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Forex News Timeline

Wednesday, July 15, 2020

The EUR/USD pair peaked after the beginning of the American session at 1.1451, the highest level since March 10. Then it corrected lower falling towar

US dollar recovers ground as Wall Street moved off highs.The dominant trend remains bullish in EUR/USD, current slide seen as corrective.The EUR/USD pair peaked after the beginning of the American session at 1.1451, the highest level since March 10. Then it corrected lower falling toward 1.1400. So far, it has been able to remain above, but the bearish pressure persists. The move lower was triggered by a recovery of the US dollar across the board. The DXY erased most of its losses and recovered from weekly lows, rising back above 96.00. Deterioration in risk sentiment boosted the US dollar. The Dow Jones is up by 0.80%, 150 points below the daily high, while Nasdaq gains 0.35%. Optimism about a vaccine for COVID-19 continues to support markets. Earlier on Wednesday, the US dollar failed to benefit from better-than-expected US economic data. In a few minutes, the Federal Reserve will release the Beige Book. In Europe, the key event ahead is the European Central Bank meeting on Thursday. “The ECB made its big decisions in June, leaving no real probability of a change in stance now. Focus is on the press conference, where we look for Lagarde to be a bit more upbeat on the macro outlook, but firmly committed to delivering the full €1.35tn PEPP”, explained analysts at TD Securities. Technical levels    

The S&P 500 is at a critical level on Thursday and could break to a level not seen since 25th February. The price printed above the key resistance but

The S&P 500 is trading 1.58% higher on Wednesday.The key resistance level is at 3,233.25.S&P 500 4-hour chart The S&P 500 is at a critical level on Thursday and could break to a level not seen since 25th February. The price printed above the key resistance but did not manage to sustain the bullish momentum. This could take the index back to a level when it really started falling due to the COVID-19 pandemic. Looking closer at the chart, there are some support levels on the downside at the purple trendlines and the black horizontal line near 3,167.50. The indicators are understandably bullish at the moment the Relative Strength Index is above 50 but has just moved away from the overbought area. This means there is still some more space for an upside move. The MACD signal lines are above the zero level and the histogram is also green.  Looking at the higher timeframe there is a gap that could be a resistance zone at 3,328.45. This was a gap from one of the weekends where the coronavirus news really took its toll around 21st February. Beyond that, we could be back at the all-time highs of 3,353.92. In terms of outperformers, the travel companies are at the top of the leaderboard. Royal Caribean Cruises (NYSE:RCL) and Norwegian Cruise Lines (NYSE:NCLH) are both above 15%.  Additional levels  

At the July meeting, the Bank of Canada held monetary policy unchanged as expected. Josh Nye, Senior Economist at RBC point out the forward guidance p

At the July meeting, the Bank of Canada held monetary policy unchanged as expected. Josh Nye, Senior Economist at RBC point out the forward guidance presented by the central bank suggests no interest rate hike before 2023.  Key Quotes:  “The bank did deploy an additional policy tool: forward guidance. Governing Council is pledging to keep the overnight rate at its current level until the economy is back at full capacity and inflation is sustainably at the bank’s 2% target.” “Based on economic projections in the MPR, that won’t be until 2023 or later. By reducing expectations of future short-term interest rates, this forward guidance is intended to keep longer-term borrowing costs low—a goal that is supported by ongoing asset purchases. As Governor Macklem clearly stated the bank wants Canadians to know that borrowing costs will remain low for a long time.” “We continue to think asset purchases will continue at least through the first quarter of 2021, and likely well into next year.” “The bank thinks permanent scarring from the COVID-19 pandemic (less investment, less immigration, permanent business closures) will reduce the economy’s long-term productive capacity by 4%. So even when the economy has recovered to “full capacity”—which, again, the BoC doesn’t see until at least 2023—GDP will be notably smaller than the previous trajectory we were on.”
 
 
 

AUD/USD was trading very well on Wednesday hitting a high of 0.7037 but now the pair has pushed under the psychological 0.70 area once again. The mark

AUD/USD trades 0.29% higher on Wednesday but the bulls have been foiled.It looked like the pair was set to attack the high of 0.7064.AUD/USD 4-hour chart AUD/USD was trading very well on Wednesday hitting a high of 0.7037 but now the pair has pushed under the psychological 0.70 area once again. The market is trying to push the pair below the intraday support level at the purple line but there is currently some hesitation.  Looking at the 4-hour chart below, the pair is still in an uptrend. The price has been making higher highs and higher lows after breaking out of the consolidation area. If the market is to break lower there are some key support zones the bears will need to break. 0.6919 could be a ticky point if there is to be more USD strength and below that the red support line could also be tested. There is also the 200 Simple Moving Average in the way too.  The indicators are still bullish as the Relative Strength Index trades above the 50 area. The MACD histogram is green and the signal lines are still above zero which indicates the market is still in an uptrend. Additional levels  

The USD/CAD pair broke under 1.3560 and accelerated the decline. It printed a fresh six-day low at 1.3517. It is holding near the lows, under pressure

