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Thứ ba, Tháng tám 4, 2020

Canada Markit Manufacturing PMI above expectations (44.1) in July: Actual (52.9)

The AUD/USD pair closed the second straight day in the negative territory on Monday but staged a rebound toward 0.7150 during the Asian session. Never

AUD/USD turned south after advancing to 0.7150 area.RBA left its policy rate unchanged at 0.25% as expected.Eyes on Factory Orders and ISM-NY Business Conditions Index data from the US.The AUD/USD pair closed the second straight day in the negative territory on Monday but staged a rebound toward 0.7150 during the Asian session. Nevertheless, the pair failed to preserve its momentum and erased its gains to turn flat on the day near 0.7120. RBA offers nothing new with respect to policy outlook Following its July monetary policy meeting, the Reserve Bank of Australia (RBA) decided to keep its policy rate unchanged at 0.25% as expected. In its policy statement, the RBA reiterated that it will maintain its accommodative approach as long as it's required. "The Australian economy is going through a very difficult period; experiencing its biggest contraction since the 1930s," the RBA added. The fact that the bank didn't voice any concerns regarding the AUD strength helped AUD/USD push higher. On the other hand, the renewed USD strength is weighing on AUD/USD during the early trading hours of the American session. Although the 10-year US Treasury bond yield is staying deep in the red on Tuesday, the US Dollar Index (DXY) continues to edge higher toward 94.00. Ahead of the Factory Orders and the ISM-NY's Business Conditions Index data, the DXY is up 0.33% on the day at 93.82. On Wednesday, AiG Performance of Construction Index, Commonwealth Bank Services PMI and Home Loans data from Australia will be looked upon for fresh impetus. Technical levels to watch for  

The prices of silver has been on the rise, as fears of a worsening economic crisis in the US implies more fiscal and monetary support. In turn, these

The prices of silver has been on the rise, as fears of a worsening economic crisis in the US implies more fiscal and monetary support. In turn, these funds could go into precious metals, with gold prices edging toward the highs once again.  While gold-bugs await XAU/USD to hit $2,000, silver prices may prove no less interesting. The metal, used for environmental projects as well as for consumer products, has surpassed a substantial technical hurdle and could extend its gains. The Technical Confluences Indicator is showing that XAG/USD is trading above 24.21, which is the convergence of the Fibonacci 23.6% one-month and the Simple Moving Average 5-one-day.  Further down, another noteworthy cushion awaits at 24.08, which is the meeting point of the SMA 1001-h, the Bollinger Band 4h-Middle, and the previous day's low.  Looking up, some resistance awaits at 24.35, which is a confluence line including the Fibonacci 38.2% one-day and the SMA 10-1h.  The next hurdle is 24.41, which is where the BB 15min-Upper, the BB 1h-Upper, and the previous 4h high converge.  The upside target is 24.59, where the Fibonacci 61.8% stands out among other lines.  Key XAG/USD resistances and supports Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

The now better tone around the greenback is forcing both the sterling and the European currency to give away initial gains, prompting EUR/GBP to climb

EUR/GBP moves higher to 2-day highs near 0.9040 on Tuesday.The sterling loses ground on the back of further USD-buying.UK’s Services PMI, BoE meeting next of relevance in the docket.The now better tone around the greenback is forcing both the sterling and the European currency to give away initial gains, prompting EUR/GBP to climb to fresh weekly peaks in the 0.9040 region. EUR/GBP looks to data, BoEEUR/GBP has managed to regain composure around recent lows in the 0.8980 region, retaking the key 0.90 barrier and beyond in a context of the continuation of the dollar’s recovery following July’s steep sell-off. In fact, the quid is so far suffering the brunt of the dollar’s rebound, therefore underpinning the upside momentum in the cross. Other than that, market participants keep monitoring the progress of the economic re-opening on both sides of the Channel, while EU-UK trade effervescence remains absent (postponed?). Earlier in the session EMU’s Producer Prices rose 0.7% from a month earlier in June and contracted 3.7% over the last twelve months. In the UK, the always-relevant Services PMI is due on Wednesday ahead of the BoE event on Thursday followed by Governor A.Bailey’s press conference. EUR/GBP key levels The cross is gaining 0.38% at 0.9029 and faces the next hurdle at 0.9148 (monthly high Jul.27) followed by 0.9175 (monthly high Jun.21) and finally 0.9324 (2019 high Aug.12). On the downside, a breach of 0.8980 (weekly low Jul.31) would expose 0.8937 (monthly low Jul.10) and then 0.8864 (monthly low Jun.9).

United States Redbook Index (MoM) remains at 1.1% in July 31

United States Redbook Index (YoY) increased to -7.1% in July 31 from previous -8.7%

The Malaysian ringgit is expected to appreciate to the 4.15 area vs. the greenback at the beginning of the next year, according to FX Strategists at U

The Malaysian ringgit is expected to appreciate to the 4.15 area vs. the greenback at the beginning of the next year, according to FX Strategists at UOB Group. Key Quotes “USD/MYR grinded lower across July from 4.29 to 4.25, reflecting a broad USD decline and also encouraging signs that activity is picking up locally.” “Bank Negara Malaysia delivered another 25 bps rate cut in July, bringing the benchmark interest rate to a record low of 1.75% to provide additional policy stimulus to accelerate the pace of economic recovery.” “With the worst of Malaysia’s economic woes probably over in the 2Q, the steady pace of recovery of its economy and the MYR is likely to solidify in the coming quarters. We update our USD/MYR forecasts to 4.20 in 3Q20, 4.18 in 4Q20, and 4.15 in 1Q21 and 2Q21.”

The GBP/USD pair spent the Asian session moving sideways around 1.3080 and inched higher during the early trading hours of the European session. Howev

GBP/USD met resistance near 1.3100 and lost its traction.Concerns over rising coronavirus cases in the UK weigh on the GBP.US Dollar Index stays relatively calm near mid-93.00s on Tuesday.The GBP/USD pair spent the Asian session moving sideways around 1.3080 and inched higher during the early trading hours of the European session. However, the pair lost its traction after peaking above 1.3100 and came under strong bearish pressure. As of writing, GBP/USD was down 0.37% on a daily basis at 1.3023. GBP on the back foot ahead of BoE The lack of progress in Brexit talks and resurfacing fears over a second coronavirus wave in the UK forcing shutdowns make it difficult for the GBP to find demand. On Monday, Britain's health ministry reported that they have confirmed 938 coronavirus cases, which was the second-highest daily increase since early June. Currently, the total number of positive COVID-19 test results in the UK stands at 305,623. On Thursday, the Bank of England will announce the interest rate decision and release its policy statement. Previewing this event, “we still expect the BoE to express caution over the highly uncertain economic outlook given the risk of further disruption from a second COVID wave, and the risk of another hit to growth later this year when the job furlough scheme expires in the autumn,” said analysts at MUFG Bank. On the other hand, the greenback is staying resilient against its peers with the US Dollar Index posting modest daily gains above 93.50 and not allowing GBP/USD to stage a rebound. The ISM-NY's Business Conditions Index and the IBD/TIPP's Economic Optimism will be featured in the US economic docket on Tuesday. Technical levels to watch for  

Brazil Industrial Output (MoM) above forecasts (7.7%) in June: Actual (8.9%)

Brazil Industrial Output (YoY) came in at -9%, above expectations (-10.2%) in June

After briefly testing daily tops in the 125.00 area, EUR/JPY sparked a correction lower to the current 124.80 region, keeping modest gains for the day

EUR/JPY looks firm and test the 125.00 level, or daily peaks.The dollar now reverses the initial drop and weighs on the euro.EMU Producer Prices rose 0.7% MoM and dropped 3.7% YoY in June.After briefly testing daily tops in the 125.00 area, EUR/JPY sparked a correction lower to the current 124.80 region, keeping modest gains for the day so far. EUR/JPY looks to risk trends EUR/JPY has reversed the negative start of the week and gained around a cent from Monday’s lows in the 124.00 zone. The now pick-up in the sentiment around the greenback continues to put the European currency and the rest of the risk complex under pressure, in turn motivating the cross to abandon the upper end of the range. In the meantime, the risk appetite trends continue to dictate the sentiment in the global markets, with the pandemic, the economic recovery and fresh US-China jitters (this time around the mobile app Tik-Tok) taking centre stage for the time being. Data wise in the euro docket, Producer Prices in the broader euro region rose at a monthly 0.7% and contracted 3.7% on a year to June, both prints coming in above estimates. Later in the NA session, the IBD/TIPP index is due seconded by Factory Orders for the month of June. EUR/JPY relevant levels At the moment the cross is gaining 0.13% at 124.78 and faces the next up barrier at 125.20 (2020 high Jul.31) followed by 126.80 (monthly high Apr.17 2019) and finally 127.50 (2019 high Mar.1). On the other hand, a breach of 122.87 (monthly high Jan.16) would expose 121.14 (monthly high Mar.25) and then 120.03 (200-day SMA).

Silver has reached the 26.02/11 2011-2012 lows. Initial failure here suggests the rally looks overextended and analysts at Commerzbank would exit any

Silver has reached the 26.02/11 2011-2012 lows. Initial failure here suggests the rally looks overextended and analysts at Commerzbank would exit any remaining longs.  Key quotes “We would allow for a corrective set back to the 23.6% retracement at 22.80 and the 38.2% retracement at 20.67 (of the move from March). We also have the 21.17 September 2019 high in this vicinity. Provided dips lower hold over the four-month uptrend at 19.26, an upside bias will be reserved.” “Above 26.14 will target initially 27.42, the 38.2% retracement of the move from the 2011 peak. And then the 50% retracement at 31.71 of the same move.”    

The USD/CAD pair registered small losses and closed at 1.3390 on Monday. Although the pair continued to edge lower during the first half of the day on

USD/CAD rose above 1.3400 ahead of American session.WTI fails to build on Monday's gains, retreats toward $40.US Dollar Index recovers above 93.50 on Tuesday.The USD/CAD pair registered small losses and closed at 1.3390 on Monday. Although the pair continued to edge lower during the first half of the day on Tuesday, it reversed its direction in the last hour and was last seen gaining 0.15% on a daily basis at 1.3408. Eyes on mid-tier US and Canada data The renewed selling pressure surrounding crude oil seems to be making it difficult for the commodity-related loonie to stay resilient against its rivals on Tuesday. Ahead of the American Petroleum Institue's Weekly Crude Oil Stock report, the barrel of West Texas Intermediate (WTI) is down 1.3% on the day at $40.24. On the other hand, the US Dollar Index is starting to push higher ahead of the American session, allowing USD/CAD to cling to its modest daily gains.  The US economic docket will feature ISM-NY Business Conditions Index and IBD/TIPP Economic Optimism data on Tuesday. Moreover, the IHS Markit will release its Manufacturing PMI report for Canada. Market participants expect the economic activity in Canada's manufacturing sector to continue to contract in July. If the data surprises to the upside and arrives above the 50 threshold, we could see the CAD gather strength and drag USD/CAD lower. Technical levels to watch for  

USD/JPY is currently recovering above the 106.00 threshold after having traded as low as 105.83 but overall maintaining a positive stance. The pair is

USD/JPY is currently recovering above the 106.00 threshold after having traded as low as 105.83 but overall maintaining a positive stance. The pair is short-term bullish but capped by selling interest aligned around 106.45, FXStreet’s Chief Analyst Valeria Bednarik reports. Key quotes “News that the US Congress has been unable to reach a deal over the next aid-package is hurting the American currency. Meanwhile, coronavirus concerns remain the same. The number of new cases in the US has been receding, but remains around 50K per day.” “Japan published July Tokyo inflation, which came in better than expected, up by 0.6% YoY, while the core reading surged 0.4%, both better than anticipated. The US session will bring minor figures, June Factory Orders and the August IBD/TIPP Economic Optimism.” “The 4-hour chart shows that the USD/JPY pair continues to develop above a firmly bullish 20 SMA, while technical indicators resumed their advances within positive levels. Still, the pair remains below a bearish 100 SMA which capped the upside on Monday.”  “Further gains are to be expected only once beyond the 106.45 area, with scope then to advance to the 107.00/10 area.”  

As tensions mount between China and the US and as fears of a second wave increase in parts of Asia and Europe, economists at Rabobank are of the view

As tensions mount between China and the US and as fears of a second wave increase in parts of Asia and Europe, economists at Rabobank are of the view that the rush to sell USD is overdone. They expect a EUR/USD pullback to the 1.16 zone in the coming weeks. Key quotes “Given concerns over a second wave of coronavirus and fears about what that could do to the global economy in addition to rising China tensions, we see risk that the recent rush to unload USDs may have extended too far.”  “The world’s need for dollars almost certainly means that there will be a scurry to secure USD funds on any further breakdown in market confidence.” “We expect a pullback towards the EUR/USD 1.16 area in the weeks ahead.”   

The S&P 500 Index has cleared the price resistance at 3279/81 to bring the high-level consolidation phase to an end. Economists at Credit Suisse look

The S&P 500 Index has cleared the price resistance at 3279/81 to bring the high-level consolidation phase to an end. Economists at Credit Suisse look for a test on the top of the key February price gap at 3328/38.  Key quotes “The S&P 500 has maintained the positive tone set on Friday and has now cleared its recent ‘reversal day’ high and price resistance at 3279/81 to bring the high-level consolidation phase to an end.” “Although the rally is seen lacking momentum, we look for strength to extend further with resistance above 3303 seen next at 3318 and then more importantly at the top of the February price gap at 3328/38. We continue to expect this to remain a major barrier for a fresh consolidation phase to unfold beneath here. A direct break though would be seen clearing the way for a challenge on the 3394 record high.”  “Support moves higher to 3285 initially then 3272/71, which we look to try and hold to keep the immediate risk higher. A break would warn of a retreat back to the 13-day average and price support at 3246/41, but with fresh buyers expected to show here.”  

Gold has reached Commerzbank’s target of $1983. Strategists at the bank expect the yellow metal to experience some profit taking as forays above are s

Gold has reached Commerzbank’s target of $1983. Strategists at the bank expect the yellow metal to experience some profit taking as forays above are seen short-lived. On the flip side, the 55-day ma at $1838 is a solid support. Key quotes “Gold has reached the top of its 49 year channel at $1983. It represents our long-term target. This should hold the initial test and provoke some profit-taking.” “Forays above $2000 are expected to remain short-lived. Above $2000 we have a point and figure target of $2030 and a Fibonacci extension to $2088.” “Support is offered by the 55-day ma at $1838 and the five-month uptrend at $1829. Below 1829 lies the $1765 May high. This guards the $1670 June low.”   

Strategists at UOB Group gave their opinion on the perspective for the precious metal in the next months. Key Quotes “Since last year, we have maintai

Strategists at UOB Group gave their opinion on the perspective for the precious metal in the next months. Key Quotes “Since last year, we have maintained a positive outlook for gold due to expectations of “lower for longer” interest rates.” “Gold has since staged a strong rally over the past month, pushing its way above our quarterly longer term forecast of USD 1,850 / oz by 2Q21. With this latest rally, gold has broken above the previous peak of USD 1,920 in Sep 2011. In terms of technical outlook, we note that “the upward momentum is strong and the focus is at USD 2,000. Next resistance of note above USD 2,000 is around USD 2,040 followed by USD 2,100”. “Fundamentally, the various positive drivers for gold price, particularly that of the massive central bank easing remain as strong as ever. However, we note that long positioning in gold has become extremely crowded with ETF tonnage rising to yet a new record high. As such, there is now an increasingly speculative element in gold’s price action with larger intra-day swings as traders are positioned for gold to trade above USD 2,000 / oz.” “Overall, we take this opportunity in the monthly to make an interim upgrade to our gold forecast but warn that with current crowded long positioning, gold may be priced for perfection and will be ripe for profit taking should expectations of near zero interest rates suddenly reverse or financial markets succumb to another round of USD liquidity crunch, similar to what happened in March. Our new forecast for gold is now USD 2,000 / oz for 3Q20, USD 2,100 / oz for 4Q20 and USD 2,200 / oz for 1Q21 and 2Q21.”

