هشدار ریسک: معامله با ریسک همراه است و سرمایه شما در معرض خطر است. Exinity Limited تحت نظارت FSC موریس تنظیم شده است.
هشدار ریسک: معامله با ریسک همراه است و سرمایه شما در معرض خطر است. Exinity Limited تحت نظارت FSC موریس تنظیم شده است.
سه‌شنبه، 23 ژوئیه، 2019

The USD/JPY pair gains traction during the Asian trading hours and broke above the 108 mark before going into a consolidation phase. As of writing, th

10-year US T-bond yield posts modest gains on Tuesday. US Dollar Index pushes higher for the third straight day. Coming up: Housing price index and existing home sales from US. The USD/JPY pair gains traction during the Asian trading hours and broke above the 108 mark before going into a consolidation phase. As of writing, the pair was trading at 108.11, adding 0.25% on a daily basis. The lack of significant macroeconomic data releases today allows the market sentiment to continue to drive the pair's price action. The sharp increases witnessed in major European equity indexes and the 0.5% daily advance of the 10-year US Treasury bond yield point to a risk-on atmosphere that makes it difficult for the JPY to find demand. At the moment, Germany's DAX and the Euro Stoxx 50 are up 1.7% and 1.25% on the day, respectively. Market mood to continue to dominate the pair In the second half of the day, existing home sales and housing price index data from the U.S. will be looked upon for fresh impetus. However, ahead of this week's crucial durable goods orders and PMI figures, the market reaction is likely to be muted.  Meanwhile, if the upbeat performance of global stock markets provides a boost to Wall Street today, we could see the pair inch higher on the back of strong risk appetite in the second half of the day. At the moment, the S&P 500 Futures is up 0.28% on the day. Technical levels to watch for  

Brazil Mid-month Inflation came in at 0.09% below forecasts (0.14%) in July

Meanwhile, technical indicators on hourly charts have been gaining positive momentum but maintained their bearish bias on the daily chart, warranting

The GBP/JPY cross quickly reversed an early European session dip to 134.30 area and rallied to the key 135.00 psychological mark in the last hour.The intraday positive momentum lifted the cross beyond a short-term descending trend-line, albeit struggled to make it through 200-hour SMA.Meanwhile, technical indicators on hourly charts have been gaining positive momentum but maintained their bearish bias on the daily chart, warranting some caution for bullish traders and positioning for any further appreciating move. However, a convincing breakthrough the mentioned handle is likely to prompt some aggressive short-covering move and pave the way for an extension of the recovery move towards the next resistance near the 135.45-50 region. A follow-through buying might now negate any near-term bearish bias and set the stage for a move back towards conquering the 136.00 handle, which has been acting a key resistance area since the beginning of this month. Alternatively, rejection slide from the current resistance zone now seems to find some support near mid-134.00s, below which the cross might turn vulnerable to slide back towards testing sub-134.00 level, or multi-month lows.GBP/JPY 1-hourly chart 

Iris Pang, economist at ING, suggests that we have yet to see any RRR cut from the PBoC, but the central bank can't wait much longer if it wants to su

Iris Pang, economist at ING, suggests that we have yet to see any RRR cut from the PBoC, but the central bank can't wait much longer if it wants to support the economy, which is being squeezed further by the trade and technology war.Key Quotes“The Chinese economy will need more liquidity and lower interest rates in 2H19 to support investment in infrastructure projects.” “We expect two 0.5 percentage point RRR cuts together with 5bp cuts in the benchmark rate in 3Q and 4Q, respectively. The benchmark rate cuts will send a signal to the market that the PBoC is easing, and could help the market to form self-fulfilling easing expectations, which should push down interest rates further.” “It's possible that the PBoC won't cut the RRR as this could result in a large and rigid change in the system's liquidity, which would be very difficult to reverse. More frequent MLF and TMLF injections could replace RRR cuts instead. But equally, RRR cuts would send a strong message to the market that the central bank is serious about easing. The choice will really depend on the pace of growth in 2H19.”

Responding to the outcome of the Conservative leadership contest, which saw Boris Johnson become the Prime Minister of the United Kingdom, European Un

Responding to the outcome of the Conservative leadership contest, which saw Boris Johnson become the Prime Minister of the United Kingdom, European Union (EU) Chief Brexit negotiator Michel Barnier, via Twitter, said that they are looking forward to working constructively with PM Johnson. "We look forward to working constructively with PM Boris Johnson when he takes office, to facilitate the ratification of the withdrawal agreement and achieve an orderly Brexit." Barnier tweeted out. "We are ready also to rework the agreed declaration on a new partnership in line with EUCO guidelines." Meanwhile, the GBP/USD pair stays flat on the day at 1.2475.

The GBP/USD pair quickly reversed an early European session dip to the 1.2420-15 region and spiked to fresh daily tops in the last hour, albeit lacked

The UK Conservative Party chose Boris Johnson to be the new UK Prime Minister.The price action seemed rather unaffected by a follow-through USD buying interest.Persistent fears of a no-deal Brexit should keep a lid on any meaningful recovery.The GBP/USD pair quickly reversed an early European session dip to the 1.2420-15 region and spiked to fresh daily tops in the last hour, albeit lacked any strong follow-through. The latest leg of a goodish recovery over the past couple of hours or so lacked any obvious catalyst and could be solely attributed to some short-covering bounce ahead of the results of the UK Conservative Party leadership contest, wherein Boris Johnson was chosen to be the next British PM.  The uptick, however, lacked any strong bullish conviction and remained capped below the key 1.2500 psychological mark in anticipation of more ministerial departures, kicked off with the UK Justice Minister David Gauke's resignation immediately after the announcement. Meanwhile, a follow-through US Dollar buying - supported by tempered expectations of an aggressive monetary easing by the Fed, did little to influence the price action, with the GBP price dynamics turning out to be an exclusive driver of the pair's momentum on Tuesday. It would now be interesting to see if the pair can capitalize on the recovery move or meets with some fresh supply at higher levels amid growing fears that the UK will crash out of the EU on October 31 without a deal.Technical levels to watch 

After bottoming out in the 0.8960 region, EUR/GBP now managed to regain some composure and continues to pare losses in the wake of the Conservative fi

EUR/GBP drops and tests daily lows near 0.8960.Boris Johnson became the new UK PM.Sterling sheds some ground following the vote.After bottoming out in the 0.8960 region, EUR/GBP now managed to regain some composure and continues to pare losses in the wake of the Conservative final vote.EUR/GBP remains under pressureThe European cross remains on the defensive, trimming the earlier spike to levels beyond 0.90 the figure after Boris Johnson became the new UK Prime Minister. The British Pound remains unfazed following the results, as consensus has largely anticipated the final vote. However, investors’ are likely to remain focused on the UK political arena for the time being in light of potential resignation of more ministers, which should put GBP under extra pressure.EUR/GBP key levelsThe cross is receding 0.16% at 0.8969 and a breach of 0.8954 (low Jul.22) would open the door to 0.8919 (low Jul.2) and then 0.8872 (low Jun.20). On the upside, the next hurdle aligns at 0.9051 (monthly high Jul.17) seconded by 0.9062 (high Jan.11) and finally 0.9092 (2019 high Jan.3).

In a widely expected outcome, Boris Johnson became the new leader of the Conservative Party, receiving an impressive 92,513 of Tory votes to replace T

In a widely expected outcome, Boris Johnson became the new leader of the Conservative Party, receiving an impressive 92,513 of Tory votes to replace Theresa May as the next Prime Minister of the United Kingdom. With the initial market reaction, the GBP/USD pair extended its rebound and turned flat on the day at 1.2470. Developing story...

Analysts at ANZ point out that in Asia, current account deficits (CAD) are an inescapable and integral feature of the present stage of development in

Analysts at ANZ point out that in Asia, current account deficits (CAD) are an inescapable and integral feature of the present stage of development in India, Indonesia, and The Philippines and the more interesting debate, however, is over its right ‘size’.Key Quotes“The benevolent view is that the size of the CAD does not matter as long as it can be funded whereas the more conservative views envisage a quantitative ceiling on the associated net external liabilities, at levels below those that have empirically been associated with an external crisis.” “Our analysis suggests that the risk of a balance of payments crisis that requires an abrupt and sharp reversal in the CAD is remote in any of these economies. At the same time, persisting with a CAD at around the 2018 levels would impart considerable volatility in the FX markets.” “There has also been a reduction in the growth that can be derived from a particular level of CAD, mainly due to a fall in savings rates. This as an unfavourable development.” “A shift in funding towards FDI would also foster stability to the external position as it would eventually help to reduce external liabilities. This issue is particularly relevant for Indonesia.”

Gold held on to its weaker tone through the mid-European session, albeit has managed to pare some of its early losses to $1414 area, or multi-day lows

Tempered Fed rate cut bets/USD strength continued exerting some downward pressure.Improving global risk sentiment further weighed on the commodity’s safe-haven status.Traders now await decisions from major central banks before placing any directional bets.Gold held on to its weaker tone through the mid-European session, albeit has managed to pare some of its early losses to $1414 area, or multi-day lows. The precious metal extended last week's late pullback from multi-year tops, with a combination of negative forces fueling the ongoing retracement slide for the third consecutive session on Tuesday. As investors continued scaling back expectations of an aggressive policy easing by the Fed, the US Dollar stood tall near one-week tops and undermined demand for the dollar-denominated commodity. This coupled with improving global risk sentiment, as depicted by a positive mood around equity markets further dented the precious metal's relative safe-haven status and collaborated to the downtick. Despite escalating geopolitical tension in the Middle East, positive developments surrounding the US-China trade talks turned out to be one of the key factors boosting investors' appetite for riskier assets. The downside, however, remained limited, at least for the time being, as traders now await decisions from major central banks - including the ECB and the Fed, before placing any directional bets. Hence, it will be prudent to wait for a strong follow-through selling before confirming that the commodity might have topped out in the near-term and positioning for any further corrective slide.Technical levels to watch 

Iris Pang, economist at ING, suggests that the path of USD/CNY will depend on which liquidity tools are used by the PBoC. Key Quotes “If there is no R

Iris Pang, economist at ING, suggests that the path of USD/CNY will depend on which liquidity tools are used by the PBoC.Key Quotes“If there is no RRR cut in 2H19 but more frequent MLF and TMLF operations, the market may not be too alarmed that the PBoC is in fact easing. The USD/CNY will be fairly stable and range bound around 6.90.” “If the central bank cuts the RRR twice in 2H19, as we expect, the market will receive a strong easing signal from the central bank. This will put downward pressure on USD/CNY. But let's not forget that the USD/CNY is not a market driven exchange rate.” “The PBoC has set an invisible line at 7.0 (once in 2016 and once in 2018) because the central bank can't afford the asset market uncertainty that would likely accompany USD/CNY crossing this key level. So USD/CNY could weaken to 6.95 but is unlikely to touch 7.0.”

The Turkish Lira remains on the defensive so far this week, lifting USD/TRY to the 5.70 area although losing some upside impulse soon afterwards. USD/

USD/TRY met resistance in the 5.7000 region.Turkey Consumer Confidence dropped to 56.5 in July.The CBRT is expected to cut rates on Thursday.The Turkish Lira remains on the defensive so far this week, lifting USD/TRY to the 5.70 area although losing some upside impulse soon afterwards.USD/TRY focused on CBRT decision, US sanctionsSpot is up for the third session in a row on Tuesday, finding quite a decent barrier at the 5.70 area, coincident with the 21-day SMA. On the downside, strong support lies at 5.60 for the time being. In the meantime, price action around the Lira reflects the nervousness among investors on potential US sanctions against Ankara after the purchase of the Russian missile defense system. Further concerns around the domestic currency are likely to emerge if the Turkish central bank (CBRT) cut rates at its meeting on Thursday. Consensus among market participants, however, remains pretty divided on the probable rate cut, which ranges between 100 bps and 600 bps. In the docket, Turkey Consumer Confidence eased a tad to 56.5 in July from 57.6 while Manufacturing Confidence and Capacity Utilization are also due on Thursday.What to look for around TRYDespite Governor M.Uysal has already emphasized the independence of the central bank and its commitment to price stability, unease around investors – and the Lira - is likely to gather steam pari passu with the perception that a new easing cycle could be in the offing despite how untimely that decision might be in the near term at least. This likely scenario is supported by the view that President Erdogan (desperately) wants to reactivate the stagnant economy via higher credit from domestic lenders. To do that, he needs lower interest rates, which can spark fresh inflationary pressures, social unrest and most likely another crisis in the currency.USD/TRY key levelsAt the moment the pair is gaining 0.34% at 5.6839 and a surpass of 5.7616 (100-day SMA) would expose 5.7849 (high Jul.8) and finally 5.8371 (55-day SMA). On the other hand, the next down barrier is located at 5.5971 (low Jul.19) followed by 5.5741 (monthly low Jul.4) and then 5.5618 (200-day SMA).

The negative price action around the single currency is eclipsing the offered bias in the Japanese safe haven and keeps EUR/JPY under pressure around

EUR/JPY alternates gains with losses around 121.00.Markets’ attention stays on UK politics and ECB event.Strong support remains in the 120.80/75 band.The negative price action around the single currency is eclipsing the offered bias in the Japanese safe haven and keeps EUR/JPY under pressure around the 121.00 neighbourhood.EUR/JPY looks to risk appetite trendsThe cross is now trading without a clear direction around the 121.00 handle in the lower end of the recent range, adding to Monday’s gains and reversing six consecutive sessions in red figures. Higher yields in the US money markets are lending oxygen to the selling bias around the Japanese safe haven, although this view is facing the increasing bearish note hitting the European currency as markets continue to factor in the probability of new easing measures by the ECB at its meeting later in the week. Data wise today, the European Commission will release its advanced gauge of Consumer Confidence for the current month ahead of the publication of flash PMIs in core Euroland tomorrow and the ECB event on Thursday.EUR/JPY relevant levelsAt the moment the cross is receding 0.01% at 120.88 and a breakdown of 120.78 (low Jun.3) would expose 119.33 (low Feb.8 2017) and then 118.82 (2019 low Jan.3). On the upside, the initial hurdle aligns at 121.70 (21-day SMA) seconded by 122.32 (high Jul.10) and then 123.35 (monthly high Jul.1).

