Amaran risiko: Berdagang adalah berisiko. Modal anda berhadapan risiko. Exinity Limited dikawal selia oleh FSC (Mauritius).
Amaran risiko: Berdagang adalah berisiko. Modal anda berhadapan risiko. Exinity Limited dikawal selia oleh FSC (Mauritius).
Jumaat, Julai 19, 2019

The European Central Bank is planning to restart the government bond purchases program by November according to the German news magazine Der Spiegel,

The European Central Bank is planning to restart the government bond purchases program by November according to the German news magazine Der Spiegel, cited by Reuters. The restart would be to support the Eurozone economy. Based on central bank sources, the magazine adds Mario Draghi, expects the program would encourage investment and consumption.  The Euro remained unchanged in the market after the report. EUR/USD holds near 1.1230 while EUR/GBP is consolidating at 0.8975.

The Aussie is trading in a bear trend below the 0.7000 handle and the 200-day simple moving average (DSMA). AUD/USD 4-hour chart AUD/USD is pulling b

AUD/USD is retreating from the 2-month highs.The level to beat for bears are 0.7030 followed by 0.7015.AUD/USD daily chart
The Aussie is trading in a bear trend below the 0.7000 handle and the 200-day simple moving average (DSMA).
AUD/USD 4-hour chart
AUD/USD is pulling back down as the market is trading above its main SMAs. Bulls are losing steam as they need to reclaim the 0.7060 resistance in order to reach the 0.7100 handle.   AUD/USD 30-minute chart   AUD/USD is trading at daily lows as the market is testing the 100 SMA near 0.7040. The market is correcting down and a break through 0.7040 can lead to 0.7030 and 0.7015 support, according to the Technical Confluences Indicator.
Additional key levels  

USD/JPY is erasing parts of the losses genearted by Fed’s Williams commenst on Thursday. USD/JPY 4-hour chart USD/JPY is trading below its main SMAs

USD/JPY is trading at daily highs as bulls target 107.83.Supports are seen at 107.50 and 107.20. USD/JPY daily chart  
USD/JPY is erasing parts of the losses genearted by Fed’s Williams commenst on Thursday.  
USD/JPY 4-hour chart
  USD/JPY is trading below its main SMAs as the market is revounding from monthly lows. Bears need to break below 107.50 to reach 107.20 on the way down, according to the Technical Confluences Indicator. 
USD/JPY 30-minute chart
  USD/JPY is trading at daily highs near 107.70 and above its 50 SMA. The market is challenging the 100 SMA. Dollar bulls would need to overcome 107.83 to reach 108.05 resistance. 
Additional key levels  

A correction of the US Dollar on Friday favor the decline in gold prices. The yellow metal earlier today jumped during the Asian session to $1,453 the

Profit-taking in gold and a correction of the US Dollar sent prices sharply lower. XAU/USD correct to the downside from the highest in six years. A correction of the US Dollar on Friday favor the decline in gold prices. The yellow metal earlier today jumped during the Asian session to $1,453 the highest level since 2013. Afterward pulled back modestly, and during the American session, the correction gained speed.  Recently XAU/USD bottomed at $1426, a fresh daily low after erasing all the spike that took place following Fed officials comments yesterday that triggered a sell-off of the US Dollar. From today’s top dropped $25.  As of writing, it is hovering around $1,428 down for the day and despite the reversal, up for the week. Price heads for the highest weekly close since May 2013. The trend still points to the upside, but the ongoing correction could signal a pause ahead.  Levels to watch  On the downside, support levels might be seen at $1,425 followed by $1415 and $1,410. On the upside, resistance could be located at $1,433 then $1,441 and $1,450.   
 

EUR/USD is trading in a bear trend below its main daily simple moving averages (DSMAs). The Michigan Consumer Sentiment Index (July) came in just belo

EUR/USD erased Fed’s William inspired gains seen on Thursday.The market is having no significant reaction after the release of the Michigan Consumer Sentiment Index.EUR/USD daily chart
  EUR/USD is trading in a bear trend below its main daily simple moving averages (DSMAs). The Michigan Consumer Sentiment Index (July) came in just below expecation at 98.4 vs. 98.5 forecast. EUR/USD 4-hour chart
 
EUR/USD is challenging 1.1220 support while below the main SMAs. Bears want to break below the level and reach 1.1200 and 1.1160, according to the Technical Confluences Indicator. EUR/USD 30-minute chart
  EUR/USD is trading below its main SMAs suggesting bearish momentum in the near term. Immediate resistance can be seen at 1.1255 and 1.1290, according to the Technical Confluences Indicator.  
Additional key levels  

The renewed selling bias around the European currency is now forcing EUR/JPY to abandon the 121.30 region and retreat to the sub-121.00 area. EUR/JPY

EUR/JPY loses the grip and recedes to sub-121.00 levels.Rising jitters on Italian politics weigh on EUR.US Consumer Sentiment next of relevance.The renewed selling bias around the European currency is now forcing EUR/JPY to abandon the 121.30 region and retreat to the sub-121.00 area.EUR/JPY offered on Italian politicsThe cross is extending the negative performance for the sixth session in a row on Friday, leaving behind the initial optimism that pushed it to as high as the 121.30 region, or 2-day lows. EUR has given away its daily gains after the re-emergence of political concerns in Italy, where rumours of a government crisis involving Lega Nord and M5S have picked up pace as of later along with the probability of early elections. In the meantime, the Japanese currency stays on the defensive on the back of the rebound in US yields, particularly after FOMC’s J.Bullard ruled out a large rate cut at this month’s meeting. Data wise today, another poor print in the German docket saw Producer Prices coming in below expectations during last month. In the US, the advanced gauge of the US Consumer Sentiment for the current month is next on tap.EUR/JPY relevant levelsAt the moment the cross is receding 0.04% at 120.94 and a breakdown of 120.78 (low Jun.3) would expose 119.33 (low Feb.8 2017) and then 118.82 (2019 low Jan.3). On the upside, the initial hurdle aligns at 121.82 (21-day SMA) seconded by 122.32 (high Jul.10) and then 123.35 (monthly high Jul.1).

United States Michigan Consumer Sentiment Index below forecasts (98.5) in July: Actual (98.4)

Rabobank analysts believe that the ECB’s Governing Council will use the July meeting to steer towards a rate cut in September. Key Quotes “Policy rate

Rabobank analysts believe that the ECB’s Governing Council will use the July meeting to steer towards a rate cut in September.Key QuotesPolicy ratesWe expect forward guidance to be updated to signal a rate cut, e.g. “The Governing Council now expects the key ECB interest rates to remain at their present or lower levels [...]” We think that this would herald a 10bp rate cut in September. Additionally, we see 3 follow-up cuts in the coming 12 months. Draghi signaled that further rate cuts would be accompanied by some form of mitigating factors. We believe a tiered deposit rate is the most feasible solution.” “Asset Purchase ProgramWe don’t expect changes to the reinvestment program or its forward guidance, nor do we anticipate the ECB to restart net asset purchases at this stage.”

USD/CAD is waveringe near multi-month lows as the market is currently capped below the 1.3100 handle and the main daily simple moving averages (DSMAs)

USD/CAD is up on the day as Canadian Retail Sales disapppoint.On a recovery scenario, the levels to beat for buyers are at 1.3100 and 1.3150 USD/CAD daily chart USD/CAD is waveringe near multi-month lows as the market is currently capped below the 1.3100 handle and the main daily simple moving averages (DSMAs). The Canadian Retail Sales in May came below expecation at -0.1% vs. 0.3% forecast, sending the CAD down. USD/CAD 4-hour chart
USD/CAD is trading just below 1.3080 resistance as the market is challenging the descending 100 SMA. 
USD/CAD 30-minute chart
 
USD/CAD is trading above its main SMAs suggesting bullish momentum in the near term. The market is currently rejecting 1.3100 and 1.3080 resistances suggesting a potential correction down. Support are seen at 1.3050 and 1.3015, according to the Technical Confluences Indicator.
Additional key levels  

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main rivals, is reversing two consecutive declines and extends the rebound b

DXY moves further north of 97.00, fresh daily highs.FOMC’s Bullard ruled out a 50 bps interest rate cut in July.Flash US Consumer Sentiment coming up next.The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main rivals, is reversing two consecutive declines and extends the rebound beyond the 97.00 mark.US Dollar Index bid on Bullard’s commentsThe index is prolonging the bounce off weekly lows near 96.70 (Thursday), regaining the 97.00 mark and above following positive comments from St. Louis Fed J.Bullard. In fact, and despite being on the dovish side of the FOMC governors, Bullard said a 25 bps interest rate cut at this month’s meeting seems appropriate amidst ongoing economic conditions, deeming unnecessary a larger rate cut for the time being. In addition, and also lending extra wings to the buck, Italian political effervescence keeps weighing on EUR, motivating EUR/USD to fade further the recent advance. Moving forward, July’s flash gauge of the US Consumer Sentiment by the U-Mich index will be the sole release later in the NA session.What to look for around USDSpeculations among investors have already priced in a 25 bps rate cut hits month, although a bigger rate cut still remains in the centre of the debate. 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 gaining 0.45% at 97.11 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 96.67 (low Jul.18) would aim for 96.46 (low Jun.7) and then 96.04 (50% Fibo of the 2017-2018 drop).

Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canadian retail sales declined 0.1% in May and excluding prices, sales were do

Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canadian retail sales declined 0.1% in May and excluding prices, sales were down 0.5%.Key QuotesThe details of the May report don’t look quite as soft as the headline.  Most of the month-over-month decline was attributed to an unusually large 2.0% drop in food & beverage store sales that will probably reverse at some point.  Sales increased in 7 of 11 subsectors – including another sizeable monthly rise in sales at furniture stores. That latter increase probably has something to do with stabilization in housing markets in recent months.” “To be sure, overall retail purchases have still been on the soft side.  Sale volumes were down 1% from a year ago and are tracking little if any increase in Q2 from Q1.  But other developments have arguably been more favourable for the near-term household spending outlook.”

GBP/USD is currently correcting Fed’s Williams spike. The market is in a bear trend below its main daily simple moving averages (DSMAs). GBP/USD 4-hou

GBP/USD is correcting parts of Fed's Willams inspired gains made on Thursday.The level to beat for bears are at 1.2509 and 1.2444, according to the Technical Confluences Indicator.GBP/USD daily chart GBP/USD is currently correcting Fed’s Williams spike. The market is in a bear trend below its main daily simple moving averages (DSMAs). GBP/USD 4-hour chart Cable is trading below 1.2550 resistance and the 100 and 200 SMAs. If bears break below 1.2509 support they could drive the market down towards 1.2444 and 1.2392, according to the Technical Confluences Indicator. GBP/USD 30-minute chart GBP/USD is trading at daily lows challenging 1.2509 support while below the 50 SMA. All in all suggesting a potential correction down. Immediate resistances are seen at 1.2550 and 1.2580. 

Additional key levels
   

James Knightley, chief international economist at ING, notes that the UK government borrowing increased more than expected in June thanks to both high

James Knightley, chief international economist at ING, notes that the UK government borrowing increased more than expected in June thanks to both higher spending and weaker tax revenues.Key Quotes“In fact, this is the largest June budget deficit for four years and is nearly twice as big as what economists expected. Excluding banking groups, public sector net borrowing came in at £7.2bn and although the May deficit was revised down, cumulative borrowing for fiscal year 2019/2020 is £17.9bn - tracking nearly one third, or £4.5bn above the same period for fiscal year 2018/19.” “The details show spending was up 7.2% year on year due to more outlays, but also higher borrowing costs. Rising retail price inflation has meant the interest paid on index-linked gilts has risen. Unfortunately, receipts rose just 1.5% YoY with corporation tax revenues actually falling, which underlines the rather weak state of the UK economy right now.”

The single currency is now eroding initial gains and comes under renwed selling pressure, dragging EUR/USD to fresh daily lows in the 1.1220 region. E

EUR/USD comes under pressure and drops to 1.1230.Fed’s Bullard ruled out a 50 bps rate cut.Italy’s Salvini to meet Di Maio amidst early elections rumours.The single currency is now eroding initial gains and comes under renwed selling pressure, dragging EUR/USD to fresh daily lows in the 1.1220 region.EUR/USD weaker on Italian politics, FedspeakSpot gathered extra downside pressure after FOMC’s J.Bullard surprised markets saying a 25 bps rate cut seems appropriate given the current US economic conditions, practically ruling out a larger cut at the July meeting. In addition, extra weakness for EUR came from Italy after Lega Nord’s leader M.Salvini said he will meet coalition partner L.Di Maio from the 5-S M against rising rumours of a government crisis and the probability of snap elections. In the docket and earlier in the session, German Producer Prices disappointed estimates during June, whereas the advanced Consumer Sentiment for the month of July is only due across the pond.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 recent test of the 1.1200 neighbourhood, where some support appears to have resurfaced. Further out, occasional bullish attempts 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 retreating 0.454% at 1.1225 and faces immediate contention at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1317 (200-day SMA) en route to 1.1412 (high Jun.25).

Belgium Consumer Confidence Index increased to -6 in July from previous -7

The Canadian Retail Sales dropped by 0.1% on a monthly basis in May when compared to the market expectation of +0.3% and +0.2% last, according to the

The Canadian Retail Sales dropped by 0.1% on a monthly basis in May when compared to the market expectation of +0.3% and +0.2% last, according to the latest data published by Statistics Canada on Friday. Further, the core retail volumes (excluding autos) fell 0.3% in May, missing the estimate of+ 0.4% and 0.0% booked in April. The Canadian dollar extended losses on a negative surprise delivered by the Canadian May Retail Sales data, bolstering the USD/CAD recovery in a bid to test the 1.31 handle.