The NZD/USD pair closed the first day of the week with small losses and is now struggling to make a decisive move in either direction. As of writing,

NZD/USD is fluctuating in a tight range on Tuesday.US Dollar Index posts small daily losses below 93.50.Unemployment Rate in New Zealand is expected to rise to 5.8% in Q2.The NZD/USD pair closed the first day of the week with small losses and is now struggling to make a decisive move in either direction. As of writing, the pair was virtually unchanged on a daily basis at 0.6612. On Monday, the broad-based USD strength witnesses during the first half of the day caused the pair to edge lower. With the 10-year US Treasury bond yield losing more than 2% on Tuesday, the US Dollar Index dropped into the negative territory and was last seen down 0.1% on the day at 93.42. In the second half of the day, the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism data will be looked upon for fresh impetus. More importantly, Statistics New Zealand will release its labour market report in the early trading hours of the Asian session on Wednesday. Market participants expect the Unemployment Rate in the second quarter to rise from 4.2% to 5.8% with the Employment Change declining by 2%. Better-than-expected jobs figures could provide a boost to the kiwi and help NZD/USD erase Monday's losses. On the other hand,  NZD/USD near-term outlook “Yesterday, we held the view that NZD ‘could test the strong support at 0.6600’ but ‘a sustained decline below this level is unlikely’. NZD subsequently dropped to a low of 0.6575 before rebounding," FX strategists at the UOB Group said. "While downward pressure is not strong, there is scope for NZD to retest the 0.6575 level before a more sustained recovery can be expected. Resistance is at 0.6630 followed by 0.6650.” Technical levels to watch for  

Following an ephemeral test of the sub-1.17 area on Monday, EUR/USD has now regained buying interest and clinched tops in the 1.18 neighbourhood, alth

EUR/USD has resumed the upside and flirts with 1.1800.Further gains could now extend to the 2020 high beyond 1.19.Following an ephemeral test of the sub-1.17 area on Monday, EUR/USD has now regained buying interest and clinched tops in the 1.18 neighbourhood, although losing some impetus soon afterwards. The pair looks firmer and there is now room for another visit to the YTD peaks just above 1.19 mark ahead of the psychological yardstick at 1.2000. Looking at the broader picture, as long as the 200-day SMA, today at 1.1093, holds the downside, further gains in EUR/USD remains well on the table. EUR/USD daily chart  

The rebound in DXY from levels last seen in May 2018 in the 92.50 region appears to have met a tough hurdle in the 94.00 neighbourhood (Monday). Selle

DXY has resumed the downside following the 2-day bullish attempt.Yearly lows in the mid-92.00s are expected to be re-visited soon.The rebound in DXY from levels last seen in May 2018 in the 92.50 region appears to have met a tough hurdle in the 94.00 neighbourhood (Monday). Sellers look to have regained the upper hand so far on Tuesday, forcing the dollar to resume the downside in the very near-term. That said, the next support of note is now at the 2020 lows near 92.50 (July 31). A deeper pullback should meet the Fibo level (of the 2017-2018 drop) at 91.92 ahead of the May 2018 low at 91.80. The negative outlook on the dollar is expected to remain unaltered while below the 200-day SMA, today at 97.98. DXY daily chart  

GBP/USD has been attempting a recovery amid some dollar weakness but rising UK COVID-19 cases and lack of improvement in international relations are s

GBP/USD has been attempting a recovery amid some dollar weakness but rising UK COVID-19 cases and lack of improvement in international relations are set to send sterling down, Yohay Elam, an analyst at FXStreet, reports. Key quotes “Thursday's announcement of new restrictions affecting around 4.3 million people, talk of a lockdown in London remains prevalent. Whitehall officials claim it is only a worst-case scenario, but the mere idea of slapping new limitations on one of the world's financial capitals is weighing on the pound.” “Sterling is also suffering from the lack of progress in Brexit talks, nor in trade negotiations with the US. International Trade Secretary Liz Truss is in America, for talks with Robert Lighthizer, the US Trade Representative. Expectations remain low.”  “Sino-American relations are also tense, with the recent row focusing on TikTok and its potential for holding sensitive information. ByteDance, the owner of the social media firm will likely be forced to sell TikTok, potentially to Microsoft. The world's largest economies are also at loggerheads over Hong Kong, where Britain has an interest as well. Any further worsening of relations between Beijing and London could weigh on the pound.”  “Speculation about the NFP and an update on US COVID-19 cases and deaths have the potential to down the dollar, countering pound weakness.”  

S&P 500 futures met supply following rejection at the 3,300 level, undermined by the shift in the risk sentiment amid US fiscal wrangling and coronavi

S&P 500 futures met supply following rejection at the 3,300 level, undermined by the shift in the risk sentiment amid US fiscal wrangling and coronavirus concerns. With the latest leg down, the path of least resistance appears to the downside ahead of the US open and macro data. S&P 500 Futures: Key resistances and supports The Technical Confluences Indicator shows that the S&P 500 futures is defending the 3,289 support, which the confluence of the Fibonacci 38.2% one-day, previous low four-hour and SMA50 15-minutes. In absence of significant support levels, the US futures will directly test the 3,275/70 demand area, where the previous week high, pivot point one-week R1 and SMA10 four-hour intersect. A failure to resist above the latter will likely expose the critical support at 3,251, the convergence of the previous year high and pivot point one-day S2. Alternatively, the buyers could probe the 3,303 (previous day high) barrier on a break above the 3,300 level. Further north, the hurdle awaits at $3306/08, where the previous high four-hour and pivot point one-week R2 coincide. The next powerful resistance is aligned at 3,327, the pivot point one-month R1. S&P 500 Chart Here is how it looks on the tool  Confluence DetectorThe Confluence Detector is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

Quek Ser Leang at UOB Group’s Global Economics & Markets Research gives his views on the prospects of the US Dollar Index (DXY). Key Quotes “We first

Quek Ser Leang at UOB Group’s Global Economics & Markets Research gives his views on the prospects of the US Dollar Index (DXY). Key Quotes “We first detected the weakness in USD Index two months ago. In the… update from 03 Jun 20 when USD Index was at 97.45, we stated clearly that ‘the outlook for USD Index is negative’ and that ‘the next support level of note is at 95.50’. USD Index subsequently dropped to 95.72 and traded sideways. When USD Index broke 95.50… we held the view that ‘the current movement is the next leg lower within USD Index overall down-trend’. At that time, we noted that the 6- year rising trend-line at 94.30 is a critical support. We highlighted that ‘the overall technical readings clearly point to a weaker USD in the months ahead’ and added, ‘a break of the critical support is not something to be trifled with especially when we are hard pressed to identify a nearby support level of note’.” “USD Index cracked the 94.30 critical support last Monday (27 Jul) and within the span of a few days, hurtled lower to a low of 92.55 on Friday (31 Jul) before recovering to close lower by a whopping -4.15% at 93.35, its biggest 1-month decline in a decade.” “The question from here is whether USD Index can maintain the current furious pace of decline as weekly RSI is already at its most oversold levels since early 2018. That said, downward momentum is still powerful and the next support is not until 91.50. This level is another critical support as it is not only at a rising trend-line that started from 2011; it is also near the bottom of the monthly Ichimoku cloud. While a break of the critical support is not ruled out, oversold conditions on the weekly chart suggest the 2018 low of 88.25 is not likely to come into the picture, at least for the next 1-2 months. The round-number of 90.00 is acting as a relatively strong support ahead of 88.25. On the upside, resistance is at 96.30 followed by the moving averages at 97.65. The latter level is acting as a solid resistance and could remain intact, possibly for the next several months, if not longer.”

EUR/JPY leaves behind the pessimism at the beginning of the week and is now flirting with the key barrier at 125.00 the figure. The underlying positiv

EUR/JPY is reversing Monday’s pullback and challenges 125.00.The 2020 peaks around 125.20 emerges as the next target.EUR/JPY leaves behind the pessimism at the beginning of the week and is now flirting with the key barrier at 125.00 the figure. The underlying positive stance in the cross remains well and sound, with occasional bearish moves deemed as corrective only. Against this, EUR/JPY is expected to re-visit the YTD tops in the 125.20 region in the short-term horizon, while bouts of weakness are predicted to meet contention in the 122.90 region. Looking at the broader picture, the outlook on EURJPY is seen as constructive while above the 200-day SMA, today at 120.03. EUR/JPY daily chart  

Tuesday's 4-hour chart is showing a dead-cat bounce, implying further falls for the GBP/USD pair, which is trading around 1.3070 after rising from low

Tuesday's 4-hour chart is showing a dead-cat bounce, implying further falls for the GBP/USD pair, which is trading around 1.3070 after rising from lows near the 1.30 level, FXStreet’s analyst Yohay Elam reports. Key quotes “Pound/dollar has risen from the lows near 1.30 but failed to stage a meaningful recovery. This ‘dead cat bounce’ pattern – as well as setting lower highs – is pointing to weakness. Moreover, GBP/USD has failed to recapture the uptrend channel that characterized it last week.” “On the other hand, momentum remains positive and the cable is holding above the 50, 100, and 200 Simple Moving Average. Overall, the bears are in the lead, but bulls have not thrown the towel.” “Resistance awaits at 1.3110, the daily high, followed by 1.3170, last week's peak. The next lines to watch are 1.32 and 1.3270.” “Support is at the daily low of 1.3050, then Monday's trough of 1.3005. It is followed by 1.2975 and 1.29.”   

USD/JPY is attempting a recovery from daily lows of 105.83 but the bulls lack follow-through upside bias amid ongoing weakness in the US dollar across

USD/JPY erases losses but recovery lacks follow-through. USD weakness and cautious trading in equities cap the upside. All eyes on risk trends and US Factory data for fresh impulse. USD/JPY is attempting a recovery from daily lows of 105.83 but the bulls lack follow-through upside bias amid ongoing weakness in the US dollar across its main competitors. The caution trading seen in the European equities combined with the drop in the S&P 500 futures also limits the recovery attempts in the spot just above the 106 level. The greenback stalled its comeback and resumed the selling bias as the coronavirus resurgence continues to cast a cloud on the economic recovery prospects, especially after the upbeat US ISM Manufacturing PMI threw some rays of hope. Meanwhile, the impending US fiscal stimulus deal combined with falling US real yields keep the USD sellers alive and kicking. On the JPY-side of the equation, the yen traders ignore the domestic macro news while drawing some support from the Bank of Japan’s (BOJ) Governor Haruhiko Kuroda’s recent comments. Kuroda said early Tuesday, BOJ may consider extending a March 2021 deadline for lending facilities aimed at channeling funds to companies hit by the coronavirus pandemic. This came amid rising new infections across Japan, with Tokyo – the worst hit. Next of relevance remains the US Factory Orders and virus data for near-term trading opportunities in the major. The sentiment on the global stocks amid stimulus expectations will also have a significant bearing on USD/JPY. USD/JPY technical levels “In a case where the USD/JPY prices cross 106.60, 107.55 and July month top close to 108.15 will grab the market attention. Meanwhile, a daily closing below 10-day SMA level of 105.82 can take rest on 105.30 before revisiting the five-month lows near 104.20,” explains Anil Panchal, FXStreet’s analyst. USD/JPY additional levels  

During July, the Turkish lira weakened against the US dollar from 6.8523 to 6.9608. Risks remain skewed to the downside for the lira due to a worsenin

During July, the Turkish lira weakened against the US dollar from 6.8523 to 6.9608. Risks remain skewed to the downside for the lira due to a worsening current account balance and rates cut by the CBoT. Therefore, economists at MUFG Bank expect a higher USD/TRY pair for the rest of the year. Key quotes “While the COVID demand shock has helped to improve current account balances in many emerging market economies, it has not been the case in Turkey. The current account deficit has widened sharply in recent months to its highest level since the 1H 2018 in the run up to the currency crisis in the summer of that year.”  “The CBoT’s decision to aggressively cut rates leaves the lira vulnerable as well. It has driven the real policy rate deeper into negative territory as inflation is holding up better than expected to the negative demand shock. The annual rate of headline and core inflation both accelerated to 12.6% and 11.6% respectively in June. It prompted the CBoT to revise higher their year-end inflation forecast for this year to 8.9%. It further reduces the likelihood of more rate cuts.”  “If the lira continues to weaken, it will begin to increase pressure on the CBoT to reverse rate cuts. In these circumstances, we expect the lira to continue weakening in the year ahead.”  

In July, the Brazilian real, benefitted by the improvement of external and domestic markets, appreciated against the US dollar from 5.4394 to 5.1851.

In July, the Brazilian real, benefitted by the improvement of external and domestic markets, appreciated against the US dollar from 5.4394 to 5.1851. The improved political and economic outlook may lead the USD/BRL to the 5.10 level by year-end, according to economists at MUFG Bank.  Key quotes “A kind of truce among the branches of power as the lack of polemic statements coming from the Executive didn’t reverberate negatively either at the Congress or Supreme Court.”  “One of the reasons for the economic recovery is the re-opening of the economy in several parts of Brazil, although the pandemic is still far from control, but it has stabilized at a high level.” “The better political/economic environment improved the popularity of the president as around 30% assess the government positively. Altogether, the political noise and odds for the presidential impeachment almost vanished. Last but not least, Congress resumed the economic agenda prioritizing at this moment two bills: a tax reform and new natural gas sector regulation. The tax reform is very complex and it will take several months of discussion, but the important point is that Congress is still prone to advance the economic agenda after the Covid-19 crisis and the several tensions with the Executive.” “Taking into consideration all these issues and considering the pandemic under gradual control along the second half, there is room for BRL appreciation to our forecast of 5.1000 by the end of 2020.”

Silver (XAG/USD) is on the verge of a range breakout after it consolidated above $24, within a symmetrical triangle formation on the one-hour chart th

Silver is teasing a symmetrical triangle breakout on hourly chart. Upside appears more compelling amid a lack of healthy resistance levels. Hourly RSI trades above 50.00, supporting the bullish case.Silver (XAG/USD) is on the verge of a range breakout after it consolidated above $24, within a symmetrical triangle formation on the one-hour chart this Tuesday. A break above the falling trendline resistance at $24.37 will validate the pattern, opening doors for a test of the upside target at $25.57. Ahead of that level, the spot could test the psychological resistance of $24.50. The next hurdle awaits at $24.95, the intersection of July 29 and August 3 high. The hourly Relative Strength Index (RSI) holds steady above the midline, backing the case for the upside. While to the downside, the $24.28 level offers strong support, which the convergence of the rising trendline support, 21 and 50-HMAs. Selling pressure will intensify on a break below the latter, calling for a test of the horizontal 100-HMA at $24.06. The next cushion is placed near $23.80, where the 200-HMA and the triangle lowest point. Silver: XAG/USD hourly chart Silver additional levels  

European Monetary Union Producer Price Index (MoM) above forecasts (0.5%) in June: Actual (0.7%)

European Monetary Union Producer Price Index (YoY) registered at -3.7% above expectations (-3.9%) in June

During July, oil prices oscillated in a remarkably narrow range, ending the month slightly higher (Brent +5.2% MoM; WTI +2.5% MoM) with the pulse of g

During July, oil prices oscillated in a remarkably narrow range, ending the month slightly higher (Brent +5.2% MoM; WTI +2.5% MoM) with the pulse of global oil markets stuck in a range bound environment, given the push-and-pull between the virus and the reopen. Strategists at MUFG Bank see oil price risks skewed to the downside this summer and forecast Brent trading at $36/b and $46 by end-Q3 and Q4, respectively. Key quotes “Macro vulnerabilities stemming from a resurgence of the virus in the US, lagging global jet fuel growth, an expected slowdown in Chinese oil imports, headwinds to normalising activity in countries where the virus remains under control and heightened geopolitical animosities between the US and China, all amalgamated together, signals a likely lid on prices with broadly range bound activity expected in the third quarter, with oil price risks skewed to the downside.”  “We expect the amalgamation of more tepid demand growth and the clearance of the large inventory overhang, to induce an upside cap in oil prices for the rest of 2020 – we forecast Brent ending Q3 and Q4 at $36/b and $46/b, respectively.”  