Loonie gains ground during BoC press conference and as Wall Street trims gains.USD/CAD extends slide, eyes 1.3500 and last week lows.The USD/CAD pair broke under 1.3560 and accelerated the decline. It printed a fresh six-day low at 1.3517. It is holding near the lows, under pressure on the back of a stronger loonie across the board. The Canadian dollar gained momentum following the Bank of Canada meeting and Macklem’s press conference. The central bank kept the monetary policy stance unchanged as expected. BoC governor mentioned the Governing Council discussed yield curve control. Before the meeting, USD/CAD was already lower on the back of weaker greenback amid risk appetite. The loonie was falling versus other commodity currencies. After the BoC press conference, the loonie turned positive across the board, becoming one of the top performers. “Perky risk sentiment and a soggy USD has benefited the loonie. While we anticipate a near-term USDCAD retest of the 1.35 level, it's likely to offer a floor rather than an extension lower. We expect the 1.35 floor to give way later this year, paving the way for a shift back to the low-1.30s”, mentioned analysts at TD Securities. Technical levels  

Looking at the chart below it is clear to see that cable was on a good run till the US came to market. The risk sentiment started well but at about 3.

GBP/USD trades 0.22% higher despite selling off in the US session.The price was heading higher but hit a brick wall at 1.2649.GBP/USD 4-hour chart Looking at the chart below it is clear to see that cable was on a good run till the US came to market. The risk sentiment started well but at about 3.30 pm London time the S&P started to sell-off. This then took GBP/USD lower too as the USD strengthened. On the 4-hour chart below the last candle is a bearish engulfing candle which could indicate lower prices ahead. Below the current price levels, there are a few key support zones to keep an eye on. The first is the red line at 1.2527, the level has been used in the past on a few occasions and it could be important in the future. The 200 Simple Moving Average could also be a support zone and if you look left on the chart it has been used as both a support and resistance zone. Lastly, the blue trendline might also help stem the losses.  On the topside, if the bulls do regain control again the first hurdle will be the wave high at 1.2666. If the bulls do manage to break the zone then the high on the chart could be tested.  Looking at the technical indicator, the Relative Strength Index is still just above the 50 area. Any move below could indicate some bearishness is on the horizon. The MACD has just turned positive as the histogram is now green and the signal lines are about to cross the mid-point.  Additional levels  

The Federal Reserve should not even consider a rate hike until inflation overshoots 2% target, Philadelphia Fed President Patrick Harker said on Wedne

The Federal Reserve should not even consider a rate hike until inflation overshoots 2% target, Philadelphia Fed President Patrick Harker said on Wednesday. Harker further noted that he expects the path of economic recovery to be slow and uneven and added that he expects the unemployment rate to be over 10% by the end of 2020. "There is a good chance job market won't see more significant gains in 2020." Market reaction The US Dollar Index largely ignored these remarks and was last seen losing 0.13% on the day at 96.07.

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "If schools were not to reopen, that would probably put us on a track somewhat below the central scenario." "Bank's target is for total CPI inflation, looking at adjusted CPI to guide on future of total CPI." "Border closures are having a very severe impact on hospitality industry." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

"We cannot be sure interest rates will always be low," British Finance Minister Rishi Sunak said on Wednesday. Sunak further reiterated that it was to

"We cannot be sure interest rates will always be low," British Finance Minister Rishi Sunak said on Wednesday.  Sunak further reiterated that it was too early to tell how strong the recovery from the coronavirus would be. "We seem to be having a once-in-a-generation economic shock," Sunak added. "We need to rebuild people's confidence in going out." Market reaction The GBP/USD pair largely ignored these comments and was last seen trading at 1.2595, gaining 0.37% on a daily basis. Meanwhile, the UK's FTSE rose 1.83% on Wednesday to close at 6,292.65.

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "The virus is going to be with us for some time, through this period we are going to have to continue to physically distance." "Families are being squeezed, hopefully as this virus progresses we get better at managing it, I hope we can find a way to reopen schools and get daycares back to work." "In order for inflation to be sustainably at the 2% target, output needs to be very close to potential, we need to have absorbed excess capacity." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

Data released on Wednesday showed industrial production rose 5.4% in June, above the 4.3% of market consensus. Analysts at Wells Fargo point out autos

Data released on Wednesday showed industrial production rose 5.4% in June, above the 4.3% of market consensus. Analysts at Wells Fargo point out autos led a broadening increase in manufacturing production, while the drag from mining eased as oil demand has firmed a bit.  Key Quotes:  “As more of the nation’s factories re-opened in June, manufacturing production grew 7.2%. Auto & parts production posted another significant bounce (up 105%), as consumers began to return to dealer lots.” “The rebound extended more broadly beyond the auto sector compared to May, with production in every major manufacturing industry up in June.” “Manufacturing output is down 11% since January.” “Total industrial production (IP) rose a more modest 5.4%, as low oil prices continue to weigh on energy extraction.” “Capacity utilization improved, but underscores the depressed levels of activity relative to the start of the year.”
 