Canada Retail Sales (MoM) registered at -0.1%, below expectations (0.3%) in May

Canada Retail Sales ex Autos (MoM) registered at -0.3%, below expectations (0.4%) in May

According to analysts at ABN AMRO, the ECB has been criticized for the asymmetric inflation target, a criticism which has also been levelled at the Fe

According to analysts at ABN AMRO, the ECB has been criticized for the asymmetric inflation target, a criticism which has also been levelled at the Fed.Key Quotes“Bloomberg reported that European Central Bank staff have begun studying a potential revamp of their inflation goal, according to officials familiar with the matter.” “Draghi said at the June press conference that "the conviction that we should pursue our objective in a symmetric fashion was also expressed". He has actually been in "camp symmetry" since at least 2016 (speech).” “The same goes for former chief economist Peter Praet (here). Also Rehn has supported a symmetric approach (here). “Following this policy would help prevent the drifting of inflation expectations persistently below the target.” “If ECB formally goes for revamping the goal towards "symmetry" around 2% it's dovish and "lower-for-longer". But a caveat would be that given how successful Draghi has been over the years in guiding expectations it ought to be at least partly priced-in. For example, long-term breakeven inflation rates rose only a couple of basis points in a reaction to the Bloomberg story.”

In view of analysts at TD Securities, the University of Michigan's sentiment indicator is expected to show a modest improvement in July to 98.8 from 9

In view of analysts at TD Securities, the University of Michigan's sentiment indicator is expected to show a modest improvement in July to 98.8 from 98.2 before and just a tad below this year's high at 100.Key Quotes“Strong stock market performance and a still-solid labor market are likely to be factors behind the improvement. Most of the attention, however, will be on the inflation expectations components that have gained particular relevance in the Fed's reaction function. At 2.3%, 5-10y inflation expectations remain stuck at all-time lows and continue to be an ongoing concern for the Fed.”

The AUD/USD pair is on a gradual decline so far this Friday, extending the correction from three-month tops of 0.7082 reached in early Asia. The spot

Dollar strength, souring risk sentiment weighs down on the Aussie.Rally in oil, copper prices slows the fall, as focus shifts to US Consumer Sentiment data.The AUD/USD pair is on a gradual decline so far this Friday, extending the correction from three-month tops of 0.7082 reached in early Asia. The spot is seen meandering near daily lows just below the midpoint of the 0.70 handle, as the demand for US dollar when compared to its main rivals remains undisputed, in the wake of less aggressive calls for a July rate cut by the Fed officials. Moreover, a lack of substantial details about the telephonic conversation between the US and Chinese trade teams combined with no updates on the likely in-person trade meeting left investors in limbo, as they preferred taking profits off the table heading into the key US data and weekly closing. Despite the corrective move lower, the commodity continues to derive support from the rally in oil and copper that helped slow the pace of declines. Looking ahead, the risk remains to the downside, as the US dollar recovery is likely to strengthen further, with the US Michigan Consumer Sentiment Index seen higher at 98.5 in July vs. 98.2 previous. Also, any fresh developments around the US-China trade spat and Fedspeak will have a major influence on the price action. Levels to watch  

India Bank Loan Growth remains unchanged at 12% in July 12

India FX Reserves, USD: $428.8B (July 12) vs previous $429.91B

Analysts at TD Securities point out that the Canadian retail sales for May are the lone data release heading into the weekend and will be a key econom

Analysts at TD Securities point out that the Canadian retail sales for May are the lone data release heading into the weekend and will be a key economic release for the day.Key Quotes“TD looks for a 0.3% increase in line with the market consensus, as a pullback in motor vehicle sales weighs on a 0.6% increase in the ex-autos measure (market: 0.4%). After a 0.3% (sa) increase in consumer prices for May, this should leave real retail sales little changed on the month, consistent with some moderation in household consumption after a robust Q1.”

The Turkish Lira has given away initial gains and is now lifting USD/TRY to the vicinity of 5.65, or daily highs. USD/TRY re-focused on US-Turkey tens

USD/TRY met initial support in the 5.60 neighbourhood.US-Turkey tensions back in centre stage on F-35, S-400.Turkey End year CPI Forecast next on tap.The Turkish Lira has given away initial gains and is now lifting USD/TRY to the vicinity of 5.65, or daily highs.USD/TRY re-focused on US-Turkey tensionsAfter four consecutive daily pullbacks, spot is now showing some recovery after briefly testing 2-week lows in sub-5.6000 zone. Sellers appear to have returned to the Lira after the US excluded Turkey from the F-35 programme, all in response to the purchase of the Russian S-400 defence missile system. Despite Ankara censured the unilateral initiative by the US and advocated for the continuation of the negotiations between both countries, speculations of potential US sanctions have gained momentum in past hours. Fanning the geopolitical flames, Russia is said to have offered Turkey advanced SU-35 jets. In the data space, Turkey’s End of Year CPI Forecast is due later, while the flash reading of the US Consumer Sentiment by the U-Mich index will be the salient event in the US calendar.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 gaining 0.71% at 5.6482 and a surpass of 5.7000 (21-day SMA) would expose 5.7556 (100-day SMA) and then 5.7849 (high Jul.8). On the downside, the next support aligns at 5.5971 (low Jul.19) followed by 5.5741 (monthly low Jul.4) and then 5.5639 (200-day SMA).

Canadian Retail Sales overview Statistics Canada will publish the monthly retail sales report for the month of May later this Friday at 12:30 GMT. The

Canadian Retail Sales overviewStatistics Canada will publish the monthly retail sales report for the month of May later this Friday at 12:30 GMT. The consensus forecast point to a minor acceleration in the headline sales, which is expected to show a 0.3% growth as compared to the previous month's +0.1%. Meanwhile, growth in the core sales - excluding automobiles, is also seen higher by 0.4% during the reported month as against +0.1% previous.Deviation impact on USD/CADReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to be in the range of 38-43 pips in case of deviations up to +0.38 to -0.58, although in some cases, if notable enough, can fuel movements of up to 73-76 pips in the subsequent 4-hours.  How could it affect USD/CAD?  From a technical perspective, “considering the pair’s repeated failure to slip beneath 1.3000 round-figure, chances of its pullback to 1.3100 seem brighter on the break of February month low surrounding 1.3070. However, a downside break of 1.3000 may fetch the quote to 1.2970 and 1.2915 numbers to the south,” FXStreet’s own Analyst, Anil Panchal, noted.Key NotesUSD/CAD: Upside still capped by 1.3050 amid firmer Oil, ahead of data USD/CAD Analysis: Sell signals todayAbout Canadian Retail SalesThe Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.

Analysts at ABN AMRO note that the US exchange rate policy has been in the spotlight recently, and US Treasury Secretary Mnuchin was quizzed on the to

Analysts at ABN AMRO note that the US exchange rate policy has been in the spotlight recently, and US Treasury Secretary Mnuchin was quizzed on the topic in a post-G7 finance minister meeting press briefing this afternoon.Key Quotes“In his remarks, Mr Mnuchin confirmed that there is no change to the US administration’s dollar policy ‘as of now’, although he did not rule anything out either, stating ‘this is something we could consider in the future’. This followed a tweet by President Trump on 3 July hinting at currency intervention, when he said the US should ‘match’ China and Europe who he accused of ‘playing [a] big currency manipulation game’.” “We judge that unilateral intervention to weaken the dollar by the US authorities is unlikely, as that there is little chance of it being effective, but given the erratic moves of the administration it is not something we would dismiss outright.”

WTI (futures on Nymex) is seen consolidating its recovery from monthly lows of 54.75, the bulls take a breather amid resurgent US dollar demand and ne

Lifted by fresh US-Iran geopolitical worries, but bulls lack follow-through.Stronger USD, bearish IEA headlines and US stocks surge cap the rally.All eyes on US rigs count and consumer sentiment data for fresh directives.WTI (futures on Nymex) is seen consolidating its recovery from monthly lows of 54.75, the bulls take a breather amid resurgent US dollar demand and nervousness ahead of the US drilling sector activity data. The black gold jumped over 1.50% this Friday, mainly driven by renewed tensions between the US and Iran after the US President Trump said that the US Navy ship “destroyed” an Iranian drone in the Strait of Hormuz. However, the tensions flared up after the Iranian officials denied any such shooting down of Iran’s drone, saying that all drones have returned to their base. The bulls lacked the vigor to extend the upside, as investors continued to weigh in the recent comments by the International Energy Agency (IEA) Chief Birol. Birol said the IEA is revising down the 2019 global oil demand growth forecast, in light of slowing global economy, especially China. Moreover, broad-based US dollar recovery, as well as swelling US fuel stockpiles, keep the sentiment undermined around the commodity. Attention now turns towards the US UoM Consumer Sentiment and rigs count data due later today for near-term trading opportunities. Levels to watch 

Robert Rennie, analyst at Westpac, suggests that they have stuck with a more negative bias for USD/JPY for the last few weeks on the basis of the pote

Robert Rennie, analyst at Westpac, suggests that they have stuck with a more negative bias for USD/JPY for the last few weeks on the basis of the potential for multiple rate cuts from the Fed, with the first of those week after next.Key Quotes“The recent run of data “substantially reduces the odds that the Fed is dragged into a larger easing cycle beyond a couple of tactical insurance cuts to help inoculate the economy”.” “Thus we are less inclined to play for significant downside for USD/JPY in the near term. It would take further deterioration in trade relations between the US and China; a sharp selloff in risk sentiment; and/ or no signs of agreement on the US Government debt ceiling to push USD/JPY lower.” “The risks of one/ several of those outcomes developing in August will probably rise thus we maintain a negative bias for the 1 and 3 month views, though shift back to a neutral bias on the week. Strength up to 108.50 a sell.”    

The sharp rebound in the Sterling has forced EUR/GBP to extend the rejection from multi-month peaks in the mid-0.9000s recorded on Wednesday, returnin

EUR/GBP trades on the defensive on fresh GBP buying.GBP regains shine on shrinking ‘no deal’ option.UK Public Sector Net Borrowing rose to £6.5 billion in June.The sharp rebound in the Sterling has forced EUR/GBP to extend the rejection from multi-month peaks in the mid-0.9000s recorded on Wednesday, returning to the 0.8970 area today, coincident with the 21-day SMA.EUR/GBP focused on UK politicsThe British Pound rallied yesterday after the UK Parliament voted in favor of an amendment that prevents the PM to suspend the Parliament and allow the UK to leave the EU without a deal. GBP came back from the vicinity of yearly lows vs. the greenback following the news, sustaining at the same time the move lower in the European cross to today’s test of the key 21-day SMA in the 0.8970 region. In the docket, German Producer Prices came in below expectations during June, contracting at a monthly 0.4% and rising 1.2% on a yearly basis. Across the Channel, the UK Public Sector Net Borrowing rose to £6.5 billion during last month and Public Sector Net Cash Requirement climbed to £15.227 billion.What to look for around GBPRising uncertainty in the UK political scenario appears unabated although the likeliness of a Brexit ‘no deal’ scenario appears to have lost some traction following the recent vote in Parliament, in turn morphing in some near term support for the Sterling. 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 retreating 0.29% at 0.8959 and a break below 0.8919 (low Jul.2) would expose 0.8872 (low Jun.20) and then 0.8864 (55-day SMA). On the upside, the next hurdle aligns at 0.9051 (monthly high Jul.17) seconded by 0.9062 (high Jan.11) and finally 0.9092 (2019 high Jan.3).

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454

Side-lined amid US dollar comeback, less dovish Fed policy outlook.US-Iran geopolitical tensions offer support ahead of US macro news. Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region. The yellow metal extended the overnight correction, largely on the back of a solid rebound staged by the US against its main rivals. The greenback was helped by the NY Fed’s clarification on President Williams’ dovish comments that poured cold water on aggressive Fed rate cut in July, weighing negatively on the non-yielding gold. Moreover, the latest remarks from the St. Louis Fed President Bullard, citing that a 25 bps Fed rate cut this month would be appropriate, strengthened the broad USD recovery.  However, the downside in the safe-haven remains restricted by escalating US-Iran geopolitical tensions and subdued trading seen around the Treasury yields. In the session ahead, the US UoM Consumer Sentiment data will fuel fresh dollar trades, eventually impacting gold prices. Also, in focus remains the Fedspeak for fresh hints on the Fed’s interest rates outlook. Levels to watch 

Analysts at ING note that the USD was briefly hit yesterday by comments by Treasury Secretary Steven Mnuchin that there was no change to Washington's

Analysts at ING note that the USD was briefly hit yesterday by comments by Treasury Secretary Steven Mnuchin that there was no change to Washington's dollar policy ‘as of now’.Key Quotes“In reality, however, it will have to be US policy settings which make the difference. There’s no point trying to talk the dollar lower with loose fiscal and tight monetary policy. That is why it seems the White House is pressuring the Federal Reserve into reversing last year’s 100 basis points of rate hikes.” “Comments from Fed members John Williams and Richard Clarida have also re-ignited expectations that the Fed starts off with a 50bp rate cut on 31 July – though our team still prefers 25bp. Importantly it is clear that the market has sunk its teeth into the disinflation, secular stagnation story and is only interested in the response from policy makers, rather than current data releases.” “For the dollar, we’re impressed by the performance of Gold and believe investors will ultimately buy into the Fed’s reflationary efforts – which include a weaker dollar. Dollar weakness is also being supported by flows into emerging market local bond markets, where disinflationary trends led to rate cuts in Korea, Indonesia, South Africa & Ukraine yesterday and very likely in Russia and Turkey next week.” “We doubt US consumer sentiment moves the needle on Fed expectations today, while Fed dove James Bullard may actually pour a little cold water on the chances of a 50bp cut when he speaks art 1710CET. DXY to edge to 96.35.”