Citing Huffington Post UK, Reuters reported that British Prime Minister candidate Boris Johnson was set to avoid an immediate no-confidence vote in hi

Citing Huffington Post UK, Reuters reported that British Prime Minister candidate Boris Johnson was set to avoid an immediate no-confidence vote in his new government claiming that Jeremy Corbyn was waiting for a better chance to "topple him after the summer." The market reaction to this article seems to be helping the British pound staged a modest rebound against its major rivals. As of writing, the GBP/USD pair was still down 0.2% on a daily basis at 1.2450.

Krishen Rangasamy, analyst at National Bank Financial, suggests that after having failed to stem the deteriorating U.S. trade deficit with tariffs, co

Krishen Rangasamy, analyst at National Bank Financial, suggests that after having failed to stem the deteriorating U.S. trade deficit with tariffs, could Trump resort to currency intervention to weaken the USD?Key Quotes“Who would do the job for him? Jerome Powell quickly washed his hands of this by pointing out it’s not the Fed but rather the Treasury that is responsible for currency policy.” “Steven Mnuchin, the Treasury Secretary, seems more amenable to the idea based on his recent statement that there is no change to dollar policy “as of now”, implying he is open to intervention at a later date. If the Treasury decides to intervene, how would that work?” “Secretary Mnuchin would have to direct the New York Fed, which is the fiscal agent of the U.S. Treasury’s Exchange Stabilization Fund (ESF) to execute the required trades using that fund’s holdings of euros, yen, SDRs, and government securities to achieve the objective of lowering the value of the dollar. Will that be enough to significantly improve the U.S. trade balance? Probably not.” “So, if the White House wants to achieve its objective of sustainably shrinking the U.S. trade deficit (and hence its current account), it has to sufficiently increase the national savings rate. But that would mean reducing the U.S. budget deficit and encouraging consumers to save more, i.e. things that would slow near-term economic growth.” “Barring a recession/slowdown (which would automatically lift the national savings rate as observed after the 2008/09 slump) and considering the current breed of politicians is unlikely to promote such corrective policies, expect red ink on U.S. trade to persist regardless of whether or not there is currency intervention from Secretary Mnuchin.”

Analysts at TD Securities suggest that the US existing home sales are expected to retreat marginally by -0.2% to 5.33mn units in June. Key Quotes “Alt

Analysts at TD Securities suggest that the US existing home sales are expected to retreat marginally by -0.2% to 5.33mn units in June.Key Quotes“Although sales appear to have failed to jumpstart in Q2, we expect them to gradually strengthen in the second half of the year on the back of lower mortgage rates and a still-strong consumer fundamentals.” “Separately, the Richmond Fed manufacturing survey for July is likely to show an increase to 5 from 3 before. This would be directionally in line with the results of the NY Empire and Philly Fed survey results, which suggest the ISM manufacturing is nearing a bottom in July.”

The latest uptick in WTI (futures on Nymex) faltered just ahead of the midpoint of the 56 handle, as a tug-of-war between the bulls and bears continue

Buoyed by rising Gulf geopolitical tensions that threaten supply disruption.Unabated US dollar strength, dwindling oil demand keep the upside in check.All eyes on trade, geopolitics and US API crude stockpiles data for fresh direction.The latest uptick in WTI (futures on Nymex) faltered just ahead of the midpoint of the 56 handle, as a tug-of-war between the bulls and bears continue ahead of the American Petroleum Institute (API) weekly crude stock data release. The sentiment around the black gold remains underpinned by rife Middle East tensions, in the face of last week’s seizure of the two British tankers by Iran in the Strait of Hormuz. Markets fear the escalating tensions in the Gulf would hamper the crude supplies, as the Hormuz Strait is one of the key trading channel. Despite the renewed strength in the barrel of WTI, the sellers continue to lurk amid persistent broad-based US dollar demand and bleak global oil demand outlook (as reported by the International Energy Agency recently). Falling odds of aggressive July Fed rate cut combined with a deal reached by the US President Trump and Congress leaders on the US debt offer extra zest to the USD bulls. A stronger greenback makes the USD-sensitive oil expensive for the holders in foreign currencies. The immediate focus now remains on the USD dynamics and geopolitical developments, as markets eagerly await the API crude report, due at 2030 GMT, for fresh direction on the prices. Levels to watch  

According to the Interfax news agency, Russian Energy Minister Alexander Novak today said that the global oil market was fairly balanced and that the

According to the Interfax news agency, Russian Energy Minister Alexander Novak today said that the global oil market was fairly balanced and that the volatility wasn't high. "Russia and Belarus are close to agreement on oil transit tariff," Novak added. "We hope there will be a high demand for oil in 2020." There seems to be a negative reaction from oil with the barrel of West Texas Intermediate erasing its daily gains in the last minutes and turning flat on the day near $56.20. 

The Confederation of British Industry's latest 'Industrial Trends Survey - Total Orders' came in at -34 in July following April’s -15 reading. Accordi

The Confederation of British Industry's latest 'Industrial Trends Survey - Total Orders' came in at -34 in July following April’s -15 reading. According to the CBI, a reading below 0 indicates pessimism. Other details of the report revealed Trends Selling Prices arrived at +12 vs.+4 previous.

Analysts at TD Securities note that the ECB released its quarterly bank lending survey for Q2, and the results are a bit softer than we've seen lately

Analysts at TD Securities note that the ECB released its quarterly bank lending survey for Q2, and the results are a bit softer than we've seen lately with credit conditions tightening for the first time since 2014.Key Quotes“Expectations for Q3 are still reasonably optimistic, but the tighter credit conditions are just one more factor in favour for further easing from the ECB. From the survey: "According to the July 2019 bank lending survey, credit standards tightened in the second quarter of 2019 for loans to enterprises, marking the end of the net easing period started in 2014, as concerns about the economic outlook and increased risk aversion translated into tighter internal guidelines and loan approval criteria despite favourable funding conditions. Credit standards also tightened for consumer credit, in line with developments in the previous quarter."

United Kingdom CBI Industrial Trends Survey - Orders (MoM) came in at -34, below expectations (-15) in July

Both the Sterling and the single currency remain under pressure so far this week and are now allowing EUR/GBP to regain the vicinity of the 0.9000 mar

EUR/GBP posts decent gains near the 0.90 handle.New UK PM will be announced later today.‘No deal’ Brexit remains on the cards and weigh on GBP.Both the Sterling and the single currency remain under pressure so far this week and are now allowing EUR/GBP to regain the vicinity of the 0.9000 mark.EUR/GBP looks to UK politicsThe European cross has managed to bounce off daily lows in the 0.8980 region and is now orbiting around the key 0.9000 mark amidst increasing nervousness ahead of the Conservative vote expected around midday. In fact, around 160,000 Tory members will vote to reveal the next party leader and the successor of Theresa May at Number 10. It is worth recalling that both candidates Boris Johnson and Jeremy Hunt have not ruled out the option that the UK could leave the EU without a deal. On this side of the Channel and later in the week, the shared currency should remain under the microscope in light of the ECB event and the probability that the central bank could announce another wave of monetary stimulus. Further out, markets’ attention is also expected to be on the publication of advanced PMIs and the German IFO. In the UK docket, CBI Industrial Trends Orders for the month of July are due later.What to look for around GBPUK politics continue to dictate the sentiment around the British Pound for the time being, while all the looks will be upon the announcement of the new PM later today. On the Brexit side, GBP is expected to stay under pressure as the ‘no deal’ option remains well on the table. Back to the UK economy, poor results from key fundamentals continue to add to the sour prospects for the economy in the months to come and collaborate further with the bearish view on the currency. On another direction, the overall tone from the BoE appears to have shifted towards a more dovish gear, while markets have started to price in the likeliness of a rate cut at some point in Q3/Q4.EUR/GBP key levelsThe cross is advancing 0.01% at 0.8984 and faces the next hurdle at 0.9051 (monthly high Jul.17) seconded by 0.9062 (high Jan.11) and finally 0.9092 (2019 high Jan.3). On the downside, a breach of 0.8954 (low Jul.22) would open the door to 0.8919 (low Jul.2) and then 0.8872 (low Jun.20).

China's Commerce Ministry is out with the latest statement, citing that it will adopt more targeted policies to stabilize trade, as reported by Reuter

China's Commerce Ministry is out with the latest statement, citing that it will adopt more targeted policies to stabilize trade, as reported by Reuters. Nothing further is provided on the same.

Analysts at Standard Chartered notes that China’s retail auto sales growth (in value terms) jumped 17.2% y/y in June, driven by clearance sales ahead

Analysts at Standard Chartered notes that China’s retail auto sales growth (in value terms) jumped 17.2% y/y in June, driven by clearance sales ahead of the introduction of a new emission standard in major cities from July.Key Quotes“Wholesale growth (in unit terms) fell 9.6% y/y, reflecting still-lacklustre demand. In the absence of a boost from demand, the rebound in June retail sales is likely to be offset by a decline in July-August. Meanwhile, our analysis of underlying trends suggests that the worst may be behind us, and growth in retail auto sales may resume from September, becoming less of a drag on overall retail sales. The number of cars sold may decline for a second consecutive year in 2019, according to our estimates, but growth is likely to turn positive in Q2-2020.” “We see three factors underpinning a gradual recovery in auto sales: (1) The base effect will become supportive from September 2019; (2) Average selling prices (ASPs) may head higher in H2-2019 after the correction in H1; and (3) The inventory cycle is about to turn, as auto dealers’ inventory has fallen sharply after their aggressive promotions; also, auto producers are likely to start restocking in early 2020, after almost two years of destocking. Therefore, we believe auto sales and production will become less of a drag on retail sales and industrial production growth in H2.” “The upside risk to our projection mainly comes from possible government policy support for car consumption, as well as a possible interest rate cut, while the downside risk could stem from uncertainty amid a slowing economy, as well as an escalation of the US-China trade war. Local governments may promote the upgrade of car consumption, but the possibility of resorting to a vehicle purchase tax cut is remote, in our view.”

Matthew Hassan, analyst at Westpac, suggests that their latest Red Book finds a mixed bag of developments for the Australian economy since April. Key

Matthew Hassan, analyst at Westpac, suggests that their latest Red Book finds a mixed bag of developments for the Australian economy since April.Key Quotes“On the plus side, the rate cuts we anticipated from the RBA have come through earlier than expected with another move waiting in the wings. Meanwhile, the surprise Federal election win for the Coalition has removed uncertainty around tax policy and seen the Government’s Personal Income Tax Plan pass into legislation. Housing markets have also improved with signs that prices are stabilising in the Sydney and Melbourne markets.” “That is about where the good news ends. Despite these positives, the Westpac–Melbourne Institute Consumer Sentiment Index has registered a 4% fall since our April report. Sentiment can often weaken when the RBA cuts rates, but this is usually when some other shock is rolling through such as the GFC. There is no such shock hitting at the moment.” “Instead, the survey detail highlights a sharp loss of confidence around the economy – one that is raising concerns about job security and over-riding expectations for a policy boost to family finances.” “The fall in sentiment will be troubling for the RBA. The chart below shows how the current trajectory for sentiment and for the ‘finances’ and ‘economy’ components compares to responses over all easing cycles since 1990.” “Initial sentiment responses to rate cuts can often be ambivalent as there are often other negatives in play (e.g. the GFC). However, the 2019 response is at the weakest end of the range and is surprisingly negative given the absence of a GFC-style ‘threat’ and that the prospect of income tax relief should also be providing some support.”

Bloomberg quotes people familiar with the matter, as saying that the Bank of Japan (BOJ) could make a downward revision to its FY 2019 inflation forec

Bloomberg quotes people familiar with the matter, as saying that the Bank of Japan (BOJ) could make a downward revision to its FY 2019 inflation forecast next Tuesday (July 30th), when it meets for the monetary policy review meeting. The sources said that the BOJ is likely to downgrade its current price forecast of 1.1%. The USD/JPY pair holds steady near 108.20 region, supported by a broadly stronger US dollar and risk-on market profile.

The mentioned region also nears 100-hour SMA and should now act as a key pivotal point for short-term traders, which if broken is likely to accelerate

The AUD/USD pair traded with a negative bias for the third consecutive session on Tuesday and retreated farther from near three-month tops set on Friday.The intraday slide managed to find some support near the 0.7020-15 region - a support marked by 38.2% Fibo. level of the 0.6910-0.7082 recent positive move. The mentioned region also nears 100-hour SMA and should now act as a key pivotal point for short-term traders, which if broken is likely to accelerate the slide and drag the pair even below the key 0.70 psychological mark towards 61.8% Fibo. near the 0.6975 region. Meanwhile, technical indicators on hourly charts have been negative traction and support prospects for further depreciating move, albeit oscillators on the daily chart maintained their bullish bias and thus, warrant some caution before placing any aggressive bets. On the upside, immediate resistance is now pegged near the 0.7040 region (23.6% Fibo. level), above with the pair is likely to make a fresh attempted towards challenging the very important 200-day SMA barrier, just ahead of the 0.7100 round figure mark.  A convincing breakthrough the mentioned hurdle will set the stage for an extension of the near-term bullish momentum and lift the pair further towards the 0.7145 intermediate resistance en-route the next major resistance near the 0.7195-0.7200 supply zone.AUD/USD 1-hourly chart 

Reuters cites ECBWATCH that money markets are now pricing in less than 40% chance of a 10 bps European Central Bank (ECB) rate cut on Thursday versus

Reuters cites ECBWATCH that money markets are now pricing in less than 40% chance of a 10 bps European Central Bank (ECB) rate cut on Thursday versus nearly 60% seen last Friday. EUR/USD remains heavy, near seven-week lows of 1.1180, as King dollar continues to rule amid less aggressive Fed rate cut expectations.

The Chinese state media reports the People’s Bank of China (PBOC) Governor, Yi Gang, with the key headlines found below. Current interest rates are ap

The Chinese state media reports the People’s Bank of China (PBOC) Governor, Yi Gang, with the key headlines found below. Current interest rates are appropriate. Any rate decision is to be based on China's situation. China's inflation trend is mild.

