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Forex News Timeline

Wednesday, July 18, 2018

   •  Against the backdrop of a broadly stronger USD, softer UK consumer inflation figures exerted some additional downward pressure and dragged the p

   •  Against the backdrop of a broadly stronger USD, softer UK consumer inflation figures exerted some additional downward pressure and dragged the pair to fresh YTD lows.   •  Short-term indicators continue losing altitude and further reinforce prospects for an extension of the downfall towards testing a support marked by a short-term descending trend-channel.GBP/USD 4-hourly chartSpot rate: 1.3049
Daily High: 1.3117
Trend: BearishResistance
R1: 1.3050 (previous YTD low set on June 28)
R2: 1.3117 (current day swing high)
R3: 1.3140 (horizontal zone)Support
S1: 1.3000 (psychological round figure mark)
S2: 1.2970 (descending trend-channel support)
S3: 1.2915 (horizontal zone)
 

The UK Consumer Prices Index (CPI) 12-month rate came in at 2.4% in June, unchanged from May’s reading and against 2.6% anticipated, the UK Office for

The UK Consumer Prices Index (CPI) 12-month rate came in at 2.4% in June, unchanged from May’s reading and against 2.6% anticipated, the UK Office for National Statistics (ONS) reported on Wednesday.  Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at 1.9% y/y, down from 2.1% booked in May while surprising the markets to the downside. The monthly figures showed that the UK consumer prices decelerated to 0.0% in June versus 0.4% previous, missing 0.2% expectations.Main Points (via ONS):“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.3% in June 2018, unchanged from May 2018. Rising prices for motor fuels and domestic gas and electricity produced the largest upward contributions to change in the rate between May and June 2018. Falling prices for clothing and games, toys and hobbies provided the largest downward effects.”

United Kingdom DCLG House Price Index (YoY) down to 3% in June from previous 3.9%

United Kingdom Producer Price Index - Output (YoY) n.s.a below expectations (3.2%) in June: Actual (3.1%)

United Kingdom Producer Price Index - Input (MoM) n.s.a below forecasts (0.3%) in June: Actual (0.2%)

United Kingdom Producer Price Index - Output (MoM) n.s.a registered at 0.1%, below expectations (0.3%) in June

United Kingdom Consumer Price Index (YoY) below forecasts (2.6%) in June: Actual (2.4%)

United Kingdom Retail Price Index (YoY) below expectations (3.5%) in June: Actual (3.4%)

United Kingdom Consumer Price Index (MoM) registered at 0%, below expectations (0.2%) in June

United Kingdom PPI Core Output (YoY) n.s.a meets forecasts (2.1%) in June

United Kingdom PPI Core Output (MoM) n.s.a in line with forecasts (0.2%) in June

United Kingdom Core Consumer Price Index (YoY) came in at 1.9% below forecasts (2.2%) in June

United Kingdom Producer Price Index - Input (YoY) n.s.a came in at 10.2%, above expectations (10%) in June

United Kingdom Retail Price Index (MoM) came in at 0.3% below forecasts (0.4%) in June

Reuters reports comments from the Chinese Foreign Ministry on the US-China trade war, with the key headlines found below. The trade war has become th

Reuters reports comments from the Chinese Foreign Ministry on the US-China trade war, with the key headlines found below. The trade war has become the biggest 'confidence killer' for the global economy. The US is fabricating all kinds of excuses on trade, including the excuse of national security. If the US continues down this road, the whole world will fight back.

   •  Powell’s overnight hawkish comments continue to underpin the USD.    •  Weaker crude oil prices weigh on Loonie and provide an additional boost

   •  Powell’s overnight hawkish comments continue to underpin the USD.
   •  Weaker crude oil prices weigh on Loonie and provide an additional boost.
The USD/CAD pair built on overnight strong gains and jumped to 2-1/2 week tops during the early European session on Tuesday. The US Dollar continued strengthening on the back of hawkish comments by the Fed Chair Jerome Powell and was seen as one of the key factors driving the pair higher for the second consecutive session. Powell's upbeat outlook for the US economy reaffirmed gradual Fed monetary policy tightening cycle through 2018 and remained supportive of the prevailing bullish sentiment around the greenback.  Meanwhile, a weaker tone around crude oil prices further weighed on the commodity-linked currency - Loonie and provided an additional boost to the pair's ongoing positive momentum. With today's strong up-move, the pair has now added nearly 150-pips over the past 24-hours and the latest leg of a spike over the past hour or so could also be attributed to some technical buying above the 1.3215-20 support zone.  Hence, a follow-through up-move, supported by persistent USD buying interest, now looks a distinct possibility. Traders now look forward to the US housing market data for fresh impetus ahead of Powell's second round of testimony before the House Financial Services Committee. Technical levels to watchAny subsequent up-move is likely to confront resistance near the 1.3265 level, above which the pair seems all set to aim towards reclaiming the 1.3300 handle. On the flip side, the 1.3200 handle now seems to protect the immediate downside, which if broken might prompt some long-unwinding trade and accelerate the slide back towards mid-1.3100s.

South Africa Consumer Price Index (MoM) registered at 0.4%, below expectations (0.6%) in June

South Africa Consumer Price Index (YoY) came in at 4.6%, below expectations (4.8%) in June

According to Analysts at Danske Bank, the Swiss Franc is expected to depreciate towards the 1.22 area vs. the shared currency in a 12-month horizon.

According to Analysts at Danske Bank, the Swiss Franc is expected to depreciate towards the 1.22 area vs. the shared currency in a 12-month horizon.Key Quotes“The SNB kept its dovish tone at the June meeting and maintained that the franc is ‘highly valued’ and kept the option of FX intervention open”. “While the SNB has clearly been challenged (again) by the ECB’s hesitant stance, the SNB should also have cemented its eagerness to see CHF weaker before making a shift on policy”. “With EUR strength set to return eventually, this makes us comfortable about maintaining a case for CHF depreciation in 6-12M but continued trade tensions is a downside EUR/CHF risk. We still look for 1.16 in 1M, 1.16 in 3M, 1.19 in 6M and 1.22 in 12M”.

Following recent price action, Cable could now be looking to a potential test of the 1.3040 area, suggested Karen Jones, Head of FICC Technical Analys

Following recent price action, Cable could now be looking to a potential test of the 1.3040 area, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.Key QuotesGBP/USD’s near term rally was short lived and remains on the defensive following last week’s rejection of 1.3362, the 23.6% retracement of the move down from the April peak. The Elliott wave count is indicating that this was the end of the corrective move higher and our attention remains on the 1.3040 October 2017 low. Below 1.3040 would target the 50% retracement at 1.2918. Below 1.2918 would be treated as the break down point to 1.2580, the 61.8% retracement from 2016”. “Above 1.3363, the 9 th July high would imply a deeper corrective phase to the 1.3470/1.3500 area and there is scope for the 1.3588 200 day ma (although this is less favoured)”.  

   •  Overnight bullish breakthrough a one-week-old trading range stalls near a descending trend-line resistance, extending from Oct. 2017 high throug

   •  Overnight bullish breakthrough a one-week-old trading range stalls near a descending trend-line resistance, extending from Oct. 2017 high through Nov. 2017 and March 2018 tops.    •  Short-term technical indicators maintain their bullish bias and the fact that the cross remains comfortably above short/medium/long-term moving averages (50, 100 & 200-day) should help limit any meaningful corrective slide.   •  Today's release of the latest UK/final EZ consumer inflation figures will now be looked upon for fresh impetus and might attract some dip-buying interest at lower levels. EUR/GBP daily chartSpot rate: 0.8885
Daily High: 0.8896
Trend: BullishResistance
R1: 0.8915 (overnight swing high)
R2: 0.8961 (R2 daily pivot-point)
R3: 0.9000 (psychological round figure mark)Support
S1: 0.8860 (horizontal zone)
S2: 0.8820 (200-day SMA)
S3: 0.8806 (S2 daily pivot-point)
 

Irish Foreign Minister Simon Coveney is on the wires now, via Reuters, expressing his concerns about the Brexit negotiations. Key Headlines: Real Br

Irish Foreign Minister Simon Coveney is on the wires now, via Reuters, expressing his concerns about the Brexit negotiations.Key Headlines:Real Brexit negotiations cannot begin while Britain continues to negotiate with itself. Some of the amendments passed by British parliament is not helpful for negotiations. But should not panic about amendments, there is a capacity for it to be changed. The UK still needs to come up with a backstop that works. It is unfortunate that people are trying to undermine the Brexit white paper.

According to Elliot Clarke, Research Analyst at Westpac, momentum in China’s housing market has continued to build in recent months as in June, 84% of

According to Elliot Clarke, Research Analyst at Westpac, momentum in China’s housing market has continued to build in recent months as in June, 84% of the 70 cities surveyed were reporting monthly price gains – the strongest outcome since August 2016.Key Quotes“At 90%, gains for the established market were broader still – a high back to April 2013.” “While the breadth of gains is striking, their quantum remains relatively subdued compared to heights reached in 2015 and 2016.” “Authorities are less likely to react to accelerating price growth in this instance given it is being seen in tier 2 and 3, where construction activity and wealth gains are desired, and because (in a macro sense) strength in residential construction is currently necessary to offset weakness in other key sectors – namely utilities and transport.” “Growth in housing starts has accelerated ahead of sales, so it is right to expect construction momentum to hold up in the second half of 2018.” “That being said, if the pace of sales does not follow, then construction activity growth will again fall back as inventory is worked through.” “If authorities decide that a further easing of financing conditions is needed, it will come via another cut to the Reserve Requirement Ratio (we forecast 100bps by year end) and the provision of additional liquidity to interbank markets. By and large, region-specific mortgage restrictions will remain in place.”

The greenback, when tracked by the US Dollar Index (DXY), is extending the weekly upside to the area around 95.30. US Dollar looks to data, Powell T

The index charted an ‘outside day’ to the upside on Tuesday.DXY moved above the 95.00 handle and now targets YTD peaks.Powell, US housing sector, EIA report all coming in next.The greenback, when tracked by the US Dollar Index (DXY), is extending the weekly upside to the area around 95.30.US Dollar looks to data, PowellThe index reacted positively to yesterday’s testimony by Chief J.Powell, while markets are now pricing in almost 90% of a rate hike at the September 26 meeting. At his semi-annual testimony before the Senate Banking Committee, Powell reiterated the gradual stance of the Federal Reserve regarding its tightening cycle, while he expects low inflation and a strong labour market to still prevail in the years to come. In the meantime, the buck keeps pushing higher following yesterday’s ‘outside day’ candle and has once again shifted its focus to the mid-95.00s, where sits the 2018 peaks. Later in the session, Fed’s J.Powell will testify before the House Financial Services Committee, with consensus looking at the Q&A session as the statement is expected to be a ‘copy-paste’ from yesterday’s testimony. In addition, Housing Starts, Building Permits are due seconded by the EIA’s report on US crude oil supplies and the release of the Fed’s Beige Book.US Dollar relevant levelsAs of writing the index is up 0.22% at 95.18 facing the next resistance at 95.26 (high Jul.18) seconded by 95.53 (2018 high Jun.21) and finally 96.00 (psychological handle). On the downside, a breach of 94.68 (21-day sma) would target 94.60 (10-day sma) en route to 94.04 (23.6% Fibo of the April-June up move).