EUR/USD Overview Today last price 1.1239 Today Daily Change 46 Today Daily Change % -0.35 Today daily open 1.1278 Trends Daily SMA20 1.1289 Daily SMA

The pair bounced off the 1.1200 area on Thursday, although the sharp up move once again run out of steam in the 1.1280/90 band, where sit last week’s peaks and the 21-day SMA.Another failure to break above this area of resistance on a sustainable fashion has opened the door to extra pullbacks and a potential re-test of the 1.1200 neighbourhood… and below.In the broader picture, the downside pressure stays unchanged while below the critical 200-day SMA, today at 1.1317.EUR/USD daily chart 

St. Louis Federal Reserve President James Bullard was on the wires last minutes, via WSJ, noting that a 25bps rate cut this month would be appropriat

 St. Louis Federal Reserve President James Bullard was on the wires last minutes, via WSJ, noting that a 25bps rate cut this month would be appropriate. He said that he sees no need for larger rate cuts. "I would have preferred to just go ahead at the last meeting, and then we would have gotten out of this argument about whether we're going to do 50 basis points at the meeting and we would have been able to come into the July meeting and ask if more was needed or not," Bullard said.   

Dollar Index Spot Overview Today last price 97 Today Daily Change 25 Today Daily Change % 0.31 Today daily open 96.7 Trends Daily SMA20 96.78 Daily S

After another test of the key 200-day SMA at 96.80, DXY has managed to regain some composure and has set sails for the 97.00 barrier and beyond.Interim hurdles emerge at the 100-day SMA at 97.16 ahaed of the 55-day SMA at 97.20.Further up aligns last week’s tops in the vicinity of 97.50 ahead of June peaks at 97.80.DXY daily chart 

Unabated US dollar buying across the board keep the recovery mode intact in the USD/CAD pair on the 1.30 handle, but the bulls struggle to take-out th

King dollar back in control, as NY Fed saves the day.Bulls jittery on oil-price rally amid intensifying US-Iran rift. Focus on Canadian retail sales and US Consumer Sentiment.Unabated US dollar buying across the board keep the recovery mode intact in the USD/CAD pair on the 1.30 handle, but the bulls struggle to take-out the 1.3050 resistance amid a rally in oil prices. The spot is seen making several recoveries attempts so far this Friday, having hit daily lows of 1.3015 following the dovish overnight comments from the Fed officials Williams and Clairda that fuelled bets of a 50bps Fed rate cut later this month. However, the dollar bulls were offered a reprieve in the Asian trades after the New York
(NY) Fed disavowed the dovish comments from President Williams. The recovery in the US dollar across the board, since then, has picked up the pace, with the USD index now testing daily tops just shy of the 97 handle, up +0.20% on the day. Despite the ongoing USD demand, the pair struggles with the recovery, as the rally in oil prices appears to lend support to the Canadian dollar. The black gold benefits from escalating US-Iran geopolitical conflict after the US President Trump reported that the US Navy ship downed an Iranian drone in Gulf. Although, the Iranian officials refuted Trump’s comments. Further, markets remain cautious ahead of the key macro releases due later in the NA session, including the US Michigan Consumer Sentiment Index and Canadian retail sales data, which are likely to have a strong bearing on the spot.    

Danske Bank analysts note that yesterday in the UK, a majority in the House of Commons passed an amendment making it harder for the government to pror

Danske Bank analysts note that yesterday in the UK, a majority in the House of Commons passed an amendment making it harder for the government to prorogue Parliament in the run-up to the current Brexit date of 31 October.Key Quotes“While this does not prevent a no deal Brexit outcome (it is still the default option from a legal point of view), it makes it more difficult for Boris Johnson (assuming he wins the leadership contest) to force a no deal Brexit through by sending Parliament home.” “Some 17 Conservative rebels voted against their own government (which did not include politicians such as Phillip Hammond), supporting our view that it is hard to find a majority for a no deal Brexit outcome.” “We may soon have a more pro-Brexit prime minister but it does not change the arithmetic in the Commons.”

EUR/JPY Overview Today last price 121.02 Today Daily Change 44 Today Daily Change % 0.02 Today daily open 121 Trends Daily SMA20 121.87 Daily SMA50 1

The cross is now looking to regain some ground lost in past sessions and is flirting with the key barrier at 121.00 the figure.The multi-session leg lower met strong contention in the 120.80 region on Thursday, matching the lowest level recorded in June.On the way south, there are no relevant levels until 2019 lows in the sub-119.00 zone seen in early January.Below the multi-month resistance line at 122.43 the negative outlook should remain unchanged in the near term.EUR/JPY daily chart 

Analysts at ING suggest that the EUR/CHF is likely to move to 1.05 this summer as expectations are building of ECB quantitative easing. Key Quotes “Ef

Analysts at ING suggest that the EUR/CHF is likely to move to 1.05 this summer as expectations are building of ECB quantitative easing.Key Quotes“Effectively our call is that the Swiss National Bank will face the same kind of pressure (ECB money printing) that prompted them to abandon the 1.20 EUR/CHF floor in January 2015. This all comes at a time when eurozone peripheral debt spreads have already tightened significantly and in the case of Italy may have tightened too much.” “Our team are watching out for signals that Italy's Deputy Prime Minister Matteo Salvini may pull his Liga party out of the government, prompting early elections. Given our view of the dollar topping out this summer, we also see a chance of USD/CHF breaking below 0.97 amidst higher volatility.”

Tuuli Koivu, analyst at Nordea Markets, suggests that given the weak economic outlook, low core inflation and inflation expectations for Euro area, mo

Tuuli Koivu, analyst at Nordea Markets, suggests that given the weak economic outlook, low core inflation and inflation expectations for Euro area, more stimulus is in the pipeline from the ECB.Key Quotes“Long rates set to fall ahead of QE. Lower for longer weighs on 5y rates. Despite TLTRO&QE, relative liquidity points to higher EURUSD.”“The ECB has been carefully preparing the ground for a new stimulus package in recent weeks. The speeches especially by President Draghi and Chief Economist Lane have been interpreted as support for further easing. The main motivation for a new round of easing is that the macroeconomic outlook has remained highly uncertain and core inflation in particular has not shown robust signs of acceleration closer to the ECB target. In addition, market-based inflation expectations are at very low levels raising concerns of the ECB’s credibility.” “We think that recent economic data have been positive enough to delay the decision until September when the new ECB staff macroeconomic projections will be published. Much may depend on the PMIs published only a day prior to the meeting. Weak prospects among companies could be a sufficient trigger to get the attention of the governors who have not so far seen further stimulus as necessary to support a new easing package.”“The main things to watch at the ECB meeting on 25 July are:Is the ECB Governing Council ready to decide about further easing already now? If yes, the size of the stimulus could be rather small because it might be difficult to achieve a consensus on e.g. a new round of net asset purchases, yet. The possibility of “lower levels” could be included again to the forward guidance. We expect to see more stimulus only in September, but will Draghi give any hints about the format and size of the stimulus? Are there any signs of how unified the Governing Council is in their view on the economic outlook and risks around it?”  

The latest headlines crossed the wires from the German Chancellor Angela Merkel, via Reuters, as she speaks about the German economic situation. The G

The latest headlines crossed the wires from the German Chancellor Angela Merkel, via Reuters, as she speaks about the German economic situation. The German economy is in a difficult phase with slower growth. Weaker conditions give us reason to try and stimulate the domestic economy. Economic slowdown largely due to uncertainty in global trade. Hopes that US and China can make progress in trade talks.

United Kingdom Public Sector Net Borrowing registered at £6.5B above expectations (£3.2B) in June

Greece Current Account (YoY) increased to €0.301B in May from previous €-1.4B

FX Strategists at UOB Group remain optimistic on spot and they now see it attempting a test of the 0.7110 region in the near term. Key Quotes 24-hour

FX Strategists at UOB Group remain optimistic on spot and they now see it attempting a test of the 0.7110 region in the near term.Key Quotes24-hour view: “AUD not only rocketed past the strong 0.7050 resistance, it also cracked 0.7070 and registered a 3-month high of 0.7075. While further AUD gains would not be surprising in the coming days, the short-term rally is running too fast, too soon. That said, it is too early to expect a sustained pull-back. AUD is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today, 0.7035/0.7085”. Next 1-3 weeks: “After ‘hesitating’ below the major 0.7050/70 resistance zone for a couple of days, AUD suddenly blew past these major resistance levels and closed at a 3-month high of 0.7075 (thanks to dovish Fed-speak). As highlighted since Tuesday (16 Jul, spot at 0.7040), if AUD were to move and stay above 0.7070, it could extend its gains to 0.7110. All in, the mid to long-term outlook for AUD has turned brighter and if it can clear the major 0.7110 hurdle, it would suggest last month’s 0.6832 low could be a significant bottom (from the perspective of multi-weeks). Meanwhile, the strong upward pressure in AUD could carry it higher to 0.7110 (next resistance is at 0.7150). On the downside, only a break of the 0.7000 ‘key support’ (level was a strong support at 0.6980 yesterday) would indicate that the current ‘positive phase’ in AUD has ended”.

European Monetary Union Current Account s.a rose from previous €21B to €29.7B in May

European Monetary Union Current Account n.s.a declined to €13.3B in May from previous €19.2B

European Monetary Union Current Account s.a increased to €30B in May from previous €21B

China's Foreign Ministry is out with a statement on Friday, confirming that the Chinese Vice-Premier Liu He had a telephonic conversation with the US

China's Foreign Ministry is out with a statement on Friday, confirming that the Chinese Vice-Premier Liu He had a telephonic conversation with the US trade team that included the US Treasury Secretary Mnuchin and Trade Representative Lighthizer.

The UK Conservative and Member of Parliament for North East Somerset, Jacob Rees-Mogg, said on Friday, the UK PM frontrunner Johnson is likely to resi

The UK Conservative and Member of Parliament for North East Somerset, Jacob Rees-Mogg, said on Friday, the UK PM frontrunner Johnson is likely to resist pressure from parliament to delay Brexit again even if it means a no-deal Brexit outcome, Reuters reports. Rees-Mogg said: “The question will be does the prime minister have the backbone to go ahead and leave, and I think Boris Johnson does, or would the prime minister be in the same position as Theresa May, and give into this type of pressure.”

Analysts at Westpac, notes that China’s Q2 GDP was on expected lines with annual growth decelerating to 6.2%. Key Quotes “Support from net exports aba

Analysts at Westpac, notes that China’s Q2 GDP was on expected lines with annual growth decelerating to 6.2%.Key Quotes“Support from net exports abated, putting the onus for growth more on domestic demand. While consumption has received support from tax cuts, it is evident in the PMI detail that employment growth is under pressure. As a result, for both the short and long-term, investment is critical. Momentum in real estate investment is strong, but public infrastructure and private business investment remain weak.” “The credit data points to local governments accumulating funding, and so a lift in infrastructure work can be expected shortly. However, private sector investment looks set to remain weak absent greater liquidity and reduced cost for banks, as well as strong encouragement by authorities to lend to these firms.”

The shared currency is trading on the back footing at the end of the week, forcing EUR/USD to recede from recent tops and trade in the 1.1260 region.

EUR/USD has once again failed near 1.1280.ECB easing, Fed’s rate cuts remain in centre stage.German Producer Prices disappointed estimates in June.The shared currency is trading on the back footing at the end of  the week, forcing EUR/USD to recede from recent tops and trade in the 1.1260 region.EUR/USD capped by the 21-day SMA near 1.1280Yesterday’s bull run has failed once again at the 1.1280/90 region, where coincide last week’s tops and the key 21-day SMA. Spot managed to reverse the pessimism on Thursday after dovish comments from FOMC’s J.Williams, which fuelled further speculations of a rate cut by the Federal Reserve later this month. The subsequent bout of selling pressure in the buck eclipsed previous weakness in the European currency in response to news that the ECB could revamp its inflation target. EUR is also deriving some weakness from another negative result in the German docket, where Producer Prices contracted 0.4% MoM in June and rose 1.2% from a year earlier, both prints coming in short of forecasts. Later in the day, EMU’s Current account figures are due, while the U-Mich index is only expected across the pond.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 recent test of the 1.1200 neighbourhood, where some support appears to have resurfaced. Further out, occasional bullish attempts 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 retreating 0.16% at 1.1258 and faces immediate contention at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1317 (200-day SMA) en route to 1.1412 (high Jun.25).

Karen Jones, analyst at Commerzbank, explains that for the USD/CHF pair, their view of neutral to negative has been recently rejected by the 2 month d

Karen Jones, analyst at Commerzbank, explains that for the USD/CHF pair, their view of neutral to negative has been recently rejected by the 2 month downtrend at .9899 today.Key Quotes“The market recently failed at its 50% retracement at .9967 and the 200 day ma at .9981. This is tough resistance and we suspect that the market has topped here. We look for further losses to .9695, the 25th June low. Above the 200 moving average lies the mid-June high at 1.0014. Longer term we target .9211/.9188, the 2018 low.” “Only a close above 1.0014 (high 19th June) would alleviate immediate downside pressure and target 1.0097 and possibly 1.0128 before failure again (November and March highs at 1.0124/28).”

The Iranian semi-official Tasnim news agency quotes Iran’s top military spokesman Abolfazl Shekarchi, as saying that all the country’s drones had retu

The Iranian semi-official Tasnim news agency quotes Iran’s top military spokesman Abolfazl Shekarchi, as saying that all the country’s drones had returned safely to base. Shekarchi said: “All drones belonging to Iran in the Persian Gulf and the Strait of Hormuz ... returned safely to their bases after their mission of identification and control, and there is no report of any operational response by USS Boxer.”  His comments came after the US President Donald Trump said a US Navy ship had “destroyed” one.