Japanese Economy Minister Motegi is out on the wires now, via Reuters, speaking about the economic situation. Key Headlines: Economy is continuing gra

Japanese Economy Minister Motegi is out on the wires now, via Reuters, speaking about the economic situation.Key Headlines:Economy is continuing gradual recovery. Expecting recovery to continue despite some weakness. On the above comments, the USD/JPY pair holds the upside near 108.15 region, up +0.30% on the day.  

Rabobank analysts point out that the UK Conservative Party will announce its new leader who will become the new Prime Minister. Key Quotes “Hard Brexi

Rabobank analysts point out that the UK Conservative Party will announce its new leader who will become the new Prime Minister. Key Quotes“Hard Brexiteer Johnson is favourite to take over from PM May. However, the parliamentary arithmetic has changed and he will struggle to deliver his “do or die” pledge to leave the EU on October 31. Based on comments from prominent EU officials, it is very unlikely that he will be able to secure a much better deal with the EU than his predecessor whose Withdrawal Agreement was rejected on three occasions by parliament.” “Johnson’s ultimate solution would be a hard Brexit and he may even consider suspending parliament. That said, MPs passed an amendment to a Northern Ireland bill that prevents the new Prime Minister from requesting a suspension of parliament between October 9 and December 18. Essentially, political uncertainty will not diminish and will continue to weigh on sterling in the coming months.” “It is worth noting that speculators increased their bearish bets against GBP to the highest level so far this year, almost matching the August 2018 high. This reflects increasingly negative sentiment towards sterling, which has been the worst performing G10 currency versus the dollar since May.”

Bart Melek, head of commodity strategy at TD Securities, suggests that fears that weak demand will negate OPEC+ cuts, speculation that millions of Ira

Bart Melek, head of commodity strategy at TD Securities, suggests that fears that weak demand will negate OPEC+ cuts, speculation that millions of Iranians barrels are about to hit the market and outsized US inventories have depressed crude oil prices recently.Key Quotes“This has occurred despite numerous escalations of tensions between the west and Iran in the Strait of Hormuz. WTI prices have fallen into $55/b territory last week, near levels which could well drive trend following CTAs to aggressively build additional short exposure.” “Weak economic data in China and around the world has some observers believing that demand may drop by as much as 400,000 b/d next year, which could well drive the market into a surplus again and force prices lower. More immediately, as many as ten very-large crude carriers and two smaller tankers owned by the state-run National Iranian Oil Company are believed to be sailing toward or idling in Chinese ports. These vessels can carry some 20 million bbls combined, and have not been cleared by Chinese costumes.” “Once this crude lands, it is likely that future Chinese imports would drop for a while, applying significant downward pressure on prices. This to some extent explains the recent price drop to support levels. The reason that crude is maintaining the current price is the rising tensions in the Middle East, particularly the Strait of Hormuz which is the most important global choke point which could cause a massive shortage.” “The risk premium has gone up after Iran seized two UK-linked tankers in the area. The good news is that UK and Iran are de-escalating, but it could also mean that the pure fundamentals may take over, sending prices below $55/b and trigger CTA selling.” “We judge that there is little appetite for a shooting war at this stage, but we also believe that tensions and the risk premium will remain, preventing a rout. We also see demand to remain firmer than many expect, and continue to see modest upside as the summer unfolds and US inventories fall.”

The NZD/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a range near the lower end of its daily trading r

RBNZ's plans for unconventional monetary stimulus weighed heavily on the Kiwi. Tempered Fed rate cut bets underpinned the USD and added to the selling bias.The NZD/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a range near the lower end of its daily trading range, below mid-0.6700s. The pair extended overnight rejection slide from the 0.6900 neighbourhood, or multi-month tops and met with some aggressive supply during the Asian session on Tuesday after the Reserve Bank of New Zealand (RBNZ) said it had done contingency planning for unconventional monetary stimulus. The pair was further pressurized by a follow-through pickup in the US Dollar demand, which remained supported by tempered market expectations for an aggressive monetary easing by the Fed despite the US President Donald Trump's latest pressure for immediate rate cuts. Meanwhile, the intraday downtick seemed rather unaffected by positive trade-related headlines, suggesting that the US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will travel to China next week for negotiations with Vice Premier Liu He. It would now be interesting to see if the pair can attract any fresh buying at lower levels or the current pullback marks the end of the recent bullish trajectory, setting the stage for a further near-term depreciating move amid absent relevant market moving economic releases from the US.Technical levels to watch 

EUR/USD Overview Today last price 1.1194 Today Daily Change 25 Today Daily Change % -0.15 Today daily open 1.1211 Trends Daily SMA20 1.1272 Daily SMA

EUR/USD is losing further ground during the first half of the week and is now threatening to test the key contention band at 1.1181/76.A break below this support region should pave the way for a test of 2019 lows in the 1.1100 neighbourhood.In the meantime, the pair needs to regain recent highs in the 1.1280/90 band to mitigate downside pressure and attempt a test of the critical barrier in the 200-day SMA at 1.1313.EUR/USD daily chart 

Karen Jones, analyst at Commerzbank, suggests that for the USD/CHF pair, their view remains negative as the market remains dominated by the 2 month do

Karen Jones, analyst at Commerzbank, suggests that for the USD/CHF pair, their view remains negative as the market remains dominated by the 2 month downtrend at .9886 today.Key Quotes“The market recently failed at its 50% retracement at .9967 and the 200 day ma at .9980. This is tough resistance and we suspect that the market has topped here. We look for further losses to .9695, the 25th June low. Above the 200 moving average lies the mid-June high at 1.0014. Longer term we target .9211/.9188, the 2018 low.” “Only a close above 1.0014 (high 19th June) would alleviate immediate downside pressure and target 1.0097 and possibly 1.0128 before failure again (November and March highs at 1.0124/28).”

Dollar Index Spot Overview Today last price 97.44 Today Daily Change 21 Today Daily Change % 0.15 Today daily open 97.29 Trends Daily SMA20 96.89 Dai

DXY is prolonging the upside momentum well beyond the 9700 handle and is now facing interim resistance at monthly peaks near 97.60.Extra buying impulse should lift the index to June tops around 97.80, at shouting distance from the key barrier at 98.00 the figure.Looking at the broader picture, the constructive outlook on the buck is expected to persist above the critical 200-day SMA at 96.83.DXY daily chart 

In an interview with an Italian newspaper, Il Sole 24 Ore, Huawei Technologies, the Chinese technology and telecoms group right at the center of the U

In an interview with an Italian newspaper, Il Sole 24 Ore, Huawei Technologies, the Chinese technology and telecoms group right at the center of the US-China trade war, founder Ren Zhengfei said that his company is ready to sign a “no backdoor” agreement with any country. Ren noted: “As far as we are concerned, we can sign a ‘no-backdoor’ agreement with any country.” 

EUR/JPY Overview Today last price 121 Today Daily Change 24 Today Daily Change % 0.07 Today daily open 120.91 Trends Daily SMA20 121.75 Daily SMA50 1

EUR/JPY is extending the positive start of the week and is now once again flirting with the key 121.00 mark.In the meantime, strong support continues to hold the downside in the 120.80/75 band.If this area of contention is breached, there are no relevant levels until 2019 lows in the sub-119.00 zone recorded in early January.Below the 55-day SMA at 122.08 the negative outlook is expected to persist for the time being.EUR/JPY daily chart 

The USD/CAD pair continued gaining positive traction for the third consecutive session on Tuesday and climbed to near two-week tops, around the 1.3135

The USD remains supported by tempered expectations for an aggressive easing by the Fed.The recent pullback in Oil prices undermined Loonie and remained supportive of the move.A sustained move beyond mid-1.3100s needed to increase prospects for any further recovery.The USD/CAD pair continued gaining positive traction for the third consecutive session on Tuesday and climbed to near two-week tops, around the 1.3135-40 region in the last hour. The pair built on its recent recovery from yearly lows set last Friday and added to the overnight strong up-move back above the 1.3100 round figure mark amid a follow-through pickup in the US Dollar demand, supported by reduced odds for an aggressive monetary easing by the Fed. Despite the US President Donald Trump's pressure for immediate rate cuts, the fact that investors have been scaling back expectations of a 50 bps Fed rate cut at the upcoming meeting on July 30-31 underpinned the greenback and remained supportive of the ongoing recovery move. This coupled with the recent pullback in Crude Oil prices, further weighed down by a vow by the International Energy Agency (IEA) to keep global Oil markets adequately supplied, dented demand for the commodity-linked currency - Loonie and provided an additional boost. The pair has now moved back closer to the 1.3145-50 supply zone, which if cleared decisively might indicate that a near-term bottom is already in place and thus, pave the way for a further short-covering move amid absent relevant market moving economic releases from the US.Technical levels to watch 

China’s Foreign Ministry is out with the latest statement, expressing its displeasure on the latest US sanctions on the Chinese firms over Iranian oil

China’s Foreign Ministry is out with the latest statement, expressing its displeasure on the latest US sanctions on the Chinese firms over Iranian oil imports. Key Quotes: Strongly opposes US sanctions on China firm over Iran oil. China urges the US to not sanction its companies.

More comments are flowing in from the Bank of England (BOE) Monetary Policy Committee (MPC) member Saunders, as he speaks in a Bloomberg TV interview.

More comments are flowing in from the Bank of England (BOE) Monetary Policy Committee (MPC) member Saunders, as he speaks in a Bloomberg TV interview. In the bank’s previous round of forecasts, “the link from the forecast to my actual vote was quite loose”. The discrepancy between BOE assumption of smooth Brexit and market views means that the BOE’s official outlook may not be “a key driver of people’s policy vote".

Bart Melek, head of commodity strategy at TD Securities, suggests that despite signals coming from the Fed that a 50 bps rate cut is unlikely in July,

Bart Melek, head of commodity strategy at TD Securities, suggests that despite signals coming from the Fed that a 50 bps rate cut is unlikely in July, ample risk appetite and still relatively firm US economic data, gold is holding near its six-year high.Key Quotes“Investors continue to position long in the yellow metal, as the world is increasingly awash in negatively yielding bonds (over $13 trillion), global economic fears continue to rage and there is a broad consensus that the Fed and other central banks will add monetary accommodation, which may include new QE programs.” “The politically-driven appointment of Ms. Lagarde to replace Mr. Draghi as head of the ECB drove bond yields in southern and western European countries lower, and made many in the market believe that non-conventional monetary policy action from the ECB is likely.” “This, along with speculation that the US Treasury Department may soon starting following a weak dollar policy is also playing a role in convincing traders that gold should do well into 2020. A potential currency war along with the Trump appointment of relatively dovish FOMC officials are additional reasons markets like gold, despite the recent headwinds.” “But despite the fact that investors are increasingly struggling to find bonds which yield above zero, gold has not broken through the $1,380-$1,440 trading range. This is very likely due to a well performing high-risk corporate bond market and strong equities, which are increasing the opportunity cost to hold a zero-yielding perpetuity like gold. A well-diversified portfolio holding bonds, equities and high yield instruments still delivers very good returns, making gold (a zero yielding safe haven assets) still very expensive to hold in relative term. And, there is still limited insurance premium assigned to the yellow metal due to low market volatility.” “Stable inflation and still decent US economic numbers are the key reasons why the US central bank is unlikely to convince traders that its time to go aggressively into simulative mode. For this reason we see gold averaging $1,400 of the balance of the year. Conversely, once equity correction risks and vols rise and as US data starts turning lower convincingly, low Fed rate expectations and insurance premiums should lift gold toward $1,500 in the final months of 2020.”

Danske Bank analysts note that late yesterday, US President Trump announced a bipartisan budget deal was finalised, making it possible for the House t

Danske Bank analysts note that late yesterday, US President Trump announced a bipartisan budget deal was finalised, making it possible for the House to pass the necessary legislation before its summer recess starts on Friday while the Senate will vote on it next week.Key Quotes“As it is bipartisan, we think it would make it through congress despite some concerns among both Republicans and Democrats. The deal includes two important things. First, the debt limit will be suspended until 31 July 2021 (i.e. after the presidential election), which means the US Treasury can soon start issuing bonds in a normal fashion again and also rebuild its cash buffer.” “Second, the automatic reduction of the so-called spending caps, which should have kicked in on 1 October and would have reduced total government spending by more than USD100bn, has been cancelled. This means fiscal policy will not go from being very expansionary to very contractionary but instead become neutral. Despite the agreement on overall funding, there is still a risk of a government shutdown by 1 October if Congress has not passed spending bills.”

Khoon Goh, analyst at ANZ, notes that Singapore’s CPI All-Items inflation for June eased to 0.6% y/y from 0.9% the previous month and was below market

Khoon Goh, analyst at ANZ, notes that Singapore’s CPI All-Items inflation for June eased to 0.6% y/y from 0.9% the previous month and was below market expectations, though it was in line with our forecast.Key Quotes“The MAS Core Inflation edged down to 1.2% y/y, continuing the moderation seen since its recent peak in December 2018 at 1.9%.” “Given the weak growth backdrop and downside risks to the outlook, there is unlikely to be much inflation pressure.” “MAS has maintained their core inflation forecast for 2019 at the mid-point of the 1-2% range. We see core inflation coming in at the lower end of that range.” “We see MAS easing monetary policy at their scheduled October review, though an earlier move cannot be ruled out.”

Reuters reports the latest comments from the Russian Defense Ministry, as they respond to the earlier reports by the South Korean Defense Ministry, ci

Reuters reports the latest comments from the Russian Defense Ministry, as they respond to the earlier reports by the South Korean Defense Ministry, citing that the South fired warning shots on the Russian planes that violated the S. Korean airspace. Key Headlines: Russian strategic bombers did not violate the airspace of other countries. South Korean military planes crossed the path of Russian aircraft. That created a threat to their security. South Korean pilots did not communicate with Russian strategic bombers. It is not the first time South Korea has tried to interfere with Russian military flights over neutral waters.

The selling pressure around the European currency has picked up extra pace on Tuesday, sending EUR/USD to fresh multi-week lows in sub-1.1200 levels.