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "Governing Council did discuss how much monetary policy stimulus is in place as part of its deliberations, also discussed yield curve control." "Rate increases and the end of quantitative easing are both a long way off." "We have the tools we need to exit when the time comes but that is some ways off." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "Bank's message is that it's going to be a long climb back and interest rates are going to be low for an extended period." "Our outlook is highly conditional on the evolution of the virus itself." "We anticipate there will be localized flare-ups of the virus, we must be prepared for localized flare-ups." "There could be a second wave that requires a broad-based lockdown and that would knock us off our centralized scenario, we would need more monetary policy stimulus." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "Many people may find it hard to return to work particularly if schools and child-care facilities cannot fully reopen." "Burden of this challenge falls disproportionately on women." "With the rapid rise of COVID-19 cases in the US, we did take down our US projections in the last couple of weeks." "We have seen a historic drop in economic activity in the first half of this year, it's going to be a long climb out." "We are being unusually clear that interest rates are going to be low for a long time." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

The USD/CHF rose from the lowest level in six days at 0.9370 to the strongest since July 7, around 0.9440 in a few hours. The move took place despite

Swiss franc among worst performers on Wednesday amid risk appetite.USD/CHF remains in the recent range, now testing the upper limit.The USD/CHF rose from the lowest level in six days at 0.9370 to the strongest since July 7, around 0.9440 in a few hours. The move took place despite a decline of the US dollar across the board and amid higher equity prices. The Swiss franc is among the worst performers on Wednesday. EUR/CHF is trading at the lowest in a month ahead of the meeting between European Union leaders to talk about the EU budget and the recovery fund. Hopes that a COVID-19 vaccine would be available soon continue to boost the demand for riskier assets. The Dow Jones is up 0.95% and the Nasdaq 0.30%. Despite optimist, US yields remain near monthly lows. The greenback gains versus the CHF but is it falling against most of its rivals. The DXY fell under 96.00 for the first time in a month. US economic data released on Wednesday came in better-than-expected (industrial production and Empire manufacturing) but it failed to offer support to the greenback. Technical outlook Since last week USD/CHF is trading in a range between 0.9370 and 0.9440. At the moment, it is testing the upper limit, very close to the 20-day moving average at 0.9450. A consolidation above 0.9450 would likely clear the way to more gains. Another failure at 0.9440, would point to a continuation of the range, with a bearish bias. The critical support is seen around the 0.9370 area, and below at 0.9320.  

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governo

Following the Bank of Canada's (BoC) decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins are delivering their remarks on the monetary policy outlook. Key quotes "Bank will be there to provide monetary stimulus for an extended period to support the recovery and return inflation to its 2% target." "As we are seeing in the United States, flare-ups of the virus can mean the reimposition of containment measures, impeding the recovery." "It was clear to everyone on the bank's governing council that this is not a normal recession." "It will take a long time for economic activity to get back even to the level where it was at the end of 2019 before the pandemic struck." About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

Florida's Department of Health announced on Wednesday that the number of confirmed coronavirus cases in the state increased by 10,181 to a total of 30

Florida's Department of Health announced on Wednesday that the number of confirmed coronavirus cases in the state increased by 10,181 to a total of 301,810.  Further details of the report revealed that the total COVID-19-related fatalities rose by 112 to 4,626. Additionally, hospitalizations surged by 453 in the past 24 hours to 19,334. Market reaction The market mood remains upbeat despite these figures. As of writing, the S&P 500 Index (SPX) was at its highest level since late February at 3,235, gaining 1.2% on a daily basis.

Economists' forecasts range from an annual contraction of around 3% to an expansion of around 4%. The consensus of 2.1% is, therefore, based on a wide

Economists' forecasts range from an annual contraction of around 3% to an expansion of around 4%. The consensus of 2.1% is, therefore, based on a wide array of opinions. A beat will be cheered while mediocre figures may weigh on the sentiment. In the unlikely case of horrible statistics, expectations for stimulus could turn positive for markets, FXStreet’s analyst Yohay Elam briefs.  Key quotes “After collapsing by 9.8% QoQ, the world's second-largest economy has probably grown by 9.6% in the second quarter, according to a Reuters poll. Is this quarterly comeback enough to put the country back to annual growth? After diving 6.8% yearly in the first quarter, the economic calendar is showing YoY of 2.1% in the second quarter.”  “Stocks will likely cheer a robust GDP figure, despite suspicions about the veracity of the data. Slow growth would be disappointing, potentially sending shares in Shanghai and S&P 500 futures lower.” “If Beijing shocks by reporting another quarter of annual contraction, markets may expect more stimulus and react in a counter-intuitive manner – rising on such stimulus hopes rather than falling.”  “Industrial output figures will likely be the second thing to watch, with a more pronounced impact on the Australian dollar. While job figures from the land down under are published around the same time, Australia's No. 1 trading partner has an impact on the Aussie.”  