Cable’s rebound could extend further although it is likely to remain sidelined in the near term, suggested FX Strategists at UOB Group. Key Quotes 24-

Cable’s rebound could extend further although it is likely to remain sidelined in the near term, suggested FX Strategists at UOB Group.Key Quotes24-hour view: “The strong advance in GBP yesterday came as a surprise as it cracked a couple of major strong resistance levels with ease and soared to a high of 1.2558 during late NY session. While the rapid rise appears to running ahead of itself, there is scope for GBP to edge above last week’s 1.2580 peak but the next resistance at 1.2615 is likely out of reach. Support is at 1.2495 but the stronger level is at 1.2460”. Next 1-3 weeks: “The manner of which GBP recouped the sharp decline from earlier this morning came as a surprise. GBP soared by +0.93% (largest 1- day gain in 2-1/2 months) and easily took out our 1.2490 ‘key resistance’. The break of 1.2490 nullified our view from Tuesday (17 Jul, spot at 1.2430) wherein we expected GBP to “trade towards 1.2340”. While the sharp bounce yesterday suggests Tuesdays (17 Jul) low of 1.2382 could be a short-term bottom, it is too early to expect a sustained rebound. From here, GBP is likely to trade sideways, even though the immediate bias is for it to probe the top of the expected 1.2430/1.2640 range first”.

The US dollar recovery gathered steam across the board in the European session, sending USD/JPY back towards 107.75, as the bulls continue to cheer th

NY Fed disavowed President Williams’ comments, USD and US rates bounce.Trade/ geopolitical worries, Fed easing bets to keep gains capped.US Michigan Consumer Sentiment data eyed amid risk-on.The US dollar recovery gathered steam across the board in the European session, sending USD/JPY back towards 107.75, as the bulls continue to cheer the New York Fed’s clarification that President Williams’ comments were academic and not about immediate policy direction. The US dollar collapsed across its main competitors in tandem with the Treasury yields in the US last session after the NY Fed President Williams’ comments remarks bolstered bets that the Fed would cut interest rates by 50 basis points, rather than 25 basis points. However, the further upside looks elusive amid a lack of clarity on the US-China trade in-person trade meeting while escalating US-Iran geopolitical tensions also weigh on the risk sentiment that helps limit the downside in the safe-haven Yen. The Middle East tensions flared up again after the US Navy ship downed an Iranian drone in the Strait of Hormuz. However, the Iranian officials deny any such incident. Further, looming July Fed rate cut also keep the dollar recovery in check, in turn loosening the bullish grip around the USD/JPY pair. The US dollar index stalled its bounce at 96.91, now trading around 96.80 region, almost unchanged on the day. Markets now await the US Michigan Consumer Sentiment Index for the next direction on the prices. In the meantime, the pair will remain at mercy of the USD price-action and broader market sentiment. Levels to watch  

Tim Riddell, analyst at Westpac, suggests that given sparse data releases over the next week, focus will concentrate on flash PMI’s on 24th and the EC

Tim Riddell, analyst at Westpac, suggests that given sparse data releases over the next week, focus will concentrate on flash PMI’s on 24th and the ECB’s pre-summer break meeting on 25th.Key Quotes“The weakness in Tuesday’s ZEW surveys, notably the failure of the expectations components to lift from recent lows, will heighten concerns that EZ’s manufacturing PMI might remain at, or even slip deeper into, recent contraction levels (June was 47.6).” “Draghi re-ignited the ECB’s “whatever ever it takes” stance initiated in 2012 and although markets do not expect changes in policy on 25th, weak PMI’s would raise their conviction that ECB will increase forward guidance by outlining intentions to move deeper into NIRP or re-open a looser APP.” “Despite media speculation that Italy’s coalition may falter and result in early elections, the BTP-Bund risk barometer has been narrowing.” “Consequently, EUR/USD remains at risk of redefining the lows within its broader 1.11-1.16 range.”

Danske Bank analysts note that a Bloomberg story yesterday suggested that informal analysis has begun at the ECB about a potential revamp of the infla

Danske Bank analysts note that a Bloomberg story yesterday suggested that informal analysis has begun at the ECB about a potential revamp of the inflation target.Key Quotes“This mirrors a discussion the Governing Council already started at the June meeting about the need to adopt a more "symmetrical" interpretation of the inflation target, i.e. where the ECB would tolerate inflation above the target to compensate for persistent undershooting in recent years.” “Although we think such a switch to a more state-dependent and less calendar-based forward guidance could help alleviate the risk of de-anchoring inflation expectations, as it strengthens the easing bias, we do not see such changes as imminent - and is also highly dependent on whether the markets believe the ECB could achieve an overshooting.” “For now, the ECB's prime focus should be on delivering a convincing easing package at the September meeting. Nevertheless, it could be the advent of a discussion that gains further traction under a Lagarde-led ECB.”

Analysts at TD Securities note that the Philly Fed index surprised massively to the upside, posting a whopping jump to 21.8 up from 0.3 in June (mkt:

Analysts at TD Securities note that the Philly Fed index surprised massively to the upside, posting a whopping jump to 21.8 up from 0.3 in June (mkt: 5.0).Key Quotes“Note that the index had registered a notable drop from 16.6 in May. So this level more than surpasses that recent high and now stands at its highest since July last year.” “The details were also encouraging, with new orders jumping to 18.9 from 8.3, shipments to 24.9 from 16.6 and employment to 30 from 15.4. This led the ISM-adjusted measure to also leap to 59.7 in July from 55.8 before - its highest since May last year.” “The Philly Fed's together with the Empire report suggests some stabilization in the surveys for July, which could also be translated into a more positive ISM report.”

According to preliminary data for JPY futures markets from CME Group, open interest increased by around 5.3K contracts on Thursday. In the same direct

According to preliminary data for JPY futures markets from CME Group, open interest increased by around 5.3K contracts on Thursday. In the same direction, volume went up by around 59.4K contracts, prolonging the choppy activity.USD/JPY faces downside risksThursday’s drop in USD/JPY was on the back of rising open interest and volume in the Japanese safe have, allowing for the continuation of the down move at least in the short-term horizon.

FX option expiries for July 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1200 567m 1.1210 983m 1.1225 595m

FX option expiries for July 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1200 567m 1.1210 983m  1.1225 595m - GBP/USD: GBP amounts 1.2500 221m  - USD/JPY: USD amounts 107.90 411m 108.50 1.1bn - AUD/USD: AUD amounts 0.7030 572m  - USD/CAD: USD amounts 1.3050 515m 1.3100 530m - NZD/USD: NZD amounts 0.6775 230m

Sam Coates, Deputy Political Editor at Sky News reports that “Tory MPs are pushing to introduce new rules to protect the next prime minister from a co

Sam Coates, Deputy Political Editor at Sky News reports that “Tory MPs are pushing to introduce new rules to protect the next prime minister from a confidence vote for a year after they enter Downing Street”. “The move is being pushed by members of the Tory 1922 executive committee, a group of Tory backbench shop stewards who oversee the leadership rules,” Coates adds. The Cable is seen paring the Asian gains, as broad USD buying combined with UK political chaos over the Brexit deal continue to weigh. 

Italian Deputy Prime Minister (PM) and Five-Star movement leader Luigi Di Maio was reported by Reuters, as saying that there is no government crisis.

Italian Deputy Prime Minister (PM) and Five-Star movement leader Luigi Di Maio was reported by Reuters, as saying that there is no government crisis. Additional Comments: Calls on Lega leader, Matteo Salvini, to meet with him for talks. Hopes to be able to meet with Salvini later today.

Iran's Deputy Foreign Minister Seyed Abbas Araghchi was on the wires last minutes, via Twitter, responding to the reports that the US Navy ship downed

Iran's Deputy Foreign Minister Seyed Abbas Araghchi was on the wires last minutes, via Twitter, responding to the reports that the US Navy ship downed the Iranian drone in Gulf. Both crude benchmarks have moved-off highs, consolidating the recent bounce on escalating US-Iran geopolitical tensions.

Chile BCCH Interest Rate: 2.5% (July)

Here is what you need to know to start your day on Friday, July 19th, European session: - US dollar bounced vs. main competitors after the NY Fed disa

US dollar index offered reprieve by the NY Fed’s clarification on President Willian’s comments. Gold consolidates the rally to 2019 highs.All eyes on trade and geopolitical developments.Here is what you need to know to start your day on Friday, July 19th, European session:  - US dollar bounced vs. main competitors after the NY Fed disavowed President Williams’ preventive rate cut comments, Treasury yields looked to stabilize. - USD/JPY jumped off 107.21 lows, a dead cat bounce amid aggressive July Fed rate cut calls? Japanese CPIs matched estimates. - Asian equities cheered risk-on. Aussie’s upside capped near 0.7080 amid trade anxiety. Kiwi bulls faced rejection just below 0.68 handle. - US-China officials discussed trade; Mnuchin eyes possible in-person talks. Japan urged S. Korea envoy to act amid escalating trade row over wartime forced labor. - UK: The Cable consolidated the recovery amid upbeat UK retail sales data and mounting Hard Brexit risks. - Oil prices extended the corrective upside after US Navy ship 'destroyed' Iranian drone in Gulf, ignored IEA 2019 oil demand forecast downgrade. Gold pulled back from 2019 highs of $1452. - Cryptocurrencies consolidated the latest upmove. Bitcoin capped below 11k. Key events to watch  

Danske Bank analysts note that the market sentiment turned swiftly positive yesterday as prominent FOMC board members of the New York Fed, Williams an

Danske Bank analysts note that the market sentiment turned swiftly positive yesterday as prominent FOMC board members of the New York Fed, Williams and Vice Chair Clarida, delivered very soft remarks highlighting the need for swift action before economic data actually turns for the worse.Key Quotes“The remarks at first seemed very coordinated, driving a weaker USD, a drop in front US yields and a sharp rally in the August Fed funds futures, essentially leaving market pricing skewed towards a 50bp July cut rather than the consensus 25bp cut. Meanwhile, this morning, the New York Fed stressed that Williams had not tried to send a specific policy signal, leading to a rebound of more than half the initial drop in US 2Y swap rates, even if the USD FX gains were more modest with EUR/USD, for example, staying around 1.1260.” “Where does this leave us in terms of the Fed and the forthcoming 31 July meeting? Yesterday's remarks were highly surprising given the Fed's communication earlier this week that seemed to want to limit market pricing of a 50bp July cut. Meanwhile, with little time until the one-week silent period, markets now have a 25bp July cut at 60% and a 50bp cut at 40% probability.” “We know that historically the Fed has not wanted to surprise markets at the meetings, leaving the coming sessions' FOMC comments crucial. For now, our call remains a 25bp cut at the 31 July meeting and an additional 50bp worth of cuts for the rest of the year. However, we must acknowledge the probability of this call getting modified towards a more aggressive July call if we get further very soft Fed remarks.”  

Karen Jones, analyst at Commerzbank, points out that EUR/USD pair is holding just above the March and mid-June lows at 1.1181/76 and has seen another

Karen Jones, analyst at Commerzbank, points out that EUR/USD pair is holding just above the March and mid-June lows at 1.1181/76 and has seen another recovery and while these hold the downside, an upside bias will prevail.Key Quotes“We should then see a recovery towards the 200 day moving average and early June high at 1.1317/48. 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).”

Germany Producer Price Index (YoY) registered at 1.2%, below expectations (1.4%) in June

Germany Producer Price Index (MoM) below expectations (-0.2%) in June: Actual (-0.4%)

CME Group’s flash figures for GBP futures markets noted investors trimmed their open interest positions by almost 5.6K contracts on Thursday. On the o

CME Group’s flash figures for GBP futures markets noted investors trimmed their open interest positions by almost 5.6K contracts on Thursday. On the other hand, volume rose by around 46.8K contracts, reversing the previous drop.GBP/USD still remains under pressureCable’s rebound yesterday carries the potential to extend a tad further in the very near term although it should stay limited eventually, all amidst declining open interest. Brexit concerns and uncertainty in UK politics keep weighing on the Sterling for the time being.

With the 21-day exponential moving average (EMA) limiting the GBP/USD pair’s recent recovery, the quote is declining to 1.2530 on early Friday.

21-day EMA triggers GBP/USD pullback.Downside break below June low can drag prices back to 1.2440, 1.2382.With the 21-day exponential moving average (EMA) limiting the GBP/USD pair’s recent recovery, the quote is declining to 1.2530 heading into the London open on Friday. However, sellers await a downside break of July 09 low of 1.2506 in order to aim for 1.2440 and the monthly bottom surrounding 1.2382. Meanwhile, pair’s ability to cross 21-day EMA level of 1.2560 could further propel it towards a downward-sloping trend-line since early-May around 1.2595. If at all buyers manage to cross 1.2595 barrier, also dominate beyond 1.2600 round-figure, late-June lows around 1.2660 could be on their radar. GBP/USD daily chartTrend: Pullback expected  

In view of FX Strategists at UOB Group, EUR/USD is expected to remain sidelined for the time being. Key Quotes 24-hour view: “The sudden pickup in vol

In view of FX Strategists at UOB Group, EUR/USD is expected to remain sidelined for the time being.Key Quotes24-hour view: “The sudden pickup in volatility was unexpected as EUR reversed an initial dip to 1.1203 and surged to an overnight high of 1.1280 (before dropping quickly after NY close). The rapid swings amidst mixed momentum indicators suggest EUR could continue to trade in a choppy manner, likely within a 1.1220/1.1290 range”. Next 1-3 weeks: “After the sharp drop on in EUR on Tuesday, we indicated on Wednesday (17 Jul, spot at 1.1210) that EUR is “expected to trade with a downside bias”. We noted the lackluster momentum and held the view that EUR “is unlikely to accelerate lower”. That said, the rapid bounce during NY hours yesterday (after dovish Fed-speak) came as a surprise. The strong 1.1260 resistance was easily breached (high of 1.1280) and the mild downward pressure has dissipated. The outlook for EUR is mixed from here and it is likely to trade sideways in an ‘undecided’ manner, likely between 1.1200 and 1.1320 range”.