Eurozone final CPIs estimate overview Eurostat will publish the Eurozone's inflation final estimate for June at 0900GMT today. Consumer prices are se

Eurozone final CPIs estimate overviewEurostat will publish the Eurozone's inflation final estimate for June at 0900GMT today. Consumer prices are seen arriving at 2% on a yearly basis, confirming the flash estimate. While the core figures are expected to come in at 1% same as that reported in the first readout. On a monthly basis, the CPI figure for June is seen sharply lower at 0.1% versus 0.5% previous while the core CPI is also expected to come in softer at 0.1% versus 0.3% last.Deviation impact on EUR/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 1.5 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 50 pips. How could affect EUR/USD?On better readings, the EUR/USD pair could head back towards “1.1654 is the convergence of the Simple Moving average 10-1h, the SMA 50-15m, the one-day high and the SMA 5-1h. A minor line is 1.1641 which is the SMA 10-15m and the Fibonacci 38.2% one-month. Looking down, the road is smoother. Some support awaits at 1.1589 which is the meeting point of the Fibonacci 23.6% one-month and the Pivot Point one-day Support 2. Lower, some support awaits at 1.1557 which is the Bolinger Band one-day lower before the 2018 nadir of 1.1508. All in all, it is clear to see that rising is harder than falling.” Yohay Elam, Analyst at FXStreet explains,” FXStreet’s Analyst Yohay Elam explains.Key NotesEurozone inflation data in focus today – Danske Bank EUR/USD clattering into familiar lows as the Greenback surges ahead of the EU's CPI releaseAbout Eurozone final CPIs estimateThe Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

   •  Overnight hawkish comments by the Fed Chair Jerome Powell remain supportive of resurgent USD demand and kept exerting downward pressure on the d

   •  Overnight hawkish comments by the Fed Chair Jerome Powell remain supportive of resurgent USD demand and kept exerting downward pressure on the dollar-denominated commodity.   •  Yesterday's fall below 200-week SMA marked a fresh bearish breakdown, with bears now looking for a subsequent weakness through a downward sloping trend-channel on the daily chart.   •  Daily/hourly RSI (14) point to highly oversold conditions, albeit has failed to lend any support and stall the ongoing bearish momentum to the lowest level since July 2017. Gold daily chartSpot rate: $1224.40
Daily Low: $1222.38
Daily High: $1229.17
Trend: BearishResistance
R1: $1229 (current day swing high)
R2: $1234 (200-week SMA)
R3: $1238 (previous YTD swing low)Support
S1: $1229 (July-14, 2017, daily closing low)
S2: $1220 (round figure)
S3: $1214 (horizontal zone)
 

Austria HICP (MoM): 0.1% (June)

Austria HICP (YoY) climbed from previous 2.1% to 2.3% in June

   •  USD continues gaining traction following Powell’s upbeat comments.    •  Subdued copper prices do little to lend any support and stall the down

   •  USD continues gaining traction following Powell’s upbeat comments.
   •  Subdued copper prices do little to lend any support and stall the downfall.
The Aussie remained on the back-foot against its American counterpart, with the AUD/USD pair weakening farther below the 0.7400 handle to over two-week lows.  The pair extended this week's retracement slide from the 0.7440 supply zone and was further weighed down by a broadly stronger US Dollar, which gained additional traction from the Fed Chair Jerome Powell's upbeat outlook for the US economy. Powell's comments, during the semiannual congressional testimony, suggested that lingering trade tensions will not prevent the Fed from raising interest rates and provided a strong boost to the greenback.  Meanwhile, a consolidative price action around copper prices did little to lend any support to the commodity-linked Australian Dollar and stall the pair's ongoing slide to mid-0.7300s, the lowest level since July 3.  Moving ahead, today's US housing market data will now be looked upon for some trading impetus ahead of Powell's second round of testimony before the House Financial Services Committee. Technical levels to watchImmediate support is pegged near the 0.7335 horizontal level, below which the pair is likely to accelerate the fall back towards challenging the 0.7300 handle. On the flip side, the 0.7380 level now seems to act as an immediate resistance, which if cleared might lift the pair, back above the 0.7400 handle, towards retesting the 0.7440 supply zone.
 

Analysts at Danske Bank explain that the relatively upbeat rhetoric from Fed Chair Jerome Powell last night pushed short-term yields higher and the ma

Analysts at Danske Bank explain that the relatively upbeat rhetoric from Fed Chair Jerome Powell last night pushed short-term yields higher and the market is now pricing in a September hike by close to a 90% probability.Key Quotes“The curve 2Y10Y flatten further to just 24bps. Powell was asked about the curve flattening, but he gave no firm answer if this is a major concern for the Fed. Noteworthy, the 10Y yield hardly moved underlining that the level seems to be locked in here slightly below 3%. With continued low inflation pressure and the Fed on course for two more rate hikes this year, we should expect the flattening to continue unabated over the summer.”

Strategist at Danske Bank Vladimir Miklashevsky noted the European cross could edge higher in the short term horizon. Key Quotes “GBP was sold off y

Strategist at Danske Bank Vladimir Miklashevsky noted the European cross could edge higher in the short term horizon.Key Quotes“GBP was sold off yesterday on reports that UK PM Theresa May could lose the vote in the House of Commons on a pro-European EU custom union amendment”. “May survived the vote last night, but GBP remained weak, with EUR/GBP trading around 0.8880 overnight. Yesterday’s sell-off in GBP came despite the release of a decent UK job report, which came in as expected and thus still supports the case for a rate hike from the Bank of England in August”. “However, the market is already pricing in more than an 80% probability that the BoE will raise the Bank Rate on 2 August, and thus relative interest rates should provide only little support to GBP ahead of the BoE meeting. Hence, risks remain skewed to the upside for EUR/GBP near term amid political uncertainty related to Brexit”.

A fresh research conducted by the European Central Bank (ECB) economists showed that the central bank’s EUR 2.6 trillion assets purchase scheme may ha

A fresh research conducted by the European Central Bank (ECB) economists showed that the central bank’s EUR 2.6 trillion assets purchase scheme may have reduced income inequality, putting at rest the dispute that claims the lavish stimulus mainly benefited the wealthiest of households. The paper argued, “The reduction in unemployment and in income inequality is particularly marked in those countries, such as Spain, where the initial unemployment rate is higher. The effect can mostly be ascribed to the disproportionately large drop in the unemployment rate of low-income households.” The paper, published by the ECB as a “Discussion Paper”, added: “The overall effects of monetary policy on income inequality are modest, compared to its observed secular trend. “Monetary policy in recent years benefited most households and did not contribute to an increase in wealth, income or consumption inequality.”

Analysts at Nomura suggest that rising oil prices and household energy bills together are likely to add between 0.1pp and 0.2pp to the annual rate of

Analysts at Nomura suggest that rising oil prices and household energy bills together are likely to add between 0.1pp and 0.2pp to the annual rate of CPI inflation in June for the UK economy.Key Quotes“Our forecast for CPI inflation is on the cusp between 2.5% and 2.6% – we have opted for the former as our official forecast (previous 2.4%, the BoE’s view is also 2.5%). With a broadly unchanged wedge that implies an RPI inflation forecast of 3.4% (index level 281.6). We see June’s rise as a temporary blip before a fall back to 2% towards year-end.” “Producer prices: Our simple model that takes into consideration shifts in oil and commodity prices and sterling suggests a flat reading on input prices in June. Still robust output price readings from the PMI and CBI surveys point to a further 0.2% increase in core output prices – the headline should rise by more owing to higher petrol prices.”

Analysts at Danske Bank points out that GBP was sold off yesterday on reports that UK PM Theresa May could lose the vote in the House of Commons on a

Analysts at Danske Bank points out that GBP was sold off yesterday on reports that UK PM Theresa May could lose the vote in the House of Commons on a pro-European EU custom union amendment.Key Quotes“May survived the vote last night, but GBP remained weak, with EUR/GBP trading around 0.8880 overnight. Yesterday's sell-off in GBP came despite the release of a decent UK job report, which came in as expected and thus still supports the case for a rate hike from the Bank of England in August.” “However, the market is already pricing in more than an 80% probability that the BoE will raise the Bank Rate on 2 August, and thus relative interest rates should provide only little support to GBP ahead of the BoE meeting. Hence, risks remain skewed to the upside for EUR/GBP near term amid political uncertainty related to Brexit.”

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair should keep looking south while below 1.1723/90. Key Quotes “EUR/

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair should keep looking south while below 1.1723/90.Key QuotesEUR/USD sold off yesterday charting an outside day to the downside. Rallies have not been enough to dislodge any resistance of note. For now we will assume while below the 55 day ma at 1.1723 and the last week’s high at 1.1790 a downside bias remains. The market remains on the defensive currently and attention stays on the 1.1510/08 recent lows and below here the 200 week ma at 1.1382”. “A recovery above 1.1790 will target 1.1855. Above 1.1855 we look for a deeper retracement to the 1.1930 55 week ma, with scope for the 1.1986 200 day ma, where we suspect that it will fail”.