UOB Group’s Economist Enrico Tanuwidjaja and Haris Handy reviewed the latest inflation figures in Indonesia. Key Quotes “Inflation print for July 2020

UOB Group’s Economist Enrico Tanuwidjaja and Haris Handy reviewed the latest inflation figures in Indonesia. Key Quotes “Inflation print for July 2020 eased to 1.54% y/y vis-à-vis June’s 1.96%, as consumption remained sluggish amidst the COVID-19 pandemic. This also marked the first monthly deflation (at -0.1% m/m) seen in 2020. Core inflation slowed to 2.07% y/y in July vs. June’s 2.26%, while volatile inflation dipped to 0.35% y/y in July vs. 2.32% a month earlier.” “Although large scale social restriction (“Pembatasan Sosial Berskala Besar” – PSBB) has eased in July, consumer spending remains low. Out of 90 cities, 61 cities experienced monthly deflation, which occured mostly in Java and Sumatera region.” “Going forward, we expect the headline inflation to remain under control. Basic needs remain as top priority as consumers are still hesitant to purchase non-essential goods. The central government and regional administrations are expected to maintain the price stability. Overall, with inflation likely to stay around the lower end of the government's 2.0-4.0% inflation target.”

EUR/JPY weakness has been well supported as the pair has maintained its break above 124.44 June high, trading currently around the 124.85 level. There

EUR/JPY weakness has been well supported as the pair has maintained its break above 124.44 June high, trading currently around the 124.85 level. Therefore, the core trend stays seen higher with analysts at Credit Suisse looking at the 125.94 mark. Key quotes “Although daily RSI momentum has as yet been unable to confirm the new high we maintain our upward bias and look for strength back to the 125.22/23 recent high. Above here can see trend resistance from January 2019 at 125.43 next, then what should be tougher initial resistance at 125.94 – the 50% retracement of the 2018/2020 downtrend. Whilst we would look for this to cap at first, a break in due course should see resistance at 126.84 next.”  “Support moves to 124.61 initially, with a move below 124.32 needed to warn of a move back to 124.00 and then the 13 -day average and price support at 123.84/73, which we look to ideally hold. A break though would warn of a more concerted setback with support seen next at 123.33/27.”  

ECB’s Lane: Committed to providing stimulus needed to support the economic recovery more to come ...

The European Central Bank (ECB) is committed to providing the support needed to boost the economic recovery, said Chief Economist Philip Lane on Tuesday. Additional quotes “Overall PEPP envelope is a core determinant of ECB's policy stance.” “There is some rebound in economic activity.” “But level of economic slack remains extraordinarily high.” “The outlook remains highly uncertain.” “Inflation outlook plays the central role in determining appropriate policy stance.”

Ho Woei Chen, CFA, Economist at UOB Group assessed the latest PMI readings in the Chinese economy. Key Quotes “China Caixin manufacturing Purchasing M

Ho Woei Chen, CFA, Economist at UOB Group assessed the latest PMI readings in the Chinese economy. Key Quotes “China Caixin manufacturing Purchasing Manager’s Index (PMI) surged 1.6 points to 52.8 in July compared to 51.2 in June (Bloomberg est: 51.1). This was the third straight month of expansion (above-50 reading). The headline PMI, production and new orders sub-indexes were all at their highest levels since January 2011.” “Similarly, the official manufacturing PMI had also improved, edging up to a 4-month high as it rose 0.2 point to 51.1 in July (Bloomberg est: 50.8). This was the fifth straight month of expansion and comes on the back of a strong rebound from record low in February.” “Overall, the improvements in both the official and Caixin manufacturing PMIs as well as the robust reading in the non-manufacturing PMI suggest that China’s economy will continue to recover in 3Q20. Our GDP forecast for China remains at 1.8% for 2020 with 3Q20 growth likely to accelerate to 4.9% y/y and around 5.7% in 4Q20. The key risks remain centred on the pandemic recovery globally, US-China relations as well as the impact from floods in China.”

Turkey Exports: $15.01B (July) vs $12.73B

Turkey Exports up to $15.12B in July from previous $12.73B

Brazil Fipe's IPC Inflation registered at 0.25%, below expectations (0.33%) in July

The single currency appears recovered following the recent correction lower and is now pushing EUR/USD to the 1.1800 neighbourhood, or session tops, o

EUR/USD leaves behind the recent weakness and tests 1.1800.EMU Producer Prices coming up next in the euro docket.Factory Orders, IBD/TIPP next of relevance in the NA session.The single currency appears recovered following the recent correction lower and is now pushing EUR/USD to the 1.1800 neighbourhood, or session tops, on Tuesday. EUR/USD looks to data, risk appetite The dollar is meeting some selling pressure and is therefore lending extra support to EUR/USD, helping the pair to regain ground lost after two consecutive sessions with losses.EUR/USD came under pressure following last week’s +2-year tops just above 1.19 the figure. This selling mood was also exacerbated after spot moved well into overbought levels, as per the daily RSI, adding the technical component to the corrective downside. In the meantime, the underlying bullish stance remains unchanged around the pair, always sustained by the broad-based bearish stance in the buck, the strong economic recovery expected in the euro area, firm hopes of a COVID-19 vaccine and the massive monetary stimulus running across the region. Later in the Euroland, Producer Prices in the region are due while June’s Factory Orders and the IBD/TIPP index are expected across the pond. What to look for around EUR EUR/USD recorded fresh tops just above the 1.19 yardstick at the end of last week, confirming once again the solid momentum around both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by broad-based dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally. EUR/USD levels to watch At the moment, the pair is gaining 0.20% at 1.1785 and a breakout of 1.1909 (2020 high Jul.31) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the downside, immediate contention emerges at 1.1695 (weekly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).

EUR/USD could be gearing for another move up after correcting with a fall of over 200 pips to 1.17. Mixed US data and political impasse plus updated c

EUR/USD could be gearing for another move up after correcting with a fall of over 200 pips to 1.17. Mixed US data and political impasse plus updated coronavirus figures could, indeed, weigh on the dollar, FXStreet’s analyst Yohay Elam informs. Key quotes “Talks between Democrats and Republicans on the next relief package are stuck. Speaker of the House Nancy Pelosi does not expect progress this week and White House Chief of Staff Mark Meadows – a fiscal hawk – opposes surpassing $1 trillion in spending. The longer the impasse extends, the greater the damage to the US economy, potentially prompting the Fed to act. The pressure to add more monetary stimulus – such as pushing the yield curve lower – may grow. Depressing returns on US debt, may, in turn, weigh on the greenback.” “Another factor weighing on the dollar is data – while the ISM Manufacturing Purchasing Managers' Index beat expectations with 54.2 in July, the employment component remained well below 50 – implying more firing in the industrial sector. Factory Orders figures for June are awaited, while speculation ahead of Friday's Non-Farm Payrolls is rising.”  “The good news from America is the drop in new coronavirus statistics – yet that is likely due to the weekend effect. Tuesday's figures may continue showing a flattening of the curve of the case, yet mortalities are set to bounce back above 1,000. In the old continent, several countries are experiencing flareups, but the situation seems under control.”  

In July, the Mexican peso appreciated from 23.066 to 22.154. Notwithstanding, economists at MUFG keep a bearish view on Mexican economic perspectives

In July, the Mexican peso appreciated from 23.066 to 22.154. Notwithstanding, economists at MUFG keep a bearish view on Mexican economic perspectives driven by local technical issues and policy choices.  Key quotes “The combination of deep recession and low inflation provides room for further cuts on the policy rate, thus leading to the continuity of lower carry-trade return. Secondly, the deep recession damages tax collection and increases the pressure for more fiscal spending, but government response keeps below expectation.” “AMLO insists on the plan to increase the role of the State in the energy sector. However, his plans to obtain energy independence by increasing oil production and refining capacity for PEMEX tend to fail, impacting even more the company’s finance that has been already hit harshly by the relatively low oil prices and weaker demand, and it would require more government capital injection. And on the electricity segment, government has been making a number of regulatory changes that benefited state owned company CFE in detriment of private companies, in particular renewables plants. These government strategies damage even more business confidence, thus jeopardizing private investments. In such negative scenario, we keep our view of a gradual MXN depreciation.”  “The USMCA trade deal is now in effect, being positive for Mexico once it maintains trade preference with the USA and Canada. In case of a faster-than-expected recovery of the USA, there would be perspectives of higher USD inflows to Mexico. On the other way around, a scenario of more prolonged and/or deeper recession would intensify the pace of MXN depreciation.”  

AUD/USD continues to face rejection at the 0.7150 mark for the second straight day, as the bulls await a strong catalyst for a convincing break above

AUD bulls draw support from USD selling, rise in S&P 500 futures. AUD/USD could be limited by US-China tensions, virus woes. RBA sees a bumpy road to recovery due to regional lockdowns.  AUD/USD continues to face rejection at the 0.7150 mark for the second straight day, as the bulls await a strong catalyst for a convincing break above that level. The aussie is looking to extend its bounce above 0.7150 on Tuesday, underpinned by the resurgent US dollar supply across the board and the uptick in the S&P 500 futures. The USD sellers returned, in light of the US fiscal stimulus wrangling, coronavirus concerns and record low US 10-year real yields. Meanwhile, a stronger US Manufacturing data lifted the overall market sentiment, boosting the S&P 500 futures in sync with the European equities. The buyers, however, face an uphill task due to the worsening virus situation in Australia and Reserve Bank of Australia’s (RBA) cautious outlook on the economy. Victoria declared a state of disaster and announced fresh lockdowns to contain the resurgence of infections. The RBA kept its cash rate unchanged at a record low of 0.25%, at its monetary policy meeting held earlier today. But the central bank predicted that the economic recovery will likely be both ‘uneven’ and ‘bumpy’. Looking ahead, the risk sentiment and dollar trades will continue to play out ahead of the US Factory Orders data and stimulus talks. AUD/USD technical levels The immediate upside will likely face stiff hurdle 0.7150 (5-DMA). The next resistance is aligned at 0.7161 (daily classic R1). On the flip side, the immediate support is seen at 0.7100 (round figure), below which the 20-DMA at 0.7077 could be tested. AUD/USD additional levels  

EUR/USD is fighting with the 1.1780 resistance as Tuesday's 4-hour chart is showing the currency pair bounced off 1.17, a critical support. On the fli

EUR/USD is fighting with the 1.1780 resistance as Tuesday's 4-hour chart is showing the currency pair bounced off 1.17, a critical support. On the flip side, the 1.1735 level is the first support seen, FXStreet’s analyst Yohay Elam reports. Key quotes “Euro/dollar has bounced off 1.17 – a level that supported it also in late July and now turns into a double-bottom. In addition, that level is where EUR/USD launched at, back in 1999. While upside momentum on the 4-hour chart vanished, the currency pair swiftly recaptured the 50 Simple Moving Average.” “EUR/USD is battling 1.1780, a cap on the way up. It is followed by 1.1805, which had a similar role last week. The higher levels to watch are 1.1850 and 1.1909.” “Initial support is at 1.1735, where the 50 SMA hits the price, followed by 1.17 mentioned earlier. Further down, 1.1625 and 1.1540 await it.”  

During July the euro strengthened further against the US dollar, moving from 1.1247 to 1.1819. Policy optimism provides support to the shared currency

During July the euro strengthened further against the US dollar, moving from 1.1247 to 1.1819. Policy optimism provides support to the shared currency. The EUR/USD pair may experience some consolidation in the near-term but economists at MUFG see upside potential in the long-run. Key quotes “While the composition of the EUR 750 billion package was altered with EUR 390 billion available for grants versus the original EUR 500 billion, the details remain supportive for the outlook ahead. Crucially, this positive sentiment is also reflective of the sound management of COVID in Europe. There are some risks to this of course. Spain in particular, but other countries too, have shown a notable escalation and containing the spread of COVID will be important for keeping EUR on a trend higher.” “The consequence of reduce fragmentation risks in the euro-zone is greater support for yields in Germany versus the periphery and versus UST bonds. The scale of narrowing in the UST-Bund spread is very significant and points to a turn in EUR/USD trend to the upside. We do not see this changing with the Fed’s focus of QE very much on maintaining lower yields for longer.”   “EUR upside potential is building as evident from the spot move in July. The scale of the move means some correction or consolidation is probable over the short-term. But the longer-term EUR/USD trend is now higher.”  

Tech stocks have rallied this year, with the tech-heavy Nasdaq up over 20% vs. a 2% gain for the S&P 500. While economists at UBS don't think tech is

Tech stocks have rallied this year, with the tech-heavy Nasdaq up over 20% vs. a 2% gain for the S&P 500. While economists at UBS don't think tech is entering bubble territory, they do think investors with a concentration in the biggest recent winners should rebalance and reposition that exposure. Key quotes “The information technology (IT) sector currently trades at 25x consensus forward EPS estimates, a 17% increase from the beginning of the year. However, using the tech-heavy NASDAQ composite as a proxy, valuations are clearly well below late 1990s levels, when the index forward P/E rose above 70x at the height of the dotcom bubble. Furthermore, the IT sector looks appropriately valued relative to other sectors given current expectations for future cash flows and discount rates.” “After the significant outperformance of growth in general and FAAMNG in particular, many investors' portfolios may be heavily skewed towards recent outperforming stocks. For example, the top five companies in the S&P 500 (Facebook, Amazon, Apple, Microsoft and Alphabet) now account for over 20% of the index. This doesn't necessarily mean that these stocks should be sold, and we still like most of the FAAMNG complex. But it does mean that portfolios may be less diversified and therefore more risky (both on the upside and downside) than they might seem. In addition, investors that have too much exposure to these growth stocks could be at risk if value stocks start to assume market leadership.”  

During July the yen strengthened notably versus the US dollar from 107.78 to 105.67. However, the yen weakened against the euro from 121.22 to 124.89.

During July the yen strengthened notably versus the US dollar from 107.78 to 105.67. However, the yen weakened against the euro from 121.22 to 124.89. Low-beta yen has resulted in sharper USD depreciation versus other G10 currencies than versus the yen. Long-term, economists at MUFG Bank believe USD/JPY could trade below the 100.00 level. Key quotes “The negative correlation between USD and equity markets has resulted in sharper USD depreciation versus other G10 currencies than versus the yen. Eventually though catch-up is likely and that means continued downward pressure on USD/JPY reflecting broader conditions.” “We have had a long-term view of gradual JPY appreciation. The aggressiveness of the COVID policy response has helped curtail JPY gains but the general global backdrop is consistent with JPY strength and eventual levels for USD/JPY below the 100 level are possible going forward.”  

Spain Unemployment Change declined to -89.8K in July from previous 5.1K

Gold (XAU/USD) is ranging within a $10 range around $1975 so far this Tuesday’s trading, as the bulls and bears fight for control amid a lack of fresh

XAU/USD sidelined heading into the European session. Downside limited by dollar weakness, coronavirus concerns. Focus remains on the USD dynamics and US-China updates.Gold (XAU/USD) is ranging within a $10 range around $1975 so far this Tuesday’s trading, as the bulls and bears fight for control amid a lack of fresh catalysts. Although, the bulls remain hopeful amid a broadly weaker US dollar, as the US 10-year inflation-adjusted Treasury yields continue to dive deeper into the negative territory. Meanwhile, renewed US-China spat, this time over the Tik-Tok issue, combined with persisting coronavirus concerns keep the haven bids for gold intact. The upbeat sentiment on the global stocks, however, limits the upside attempts in the spot. The traders cheer the above-forecasts US ISM Manufacturing PMI data, although the employment part of the index still remains a concern, which has cautioned the bulls ahead of the US Non-Farm Payrolls report due this Friday. The sideways movement in the yellow metals could be also associated with a Doji candle formed on the daily chart on Monday, which likely suggests a lack of clear directional bias. Markets now await the US Factory Orders data and fiscal stimulus talks for directives on the bright metal. Gold Related content Gold Price Analysis: Acceptance above $1985 critical to conquer $2000 – Confluence Detector Gold Price Forecast: Bulls eye $2000 amid record low US real yields, favorable technicals Gold Technical levels The immediate upside barrier is seen at $1980 above which the record highs of $1988.02 could be tested. To the downside, the daily low near $1971 could offer some cushion. The next support is aligned at $1960 (previous day low). Gold Additional levels  

Turkey Producer Price Index (YoY): 8.33% (July) vs 6.17%

Turkey Consumer Price Index (YoY) came in at 11.76% below forecasts (12.1%) in July

Turkey Producer Price Index (MoM) up to 1.02% in July from previous 0.69%

Turkey Consumer Price Index (MoM) below forecasts (0.9%) in July: Actual (0.58%)

USD/CHF last week failed to close below the 0.9072 May 2015 low and the market is correcting higher very near-term. With the pair trading at 0.9180, C

USD/CHF last week failed to close below the 0.9072 May 2015 low and the market is correcting higher very near-term. With the pair trading at 0.9180, Commerzbank’s Karen Jones sees first resistance at 0.9383. Above here, the 0.9478 mark is expected to cap the rally.   Key quotes “Initial resistance is the 0.9373 short term downtrend ahead of the 0.9362/93 tougher resistance. This latter level represents the lows from June and July and also a double Fibonacci retracement. The 50% retracement of the move down this year lies at 0.9478 and is expected to cap the rally. We expect this to act as formidable resistance.”  “Below last week’s low at 0.9057 will introduce scope to the 0.8703/0.8698 2014 lows.”  