Open interest in EUR futures markets rose for yet another session on Thursday, this time by around 1.5K contracts according to preliminary figures fro

Open interest in EUR futures markets rose for yet another session on Thursday, this time by around 1.5K contracts according to preliminary figures from CME Group. In the same line, volume extended the erratic performance and increased by nearly 93.8K contracts.EUR/USD now targets the 21-day SMA near 1.1290The positive price action in EUR/USD met once again resistance in the 1.1280/90 band, where sits the 21-day SMA, all amidst rising open interest and volume. Against this backdrop, the pair’s upside momentum could extend further and test the critical 1.1300 neighbourhood in the near term.

Having repeated failure to rise much beyond February lows, USD/IDR declines to 13,905 ahead of the Europe markets open on Friday.

Failure to extend pullbacks from 13,895 highlights the USD/IDR pair’s weakness.A 200-week simple moving average (SMA) and 38.2% Fibonacci retracement offer strong downside support.Having repeated failure to rise much beyond February lows, USD/IDR declines to 13,905 ahead of the Europe markets open on Friday. While 13,895 acts as adjacent support, a break of which can drag the quote to 13,740/25 support confluence including 38.2% Fibonacci retracement level of 2014 swing lows to 2018 swing highs and 200-week SMA. On the upside, mid-June low around 14,085 and 23.6% Fibonacci retracement near 14,323 could be on the buyers’ radar during the pair’s U-turn. It should also be noted that 14-bar relative strength index (RSI) is near to oversold conditions, increasing the odds for the pair’s pullback from key support. USD/IDR weekly chartTrend: Bearish  

TD Securities analysts point out that Bloomberg has reported that the ECB is seriously looking at altering its inflation goal, potentially changing it

TD Securities analysts point out that Bloomberg has reported that the ECB is seriously looking at altering its inflation goal, potentially changing it from "below, but close to 2%" to a symmetric 2.0% target.Key Quotes“Staff have reportedly already presented their findings to the Governing Council, which were generally in favor of the new approach. A move in this direction would apparently require a formal review, but would support the case for more stimulus.”

The greenback, in terms of the US Dollar Index (DXY), trades on a better footing today and is testing the 96.85/90 band ahead of the opening bell in t

DXY rebounds from recent lows near the 200-day SMA.Yields of the US 10-year note coming up from 2.02%.Advanced July U-Mich index next of relevance today.The greenback, in terms of the US Dollar Index (DXY), trades on a better footing today and is testing the 96.85/90 band ahead of the opening bell in the Old Continent.US Dollar Index met support at the 200-day SMAAt his speech yesterday, FOMC’s J.Williams left the door open for a Fed’s move lower on interest rate later this month, forcing the buck to give away weekly gains and drop to the 96.70/65 band, where sits the 200-day SMA. Previously in the day, DXY was navigating tops near 97.30 following stronger-than-expected results from the Philly Fed index, while market chatter regarding the likeliness that the ECB could revamp its inflation target put EUR/USD under downside pressure and thus lent extra wings to the buck. Later today, and amidst a decent recovery so far, the greenback will looks to the release of the flash reading of the US Consumer Sentiment for the current month. In addition, St.Louis Fed J.Bullard (voter, dovish) will speak at the Central Bank Research in New York and Boston Fed E.Rosengren (voter, centrist) will join a Panel on Central Bank Independence.What to look for around USDDovish Fedspeak hurt the buck and sent the index back near the 200-day SMA below the 97.00 handle. 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 gaining 0.16% at 96.83 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 96.67 (low Jul.18) would aim for 96.46 (low Jun.7) and then 96.04 (50% Fibo of the 2017-2018 drop).

ANZ analysts suggest that with the US-China trade dispute shaping up to be a long drawn-out affair, there have been some adjustments in Asia’s supply

ANZ analysts suggest that with the US-China trade dispute shaping up to be a long drawn-out affair, there have been some adjustments in Asia’s supply chain.Key Quotes“China’s exports to the US have been contracting, while exports to the US from some other Asian economies, notably Vietnam and Cambodia, have picked up.” “Taiwan and Singapore have also seen higher exports to the US. US trade deficit with China is narrowing, but its deficit with the lower-tariff countries is widening.” “Challenges lie ahead, however. Already, Vietnam’s widening trade surplus with the US has caught the attention of President Trump, and a number of Asian economies are already on US Treasury’s FX Monitoring List.” “Also, it appears that most of the supply chain adjustments have thus far involved re-routing of exports as opposed to relocation of production. China’s outbound direct investment has yet to show signs of a pick-up. Indeed, its M&A activity is seeing the slowest H1 in five years, with no notable increase in its activity in Asia.” “The same is seen for US FDI and M&A activity, reflecting President Trump’s ‘America First’ policy. Overall, the latest data suggests a slow start in Asia’s restructuring with a long way to go.”

Robert Rennie, head of financial market strategy at Westpac, points out that the RBA minutes released Tuesday confirmed that the Board is still open t

Robert Rennie, head of financial market strategy at Westpac, points out that the RBA minutes released Tuesday confirmed that the Board is still open to further monetary easing, although the prospects for a third consecutive easing in August have been dampened.Key Quotes“Employment data released Thursday revealed a soft update in an otherwise robust trend.” “Employment rose by a smaller than expected 0.5k and the unemployment rate rose from 5.19% to 5.24%. While the underemployment rate fell 0.4% to 8.2%, it is important to highlight that, at 5.2%, the unemployment rate is well above the RBA’s 4.5% full employment target.” “This then reinforces Westpac’s view that the RBA has further to go in terms of rate cuts if it has any chance of hitting the 4.5% NAIRU target any time soon. The RBA Governor may emphasise this point Thursday next week when he delivers his Anika Foundation speech on the topic of “Inflation Targeting and Economic Welfare”.” “We remain of the view that the A$ should be capped above 0.70 and expect to see further weakness to 0.68 by the end of the year.”

AUD/USD fails to extend its recent upward trajectory as it trades near 0.7070 heading into the Europe market open on Friday.

Greenback buyers emphasize the NY Fed’s statements pouring cold water on the President Williams dovish comments.The US-China diplomats are likely to meet in-person, the US tech firms also exert pressure on the Trump administration to remove Huawei ban.AUD/USD fails to extend its recent upward trajectory as it trades near 0.7070 heading into the Europe market open on Friday. While dovish Fedspeak and domestic employment data pleased the Aussie buyers to clock in the best G10 pair status on Thursday, the early Friday statements from the New York Fed nullified effects of the President John Williams comments favoring 50 basis points (bps) Fed rate cut. The US and Chinese trade negotiations are likely to be fast-tracked, as per Reuters, whereas American Tech giants’ pressure to remove the ban on selling equipments to China’s Huawei also spreads trade optimism. On the negative side, the US recently said that it downed Iran’s drone and Iran is also complaining to the United Nations (UN) about the UK Navy seizing its oil tanker could weigh on the global risk sentiment. While the Asian stocks benefited from the recent market recovery, the US 10-year treasury yield clings to yesterday’s close of 2.04% by the press time. Moving on, second-tier data from the US and final round of Fedspeak, before the policymakers sneak in the blackout period, could keep traders on edge while US-China developments will also contribute towards busy Friday. Technical Analysis A bullish Marubozu candle formed yesterday continues to favor the pair’s run-up towards 200-day exponential moving average (EMA) level of 0.7100 unless the quote slips beneath 0.7050/45, which in turn could recall 0.7000 back to the chart.

ANZ analysts suggest that they have changed their view on the Monetary Authority of Singapore (MAS) after last week’s poor advance Q2 GDP release, cal

ANZ analysts suggest that they have changed their view on the Monetary Authority of Singapore (MAS) after last week’s poor advance Q2 GDP release, calling for a policy easing at the October review.Key Quotes“Our conviction of a MAS easing has strengthened after this week’s dismal Non-oil Domestic Exports (NODX) data.” “Though we are still some way off the October meeting, and the US Federal Reserve looks set to cut the fed funds rate at the end of this month, we now recommend positioning for a weaker Singdollar. We cannot rule out the possibility of an intra-meeting move by MAS.”

Analysts at Standard Chartered suggest that China’s 2019 budget envisages a widening of the deficit to 2.8% of GDP from 2.6% in 2018 and thinks that t

Analysts at Standard Chartered suggest that China’s 2019 budget envisages a widening of the deficit to 2.8% of GDP from 2.6% in 2018 and thinks that the official number substantially understates the degree of fiscal expansion.Key Quotes“Our estimate, which consolidates the general public and government funds budget and adopts widely accepted fiscal accounting, shows a widening of the budget deficit to 6.5% of GDP from the actual deficit of 4.7% in 2018. In other words, the approved budget entails stimulus worth 1.8% of GDP.” “Budget implementation has been aggressive. The general public budget deficit surged to CNY 1.6tn in H1-2019, double that of H1-2018. Revenue growth slowed significantly to 3.4% y/y largely on tax cuts, while spending growth picked up to 10.7% y/y. In addition, the government funds deficit reached CNY 537bn in H1, exceeding the 2018 full-year deficit. The H1 consolidated deficit was five times the level posted for the same period last year.” “We see room for the consolidated deficit to expand further by CNY 4.3tn in H2 if the 2019 budget is fully implemented. Our estimate suggests fiscal policy can remain expansionary in the next six months, given that the actual consolidated deficit was CNY 3.9tn in H2-2018.” “We expect the strong – and front-loaded – fiscal stimulus to kick in and support a moderate recovery in economic activity in H2, assuming no further escalation in US-China trade tensions.”

Despite recent recovery, USD/INR remains below key immediate resistances as it takes the rounds to 68.78 ahead of the European open on Friday.

23.6% Fibonacci retracement and 50-day EMA question immediate upside of USD/INR.Near-term descending trend-line and 69.65/70 confluence also challenge bulls.Despite recent recovery, USD/INR remains below key immediate resistances as it takes the rounds to 68.78 ahead of the European open on Friday. Among them, 50-day exponential moving average (EMA) and 23.6% Fibonacci retracement of February to July decline, around 69.10/15, offers the closest upside barrier, a break of which further propel prices to the 9-week old resistance-line at 69.36. However, pair’s rise beyond 69.36 might struggle unless clearing the 69.65/70 confluence including 38.2% Fibonacci retracement and 200-day EMA. On the downside, 68.38/36 seems the strong support before the latest low surrounding 68.25. Should bears dominate below 68.25, 68.00 could be on their radar. USD/INR daily chartTrend: Bearish  

Japan All Industry Activity Index (MoM) came in at 0.3%, above expectations (-0.2%) in May

According to analysts at ANZ, all eyes will be on RBA communication in the week ahead as Assistant Governor (Financial Markets) Kent will be focused o

According to analysts at ANZ, all eyes will be on RBA communication in the week ahead as Assistant Governor (Financial Markets) Kent will be focused on largely technical matters to do with the Committed Liquidity Facility (CLF).Key Quotes“The real focus will be on the RBA Governor’s speech at the Anika Foundation luncheon. The current and previous RBA Governors are strong supporters of the Foundation, and the speeches delivered at the annual luncheon have been important events. It seems reasonable to expect a similar approach.” “The Governor may pick up some of the themes in the RBA’s recent Research Discussion Paper: Cost-benefit Analysis of Leaning Against the Wind.” “The focus should be on the inflation objective. Of course, other considerations such as the signal being sent by a series of rapid rate cuts might still be relevant. The employment data for June did not advance the case for a follow-up cut in August. It does, however, leave the RBA with higher unemployment than it expected in May.” “We think the core CPI for the June quarter will be a downward surprise, adding to the picture of a worse starting point for the August forecast update. The cash rate is going lower at some point and will stay low, implying negative real interest rates for an extended period.”

In a Reuters in interview late-Thursday, the International Energy Agency (IEA) Executive Director Faith Birol said the Agency is making downward revis

In a Reuters in interview late-Thursday, the International Energy Agency (IEA) Executive Director Faith Birol said the Agency is making a downward revision to its 2019 global oil demand growth outlook to 1.1 million barrels per day (bpd) and leaves scope for further downgrade should the global and Chinese economy slowdown further. Key Highlights: “China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come. The IEA was concerned by rising Middle East tensions, particularly around the Strait of Hormuz, a vital shipping route linking Gulf oil producers to markets in Asia, Europe, North America and elsewhere. We are keeping a close eye on what is happening there. And if something happens, we are ready to act quickly and decisively.  In the very short-term, the effect of those options are not very huge. We should think of options and work on them. They will not bring a major change in the current markets but will be helpful in the medium and longer-term. Oil prices at around $65 a barrel priced in tensions relating to Iran, Libya and Venezuela, as well as concerns about the U.S.-Chinese trade row.” Both crude benchmarks are little affected by the IEA’s revision, as rising US-Iran geopolitical tensions amid reports that the US Navy downed Iranian drones continue to keep the sentiment around the black gold lifted.

US Dollar (USD) recovery is struggling to oversee declining odds for a no-deal Brexit, which in turn flashes 1.2545 quote for the GBP/USD pair on early Friday.