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

The UK June CPIs OverviewThe cost of living in the UK as represented by the consumer price index (CPI) is due later today at 0830 GMT. The headline CPI inflation is expected to tick lower to 0.2% m/m in June while the annualized figure is seen firmer at 2.6%. The core inflation rate that excludes volatile food and energy items is also expected to have accelerated to 2.2% last month versus 2.1% booked in May.Deviation impact on GBP/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.How could it affect GBP/USD?Upbeat UK CPI figures are likely to offer the much-needed respite to the GBP bulls, prompting a recovery back above the 1.31 handle for the upside targets of 1.3148 (daily pivot), 1.3179 (5-DMA) and 1.3214/26 (10-DMA/ classic R1). On a downside surprise, the GBP/USD pair could breach three-week lows of 1.3070 below which floors open up for a test of 1.3050 (seven-month lows) and 1.3000 (key psychological levels).Key NotesMarket themes of the Day: UK & Eurozone inflation and Powell’s testimony part 2.0 headline Could CPI Rescue POUND-ed Brexit-hit Sterling? UK: CPI to pick up to 2.6% y/y in June - TDS GBP/USD Technical Analysis: Sterling on the downside as bears resume controlAbout the UK CPIThe Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

The EUR/USD is knocking further into bearish territory as the European market session gets underway, touching into 1.1630 as bears keep a firm grip on

The Euro is looking over the edge at further losses as the Fed-ECB divergence looks set to widen further.EU inflation figures due for Wednesday could push the EUR further down if the figures disappoint.The EUR/USD is knocking further into bearish territory as the European market session gets underway, touching into 1.1630 as bears keep a firm grip on the controls. US Federal Reserve Chairman Jerome Powell drove markets back into the Greenback on Tuesday with his Senate testimony that further cemented the Fed's plans of a gradual rate hike path looking forward, and the Fed's hawkish stance sees markets increase their focus on the divergence between the US Fed and the European Central Bank (ECB), whose dovish outlook on economic activity sees the central bank unlikely to begin lifting rates until late 2019. Wednesday will be seeing Consumer Price Index (CPI) data at 09:00 GMT, and with the Fed-ECB policy divergence front and center of traders' focus, the y/y CPI into June, forecast to remain steady at 2%, could see the Euro resume the bearish push heading into the late week.EUR/USD Levels to watchThe Euro-Dollar pairing's technical outlook is leaning heavily bearish with declining resistance from a falling 50-day SMA, and as FXSTreet's own Haresh Menghani noted in his EUR/USD forecast: "weakness below the trend-channel support, currently near the 1.1630 area, is likely to accelerate the fall towards the 1.1600 handle before the pair eventually drops to 1.1565 horizontal zone en-route the key 1.1500 psychological mark, YTD lows. On the flip side, any meaningful up-move back above 1.1670 level might continue to confront fresh supply around 50-day SMA, currently near the 1.1700 handle. Only a sustained move beyond the mentioned hurdle, leading to a follow-through momentum beyond 1.1745-50 resistance might negate the near-term negative outlook and assist the pair to continue with its positive momentum."

Analysts at Nomura suggest that based on detailed Q2 GDP breakdown data of Chinese economy which was released by the National Bureau of Statistics, th

Analysts at Nomura suggest that based on detailed Q2 GDP breakdown data of Chinese economy which was released by the National Bureau of Statistics, they estimate the contribution from service sector to real GDP growth declined to 4.1 percentage points (pp) from 4.2pp in Q1, while that from primary and secondary sectors remained largely unchanged.Key Quotes“By industry, output growth in construction and property services sectors dropped by 1.4pp and 0.7pp, respectively, to 4.0% y-o-y and 4.2% in Q2, consistent with the recent slowdown in property investment and sales; that in wholesale & retail sales sector also slowed, by 0.2pp to 6.6% in Q2, likely weighted on by the rapid build-up of household leverage.” “That said, we see a continued momentum building in new economy components.” “We continued to expect a growth slowdown ahead, mainly due to headwinds from weakening end-demand, rising credit defaults, a problematic property sector, and escalating ChinaUS trade tensions.”

Analysts at Danske Bank points out that in the UK, CPI inflation data for June is due out at 10:30 CEST and will be a key economic release for today’s

Analysts at Danske Bank points out that in the UK, CPI inflation data for June is due out at 10:30 CEST and will be a key economic release for today’s session.Key Quotes“It is the last major data release before the Bank of England meets on 2 August, and inflation needs to surprise significantly for the BoE to change its plans to raise the Bank Rate at the next meeting.” “Today, we get the final euro area HICP figures for June. From the country figures released in advance, there is a risk that core inflation will be revised lower to 0.9% from 1.0%, indicating that the underlying inflation pressures still remain fairly weak.” “Fed Chair Powell continues his semi-annual testimony this afternoon before the House Financial Services Committee. Powell did not change the current policy signal yesterday and the second day is usually less interesting than the first.”

Analysts at TD Securities note that in the UK, late-night drama in the House of Commons saw the government survive key votes to incorporate the hard B

Analysts at TD Securities note that in the UK, late-night drama in the House of Commons saw the government survive key votes to incorporate the hard Brexit ERG group's amendments to the Customs Bill.Key Quotes“Last night's votes showed that the hard Brexit Conservatives have the numbers to sway the government's Brexit strategy, in contrast to the Rebel Remainers who have lost or withdrawan some of their key amendments. Overall, it shows that Parliament has the numbers to pass a harder--not softer--form of Brexit.”  

Elliot Clarke, Research Analyst at Westpac, points out that the FOMC Chair Powell appeared before the Senate’s Committee on Banking, Housing, and Urba

Elliot Clarke, Research Analyst at Westpac, points out that the FOMC Chair Powell appeared before the Senate’s Committee on Banking, Housing, and Urban Affairs overnight in part one of his Semiannual report to Congress and his message on the economy was clear: “the FOMC believes that – for now – the best way forward is to keep gradually raising the federal funds rate”.Key Quotes“In his prepared remarks, Chair Powell showed no particular concern on inflation. It was noted to have been “a little above 2 percent” recently, but this was due to “a significant increase in gasoline and other energy prices”. Looking forward, the symmetric nature of the “2 percent objective” was (again) highlighted, with the FOMC said to only be “concerned if inflation were running persistently above or below our objective”.” “Nominal wage gains were also viewed as sanguine for the inflation outlook.” “While employment growth continues to run well in excess of the level necessary to keep the unemployment rate unchanged (at or below its full employment level), the FOMC does not expect this benign state of affairs to end soon.” “The primary reason why is the case is that, while it is rising, prime-aged participation still remains well below its pre-GFC level.” “Comments on the yield curve were also non-threatening, with the only reference being that Chair Powell regarded long-term rates as a useful input when assessing neutral rates. A narrowing 2-10 Treasury spread is unlikely to unnerve the FOMC.” “The risks to watch more closely then are those tied to the real economy, particularly current trade tensions. Most notable from the Q&A was the comment from Chair Powell that the FOMC had evidence of capital expenditure plans being “put on ice” owing to uncertainties around trade. This builds on previous comments found in the Beige Book and minutes on this issue.”

Analysts at TDS are looking for the UK CPI to pick up to 2.6% y/y in June (mkt 2.6%), a tenth higher than the BoE had forecast in the May IR. Key Quo

Analysts at TDS are looking for the UK CPI to pick up to 2.6% y/y in June (mkt 2.6%), a tenth higher than the BoE had forecast in the May IR.Key Quotes“But as it comes on the back of rising energy prices, we don't think that the upside surprise will have much impact on the BoE's thinking. For core inflation we look for a steady reading of 2.1% y/y for the third straight month (mkt 2.1%).” “We've seen growing reports of labour shortages and upward pressure on wages in the UK, which should help to support underlying inflation going forward.”

GBP/USD Chart, 15-Minute Spot rate:  1.3095 Relative change:  -0.15% High:  1.3116 Low:  1.3093

Sterling continuing to head lower ahead of Wednesday's London market session, as Brexit concerns continue to weigh.UK inflation figures are due early at 08:30 GMT, but the bears are already in control. A positive reading could put a floor under current losses.Daily candles have the pair in a confirmed downside move from a lower high, and the year's low is close to breaking.GBP/USD Chart, 15-MinuteSpot rate:  1.3095 Relative change:  -0.15% High:  1.3116 Low:  1.3093     Trend:  Bearish     Support 1:  1.3067 (previous day low) Support 2:  1.3049 (2018 low; major technical bottom) Support 3:  1.2972 (S2 weekly pivot)     Resistance 1:  1.3153 (38.2% Fibo retracement level) Resistance 2:  1.3200 (major technical level) Resistance 3:  1.3292 (current weekly high)  

The UK Times reports the latest headlines, citing that the UK PM Theresa May is said to have threatened the Conservative rebels with a general electio

The UK Times reports the latest headlines, citing that the UK PM Theresa May is said to have threatened the Conservative rebels with a general election this summer if they defeated her plans on customs after Brexit. She was noted as saying that ‘back me or we hold an election’. Late-Tuesday, Theresa May survived the confidence vote by a majority of six, although 12 of her MPs walked through the opposition division lobbies in defiance. The UK House of Commons voted 307 vs. 301 to reject the amendment NC18 to the trade bill.

FX option expiries for July 18 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1500 609m 1.1610 780m 1.1625

FX option expiries for July 18 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1500 609m 1.1610 780m 1.1625 918m 1.1630 563m - GBP/USD: GBP amounts 1.3100 201m 1.3260 326m - USD/JPY: USD amounts 112.00 1.1bn - AUD/USD: AUD amounts 0.7400 989m

The US-China trade dispute could elevate regional geopolitical risks and hurt smaller Asian economies like Taiwan, Malaysia, and Korea - that are depe

The US-China trade dispute could elevate regional geopolitical risks and hurt smaller Asian economies like Taiwan, Malaysia, and Korea - that are dependent on international trade, said S&P Global Ratings today. Key quotes"The elevation of cross-straits tension with Taiwan is one possible spill-over of the growing trade spat." "Both China and the US have made unusual naval maneuvers the seas around Taiwan recently as relations between the governments in Beijing and Taipei grew colder."      

EUR/JPY Chart, 15-Minute Spot rate:  131.56 Relative change:  -0.01% High:  131.76 Low:  131.50

The EUR/JPY has seen steady lift in July, closing on the green for nine consecutive trading days.The current intraday action is hesitating near recent peaks, and continued softness will see a bearish correction begin to form up.The pair's pattern of consecutive lower highs on Daily candles has broken after July saw a break of June's peaks near 130.35.EUR/JPY Chart, 15-MinuteSpot rate:  131.56 Relative change:  -0.01% High:  131.76 Low:  131.50     Trend:  Flat to bullish Support 1:  131.06 (current week low) Support 2:  130.69 (61.8% Fibo retracement level) Support 3:  129.90 (July 11th swing low)     Resistance 1:  131.76 (current day high) Resistance 2:  131.97 (current week high) Resistance 3:  132.42 (March 13th swing high)

According to the latest Reuters poll on the Australian economy, a majority of the economists expect the growth to steady in 2018, despite mounting tra

According to the latest Reuters poll on the Australian economy, a majority of the economists expect the growth to steady in 2018, despite mounting trade tensions.Key Findings:Median economic growth forecast for 2018 at 2.9%. Forecast of 2.8% for 2019. Forecast of 2.7% for 2020. CPI inflation seen averaging 2.2% in 2018, 2.4% in 2019 and 2020.