France Budget fell from previous €-117.85B to €-124.88B in June

Gold (XAU/USD) is currently testing the $1973/72 support which would open the door toward $1966. Further down, a break below $1960 would dissipate the

Gold (XAU/USD) is currently testing the $1973/72 support which would open the door toward $1966. Further down, a break below $1960 would dissipate the bullish bias. On the fundamental side, the yellow metal finds support from the US 10-year real or inflation-adjusted yield which hits record low of -1%, FXStreet’s Dhwani Mehta briefs. Key quotes “The negative US 10-year real yields, which wallow near record lows of -1%, are indicative of dour macro outlook, thus, underpinning the safe-haven bids for gold. Fresh US-China concerns over the Hong Kong and Tik-Tok issue could likely benefit the precious metal going forward. Next of relevance for traders remains the US Factory Orders data and ongoing US stimulus negotiations.” “Gold is teasing a descending triangle breakout near $1976 levels, with the Relative Strength Index (RSI) still holding up above the midline in the bullish territory.” “A technical breakout above the $1978 level could open doors for a retest of the record highs en route the $2000 barrier.” “The immediate downside sees powerful support at $1973/72, the confluence of the 21 and 50-hourly Simple Moving Averages (HMA). The next support awaits at $1966, the horizontal 100-HMA, which will test the bears’ commitment. A break below the horizontal trendline support at $1960 will negate the near-term bullish bias, opening floors for further correction.”  

USD/CNH risks further losses on a break below the 6.9645 level in the short-term horizon, suggested FX Strategists at UOB Group. Key Quotes 24-hour vi

USD/CNH risks further losses on a break below the 6.9645 level in the short-term horizon, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectation for USD to ‘dip below 6.9755’ did not materialize as it traded in a quiet manner between 6.9765 and 6.9931. The underlying tone still appears to be soft and we continue to see chance for USD to dip below 69755. For today, the next support at 6.9645 is unlikely to come into the picture. Resistance is at 6.9880 followed by 6.9950.” Next 1-3 weeks: “In our latest update from last Tuesday (28 Jul, spot at 6.9900), we highlighted that ‘breach of 6.9750 would indicate end of correction phase and increase risk of USD moving below the month-to-date low of 6.9645’. Since then, USD has traded mostly sideways and downward momentum has barely improved. That said, looking forward, the downside risk still appears to be higher but USD has to crack and close below the July’s low of 6.9645 before a sustained weakness can be expected.”

The greenback, when tracked by the US Dollar Index (DXY), looks steady around the 93.50 area on turnaround Tuesday. US Dollar Index looks to data, ris

DXY looks steady in the mid-93.00s region on Tuesday.Focus remains on US politics and the pandemic.Factory Orders, IBD/TIPP index, API’s report next in the docket.The greenback, when tracked by the US Dollar Index (DXY), looks steady around the 93.50 area on turnaround Tuesday. US Dollar Index looks to data, risk trends The index managed to advance to the 94.00 neighbourhood at the beginning of the week, although the bullish intentions lacked follow through and motivated the index to return to the current mid-93.00s ahead of the opening bell in the Old Continent. In the meantime, investors keep gauging the fast-spreading pandemic vs. the ongogin economic recovery, staying vigilant at the same time on the US political scenario, where an extra coronavirus-stimulus package remains in the centre of the debate between Democrats and Republicans. Still on US politics, and with 90 days to the national elections, Democrat candidate Joe Biden is seen defeating current President Donald Trump. Later in the US calendar, June’s Factory Orders are due seconded by the IBD/TIPP index and the weekly report on US crude oil supplies by the American Petroleum Institute (API). What to look for around USD The dollar managed to regain attention after bottoming out in levels last seen over two years ago in the 92.50 area during last week. Looking at the broader picture, investors keep the bearish stance on the currency unchanged against the usual backdrop of US-China jitters, the spread of the pandemic and the dovish message from the Fed. Also weighing on the buck, market participants seem to have shifted their preference for other safe havens instead of the greenback on occasional bouts of risk aversion. On another front, the speculative community remained well into the negative territory for yet another week, adding to the idea of a more serious bearish trend in the dollar. US Dollar Index relevant levels At the moment, the index is losing 0.04% at 93.47 and faces the next support at 92.55 (2020 low Jul.31) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018). On the other hand, a break above 93.99 (weekly high Aug.3) would target 94.20 (38.2% Fibo of the 2017-2018 drop) en route to 96.03 (50% Fibo of the 2017-2018 drop).

Australia RBA Commodity Index SDR (YoY) came in at -12%, above forecasts (-12.3%) in July

USD/CAD is on a gradual decline below 1.3400 following a brief attempt to regain the latter in early Asia. The bears have regained control and now loo

USD/CAD on the back foot amid fresh USD supply. CAD ignores drop in WTI, as risk-on mood prevails. Bear flag breakdown spotted on hourly chart. USD/CAD is on a gradual decline below 1.3400 following a brief attempt to regain the latter in early Asia. The bears have regained control and now look to test the 1.3350 levels, aided by the resurgence of the US dollar supply across the board. The dollar recovery faltered amid concerns over the health of the US labor market after the manufacturing sector employment sub-index dwindled, the latest ISM data showed. Further, the slowing progress on the US fiscal aid also remains a weight on the greenback.    On the CAD-side of the story, the Canadian dollar tracks its commodity peers higher, as they cheer the upbeat market mood. The loonie ignores the drop in WTI prices below the $41 level. Attention now turns towards the US Factory Orders and Canadian Markit Manufacturing PMI data for fresh trading impetus. From a near-term technical perspective, the spot has carved out a bear flag breakdown on the hourly sticks alongside a bearish Relative Strength Index (RSI). The technical set up, therefore, suggests additional scope to the downside. The bears could likely test the 1.3350 psychological level should the selling pressure intensify. Only a  break above the downward-sloping 21-hourly Simple Moving Average (HMA) at 1.3401 could prompt any recovery attempts in the spot. USD/CAD hourly chart USD/CAD additional levels  

FX Strategists at UOB Group noted the outlook on USD/JPY stays unclear for the time being. Key Quotes 24-hour view: “We highlighted yesterday that ‘th

FX Strategists at UOB Group noted the outlook on USD/JPY stays unclear for the time being. Key Quotes 24-hour view: “We highlighted yesterday that ‘there is scope for the sharp bounce to extend higher but any advance is viewed as part of a broad 105.30/106.70 range’. However, USD traded within a narrower range than expected (between 105.56 and 106.46). The price action offers no fresh clues and USD could trade sideways for today, expected to be between 105.50 and 106.50.” Next 1-3 weeks: “We have expected USD to weaken since 22 Jul (spot at 106.85) and in our latest update from last Tuesday (28 Jul, spot at 105.35), we highlighted that ‘a break of 105.00 would not be surprising’ but were of the view ‘104.40 is unlikely to come into the picture so soon’. However, USD cracked 104.40 on Friday and plummeted to 104.17 before lifting off and blast past several resistance levels with ease (high of 106.05). Such price action is not common as can be seen by the wide daily range of 188 pips, its biggest 1-day range since the ‘mayhem’ in March. While the negative phase has clearly ended, the outlook for USD is unclear. From here, USD could trade in a choppy manner and within a broad 105.00/107.00 range.”

USD/JPY prints 0.13% gains on a day while trading around 106.10 during the pre-European session on Tuesday. The pair crossed 10-day SMA for the first

USD/JPY carries an upside break of 10-day SMA despite Monday’s pullback form 106.47.Normal RSI, a three-day winning streak favor the bulls to attack a falling trend line from June 05.105.30 can offer immediate support during the pair’s U-turn.USD/JPY prints 0.13% gains on a day while trading around 106.10 during the pre-European session on Tuesday. The pair crossed 10-day SMA for the first time in over two weeks on Monday. The same helps the quote to extend Friday’s recovery moves from the lowest since March 12 towards a short-term descending resistance line. Other than the 106.75 immediate upside barrier, comprising the said trend line, multiple lows marked during the early June and July months, around 106.55/60 also questions the pair buyers. In a case where the USD/JPY prices cross 106.60, 107.55 and July month top close to 108.15 will grab the market attention. Meanwhile, a daily closing below 10-day SMA level of 105.82 can take rest on 105.30 before revisiting the five-month lows near 104.20. USD/JPY daily chart Trend: Further recovery expected  

Here is what you need to know on Tuesday, August 4: The US dollar is on the back foot once again as American lawmakers fail to reach a deal, Sino-Amer

Here is what you need to know on Tuesday, August 4: The US dollar is on the back foot once again as American lawmakers fail to reach a deal, Sino-American tensions remain high, and data is unclear. Coronavirus-related developments are set to join the mix.Fiscal stimulus: Democratic Speaker of the House Nancy Pelosi said that a fiscal stimulus deal is unlikely this week and may have to wait until next week. White House Chief of Staff Mark Meadows said that Republicans will not agree to a package worth more than $1 trillion. Federal unemployment benefits and other programs expired last week and the lack of support is weighing on the economy. Talks resume on Tuesday.Charles Evans, President of the Chicago branch of the Federal Reserve, said that the ball is in Congress after the Fed did its part. Other officials Economic data: The ISM Manufacturing Purchasing Managers' Index beat expectations with 54.2 points, but the employment component remained depressed below 50, including a contraction in hiring. Factory Orders are due out on Tuesday as tension is rising toward Friday's Non-Farm Payrolls.  See US Manufacturing PMI Rebounds to 16 Month High in July:  Employment trails general improvementCoronavirus hopes: A treatment called RLF-100 helps critically-ill COVID-19 patients and is being fast-tracked in the US. Vice President Mike Pence reiterated hopes for having a coronavirus vaccine in the autumn. Regeneron Pharmaceuticals has joined the race to develop immunization after its drug proved efficient in animals. On the other hand, Dr. Tedros Adhanom Ghebreyesus, the head of the World Health Organization, said there "might never be" a silver bullet for the disease. Nearly 700,000 people have died worldwide, 155,000 in the US.COVID-19 figures from Florida, Texas, California, and other states is of interest on Tuesday after statistics have been exceptionally low on Monday due to the weekend effect. Hurricane Isaias and its impact are also eyed. Sino-American tensions: The US will allow TikTok to sell its operations to Microsoft or any other American company until September 15. The popular Chinese social network has been the latest focus in a long list of issues between the world's largest economies. AUD/USD is trading above 0.71, weathering the Reserve Bank of Australia's decision to resume bond buying. The Canberra-based institution is concerned about the rise in coronavirus cases in Victoria and the following lockdown. Australian retail sales beat with an increase of 2.7% in July, while the trade balance surplus fell short of estimates. EUR/USD is trading above 1.1750, up from the lows. Upbeat eurozone PMIs are battling fears of rising COVID-19 cases in some parts of the old continent. GBP/USD bounced off 1.30 as the British government continues making plans for an increase in coronavirus infections, including locking down London. Gold prices have stabilized below $1,980, seemingly unprepared to attack the $2,000 level just yet. Bitcoin is holding its ground above $11,000, resuming its gains after a wild weekend – including moves above $12,000 and below $10,000.  More Where next for the dollar, stocks and the US economy after downbeat data and the Fed

CME Group’s advanced figures for Natural Gas futures markets noted open interest retreated by almost 3K contracts on Monday, extending the choppy acti

CME Group’s advanced figures for Natural Gas futures markets noted open interest retreated by almost 3K contracts on Monday, extending the choppy activity seen as of late. Volume, instead, reversed two consecutive daily pullbacks and rose by nearly 602K contracts. Natural Gas now targets the 2020 highs Prices of Natural Gas rose more than 15% at the beginning of the week amidst diminishing open interest, leaving the upside exposed to some correction in the very near-term. Looking at the broader picture, Natural Gas could attempt a move to test YTD highs around $2,26 (May 5) in the short-term horizon.

Switzerland SECO Consumer Climate (3m) rose from previous -39.3 to -12 in 3Q

WTI eases to $40.88, down 0.10% on a day, while heading into the European open on Tuesday. The oil benchmark managed to flash gains for the last two d

WTI struggles to extend recovery moves from $40.74 beyond $41.00.Virus woes join OPEC output increase to combat drop in Russian oil production.US Factory Orders, API inventories will be the key.WTI eases to $40.88, down 0.10% on a day, while heading into the European open on Tuesday. The oil benchmark managed to flash gains for the last two days but a quiet Asian session seems to limit the moves off-late. As a result, traders eye the weekly release of private stockpile data from the American Petroleum Institute (API) for fresh impetus. Recovery in the US economics, coupled with hopes of the further stimulus from global policymakers, led-by America, seems to have offered the latest bids to the back gold. Also supporting the mood could be the month-end position adjustments. Even so, the recent increase in the Organization of the Petroleum Exporting Countries (OPEC) output driven by Saudi Arabia joins the broad fears of the coronavirus (COVID-19) led economic halt to challenge the bulls. “OPEC increased its output by 900,000 barrels a day last month to 23.43 million a day as Saudi Arabia, the United Arab Emirates and Kuwait restored additional production that was cut in June,” said Bloomberg. Talking about the virus, the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus warned, as per the Sky News, while saying that there may never be a "silver bullet" to beat coronavirus (COVID-19). Additionally, the US policymakers’ struggle to agree over the much-awaited stimulus also weighs on oil prices. It should also be noted that news suggesting a drop in Russia’s output by 16% in July failed to grab major attention. The reason could be traced from Russian Energy Ministry data, as reported by Reuters, suggesting a daily average output of 9.37 million barrels in July versus 9.32 million barrels in June. Moving on, any further fall in the API Weekly Crude Oil Stock, for the period ending on July 31, could help the energy benchmark to cross $41.00. However, an increase in inventories versus -6.829M prior will join COVID-19 woes and policy deadlock in the US to target a sub-$40 area during the fresh downside. Technical analysis A falling trend line from July 21, currently around $41.45, precedes the previous month’s top near $42.55 while challenging the bulls targeting February month bottom close to $44.00. On the contrary, $40.00 and 50-day SMA near $39.30 restricts the quote’s short-term downside.  

Ireland Purchasing Manager Index Manufacturing climbed from previous 51 to 57.3 in July

NZD/USD is expected to keep the consolidative fashion unchanged for the time being, likely between 0.6540 and 0.6710, suggested FX Strategists at UOB

NZD/USD is expected to keep the consolidative fashion unchanged for the time being, likely between 0.6540 and 0.6710, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Yesterday, we held the view that NZD ‘could test the strong support at 0.6600’ but ‘a sustained decline below this level is unlikely’. NZD subsequently dropped to a low of 0.6575 before rebounding. While downward pressure is not strong, there is scope for NZD to retest the 0.6575 level before a more sustained recovery can be expected. Resistance is at 0.6630 followed by 0.6650.” Next 1-3 weeks: “We highlighted yesterday (03 Aug, spot at 0.6620) that ‘a break of 0.6600 would indicate that NZD has moved into a consolidation phase’. NZD subsequently dropped to 0.6575 before settling on a soft note at 0.6613 (-0.24%). For the next 1 to 2 weeks, NZD is likely to trade sideways, expected to be between 0.6540 and 0.6710. Looking forward, a clear break of 0.6540 would suggest the start of a deeper pullback in NZD.”

FX option expiries for Aug 4 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1650 1.8bn 1.1725 769m 1.1750 827m -

FX option expiries for Aug 4 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1650 1.8bn 1.1725 769m 1.1750 827m - USD/JPY: USD amounts          105.75 401m 106.00 521m 106.07 444m - USD/CAD: USD amounts         1.3330 1.4bn 1.3450 738m

Traders scaled back their open interest positions by just 123 contracts at the beginning of the week, reaching the second drop in a row in light of pr

Traders scaled back their open interest positions by just 123 contracts at the beginning of the week, reaching the second drop in a row in light of preliminary readings from CME Group. On the other hand, volume reversed the previous drop and advanced by around 112.5K contracts. WTI expected to keep navigating below $43.00/bbl Prices of the WTI remain entrenched into the current consolidative range amidst erratic performance in both open interest and volume. This scenario is likely to prevail in the short-term horizon, while the key 200-day SMA at $42.80 per barre continues to cap the upside.