House of Commons passed an amendment that restricts the new PM from suspending the UK Parliament before Brexit.Increasing odds for a solution to the Irish border adds strength to Brexit optimism.USD recovers after the NY Fed’s attempt to disappoint policy bears.Absence of UK data continues to highlight politics/trade and the US consumer sentiment gauge for fresh impulse.US Dollar (USD) recovery is struggling to oversee declining odds for a no-deal Brexit, which in turn flashes 1.2545 quote for the GBP/USD pair ahead of the London open on Friday. The greenback trimmed overnight losses against the majority of counterparts after the Federal Reserve Bank of New York safeguarded its President John Williams bearish comments that helped to drag the US currency southwards on the previous day. However, news that the UK’s Members of the Parliaments (MPs) passed an amendment to make it harder for the incoming PM to suspend the Parliament before Brexit reduced the odds of a no-deal departure and pleased the pair buyers. Adding to the strength could be the comments from the European Union’s Brexit negotiation Michel Barnier that the bloc is ready to work on alternative arrangements for Irish border issue. While declining expectations of a no-deal Brexit favor the British Pound (GBP), the EU and the UK policymakers are still lacking the departure agreement (after it was failed by the Britain). Also, the latest amendment doesn’t totally restrict the new Prime Minister (PM) from suspending the parliament. Elsewhere, the US-China trade discussion is on-going and diplomats from both the nations may soon meet each other in person, as Reuters conveyed quoting the US Treasury Secretary Steve Mnuchin. Given the lack of economic data on the cards, the news headlines are likely to keep dominating the market sentiment whereas the US Michigan Consumer Sentiment Index for July, expected 98.5 versus 98.2, might also offer intermediate direction. Technical Analysis 100-bar moving average on the 4-hour chart (4H 100MA) limits the pair’s immediate upside around 1.2550/55 amid overbought RSI, highlighting chances of a pullback to 1.2510/05 area comprising June month low and a drop towards July 09 low near 1.2440. Alternatively, pair’s upside clearance of 1.2555 can’t be considered as a strong signal for its rally as 11-week old descending trend-line ranged since early-May, at 1.2594, can question buyers, a break of which could recall towards late-June lows close to 1.2660.

EUR/USD seems to have created a minor double bottom pattern with the neckline resistance at 1.1286 over the last 13 days. A break above 1.1286 would c

EUR/USD has created a minor double bottom near 1.12.Trades increase bets of an aggressive Fed rate cut.Below-forecast German PPI will likely hurt the EUR.EUR/USD seems to have created a minor double bottom pattern with the neckline resistance at 1.1286 over the last 13 days. A break above 1.1286 would create room for a rally to 1.1380 (target as per the measured move method). That looks likely as traders have increased their bets that the US Federal Reserve (Fed) would cut rates by an aggressive 50 basis points on July 31. The probability that Fed would reduce interest rates by a half percentage point at its July 30-31 policy meeting stood at 63% in the North American session on Thursday, up from 34% on Wednesday, according to CME Group’s FedWatch program. However, the case for a double bottom breakout in the European session would weaken if the German German Producer Price Index (PPI), scheduled at 06:00 GMT, drops more than expected, reinforcing dovish European Central Bank (ECB) expectations. It is worth noting that a significant majority in the market, including rating agency Fitch, believes the ECB will restart the QE program. That said, the pair will remain in the hunt for a double bottom breakout as long as it is held above 1.12. In fact, any weakness, seen after German data could be reversed in the US session if the Michigan Consumer Sentiment  Index (Jul) due for release at 14:00 GMT today, misses estimates by a big margin and Fed's Bullard sounds dovish, highlighting the need for "insurance cuts". As of writing, EUR/USD is trading at 1.1262, representing marginal losses on the day, having hit a session low of 1.1240 earlier today.Pivot points 

The Financial Times carries a story on Friday, citing that the ongoing Brexit political turmoil has deterred the likes of former Fed Chair Yellen and

The Financial Times carries a story on Friday, citing that the ongoing Brexit political turmoil has deterred the likes of former Fed Chair Yellen and former Reserve Bank of India (RBI) Governor Rajan from applying for the position of the Bank of England (BOE) Governor. The FT added that “a number of potential candidates the government had considered did not want to get embroiled in the politics of Brexit”.

AUD/USD is currently trading largely unchanged on the day at 0.7073, having hit a session low of 0.7054 earlier today. The currency pair created a bul

AUD/USD charted bullish Marubozu on Thursday.The daily chart shows a higher high, higher low pattern.Path of least resistance is to the higher side.AUD/USD is currently trading largely unchanged on the day at 0.7073, having hit a session low of 0.7054 earlier today. The currency pair created a bullish Marubozu candle on Thursday, which indicates the bulls controlled the price action throughout the day. More importantly, with the Marubozu candle, the pair has established a fresh "higher high" above the April 7 high of 0.7048. As a result, further gains to 0.71 could be in the offing. Supporting the bullish case are the ascending 5- and 10-day moving averages, rising MACD and an above-50 reading on the relative strength index. Daily chartTrend: BullishPivot points 

Despite witnessing better than forecast spending data from New Zealand, the NZD/USD pair struggles to extend the latest rally around 61.8% Fibo on early Friday.

New Zealand Credit Card Spending grew past market consensus in June.The Kiwi pair struggles to extend break of 61.8% Fibonacci retracement amid overbought RSI.Despite witnessing better than forecast spending data from New Zealand, the NZD/USD pair struggles to extend the latest rally as it trades near 0.6786 on early Friday. June month Credit Card Spending (YoY) from New Zealand beat market expectations of 5.6% by matching the previous growth figure of 6.6%. Given the overbought conditions of 14-day relative strength index (RSI), prices can revisit Wednesday’s high should they decline below 61.8% Fibonacci retracement level of December 2018 to May 2019 downpour, at 0.6780. Additionally, 50% Fibonacci retracement and 200-day exponential moving average (EMA) can support the pair’s further declines around 0.6725 and 0.6715 respectively. On the contrary, 0.6800 round-figure seems to hold the key for the quote’s extra rise towards April month high close to 0.6840. Also, pair’s run-up past-0.6840 may push the bulls to look for 0.6875 and 0.6900 mark. NZD/USD daily chartTrend: Pullback expected  

South Korean Trade Ministry Director crossed the wires in early trades, urging Japan to hold talks to discuss export control system. Further Headlines

South Korean Trade Ministry Director crossed the wires in early trades, urging Japan to hold talks to discuss export control system. Further Headlines: Expresses regret over repeated claims in Japan that are different from the truth. We have yet to receive a response from Japan regarding our request for another meeting.

The US Federal Reserve will cut rates by 25 basis points this month, contrary to market pricing for a 50 basis point rate cut, according to analysts a

The US Federal Reserve will cut rates by 25 basis points this month, contrary to market pricing for a 50 basis point rate cut, according to analysts at National Bank of Australia (NAB). Essentially, the central bank is forecasted to disappoint the market. Even so, the NAB analysts expect the US Dollar to depreciate in line with the historical data which shows the greenback almost always loses ground at the beginning of an easing cycle.

The Citigroup strategists are out with their call on the July Fed rate cut following the dovish comments from Fed Vice-President Clarida and NY Fed Pr

The Citigroup strategists are out with their call on the July Fed rate cut following the dovish comments from Fed Vice-President Clarida and NY Fed President Williams.Key Quotes:"So close to the blackout period that emphasized the case for early action. It supports a tactical bearish view on the USD and tips the scales to a 50bp cut. Short USD against CAD, AUD and NOK.”

The European Central Bank will restart the quantitative easing program and the Bank of Japan will likely take more steps counter weaker economic growt

The European Central Bank will restart the quantitative easing program and the Bank of Japan will likely take more steps counter weaker economic growth and dovish steps taken by other central banks, Fitch Rating's head reportedly said today while speaking at a conference in Tokyo. He added further that the US Federal Reserve will cut rates only once this year, contrary to market expectations of two or more rate cuts.

Asian stocks are solidly bid this Friday on the rising odds of aggressive rate cuts by the US Federal Reserve (Fed). As of writing, Japan's Nikkei is

Asian stocks are flashing green after gains on Wall Street.Traders have increased bets that the Fed could cut deeper this month.Asian stocks are solidly bid this Friday on the rising odds of aggressive rate cuts by the US Federal Reserve (Fed).   As of writing, Japan's Nikkei is up 1.65% or 365 points and the Shanghai Composite is adding 1.12% or 32 points. Shares in South Korea and Hong Kong are also up 1% and Australia's S&P/ASX 200 is reporting a 0.85% or 56 point rise. New York Federal Reserve President John Williams said Thursday the central bank needed to “act quickly” when the economy was slowing and rates were low. As a result, Treasury yields softened with the 10-year shedding almost seven basis points to 2.01% and the probability of the Fed cutting rates by 50 basis points on July 31 rose to 42%.  The rising odds of Fed rate cuts also helped the major US indices eke out gains for the first time in three trading days. The S&P 500 adding 0.4% higher and the Nasdaq Composite rose 0.3%. The Dow Jones Industrial Average ended with marginal gains. The dovish Fed expectations are helping markets stay in the green despite tensions in the Middle East. The US President Donald Trump said on Thursday that an American Navy ship had destroyed an Iranian done in a “defensive action. ” The announcement came hours after Iranian forces seized a foreign tanker it accused of smuggling oil, according to CNBC.

Reuters reported an hour ago that a US Trade Representative (USTR) spokesman, as saying that the US and China trade teams have had a telephonic conver

Reuters reported an hour ago that a US Trade Representative (USTR) spokesman, as saying that the US and China trade teams have had a telephonic conversation on Thursday. The US Treasury Secretary Mnuchin and USTR Lighthizer spoke to their Chinese counterpart over the phone. Mnuchin, said via Reuters, "Right now we're having principal-level calls and to the extent that it makes sense for us to set up in-person meetings, I would anticipate that we would be doing that".  The details of the in-person meeting are not yet out, as the Chinese leaders are busy holding their annual Summer meeting. However, the exact dates and people attending the meeting are not disclosed so far, but the US-China trade spat is likely to be on top of the agenda.

According to the latest Reuters poll, the odds of a no-deal Brexit outcome is at the highest since October 2017, UK Prime Minister (PM) front-runner a

According to the latest Reuters poll, the odds of a no-deal Brexit outcome is at the highest since October 2017, UK Prime Minister (PM) front-runner and Brexit hardliner Boris Johnson looks set to take over the position next week. Key Findings: Chances of disorderly UK exit from European Union (EU) now 30% (highest since Oct 2017, June poll: 25%) EU-UK free trade agreement is the most likely eventual outcome of Brexit. Bank of England (BOE) to leave bank rate at 0.75% until 2021 (June poll: raise to 1.00% in Q3 2020). UK trading with the EU under WTO rules now second most likely outcome, overtaking EEA membership. The median forecast for a recession in the coming year was 30% and of one in the next two years was 35%, up from 25% and 30% respectively in June's poll. The slump in sterling has driven up prices in import-reliant Britain and the economists who were polled expected inflation to hover around the Bank's target for the next three years at least.

Gold is currently trading at $1,443 per Oz, having hit a fresh 2019 high of $1,452. The yellow metal is trimming gains, possibly due to overbought con

Gold's daily chart shows a pennant breakout.Prices will likely bounce from key support at $1,439, reinforcing the bull view.Gold is currently trading at $1,443 per Oz, having hit a fresh 2019 high of $1,452. The yellow metal is trimming gains, possibly due to overbought conditions reported by the hourly and 4-hour chart indicators and the pullback could be extended further to the former resistance-turned-support of $1,439 (June 25 high). With the 14-day relative strength index of 67.00 signaling a room for the rally, the crucial support at $1,439 will hold, reinforcing the bullish view put forward by the pennant breakout on the daily chart.   A pennant breakout indicates a resumption of the rally from the May 21 low of $1,261. As a result, $1,500 could come into play over the next few weeks. The short-term bullish case would be invalidated if prices drop below the June 17 low of $1,400. That could happen if the U.S. Federal Reserve surprises markets by keeping rates unchanged on July 31. Markets are full-priced for a 25 basis point rate cut. Daily chartTrend: BullishPivot point 

NY Fed’s comments reversing significance of the President Williams’ dovish statements and trade optimism recently pleased USD/JPY buyers.

Risk sentiment stabilizes after the NY Fed disavowed President Williams’ comments.Expectations of US-China trade talks next week also pleased risk-takers.The USD/JPY pair earlier dropped to the month’s low on active risk aversion.US consumer confidence, trade/political headlines will provide near-term trade guidance.In addition to the NY Fed’s comments reversing significance of the President Williams’ dovish statements, increasing odds for trade developments between the US and China also triggered USD/JPY recovery from monthly lows as it takes the bids to 107.55 during early Friday. The safe-haven pair dropped to the month’s low after the US Fed policymakers heightened chances of a 50 bps Fed rate cut during the July 31 meeting. Adding to the risk aversion was the US-Iran and the US-China tussles that have been present off-late. Though, market mood shifted during Asian morning on Friday after the Federal Reserve Bank of New York mentioned that comments made by the President John Williams at the academic institute were not indicative of the US Federal Reserve’s future policy actions. Further strengthening the momentum was the Washington Post’s article that said the US tech firms are pushing the Trump administration to allow them to supply the part to China’s Huawei. It should be noted that the US-China trade talks are presently hovering around the same issue which the US is refraining from off-late. Investors may now keep eyes over the US Michigan Consumer Sentiment Index (July), expected 98.5 versus 98.2, coupled with the news headlines concerning trade and politics for fresh impulse. While the US markets are still left to react to the NY Fed’s U-turn, chances of the greenback to strength during the later day are high if the scheduled data don’t disappoint. Also, the US recently claimed to shot down an Iranian drone and developments surrounding the same will grab investors’ attention. Technical Analysis Multiple lows marked during mid-July highlights 107.80/85 as the key short-term resistance, a break of which can propel prices to 1-week old descending trend-line around 108.05/10. Alternatively, 107.20 and 106.78 become crucial for sellers to watch during the pair’s declines.