EUR/USD drops to multi-week lows near 1.1180.Cautious trade expected to grow ahead of ECB event.Advanced EMU Consumer Confidence due later in the day.The selling pressure around the European currency has picked up extra pace on Tuesday, sending EUR/USD to fresh multi-week lows in sub-1.1200 levels.EUR/USD looks to data, ECB, UK politicsThe pair is down for the third consecutive session today, managing to break below the multi-session consolidative theme as well as the critical support area in the 1.1200 neighbourhood. Spot has resumed the downside pari passu with the upbeat tone surrounding the buck in response to shrinking bets for a large interest rate cut by the Federal Reserve at the July meeting. In fact, market consensus appears to have practically priced in a 25 bps rate cut next week. Additionally, the likeliness of new easing measures to be announced at the ECB meeting on Thursday keep the sentiment around EUR depressed for the time being. In today’s docket, the European Commission will publish the preliminary reading of the Consumer Confidence gauge for the current month. Across the pond, the housing sector will once again be in the limelight with  the release of Exiting Home Sales during last month. In addition, a new UK Prime Minister will be announced around midday in Europe, with Boris Johnson most likely to succeed Theresa May at Number 10.What to look for around EURThe inability of the pair to clear the important resistance area in 1.1280/90 has encouraged sellers to return to the markets and drag EUR back below the 1.1200 level, threatening to visit the key contention area in the 1.1181/76 band. Further out, occasional bullish attempts should be seen as a short-lived against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank as early as this week’s meeting, including interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance.EUR/USD levels to watchAt the moment, the pair is retreating 0.21% at 1.1185 and faces immediate contention at 1.1181 (low Jun.18) seconded by 1.1176 (low Mar.7) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1313 (200-day SMA) en route to 1.1412 (high Jun.25).

The Bank of England (BOE) Monetary Policy Committee (MPC) member Saunders is on the wires now, via Reuters, noting that the central bank isn't bound b

The Bank of England (BOE) Monetary Policy Committee (MPC) member Saunders is on the wires now, via Reuters, noting that the central bank isn't bound by forecasts calling for rate hikes. Further Comments: UK economy is weak and clearly not overheating. BOE can't stop a no-deal Brexit from being 'painful'. A no-deal Brexit would push the Pound lower.

The USD/JPY pair continued gaining positive traction for the third consecutive session on Tuesday and built on last week's recovery move from four-wee

Tempered Fed rate cut expectations underpinned the USD and helped build on the recent bounce.Improving risk sentiment dents the JPY’s safe-haven status and remained supportive of the up-move.The USD/JPY pair continued gaining positive traction for the third consecutive session on Tuesday and built on last week's recovery move from four-week lows. Despite the US President Donald Trump's pressure for immediate rate cuts, the US Dollar remained well supported by the fact that investors continued scaling back expectations of aggressive monetary easing by the Fed at the upcoming meeting on July 30-31. This was evident from the ongoing bounce in the US Treasury bond yields, with coupled with improving global risk sentiment undermined the Japanese Yen's safe-haven demand and remained supportive of the ongoing positive momentum further beyond the 108.00 handle.  Reports that US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will travel to China next week for negotiations with Vice Premier Liu He raised prospects for a trade deal and boosted investors' appetite for perceived riskier assets. Moving ahead, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair's momentum on Tuesday amid absent relevant market-moving economic releases and ahead of next week's FOMC meeting.Technical levels to watch 

Turkey Consumer Confidence declined to 56.5 in July from previous 57.6

Speaking at the meeting of high-ranking delegations of Iran and Iraq, Iranian President Hassan Rouhani made some remarks on the ongoing Gulf crisis. K

Speaking at the meeting of high-ranking delegations of Iran and Iraq, Iranian President Hassan Rouhani made some remarks on the ongoing Gulf crisis. Key Quotes: Iran has always been and will be, the key guardian of security and freedom of navigation in the Persian Gulf, the Strait of Hormuz and the Sea of Oman. Iran and Iraq, as two friendly and neighboring countries, can promote their cooperation in the development of regional stability and security.  Iran has no intention to escalate tensions in the region and with other countries, and will never initiate war and conflict. We believe that regional issues should be resolved through dialogue, negotiations and cooperation between neighbors and regional countries.

The latest Reuters poll conducted showed that a majority of the economists see the South Korean economy returning to expansion in the second quarter o

The latest Reuters poll conducted showed that a majority of the economists see the South Korean economy returning to expansion in the second quarter of this year, but remain wary over the new trade spat with Japan.Key Findings:“Asia’s fourth-largest economy is estimated to have expanded by a seasonally adjusted 1.0% in the April-June period in sequential terms, according to the median forecast in the survey of 12 economists with estimates ranging from 0% to 1.3%. It would be the best reading since the first quarter of 2018 but the 0.4% contraction in the January-March period brings the average for the first two quarters of 2019 to just 0.3%. In year-on-year terms, second-quarter growth was expected to quicken slightly to 2.0% from 1.7% in the January-March period, according to the survey. Sixteen economists provided forecasts for year-on-year growth.” The Bank of Korea will release advance estimates Q2 GDP at 2300 GMT on Wednesday.

FX Strategists at UOB Group noted NZD/USD could have reached a near term top in the 0.6790 region. Key Quotes 24-hour view: “We expected NZD to trade

FX Strategists at UOB Group noted NZD/USD could have reached a near term top in the 0.6790 region.Key Quotes24-hour view: “We expected NZD to trade sideways within a 0.6740/0.6780 range yesterday. However, NZD traded in a quiet manner and within a narrower range than expected (0.6757/0.6786). The subsequent daily closing is on the soft side and from here, NZD could drift lower to 0.6740. For now, any down-move is viewed as part of a lower 0.6740/0.6785 range and a sustained decline is not expected”. Next 1-3 weeks: “Despite overall positive indications, NZD has not been able to capitalize on its strong advance from last week. The relatively rapid retreat from last Friday’s (19 Jul) 0.6789 peak has dented the upward momentum and our view for NZD to “extend its gains to 0.6815” is likely incorrect. From here, a dip below the 0.6725 ‘key support’ would indicate that 0.6789 is a short-term top and NZD is then likely to trade sideways for period. In order to revive the rapidly waning momentum, NZD has to move and stay above 0.6785 within these 1 to 2 days or the risk of a short-term top would increase quickly”.

The AUD/USD pair kept losing ground on Tuesday and dropped to three-day lows in the last hour, with bearish eyeing a move towards challenging the key

Extends the recent corrective slide from near three-month tops, set last Friday.The slide seemed unaffected by renewed optimism over a US-China trade deal.Tempered Fed rate cut expectations underpin the USD and added to the weakness. The AUD/USD pair kept losing ground on Tuesday and dropped to three-day lows in the last hour, with bearish eyeing a move towards challenging the key 0.70 psychological mark. The pair extended its retracement slide from near three-month tops set last Friday and remained under some selling pressure for the third consecutive session on Tuesday, rather unaffected by the fact that the US and China might be moving closer towards a trade deal. The South China Morning Post (SCMP) reported that US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are likely to travel to China next week for negotiations with Vice Premier Liu He, though did little to impress the bulls. With the US-China trade optimism failing to provide any meaningful impetus to the China-proxy Australian Dollar, a follow-through pickup in the US Dollar demand further collaborated to the pair's ongoing slide back towards challenging 100-day SMA support. Despite the US President Donald Trump's continuous pressure for immediate rate cuts, tempered expectations of an aggressive monetary easing by the Fed continued underpinning the greenback and lifted it further beyond the 97.00 handle to fresh weekly tops. It would now be interesting to see if the pair can attract any meaningful buying interest or continued with downward momentum, marking the end of the recent positive momentum amid absent relevant market moving economic releases from the US.Technical levels to watch 

According to advanced figures from CME Group for JPY futures markets, open interest increased by around 1.5K contracts on Monday, reversing the previo

According to advanced figures from CME Group for JPY futures markets, open interest increased by around 1.5K contracts on Monday, reversing the previous drop. Volume, instead, dropped for the second day in a row, this time by nearly 35.7K contracts.USD/JPY scope for extra gainsUSD/JPY has regained the 108.00 mark and above on the back of rising open interest amidst declining prices in JPY. That said, there is still room for the continuation of the uptrend in spot, although shrinking volume could remove some tailwinds from the upside.

Danske Bank analysts suggest that today's main even is the announcement around midday of the next UK Conservative Party leader, who is also going to s

Danske Bank analysts suggest that today's main even is the announcement around midday of the next UK Conservative Party leader, who is also going to succeed Theresa May as Prime Minister.Key Quotes“Everyone expects it to be Boris Johnson. While Boris Johnson is more pro-Brexit than Theresa May, the arithmetic in the House of Commons is unchanged making it difficult for him to force a no-deal Brexit despite it being the default option from a legal point of view.” “Noticeably, pragmatic Conservative Philip Hammond has said he will step down as Chancellor if Boris Johnson wins and has not ruled out he will bring down his own government if necessary to prevent a no-deal Brexit.”

Cable stays under pressure and is seen trading within a lower range betwee 1.2400 and 1.2580, according to FX Strategists at UOB Group. Key Quotes 24-

Cable stays under pressure and is seen trading within a lower range betwee 1.2400 and 1.2580, according to FX Strategists at UOB Group.Key Quotes24-hour view: “GBP traded between 1.2456 and 1.2518, narrower than our expected sideway trading range of 1.2460/1.2550. Momentum indicators are still most ‘neutral’ and GBP is expected to continue to trade sideways, albeit likely at lower range of 1.2445/1.2515”. Next 1-3 weeks: “GBP slipped to 1.2456 and closed lower for the second straight day (1.2479, -0.21%). While we continue hold the view that GBP is “likely to trade sideways”, the positive underlying tone detected previously has dissipated. In other words, our expectation for GBP to “test the top of the expected sideway range of 1.2430/1.2640 first” is unlikely to materialize. From here, GBP is expected to continue to trade sideways, even though likely at a lower and narrower range of 1.2400/1.2580”.

Karen Jones, analyst at Commerzbank, suggests that EUR/USD pair continues to struggle with interim resistance at 1.1285 and again has sold off – it is

Karen Jones, analyst at Commerzbank, suggests that EUR/USD pair continues to struggle with interim resistance at 1.1285 and again has sold off – it is on the defensive.Key Quotes“Provided dips lower hold over the March and mid-June lows at 1.1181/76 on a closing basis an upside bias will be preserved. We should then see a recovery towards the 200 day moving average and early June high at 1.1313/48. This guards the more important 1.1344/1.1412 55 week ma and recent high.” “Above the 1.1412 June high we look for resumption of the up move and a test of the 1.1570 2019 high. Slightly longer term we target 1.1815/54, the highs from June and September 2018.” “Below 1.1175/60 will allow for another test of 1.1110/06. We regard the April and May lows at 1.1110/06 as a turning point and continue to view the market as based longer term and target 1.1990 (measurement higher from the wedge).”

Preliminary figures for GBP futures markets from CME Group noted open interest shrunk for the third session in a row on Monday, this time by around 1.

Preliminary figures for GBP futures markets from CME Group noted open interest shrunk for the third session in a row on Monday, this time by around 1.1K contracts. In the same direction, volume went down for the second day in a row, now by around 23.6K contracts.GBP/USD could slip back to sub-1.2400 levelsCable extends its downside mood on Tuesday amidst shrinking open interest and volume, allowing for a probable rebound in the near term. However, the Sterling remains under heavy pressure on UK politics and Brexit and therefore another test of levels below 1.2400 the figure should not be ruled out in the near term.

Here is what you need to know to start your day on Tuesday, July 23rd, European session: - US dollar hit weekly tops vs. main rivals; Trump, Congress

US dollar index rises on lower odds of aggressive Fed easing.Gold drops amid risk-on market profile.Market awaits next UK PM announcement. Here is what you need to know to start your day on Tuesday, July 23rd, European session:  - US dollar hit weekly tops vs. main rivals; Trump, Congress leaders reached a deal on debt limit, Trump ramped up pressure on the Fed for easing. - Asian equities cheered the prospect of Fed, ECB easing, USD/JPY advanced beyond 108.00 – unfazed by BOJ pre-emptive easing talks, S. Korea fired warning shots on Russian planes. - Kiwi slipped as RBNZ considers working on unconventional policy/ QE strategy while RBA’s Kent said its highly unlikely to need QE. - Cable pressured; Boris Johnson set to become next UK PM as Conservatives to announce new leader at 1045 GMT. - Trade: US negotiators to visit China next week for first face-to-face trade talks since G20. China launched an anti-dumping probe on US propanol exports. - Oil prices traded modestly flat amid UK-Iran geopolitical tensions, Gold fell on dollar strength, higher Treasury yields. - Cryptocurrencies remained under pressure. Bitcoin held above the 10k handle. Key economic events ahead  

Denmark Consumer Confidence down to 2.9 in July from previous 5.8

10-week old descending trend-line keeps GBP/USD upside confined as the quote declines to 1.2455 ahead of the UK open on Tuesday.

23.6% Fibonacci retracement of multi-year old downpour limits the GBP/USD pair’s immediate upside.2.5 month long descending trend-line becomes sellers’ favorite tool.Multiple halts before meeting the 1.2300 round-figure.10-week old descending trend-line keeps GBP/USD upside confined as the quote declines to 1.2455 ahead of the UK open on Tuesday. While current year low near 1.2382 offers immediate support, March – April 2017 raise 1.2365 and 1.2335/30 as following levels to watch during further declines. In case prices keep trading southwards below 1.2330, 1.2300 is likely an intermediate stop before watching over March 2017 bottom surrounding 1.2110. Alternatively, 23.6% Fibonacci retracement level of 1.2570, followed by short-term falling resistance-line at 1.2580, can continue being tough upside barriers for the buyers to conquers. If bulls manage to cross 1.2580, June high close to 1.2685 could be next on their watchlist. GBP/USD weekly chartTrend: Bearish  

Analysts at TD Securities point out that for UK data today, we just have CBI industrial orders, where markets are looking for an unchanged reading of

Analysts at TD Securities point out that for UK data today, we just have CBI industrial orders, where markets are looking for an unchanged reading of -15 in July, but more interestingly, today the Conservative Party announces the winner of the leadership contest, and therefore the next Prime Minister, at 11am.Key Quotes“While Boris Johnson is widely expected to have won, we may see some small market reaction around the revelation of the scope of his win; a clear vote share of something like 80%/20% would be seen as a clearer mandate for a hard Brexit, while a narrower vote of more like 60%/40% would suggest that there's a strong appetite for a more conciliatory tone.”