Analysts at NAB points out that Australia’s NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in M

Analysts at NAB points out that Australia’s NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in May (revised from 0.8%). Key Quotes“Results were stronger for only two of the six major categories: other retailing and cafes, restaurants and takeaways, although all but one category (household goods) recorded positive growth for the month. Overall, our indicator suggests that retail sales were much less buoyant in Q2 than Q1.” “Our data mapping suggests that the official ABS measure of retail sales will rise 0.4% in June, following a rise of 0.4% in May. The May ABS print was stronger than our then expectation for a flat result.” “The data remains a little more encouraging on a year ended basis, with the NAB Cashless Retail Sales Index up 9.9% in June, although this is potentially distorted by special factors from late-2017, including the new to Australia Black Friday sales.” “Retail spending patterns across Australia have seen some convergence over the past few months, with the difference between the fastest and slowest growing states around 60% of the long term average on a year ended basis.”

Hourly chart Spot Rate: 83.35 Daily High: 83.50 Daily Low: 83.35 Trend: Bearish below 83.35 Resistance R1: 83.69 (July 16 high) R2: 81.16 (Ju

The AUD/JPY pair is flirting with pennant support of 83.35, hourly chart shows.An hourly close below 83.35 would confirm a breakdown and would open up downside towards 82.60 (50-day moving average).The pennant breakdown would also add credence to bullish exhaustion indicated by the long upper shadows of previous three daily candles.Hourly chartSpot Rate: 83.35 Daily High: 83.50 Daily Low: 83.35 Trend: Bearish below 83.35ResistanceR1: 83.69 (July 16 high) R2: 81.16 (June 12 high) R3: 84.56 (200-day MA)SupportS1: 82.86 (10-day MA) S2: 82.60 (50-day MA) S3: 82.19 (50% Fib R of 80.69-83.69)

King dollar ruled the roost in Asia, consolidating yesterday’s extensive rally fuelled by upbeat US industrial figures and Fed Chair Powell’s testimon

King dollar ruled the roost in Asia, consolidating yesterday’s extensive rally fuelled by upbeat US industrial figures and Fed Chair Powell’s testimony on the Semiannual Monetary Policy Report before the Senate Banking Committee. Amongst G10 currencies, the USD/JPY pair hit fresh six-month highs above the 113 handle while the Antipodeans traded a touch lower amid mixed oil prices. The Euro and the pound remained on the back foot, in the wake of monetary policy divergence and Brexit uncertainty. Meanwhile, the Asian equity markets traded with moderate gains, led by the rally in the Japanese indices. Gold prices on Comex extended its consolidative-mode near yearly lows of $ 1226 amid firmer positive Treasury yields and heading towards the round 2 of Fed Chair Powell’s testimony.Main topics in Asia US planning Uranium probe in search of tariffs - Bloomberg According to reporting by Bloomberg, the Trump administration is planning to begin an investigation into uranium imports which could lead to further border tariffs on national security grounds. Trump defense chief open to talks with Russian counterpart - Reuters According to reporting by Reuters, US Defense Secretary James Mattis is open to holding talks with Russian Defense Minister Sergei Shoigu, a move that hasn't been made since 2015. EU-Japan trade pact to see almost all trade barriers eliminated The massive EU-Japan trade agreement, which has been winding through negotiations for four years, is now heading off to the EU's and Japan's respective parliaments for ratification, which is expected to go smoothly. Fed’s George: Gradual further rate hikes are needed Kansas Federal Reserve (Fed) President Esther George (a dove) was on the wires last hour, via Reuters, commenting on the US rate hike outlook. Asian stocks continue the move higher following the hawkish US Fed's Powell Asian stock markets are on the upside following a bullish showing from the US Fed's chairman Jerome Powell, but a subdued undertone remains in Chinese indexes. S. Korea Finance Ministry sees 2018 growth at 2.9% vs. 3% previous forecast Do Kyu-sang, a director general at the South Korean Finance Ministry, is out with his take on the country’s economic outlook at a press conference, following the release of its bi-annual economic policy report.Key Focus aheadThere are plenty of risk events lined up for release today that may have a significant impact across the fx space. The main focus in the European session is likely to be the UK consumer price index (CPI) data, which is expected to come in a tad firmer at 2.6% y/y in June versus 2.4% previous while the core figures are also seen higher at 2.2% y/y versus 2.1% last. Also, of note remains the Eurozone final CPI release that will confirm the flash reading of 1.0% on an annualized basis. Moving on, the US housing starts and building permits data will headline the NA session ahead of the Fed Chair Powell’s testimony on the Semiannual Monetary Policy Report before the House Financial Services Committee. No surprises are expected from the Round 2 of Powell’s speech, as he is likely to reiterate yesterday’s comments on the inflation and interest rates outlook. Further, the US Energy Information Administration (EIA) will publish its weekly crude stockpiles report that will offer fresh impetus to the oil and Canadian dollar traders. Meanwhile, the Fed Beige book will be published at 1800 GMT. EUR/USD: Focus back on Fed-ECB divergence The common currency will likely report losses today. The monetary policy divergence may widen further in the EUR negative manner if the Eurozone June CPI is revised lower today. GBP/USD staggering into 1.31 as Brexit continues to weigh ahead of the UK CPI reading Wednesday brings high-impact Consumer Price Index numbers early in the London session at 08:30 GMT and the y/y CPI is expected to tick upwards to 2.6%, compared to the last reading of 2.4%, while Core CPI is expected to move from 2.1% to 2.2%. How to trade the UK inflation data with GBP/USD Headline UK inflation is closely watched by the BOE and has a significant impact on the Pound. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event. UK: June's CPI rise a temporary blip? – Nomura Analysts at Nomura offer a sneak peek at what to expect from the UK CPI release due today at 0830 GMT. The Independent: EU's Juncker to meet Trump on July 25 at the White House - Reuters Jean-Claude Juncker, President of the European Commission, will meet the US President Donald Trump on July 25 at the White House to discuss security and economic matters.  Brent to retest $80/ barrel by end-2018 – Goldman Sachs In its latest client note on oil prices, the US investment bank, Goldman Sachs, noted that it continues to expect high supply volatility with potential for further disruptions in the coming months.  

Analysts at Nomura point out that the US industrial production rose 0.6% m-o-m in June, above market expectations but below Nomura’s forecast (Nomura:

Analysts at Nomura point out that the US industrial production rose 0.6% m-o-m in June, above market expectations but below Nomura’s forecast (Nomura: 0.9%, Consensus: 0.5%).Key Quotes“May estimates were revised down to a 0.5% m-o-m decline (previously reported as a 0.1% decline). Revisions were distributed across broad categories, suggesting that activity was likely slower in May than the Federal Reserve’s initial estimates implied.” “The robust gains in Q2 appear consistent with our tracking model, which points to strong contribution to real GDP growth from equipment investment in Q2.” “GDP tracking update: Residential electricity output declined more than we expected in June, suggesting less personal consumption of electric utility services in the month. Elsewhere, June industrial production report revised down auto assemblies in May, suggesting that disruptions caused by an auto parts plant, were greater than initially estimated. Further, the rebound in auto assemblies in June was modestly weaker than we expected. Slower auto assemblies overall in Q2 relative to Q1 suggests less accumulation of auto inventories in Q2. Altogether, we lowered our Q2 real GDP tracking estimate by 0.2pp to 4.6% q-o-q saar.”

Bill Evans, Research Analyst at Westpac, notes that the six month annualised growth rate in the Westpac–Melbourne Institute Leading Index of Australia

Bill Evans, Research Analyst at Westpac, notes that the six month annualised growth rate in the Westpac–Melbourne Institute Leading Index of Australia, which indicates the likely pace of economic activity relative to trend three to nine months into the future, dropped from +0.05% in May to –0.33% in June.Key Quotes“This is the first below trend reading since September last year and the weakest index growth rate since July 2017.” “The Leading Index growth rate has now slowed by just over 1ppt since the start of the year, swinging from a comfortably above trend pace to back below trend.” “The comfortably above trend pace persisted through January to April; slowed in May; and has now moved below trend in June. We will need further confirmation of this below trend movement to be comfortable that the Index has now shifted to a below trend signal for the growth outlook for the remainder of 2018 and into 2019.” “All components have contributed to this slowdown over the course of 2018 (from positive 0.68% in January to a negative 0.33% in June – a deterioration of 1.01ppts over the year).”

The EUR/USD created a bearish outside-day candle yesterday and also closed well below Monday's low of 1.1676, putting the bears back into the driver's

Powell's Senate testimony has put the focus back on the Fed-ECB policy divergenceThe EUR/USD technical studies have regained bearish bias, so the common currency could explore the downside today.The EUR/USD created a bearish outside-day candle yesterday and also closed well below Monday's low of 1.1676, putting the bears back into the driver's seat. The greenback picked up a bid after Fed's Powell reiterated the gradual rate hike path view while noting the economy is nearing the cusp of "several years" of a strong labor market. More importantly, Powell's hawkish stance puts the focus back on the Fed-ECB divergence. The European Central Bank (ECB) is not seen raising rates before the end of 2019. Consequently, the common currency will likely report losses today. The monetary policy divergence may widen further in the EUR negative manner if the Eurozone June CPI is revised lower today. Also, the technical studies have adopted a bearish bias - the 14-day relative strength index (RSI) has rolled over in favor of the bears, the pair created a bearish outside-day candle yesterday. At press time, the EUR/USD pair is trading at a three-day low of 1.1645.Daily chartSpot Rate: 1.1645 Daily High: 1.1665 Daily Low: 1.1645 Trend: BearishResistanceR1: 1.1674 (5-day MA) R2: 1.1703 (50-day moving average) R3: 1.1745 (previous day's high)SupportS1: 1.1613 (July 13 low) S2: 1.1527 (June 28 low) S3: 1.1510 (June 21 low)      

The GBP/USD is trading tightly to Tuesday's close, playing near 1.3110 after a drop into 1.3067 saw a mild rebound on Prime Minister Theresa May's las

Sterling continuing on the defensive despite an unexpected win for PM May on her Brexit strategy.Inflation figures for the UK are due Wednesday, and Pound buyers will be looking for a positive read to halt the current downside.The GBP/USD is trading tightly to Tuesday's close, playing near 1.3110 after a drop into 1.3067 saw a mild rebound on Prime Minister Theresa May's last-minute win in the House of Commons. The Sterling headed south through Tuesday's action, dropping from the day's high of 1.3267 in the run-up to a Brexit vote in the House of Commons, where Labour voters were expected to side with conservative Tories and vote to make extreme changes to PM May's latest Brexit proposal. The Prime Minister managed to pull out a last-minute win, and the GBP/USD managed to recover from the day's low, but the pair remains deeply bearish as Brexit is set to continue weighing on the Pound. Wednesday brings high-impact Consumer Price Index numbers early in the London session at 08:30 GMT, and the y/y CPI is expected to tick upwards to 2.6%, compared to the last reading of 2.4%, while Core CPI is expected to move from 2.1% to 2.2%. GBP/USD levels to watchThe GBP/USD remains trapped on a bearish spiral, heading further down the charts, and as FXStreet's own Valeria Bednarik pointed out, "the 4 hours chart for the pair shows that, despite the latest bounce, the bearish momentum remains strong ahead of the Asian opening, with technical indicators flipping into the red almost vertically after the price broke with a huge volume candle through its 20 SMA. The decline is set to extend on a break below 1.3100, as the pair bottomed at 1.3102 last week and at 1.3106 this Tuesday, with the pair then probably approaching the key 1.3000 threshold." Support levels: 1.3100 1.3065 1.3030 Resistance levels: 1.3155 1.3190 1.3240  

The US Treasury yield curve, as represented by 10s2s spread, hit fresh 11-year low (flattest) since August 2007. The flattening yield curve is likely

The spread between the US 10-year treasury yield and 2-year treasury yield (10s2s) fell to 24 basis points today - the lowest level since August 2007.The relentless flattening of the curve could be an indication the Fed is nearing neutral rate.The US Treasury yield curve, as represented by 10s2s spread, hit fresh 11-year low (flattest) since August 2007. The flattening yield curve is likely suggesting that the Fed's interest rate is close to its neutral rate than its forecasts indicate. Note that the Fed’s own range of estimates for the neutral rate was 2.3 percent to 3.5 percent in June. Further, the central bank intends to hike rates two more times this year. So, the Fed could soon hit the neutral rate range and the market focus could shift from "faster rate hike narrative" to whether the central bank is feeling the need to contract the economy, i.e. push interest rates above the neutral rate.    

