seen near the 2,985.00 and 2,965.00 levels.  S&P500 daily chart The S&P500 is trading in a bull trend above its main SMAs. The market is retrearting below the 3,010.00 level.  S&P500 4-hour chart The market is correcting down. If bears get enough strength they could dricve the market to the 2,985.00 level. If that level fails to hold prices, further down lies the 2,965.00 level. Additional key levels  

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