According to FX Strategists at UOB Group, the rally in Cable is expected to have ended on a breakdown below the 1.2970 mark. Key Quotes 24-hour view:

According to FX Strategists at UOB Group, the rally in Cable is expected to have ended on a breakdown below the 1.2970 mark. Key Quotes 24-hour view: “We highlighted yesterday that ‘the sharp pullback is viewed as part of an on-going correction phase’. We added, ‘the pullback in GBP could extend lower towards 1.3025’ and ‘the next support at 1.2990 is unlikely to come into the picture’. Our view was not wrong as GBP dropped to a low of 1.3005 before rebounding quickly to end the day largely unchanged at 1.3078 (-0.05%). The short-term weakness appears to have stabilized and for today, GBP is likely to consolidate and trade between 1.3020 and 1.3125.” Next 1-3 weeks: “While we have expected GBP to strengthen since 21 Jul (spot at 1.2670); in our latest narrative from last Thursday (30 Jul, spot at 1.2980), we held the view that GBP ‘could continue to advance but any potential gain is likely to be relatively modest. Next resistance is at 1.3080’. However, GBP blast past 1.3080 and surged to a high of 1.3170 last Friday. The subsequent sharp and rapid pull-back has dented the upward momentum considerably and this coupled with overbought conditions suggest the rally in GBP could be coming to an end soon. From here, unless GBP moves and stays above 1.3170 within these few days, a breach of 1.2970 (‘strong support’ level previously at 1.2850) would indicate that the current positive phase in GBP has run its course.”  

Open interest in Gold futures markets shrunk for the third session in a row at the beginning of the week, this time by nearly 2K contracts. Volume, in

Open interest in Gold futures markets shrunk for the third session in a row at the beginning of the week, this time by nearly 2K contracts. Volume, in the same line, went down for the fourth consecutive day, now by 108.1K contracts. Gold faces extra rangebound Prices of the yellow metal charted an inconclusive session on Monday amidst shrinking open interest and volume. That said, and in light of the absence of a clear trend, Gold faces some consolidation in the near-term, always below the key $2,000 mark per ounce.

In opinion of FX Strategists at UOB Group, EUR/USD is now seen navigating within 1.16 and 1.19. Key Quotes 24-hour view: “Yesterday, we held the view

In opinion of FX Strategists at UOB Group, EUR/USD is now seen navigating within 1.16 and 1.19. Key Quotes 24-hour view: “Yesterday, we held the view that ‘the rapid pull-back has room to extend lower but for today, the strong support at 1.1700 is likely safe’. However, USD dropped to 1.1694 before rebounding quickly. Downward pressure has eased and for today, EUR is likely to consolidate and trade between 1.1725 and 1.1820.” Next 1-3 weeks: “We pointed out yesterday that ‘risk of short-term top has increased further but confirmation is only upon a breach of 1.1700’. EUR subsequently breached 1.1700 but rebounded quickly after touching 1.1694. The break of the ‘strong support’ at 1.1700 indicates that the positive phase that started about 3 weeks ago has run its course. The current movement is viewed as the early stages of a consolidation phase. For the next couple weeks, EUR is likely to consolidate and trade between 1.1600 and 1.1900.”

AUD/JPY refreshes the intraday high to 75.71, currently around 75.62, following the RBA’s status-quo, during the early Tuesday. The pair carries its e

AUD/JPY keeps the upside break of two-day-old resistance line, now support, to refresh intraday high after RBA.RBA left monetary policy unchanged with a 0.25% cash rate, decision-makers showed readiness for further policy accommodation.Sustained break of the two-week-old falling trend line, bullish MACD favors the buyers.AUD/JPY refreshes the intraday high to 75.71, currently around 75.62, following the RBA’s status-quo, during the early Tuesday. The pair carries its early-Asian break of a falling trend line from Friday while also stretching the run-up after crossing the downward sloping trend line from July 22. Read: RBA: Accommodative approach will be maintained as long as it is required Considering the market’s upbeat reaction to the RBA monetary policy meeting, coupled with the technical breakout, the quote is likely to attack 76.00 during its further rise. Though, the initial July 23 bottom surrounding 76.40 and the July month top near 76.90 could challenge the bulls afterward. In a case where the pair manages to cross 76.90, it needs to sustain the run-up beyond 77.00 to aim for February low near 77.45. On the contrary, the resistance-turned-supports around 75.50 and 74.90, comprising respective trend lines from July 31 and 22, will join an ascending support line from July 30, near 75.25 to challenge the quote’s immediate downside. If at all the bears dominate past-74.90, the previous month’s bottom near 73.90 will be in the spotlight. AUD/JPY hourly chart Trend: Bullish  

AUD/USD eases from 0.7136 to 0.7130 as the RBA held monetary policy unchanged on early Tuesday. Even so, the pair keeps the early-day gains while snap

AUD/USD refreshes intraday high of 0.7136 following RBA’s no rate-change decision.Market’s risk-tone sentiment extends latest recovery as upbeat US data, hopes of further stimulus supersedes virus woes.US Factory Orders, updates from the American Congress, concerning the pandemic will be in focus.AUD/USD eases from 0.7136 to 0.7130 as the RBA held monetary policy unchanged on early Tuesday. Even so, the pair keeps the early-day gains while snapping the two-day losing streak. RBA left its benchmark interest rate unchanged at 0.25% during the latest policy meeting. In doing so, the Aussie central bank’s policymakers sound cautious while citing uncertainty over the global outlook. Read: RBA: Accommodative approach will be maintained as long as it is required Trading sentiment stays positive following the upbeat prints of US ISM Manufacturing PMI and American policymakers’ rush to deliver the already delayed fiscal stimulus. However, spreading of the pandemic in Australia’s Victoria becomes the key concern. On Tuesday’s Victorian State Premier Daniel Andrews said, anyone who has contracted COVID-19 and caught outside their home in breach of isolation orders will face fines of nearly A$5,000 ($3,559.00). Also standing on the negative side could be a warning from the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus. Talking about data, Australia’s June month Retail Sales and Trade Balance decorated the economic calendar during the early-Asia. While Retail Sales grew past-2.4% initial forecast to 2.7%, trade surplus softened to 8,202M versus 8,800 market consensus. Having witnessed the initial reaction to the RBA moves, traders will wait for Friday’s Statement of Monetary Policy (SOMC) for further details. However, the US Factory Order for June, expected 5% versus 8% prior, will precede Wednesday’s ISM Non-Manufacturing PMI to entertain the pair traders. It should, however, be noted that any agreement among the US Senators, concerning the fiscal outlay or the unemployment claims benefits, will be an additional boost for the quote. Furthermore, developments surrounding the virus vaccine may offer extra support to the optimists. Technical analysis Unless the quote slips below 0.7065/60 support-zone, comprising June 10 high and July 24 low, bulls are less likely to stop dreaming for 0.7200. Though there will be multiple resistances beyond the July month’s top near 0.7230, also the highest since early-2019, to challenge the bulls afterward.  

Following are the key headlines from the August RBA monetary policy statement, via Reuters, as presented by Governor Phillip Lowe. Committed to do wha

Following are the key headlines from the August RBA monetary policy statement, via Reuters, as presented by Governor Phillip Lowe. Committed to do what it can to support jobs, incomes and business Global outlook remains uncertain Target will remain in place until progress made towards goals for full employment, inflation Likely that fiscal and monetary support will be required for some time Bank's mid-march package of support for the Australian economy is working as expected Inflation is expected to average between 1 and 1½ per cent over the next couple of years Inflation is expected to return to positive territory in the current quarter Will purchase gov't bonds in the secondary market on wednesday to ensure that the yield on 3-year bonds Australian economy going through a very difficult period; experiencing biggest contraction since the 1930s Government's recent announcement that various income support measures will be extended is a welcome development Ownturn is not as severe as earlier expected and a recovery is now underway in most of Australia Recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria In its baseline scenario for GDP growth, output falls by 6% over 2020 and then grows by 5% over the following year

At its August monetary policy meeting this Tuesday, the Reserve Bank of Australia (RBA) left its monetary policy settings unadjusted for the third str

At its August monetary policy meeting this Tuesday, the Reserve Bank of Australia (RBA) left its monetary policy settings unadjusted for the third straight meeting, with the official cash rate (OCR) maintained a record low of 0.25%, as widely expected.more to come ... About RBA rate decision RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

Australia RBA Interest Rate Decision meets forecasts (0.25%)

USD/CHF approaches the upper-end of the immediate trading range while taking rounds to 0.9180 during the pre-European session on Tuesday. In doing so,

USD/CHF seesaws in a choppy range between 0.9170 and 0.9185.Overbought RSI favors the pair’s further pullback from the early 2015 lows.A descending trend line from March 27, 21-day SMA probes the bulls.USD/CHF approaches the upper-end of the immediate trading range while taking rounds to 0.9180 during the pre-European session on Tuesday. In doing so, the quote extends its recovery moves from the lowest since mid-January 2015. The up-moves also take clues from oversold RSI conditions. However, a 17-week-old falling trend line, near 0.9285, followed by a 21-day SMA level of 0.9300, become the key upside barriers to watch. Should the quote remains strong past-0.9300, 0.9465 and the July month’s top near 0.9500 will be the additional filters. Meanwhile, 0.9150 and 0.9100 could offer immediate support to the pair in a case bulls dwindle to carry the upside, which is less likely. Additionally, the quote’s further weakness past-0.9100 will be challenged by the recent multi-month low around 0.9055 and 0.9000 psychological magnet. USD/CHF daily chart Trend: Further recovery expected  

With the US dollar selling back on the cards, Gold’s quest for the $2000 level extends into August, as it consolidates the rebound to near $1980 regio

With the US dollar selling back on the cards, Gold’s quest for the $2000 level extends into August, as it consolidates the rebound to near $1980 region. The bulls continue to struggle at higher levels, with a convincing break to the upside awaited. Record low US real yields and renewed US-China concerns will continue to bode well for the gold buyers while they eagerly await the developments surrounding the US fiscal stimulus package. Let’s see how the metal positioned technically, as it faces stiff resistance on its way to the key 2K mark. Key XAU/USD resistances and supports The tool shows that the bright metal is seen running into supply at $1980 in the immediate term. The level is the confluence of the Bollinger Band one-hour Upper, Fibonacci 38.2% one-day and previous high four-hour. The next resistance is aligned at $1983, the Fibonacci 23.63% one-day. The spot needs to take out a powerful hurdle at $1985, in order to revive the bullish bias. Alternatively, immediate support is placed at $1968, the convergence of SMA10 one-day and Bollinger Band four-hour Middle. A failure to defend the latter, the next cushion of $1965 will offer some respite to the bulls. That is the Fibonacci 23.6% one-week support.           Further down, a cluster of support levels awaits at $1960, the intersection of the pivot point one-day S1 and the previous day low. Here is how it looks on the tool About the Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.Learn more about Technical Confluence

EUR/USD’s pullback from Friday’s 26-month high of 1.1909 looks to have stalled with key data reviving concerns about the health of the US job market.

EUR/USD is sidelined near 1.1765, having hit lows near 1.17 on Monday. Job losses in the US manufacturing sector weigh over the US dollar. EUR/USD’s pullback from Friday’s 26-month high of 1.1909 looks to have stalled with key data reviving concerns about the health of the US job market.  While the US ISM Manufacturing headline figure climbed to a 15-month high of 54.2 in July, the employment sub-index remained well below 50%. The below-50 reading suggests that companies continued to reduce jobs in July.  The data released during Monday’s US trading hours put brakes on the US dollar’s oversold bounce, restricting downside in EUR/USD near 1.17. The pair has since then regained some poise to trade around 1.1765.  The greenback looked set to chart a notable bounce on Monday with market sentiment around the currency reaching extremes and technical indicators reporting oversold conditions. However, the dismal employment sub-index of the ISM Manufacturing played a spoilsport.  With focus back on the health of the US economy, the dollar may remain under pressure on Tuesday and push EUR/USD back above 1.18 – more so, as the European equities are likely to track their Asian counterparts higher. That would further weaken the demand for the greenback.  On the data front, Spain’s Unemployment Change and the Eurozone Producer Price Index are scheduled for release during Tuesday’s European trading hours. Later in the day, the focus would shift to the US Factory Orders data for June.  Technical levels

GBP/USD seesaws around 1.3080, intraday high of 1.3088, while heading into the London open on Tuesday. Broad US dollar strength, coupled with the coro

GBP/USD bears catch a breather after a two-day losing streak, pullback from 1.3000 be the key.UK Government unveils further economic help, Chancellor Rishi Sunak defends free port trade policy.EU policymakers ready to ease Brexit stand but virus woes still challenge Britain.Risk catalysts remain on the driver’s seat amid a light calendar.GBP/USD seesaws around 1.3080, intraday high of 1.3088, while heading into the London open on Tuesday. Broad US dollar strength, coupled with the coronavirus (COVID-19) challenges to the UK, earlier inverted the Cable’s run-up to the highest since March. Though, increasing odds of a soft Brexit and the Tory government’s further economic push recently stopped the pair’s downside. Given the thin calendar details to watch for Tuesday, market players will have to keep eyes on the key risk factors like Brexit, COIVD-19 and US fiscal stimulus for fresh impulse. “The UK government has confirmed a £900m funding boost for more than 300 ‘shovel-ready’ projects in England in an effort to speed up construction of homes and infrastructure, said the Financial Times (FT) early in Asia. The news follows earlier updates from Reuters, citing anonymous diplomatic sources, to say that the European Union (EU) is willing to compromise to rescue troubled Brexit talks by softening its demand that Britain heeds EU rules on state aid in the future. Also on the positive side is the UK Express headline indicating plans to introduce 10 freeports after the end of the transition period. On the contrary, a surge in the UK’s new cases by 938, the highest since June, joins the broad US dollar strength to curb the GBP/USD price moves. Furthermore, chatters surrounding the British government’s warning to the medical suppliers to stockpile and former Tory leader Sir Iain Duncan Smith’s push for reopening the withdrawal agreement also challenged the pair bulls. Market sentiment remains positive despite US policymakers’ inability to offer any decision on the unemployment claims benefits and the much-awaited fiscal plans. While portraying the same, stocks in Asia-Pacific gains whereas the US stock futures and 10-year Treasury yields await fresh clues to extend Monday’s upbeat performances. Although the Brexit talks are likely to restart of August 17, updates concerning the UK-US and the Britain-Japan trade negotiations will join pandemic headlines to offer immediate direction to the quote. Additionally, policy deadlock in the US and the vaccine news, coupled with pandemic news, will also be the key to watch for near-term trade direction. Technical analysis An ascending trend line from July 20, at 1.3053 now, restricts the pair’s immediate downside ahead of 1.3000 threshold. Alternatively, bulls’ dominance past-1.3200 will have multiple resistances to tackle before attacking the yearly top surrounding 1.3285.  

Russian oil companies drilled 16% less oil in July than a year earlier, as noted by Interfax, a Russian news agency. Russia’s average daily output fe

Russian oil companies drilled 16% less oil in July than a year earlier, as noted by Interfax, a Russian news agency.  Russia’s average daily output fell to 39.63 million tons in July – down 9.35 million barrels per day based on a conversion rate of 7.33 barrels per metric ton of oil, according to oilprice.com.  However, Energy Ministry data, as reported by Reuters, showed a daily average output of 9.37 million barrels in July versus 9.32 million barrels in June.