Australia is scheduled to release its June employment data this Thursday at 01:30 GMT. The country is expected to recover over 110K job positions in J

Australia is scheduled to release its June employment data this Thursday at 01:30 GMT. The country is expected to recover over 110K job positions in June and better figures could send AUD/USD, which is currently at the upper end of its latest range above 0.7000, towards 0.71, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “Australia is expected to recover 112.5K jobs in the month, after losing 227.7K positions in May and roughly 600K in April. The unemployment rate, however, is seen rising to 7.4% after jumping to 7.1% in the previous month and almost two-decade high.” “An upbeat outcome will likely fuel the ongoing rally in AUD/USD. The immediate resistance and critical level to surpass is 0.7063, the high set last June. Beyond it, the advance could continue towards the 0.7100 figure. Further gains will depend on the market’s sentiment.” “An immediate short-term support level comes at 0.6990, with a break below it on a dismal employment report exposing the 0.6940/50 price zone. Seems unlikely that the pair could lose the 0.6900 level in the current risk-on scenario, no matter how terrible employment data could be.”  

Crude Oil Stocks Change in the US was -7.5 million barrels in the week ending July 10th, the weekly report published by the US Energy Information Admi

EIA reported a larger-than-expected draw in US' crude oil stocks.WTI climbs above $40.50 on following the EIA report.Crude Oil Stocks Change in the US was -7.5 million barrels in the week ending July 10th, the weekly report published by the US Energy Information Administration (EIA) revealed on Wednesday. This reading came in higher than the market expectation for a decline of 2.1 million barrels. Market reaction Crude oil prices edged slightly higher on this data and the barrel of West Texas Intermediate (WTI) was last seen gaining 0.53% on the day at $40.65. Additional takeaways "US crude oil imports averaged 5.6 million barrels per day last week, decreased by 1.8 million barrels per day from the previous week." "Total products supplied over the last four-week period averaged 18.1 million barrels a day, down by 13.1% from the same period last year." "Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, down by 8.8% from the same period last year." "Distillate fuel product supplied averaged 3.5 million barrels a day more than the past four weeks, down by 6.4% from the same period last year."

Daniel Ghali, a commodity strategist at TD Securities, advises how to trade gold in the current risk-on regime. He notes that a positioning squeeze is

Daniel Ghali, a commodity strategist at TD Securities, advises how to trade gold in the current risk-on regime. He notes that a positioning squeeze is on the cards as the yellow metal becomes a crowded trade. Key quotes “We have argued that gold is in the midst of a regime change, shifting from a safe-haven into an inflation-hedge asset. As a result, gold prices have increasingly been correlated to risk assets. This is driven by common drivers impacting both risk assets and gold – namely, the surge in liquidity that has driven both risk assets and gold higher, as capital shelters itself from negative real yields in risk and real assets.”  “A decomposition of the themes driving trading decisions reveals that macro themes, such as inflation expectations, have driven an increase in length, particularly as prices broke through resistance levels. Importantly, risk-on has had a limited impact on positioning, and has been positively correlated with length on average over the last month. Waning momentum has been the largest hurdle for an increase in length.” “Insofar as this regime is driven by real-rate suppression, money managers need not be concerned about trading gold in a risk-on environment. However, while we see no extremes in positioning, gold is becoming a crowded trade, raising the risk of a positioning squeeze should these themes be adversely affected.”  

United States EIA Crude Oil Stocks Change below expectations (-2.098M) in July 10: Actual (-7.493M)

Following the Bank of Canada's decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Caro

Following the Bank of Canada's decision to leave its policy rate unchanged at 0.25% as expected, Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins will be delivering their remarks on the policy outlook in a press conference at 1500 GMT. Related articlesBank of Canada leaves policy rate unchanged at 0.25% as expected.In a widely expected decision, the Bank of Canada (BoC) on Wednesday announced that it left its key rate unchanged at 0.25% at its June policy meeting. In its rate statement, the BoC noted that its central scenario doesn't expect the Canadian economy to return to pre-COVID-19 levels until 2022. About Tiff Macklem via bankofcanada.ca "Tiff Macklem was appointed Governor of the Bank of Canada, effective June 3, 2020, for a term of seven years. During the Global Financial Crisis, Mr. Macklem was Associate Deputy Minister at the Department of Finance, and served as Canada's representative at the G7, G20 and Financial Stability Board. In July 2010, Mr. Macklem returned to the Bank and was appointed Senior Deputy Governor."

In a widely expected decision, the Bank of Canada (BoC) on Wednesday announced that it left its key rate unchanged at 0.25% at its June policy meeting

In a widely expected decision, the Bank of Canada (BoC) on Wednesday announced that it left its key rate unchanged at 0.25% at its June policy meeting. In its rate statement, the BoC noted that its central scenario doesn't expect the Canadian economy to return to pre-COVID-19 levels until 2022. Market reaction The USD/CAD pair showed little to no reaction and was last seen losing 0.28% on the day at 1.3575. Additional takeaways "Central scenario assumes most large-scale containment measures will be gradually lifted and that the coronavirus pandemic will have largely run its course by mid-2022." "BoC scenario sees Canada 2020 Q4 real GDP falling by 6.8%; projects 2020 real GDP down 7.8%, up 5.1% in 2021 and up 3.7% in 2022."
"Canadian economic activity in Q2 2020 is estimated to have fallen about 15% below its level at the end of 2019; economy appears to have hit bottom in April."