The near term outlook on USD/JPY points to the continuation of the sideline theme, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We

The near term outlook on USD/JPY points to the continuation of the sideline theme, suggested FX Strategists at UOB Group.Key Quotes24-hour view: “We highlighted yesterday USD “could test 108.00 but any advance is viewed as a higher trading range of 107.40/108.00”. USD subsequently touched 108.06 briefly before trading sideways for rest of the session. Momentum indicators are mostly ‘neutral’ now and USD is likely to continue to trade sideways for today, albeit likely at a slightly higher range of 107.70/108.10”. Next 1-3 weeks: “The relatively strong rebound from last Thursday (18 Jul) steep decline was not exactly expected. While we “have doubts about the sustainability of any USD weakness”, we expected USD to “trade with a downside bias”. The price action over the past couple of days suggests that USD is likely caught in a broad 107.40/108.40 range”.

In light of flash data for EUR futures markets from CME Group, investors trimmed their open interest positions by just 804 contracts at the beginning

In light of flash data for EUR futures markets from CME Group, investors trimmed their open interest positions by just 804 contracts at the beginning of the week, reaching the second drop in a row. In the same line, volume shrunk once again, this time by around 71.8K contracts.EUR/USD likely to meet contention in the 1.1180 regionEUR/USD is challenging 6-week lows in the 1.1190 region today. However, declining open interest and volume coupled with negative price action carries the potential to spark a squeeze higher in the near term, while the 1.1180 area is seen as providing strong support for the time being.

With the USD buyers cheering recent positive news/headlines, Gold drops to multi-day low as it makes the rounds to $1,417 during early Tuesday.

Upbeat trade/political news strengthen initial USD positive sentiment backed by calls for less extreme Fed rate hike.20-DMA offers the halt to $1,400 round-figure.With the US Dollar (USD) buyers cheering recent positive news/headlines, Gold drops to multi-day low as it makes the rounds to $1,417 heading into the Europe markets’ open on Tuesday. Not only the US lawmakers ability to have a strong solution for the government shutdown but positive developments surrounding the US-China trade deal also please the greenback bulls. Signals for less extreme Fed rate cut by the NY Fed triggered initial USD buying ahead of the Federal Reserve policymakers’ blackout period on Friday. Investors showed little reaction to the geopolitical tension concerning Iran whereas South Korea’s gunshot to Russian military plane was also the largest ignored. The US and Chinese trade negotiators will meet in Beijing the next week whereas the US President Donald Trump readies for a positive start by allowing the tech companies to sell inputs to China’s Huawei. Asian equities cheered the momentum with the US 10-year treasury yield also being on the front-foot during early day. Coming up on the investors’ radar will be some of the second-tier housing and manufacturing data from the US while qualitative headlines can keep dominating the market sentiment. Technical Analysis FXStreet Analyst Ross J. Burland expects the 20-day moving average (DMA) to be immediate support ahead of $1,400 round-figure: Gold had been bumping along the symmetrical triangle's prior resistance following a breakout through the 1450 level which was followed by a fade back to the symmetrical triangle. Should price hold below 1420/25, bears will then look for a run below the 1400 psychological level. The 23.6% Fibo of the latest swing lows and highs are located at 1398. The $1,373/76 zone comes into play thereafter which meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. Directly below the price in this move, we can see that the 20 daily moving average is located at 1413, this too is a key level to the downside as will the 50 and 100-days moving averages.

In view of FX Strategists at UOB Group, EUR/USD is seen navigating the 1.1160/1.1300 range in the next weeks. Key Quotes 24-hour view: “Expectation fo

In view of FX Strategists at UOB Group, EUR/USD is seen navigating the 1.1160/1.1300 range in the next weeks.Key Quotes24-hour view: “Expectation for EUR to “dip below the strong 1.1200 support” did not materialize as it traded within a tight range of 1.1204/1.1225. The underlying tone still appears soft and from here, EUR could drift towards 1.1195. The next support at 1.1180 is a stronger level and is unlikely to yield. Resistance is at 1.1225 but the stronger level is at 1.1240”. Next 1-3 weeks: “EUR traded in a very tight range of 21 pips yesterday (between 1.1204 and 1.1225). This is the smallest 1-day range since April 2014. We continue to hold the same view wherein the “outlook for EUR is mixed” and it is “likely to trade sideways in an ‘undecided’ manner”. For now, a 1.1160/1.1300 range is likely enough to contain the price action in EUR, at least for several more days”.

FX option expiries for July 23 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - USD/JPY: USD amounts 107.00 929m 108.00 800m 109.00 647m

FX option expiries for July 23 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - USD/JPY: USD amounts 107.00 929m 108.00 800m 109.00 647m - GBP/USD: GBP amounts 1.2400 703m - USD/CAD: USD amounts 1.3000 703m

ANZ analysts point out that the synchronised slowdown in global growth has become more pronounced, against a backdrop of below-target inflation in man

ANZ analysts point out that the synchronised slowdown in global growth has become more pronounced, against a backdrop of below-target inflation in many economies.Key Quotes“Major central banks are to set to ease policy rates further, but many have little monetary policy ammunition to spare.” “Back home, the direct impacts of slower global growth on the New Zealand economy have so far been muted. But confidence effects are likely weighing on business sentiment, employment and investment intentions.” “Domestic growth looks set to trough at 2% in Q2, but the outlook from there is murky. Fiscal and monetary stimulus should provide a bit of a boost, which we expect will support a gradual acceleration in growth. But downside risks are heightened.” “The inflation outlook is troubling – we’ve likely seen the peak in domestic inflation pressures, and more is needed from the RBNZ to help met their employment and inflation objectives. We think cuts in August and November, taking the OCR to 1%, should do the trick.”   

According to Nick Kounis, head of Financial Markets Research at ABN AMRO, there is a possibility of a cut in policy rates already at this week’s ECB m

According to Nick Kounis, head of Financial Markets Research at ABN AMRO, there is a possibility of a cut in policy rates already at this week’s ECB meeting.Key Quotes“The macroeconomic conditions for easing set out by the ECB do seem to have already been met. In addition, Chief Economist Philip Lane outlined that below-target inflation outcomes meant that the ECB needed to prove its commitment to price stability by taking relatively earlier action than if inflation outcomes had been closer to target.” “On the other hand, the ECB has tended to take decisions at meetings when it has updated macro projections and the next update is in September. So although it is a close call, we expect the ECB to stand pat in July, but cut all its main policy rates by 10bp in September.”As well as a 10bp rate cut in September, we expect an even stronger signal that the ECB is investigating the design of a new asset purchase programme. By December, we expect the ECB to announce the full modalities of a EUR 630bn QE package, to be implemented for 9-months from January 2020 at a pace of EUR 70bn per month. The second 10bp rate reduction will follow in Q1 of next year. However, recent comments from officials suggest that the balance of risks are towards earlier moves.”Most economic data over the last few weeks suggest that downgrades of the ECB’s growth and inflation projections are indeed likely in September. Furthermore, the further decline in market-based indicators of inflation expectations is adding to the concerns of the Governing Council.”  

The greenback keeps pushing higher in the first half of the week and is now flirting with the 97.50 level when tracked by the US Dollar Index (DXY). U

The index moves higher and trades close to the 97.50 area.US 10-year yields climb to the 2.06% area.June’s Existing Home Sales next of relevance in the docket.The greenback keeps pushing higher in the first half of the week and is now flirting with the 97.50 level when tracked by the US Dollar Index (DXY).US Dollar Index bid on fed, debt ceiling dealThe index is up for the third session in a row on Tuesday, fully recovering last Thursday’s Williams-led sell-off to the 96.70 region and posting at the same time new 2-week tops. The greenback gathered extra steam as of late in response to firmer bets of a 25 bps rate cut (‘insurance cut’) by the Federal Reserve at next week’s meeting and the bipartisan agreement clinched yesterday to suspend the debt ceiling for two years, preventing the Government from missing payments from as early as September. Later in the US docket, Existing Home Sales for the month of June will be the only release of note seconded by the weekly report on US crude oil supplies by the API.What to look for around USDInvestors have already priced in a 25 bps interest rate cut hits month, while a larger rate cut appears to have lost consensus in the last sessions. Trade tensions, US-Iran geopolitical concerns and global growth worries continue to cloud the US outlook, however, while the absence of solid upside traction in inflation remains well in place. Confronting this scenario, the greenback still looks underpinned by its safe have appeal, the status of ‘global reserve currency’, solid US fundamentals when compared to its G10 peers and the shift to a more accommodative stance from the rest of the central banks.US Dollar Index relevant levelsAt the moment, the pair is gaining 0.16% at 97.44 and faces the next resistance at 97.59 (high Jul.9) followed by 97.80 (monthly high Jun.3) and finally 98.37 (2019 high May 23). On the flip side, a break below 96.67 (low Jul.18) would aim for 96.46 (low Jun.7) and then 96.04 (50% Fibo of the 2017-2018 drop).

Despite repeated failures to slip beneath 2-day long rising support-line, EUR/GBP upside is likely to be tamed by short-term key resistances on early Tuesday.

Nearby key resistances to question EUR/GBP recovery from mid-month bottom.A downside break of pattern support could exert fresh selling pressure.Despite repeated failures to slip beneath 2-day long rising support-line, EUR/GBP upside is likely to be tamed by short-term key resistances as it takes the rounds to 0.8980 ahead of the European open on Tuesday. The first one being 200-hour moving average (HMA) level of 0.8995, close to the rising triangle’s upper-line at 0.9000 round-figure. Should prices rally beyond 0.9000, 38.2% Fibonacci retracement level of 0.9015 and July 17 high around 0.9050 can please the bulls. Though, a downside break of 0.8980 comprising pattern support might not hesitate to drag the quote to 0.8955 whereas 0.8900 round-figure could be on the bears’ radar then after. EUR/GBP hourly chartTrend: Pullback expected  

Singapore Consumer Price Index (YoY) came in at 0.6, below expectations (0.7) in June

In view of analysts at ANZ, regional divergences remain a key theme in New Zealand’s housing market as Auckland house price growth slipped further int

In view of analysts at ANZ, regional divergences remain a key theme in New Zealand’s housing market as Auckland house price growth slipped further into negative territory in June.Key Quotes“House price inflation in the capital is still high but falling back in line with the rest of the pack. Canterbury inflation has made a small run back into positive territory and some of the small centres, like Manawatu-Whanganui and the deep south, are seeing prices tick up again.” “House price inflation isn’t expected to roll over at the national level as OCR cuts should help keep mortgage rates under pressure, LVR restrictions will likely be loosened gradually and supply shortages remain.” “Conversely, several headwinds are capping the upside: banks are cautious and LVR limits remain binding; investors are wary of policy changes; and affordability constraints are biting.”    

In line with the unanimous consensus, analysts at TD Securities are expecting the NBH to keep all its policy rates on hold at today's Monetary Council

In line with the unanimous consensus, analysts at TD Securities are expecting the NBH to keep all its policy rates on hold at today's Monetary Council (MC) meeting.Key Quotes“Since the last MC meeting headline inflation fell to 3.4% y/y in June from 3.9% in May and core ex-taxes to 3.5% from 3.7%. Furthermore, the global financial environment remains decisively dovish, with the Fed likely to cut next week.” “We think the MC will keep rates on hold and continue with their wait-and-see approach until September when the new economic forecasts will be available.”

After weeks of drama surrounding the UK’s leadership contests, the day is finally here when the British Conservatives will announce their next leader.

Key UK lawmakers threaten/announce resignations fearing PM hopeful Johnson’s readiness for no-deal Brexit.USD strength on trade/political positives also weighs on the pair.Results of the Tory Leadership Contest will be in the spotlight.After weeks of drama surrounding the UK’s leadership contests, the day is finally here when the British Conservatives will announce their next leader on 10:45 GMT Tuesday. Though, anxiety over the downside growth risks emanating from the no-deal Brexit scenario, given the frontrunner Boris Johnson wins, drags the GBP/USD pair down to 1.2460 heading into the London open. Despite largely expected to come out as a winner, sustained pledge for leaving the EU on “do or die” basis by October 31 made Mr. Johnson despicable amongst the UK’s political fraternity. Not only Chancellor Phillip Hammond and Justice Secretary David Guake but key Tory policymaker Rory Stewart and Foreign Office Minister Sir Alan Duncan also announce their readiness to resign immediately after the result if Boris Johnson become the next UK Prime Minister (PM), Elsewhere, the US Dollar (USD) gains across the board after the Congress agreed over the 2-year debt/spending limit. Also adding to the greenback strength could be positive developments surrounding the US-China trade deal. While British lawmakers are likely to resign if Mr. Johnson wins, which is almost certain, and can further weaken the British Pound (GBP), the Guardian came out with a news report signaling that some of the Tory rebels have already warned the ex-London Mayor to change his outlook towards Brexit or face fight for survival despite being the PM. Other than political/trade news, the US Housing Price Index, Existing Home Sales and Richmond Fed Manufacturing Index are some other catalysts to follow. While Richmond Fed Manufacturing Index is likely to improve from 3 to 5, Existing Home Sales aren’t expected to change from 5.34 million whereas the Housing Price Index might soften to 0.3% versus 0.4% prior. Technical Analysis With the 100-bar moving average on the 4-hour chart (4H 100MA) limiting the pair’s immediate upside around 1.2530, chances of its gradual declines to 1.2440 horizontal support comprising early-month lows and mid-month highs seem brighter. In a case prices slip beneath 1.2440, latest lows surrounding 1.2382 and April 2017 bottom close to 1.2365 can lure sellers. Meanwhile, an upside clearance of 1.2530 can trigger the pair’s upside targeting mid-month top around 1.2580.