AUD/USD eases to 0.7123 while stepping back from day’s top during the early Tuesday. In doing so, the pair seesaws around the neckline of a short-term

AUD/USD recedes from intraday high while teasing a bullish chart formation.200-bar SMA adds to the upside barrier, 0.7065/60 can offer strong downside support.RBA is expected to stand pat while citing coronavirus (COVID-19) worries.AUD/USD eases to 0.7123 while stepping back from day’s top during the early Tuesday. In doing so, the pair seesaws around the neckline of a short-term head-and-shoulders bullish pattern ahead of the key RBA monetary policy meeting. Read: When is the RBA Interest Rate Decision and how could it affect AUD/USD? Considering the pair’s failure to stay positive beyond 0.7200, coupled with anticipated dovish halt by the RBA, the quote may refrain from confirming the mentioned chart formation. Even if 0.7100 is likely immediate support for the pair traders to watch, sellers should remain cautious unless the quote slips below 0.7065/60 support-zone, comprising June 10 high and July 24 low. Alternatively, a sustained rise past-0.7125 will have to cross 200-bar SMA level of 0.7156 to challenge the July month’s top, also the highest since early-2019, near 0.7230. AUD/USD 30-minutes chart Trend: Pullback expected  

Japanese Foreign Minister Motegi said in a statement on Tuesday, he will visit Britain from Aug 5-7 to discuss bilateral free trade deal. Additional c

Japanese Foreign Minister Motegi said in a statement on Tuesday, he will visit Britain from Aug 5-7 to discuss bilateral free trade deal. Additional comments “Trip will be first for the Japanese minister since coronavirus outbreak.” “To discuss bilateral free trade deal with British Trade Minister Truss for the early conclusion.” “To discuss issues left unresolved in working-level negotiations for a bilateral trade deal.” Market reaction The yen is unperturbed by the above comments, as USD/JPY keeps gains above 106.00 on the back of positive Asian equities. The spot, currently, trades 0.17% higher at 106.11.  

Asian stocks track US equities higher on Tuesday. Upbeat US manufacturing data and dovish Fed expectations power gains. Asian stocks ticked higher on

Asian stocks track US equities higher on Tuesday. Upbeat US manufacturing data and dovish Fed expectations power gains. Asian stocks ticked higher on Tuesday as strong US manufacturing data boosted confidence, helping investors shrug off coronavirus-induced uncertainty.  Japan’s Nikkei index rallied by over 1% and stocks in Australia rose 1.6%. South Korean shares also jumped 1.13% alongside a 0.7% gain in Hong Kong’s Hang Seng index. The MSCI’s broadest index of Asia-Pacific shares outside Japan added nearly 0.9%.  Meanwhile, gold is sidelined near $1,976 per ounce amid lackluster action in the forex markets.  The US ISM Manufacturing released on Monday showed the activity expanded in July at the fastest pace in more than a year. The data put a bid under the US stocks, lifting the Dow Jones Industrial Average by 0.89%.  Additional bullish pressure may have stemmed from reports stating that the US Federal Reserve may ditch its long-followed strategy of preemptively raising rates to avoid a buildup of inflationary pressures. In other words, the Fed may become more tolerant of above-target inflation and keep the monetary policy easy for a prolonged period of time.  And while the US data and dovish Fed expectations are currently powering gains in stocks, the risk sentiment remains vulnerable to a resurgence of the coronavirus and flare-up in Sino-US tensions. The US President Trump has threatened to ban social media app TikTok unless its operators are sold off from the Chinese company called ByteDance, according to Reuters.

Silver is trapped in a pennant pattern, according to the 4-hour chart. A breakout would imply a resumption of the uptrend from lows near $19. Silver

Silver is trapped in a pennant pattern, according to the 4-hour chart. A breakout would imply a resumption of the uptrend from lows near $19.Silver is being squeezed in a narrowing price range for the eighth trading day. At press time, the metal is trading largely unchanged on the day at $24.31 per ounce.  The 4-hour chart shows the metal has carved out a pennant pattern.  A break above the pennant resistance, currently at $24.56, would confirm the breakout and signal a continuation of the rally from the July 17 lows near $19. That would expose the recent high of $26.20.  Alternatively, a pennant breakdown would imply bearish reversal and open the doors for a pullback to $22.25 (pennant low). Acceptance under that level would expose the psychological support of $20.  4-hour chartTrend: Neutral Technical levels

The yield on the US 10-year real or inflation note fell to a record low of -1% on Monday after Wall Street Journal said the Fed may ditch the long-fol

The yield on the US 10-year real or inflation note fell to a record low of -1% on Monday after Wall Street Journal said the Fed may ditch the long-followed strategy of pre-emptive rate hikes to avoid a buildup of inflationary pressures in the economy.  The real yield has collapsed by 162 basis points over the past 4.5 months, having hit a high of 0..62% during the height of the coronavirus-induced turmoil in the global financial markets in mid-March.  The slide in real yields is reflective of ultra-accommodative monetary policy expectations and deteriorating macro conditions.  With the Fed planning to become more tolerant for above-target inflation, the odds appear stacked in favor of continued decline in real yields. The Fed adopted a 2% inflation target on Jan. 25, 2012 Gold has benefitted from the slide in the real yield. The yellow metal is currently trading at $1,976 per ounce, representing a 30% year-to-date gain.

Speaking in a Fox News interview on Tuesday, US Vice President Mike Pence voiced some optimism on the coronavirus vaccine. Pence said: “A COVID-19 vac

Speaking in a Fox News interview on Tuesday, US Vice President Mike Pence voiced some optimism on the coronavirus vaccine. Pence said: “A COVID-19 vaccine "could well be available for this fall." Late Sunday, President Donald Trump said, “we may have a coronavirus vaccine far in advance of the end of the year.”

With the recent pessimism concerning the coronavirus (COVID-19) outbreak in Victoria, the Reserve Bank of Australia’s (RBA) monetary policy decision,

With the recent pessimism concerning the coronavirus (COVID-19) outbreak in Victoria, the Reserve Bank of Australia’s (RBA) monetary policy decision, at 04:30 GMT on Tuesday, become the key for the AUD/USD traders. While the Aussie central bank has already shown the intention to keep the interest rates near the record low of 0.25%, no major forecasts are supporting an increase in the Quantitative Easing (QE). Though, the recent recovery in Aussie economics confronts the pandemic woes at home to probably push Governor Philip Lowe and the company to strike a dovish tone. Analysts at Westpac provide key details of the RBA’s fight against the virus and probable outcome: No change in the stance of policy is expected at the August RBA meeting. A full discussion of the outlook and risks will follow on Friday as the RBA releases its latest Statement on Monetary Policy. Recent RBA commentary has indicated skepticism over policy options such as negative interest rates and FX intervention. But Australia’s deteriorating economic outlook means the topic needs to be addressed. TD Securities, on the other hand, expect no major surprises from the event: RBA Board Meeting should have the target cash rate remaining at 0.25%. The Minutes of the July meeting and the Governor's speech released on 21st July indicated the door is shut to further policy easing, the Minutes concluding there is “no need to adjust the package of policy measures in Australia in the current environment”. Otherwise, on Tuesday the market will look to get a flavor of the Bank's latest set of forecasts for GDP, CPI and unemployment that will be published on Fri. How could the RBA decision affect AUD/USD? AUD/USD picks up the bids near 0.7125 by the press time of early Tuesday's Asian session. In doing so, the aussie pair snaps the previous two-day losing streak. The reason could be traced from the latest swing in the risk-tone as well as upbeat data concerning Australia’s Retail Sales. Even so, the bulls are cautious amid the latest recovery in the US dollar and strict lockdown conditions in Victoria. While the latest COVID-19 figures for the American and Australia both cite a bit of relief, the pandemic still looms over the respective economies and hurt the growth outlook. While the recent data have been price-positive, odds of witnessing future weakness in the figures, due to the virus, can’t be ruled out. Should the policymakers convey this challenge, the AUD/USD pair may have to extend the last two-day declines. Alternatively, any optimism can add to the immediate gains but will be curtailed unless backed by the fading of the virus woes. Technically, an ascending trend line from May 22, currently around 0.7075 precedes the 0.7065/60 support-zone, comprising June 10 high and July 24 low, to restrict the pair’s near-term downside. Alternatively, bulls have to dominate past-0.7200 to regain market confidence. Key quotes AUD/USD: Off one-week low to regain 0.7100, eyes RBA AUD/USD Forecast: At risk of losing further ground RBA Preview: COVID running a muck? An Exy Aussie? Nah, no worries mate! AUD/USD: Rebound in Aussie exports fails to lift the AUD About the RBA interest rate decision RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

According to Global Times Editor in Chief Hu Xijin, China threatened retaliation if all Chinese journalists based in the US are forced to leave the co

According to Global Times Editor in Chief Hu Xijin, China threatened retaliation if all Chinese journalists based in the US are forced to leave the country, including targeting US journalists in Hong Kong. Hu said: “Given that the US side hasn’t renewed visa of Chinese journalists, Chinese side has prepared for the worst scenario that all Chinese journalists have to leave the US.” “If that’s the case, the Chinese side will retaliate, including targeting US journalists based in HK,” Hu added. Market reaction AUD/USD appears to catch fresh bids despite the mixed Australian Trade and Retail Sales data, as the US dollar continues to trade broadly subdued. The spot modestly flat at 0.7125, at the time of writing, with the focus now on the RBA decision.

Gold is currently trading sidelined near $1,975, having witnessed a two-way business and a flat close on Monday. Essentially, the yellow metal created

Gold lacks clear directional bias for the second day. Monday's Doji candle is indicative of buyer exhaustion. Daily chart indicators continue to report overbought conditions. Gold is currently trading sidelined near $1,975, having witnessed a two-way business and a flat close on Monday.  Essentially, the yellow metal created a Doji candle on Monday, which comprises long wicks and a small or negligible body. The Doji candle is widely considered to be a sign of indecision in the market place.  In this case, however, the candle has appeared at record highs and following a meteoric rise from $1,450 to $1,988 and indicates buyer exhaustion.  That, alongside overbought readings on key indicators like the 14-day relative strength index (RSI) and slow stochastic, suggests scope for price pullback.  Moreover, the short-term trend would turn bearish if prices end Tuesday below $1,960 – the low of Monday’s Doji candle. That would expose the support of the 200-hour simple moving average, currently at $1,938.  On the higher side, $2,000 is a key hurdle. The bulls may have a tough time establishing a strong foothold above the psychological resistance amid overbought conditions.  Daily chartTrend: Bull exhaustion Technical levels  

Analysts at Citigroup enlist key primary drivers behind the gold-price rally while projecting higher targets in the short-term. Key quotes “Key driver

Analysts at Citigroup enlist key primary drivers behind the gold-price rally while projecting higher targets in the short-term. Key quotes “Key drivers include the record pace of ETF investor inflows, a weakening US$ and negative real yields.  Citi predicts a short-term target at ~$2,100/oz. Breaching $2,300/oz over the six-twelve months seems plausible. The contraction in global jewelry demand for 2020 persists and still appears worse than the GFC. This may put downside risks on gold. Russia (CBR) has paused fresh purchases as of April.  The PBOC has not increased gold holdings since last September/October, either.  Total net buying of EM CBs should slow dramatically in 2020.”

GBP/JPY refreshes intraday high to 138.80, up 0.19% on a day, amid the Asian session on Tuesday. The pair eased from two-month high the previous day b

GBP/JPY extends pullback from 137.75 to refresh the intraday high.Signals of further stimulus from the UK beat welcome Tokyo CPI data.The risk-on sentiment, Brexit optimism add strength to the recovery moves.GBP/JPY refreshes intraday high to 138.80, up 0.19% on a day, amid the Asian session on Tuesday. The pair eased from two-month high the previous day but failed to drop far below the open and hence portrayed a Doji Candlestick formation suggesting a reversal of the previous upside. However, recent optimism in the market takes clues from the news suggesting Tory government’s one more stimulus package and signals of easy Brexit talks favor the bulls. Financial Times (FT) came out with the news citing the UK government’s another attempt to revive the economy, this time via helps to the construction sector. The update marked £900 million as a planned outlay. Additionally, Reuters also quoted an anonymous source to say that the European Union (EU) is willing to compromise to rescue troubled Brexit talks by softening its demand that Britain heeds EU rules on state aid in the future. Elsewhere, market players cheer vaccine hopes and clues of further stimulus from the BOJ to ignore the US policymakers’ delay in announcing the much-awaited aid package. The same shrugs of warnings from the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus. While portraying the market sentiment, Japan’s Nikkei 22 rises 1.36% whereas US 10-year Treasury yields and S&P 500 Futures stay positive, though with little gains. Talking about data, Japan's Tokyo Consumer Price Index (CPI) for July managed to cross 0.4% forecast and 0.3% prior with 0.6% YoY in July. Looking forward, a light calendar keeps the pair traders directed to risk catalysts for fresh impetus. As a result, virus updates and news concerning the US Congress will be the key. Technical analysis Bulls should wait for a clear break of 139.00 to negate the previous day’s Doji formation and aim for June month’s top near 139.74. On the contrary, a downside break below 200-day SMA level of 137.55 will favor the bears.  

EUR/USD is trading at 1.1763 between a range of 1.1695 and 1.1796, pressured as market positioning hits extremes and the US dollar starts to show sign

Positioning data is overstretched and bets are being laid for a short term top in EUR/USD.Various fundamentals could come into play to start driving in demand for greenbacks again.EUR/USD is trading at 1.1763 between a range of 1.1695 and 1.1796, pressured as market positioning hits extremes and the US dollar starts to show signs of stabilisation.  The euro has been on the bid during the worth month in a decade for the greenback. For positing data last week, despite the crowded trade against the US, it did not prevent bearish bets increasing further, hammering the dollar down into negative territory for the seventh consecutive week. A series of factors have led to the downfall in the dollar, described here:DXY: Dollar liquidity plentiful thanks to the Fed, markets increasingly bearish on US outlookHowever, the sell-off seems overdone in light of market positioning and even the escalating geopolitical tensions between the US and China accompanied by the rising risk of a second wave in Europe and Asia. Net long EUR positions rose to a record high of 157.56k as the financial package worth EUR 1.82trl approved by EU leaders was cheered by the investment area, leading to the EUR/USD rally to 1.19 from 1.12 at the beginning of July. However, the all-time high bullish bets on the euro could prove a classic contrarian indicator. EUR/USD levels If this is a short-term top at 1.19, then we can expect to see a proper correction lower to unfold over the coming weeks. As analysts at Commerzbank have pointed out, EUR/USD last week sailed tough resistance at 1.1785/1.1825, this was a 61.8% Fibonacci retracement, a 12-year resistance line and the September 2018 high. HOWEVER the market has not CLOSED above here on a weekly basis and we may see some near term consolidation ahead of a move to 1.2635/66, the 200 month ma Initial support lies 1.1625/38 (a double Fibo) ahead of the March high at 1.1495. Ideally dips lower will be contained by the 2 month uptrend at 1.1441.    

AUD/USD fails to draw bids despite a rebound in Aussie exports. Exports rose 2.4%, while imports increased by 1%. Australia's Retail Sales growth for

AUD/USD fails to draw bids despite a rebound in Aussie exports.Exports rose 2.4%, while imports increased by 1%. Australia's Retail Sales growth for June has been revised higher to 2.7%.Trade surplus missed expectations by a big margin.AUD/USD continues to trade in the red near 0.7115 despite the rebound in Australia’s exports.  Outbound shipments or exports rose 3% in June following May’s 4% contraction. In addition, consumer spending, as represented by seasonally adjusted retail sales rose 2.7% month-on-month in June, beating the preliminary forecast of 2.4%.  Even so, the AUD is struggling to draw bids. That’s probably because trade surplus rose only slightly to AUD 8,202 million from AUD 8,025 million, missing the forecast of AUD 8,800 million by a big margin. Take note that imports rose 1% following May’s 6% contraction.  Also, the sell-off in the American dollar has stalled with sentiment reaching bearish extremes. The upbeat print of ISM Manufacturing PMI released Monday may be helping the US dollar stay bid and keep the AUD/USD under pressure.  Looking ahead, all eyes will be on the Reserve Bank of Australia’s monetary policy decision and Statement of Monetary Policy (SoMP). The RBA is likely to maintain the status quo on Tuesday and reiterate the willingness to do more if required. Traders would watch out for comments on the exchange rate. The AUD/USD pair has rallied by over 1,700 pips in the last 4.5 months. So far, however, the central bank has refrained from aggressively talking down the Aussie dollar.  Technical levels

GBP/USD eases to 1.3070 during Tuesday’s Asian session. The Cable prints the third day of losses after it took a U-turn from March top during Friday.