Canada BoC Interest Rate Decision meets expectations (0.25%) in July 15

The greenback, when measured by the US Dollar Index (DXY), remains under heavy pressure and navigates at shouting distance from June’s lows near 95.70

DXY accelerates the downside to the 95.80 region.US Industrial Production rebounded more than estimated in June.The Fed’s Beige Book will close the daily US docket later in the session.The greenback, when measured by the US Dollar Index (DXY), remains under heavy pressure and navigates at shouting distance from June’s lows near 95.70. US Dollar Index hurt by risk-on sentiment The index is down for the fourth session in a row on Wednesday, breaking below the support at the 96.00 neighbourhood – where coincide a Fibo level (of the 2017-2018 drop) and therefore opening the door to a probable move to June’s low at 95.71 (June 10). The greenback, as well as its safe haven peers, remains well on the defensive in a context totally dominated by the risk appetite mood, in turn bolstered by rising optimism on a coronavirus vaccine and a strong (‘V’-shaped?) rebound in the economic activity. In the docket, positive results only added to the upbeat sentiment after the NY Empire State Index reclaimed the positive territory in July and Industrial Production expanded 5.4% inter-month in June. In addition, Manufacturing Production expanded 7.2% MoM and the Capacity Utilization Rate ticked higher to 68.6%. Later in the session, the Fed will publish the Beige Book. What to look for around USD The relentless advance of the COVID-19 pandemic in the US and across the world vs. news of a potential vaccine that could be developed before markets’ expectations plus the ongoing reopening of global economies are all driving the sentiment in the global markets and keep the dollar under pressure. On the constructive view of the dollar, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value. US Dollar Index relevant levels At the moment, the index is losing 0.28% at 95.92 and faces the next support at 95.72 (monthly low Jun.10) followed by 94.65 (2020 low Mar.9) and then 93.81 (monthly low Sep.21 2018). On the other hand, a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.22 (200-day SMA).

Major equity indexes in the US started the day sharply higher on Wednesday as investors cheer reports ramping up coronavirus vaccine optimism. Reflect

Wall Street's main indexes open sharply higher on Tuesday.Moderna and Oxford are reportedly producing positive results in vaccine trials.All major sectors of S&P 500 trade in positive territory.Major equity indexes in the US started the day sharply higher on Wednesday as investors cheer reports ramping up coronavirus vaccine optimism. Reflecting the risk-on mood, the CBOE Volatility Index, Wall Street's fear gauge, is down nearly 5% on the day. Vaccine hopes lift market mood As of writing, the S&P 500 was rising nearly 1% on the day at 3,226, the Dow Jones Industrial Average was gaining 1.1% and the Nasdaq Composite was up 0.65%. Moderna said that it received 'robust' immune response in its coronavirus vaccine trial and announced that it will kick off its late-stage trial with 30,000 participants on July 27th. Moreover, Robert Peston, ITV News’ political editor, said that Oxford's COVID-19 vaccine was generating "the kind of antibody and T-cell (killer cell) response that the researchers would hope to see." Earlier in the day, the report published by the US Federal Reserve revealed that Industrial Production in June increased by 5.4%. Boosted by this data, the Industrial Index is up 1.6% as the best-performing major S&P 500 sector. The Energy Index, the Materials Index, the Financials Index and the Technology Index all gain more than 1% in the early trade.  

EUR/USD is trading above the 1.1440 zone, its highest since last March when the pair reached a yearly high of 1.1496, and has room to extend the advan

EUR/USD is trading above the 1.1440 zone, its highest since last March when the pair reached a yearly high of 1.1496, and has room to extend the advance on a break above 1.1460, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “The EU didn’t release macroeconomic data this Wednesday, while the US has published the NY Empire State Manufacturing Index for July, which improved from -0.2 to 17.2. The country also released the June import Price Index and the Export Price Index for the same month, both better than anticipated. Ahead of Wall Street’s opening, the country will publish June Industrial Production, foreseen at 4.3% from 1.4% previously, and Capacity Utilization, seen improving to 67.7%.” “In the 4-hour chart, the EUR/USD pair is above all of its moving averages, with the 20 SMA heading firmly north above the larger ones. Technical indicators, in the meantime, remain near their daily highs near overbought levels, supporting an extension towards the mentioned yearly high on a break above 1.1460, a strong static resistance level.”  

All ministers of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) are all aligned to ease oil production cuts, Reuters reported on Wednesday, c

All ministers of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) are all aligned to ease oil production cuts, Reuters reported on Wednesday, citing an OPEC+ source. OPEC+ is expected to hold a news conference later on Wednesday after the JMMC meeting is concluded. Market reaction Crude oil prices came under strong bearish pressure in the last hour and the barrel of West Texas Intermediate (WTI) slumped to a daily low of $40.06. As of writing, WTI was down 0.23% on the day at $40.35.

Industrial Production in the US increased by 5.4% in June following May's expansion of 1.4%, the data published by the Federal Reserve showed on Wedne

Industrial Production in US rose more than expected in June.US Dollar Index stays deep in red near 96.80.Industrial Production in the US increased by 5.4% in June following May's expansion of 1.4%, the data published by the Federal Reserve showed on Wednesday. This reading came in better than the market expectation of 4.3%. Further details of the report revealed that Manufacturing Output rose by 7.2% in June and Capacity Utilization improved to 68.6% from 65.1%. Market reaction The US Dollar Index, which tracks the USD's performance against a basket of six major currencies, ignored these figures and was last seen losing 0.35% on the day t 95.84.  