Analysts at ANZ notes that Australia’s ANZ-Roy Morgan Consumer Confidence gained 0.3% last week as the financial and economic conditions subcomponents

Analysts at ANZ notes that Australia’s ANZ-Roy Morgan Consumer Confidence gained 0.3% last week as the financial and economic conditions subcomponents were positive, implying the detail was better than the headline suggested.Key Quotes“Current finances gained 2.8%, while future financial conditions were up 0.3%. Both the indices are comfortably above their respective long-term average.” “The economic subindices were also positive, with current economic conditions gaining 3.4% and future economic conditions rising by 1%.” ‘The ‘Time to buy a major household item’ was the only subindex that fell, dropping 4.4%. The four-week moving average for inflation expectations was flat at 4.0%, though weekly inflation expectations rose for the third consecutive week.”

EUR/USD fell below 1.12 in Asia and could extend losses in Europe, courtesy of the dovish European Central Bank (ECB) expectation and the weakness in

EUR/USD dips below 1.12 on dovish ECB expectations.Dollar may find love on lower odds of aggressive Fed easing.EUR/USD fell below 1.12 in Asia and could extend losses in Europe, courtesy of the dovish European Central Bank (ECB) expectation and the weakness in German Bund yields. The benchmark German 10-year government bond yield fell four basis points to -0.345 on Monday, having dropped more than 10 basis points in the previous five trading days. The German yields have come under pressure on expectations that the ECB will keep rates unchanged later this week, but send out a strong dovish message, setting the stage for a 10 basis point deposit rate cut in September. Many, including the likes of rating agency Fitch, also expect the ECB to restart quantitative easing later this year. The investors may continue to price in the prospects of fresh stimulus by the ECB today, sending German yields and the common currency lower. Meanwhile, the US Dollar may remain bid on lower odds of aggressive easing by the Fed. President Trump ramped up pressure on the Fed by tweeting the need for immediate rate cuts. The futures market, however, is still seeing only a 30% probability of a 50 basis point rate cut on July 31. The probability had jumped to 70% last Thursday. Apart from monetary policy expectations, the pair could take cues from the monthly US housing data and Eurozone's Consumer Confidence (Jul) scheduled for release during the North American session.  Technical Levels 

Although 50% Fibonacci retracement of mid-June to early July downpour limits the USD/INR pair’s immediate upside, short-term rising channel portrays its upside.

Overbought RSI shows buyers’ exhaustion during gradual recoveries from the multi-month low.Sellers await downside break of the short-term rising channel.Although 50% Fibonacci retracement of mid-June to early July downpour limits the USD/INR pair’s immediate upside, short-term ascending trend-channel portrays the underlying momentum strength as the quote seesaws near 69.02 on early Tuesday. Given the overbought conditions of 14-bar relative strength index (RSI), sellers are waiting to enter on the downside break of 68.70/69 comprising 23.6% Fibonacci retracement and channel’s lower-line. In doing so, 68.36 and 38.25 could be their intermediate halts while targeting 68.00 during further declines. Alternatively, the channel resistance of 69.27 can limit the pair’s upside past-50% Fibonacci retracement level of 69.19. It’s worth noting that the quote’s rise beyond 69.27 enables it to challenge late-June highs surrounding 69.83. USD/INR 4-hour chartTrend: Pullback expected  

US Secretary of State Mike Pompeo said in a speech late-Monday that the US sanctioned Chinese state-run energy company Zhuhai Zhenrong Co Ltd for alle

US Secretary of State Mike Pompeo said in a speech late-Monday that the US sanctioned Chinese state-run energy company Zhuhai Zhenrong Co Ltd for allegedly violating restrictions imposed on Iran’s oil sector. Pompeo said: “We’ve said that we will sanction any sanctionable behavior, and we mean it.” Zhuhai Zhenrong “knowingly engaged in a significant transaction for the purchase or acquisition of crude oil from Iran” after the expiration of a US sanctions waiver covering China on May 2, Pompeo added. Extra Reading: Iran: U.S. Secretary Pompeo said the U.S. is serious about enforcing sanctions US Sec. of State Pompeo: US does not want war with Iran

Brent oil's recovery from one-month lows hit on Friday has taken the shape of a bear flag on the 4-hour chart. A bear flag or an inverted flag is a co

Brent's 4-hour chart shows a bear flag.A break below $61.28 would confirm a flag breakdown.Brent oil's recovery from one-month lows hit on Friday has taken the shape of a bear flag on the 4-hour chart. A bear flag or an inverted flag is a continuation pattern, which usually accelerates the preceding bearish move. A 4-hour close below the lower edge of the flag, currently at $62.78, would confirm a breakdown and create room for a sell-off to 457.00 (target as per the measured height method). On the way lower, Brent may face strong support at the recent low of $61.28. As of writing, a barrel of Brent oil is changing hands at $63.26. Prices hit a high of $$64.01 on Monday, having printed a low of $61.28 on Thursday, a level last seen on June 18. 4-hour chartTrend: Bearish below $61.28Pivot points 

Despite recently released risk-sensitive news from South Korea and Bank of Japan (BOJ), USD/JPY remains largely unchanged at 108.00 on early Tuesday.

Markets show little attention to the news/headlines from South Korea and the Bank of Japan (BOJ) amid overall upbeat sentiment.The US debt deal and trade positive catalysts please risk-takers.Second-tier US data, trade/political news will entertain short-term traders.Despite recently released risk-sensitive news from South Korea and Bank of Japan (BOJ), not to forget on-going geopolitical tension concerning Iran, the USD/JPY pair remains modestly flash around 108.00 during early Tuesday. South Korea recently fired a warning shot at Russian military plane while Bank of Korea (BOK) Governor Lee Ju-you reiterated support for losing monetary policy considering trade tussle with Japan. It was also anticipated that the Bank of Japan (BOJ) will consider pre-emptive easing next week in order to achieve inflation target at the time Japanese Prime Minister Shinzo Abe’s recently victory further strengthens his call for October month tax hike. Additionally, geopolitical tension concerning Iran continues despite the recent shift in the tone of the nation’s policymakers. On the positive side, the US President Donald Trump’s readiness to fasten the process of allowing the license to do sell inputs to China’s Huawei brightens trade sentiment ahead of the next week’s US-China trade negations in Beijing. Furthermore, the lawmakers also agreed over a two-year debt/spending limit and further propelled the risk tone. The US 10-year treasury yields gain nearly 1.5 basis points to 2.057% by the press time. While trade/political headlines are likely to keep entertaining momentum traders, second-tier housing and manufacturing data from the US could offer intermediate trading opportunities to follow. Technical Analysis Unless successfully rising beyond 21-day exponential moving average (EMA) level of 108.07, chances of the pair’s run-up to 108.57/60 confluence comprising 50-day EMA and 2-month old descending trend-line seems less likely. As a result, 107.80 and 107.20 can keep being on sellers’ radar.

US Senator Elizabeth Warren, now a Democratic presidential candidate, warned Monday that the US economy is at risk of a recession, largely due to high

US Senator Elizabeth Warren, now a Democratic presidential candidate, warned Monday that the US economy is at risk of a recession, largely due to high levels of debt among both consumers and businesses, according to American Banker.Key quotes (Source: American Banker, Reuter, Medium)"Warning lights are flashing. Whether it's this year or next year, the odds of another economic downturn are high — and growing." "Congress and regulators should act immediately to tamp down these threats before it's too late." " Families may be able to afford these debt payments now, but an increase in interest rates or a slowdown in income could plunge families over a cliff." "Leveraged lending — lending to companies that are already seriously in debt — has jumped by 40% since Trump took office." " The risks of leveraged lending are exactly the kind of thing Financial Stability Oversight Council (FSOC) is supposed to monitor, but the Trump-era FSOC is falling down on the job."

Japan's weaker economy and the output gap's influence on achieving the 2% inflation target may force the Bank of Japan (BOJ) to consider pre-emptive e

Japan's weaker economy and the output gap's influence on achieving the 2% inflation target may force the Bank of Japan (BOJ) to consider pre-emptive easing next week, tweeted Market News International's (MNI) Anthony Barton soon before press time. Japan’s core inflation slowed to its weakest in about two years in June, underlining the needs for more stimulus. It is worth noting that the BOJ has been running ultra easy monetary policy since April 2013, but even so, the inflation target remains elusive.

South Korean Central Bank Had Lee said on Tuesday that he was ready to cut interest rates further if needed and added that a situation requiring more

South Korean Central Bank Had Lee said on Tuesday that he was ready to cut interest rates further if needed and added that a situation requiring more policy response after last week's rate cut cannot be ruled out. The central bank cut delivered a surprise rate cut last Thursday and trimmed this year's growth forecast to the lowest in a decade. The base rate was cut by 25 basis points to 1.50% – the first reduction in three years and lowest since November.  

China’s Commerce Ministry launches an anti-dumping investigation on imported propanol and other related products from the US, according to Reuters. No

China’s Commerce Ministry launches an anti-dumping investigation on imported propanol and other related products from the US, according to Reuters. No further details are provided on the same.

Japanese Finance Minister Taro Aso was on the wires last minutes, via Reuters, noting that Japan’s PM Abe's election win as support for a sales tax hi

Japanese Finance Minister Taro Aso was on the wires last minutes, via Reuters, noting that Japan’s PM Abe's election win as support for a sales tax hike. Aso added that “think we gained public trust for planned sales tax hike through upper house election".

Asian stocks are on the rise with the Shanghai Composite recovering from a one-month low, despite lower odds of an aggressive Federal Reserve rate cut

Asian stocks rise as Shanghai Composite recovers from one-month lows. The odds of an aggressive Fed rate cut remain low after President Trump's tweet. Fed to cut rates by 25 bps this month. ECB seen cutting rates later this year. Asian stocks are on the rise with the Shanghai Composite recovering from a one-month low, despite lower odds of an aggressive Federal Reserve rate cut. As of writing, Japan's Nikkei index is changing hands at 21,612, representing 195 points or 0.91% gain on the day. Stocks in Australia and New Zealand are also flashing 0.30% gains and Hong Kong's Hang Seng index is adding 0.19% or 54 points at 28,426. The Shanghai Composite index, which had dropped to 2879 on Monday – the lowest level since June 18 – is now hovering at 2893, representing 0.26% gains on the day. The US stocks eked out moderate gains in the overnight trade with the Dow Jones Industrial Average rising 0.10% and the S&P 500 index adding 0.28%. The US President Trump ramped up pressure on the Fed by tweeting that the very misguided central bank should move now to cut rates. So far, however, Trump's comments have not had a major impact on market pricing of Fed rate cut odds. The futures market odds of a 50-basis point cut at the July meeting rose slightly to 30%, but remain well below the high of 71% seen last Thursday. That said, the markets are still expecting the Fed to cut rates by 25 basis points on July 31. Further, the European Central Bank is expected to cut rates by 10 basis points in September and restart the quantitative easing program later this year. The expectation of easing by major central banks is likely helping the Asian equities stay bid. The American dollar, however, has picked up a bid, courtesy of lower odds of aggressive Fed easing. As of writing, the Dollar Index, which tracks the value of the greenback against majors, is trading at 97.38, up 0.10% on the day, having logged gains in the previous two trading days.    

Latest headlines are crossing the wires on reports that South Korean military fired warning shot at Russian military plane, as cited by Yonhap. The Ja

Latest headlines are crossing the wires on reports that South Korean military fired a warning shot at Russian military plane, as cited by Yonhap. The plane reportedly entered the South Korean airspace. The Japanese Yen is seen picking up fresh bids on the above headlines, sending the USD/JPY pair back below the 108 handle.

In a scheduled report, the Bank of Korea (BOK), the South Korean central bank, told the parliament on Tuesday that Japan's export curbs on key chip an

In a scheduled report, the Bank of Korea (BOK), the South Korean central bank, told the parliament on Tuesday that Japan's export curbs on key chip and display production materials were one of the top three risks to the domestic economy. The report read: "Developments in the U.S.-China trade negotiations, the speed of the global semiconductor industry's recovery and Japan's export restrictions are the main risks over the economic growth path." Amid S. Korea-Japan trade spat, the BOK last week cut the policy interest rate by 25 basis points to 1.50% in a surprise move and slashed 2019 economic growth forecast to 2.2% from 2.5% seen in April.

Reuters reports the latest comments from the Chinese Industry Ministry, as he says that China needs arduous efforts to achieve industrial growth targe

Reuters reports the latest comments from the Chinese Industry Ministry, as he says that China needs arduous efforts to achieve industrial growth target in 2019. This comes in spite of the June Chinese industrial output having climbed 6.3% from a year earlier, according the latest data released by China’s National Bureau of Statistics (NBS).

With the trade positives news headlines joining the upbeat weekly consumer sentiment data from Australia, the AUD/JPY pair seesaws near 75.90.

Risk sentiment strengthens on the latest news concerning the US-China trade negotiations.Political tension between the US and Iran, coupled with lack of data/events, limits upside momentum.With the trade positives news headlines joining the upbeat weekly consumer sentiment data from Australia, the AUD/JPY pair seesaws near 75.90 during the early Asian session on Tuesday. The Wall Street Journal quotes the White House spokesperson while confirming that the US President Donald Trump agreed to tech leaders’ request for speeding up the licensing process for selling components to China’s Huawei. Additionally, China’s SCMP has noted that trade negotiators from the US and China will meet in Beijing next week for further talks. Contrast to the aforementioned trade positive headlines, political tension between the US and Iran remains on the card as the US Secretary of State Mike Pompeo recently announced readiness to punish Chinese firms importing oil from the Gulf nation. Risk takers have recently been cheering the US Fed communication to tame the policy bears. The US 10-year treasury yield, generally followed to gauge market’s risk sentiment, rises nearly 2 basis points to 2.06% by the press time. Elsewhere, Australia’s weekly ANZ Roy Morgan Consumer Confidence data crossed 115.8 prior to 116.3. With no major data/events left for publishing, investors may keep an eye over the trade/political headlines for fresh impulse. Technical Analysis The quote follows a range between the 21-day exponential moving average (EMA) level of 75.67 and 76.34/28 with 75.00 and 77.00 being likely following numbers to watch during either side breaks.