Currently, the NZD/USD is trading at 0.6780 - largely unchanged on a 24-hour basis. The spot had rallied to a high of 0.6841 in the Asian session yes

The NZD faded spike to a weekly high of 0.6841 after Powell's testimony to Congress.The NZD/USD is lacking clear bias, could pick up a strong bid if the spot finds acceptance above the July 9 high of 0.6859.Currently, the NZD/USD is trading at 0.6780 - largely unchanged on a 24-hour basis. The spot had rallied to a high of 0.6841 in the Asian session yesterday after the RBNZ's measure of core inflation printed at a 7-year high. However, the gains were short-lived as the USD found love after Federal Reserve chair Jerome Powell told legislators the central bank will continue to raise interest rates gradually. ' Further, global dairy prices dropped for the fourth time in a row at an auction earlier today, likely adding to the bearish pressure around the NZD. Consequently, the pair fell back to 0.6767 in the Asian session today, and hence, is trading listless for the fifth consecutive day. The daily chart below shows the 20-day MA has proved a tough nut to crack this month. So, only a daily close above the 20-day moving average (MA), currently located at 0.68, would allow a sustained rally towards 0.70 (psychological level).Daily chartSpot Rate: 0.6778 Daily High: 0.6786 Daily Low: .6767 Trend: Bullish above 20-day MAResistanceR1: 0.68 (20-day MA) R2: 0.6859 (July 9 high) R3: 0.69 (upper Bollinger Band)SupportS1: 0.6767 (Asian session low) S2: 0.6725 (July 13 low) S3: 0.6688 (July 3 low)

In its latest client note on oil prices, the US investment bank, Goldman Sachs, noted that it continues to expect high supply volatility with potentia

In its latest client note on oil prices, the US investment bank, Goldman Sachs, noted that it continues to expect high supply volatility with potential for further disruptions in the coming months.Key Highlights (via Reuters):Expect benchmark Brent crude in a $70-80 per barrel range. Still expects Brent to retest $80 per barrel, although this may occur only late this year depending on U.S. oil policies, rather than this summer as it previously expected. “Production disruptions and large supply shifts driven by U.S. political decisions are the drivers of this new fundamental volatility, with demand remaining robust so far.”  “The uncertainty on the magnitude and timing of the supply shifts has muddied the near-term outlook for oil fundamentals.”  “These supply shifts, alongside the ongoing surge in Saudi production, create the risk that the oil market moves into surplus in third-quarter 2018.”  However, prices are expected to get some support longer term as global oil inventories are weak, according to the bank. “Ultimately, global inventories are low, oil demand remains robust and we still expect a deficit once U.S secondary sanctions are reintroduced.” “The recent escalation in trade tensions was unlikely to have much impact on its 2018 oil demand growth view, but would likely create downside risks to its 2019 oil demand growth forecast of 1.6 million barrels per day.”

Analysts at Nomura offer a sneak peek at what to expect from the UK CPI release due today at 0830 GMT. Key Quotes: “Looking for headline a little hi

Analysts at Nomura offer a sneak peek at what to expect from the UK CPI release due today at 0830 GMT.Key Quotes:“Looking for headline a little higher citing rising oil prices and household energy bills together are likely to add between 0.1pp and 0.2pp to the annual rate of CPI inflation. Forecast CPI inflation 2.5%. See June's rise as a temporary blip before a fall back to 2% towards year-end.”

Jean-Claude Juncker, President of the European Commission, will meet the US President Donald Trump on July 25 at the White House to discuss security a

Jean-Claude Juncker, President of the European Commission, will meet the US President Donald Trump on July 25 at the White House to discuss security and economic matters.  Trump's repeated criticism of EU's trade policies and his decision to impose tariffs on the steel and aluminum imports from the bloc has not gone down well with the European leaders, consequently, th relationship between the EU and US has hit the lowest point in recent memory.

Hourly chart Spot Rate: 112.93 Daily High: 113.08 Daily Low: 112.85 Trend: Overbought, pullback likely Resistance R1: 113.08 (Asian session hi

The bearish divergence of the hourly stochastic indicates the USD/JPY could be in for a minor pullback and a much awaited break above 113.30 (200-week MA) could remain elusive.Further, the daily relative strength index (RSI) is also reporting overbought conditions.Hourly chartSpot Rate: 112.93 Daily High: 113.08 Daily Low: 112.85 Trend: Overbought, pullback likelyResistanceR1: 113.08 (Asian session high) R2: 113.30 (200-week MA) R3: 113.75 (December 2017 high)SupportS1: 112.85 (Asian session low) S2: 112.59 (5-day MA) S3: 112.20 (July 16 low)

Do Kyu-sang, a director general at the South Korean Finance Ministry, is out with his take on the country’s economic outlook at a press conference, fo

Do Kyu-sang, a director general at the South Korean Finance Ministry, is out with his take on the country’s economic outlook at a press conference, following the release of its bi-annual economic policy report.Main Points:Sees 2018 growth at 2.9 pct vs. 3 pct estimated earlier. Job growth at worst since the financial crisis. Will increase fiscal spending by $3.6 bln within the existing budget. Will expand subsidies for small businesses, low-income elderly.

Hourly chart Current Price: $71.80 Daily High: $71.89 Daily Low: $71.57 Trend: Intraday rally likely Resistance R1: $72.00 (psychological hurd

The bulls divergence of the relative strength index (RSI) seen on the hourly chart indicates Brent oil could have a relook at $72.00 and could possibly rise further to descending 50-hour moving average (MA), currently located at $72.70. A break below $71.35 would embolden bears.Hourly chartCurrent Price: $71.80 Daily High: $71.89 Daily Low: $71.57 Trend: Intraday rally likelyResistanceR1: $72.00 (psychological hurdle) R2: $72.70 (50-hour MA) R3: $73.24 (50-day MA)SupportS1: $71.35 (previous day’s low) S2: $70.86 (April 17 low) S3: $70.00 (psychological level)

The AUD/USD is continuing to cycle close to Wednesday's opening prices near 0.7385 after kicking lower to start off the overnight session, and peaking

The Aussie remains on the softer side as bullish pushes get capped off quickly.Wednesday sees little Aussie-focused data, and AUD bulls will be looking for a good-looking jobs report on Thursday.The AUD/USD is continuing to cycle close to Wednesday's opening prices near 0.7385 after kicking lower to start off the overnight session, and peaking just beneath the 0.7400 key level. Market direction remains in the middle as traders shift in place with bearish pressures remaining in place. Wednesday saw the Westpac Leading Indicator for June come in at 0.0%, an improvement over the previous reading of -0.2%, but the low-tier indicator saw little impact as traders turn their eyes to Thursday's jobs report. The Australian Unemployment Rate and Participation Rate will be dropping at 01:30 GMT on Thursday, alongside the Full-time and Part-time Employment metrics. The Unemployment and Participation Rates are expected to hold steady at 5.4% and 65.5% respectively, while the Employment Change is expected to clock in at 17 thousand versus the previous reading of 12 thousand.AUD/USD Technical AnalysisThe Aussie kicked higher during the early Asia trading session, but the USD remains stubbornly strong heading into Wednesday and is still pushing the AUD into defensive territory. AUD/USD Chart, 15-MinuteSpot rate:  0.7383 Relative change:  -0.05% High:  0.7395 Low:  0.7376     Trend:  Bearish     Support 1:  0.7375 (previous day low) Support 2:  0.7359 (previous week low) Support 3:  0.7309 (2018 low; major technical bottom)     Resistance 1:  0.7400 (major technical level) Resistance 2:  0.7416 (61.8% Fibo retracement level) Resistance 3:  0.7441 (current week high)

According to the latest IPA Bellwether report, conducted by IHS Markit, the UK companies’ marketing budgets growth the second-slowest since Q1 2016 du

According to the latest IPA Bellwether report, conducted by IHS Markit, the UK companies’ marketing budgets growth the second-slowest since Q1 2016 due to Brexit uncertainty.Key Findings via Reuters:23 percent of marketing executives raised their budgets during the quarter, while just under 17 percent of executives who took part in the survey cut their marketing budgets. The resulting net rise of 6.5 percent was higher than an increase of 5 in the previous quarter. IPA’s Director General Paul Bainsfair said, “Despite this overall positive growth, however, with continued Brexit uncertainty, the underlying story still remains one of caution, with the latest Bellwether data pointing to the second-slowest marketing budget growth since Q1 2016.”  Around 300 UK marketing professionals, primarily from Britain’s top 1,000 companies and across all key business sectors, were interviewed for the survey. The report showed that Brexit remained a dominant theme for respondents, with a number concerned about the general uncertainty caused by the negotiations and how this might affect business and consumer confidence.