United States Industrial Production (MoM) came in at 5.4%, above expectations (4.3%) in June

United States Capacity Utilization came in at 68.6%, above expectations (67.7%) in June

The bid bias around the shared currency remains well and sound on Wednesday and is now lifting EUR/USD to fresh monthly peaks around 1.1450. EUR/USD n

EUR/USD keeps pushing higher and trades close to 1.1450.Next on the upside emerges the YTD peak near 1.1500.The US Empire State Index surpassed expectations in July.The bid bias around the shared currency remains well and sound on Wednesday and is now lifting EUR/USD to fresh monthly peaks around 1.1450. EUR/USD now focused on 1.1500EUR/USD is extending the upside momentum and is currently flirting with a Fibo level (of the 2017-2018 rally) in the mid-1.1400s, considered the last defense for a move to 2020 highs just below 1.15 the figure (March 9). In the meantime, and as usual in past weeks, the improved sentiment in the risk complex continues to hurt the buck and provides extra legs to the pair and its risk peers. Indeed, optimism over a strong economic recovery has been boosted by rising hopes of a coronavirus vaccine, all morphing into a stronger uptrend in the risk universe. The rally in EUR/USD is also sustained by rising open interest and volume in the futures markets, hinting at the idea that a move to yearly peaks remains well on the table in the short-term horizon. In the US calendar, the NY Empire State index is back to the positive territory in July after printing 17,20, surpassing previous estimates at the same time. Additional data saw Export and Import Prices both rising at a monthly 1.4% in June. Later in the NA session, Industrial/Manufacturing Production will take centre stage seconded by Capacity Utilizaztion and the publication of the Fed’s Beige Book. In addition, FOMC’s T.Harker will speak and the EIA will release its weekly report on crude inventories. What to look for around EUR EUR/USD is challenging multi-month peaks beyond 1.1400 the figure, always on the back of the upbeat risk appetite trends and helped at the same time by better-than-forecasted results in some key fundamentals in the region. Also supportive of a strong euro appears the solid stance of the current account in the euro area. EUR/USD levels to watch At the moment, the pair is gaining 0.35% at 1.1439 and a breakout of 1.1448 (50% Fibo of the 2017-2018 rally) would target 1.1495 (2020 high Mar.9) en route to 1.1514 (high Jan.31 2019). On the other hand, immediate contention is located at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1168 (monthly low Jun.19) and finally 1.1147 (high Mar.27).

The headline General Business Conditions Index of the NY Fed's Empire State Manufacturing Survey surged from -0.2 in June to 17.2 in July. This readin

The headline General Business Conditions Index of the NY Fed's Empire State Manufacturing Survey surged from -0.2 in June to 17.2 in July. This reading beat the market expectation of 10 by a wide margin. Key takeaways "The new orders index rose fifteen points to 13.9, indicating that orders increased, and the shipments index climbed fifteen points to 18.5, pointing to a solid increase in shipments." "The index for number of employees edged up to 0.4, signaling that employment levels were steady." "After rising sharply last month to a multi-year high, the index for future business conditions fell eighteen points to 38.4, suggesting that firms remained optimistic about future conditions, though less so than in June." Market reaction The US Dollar Index largely ignored this data and was last seen losing 0.33% on the day at 95.87.

After contracting by 27.9% in April, Manufacturing Sales in Canada recovered sharply in May and rose increased by 10.7% to $40.2 billion, the data pub

Manufacturing Sales in Canada rose more than expected in May.USD/CAD pair remains in the negative territory below 1.3600.After contracting by 27.9% in April, Manufacturing Sales in Canada recovered sharply in May and rose increased by 10.7% to $40.2 billion, the data published by Statistics Canada showed on Wednesday. This reading came in better than the market expectation of 9.5%.  "Many manufacturers resumed operations following full or partial shutdowns related to COVID-19 during the previous month," Statistics Canada noted in its press release. "Nevertheless, total manufacturing sales in May were 28.4% below their pre-pandemic level in February." Market reaction The USD/CAD pair edged slightly lower after this upbeat data and was last seen losing 0.35% on the day at 1.3565. 

United States Import Price Index (YoY) came in at -3.8%, above forecasts (-6.5%) in June

United States Export Price Index (YoY) came in at -4.4%, above forecasts (-5.4%) in June

"We are moving to the next phase of the oil output cut agreement," Saudi Arabia's energy minister Prince Abdulaziz bin Salman said on Tuesday. Additio

"We are moving to the next phase of the oil output cut agreement," Saudi Arabia's energy minister Prince Abdulaziz bin Salman said on Tuesday.  Additional takeaways "Easing of cuts will be consumed as demand will continue to recover." "Local Saudi August extra oil demand will be 0.5 million barrels per day (bpd) higher." "No increase in Saudi oil exports in August." "Effective cuts will be deeper than 7.7 million bpd." Market reaction Crude oil prices largely ignored these comments. As of writing, the barrel of West Texas Intermediate was gaining 1.1% on the day at $40.85.