Amid rife trade dispute between Japan and South Korea, the Japanese Foreign Minister Kono came out on the wires on Friday, telling the South Korean En

Amid rife trade dispute between Japan and South Korea, the Japanese Foreign Minister Kono came out on the wires on Friday, telling the South Korean Envoy that “it's very regrettable third-country arbitration could not take place over forced labor compensation dispute”. Additional Quotes: We strongly demand that South Korea swiftly take measures to correct the situation that is violating international law. What South Korean govt is doing is equivalent to subverting international order in the post-world war era.

The Washington Post has reported that the U.S. technology industry is pushing the Trump administration for permission to supply Chinese tech company H

The Washington Post has reported that the U.S. technology industry is pushing the Trump administration for permission to supply Chinese tech company Huawei with parts for consumer technology products, arguing that such sales won’t hurt U.S. national security, according to people familiar with the matter. Key notes from the article: Tech companies are asking the administration to allow sales of chips and other parts for Huawei-made smartphones and laptops, even if the White House is intent on continuing to block exports of supplies Huawei uses to manufacture 5G wireless equipment, according to the people, who requested anonymity to discuss sensitive issues. Several large semiconductor companies recently made such requests in applications to the Commerce Department, petitioning for special licenses that would allow them to sell some products to Huawei, these people said. The subject is likely to come up Monday at the White House where Huawei’s major suppliers are scheduled to meet with National Economic Council Director Larry Kudlow, according to people familiar with the matter. Companies such as Qualcomm, Intel and Google are expected to talk with Kudlow and other administration officials, and President Trump may make a brief appearance at the gathering. Tech companies are also asking the administration to relax the anti-Huawei rules that now bar them from participating alongside the Chinese company in global standards-setting bodies, which establish technical rules that underpin global networks, according to one person familiar with the matter. Prominent lawmakers, including Sens. Marco Rubio (R-Fla.) and Mark R. Warner (D-Va.), have warned the president not to ease up on Huawei. Earlier this week, bipartisan groups of lawmakers in the House and Senate introduced legislation that would reinforce the existing ban on U.S. companies providing computer chips and other key parts to Huawei. “Our bill will prohibit U.S.-based companies from doing business with Huawei until they no longer pose a national security threat,” said Sen. Mitt Romney (R-Utah), who was among the Senate sponsors. The House has included similar language in its version of the fiscal 2020 defense authorization bill. The Commerce Department added Huawei to a trade blacklist in May, saying it had “reasonable cause to believe” that the company was “involved in activities contrary to the national security or foreign policy interests of the United States.” Some attorneys who focus on U.S. export law have disagreed with that interpretation, arguing that the value in the chip comes not just from the physical manufacturing of the product, but also from the design, which happens largely in the United States. So far, the Commerce Department has not indicated it would crack down on companies that continue to sell Huawei products manufactured outside the U.S. by American companies, according to the people familiar with chip makers’ plans.

Brent oil's recovery from the one-month low off $61.32 could be extended further to key resistance at $63.80 on the hourly chart. Sings of seller exha

Brent has recovered from one-month lows.The corrective bounce could be extended further to key MA at $63.80Brent oil's recovery from the one-month low off $61.32 could be extended further to key resistance at $63.80 on the hourly chart. Sings of seller exhaustion have emerged on the 4-hour chart in the form of oversold readings on the relative strength index, bullish divergence of the MACD and a long-tailed bullish hammer. Further, the MACD on the hourly chart has turned bullish. So the black gold could rise toward the 50-hour moving average, currently at $63.80, in the next few hours. The overall outlook remains bearish with the daily chart reporting a rising channel breakdown. 4-hour chart Hourly chart Daily chartTrend: Corrective bouncePivot points 

USD/CNH keeps following a short-term symmetrical triangle as it trades near 6.8755 during early Friday.

USD/CNH trades in a range below the key short-term moving average.Technical indicators show traders’ indecision.USD/CNH keeps following a short-term symmetrical triangle as it trades near 6.8755 during early Friday. The pair recently bounced off the pattern support, indicating brighter chances of its pullback towards yesterday’s high around 6.8867. However, 200-bar moving average on 4-hour chart, coupled with the formation resistance, could limit the pair’s further upside around 6.8946/52. While 14-bar relative strength index (RSI) and 12-bar moving average convergence/divergence (MACD) are both signaling traders’ indecision, pair’s rise past-6.8952 could recall buyers targeting June 19 high around 6.9100. On the downside, 38.2% Fibonacci retracement of June month declines and the triangle support can limit the quote’s south-run near 6.8710/20. It should also be noted that the pair’s declines beneath 6.8710 can push bears towards 23.6% Fibonacci retracement level of 6.8500 ahead of highlighting late-June low close to 6.8166. USD/CNH 4-hour chartTrend: Sideways  

AUD/JPY has risen to the to a resistance, obeying the trendline support since recovering from the 18th June swings lows located down at 73.93. Bulls h

AUD/JPY has risen to the to a resistance, obeying the trendline support since recovering from the 18th June swings lows located down at 73.93. Bulls have reached a high of 76.07 with 76.28/30 on the radar as a prior high and resistance. 76.80 comes thereafter with a full retracement to the 50% Fibo of the mid-April highs to aforementioned recent lows at 77.40 as a major hurdle that meets a series of support levels. A 50% retracement of the recent range brings 75 the figure into play.   

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8635 vs Thursday's fix of 6.8761.

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8635 vs Thursday's fix of 6.8761.

Having slumped to the lowest in a fortnight, the US Dollar Index (DXY) recovers to 96.81 during the early morning on Friday.

Statements from the Federal Reserve Bank of New York downplayed market’s previous bearish bias towards the Fed policy.Lack of economic data highlights trade/political news to follow for fresh direction.Having slumped to the lowest in a fortnight, the US Dollar Index (DXY) recovers to 96.81 during the early morning on Friday. The greenback gauge previously had to bear the burden of dovish Fedspeak led by the NY Fed President John Williams and Fed Vice Chair Richard Clarida. Both the Federal Reserve policymakers cited the need for "swift" and "pre-emptive" action by the US central bank, which in turn fuelled market sentiment for a 50 basis points (bps) rate cut during the July 31 meeting. However, the Federal Reserve Bank of New York took a U-turn on early Friday morning in Asia by stating that Mr. Williams’ comments were not indicative of the future monetary policy. The same grabbed market attention during less liquid hours of the trading day and activated the US Dollar (USD) recovery while also stopping the risk sentiment from being worse. The US 10-year treasury yields remain static around 2.04%. Elsewhere, the US claims that it downed an Iranian drone whereas the US Treasury Secretary Steve Mnuchin highlighted the prospects an in-person meet of the diplomats to extend the trade negotiations. Technical Analysis While 21 and 50-day exponential moving average (EMAs) are likely to limit immediate upside around 96.97 and 97.06, a month-old trend-line at 97.50 becomes the key resistance to watch. Meanwhile, 96.45/40 and June month low near 95.84 could please sellers during further declines.

USD/JPY dropped from 108.00 to 107.21 for a one-month low overnight. In Tokyo, the price has been stabilising between 107.33/43. The slide in the pair

USD/JPY dropped from 108.00 to 107.21 for a one-month low overnight. Federal Reserve James Williams was advocating for significant easing.USD/JPY dropped from 108.00 to 107.21 for a one-month low overnight. In Tokyo, the price has been stabilising between 107.33/43. The slide in the pair came despite a strong end to Wall Street that took stocks off their lows. The Dollar was the culprit in the main after Federal Reserve speakers played up the rate cut ante.  The indexes subsequently rallied later in the day. The S&P 500 index added  0.4% to end at 2,995, and the Nasdaq Composite Index ended 0.3% higher at 8,207. The Dow Jones Industrial Average, DJIA, however, was the laggard due to the declines in UnitedHealth Group Inc. -2.27% and Boeing Co. BA, +1.85%, ending the day flat at 27,222.  Firstly, Federal Reserve James Williams advocating for significant easing which was followed up by Clarida underscoring the need for "swift" and "preemptive" action by the Fed. The Dollar tanked as markets are pricing in a higher chance of a 50bp cut by the Fed in July. Subsequently, we had the US 2-year treasury yields falling from 1.84% to 1.76% and the 10-years dropping from 2.08% to 2.03%. The markets have now priced 38bp of easing at the 31 July meeting, up from yesterday's pricing in of 33bp. We also had some risk-off on the reports of confrontations between the US and Iran which helped to lift the price of oil. In early Asia, we had the Japanese CPI for June 2019 with a headline of 0.7% y/y, in line with expectations. As for US data, analysts at Westpac explained that Manufacturing sentiment in the Philly region rebounded strongly in July:
 
"The Philadelphia Fed general activity survey surging to a one-year high of 21.5 from 0.3, exceeding even the most bullish forecasts; orders, shipments and employment all saw solid increases. The Conference Board’s US economic leading index fell 0.3%, weaker than expected. US jobless claims hovered down near general lows for yet another week; +216k from 208k the prior week." USD/JPY levelsValeria Bednarik, the Chief analyst at FXStreet explained that the USD/JPY pair was heading into the Asian session technically bearish according to the 4 hours chart, as the pair continued developing below all of its moving averages, and with the 20 SMA gaining bearish traction below the larger ones: "The Momentum indicator in the mentioned chart has extended its decline within negative territory, while the RSI turned sharply lower, all of which maintains favors further slides ahead. Trading now around the previous monthly low, the pair has room to extend its decline to 106.77, June’s low, during the upcoming sessions."
 

The GBP/USD pair’s recent recovery is currently struggling with the 100-hour moving average (4H 100MA) amid overbought RSI.

4H 100MA, 11-week descending trend-line limit the GBP/USD pair’s near-term upside amid overbought RSI levels.Sellers await a break of 1.2510/05 for fresh positions.The GBP/USD pair’s recent recovery is currently struggling with the 100-hour moving average (4H 100MA) while taking the rounds to 1.2545 on early Friday. Not only repeated failure to cross the key short-term moving average (MA) but overbought conditions of the 14-bar relative strength index (RSI) also signals brighter chances of the quote’s pullback to 1.2510/05 area comprising multiple supports and June month low. In a case where sellers dominate past-1.2505, July 09 low close to 1.2440 and current month bottom surrounding 1.2382 could be on their radars. Alternatively, pair’s ability to rise beyond 4H 100MA level of 1.2551 will be tested by the 11-week old descending trend-line ranged since early-May, at 1.2594. However, a successful break of 1.2594 opens the gate for the rally towards late-June lows close to 1.2660. GBP/USD 4-hour chartTrend: Pullback expected  

Given the New York Fed’s attempt to downplay the President Williams’ previously dovish comments, the USD/CAD pair recovers from multi-month lows.

USD recovers across the board after the New York Fed downplayed the President Williams’ earlier comments.The US Michigan Consumer Sentiment Index and Canadian Retail Sales data will join trade/political news to direct near-term market moves.Given the New York Fed’s attempt to downplay the President Williams’ previously dovish comments, the US Dollar (USD) manages to recover some of its earlier losses and triggers the USD/CAD pair’s pullback towards 1.3040 during early Friday morning. The Loonie pair initially dropped to the fresh lows since late-October 2018 amid signs of a 50 basis points rate cut from the key Federal Reserve policymakers including the New York Fed President John Williams. However, the Federal Reserve Bank of New York, later on, downplayed the bearish comments by stating that the President’s speech was academic and based on research and was not about potential policy actions at the upcoming FOMC meeting. Limiting the pair’s upside was WTI recovery on the back of the US comments that they have downed an Iranian drone and also due to Iran’s complain to the United Nations (UN) that their oil tanker is being seized by the British Navy. It should also be noted that the US-China trade developments are going on with Reuters quoting the US Treasury Secretary Steve Mnuchin who highlights chances of the in-person meeting of the diplomats. Looking forward, monthly readings of the US Michigan Consumer Sentiment Index (July) and Canadian Retail Sales (May) will be up for grabs during the day. While the US consumer confidence gauge is expected to inflate to 98.5 from 98.2, the Canadian data could flash 0.3% growth versus 0.1% prior on a monthly basis with Core figure likely rising to 0.4% against 0.1% previous readouts. Technical Analysis Considering the pair’s repeated failure to slip beneath 1.3000 round-figure, chances of its pullback to 1.3100 seem brighter on the break of February month low surrounding 1.3070. However, a downside break of 1.3000 may fetch the quote to 1.2970 and 1.2915 numbers to the south.

The US Dollar and rates dropped following Federal Reserve James Williams advocating for significant easing which was followed up by Clarida underscori

The Dollar tanked as markets are pricing in a higher chance of a 50bp cut.US 2-year treasury yields lost ground from 1.84% to 1.76%. The US Dollar and rates dropped following Federal Reserve James Williams advocating for significant easing which was followed up by Clarida underscoring the need for "swift" and "preemptive" action by the Fed. The Dollar tanked as markets are pricing in a higher chance of a 50bp cut by the Fed in July. US 2-year treasury yields lost ground from 1.84% to 1.76%, while the 10-years fell from 2.08% to 2.03%. Indeed, the markets have priced 38bp of easing at the 31 July meeting. Yesterday, they only pricing in 33bp yesterday. Then there were also reports of confrontations between the US and Iran which helped to lift the price of oil. In early Asia, we had the Japanese CPI for June 2019 with a headline of 0.7% y/y, in line with expectations. Currency action   Australian employment data brought a softer headline data yesterday, but the AUD/USD pair still climbed and scored above 0.7040 and reached as high as 0.7082, a three month high. EUR climbed from 1.1210 to 1.1270.  GBP/USD rallied from 1.2400 to 1.2544. USD/JPY dropped from 108.00 to 107.40 – a one-month low.  NZD rose from 0.6740 to 0.6871 which was a three-month high.  Key notes from Wall Street Wall Street ends mixed following Fed speaker's solid remindersUS Dollar Index technical analysis: DXY gets slammed on Fed’s William comments   

Japan Foreign Bond Investment rose from previous ¥297.1B to ¥950B in July 12

Japan Foreign Investment in Japan Stocks fell from previous ¥192.2B to ¥-93.1B in July 12

Japan National CPI ex Food, Energy (YoY) came in at 0.5%, below expectations (0.6%) in June

Japan National CPI ex-Fresh Food (YoY) meets expectations (0.6%) in June

Japan National Consumer Price Index (YoY) meets forecasts (0.7%) in June

Despite successfully trading above 23.6% Fibonacci retracement of a recent downpour, the GBP/JPY pair lags behind many key resistances by early Friday.