Currently, gold (XAU/USD) is trading at $1,228, having hit a one year low of $1,226 earlier today.  The yellow metal ran into offers during the overn

Gold is losing its shine, having hit a one year low yesterday.The demand for bearish bets (put options) continues to rise, risk reversals hit fresh 7-month low. Currently, gold (XAU/USD) is trading at $1,228, having hit a one year low of $1,226 earlier today.  The yellow metal ran into offers during the overnight trade and fell below the key support of $1,234 (50-month MA) as Fed’s Powell’s Senate testimony was mostly upbeat, driven by positive trends in labor market, inflation and economic growth. The Fed head added words “for now” while discussing Fed’s plans to gradually raise interest rates, to indicate that the central bank is not on autopilot. However, the caveat failed to put a bid under the yellow metal.  Further, the solid demand for gold puts indicates the investors are likely expecting a deeper drop in the safe haven yellow metal.  At press time, the one-month 25 delta risk reversals are being paid at -0.8 XAU puts - the lowest level since December 22. The negative number indicates the implied volatility premium 
(or demand) for gold puts is higher than that of gold calls. Gold Technical LevelsResistance: $1,234 (50-month MA), $1,245 (10-day MA), $1,247 (200-hour MA) Support: $1,226 (overnight low), $1,214 (May 2017 low), $1,200 (psychological level)  

Asian stock markets are on the upside following a bullish showing from the US Fed's chairman Jerome Powell, but a subdued undertone remains in Chinese

Equities in the Pacific-Asia window are continuing Tuesday's bull move as the US Fed's Powell delivers a bullish outlook.China equities are pushing higher, but are restrained as US-China tensions remain unresolved.Asian stock markets are on the upside following a bullish showing from the US Fed's chairman Jerome Powell, but a subdued undertone remains in Chinese indexes. Federal Reserve chairman Jerome Powell give a hawkish stance in the first day of his testimony before the Senate Banking Committee, talking up the positive aspects of the US economy's growth metrics looking foward, and downplaying potential negative fallout from the ongoing US-China trade spat. Equity markets reacted largely positive, and the positive twist to indexes is carrying over into the Asian market session, though Chinese stocks are seeing smaller gains for the day. Japan's Nikkei 225 is up 0.90% so far for Wednesday, with the Tokyo Topix index up for 0.70%, while Australia's ASX 200 is likewise up 0.70%; Chinese equities are in the green, but relatively more sedate, with Hong Kong's Hang Seng index up about 0.60% with the Shanghai CSI 300 up around 0.35%.Nikkei 225 levels to watchJuly has seen a bullish recovery for Japan's leading equity index, and resistance is sitting nearby at June's highs of 23,000.00, with January's all-time peak of 24,180.00, while a bearish turnaround will be faced with June's lows at 22,030.00 and July's technical bottom at 21,475.00.

Analysts at Barclays provide their thoughts on what to expect from today’s UK CPI report for the month of June, slated for release at 0830 GMT. Key Q

Analysts at Barclays provide their thoughts on what to expect from today’s UK CPI report for the month of June, slated for release at 0830 GMT.Key Quotes:“Headline y/y from 2.3% to 2.4%. But we see core 0.1pp lower to 1.9%y/y. Main driver ... fuel, lubricants and household administered tariffs as the Big Six price hikes should largely feed through in June. See all other components broadly unchanged from the previous month.”

The Citi Research Team offered key insights on the outlook for copper, via Twitter, noting that the red metal is a long-term buying opportunity. Key

The Citi Research Team offered key insights on the outlook for copper, via Twitter, noting that the red metal is a long-term buying opportunity.Key Points:Prepare for a decade of copper on 'steroids'. Current copper prices not high enough to spur supply. Citi bumps its long term copper price forecast to $7,500/t (from $7,000/t). Trade war present a long-term buying opportunity for copper.

Kansas Federal Reserve (Fed) President Esther George (a dove) was on the wires last hour, via Reuters, commenting on the US rate hike outlook. Key He

Kansas Federal Reserve (Fed) President Esther George (a dove) was on the wires last hour, via Reuters, commenting on the US rate hike outlook.Key Headlines: The US economy in excellent shape, monetary policy should be neutral influence. Monetary policy is still accommodative. Gradual further rate hikes are needed. There is still uncertainty about how far, how fast fed should raise rates. Financial stress may be building in some sectors. Sees significant upside risks from fiscal policy, downside risks from trade policy. It is not clear how much concern there should be over possibly inverting the yield curve. Heightened uncertainty due to trade policy not healthy for economy.

Oil prices are back on the defensive with WTI crude barrels back beneath 68.00 as US inventory supplies bumped higher than expected. Inventories of d

Crude oil prices clatter along recent bottoms as US stockpiles edge higher.The API is reporting broad increases in various stocks measures, implying demand is grappling with current production amounts despite outages.Oil prices are back on the defensive with WTI crude barrels back beneath 68.00 as US inventory supplies bumped higher than expected. Inventories of distillate fuel reserves rose by 1.7 million barrels on Wednesday, adding bearish pressure to oil prices which were already in decline from Monday, and oil prices are continuing to clatter along the bottom of recent technical levels. US crude stockpiles also climbed by an unexpected 600 thousand barrels according to the American Petroleum Institute (API) late on Tuesday. WTI crude barrel prices are now touching into three-week lows lows as fossils traders continue to absorb the downside pressure of supply outages from Canada and Libya.WTI levels to watchWith WTI crude prices sliding back into the 67.90 area, oil bulls will be looking for a bounce from a rising trendline in the 66.00 region, while June's lows near 63.50 is putting a floor underneath any potential moves lower; with the severity of the recent drop on the technical charts, resistance is firming up at the last swing low of 69.25, with the year's highs nearby at 75.35 per barrel.

The People's Bank of China (PBOC) set the Yuan reerence rate at 6.6914 vs  previous day's fix of 6.6821.

The People's Bank of China (PBOC) set the Yuan reerence rate at 6.6914 vs  previous day's fix of 6.6821.

EUR/GBP daily chart, price above bearish triangle resistance Spot rate:               0.8890      High:                      0.8914 Low:       

EUR/GBP is above the 0.8832/40 (21-D SMA) bearish triangle support and making bullish advances.  The 0.9034 October 2017 high on the wide is a key upside.EUR/GBP daily chart, price above bearish triangle resistance Spot rate:               0.8890
    
High:                      0.8914
Low:                       0.8888 Trend:                    Bullish Resistance 1:        0.8920
Resistance 2:        0.8943 (5th May tops). 
Resistance 3:        The 0.9034 October 2017 high on the wide is a key upside. Support 1:              0.8852 (10-D SMA)         
Support 2:              0.8832/40 (21-D SMA) bearish triangle support
Support 3:              0.8620 protects a run towards 0.8526 as being the 78.6% retracement of the move from 2017 on the wide.  

The massive EU-Japan trade agreement, which has been winding through negotiations for four years, is now heading off to the EU's and Japan's respectiv

The massive EU-Japan trade agreement, which has been winding through negotiations for four years, is now heading off to the EU's and Japan's respective parliaments for ratification, which is expected to go smoothly. Under the confines of the trade agreement, Japan is set to drop 94% of trade tariffs against the EU, while the EU will be seeing an eventual elimination of 99% on imports from Japan. The process is expected to take shape over time, with the EU set to abolish tariffs on Japanese autos by the eighth year following ratification, as an example. The EU and Japan will also be co-operating on standard-setting and regulation creation looking forward, with the two sides set to share responsibilities for overseeing trade after the trade barriers are finally removed.

Fed Chair Powell’s upbeat testimony took the limelight in markets overnight which supported the US dollar index and indeed sending USD/JPY on the warp

There is a fundamental case for a strong dollar currently.Tokyo has picked up the batton and bulls have scored territory through 113 the figure.Fed Chair Powell’s upbeat testimony took the limelight in markets overnight which supported the US dollar index and indeed sending USD/JPY on the warpath, advancing towards the 2018 high but not quite over the line, failing below the 113 handle. However Tokyo has picked up the batton and bulls have scored territory through 113 the figure, scoring a high of 113.08 so far.  However, although Powell reiterated that, "for now - the best way forward is to keep gradually raising the federal funds rate," 'gradual hikes' is hardly a new theme for markets and indeed the 10-year yields were reflecting that, ranging sideways between 2.85% and 2.87%. What does appear to be happening is the yen is losing its safe-haven status to the Swissy and the US dollar and bears are stepping aside, enabling the pair to move higher. Additionally, the 2yr yields, which are arguably more sensitive to rate talk and US data, climbed from 2.59% to 2.61% which was the highest level since 2008. The Fed fund futures yields continue to price 1 ½ more hikes in 2018 as well. Powell remains upbeatOn the economy, while Powell was upbeat overall against a firm global backdrop and noting how and tax cuts are beneficial, there was an air of caution where he noted uncertainties on trade policy, “it is difficult to predict the ultimate outcome of current discussions”. Meanwhile, there is a fundamental case for a strong dollar currently. We had recent retail sales revisions that were strong and overnight, we had the latest US industrial production which jumped a solid 0.6% in June. However, analysts at Westpac noted that there was also a large 0.4ppt downward revision to the prior month, "taking May’s reading to -0.5%, portrays a less impressive picture. Most of June’s gain came from rebounding motor vehicle production which had fallen sharply in the prior month due to supplier disruptions. The National Association of Homebuilders sentiment survey held steady at an elevated 68."USD/JPY levelsValeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators regained the upside, with the Momentum indicator heading north well above its mid-line and the RSI partially losing upward strength around 71: "In the mentioned chart, moving averages are finally gaining upward traction, although far below the current level to be relevant in the near term. Pullbacks should remain contained around 112.60 to keep the positive tone alive, while above the 113.00 level, the mentioned yearly high is the main resistance/bullish target."

Australia Westpac Leading Index (MoM) up to 0% in June from previous -0.2%

Analysts at Nomura offered their model's projection for today's fix in USD/CNY. Key Quotes: "Our model1 projects the fix to be 114 pips higher than

Analysts at Nomura offered their model's projection for today's fix in USD/CNY.Key Quotes:"Our model1 projects the fix to be 114 pips higher than the previous fix (6.6935 from 6.6821) and 145 pips higher than the previous official spot USD/CNY close of 6.6790. The basket implied change is 194 pips higher than the previous official spot USD/CNY close (6.6984 from 6.6790)."