The path of least resistance for USD/CNH is on the higher side, technical charts indicate. The pair closed at 6.8834, confirming a falling channel bre

USD/CNH's daily chart shows a bearish channel breakout.A break above 6.90 looks likely.The path of least resistance for USD/CNH is on the higher side, technical charts indicate. The pair closed at 6.8834, confirming a falling channel breakout. The pattern indicates the pullback from June's high of 6.9618 has ended and the bulls have regained control. So, the doors look open for a test of 6.90 (July 3 high). A break above that level would invalidate bearish lower highs pattern and reinforce the bullish view put forward by the channel breakout and could yield rise to 6.9618. The bullish case would weaken if the pair finds acceptance below the July 11 low of 6.8610. Daily chartTrend: BullishPivot points 

On Tuesday, the People’s Bank of China (PBOC), the Chinese central bank, conducted a Targeted Medium Lending Facility (TMLF).

On Tuesday, the People’s Bank of China (PBOC), the Chinese central bank, conducted a Targeted Medium Lending Facility (TMLF).

The AUD/USD pair’s sustained break of 8-day long rising trend-line drags it to 0.7025 during early Tuesday.

AUD/USD drops to 3-day low while being just above 23.6% Fibonacci retracement of June-July upside.4H 100MA and more than a month old rising support-line flashes on sellers’ radar.The AUD/USD pair’s sustained break of 8-day long rising trend-line drags it to 0.7025 during early Tuesday. The pair now rests of 23.6% Fibonacci retracement of June-July advance, a break of which can exert additional downward pressure towards 100-bar moving average (4H 100MA), at 0.7000, followed by 50% Fibonacci retracement around 0.6960. Though, an ascending trend-line since mid-June, at 0.6952, will create disturbances during the further weakness of the quote. Alternatively, 0.7050 and latest high surrounding 0.7082 hold the keys to the pair’s run-up towards 200-day exponential moving average (EMA) level of 0.7100. AUD/USD 4-hour chartTrend: Bearish  

Gold support has given way to a move back into the symmetrical triangle. The 20-day moving average is now a key target on the downside. Gold had been

 Gold support has given way to a move back into the symmetrical triangle.The 20-day moving average is now a key target on the downside. Gold had been bumping along the symmetrical triangle's prior resistance following a breakout through the 1450 level which was followed by a fade back to the symmetrical triangle. Should price hold below 1420/25, bears will then look for a run below the 1400 psychological level. The 23.6% Fibo of the latest swing lows and highs are located at 1398. The $1,373/76 zone comes into play thereafter which meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. Directly below the price in this move, we can see that the 20 daily moving average is located at 1413, this too is a key level to the downside as will the 50 and 100-days moving averages. 
 

EUR/USD printed session lows below 1.12 soon before press time. The US Dollar is pushing higher against most majors on lower odds of an aggressive Fed

Dollar demand pushes EUR/USD below 1.12. A close below 1.1204 would confirm a flag breakdownEUR/USD printed session lows below 1.12 soon before press time. The US Dollar is pushing higher against most majors on lower odds of an aggressive Federal Reserve rate cut at July 21 meeting. Meanwhile, the shared currency could be losing altitude due to a widespread belief that the European Central Bank would cut rates by 10 basis points in September and restart the quantitative easing program later this year. On the daily chart, EUR/USD is teasing an inverted flag breakdown, a continuation pattern which usually accelerates the preceding bearish move. A daily close below 1.1204 would confirm flag breakdown and create room for a drop to fresh 2019 low below 1.1107. On the higher side, the July 11 low of 1.1286 is the level to beat for the bulls. As of writing, the pair is trading at 1.1195, having hit a high of 1.1210 earlier today. Daily chartTrend: BearishPivot points 

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8818 vs Monday's fix of 6.8759.

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8818 vs Monday's fix of 6.8759.

With fewer hurdles to the US government offices and likely resolution of the trade issue with China pleasing the greenback buyers, the US Dollar Index surges.

The US lawmakers reached a 2-year spending/debt ceiling deal.Huawei cuts jobs at the US research arm while the US President considers allowing sales to the Chinese telecom giant.Greenback buyers cheer scaling back expectations of Fed’s steeper rate cuts.With fewer hurdles to the US government offices and likely resolution of the trade issue with China pleasing the greenback buyers, the US Dollar Index (DXY) rises back towards short-term resistance-line while taking the rounds to 97.35 during early Tuesday. The White House and the Congress agreed over a 2-year debt and spending limit increase to $1.37 trillion in the fiscal year 2020, up from $1.32 trillion this year, as cited by Reuters. While the deal offers an easy road for the US government offices beyond 2020, the Wall Street Journal quoted lawmakers that indicated they may need to pass some sort of stopgap funding measure to avoid a shutdown and negotiate agreements on all of the remaining bills. Elsewhere, the Wall Street Journal also reported that the US President Donald Trump agreed to the technology company CEO request for timely licensing decisions on sales to Huawei. Though, Reuters’ report that the Chinese telecom giant is cutting over 600 jobs off its US research arm Futurewei might negatively affect the US President Trump’s temper ahead of the next week’s US-China trade talks in Beijing. Other than the aforementioned US Dollar (USD) positive news, markets’ response to the Fed trying to scale back expectations of much steeper rate cuts was also notable. It should also be noted that traders showed little reaction to the US staying ready to sanction Chinese company after it was found importing oil from Iran. Looking forward, the US Housing Price Index, Existing Home Sales and Richmond Fed Manufacturing Index are likely short-term directives to watch for the greenback traders. Technical Analysis A downward sloping trend-line since May 30, at 97.35 limits the greenback gauge’s immediate upside, a sustained break of which can challenge early-month high around 97.60 whereas 97.80 and 98.00 might please buyers afterward. Meanwhile, current month low close to 96.70 and 200-day exponential moving average (EMA) near 96.60 can keep the index downside limited.

Futurewei Technologies Inc, the US research arm of China’s Huawei Technologies Co Ltd, began laying off workers on Monday. The layoffs come two months

Futurewei Technologies Inc, the US research arm of China’s Huawei Technologies Co Ltd, began laying off workers on Monday.  The layoffs come two months after the US President Trump put Huawei on the blacklist, making it illegal for its US subsidiary to transfer sensitive technologies to its parent and restricting the Chinese giant from purchasing products from US tech companies.  A Huawei employee told Reuters last week that the target was to remove 70% of the 850 Futurewei workers in the United States.  Also as per latest reports, Trump has agreed to make “timely” decisions on requests by US companies to sell to blacklisted Huawei Technologies Co Ltd. 

NZD/USD dropped a touch on the RBNZ headlines which have warned markets that the RBNZ is looking to refresh the unconventional policy strategy. Lookin

RBNZ on course for an interest rate cut in August. Calls for QE far too premature and should not be impacting the price of spot NZD/USD. NZD/USD dropped a touch on the RBNZ headlines which have warned markets that the RBNZ  is looking to refresh the unconventional policy strategy.  Looking at refreshing unconventional policy strategy. Unconventional policy work 'at very early stage'. The idea that the RBNZ could be moving towards QE has weighed on the bird in Asia today, as markets are looking for clues as to which of the central bank will be the first to the bottom. So far, the RBNZ has been the most forthcoming with its easing intentions. The RBNZ last cut its cash rate by 25 basis points in May, but at the last meeting around, where the RBNZ left its cash rate at 1.5 per cent in June, as widely expected, it did firmly signal that it may lower the cash rate in the future.  "The RBNZ bought themselves some time with the 25 basis point cut in May, which wasn't priced and was delivered nine months earlier than the staff forecasts projected. The sand is rapidly running out of the hourglass now, however, as global policy rates are on the move," said JPMorgan economist Ben Jarman. Conventional wisdom says the Reserve Bank’s monetary policy committee will likely cut again in August when it will have had move information to justify another reduction. Indeed, the move toward lower rates globally, coupled with weak domestic economic data, makes a case for the RBNZ  to do so.   5 unconventional monetary policy plans Casting minds back to a bulletin issued all the way back on 4 May 2018, the RBNZ outlined 5 unconventional monetary policy plans the RBNZ could implement in case of a crisis. Including that the RBNZ is prepared to print money.   The bulletin entitled “Aspects of implementing unconventional monetary policy in New Zealand” outlined these 5 potential tools: Negative interest rates: the OCR could be cut to as low as -0.75% Forward guidance: the RBNZ would clearly signal its intentions QE: the RBNZ would consider buying large amounts of government and corporate bonds on the secondary market, and potentially foreign government bonds Interest-rate swaps: the RBNZ could use this market to influence broader interest rates Term lending facilities for banks: the RBNZ would lend to banks against collateral, guaranteeing them liquidity “While there is no need to introduce unconventional monetary policies in New Zealand at this time, it is prudent to learn from other countries’ experiences and examine how such polices might work in New Zealand if the need arises,” - authors of the paper at the RBNZ Back then, when the RBNZ Assistant Governor John McDermott was interviewed by Bloomberg following the release of the report [emphasis added is ours]. he said, “This is all about planning for the future,” McDermott said. While there’s “no imminent prospect” of using such measures, “the probability of needing them at this point in the cycle is higher than it ever was in history” and “it would be silly of us not to be ready just in case.” McDermott also commented on the likely need for government support if such a crisis arose: “If we felt this was necessary to protect New Zealand, we can do any of this, but the more we’re supported by the government, the more effective this would be,” McDermott said. “Maybe the government would give us more capital or indemnify us against any risk of losses we’d take on, or maybe they would just do more fiscal policy. In that kind of world, I think coordination would be important.” However, markets should not get too ahead of themselves. The recently released Q1 2019 GDP matched 0.6% forecast and the prior mark on a quarterly basis but grew past 2.4% expectations to print upwardly revised prior of 2.5%. While this remains below a 3% preferable growth rate, it is hardly making the case for negative rates.  In 2018, the RBNZ stated that if annual GDP growth stays below 3% over 2019 and it’s 'clear growth' is not 'picking up' as expected, “the OCR would need to be reduced by around 100 basis points” by mid-2020. The OCR is now at 1.50%.  When the central bank made that statement, rates were at 1.75% which would mean, we are looking down the barrel of an OCR rate down to just 0.75% and it's not far to zero from there.  Indeed, the RBNZ is now a quarter of the way there already and it’s only mid-2019. If there were to be some catastrophic shock to the global financial system, its foreseeable to see the RBNZ cutting all the way down to 0.75% and into negative territory - but lower growth is hardly a need to QE and this any sentiment for Qe at the RBNZ should be quickly pulled at this stage.  NZD/USD levels Instead, NZD/USD could firm-up again on the back of prospects of a dovish Federal Reserve and the possibility of a new easing cycle. However, stop territory is not far below from here and there are arguments for a 'one and done' scenario from the Fed, acting on just an insurance policy which could give some life back to the Dollar. This makes the case for a run of stops around 0.6700/20 before 0.6900 can come back onto the radar again compelling. We are some way off from the event on the 31st of July when the interest rate decision will be made which makes for plenty of time for a continuation to the downside and squeeze out of trailing longs below 0.67 the figure. 0.6680 marks the double top daily highs of 30th April and early June. On the flipside, 0.68 opens the way to the 0.69 handle. 

USD/JPY is looking to break above 108.00 in the Asian session, having registered gains in the previous two trading days. The pair eked out moderate ga

USD/JPY is flashing green for the third straight day. American Dollar is bid on lower odds of aggressive Fed easing. USD/JPY is looking to break above 108.00 in the Asian session, having registered gains in the previous two trading days. The pair eked out moderate gains on Monday even though President Trump ramped up pressure on the US Federal Reserve to ease, by tweeting that the 'very misguided' central bank should 'move now' to cut interest rates. It is worth noting that the yield on the US 10-year treasury note fell to 2.02% on Trump's comments only to recover to 2.05% by day's end. The two-year yield, which is more sensitive to short-term rate cut expectations, also dropped to 1.79% only to rise back to 1.82%. As of writing, the 10-year yield is trading at 2.06% and the two-year yield is seen at 1.83%. The resilience in yields could be associated with the fact that Trump's tweets caused only minor repricing of the odds of an aggressive rate cut by the Fed on July 31. The futures market odds of a 50-basis point cut at the July meeting rose slightly to 30%. The odds had risen to 71% late Thursday. As a result, the US Dollar may continue to push higher during the day ahead. The bid tone, however, may weaken if the Asian equities print losses on lower odds of aggressive Fed easing. As of writing, the pair is trading at 108.00.Technical levels 

Having breached immediate resistance-line, USD/IDR takes the bids to 13,941 during early Tuesday.

Resistance-line of a short-term failing channel, 4H 200MA limit the USD/IDR pair’s latest recovery.13,885 and channel’s support-line could please sellers during fresh entry.Having breached immediate resistance-line, USD/IDR takes the bids to 13,941 during early Tuesday. Break of short-term upside barrier and absence of oversold technical indicators favors the pair’s further recovery towards last week's high around $14,030 and 38.2% Fibonacci retracement level of 14,080. However, 200-bar moving average (4H 200MA) and upper-line of the channel can limit the quote’s further advances around 14,140/45. In a case buyers refrain from respecting 14,145, 61.8% Fibonacci retracement level of 14,285 and June 18 high around 14,420 will become their targets. On the contrary, 13,885 and channel-support close to 13,830 hold the keys to the quote’s fresh drop towards 13,750. USD/IDR 4-hour chartTrend: Pullback expected  

Early on Tuesday, Bloomberg came out with a report quoting the Reserve Bank of New Zealand (RBNZ).