GBP/JPY remains positive above 23.% Fibonacci retracement.134.83/95 stands first in the series of resistances comprising trend-line and key moving averages.Despite successfully trading above 23.6% Fibonacci retracement of a recent downpour, the GBP/JPY pair lags behind many key resistances as it takes the rounds to 134.70 during the early Asian session on Friday. The 134.83/95 area comprising Thursday’s top and July 15 low becomes the first resistance buyers have to clear ahead of confronting a week-long descending trend-line at 135.10. Should prices rally past-135.10, 200-hour moving average (200-HMA) around 135.23 and 61.8% Fibonacci retracement level of 135.36 hold the keys to 7-day long descending trend-line at 135.65. Alternatively, the pair’s decline below 23.6% Fibonacci retracement level of 134.43 might not refrain from highlighting the latest low of 133.85 for sellers. GBP/JPY hourly chartTrend: Pullback expected  

With the US Dollar (USD) taking some of the pips back from bears, the Gold drops off the May 2013 high while trading near $1443 amid initial Friday.

The Federal Reserve Bank of New York tried safeguarding the President Williams earlier dovish comments.The USD is on the run-up to recover some of the previous losses due to the Fed speaker’s signals to rate cut.With the US Dollar (USD) taking some of the pips back from bears, the Gold drops off the May 2013 high while trading near $1443 amid initial Asian session on Friday. The bullion surged the previous day after the key Federal Reserve officials, including the New York Fed John Williams and Vice Chairman Richard Clarida, brightened chances of a 50 basis points (bps) cut in the Fed’s benchmark rate during the July 31 monetary policy meeting. However, sellers sneaked in around the multi-year top after the New York Fed said that the President Williams’ speech was not about potential policy actions. Though, the prices are yet to register a slump as geopolitical plays surrounding the US and Iran, coupled with the US-China trade stalemate, remain in the spotlight. Given the absence of major data, except the Michigan Consumer Sentiment Index, investors may keep following news headlines for fresh impulse. Technical Analysis May 2013 top surrounding $1,488/90, followed by $1,500 round-figure, can lure buyers during the yellow metal’s fresh rise beyond recent highs of $1,453, failure to do so could recall $1,430 and 21-day simple moving average (SMA) level of %1,413 back to the chart.    

Oil was sold off into the New York session but recovered some ground late in the day following escalations of the U.S. and Iran stand-off. In New York

WTI is currently trading at 55.77, between a range of 55.69 and 55.88, consolidating the overnight volatility. Oil was sold off into the New York session but recovered some ground late in the day.Oil was sold off into the New York session but recovered some ground late in the day following escalations of the U.S. and Iran stand-off. In New York, spot prices has travelled between $57.29bbls and $54.76bbls, ending the day down -1.82%, although up off its lows to $55.50bbls. August WTI lost $1.48, or 2.6%, to settle at $55.30 a barrel on the New York Mercantile Exchange after falling 1.5% on Wednesday. In Asia, the price is consolidating but better bid considering the heightened tensions between the US and Iran. Just as de-escalation with Iran looked to be on the cards after Pompeo's remarks suggested Iran was ready to negotiate, accompanied by what appeared to be a technical sell-off that triggered stops which could be attributed to the fall, a late announcement that the US had shot down an Iranian drone took the spotlight and helped the price to recover. Trump said that the amphibious assault ship, the USS Boxer, shot down an Iranian drone in the Strait of Hormuz in a defensive action, although Iran's FM Zarif claimed not be aware of any drone downing following Trump's announcement, according to Reuters. “We have no information about losing a drone today,” Zarif told reporters at the United Nations. "In US markets, tropical storm Barry came and went without any major outages, with production and refining already ramping back up. While the most recent EIA data showed large product builds, this was likely due to higher runs heading into the storm," analysts at TD Securities explained.  USD/JPY levels Following a break below the fresh weekly lows, WTI has extended the fall to a fresh low of 54.76 today. Bears now sit below the 4HR 200 moving average and have eyes on the 200-week moving average down at 52.98. Thereafter, we have the 14th Jan 50.41 lows ahead of the 26th November lows which are located at 49.44. On the upside, 57.40 comes in as a key area with the confluence of prior support and an accumulation of daily 20, 50 and 200 moving averages.

With the failure to slip beneath 120.80/78 support-zone, the EUR/JPY pair trades near 121.00 during early Friday.

EUR/JPY buyers lurk around June month low amid nearly oversold RSI.Break of key support can drag prices to sub-120.00 region.With the failure to slip beneath 120.80/78 support-zone, the EUR/JPY pair trades near 121.00 during early Friday. Given the nearly oversold conditions of 14-day relative strength index (RSI) and the quote’s U-turn from June month low, prices are likely to witness a pullback towards early-month low close to 131.30 while 23.6% Fibonacci retracement of November 2018 to January 2019 drop, at 121.51, could be on buyers’ radar then after. Should prices manage to clear 23.6% Fibonacci retracement, 21-day and 50-day simple moving averages (SMAs) around 121.83 and 122.07 respectively could return to the chart. Alternatively, bears await a sustained break of 120.80/78 support-zone, comprising June month low, to aim for January’s flash crash bottom surrounding 118.85. However, 120.00 round-figure might offer an intermediate halt during the slump. EUR/JPY daily chartTrend: Pullback expected  

Just when the markets are heavily expecting a 50 bps Fed rate cut on New York Fed President Williams comments, the bank came out with statements.

Just when the markets are heavily expecting a 50 basis points rate cut from the US Federal Reserve in its July 31 meeting, mainly based on the New York Fed President John Williams latest comments, the New York Federal Reserve came out with statements defending Mr. Williams’ dovish appearance. Key quotes Speech today by President Williams was academic and based on research. Was not about potential policy actions at the upcoming FOMC meeting. FX Implications The news triggered a pullback of the US Dollar (USD) which declined heavily on the Fed policymakers’ earlier comments. Investors may now await fresh clues for further direction

While yesterday's jobs report initially built the Aussie run-up, dovish comments from the key Fed members fuelled the pair which is at the 12-week top now.

Aussie bulls cheered domestic employment data, dovish Fedspeak to lead the G10 currencies.US-China trade developments, market risk sentiment will be closely followed amid a dearth of major data/events.While Wednesday’s jobs report initially built the Aussie run-up, dovish comments from the key Federal Reserve policymakers fuelled the quote towards 12-week high as it trades near 0.7075 on early Friday morning in Asia. No change in the Unemployment Rate and an upbeat reading of the Fulltime Employment data tamed expectations of successive rate cuts by the Reserve Bank of Australia (RBA) and pleased the Australian Dollar (AUD) buyers the previous day. Adding to the sentiment, with a great force, were the US Federal Reserve policymakers that highlighted prospects of 50 basis points Fed rate cut with their statements favoring the need for "swift" and "preemptive" action. However, the presence of risk aversion and doubts over the US-China trade deal remain present with the US 10-year treasury yield revisiting early-month levels around 2.02% by the press time. Investors may now concentrate more on the qualitative catalysts amid lack of data on the economic calendar. Among them, signals for the Fed’s future monetary policy and the trade-related headlines might lure the short-term traders. Technical Analysis 200-day exponential moving average (EMA) level of 0.7100 becomes the landmark to achieve for the Aussie bulls at the moment. However, a sustained break beyond yesterday’s high around 0.7080 becomes a precondition which if not matched shifts sellers’ attention to overbought conditions of 14-day relative strength index (RSI) and can recall 0.7050/45 back to the chart.

Three key Tory members of the UK political fraternity are readying to resign if Boris Johnson becomes the PM next week, as per the UK Times.

Three key Tory members of the UK political fraternity, including the chancellor Philip Hammond and Rory Stewart, the international development secretary, are readying to resign if the Prime Minister (PM) hopeful Boris Johnson wins the race on next Wednesday, the UK Times report. The news report further says that the resignations will deny the new PM the chance to sack the most hardline opponents of a no-deal Brexit. FX implications While no immediate reaction to the news was witnessed during early Asian morning on Friday, the news report increases the chances of a soft Brexit and might help the British Pound (GBP) for a short-term.

With the Fed policymakers’ clear bearish bias dragging the US Dollar (USD) down, the NZD/USD carries previous strength forward as it trades near 3-month high.

Greenback bears took dovish Fedspeak ahead of the blackout period as a clear indication of the Fed’s high rate cut.Absence of major data, positive sentiment surrounding the largest customer, Australia, helped Kiwi.Trade/political headlines will be in the spotlight following NZ Credit Card Spending data.With the Fed policymakers’ clear bearish bias dragging the US Dollar (USD) down, the NZD/USD carries previous strength forward as it trades near 3-month high while taking the rounds to 0.6785 at the start of Friday’s Asian session. The New York Fed President John Williams stole the show before the US Federal Reserve policymakers go for a 2-week’s blackout period ahead of the July 31 monetary policy meeting decision. Mr. Williams provided the strongest hint to the speculations of 50 basis points (bps) Fed rate cut during the upcoming Federal Open Market Committee meet while mentioning that a preventive cut is better than letting ‘disaster unfold’. Additionally, comments from the Fed Vice Chairman Richard Clarida, as conveyed by the Fox News, were also downbeat enough to support the sentiment in favor of the Kiwi pair. Elsewhere, optimism surrounding the largest customer Australia also pleased the New Zealand Dollar (NZD) buyers. On the contrary, the US-China trade tussles turn stalemate as the US weighs what kind of concessions it can give to China’s Huawei in order to push the trade negotiations forward. Looking ahead, the economic calendar has fewer data/events up for release during the day but New Zealand’s Credit Card Spending for May and the US Michigan Consumer Sentiment Index for July will be observed closely. While NZ Credit Card Spending may soften to 5.4% from 6.6%, the US consumer confidence gauge could strength to 98.5 versus 98.2. Technical Analysis With the overbought conditions of 14-day relative strength index (RSI) favors the quote’s pullback to 200-day exponential moving average (EMA) level of 0.6716, 0.6750 may offer an intermediate halt during the dip. Meanwhile, sustained break of 0.6790 enables the pair to target April month high around 0.6840.

DJIA was ending the day flat at 27,222. Nasdaq Composite Index ended 0.3% higher at 8,207. The S&P 500 index added 0.4% to end at 2,995. Wall Street'

 DJIA was ending the day flat at 27,222. Nasdaq Composite Index ended 0.3% higher at 8,207. The S&P 500 index added  0.4% to end at 2,995.Wall Street's stocks were closing Thursday's session mostly higher Thursday as investors price back in the prospects of a new easing cycle at the Fed following New York President John Williams saying that the Fed' should act quickly to prevent further economic weakness, giving the US economy a vaccine against it.  The comments came before the blackout period ahead of the 31 July FOMC meeting where increasing odds of rate cut is expected, despite a recent run of solid data.Williams: Concerned inflation expectations are anchored too low - RTRSThe indexes subsequently rallied later in the day. The Dow Jones Industrial Average, DJIA, however, was the laggard due to the declines in UnitedHealth Group Inc. -2.27% and Boeing Co. BA, +1.85%, ending the day flat at 27,222. The S&P 500 index added  0.4% to end at 2,995, and the Nasdaq Composite Index ended 0.3% higher at 8,207.  U.S. data The Philadelphia Fed factory index jumped by the most in ten-years in July, rising to 21.8 (the highest level since July 2018), and far exceeding expectations for a print of 5: "Increases in orders, shipments, prices paid, and employment drove the rise in the index for the region. The New York Empire State survey earlier this week rose to 4.3 (from -8.6), a +13 gain from June. Taken together with the Philadelphia Fed gauge, which rose +21, we could be in for a strong ISM print later this month if the trend continues," analysts at ANZ bank explained.  DJIA levels On a technical basis, the DJIA  consolidates within a broader bearish correction where 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 flip side, the 28500s remains as a key target.

South Korea Producer Price Index Growth (YoY) below forecasts (0.5%) in June: Actual (0.1%)

South Korea Producer Price Index Growth (MoM) below expectations (-0.1%) in June: Actual (-0.3%)

The US Dollar Index (DXY) broke below the 97.00 handle and the 200-daily simple moving average (DSMA). DXY 4-hour chart The market is trading below it

DXY breaks below the 97.00 figure and the 200 DSMA. The level to beat for bears is 96.60 and 96.36.
  DXY daily chart
  The US Dollar Index (DXY) broke below the 97.00 handle and the 200-daily simple moving average (DSMA).
DXY 4-hour chart
  The market is trading below its main SMAs suggesting bearish momentum in the medium term. Bears would need a break below 96.60 and 96.36.
DXY 30-minute chart
  The bears took the market by surprise and brought the index near the weekly lows. Resistances are seen at 96.80 and the 97.00 figure. 
Additional key levels  

Garis Masa Berita Forex

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