USD/JPY Chart, 15-Minute Spot rate:  112.99 Relative change:  0.13% High:  113.07 Low:  112.82

Dollar surging against the Japanese Yen as traders ramp up the Greenback, looking to mark in a fresh high for 2018 and erase the first half's bearish tone.Resistance levels above the 114.00 major handle represent significant challenges for buyers.The bullish trend from 2018's bottom at 104.60 has been decidedly bullish as the USD continues to shake off major institutional calls for a further-weakening Dollar in 2018.USD/JPY Chart, 15-MinuteSpot rate:  112.99 Relative change:  0.13% High:  113.07 Low:  112.82     Trend:  Bullish     Support 1:  112.21 (previous day low) Support 2:  111.64 (61.8% Fibo retracement level) Support 3:  110.76 (July 11th swing low)     Resistance 1:  113.07 (current week high) Resistance 2:  113.38 (2018 high) Resistance 3:  114.72 (November 2017 high)  

NZD/USD Chart, 15-Minute Spot rate:  0.6770 Relative change:  -0.17% High:  0.6785 Low:  0.6766

The Kiwi is pushing back into the week's lows as the NZD steps down against the US Dollar, which is getting a boost from a hawkish Fed chair Jerome Powell.Firm bearish trend is still in place on higher timeframes, traders should keep bias shifted to the short side and wait to sell on pullbacks.A failure for the bulls to break through the year's low at 0.6686 could see a sharp reversal develop.NZD/USD Chart, 15-MinuteSpot rate:  0.6770 Relative change:  -0.17% High:  0.6785 Low:  0.6766     Trend:  Bearish     Support 1:  0.6753 (previous week low) Support 2:  0.6705 (100.0% Fibo expansion level)  Support 3:  0.6686 (2018 low; major technical bottom)     Resistance 1:  0.6785 (current day high) Resistance 2:  0.6839 (current week high) Resistance 3:  0.6858 (previous week high)  

Forex today was mostly about the pound and Fed Chair Powell’s upbeat testimony which supported the US dollar index that ended the day up 0.5% on the d

Forex today was mostly about the pound and Fed Chair Powell’s upbeat testimony which supported the US dollar index that ended the day up 0.5% on the day. 
While Powell reiterated that, "for now - the best way forward is to keep gradually raising the federal funds rate," 'gradual hikes' was the main takeaway which lifted stocks and left US 10yr treasury yields ranging sideways between 2.85% and 2.87%. However, the 2yr yields, which are more sensitive to rate talk and data, climbed from 2.59% to 2.61% which was the highest level since 2008. The Fed fund futures yields continue to price 1 ½ more hikes in 2018. For sterling, it was quite a session in NY on the back of Monday's concession to pro-Brexit hardliners while lingering Brexit angst made for a volatile time over the voting customs union. The government survived this attempt by pro-EU Conservative MPs to change its post-Brexit trade strategy where the MPs wanted the UK to join a customs union if it didn't agree a free-trade deal with the EU. The government won by 307 to 301, where otherwise, a customs union would likely stop the UK striking new trade deals. The pound dropped to 1.3068, by 2018 low (1.3050) during the infighting of parliament and then skyrocketed to a high of 1.3150 on the winning vote before drifting back lower and steeply to an NY close of 1.3114. Prior to that, the pound was sliding from 1.3267 after the UK employment data for May showed an expected move back to +2.7%y/y. However, unemployment remained low at 4.2%, but there was a minor +7.8k rise in jobless claims for June. In all of that, EUR/GBP ended NY 0.8883 +0.41%, within the NY range between 0.8915-0.885. As for the euro, the DE-US yield spread widened and supported the DXY, weighing on the euro and sending the pair down below the 21-D SMA at 1.1657 to a low of 1.1648. USD/JPY was climbing from 112.25 to 112.90, closing the gap on 2018's 113.40 high on Powell's testimony as yen loses its safe haven status to the Swissy and the dollar.     Bulls have eyes further ahead at 114.73 as the Nov high and the 115 broad range top as key breakout points. For the Aussie, the gains inspired by RBA minutes eroded in Europe's morning and AUD/USD lost its footing from 0.7435 to 0.7376, while the AU-US yield spreads widen. Copper and iron-ore continued to weigh as well although the pair was bouncing back to 0.7390 into the close as the dollar gave back some gains. NZD dropped from 0.6840 to 0.6769, reversing all yesterday’s post-CPI data gains.Key notes from US session:Fed's Powell: Gradually raising rates is way to extend U.S. Economic expansionWall Street closes higher boosted by Fed's Powell's optimistic remarksBreaking News: UK Government wins the vote on critical trade bill amendmentUK: Senior Tory asks Brexit referendum to be re-run amid evidence of 'cheating' - The GuardianKey events ahead (Source, Westpac Banking Corporation):Australia: Jun Westpac-MI Leading Index is released. UK: Jun CPI is expected to rise 0.2%, while the core measure is seen to be contained, holding at a 2.1% annual pace. US: Fed Chair Powell delivers his follow up testimony to the House. The Fed release their Beige Book providing a summary of conditions across the 12 districts. Jun housing starts and building permits are out. Aside from month to month volatility, the trend remains supportive of investment in the sector.

AUD/USD Chart, 15-Minute Spot rate:  0.7380 Relative change:  -0.05% High:  0.7387 Low:  0.7378

Aussie flubbed Tuesday as the Greenback rebounded against broader markets on a hawkish showing from Fed chair Powell.Wednesday sees little action on the Aussie calendar, AUD/USD to be driven by market sentiment which currently leans Dollar-positive.A break into recent lows will see a fresh challenge of the year's bottom near 0.7310.AUD/USD Chart, 15-MinuteSpot rate:  0.7380 Relative change:  -0.05% High:  0.7387 Low:  0.7378     Trend:  Bearish     Support 1:  0.7375 (previous day low) Support 2:  0.7359 (previous week low) Support 3:  0.7309 (2018 low; major technical bottom)     Resistance 1:  0.7400 (major technical level) Resistance 2:  0.7416 (61.8% Fibo retracement level) Resistance 3:  0.7441 (current week high)  

Greg Gibbs, Founder, Analyst, & PM at Amplifying Global FX Capital Pty Ltd, an Australian financial services company, explained that AUD faces a numbe

Greg Gibbs, Founder, Analyst, & PM at Amplifying Global FX Capital Pty Ltd, an Australian financial services company, explained that AUD faces a number of downside risks.Key Quotes:"These include a weakening housing market, a persistent jump in Australian bank funding costs, tightening credit conditions for Australian borrowers, tightening shadow-finance in China, a slowing Chinese economy, and threats related to a trade war between the US and China." "However, to date, China is managing its economy and financial sector to prevent more than a gradual slowing in activity. Chinese steel production growth remains solid and Australian commodity prices are holding above their average for the last two years." "Australia is taking a bigger share of Chinese iron ore imports, and its material sector is being supported by a combination of a weaker AUD and stable commodity prices. Australia’s external balance appears structurally stronger." "Private business investment is growing solidly, supported by infrastructure demand, as the mining investment downturn tapers out. Overall business conditions have ebbed in recent months but remain well above average." "Consumer confidence has lifted to moderately above average, showing little fallout, yet, from a weaker housing market. We expect the AUD/USD to be hemmed into a 70/75 range with a bias to expect further falls."

According to reporting by Reuters, US Defense Secretary James Mattis is open to holding talks with Russian Defense Minister Sergei Shoigu, a move that

According to reporting by Reuters, US Defense Secretary James Mattis is open to holding talks with Russian Defense Minister Sergei Shoigu, a move that hasn't been made since 2015.Key quotes"The possibility of talks surfaced after Monday's controversial summit in Helsinki between U.S. President Donald Trump and Russian President Vladimir Putin, in which they sought an end to years of strained relations. Trump was heavily criticized at home for not holding Putin accountable in Helsinki for meddling in the 2016 U.S. election, an allegation that Moscow denies. Discussions between Mattis and Russian Defense Minister Sergei Shoigu would be another step toward creating more regular top-level political talks between the two nuclear powers, whose relations have deteriorated in recent years to the worst point since the Cold War. Two U.S. officials, speaking to Reuters on condition of anonymity, said Mattis was open to the possibility of talks. They did not suggest he was actively seeking discussions with Shoigu, either in person or by telephone. The Russian military is reaping political dividends from what the Kremlin saw as its big successes in Crimea, annexed from Ukraine in 2014, and Syria, where Russian forces helped turn the tide of a civil war in Moscow ally President Bashar al-Assad's favor in 2015. Shoigu is a critic of the United States and was quoted last week telling an Italian newspaper that Russia would always work to counter what he described as America's "neocolonialism strategy." Shoigu said the strategy was aimed at destabilizing countries like Iraq and Libya for U.S. financial gain. Former U.S. officials said former President Barack Obama's last two defense secretaries - Chuck Hagel and Ash Carter - came to the conclusion after attempts to hold meaningful dialogue with Shoigu that the discussions were not worth their time. Derek Chollet, a former senior Pentagon official who was present during talks with Shoigu under the Obama administration, doubted that Mattis would find any discussions very productive. "Perhaps Mattis feels as though he has to test the proposition for himself, but I don't hold out much hope that he's going to get anywhere. If anything, he could expose himself as out of step with his boss," Chollet said, referring to Trump."

Analysts at Westpac noted in a market wrap that US equities rose, led by the technology sector, (the NASDAQ index up 0.6% to a fresh record high). Ke

Analysts at Westpac noted in a market wrap that US equities rose, led by the technology sector, (the NASDAQ index up 0.6% to a fresh record high).Key Quotes:"The US dollar and short-term bond yields also rose before and after Fed Chair Powell’s upbeat testimony. US Fed Chair Powell made an uneventful appearance in front of the Senate Banking Committee, reiterating that, "for now - the best way forward is to keep gradually rising the federal funds rate." On the economy he remained upbeat, citing accommodative financial conditions, a firm global picture and tax cuts. Powell noted uncertainties on trade policy, “it is difficult to predict the ultimate outcome of current discussions”, but despite that he felt the risks were “roughly balanced” with the most likely path for the economy being one of continued jobs gains and moderate inflation." "US industrial production jumped a solid 0.6% in June, but a large 0.4ppt downward revision to the prior month, taking May’s reading to -0.5%, portrays a less impressive picture. Most of June’s gain came from rebounding motor vehicle production which had fallen sharply in the prior month due to supplier disruptions. The National Association of Homebuilders sentiment survey held steady at an elevated 68.
UK employment data for May showed an expected drift back to +2.7%y/y in weekly ex-bonus earnings (peaked at 2.9%y/y in March). Though unemployment remained low at 4.2%, there was a minor +7.8k rise in jobless claims for June." "The GDT dairy auction was mixed, resulting in a 1.7% fall in prices overall, with whole milk powder up 1.5% and butter down 8.1%. The US dollar index is up 0.5% on the day. EUR fell from 1.1745 to 1.1650. USD/JPY rose from 112.25 to 112.90. AUD fell from 0.7435 to 0.7376, before bouncing back to 0.7390. NZD fell from 0.6840 to 0.6769, reversing all yesterday’s post-CPI data gains. AUD/NZD bounced off 1.0860 to 1.0895." "US 10yr treasury yields ranged sideways between 2.85% and 2.87%, while 2yr yields seemed to respond to the firmer data and Powell, rising from 2.59% to 2.61% - the highest level since 2008. Fed fund futures yields continued to price 1 ½ more hikes in 2018."
 