GBP/USD stays depressed following the break of an eight-day-old rising trend line.Failures to cross March month’s high, lower high formation favor sellers.Bulls seek a clear break of 1.3200 to extend the previous upside.GBP/USD eases to 1.3070 during Tuesday’s Asian session. The Cable prints the third day of losses after it took a U-turn from March top during Friday. The weakness takes clues from a recent break below a short-term ascending trend line stretched from July 23. The pair currently targets to revisit 1.3000 round-figure comprising horizontal support, a break of which could direct the sellers towards a 200-HMA level of 1.2925. However, any more downside past-1.2925 will make the quote vulnerable to test 61.8% Fibonacci retracement level of July 22-31 upside, at 1.2845. Meanwhile, the support-turned-resistance near 1.3106 limits the pair’s immediate upside ahead of the March month’s top close to 1.3200. In a case where the bulls dominate past-1.3200, there are multiple resistances to tackle before attacking the yearly top surrounding 1.3285. GBP/USD hourly chart Trend: Pullback expected  

Australia's preliminary estimate for June nominal Retail Sales was pointed to a 2.4% increase in the month. Retail Sales AUSTRALIA JUNE RETAIL SALES +

Australia's preliminary estimate for June nominal Retail Sales was pointed to a 2.4% increase in the month. Retail Sales AUSTRALIA JUNE RETAIL SALES +2.7 PCT M/M S/ADJ (REUTERS POLL +2.4 PCT)   AUSTRALIA Q2 CHAIN VOLUME RETAIL SALES -3.4 PCT Q/Q S/ADJ (REUTERS POLL -3.2 PCT) AUD/USD update AUD/USD was down 0.13% ahead of the data today in a fade on rallies.  The currency has been under pressure in a barroom brawl at the start of the week as the greenback corrects across the board. A weight on the currency falls with the surge in virus cases in Victoria. In fact, the Australian new coronavirus cases for Victoria are said to have 439 cases added just today. The Chart of the Week: AUD/USD toppy, H&S could be in the making The chart above was attached in this week's Chart of the Week yesterday to illustrate the prospects for a barroom brawl and construction of a bearish head and shoulder's right-hand shoulder. This was playing out throughout Europe and New York markets overnight and has continued to do so throughout Asia, so far, today as traders get set for the RBA. Meanwhile, looking ahead, no change in the stance of policy is expected at the August RBA meeting. A full discussion of the outlook and risks will follow on Friday as the RBA releases its latest Statement on Monetary Policy. Recent RBA commentary has indicated scepticism over policy options such as negative interest rates and FX intervention. But Australia’s deteriorating economic outlook means the topic needs to be addressed, analysts at Westpac explained.  Description of the Retail Sales The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it''s considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.

Australia Retail Sales s.a. (MoM) above expectations (2.4%) in June: Actual (2.7%)

Australia Trade Balance registered at 8202M, below expectations (8800M) in June

Australia Imports up to 1% in June from previous -6%

Australia Exports rose from previous -4% to 3% in June

The People's Bank of China has set the yuan reference rate at 6.9803 versus Monday's fix at 6.9980.

The People's Bank of China has set the yuan reference rate at 6.9803 versus Monday's fix at 6.9980.

Confirmed: Victoria reports 439 cases More to come...

The prior head's up, Australian new coronavirus cases, Victoria said to have 439 cases added today, has been confirmed with Victoria reporting 439 new coronavirus cases. As the Guardian writes,  Daniel Andrews confirms the 439 new cases of covid and says 11 people who had been diagnosed with virus died in the last 24 hours.  One man in his 70s. One man and three women in their 80s. Two men and three women in their 90s. And one woman who was in her hundreds. All of those tragedies, all of those fatalities are connected to aged care settings. More broadly, on that front, there are 1,186 active cases in aged care. That remains a very challenging setting for us and one that we’re working incredibly closely with the Commonwealth Government, with the private sector, public hospitals, private hospitals, literally hundreds and-ups of shifts that have been picked up by nurses out of our hospital system, a large team of people working together to provide the best care to those residents and get them what they need when they need it, NSW has also released this update: There were 12,876 tests reported in the 24-hour reporting period, compared with 18,823 in the previous 24 hours. Of the 12 new cases reported to 8pm last night: More to come...

S&P 500 Futures stay mostly unchanged near the previous day’s close around 3,290 amid the initial hour of Tokyo open on Tuesday. The risk barometer re

S&P 500 Futures seesaws in a choppy range between 3,283 and 3,291.Risk-tone sentiment remains positive amid vaccine hopes, ignores US policy deadlock.Updates concerning the virus, the American fiscal stimulus remain as the key catalyst.S&P 500 Futures stay mostly unchanged near the previous day’s close around 3,290 amid the initial hour of Tokyo open on Tuesday. The risk barometer refreshed the highest levels since February 24 on Monday. The move could have gained clues from upbeat performance technology giants while also cheering upbeat US data. Further, US President Donald Trump’s optimism concerning the coronavirus (COVID-19) vaccine adds to the broad optimism. On the contrary, warnings from the World Health Organization (WHO) join the lack of agreement among the American Congress members for jobless claim benefits to challenging the market sentiment. Also acting as the market-negative catalyst is strict lockdown measures in Australia’s Victoria and the latest headlines from Global Times suggesting China will expel US journalists in Hong Kong. Amid all these catalysts, Japan’s Nikkei gains near 1.5% to 22,532 whereas the US 10-year Treasury yields take rounds to 0.56% as we write. Although Aussie data and RBA can entertain Asian traders, major attention will be given to how the US policymakers unveil details of the much-awaited fiscal package. Further, second-tier American data and global combat with the COVID-19 can also entertain the traders. It should also be noted that a slew of earnings reports from the key US enterprises will also direct the S&P 500 Futures.

EUR/USD looks to be forming a head-and-shoulders pattern on the hourly chart. A move below1.1695 would confirm a breakdown. EUR/USD’s bounce from Mon

EUR/USD looks to be forming a head-and-shoulders pattern on the hourly chart. A move below1.1695 would confirm a breakdown. EUR/USD’s bounce from Monday’s low of 1.1696 looks to have run out of steam above 1.1760 in the last few hours. If the currency pair falls back to sub-1.17 levels, a head-and-shoulders pattern would be formed on the hourly chart.  Acceptance under the neckline support at 1.1695 would imply bearish reversal on the hourly chart and open the doors for 1.1481 (target as per the measured move method).  On the higher side, Monday’s high of 1.1797 is key resistance, A move above that level would validate the dip demand near 1.17 and restore the immediate bullish view, possibly leading to a re-test of Friday’s high of 1.1909.  Hourly chartTrend: Bearish below 1.1695 Technical levels      

USD/CAD drops to 1.3393 during the initial Asian session on Tuesday. The loonie pair rose to a one-week high on Monday. Though, failures to cross 100-

USD/CAD stays depressed despite recently bouncing off 1.3380.A confluence of 200-bar EMA, falling trend line from June 26 offer strong resistance.July month’s bottom gains immediate attention of sellers.USD/CAD drops to 1.3393 during the initial Asian session on Tuesday. The loonie pair rose to a one-week high on Monday. Though, failures to cross 100-bar EMA keep the bears hopeful. The same drives sellers towards July’s low near 1.3330 ahead of attacking 1.3315 mark comprising lows registered during March and June month. It should, however, be noted that the pair’s weakness past-1.3315 will have to break 1.3300 round-figures to revisit February month’s trough surrounding 1.3200. On the upside, a clear break above 100-bar EMA level of 1.3450 could push the recovery moves towards 1.3515 resistance confluence including a five-week-old falling trend line and 200-bar EMA. USD/CAD four-hour chart Trend: Bearish  

The ABC reports that Victoria will report around 439 new coronavirus cases today. Premier Daniel Andrews is due to give an update at 11am.

The ABC reports that Victoria will report around 439 new coronavirus cases today. Premier Daniel Andrews is due to give an update at 11am.

The US Treasury on Monday said that it expects to borrow $947 billion in debt in the third quarter to fund the massive coronavirus-induced spending s

The US Treasury on Monday said that it expects to borrow $947 billion in debt in the third quarter to fund the massive coronavirus-induced spending surge. The new forecast is $270 billion higher than the previous projection made in May, according to Bloomberg.  The Congressional Budget Office sees the deficit reaching a record $3.7 trillion in the fiscal year ending Sept. 30.  Meanwhile, the Treasury anticipates selling $1.216 trillion in net marketable debt in three months through December.  Treasury’s announcement to raise the borrowing target did not have any notable impact on yields on Monday, The yield on three-month bills was steady near 0.09%, while the 10-year yield hovered around 0.55%.  The benchmark yield is down nearly 140 basis points on a year-to-date basis as increased spending and bond supply has been accompanied by Federal Reserve’s open-ended asset purchases. 

USD/JPY remains on the front-foot around 106.15 as markets in Tokyo open for Tuesday’s trading. The yen pair recently shrugged off the July month Toky

USD/JPY reverses decline from 106.47 while bouncing off 105.90.Tokyo Consumer Price Index grew past-0.4% forecast, 0.3% prior to 0.6% YoY in July.Market sentiment stays positive despite policy deadlock in the US, virus woes.BOJ Governor Kuroda stays ready to extend the bank’s support further.USD/JPY remains on the front-foot around 106.15 as markets in Tokyo open for Tuesday’s trading. The yen pair recently shrugged off the July month Tokyo Consumer Price Index (CPI) data while rising for the third consecutive day. In doing so, the quote pays a little heed to the risks emanating from the delay in the US stimulus and the coronavirus (COVID-19) woes. Tokyo CPI ex-Fresh Food crossed 0.2% expected and previous with 0.4% whereas CPI ex-Food, Energy beat 0.5% market consensus and 0.4% last readings to flash 0.6% in July. Even if the data flashed upbeat signals for the Japanese currency, the USD/JPY prices failed to step back. The reason could be traced from US President Donald Trump’s optimism and broad US dollar strength backed recently by welcome data. US President Trump defies WHO’s grim words… In his latest White House press conference, the Republican leader cited hopes of a vaccine before the year ends while turning down the odds of permanent lockdowns. This contradicts warnings from the World Health Organization’s (WHO) Head Dr. Tedros Adhanom Ghebreyesus that there may never be a "silver bullet" to beat COVID-19. Not only this US President Trump also challenges the opposition Democratic Party’s push for a $3.5 trillion stimulus plan, not to forget the proposal of unemployment claim benefits of $600. The same generates a policy deadlock in the world’s largest economy amid the pandemic’s surge. Other than the delay in the much-awaited US stimulus, worsening virus conditions in Australia, Japan and some of the notable Asian nations like India also challenge the latest risk-on sentiment. As a result, S&P 500 Futures refrains from following Wall Street’s gains but Japan’s Nikkei 225 takes the bids near 22,450, up 1.18% on a day, by the press time. Nikkei’s gains could be traced from the Bank of Japan (BOJ) Governor Haruhiko Kuroda’s readiness to pump the economy further. In the latest appearance, BOJ’s Kuroda said, if needed, may mull extending march 2021 deadline of steps to support corporate funding. Looking forward, traders may have to dig deeper for the catalysts. In doing so, virus updates and US fiscal news can entertain market players amid a light calendar. Technical analysis In addition to 21-day SMA near 106.55, a downward sloping trend line from June 05, around 106.75 also restricts the pair’s short-term upside.  

Bank of Japan Governor Haruhiko Kuroda said the central bank may consider extending a March 2021 deadline for lending facilities aimed at channelling

Bank of Japan Governor Haruhiko Kuroda said the central bank may consider extending a March 2021 deadline for lending facilities aimed at channelling funds to companies hit by the coronavirus pandemic, the Yomiuri newspaper reported on Tuesday. Retures reports on the matter and explains that in the interview with the daily, Kuroda also said risks to Japan's economy were high as COVID-19 infection numbers were increasing not just in Tokyo but outside the capital city. Key notes Kuroda says if needed, may mull extending march 2021 deadline of steps to support corporate funding - Yomiuri newspaper. Says Japan's economy gradually heading toward recovery, but downside risk is big given increase in COVID-19 infections outside of Tokyo - Yomiuri. Says expanding loan scheme, cutting short-, long-term rate targets, ramping up ETFbuying among options if BoJ were to ease further - Yomiuri. Market implications There will be no material or immeadiate impact to the yen on this subject , although it is risk positive for equities.

Japan Monetary Base (YoY) above forecasts (6.3%) in July: Actual (9.8%)

NZD/USD eases to 0.6610 amid the pre-Tokyo open Asian session on Tuesday. The kiwi pair ended up extending Friday’s losses to the lowest since July 21

NZD/USD fails to extend pullback from two-week low beyond 0.6618.Traders await fresh clues following the US dollar strength.Aussie data, RBA can offer intermediate clues.American fiscal headlines, coronavirus updates keep the driver’s seat.NZD/USD eases to 0.6610 amid the pre-Tokyo open Asian session on Tuesday. The kiwi pair ended up extending Friday’s losses to the lowest since July 21 on Monday. However, the late-US session recovery, followed by the period of range trading between 0.6607 and 0.6618, portrays the play of bulls and bears. The US dollar index (DXY) recently benefited from upbeat US data, as well as the month-end position adjustments. However, the greenback’s gains are likely to be challenged by fears of further delay in the much-awaited fiscal stimulus plan. The American policymakers failed to offer any updates on jobless claim benefits that expired Friday. In her latest appearance, House Speaker Nancy Pelosi turned down odds of any deal during this week, citing US President Donald Trump as the key hurdle. Other than the policy paralysis, the coronavirus (COVID-19) also become a major threat to the markets. New Zealand’s largest customer Australia has recently been badly hit by the virus wave 2.0. Even if chatters concerning the vaccine are live, the World Health Organization (WHO) said, no 'silver bullet' to beat COVID-19. Elsewhere, increasing odds of the Reserve Bank of New Zealand’s (RBNZ) dovish tone adds to the pair’s weakness. While identifying this, analysts at the Australia and New Zealand Banking Group (ANZ) said, “With the RBNZ set to strike a dovish tone next week that will limit NZD upside too, suggesting a more neutral near-term outlook.” Looking forward, Australia’s Retail Sales, Trade Balance and RBA can offer immediate direction to the pair amid a lack of major catalysts at home. While the RBA is widely anticipated to mark dovish halt, upbeat data may help the NZD/USD prices to probe the latest downside. Though, any more disappointment from the pandemic or US stimulus headlines will be enough for the bears to attack the early-July top. Technical analysis 21-day SMA near 0.6605 restricts the pair’s immediate downside ahead of June month’s top near 0.6585. Alternatively, bulls have to mark a decisive break above 0.6700 to attack the yearly top surrounding 0.6740.  

Japan Tokyo CPI ex Fresh Food (YoY) came in at 0.4%, above forecasts (0.2%) in July

Japan Tokyo CPI ex Food, Energy (YoY) above expectations (0.5%) in July: Actual (0.6%)

Japanese headline inflation for July arrived at 0.6% vs. 0.3% expected. Core consumer prices in Tokyo rose 0.4 percent in July from a year earlier, go

Japanese headline inflation for July arrived at 0.6% vs. 0.3% expected. Core consumer prices in Tokyo rose 0.4 percent in July from a year earlier, government data showed on Tuesday. The core consumer price index for Japan’s capital, which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.2 percent annual rise. more to come...

Japan Tokyo Consumer Price Index (YoY) above forecasts (0.4%) in July: Actual (0.6%)

Early Tuesday morning in Asia, Reuters came out with the news, relying on the United Nations, while citing the fears of North Korea’s secret pilling o

Early Tuesday morning in Asia, Reuters came out with the news, relying on the United Nations, while citing the fears of North Korea’s secret pilling of the nuclear arsenal. Key quotes North Korea is pressing on with its nuclear weapons program and several countries believe it has probably developed miniaturized nuclear devices to fit into the warheads of its ballistic missiles. The report by an independent panel of experts monitoring U.N. sanctions said the countries, which it did not identify, believed North Korea’s past six nuclear tests had likely helped it develop miniaturized nuclear devices. Pyongyang has not conducted a nuclear test since September 2017. The interim report, seen by Reuters, was submitted to the 15-member U.N. Security Council North Korea sanctions committee on Monday. The UN report said that as only tunnel entrances were known to have been destroyed and there is no indication of a comprehensive demolition, one country had assessed that North Korea could rebuild and reinstall within three months the infrastructure needed to support a nuclear test. FX implications The news failed to offer any decisive market moves amid the generally calm trading session. However, Monday’s risk-on sentiment seems to fizzle off-late.