United States NY Empire State Manufacturing Index above forecasts (10) in July: Actual (17.2)

United States Export Price Index (MoM) registered at 1.4% above expectations (0.8%) in June

Canada Manufacturing Sales (MoM) above expectations (9.5%) in May: Actual (10.7%)

United States Import Price Index (MoM) came in at 1.4%, above forecasts (1%) in June

The generalized improvement in the risk complex is putting the safe haven universe under extra downside pressure and pushes EUR/CHF to fresh multi-wee

EUR/CHF extends the weekly rebound to the 1.0780 area.Persistent risk-on sentiment weighs on the safe haven CHF.US Industrial/Manufacturing Production, Fed’s Beige Book next on tap.The generalized improvement in the risk complex is putting the safe haven universe under extra downside pressure and pushes EUR/CHF to fresh multi-week highs around 1.0780 on Wednesday. EUR/CHF prints monthly tops Following the drop to monthly lows in the 1.06 neighbourhood at the end of last week, EUR/CHF managed to regain composure and is now approaching the 1.0800 mark, up for the fourth session in a row so far. Increasing inflows into the risk-associated space have been sustaining the nearly 2-cent recovery in the cross. In fact, optimism over a potential vaccine to finally eradicate the coronavirus pandemic plus hopes of a ‘V’-shaped recovery in the global economy have lifted the morale among investors, morphing into extra legs to stocks and other riskier assets. In the docket, the US calendar deserves all the attention in light of releases of Industrial/Manufacturing Production figures, the NY Empire State index, Capacity Utilization and the Fed’s Beige Book. Further out around the Swiss franc noted speculators added gross shorts to their CHF positions, taking the net longs to 2-week lows during the week ended on July 7 according to the latest CFTC Positioning Report. EUR/CHF significant levels As of writing the cross is gaining 0.63% at 1.0782 and a surpass of 1.0818 (23.6% Fibo of the May-June rally) would expose 1.0915 (2020 high Jun.5) and then 1.1033 (monthly high Dec.13 2019). On the other hand, the immediate support is located at 1.0735 (200-day SMA) ahead of 1.0644 (55-day SMA) and finally 1.0601 (monthly low Jul.10).

The Bank of Canada (BoC) will have a monetary policy decision today at 14:00 GMT, the first lead by new Governor Tiff Macklem. BoC’s likely to maintai

The Bank of Canada (BoC) will have a monetary policy decision today at 14:00 GMT, the first lead by new Governor Tiff Macklem. BoC’s likely to maintain its current monetary policy unchanged in July. USD/CAD is unlikely to leave its monthly boundaries though an upbeat stance could send the loonie below 1.36, FXStreet's Chief Analyst Valeria Bednarik briefs. Don't miss – BoC Preview: Nine major banks expectations Key quotes “Policymakers are expected to maintain the main rate at 0.25%, the level set last March when the ongoing coronavirus pandemic forced them into three rate cuts within a month. Speculative interest will be looking for any change in the bond-buying program, although chances of that happening are quite a few. Meanwhile, negative rates in Canada are off the table for now, as well as a rate hike, given the high levels of uncertainty surrounding how the economic recovery will unfold.” “Back in April, the BoC launched the Government of Canada Bond Purchase Program (GBPP), a program to purchase Government of Canada securities in the secondary market, which targets a minimum of $5 billion per week across the yield curve. No changes are expected in the GBPP either this month, as long-term bond yields remain at historical lows, in line with the BOC’s target.”     “A horizontal 200-DMA around 1.3490 has provided support, while sellers have been strong around the current 1.3630 price zone. The top of the monthly range comes at 1.3715. It seems unlikely that the BoC can trigger a movement strong enough to push the pair outside the mentioned boundaries.” “An optimistic stance could see it pulling down to 1.3600, while below this last, an approach to the mentioned 1.3490 level seems likely, particularly considering the market is quick when it comes to selling the greenback. A test of the 1.37 area is possible only if risk aversion returns alongside dovish Canadian policymakers.”

Economists at Rabobank expect the EUR/USD pair to trade around the 1.13 level on a one to three-month view while see a dip below 1.10 on a six-month v

Economists at Rabobank expect the EUR/USD pair to trade around the 1.13 level on a one to three-month view while see a dip below 1.10 on a six-month view.  Key quotes “In response to the changes in EUR fundamentals we revised higher our forecasts for EUR/USD in the spring, expecting to see EUR/USD fluctuating around the 1.13 level on a one and three-month view. Beyond that we saw risk of another dip below 1.10. The rationale behind that view is the assumption that risk appetite will dip again on the back of another wave of covid-19 or on associated weak economic and corporate news. In view of the USD’s safe-haven characteristics, we continue to expect a pullback in risk appetite to support the USD.”  “While we leave our forecast of another dip below EUR/USD 1.10 on a six-month view unchanged, we acknowledge that the EUR could see some additional near-term support at the end of the week from the EU summit.”  “From a technical perspective EUR/USD would have to break above the long-term downside trendline at 1.1655 for a bullish scenario to materialise.”  