According to meda wesbite Sputnik News, the US Department of Justice has added further charges against Russian national Mariia Butina. Butina was deta

According to meda wesbite Sputnik News, the US Department of Justice has added further charges against Russian national Mariia Butina. Butina was detained on charges of conspiracy to act as a foreign agent, and is now also being charged with acting as a foreign agent. The Russian embassy in Washington, DC urgently requested consular access to Butina, a request that the DoJ promptly denied. Russia has been pushing to gain access to Butina ever since she was arrested on Sunday on conspiracy charges after evidence showed Butina was working closely with Russian officials to develop open communication between the Kremlin and the US National Rifle Association (NRA).Key quotes"The US Department of Justice announced an additional charge for detained Russian national Mariia Butina on Tuesday, one day after she was accused of conspiring to act as a foreign agent. The US government announced on Monday that Butina, 29, had been indicted for conspiring to act as a foreign agent for Moscow. With the latest additional alleged crime, Butina is seen by US authorities as having materially acted as a foreign agent in addition to conspiring to be one.  A grand jury indicted the individual on Tuesday on the second charge. The indictment was filed in a Washington DC federal court, Bloomberg reported. "Between in or around January 2015 and up to and including the present, in the District of Columbia and elsewhere, defendant Mariia Butina, also known as "Maria Butina," did act within the United States as an agent of a foreign government," the new indictment said." Butina, a longtime advocate of gun rights in Russia and a recent graduate of DC's American University, where she studied international relations, is widely believed to have worked with the US National Rifle Association (NRA). She is accused of conspiring with a Russian official via email and Twitter direct messages as well as emailing a US "person in an effort to develop, maintain, and exploit a relationship," among other similar offenses."

According to reporting by Bloomberg, the Trump administration is planning to begin an investigation into uranium imports which could lead to further b

According to reporting by Bloomberg, the Trump administration is planning to begin an investigation into uranium imports which could lead to further border tariffs on national security grounds.Key quotes"U.S. uranium producers Energy Fuels Inc. and Ur-Energy Inc. filed a petition in January asking the Commerce Department to investigate the matter under Section 232 of the 1962 Trade Expansion Act, the same provision the president used to slap tariffs on steel and aluminum imports. U.S. industry wants the government to shield it from competition from state-owned companies in countries including Russia and Kazakhstan. A uranium investigation would add to trade tensions that the IMF warns represents the biggest risk to the global economy. Imposing uranium duties would deal another blow to nuclear power plants already struggling with low electricity prices and flat demand. However, U.S. miners supply less than 5 percent of domestic consumption for the metal, and they argue it’s increasingly difficult to compete with state-subsidized companies in Russia, Kazakhstan and Uzbekistan. “The global uranium market is not a level playing field,” said Paul Goranson, chief operating officer of Energy Fuels. “It’s put the country at a real risk, because we’re increasingly dependent on these state-owned companies which obviously have different global strategic objectives than we do.” U.S. producers want about 25 percent of the domestic market to be reserved for American miners, which produced about 1.2 million pounds last year, the lowest in at least 25 years. Commerce Secretary Wilbur Ross told the Senate Finance committee last month that he would make a decision on the uranium probe “very shortly.” “It’s complicated by some prior agreements that exist but we are sorting through it and we will come to a conclusion very, very quickly,” Ross said."

The AUD/USD is back below 0.74, currently testing near-term support at 0.7385 after a bullish showing on Tuesday for the US Dollar. The latest showin

Aussie sputters as the USD bounces higher on a hawkish Fed chairman Powell.Wednesday is a thinned-out showing for the Asia session, and traders will be turning their eyes towards Powell's second Senate showing for the week.The AUD/USD is back below 0.74, currently testing near-term support at 0.7385 after a bullish showing on Tuesday for the US Dollar. The latest showing from the Reserve Bank of Australia (RBA) showed the central bank leaning towards an upwards interest rate hike, but only if key economic indicators for the Australian economy continue to improve, and rising trade tensions are keeping the RBA in a dovish stance, and markets are continuing to price in the odds of a rate hike from the Assie central bank not happening until far into the future. Meanwhile, the US Fed's Jerome Powell struck a decidedly hawkish tone, talking up the US economy's growth potential, while also downplaying inherent risks from trade frictions with China, sending the US Dollar higher and forcing down Gold prices, dragging the Aussie lower through Tuesday's action.  Early Wednesday will be seeing the Westpac Leading Index for June at 00:30 GMT, but the impact on the AUD is expected to be limited from the low-tier indicator, which last printed at -0.2%. Later on in the upcoming US session, Fed chairman Jerome Powell will undergo day two of his Senate testimony on the Semiannual Monetary Policy Report before the House Financial Services Committee, and traders will be looking for any key hints dropped about the US Fed's forward guidance.AUD/USD levels to watchThe Aussie has once again softened against the Greenback as metals prices get forced down by an optimistic market, and as FXStreet's own Valeria Bednarik noted, "the pair is technically neutral-to-bearish as in the 4 hours chart, it is currently below the 20 and 100 SMA, both directionless and in a tight 10 pips range, while technical indicators head entered negative territory, maintaining their downward slopes but coming from a consolidative stage around their midline. The downward momentum will likely accelerate on a break below 0.7370, the immediate support." Support levels: 0.7370 0.7335 0.7310  Resistance levels: 0.7410 0.7450 0.7490

Analysts at ANZ offered a snapshot of global markets. Key Quotes: "US equities gained overnight alongside a higher USD, while yields were little cha

Analysts at ANZ offered a snapshot of global markets.Key Quotes:"US equities gained overnight alongside a higher USD, while yields were little changed. Oil found some stability, and gold fell through technical support. US equities were up 0.1-0.6% with materials and consumer staples leading gains." "Netflix opened down 15% but has rebounded 10% through the New York afternoon. European bourses were also higher by 0.2-0.8%." "The USD rose against the G10 with GBP underperforming. " "Prime Minister May narrowly survived another revolt in the Brexit saga." "Oil found some stability with WTI unchanged and Brent up 0.4%. Gold fell to $1228/oz." 

Analysts at Nomura explained that Chair Powell’s testimony to the Senate Banking Committee provided few new insights into the course of Fed policy. 

Analysts at Nomura explained that Chair Powell’s testimony to the Senate Banking Committee provided few new insights into the course of Fed policy. Key Quotes:"Powell’s prepared remarks and Q&A indicated no material shift from the outlook the FOMC presented at the June FOMC meeting. There was one notable change in Powell’s language. In his prepared remarks, he stated, “the FOMC believes that—for now—the best way forward is to keep gradually raising the federal funds rate.” The qualification of “for now” was new. It seems unclear why it was added." "During Q&A, Chair Powell avoided any suggestion that the Committee was leaning one way or another. Powell did not talk about the prospect of a "pause" in Fed hiking. On the other hand, he did not stress the potential risks of inflation and financial stability from firming labor markets. In this context, the addition of “for now” was, perhaps, meant to emphasize that the FOMC’s interest rate path is not completely on autopilot."

Analysts at TD Securities explained that Powell's testimony offered little to go by for FX markets, though broad based USD strength against the G10 wa

Analysts at TD Securities explained that Powell's testimony offered little to go by for FX markets, though broad based USD strength against the G10 was the name of the game with notable laggards that included GBP, JPY and CAD. Key Quotes:"GBP has come under newfound pressure following the Trade Bill vote. 1.3050 offers next support for cable." "This comes against a backdrop muted G7FX vol. Our positioning metrics suggest the market is sitting net long USDs, though still not an extreme. Without a durable macro catalyst however, the combination of a summer lull and carry costs suggest the prevailing 93.50/95.50 DXY range could persist for a while yet." "Treasuries saw little reaction to Powell's testimony, but will continue to look for the Q&A from day two of testimony for any surprises. Trade war concerns appear to have dissipated and strong earnings momentum appears to be keeping risk markets elevated, weighing on Treasuries."
 

Crude oil met a fresh selling wave in the post-settlement trading hours after the weekly data released by the American Petroleum Institute showed a su

Weekly API report shows a 629,000 barrels increase in U.S. crude stocks.WTI comes under selling pressure after settling for the day at $68.08.Crude oil met a fresh selling wave in the post-settlement trading hours after the weekly data released by the American Petroleum Institute showed a surprise build in crude oil stocks in the United States. The barrel of West Texas Intermediate, which was flat on the day when it settled near $68, broke below $67 and was last seen trading at $66.70. The API on Tuesday announced that crude inventories increased by 629,000 barrels during the week ending July 13 to 410.7 million to surpass the Reuters' estimate for a decrease of 3.6 million barrels. Further details of the report revealed that refinery crude runs dropped by 279,000 barrels per day. Earlier today, crude oil prices extended their losses after the oil production in Libya rebounded with eastern ports reopening. However, news of Venezuela shutting down two major crude upgraders for scheduled maintenance paved the way for a late recovery. "Every time there's an update that the situation in Venezuela is, in fact, worsening, it props up the market," John Kilduff, a partner at Again Capital Management in New York, told Reuters on Tuesday. On Wednesday, investors are likely to remain focused on the developments in Libya and Venezuela ahead of the weekly EIA stock report, which is expected to show a 3.5 million barrels draw in crude inventories, scheduled to be released in the NA session.   

EUR/USD 15-minute chart  Spot rate:              1.1657 Relative change:   -0.42%   High:                     1.1745 Low:                      1

EUR/USD had a failed breakout above 1.1740 earlier in Europe after which it lost almost a 100 pips to the downside. After it made a daily low at 1.1649, prices remained contained below 1.1672 which is now acting as near-term resistance. The bears are quite strong and EUR/USD should progress lower as long as it stays below 1.1672 and 1.1700 resistances. The idea of bull breakout above 1.1740 seems at the moment unlikely unless a fundamental catalyst shocks the market. Bear targets are seen near 1.1640-1.1649 area and 1.1613, last week's low.  
 EUR/USD 15-minute chart Spot rate:              1.1657
Relative change:   -0.42%  
High:                     1.1745
Low:                      1.1649 Trend: Bearish Resistance 1: 1.1672 June 27 high
Resistance 2: 1.1700 figure
Resistance 3: 1.1730-1.1740 area, 23.6% Fibonacci retracement from mid-April-May bear move and last week’s open.
Resistance 4: 1.1790 last week’s high
Resistance 5: 1.1851-1.1854 area, June high and 38.2% Fibonacci retracement from mid-April-May bear move Support 1: 1.1640-1.1649 area, key level and July 12 low 
Support 2: 1.1613 last week's low
Support 3: 1.1600 figure 
Support 4: 1.1560 June 14 low
Support 5: 1.1508 current 2018 low