World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus recently crossed wires, via the Sky News, while saying that there may never b

World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus recently crossed wires, via the Sky News, while saying that there may never be a "silver bullet" to beat coronavirus (COVID-19). Key quotes Dr. Tedros Adhanom Ghebreyesus said while work on an "effective" vaccine is underway in several countries, a perfect one to end the pandemic may never be found. In a bid to stop the virus exploding again, Dr. Tedros appealed to countries to rigorously enforce measures such as mask-wearing, social distancing, hand washing and testing. There are concerns that we may not have a vaccine that may work, or its protection could be for just a few months, not more. But until we finish the clinical trials, we will not know. There are just five vaccines in what is known as phase three - meaning they are in large-scale efficacy tests. Sky News is tracking the race for a vaccine, which currently looks to be led by the British group from the University of Oxford and AstraZeneca. FX implications The news probes earlier risk-on sentiment by stopping S&P 500 Futures around 3,285 even if Wall Street managed to end Monday on a positive side.

WTI declines to $40.85 during the early Asian session on Tuesday. The oil benchmark recently took a U-turn from the resistance line of a descending tr

WTI eases from $41.37 in its latest pullback inside a bearish chart pattern.RSI conditions also make traders skeptical of further upside.July month’s low can offer strong support ahead of the late-June bottom.WTI declines to $40.85 during the early Asian session on Tuesday. The oil benchmark recently took a U-turn from the resistance line of a descending trend channel stretched since July 23. Other than the bearish chart formation, RSI also fizzles upside momentum, which in turn favors sellers. Hence, $40.00 round-figures can be considered as an imminent target for the bears ahead of confronting the support line of the mentioned channel, at $39.60 now. If at all the oil prices drop past-$39.60, July 10 low near $38.70 will be the key to the quote’s further downside targeting June 25 trough surrounding $37.20/15. Meanwhile, upside break beyond $41.10 enables the bulls to retake control while targeting highs marked during July and June months, respectively around $42.50 and $42.65. WTI four-hour chart Trend: Pullback expected  

South Korea Consumer Price Index Growth (MoM) below expectations (0.1%) in July: Actual (0%)

South Korea Consumer Price Index Growth (YoY) registered at 0.3%, below expectations (0.35%) in July

Gold prices drop to $1,973 amid the initial Asian session on Tuesday. The precious metal again took a U-turn from $1,978 following its recovery moves

Gold prices fail to extend pullback from $1,960 beyond $1,978.US dollar bulls confront the bullion buyers amid mixed catalysts.American Senators still jostling over fiscal stimulus, coronavirus keeps posting a threat to the global economy.Asian economic calendar becomes interesting but major attention remains on the risk catalysts.Gold prices drop to $1,973 amid the initial Asian session on Tuesday. The precious metal again took a U-turn from $1,978 following its recovery moves from $1,960 during Monday’s late-US session. Even if the US dollar buyers seem to restrict the quote’s near-term upside, the coronavirus (COVID-19) woes keep the bears away. USD bulls v/s yellow metal buyers… Considering the US dollar’s recovery moves from the lowest since May 2018, triggered Friday, gold buyers seem to catch a breather. However, sellers aren’t in as broad economic pessimism, backed by the pandemic, favor the risk-aversion wave. The US dollar benefited from upbeat data and the month-end policy adjustments even if policymakers failed to update on unemployment claim benefits on Friday. The American Senators are not only struggling to finalize the details of the jobless claim but are also far from agreeing on the broad fiscal stimulus plan. In the recent update, House Speaker Nancy Pelosi signaled no deal in sight during this week. On the other hand, US President Donald Trump cheers a report from the University of Chicago, suggesting 68% of people eligible for the benefits receive more than they were earning previously, to fight the extra spending. Talking about the virus, Victoria is immensely pressured despite the latest easing in new cases, from +670 to 429, whereas numbers from the US seems to stabilize around 60,000 a day off-late. Even so, China, Tokyo and India are some of the countries still jostling over the pandemic, not to mention its devastative economic impacts. Even so, US President Trump rules out plans of permanent lockdown in his latest speech. Amid all these catalysts, Wall Street managed to kick-start the week on a positive side with the US 10-year Treasury yields. However, S&P 500 Futures seem to struggle while taking rounds to 3,285 by the press time. Moving on, Japan’s inflation numbers for July will precede Aussie Retail Sales, Trade Balance and monetary policy meeting by the RBA to entertain the Asian traders. Other than the economics, coronavirus updates and news from the US, relating to the fiscal stimulus, will be the key to watch. Technical analysis While $1,978 offers immediate upside barrier, $1,988 holds the key to the metal’s rise towards $2,000. On the contrary, Thursday’s low near $1,939 and the previous record high surrounding $1,921 restricts the bullion’s short-term downside.  

UK PM Boris Johnson-led Tory government is up with another stimulus announcement, this time for construction of homes and infrastructure, during the e

UK PM Boris Johnson-led Tory government is up with another stimulus announcement, this time for construction of homes and infrastructure, during the early Tuesday morning in Asia. The Financial Times (FT) came out with the news suggesting an estimated outlay of £900 million. Key quotes As part of a stimulus package aimed at boosting the economy in the wake of the coronavirus crisis, £360m will also be allocated towards delivering 26,000 new homes on brownfield land. Officials said the extra investment would help to build up to 45,000 homes, create up to 85,000 jobs and cut around 65m kg of CO2 emissions in England. Robert Jenrick, housing secretary, also gave more details on the £2bn green grants scheme for home improvements. This will help households to reduce energy use amid pressure on ministers to get the economy growing again with an emphasis on 'green growth'. FX implications The news helps GBP/USD to keep its pullback from 1.3004, currently around 1.3075. However, the market’s risk-tone sentiment seems to wait for more clues to extend the latest optimism.

AUD/JPY seesaws around 75.50 amid the early hour of the Aussie market open on Tuesday. The pair marked a negative daily closing on Monday. However, lo

AUD/JPY bulls catch a breather after fetching the quote up from 75.10 the previous day.Bearish MACD suggests weakness in upside momentum, an ascending trend line from June 26 adds to the support.Multiple resistances stay ready to question the pair’s north-run below 77.00.AUD/JPY seesaws around 75.50 amid the early hour of the Aussie market open on Tuesday. The pair marked a negative daily closing on Monday. However, losses couldn’t break the range between 21 and 10-day SMA. Even so, bearish MACD signals suggest mixed clues, which in turn highlight the traders’ pause ahead of the key RBA. Read: RBA Preview: COVID running a muck? An Exy Aussie? Nah, no worries mate! Other than the immediate support of 21-day SMA, currently around 75.20, a five-week-old ascending trend line, at 75.06 now, also poses challenges to the sellers. Additionally, a downside break of 75.06 will need validation from 75.00 before attacking the previous month’s low of 73.98. Alternatively, a 10-day SMA level of 75.57 precedes Friday’s top near 75.92 and 76.00 round-figures to mark upside barriers. Even if the pair manages to cross 76.00 on a daily closing basis, highs printed during June and July, respectively around 76.80 and 76.90, will be the strong resistances holding keys for the pair’s rise beyond 77.00. AUD/JPY daily chart Trend: Pullback expected  

US President Donald Trump is speaking at a presser and has said that a permanent lockdown is not a viable path forward to combating COVID-19. Key comm

US President  Donald Trump is speaking at a presser and has said that a permanent lockdown is not a viable path forward to combating COVID-19. Key comments The virus is receding. More to come...

AUD/USD takes rounds to 0.7125 at the start of Tuesday’s Asian session. The aussie pair recently pulled back from the lowest since July 24. Though, th

AUD/USD seesaws around 0.7120-32 after recovering from 0.7075.US dollar recovery, worsening coronavirus conditions in Victoria favored short-term sellers earlier.RBA widely anticipated repeating the status-quo amid pandemic, Aussie Retail Sales and Trade Balance to also entertain pair trader.US stimulus talks, second-tier data and virus updates are important too.AUD/USD takes rounds to 0.7125 at the start of Tuesday’s Asian session. The aussie pair recently pulled back from the lowest since July 24. Though, the 0.7120-32 area seems to restrict the quote’s recovery moves currently. While the US dollar’s bounce portrayed a second daily loss-making day on Monday, bears are catching a breather ahead of the key data/events from Australia. US dollar recovery or a pullback? Although catalysts ranging from the month-end positioning to upbeat US data favored the greenback’s gains, there are no strong clues as to the currency’s future strength. The US dollar index (DXY) stabilized around 93.50 by the end of Monday. In doing so, the greenback’s gauge versus the major currencies stretched its U-turn from the lowest since May 2018, triggered Friday. Upbeat prints of ISM Manufacturing PMI, up 54.2 versus 53.6 forecast, rekindled expectations that the American economy is strong enough to ward off the coronavirus (COVID-19) risk. Also favoring the greenback could be the policymakers’ rush to cut the much-awaited deal on the fiscal stimulus, with the decision on unemployment claim benefits be the priority. However, the pandemic continues to pose a threat to the USD’s return whereas the Fed policymakers’ dovish outlook also poses a threat to the bulls. On the other hand, upbeat figures from Australian PMI and TD Securities Inflation, not to forget China’s Caixin Manufacturing PMI, failed to please the bulls. The reason could be traced from worsening COVID-19 conditions in Victoria. Even if the new cases have eased from +670 to near 430, downbeat comments from Victorian Premier Daniel Andrews, suggesting further business closures, weigh on the quote. On Sunday, Victoria declared a state of disaster and imposed new lockdown measures until at least 13 September. Against this backdrop, the market’s risk-tone remains upbeat. To portray the mood, Wall Street marked gains on Monday whereas the US 10-year Treasury yields also gained 1.8 basis points (bps) to 0.554%. Moving on, traders will keep eyes on the RBA’s monetary policy decision and Statement of Monetary Policy (SoMP). While the policymakers are less likely to offer any surprises, the recent outbreak of the virus in Victoria might push them towards a dovish outlook, which in turn could extend the Australian dollar’s weakness. Read: RBA Preview: COVID running a muck? An Exy Aussie? Nah, no worries mate! Ahead of the RBA, Australia’s June month’s Retail Sales may confirm 2.4% preliminary forecast whereas Trade Balance can rise to 8,800M from 8,025M for the said month. Technical analysis An ascending trend line from May 22, currently around 0.7075 precedes the 0.7065/60 support-zone, comprising June 10 high and July 24 low, to restrict the pair’s near-term downside. Alternatively, bulls have to dominate past-0.7200 to regain market confidence.  

Federal Reserve's Evans sees the US jobless rate at 9.5% at the end of 2020, 6.5% at the end of 2021 in baseline outlook. More pessimistic forecasts a

Federal Reserve's Evans sees the US jobless rate at 9.5% at the end of 2020, 6.5% at the end of 2021 in baseline outlook. More pessimistic forecasts are 'equally' likely. Monetary policy is about where it can be. Ball is in Congress' court on economy. Sees 'aggregate demand trouble brewing' without extension of fiscal supports like jobless benefits. More to come...

Global equity markets started what is usually a poor month for equities positively, buoyed by evidence that the manufacturing recovery is holding up a

The Dow Jones Industrial Average climbed 236.08 points, or 0.9%, to close at 26,664.40. The S&P 500 added 23.49 points, or 0.7%, touching 3,294.61 at the close. The Nasdaq Composite added 157.52 points, or 1.5%, to close at 10,902.80. Global equity markets started what is usually a poor month for equities positively, buoyed by evidence that the manufacturing recovery is holding up amid rising COVID-19 cases, particularly in the US. The three US benchmarks advanced on Monday and Nasdaq ended the day at a record closing high. The technology stocks continue to outperform while investors bank on a coronavirus stimulus agreement while leaning on strength in earnings and a flurry of merger activity. The S&P 500 finished just 2.7% below its Feb for te 19th record close while the Dow was 9.8% under its record close. The Dow Jones Industrial Average climbed 236.08 points, or 0.9%, to close at 26,664.40. The S&P 500 added  23.49 points, or 0.7%, touching 3,294.61 at the close. The Nasdaq Composite added 157.52 points, or 1.5%, to close at 10,902.80.  Of the S&P 500's major sectors, technology was by far the biggest gainer, closing up in its fourth consecutive advance. It was the sector's biggest two-day percentage gain since April 7.  In corporate news, Microsoft MSFT jumped 5.6% after it said it would push ahead with talks to buy the operations of Chinese-owned TikTok. In other markets,  the Euro Stoxx 50 and the FTSE 100 were up 2.3%, The yield on the US 10-year note rose 2.3bps to 55.1bps. In commodities, oil prices were higher pertaining to the optimistic tones provided by the manufacturing data, with WTI up 1.3% to USD40.81/bbl. Gold was down 0.4% at USD1967.96/oz as the US dollar starts its correction.  No progress on Capital Hill Meanwhile, progress is nowhere to be seen in the fiscal stimulus talks on Capitol Hill. Republicans are griping that House Speaker Nancy Pelosi won't drop her expansive wish list. At this stage, several more days of talks are going to be needed but it would appear the market has this factored in now as the delays are doing little to hinder progress on Wall Street.  US data Manufacturing on the mend, labour market lagging:  The US manufacturing ISM rose 1.6pts to 54.2 in July, its highest reading since March last year. New orders jumped to 61.5 from 56.4 and prices paid lifted slightly to 53.2 from 51.3. However, employment is still contracting, with that sub-gauge still below 50.0 at 44.3 (but up from 42.1 in June). Both the ADP and labour market report later this week are expected to show that the recovery in jobs has moderated materially and there are very real fears that the recovery may falter if policy makers fail to cut a deal, analysts at ANZ Bank explained.   S&P 500 levels






In economic data, the Institute for Supply Management reported that its manufacturing gauge rose to a reading of 54.2, while new orders jumped to 61.5. MarketWatch-polled analysts had forecast the purchasing managers index to rise to 53.6, from 52.6 in June. Any reading above 50 indicates expansion in factory activity.

“The ongoing uncertainty around the virus and state of the economy still raises questions on the sustainability of the rebound in manufacturing. The strong July report provides further confirmation of improvement in recent months,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

A raft of stronger-than-expected manufacturing purchasing managers indexes in Europe and in China, signaling a steadying global economy, helped to set the stage for the upthrust in the market.

For all that, there are still no signs of a stimulus package agreement between Democrats and Republicans after negotiations over the weekend failed to yield a replacement for a $600-a-week boost to unemployment benefits that expired Friday.

House Speaker Nancy Pelosi, D-California, and Treasury Secretary Steven Mnuchin revealed clear fault lines in negotiations between the parties during Sunday talk shows. Pelosi said that “we’ll be close to an agreement when we have…an agreement,” speaking to ABC’s Martha Raddatz on “This Week.”

At issue for Democrats and Republicans is the amount of unemployment assistance for Americans. The White House has come out in favor of reducing the federal assistance to $200 a week, Democrats have called for keeping it at $600 a week. However, the parties appear to both support a fresh round of stimulus checks of $1,200 for workers.

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The fight for aid for out-of-work Americans comes ahead of Friday’s July report on the labor market that will be examined to determine the impact on employment as cases of the infection have steadily risen in a number of states.

Indeed, coronavirus infections in the U.S. reached a record in July, with more than 1.9 million new cases. The U.S. has nearly 4.7 million confirmed COVID-19 cases and about 155,000 deaths, while the global tally for infections stands at more than 18 million and almost 690,000 deaths, according to data compiled by Johns Hopkins University.

Meanwhile, investors may focus on developments between Microsoft Corp. US:MSFT and video-sharing app TikTok, owned by a Chinese company, ByteDance. Microsoft confirmed talks to buy the American unit of the company and Microsoft CEO Satya Nadella said he spoke with President Donald Trump. Trump on Friday had signaled that he was considering a ban of the popular app. On Monday, Trump said he favored an outright purchase of TikTok by Microsoft and said that the deal should be completed before Sept. 15 if TikTok isn’t avoid a U.S. ban.

Trump on Monday suggested the U.S. government should get part of the proceeds of any sale of TikTok.

Secretary of State Mike Pompeo over the weekend said that the White House may take action against other Chinese software companies, highlighting elevated tensions between Beijing and Washington.

On the Federal Reserve front, Dallas Fed President Robert Kaplan said the economic rebound this quarter “is more muted” than expected and, as a result, the unemployment rate this year will likely be higher than previously thought.
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