Early on Tuesday, Bloomberg came out with a report quoting the Reserve Bank of New Zealand (RBNZ). Key quotes Looking at refreshing unconventional policy strategy. Unconventional policy work 'at very early stage'. FX implications While RBNZ has already said that it was only a response to an official information request, statements favor the New Zealand central bank’s support for unconventional monetary policy and can be taken to selle the Kiwi.Also read: NZD/USD clings to 0.6760 amid greenback strength, lack of fresh catalysts

In recent weeks, the United States has blamed Iran for a string of incidents in the Strait of Hormuz, an important shipping alley in the oil trade bor

There is a constant flow of headlines with respect to Iran and theUS.Oil prices are supported on such conflict, with WTI based above $55 the figure. In recent weeks, the United States has blamed Iran for a string of incidents in the Strait of Hormuz, an important shipping alley in the oil trade bordering one coast of Iran. Iran has denied the accusations. Today, U.S. Secretary Pompeo said the U.S. is serious about enforcing sanctions on the outlaw regime in Iran, hence action is taken against the Chinese co. purchasing oil from Iran on contrary to U.S. sanctions. This follows earlier titbits such as: Iran's Foreign Minister Zarif says - Iran doesn't want to confront Boris Johnson over oil tanker case. Zarif claimed that move by Britain was orchestrated by the United States. Meanwhile, U.S. Secretary of State Mike Pompeo was reported saying on Monday that Washington does not want war with Iran. Regarding the British tanker incident, Pompeo added that it falls on the UK to take care of their ships. In other news, Iran made an announcement in state media, saying US spies had been arrested in the 12 months to March 2019 and had sentenced some of them to death. Iran's intelligence ministry had said the suspects had been collecting information in the nuclear, military and other sectors. Such announcements are not unusual in Iran, but the timing has raised concerns that Tehran is hardening its position in its standoff with Western powers. "The Iranian regime has a long history of lying ... I would take with a significant grain of salt any Iranian assertion about actions that they've taken," Pompeo said in an interview with Fox News Channel. Pompeo has declined to comment about any specific cases, but added: "There's a long list of Americans that we are working to get home from the Islamic Republic of Iran." Market implications WTI has been buoyed and based down at the $55 handle on the recent tensions between US/UK and Iran, climbing to a high of $56.92 overnight. The thing to watch for is whether heightened tensions will lead to a closure of the Strait of Hormuz which would have an impact on oil exports.   

Despite recovering from the multi-month low, the USD/CAD pair remains below near-term key resistances as it takes the rounds to 1.3130 during the early Tuesday.

Overbought RSI conditions can trigger the USD/CAD pair’s pullback from key resistances.Bears await a sustained break of 1.3015 to aim for late-2018 lows.Despite recovering from the multi-month low, the USD/CAD pair remains below near-term key resistances as it takes the rounds to 1.3130 during the early Asian session on Tuesday. Late-June low and multiple highs marked during the current month portray 1.3145/50 as the closest upside barrier ahead of highlighting 200-bar moving average (4H 200MA), at 1.3168 now. If at all buyers manage to cross 1.3168 resistance, June 21 high around 1.3230 could be on their radar. Given the overbought conditions of 14-bar relative strength index (RSI), the quote is likely to witness a pullback from important resistances. In doing so, 1.3100 may act as adjacent support ahead of highlighting the latest low of 1.3015 that holds the key for the pair’s downpour to late-October 2018 low near 1.2970. USD/CAD 4-hour chartTrend: Pullback expected  

Considering mixed sentiment surrounding the latest shift in Iran’s tone and the US-China trade positive news, WTI seesaws near $56.00 during early Tuesday.

Trade positive news/headlines confront Iran’s latest shift to a more conciliatory tone.API data, qualitative catalysts will provide fresh impulse.Considering mixed sentiment surrounding the latest shift in Iran’s tone and the US-China trade positive news, WTI seesaws near $56.00 during early Tuesday. While news of the next week’s trade meeting between the US and Chinese diplomats provide positive signals for the energy benchmark, a shift in the tone of Iran’s key lawmakers indicate brighter chances of an end to the recent geopolitical tensions and drags the black gold below 200-day moving average (200-DMA). Recently, the US Secretary of State Mike Pompeo announced action against Chinese company purchasing oil from Iran despite the US sanctions. Also weighing on the price could be the US Dollar (USD) strength on the Congress’ ability to reach a budget deal and a latest pullback in the speculations of Fed’s steeper rate hike. Moving on, investors may emphasize weekly details of the American Petroleum Institute’s (API) US Crude Oil Stocks. During the week ended on July 12, the inventories decline by -1.401 million barrels. Technical Analysis 200-DMA around $57.00 remains as a short-term tough nut to crack for the oil buyers, a break of which can challenge late-June low close to $57.80 ahead of targeting $60.00 during further upside. Alternatively, current month low around $54.70 limits near-term declines.

Following his speech, Reserve Bank of Australia Assistant Government Kent said in a Q/A that AUD/USD might have been higher without recent rate cuts.

Following his speech, Reserve Bank of Australia Assistant Government Kent said in a Q/A that AUD/USD might have been higher without recent rate cuts.   Global policy easing is still positive for Australia. Too low a likelihood of QE in Australia, long way away from that. Market expectations for federal reserve rate cuts should be already priced into currencies. RBA will adjust policy if needed to meet targets.      
 

Following its sustained downpour below the key short-term moving average and a downward sloping trend-line, the GBP/USD declines to 1.2480 on early Tuesday.

3-day long descending trend-line, sustained trading below key short-term moving average portray GBP/USD weakness.Bears can aim for 1.2382 if 1.2440 fail to disappoint them.Following its sustained downpour below the key short-term moving average and a downward sloping trend-line, the GBP/USD declines to 1.2480 during the early Asian session on Tuesday. The pair now aims to revisit the 1.2440 horizontal support comprising early-month lows and mid-month highs, a break of which can push sellers towards the monthly bottom around 1.2382. In a case bears dominate past-1.2382, April 2017 low near 1.2365, followed by 1.2300 round-figure, will be on their radar. Meanwhile, an upside clearance of immediate trend-line resistance, at 1.2491 now, can propel the pair to 100-bar moving average on the 4-hour chart (4H 100MA) close to 1.2530. Additionally, pair’s successful run-up beyond 1.2530 enables it to claim mid-month tops surrounding 1.2580. GBP/USD 4-hour chartTrend: Bearish  

The Telegraph has released a report confirming that Philip Hammond will resign three hours before Boris Johnson is expected to become Prime Minister i

The Telegraph has released a report confirming that Philip Hammond will resign three hours before Boris Johnson is expected to become Prime Minister in a clear sign of how much trouble he intends to cause from the backbenches: The Chancellor announced live on television yesterday that he will hand his resignation to Theresa May on Wednesday afternoon if, as expected, Mr Johnson is confirmed as Tory leader tomorrow. He will be followed by other ministers including David Gauke and Rory Stewart who have said they could not serve in a Johnson Cabinet, and will join Mr Hammond in plotting against Mr Johnson from the minute he enters Number 10. Several Tory MPs, including the former attorney general Dominic Grieve, are understood to be considering...

With traders awaiting statements from the RBA’s Kent, the AUD/USD pair trades near 0.7030 during the initial Asian trading on Tuesday.

Investors cared more for the Fed’s recent message taking the possibilities of excessive rate cuts backward.The US-China trade developments are so far positive but gained little attention.Speech from RBA’s Kent is on the spotlight for now.With traders awaiting statements from the RBA’s Kent, the AUD/USD pair trades near 0.7030 during the initial Asian trading on Tuesday. Global investors kept cheering the US Dollar (USD) strength after the Fed’s last message before the blackout period reducing expectations of a heavy rate cut during July meet. The US and China are moving closer towards a trade deal with China’s SCMP saying that the US diplomats are to visit Beijing for further trade talks during next week. Risk tone remains little affected due to the absence of major catalysts. The 10-year treasury yields from the US remains around 2.05% by the press time. Investors will now seek monetary policy clues from the Reserve Bank of Australia’s (RBA) Assistant Governor (Financial Markets) Christopher Kent who is scheduled to deliver a speech at the Bloomberg address in Sydney. Even if the RBA recently struck less dovish statements, the overall bearish bias remains largely unaffected. As a result, comments favoring further easy monetary policy from the policymaker could offer additional weakness to the Australian Dollar (AUD). After Kent’s speech, investors may shift their attention back to the US economic calendar as no major data/event is up for publishing at the Asian line of statistics. Technical Analysis 100-day exponential moving average (EMA) level around 0.7020, 0.7000 round-figure and the current month bottom surrounding 0.6910 are on sellers’ radar unless witnessing a sustained break of 200-day EMA level surrounding 0.7100.

The US President Donald Trump again took his twitter handle to convey the Republicans’ victory in managing the world’s largest economy .

The US President Donald Trump again took his twitter handle to convey the Republicans’ victory in managing the world’s largest economy while conveying the news that the policymakers at the Congress have agreed over a two-year suspension to the debt limit. Key quotes: I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy - on a two-year Budget and Debt Ceiling, with no poison pills. This was a real compromise in order to give another big victory to our Great Military and Vets! FX implications Given the mostly expected turnout, Forex market showed almost no reaction to the news that should have helped the US Dollar (USD) to gain if the consensus would have been otherwise.

Iran’s Foreign Minister Mohammad Javad Zarif is on wires, via CNA, while speaking in Nicaragua.

Iran’s Foreign Minister Mohammad Javad Zarif is on wires, via CNA, while speaking in Nicaragua. Contrast to his general threat tone, Mr. Zarif spread the conciliatory marks during his latest appearance while saying that it's important for everybody to realize, it's important for Boris Johnson to understand, that Iran does not seek confrontation.  The news report further quotes the Iranian Foreign Minister stating that Iran acted when it observed that the UK ship did not follow regulations. FX implications While immediate reaction to the news was nil, the shift in the tone of Iran’s diplomat increases the hope for receding geopolitical tension and a likely pullback in Crude prices.

With the greenback extending the previous recovery amid no major fresh catalyst to watch, the NZD/USD pair begins Tuesday’s Asian trading session around 0.6760.

The pullback in expectations of the Fed’s excessive rate cuts keeps pleasing the USD buyers.NZD/USD remains on the mercy of greenback moves due to no major news/data at home.With the greenback extending the previous recovery amid no major fresh catalyst to watch, the NZD/USD pair begins Tuesday’s Asian trading session around 0.6760. The kiwi pair remains on a back foot amid a pullback in expectations of much excessive rate cuts from the US Federal Reserve. Lack of data/event and no major headlines from the US-China trade front offered additional ease to traders while carrying earlier moves forward. Investors showed little reaction to the US President Donald Trump’s tweets criticizing the Fed’s monetary policy and also remained less interested in the statements from his Fed nominee Judy Shelton. China’s SCMP reported that the US trade negotiators will visit Beijing next week to have face-to-face talks with their Chinese counterparts. As per the latest news, the US is stuck around Huawei while China offered readiness to import more of the Agricultural products from the other side. Moving on, economic calendar remains silent with the absence of major directives continue pushing markets to the Fed rate cut consensus amid blackout period for the US monetary policymakers. On the other hand, the US Housing Price Index, Existing Home Sales and Richmond Fed Manufacturing Index could entertain short-term traders. Technical Analysis Buyers seem exhausted around 15-week high with overbought conditions of 14-day relative strength index (RSI) flashing signs of a pullback towards 0.6750 and then to 50% Fibonacci retracement of December 2018 to May 2019 downpour at 0.6725. On the contrary, 61.8% Fibonacci retracement level of 0.6780 caps immediate upside of the quote, a break of which can trigger fresh buying interest targeting 0.6800 round-figure and then the April month high around 0.6840.

It was a relatively subdued day in global markets on Monday, with scarce data flow and as the market awaits the outcome of next week's Federal Open Ma

The DJIA, rose 17.7 points, or 0.1%, at 27,171.9.The S&P 500 index advanced 8.42 points, or 0.3%, to 2,985.03.The Nasdaq gained 57.65 points, or 0.7%, to close at 8,204.14.It was a relatively subdued day in global markets on Monday, with scarce data flow and as the market awaits the outcome of next week's Federal Open Market Committee's meting while the Fed enters its communications blackout. On a week where a third of the Dow Jones Industrial Average components are set to report earnings, the DJIA, rose 17.7 points, or 0.1%, at 27,171.9 while U.S. stock-market indexes closed higher on Monday. The S&P 500 index advanced 8.42 points, or 0.3%, to 2,985.03, supported largely by gains in the information-technology sector (up 1.2%) while the Nasdaq Composite Index COMP, +0.71%  gained 57.65 points, or 0.7%, to close at 8,204.14. The recover follows a set back on Friday following Bullard's less dovish comments who advocated for only a 25 basis cut from the Federal Reserve this month.  US data The June Chicago National Activity index fell short of expectations at -0.02. This was the seventh consecutive month that the index has suggested the economy has been operating below potential. Forty out of 85 indicators made positive contributions. All eyes will now be on US Gross Domestic Produce this week.  We expect GDP to advance a near-trend 2.0% q/q saar in Q2, down from a strong 3.1% print in Q1. Unlike the prior quarter, we expect consumer spending to be a key engine of growth, rebounding to about 4% after a wobbly start to the year. Business investment, however, continued to slow due to heightened uncertainty while inventories and net exports were likely a drag on growth," analysts at TD Securities explained.  DJA levels The DJIA  index stays consolidated, printing a doji on the daily chart, albeit marking a higher low as it bases in the 27000s. On a break to the downside, below the 20-Day moving average at 26924, the 23.6% retracement of the 3rd June low to 12th July recently printed high falls in at 26706 which meets April 23rd and 1st May double-top highs. Then, the 23.6% retracement of the Dec 2018 to recent highs at 26056 come into play. The 38.2% Fibo at 25226, below the 200-day moving average, is a key target should the Fed be a let down. 
 

EUR/USD is trading in a bear trend below the main daily simple moving averages (DSMAs). The market is about to enter the Asian session while trading

EUR/USD is starting the week confined in a 20-pip range.The level to beat for sellers are seen at 1.1200 followed by 1.1160.EUR/USD daily chart
 
EUR/USD is trading in a bear trend below the main daily simple moving averages (DSMAs). The market is about to enter the Asian session while trading near the monthly lows. 
EUR/USD 4-hour chart  
EUR/USD has been trading in a 20-pip range this Monday confinded between 1.1200 and 1.1220. Sellers want a breakout below the 1.1200 support to reach 1.1160 and 1.1120 to the downside, according to the Technical Confluences Indicator.  EUR/USD 30-minute chart
   
EUR/USD is ranging below its main SMAs suggesting bearish momentum in the near term. The market could find immediate resistance at 1.1220, 1.1255 and potentially 1.1290, according to the Technical Confluences Indicator.
Additional key levels  

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