Negotiations with the UK on Brexit have failed to make enough progress, Germany's Europe Minister Michael Roth said on Wednesday, as reported by Reute

Negotiations with the UK on Brexit have failed to make enough progress, Germany's Europe Minister Michael Roth said on Wednesday, as reported by Reuters. "There has been a shortage of realism on the British side," Roth added. Market reaction These comments don't seem to be having a significant impact on market sentiment or the GBP's performance against its rivals. As of writing, the UK's FTSE 100 was up 2.02% on the day at 6,304 and the GBP/USD pair was gaining 0.75% at 1.2643.

The price of gold has been somewhat limited to a narrow range just above $1,800. There are several technical lines explaining why XAU/USD stuck, but a

The price of gold has been somewhat limited to a narrow range just above $1,800. There are several technical lines explaining why XAU/USD stuck, but also bullish targets for the precious metal, once it loses its chains.  The Technical Confluences Indicator is showing that gold is mired between $1,804 and $1,806, which is a dense cluster including the Simple Moving Average 200-15m, the SMA 50-1h, the Bollinger Band 1h-Lower, the Fibonacci 23.6% one-day, the BB 15min-Lower, the BB 4h-Middle, the Fibonacci 23.6% one-week, and more. Initial resistance awaits at $1,818, which is the meeting point of the Pivot Point one-day Resistance 1 and the previous weekly high.  The upside target is $1,821, which is the convergence of the PP one-month R1 and the PP one-week R1. Looking down, support is at $1,795, which is the confluence of the PP one-day Support 1, the SMA 200-1h, and the BB 4h-Lower.  The next cushion is at $1,786, the previous monthly high.  Here is how it looks on the tool:Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas. Learn more about Technical Confluence

The China-US conflict is heating and threatening to derail the rally on the global stock markets. The US President Donald Trump dashed hopes for “Phas

The sell-off on the stock market may put BTC under pressure.At the time of writing, BTC/USD is glued to $9,200.The China-US conflict is heating and threatening to derail the rally on the global stock markets. The US President Donald Trump dashed hopes for “Phase 2” trade negotiations with China by accusing Beijing of spreading coronavirus and causing a global pandemic. We made a great trade deal. But as soon as the deal was done, the ink wasn’t even dry, and they hit us with the plague, he said, as cited by Reuters.  While the stock market reaction has been muted so far, further signs of the conflict escalation might pull the rug from under the risk asset markets. Once this happens Bitcoin won't be left unaffected due to an increased correlation between the digital asset and the US stocks,  which is especially strong on the way down. Moreover, the prolonged period of range-bound trading increases the risks of exaggerated moves and spikes of volatility.   However, currently, the market is supported by the vaccine news that brought optimism to financial markets and diverts the attention of the China-US issues.   The vaccine news is clearly a positive development. But it’s still a long way off. The fear of the W-shaped recovery is probably very high at the moment. Good news is that markets still have a chance to ride it out because the Fed has bought time, so financial conditions can stay easy until growth kicks in, Mark Nash, head of global fixed income at Merian Global Investors commented as cited by Bloomberg.  BTC/USD: Technical picture Contradictory fundamental factors keep BTC/USD locked in a tight range. The coin has been moving around $9,200 since the start of the week with little progress so far. Low volatility and decreasing trading volumes leave no hope for the bulls and keep bears in check at the same time.   On the intraday charts, BTC/USD recovery is limited by a confluence of 1-hour SMA50, SMA100 and the middle line of the 1-hour Bollinger Band at $9,250. Once this barrier is cleared, the upside momentum may be extended towards $9,345 (July 12 high). The local support for BTC/USD is created by the lower line of the 1-hour Bollinger Band on approach to $9,200. If it is broken, the sell-off may be extended towards $9,104 (the lowest level of July 14) and psychological $9,000. BTC/USD 1-hour chart

The USD/JPY pair is down to the 106.90 region, not affected by the Bank of Japan monetary policy decision which left its monetary policy unchanged and

The USD/JPY pair is down to the 106.90 region, not affected by the Bank of Japan monetary policy decision which left its monetary policy unchanged and downgraded inflation and growth forecasts, FXStreet’s Chief Analyst Valeria Bednarik reports. Key quotes “As expected, the BoJ kept rates unchanged at -0.1%, and its 10-year JGB target around 0%. Also, policymakers downgraded growth forecast, now seeing the economy shrinking between 4.5% and 5.7% in the current fiscal year. Core inflation is expected to stay between -0.5% and -0.7% in the same period.” “To turn bearish, USD/JPY would need to break below the 106.60 level, as it met buyers in the area several times throughout June and July.”  “The 4-hour chart shows that the pair remains below all of its moving averages, which remain directionless, reflecting the lack of a clear trend. Technical indicators, in the meantime, have turned flat, although the RSI stands around 40, skewing the risk to the downside.”  

OPEC and its allies’ (OPEC+) will focus on easing output cuts to 7.7 million barrels per day (bpd) at Wednesday's Joint Ministerial Monitoring Committ

OPEC and its allies’ (OPEC+) will focus on easing output cuts to 7.7 million barrels per day (bpd) at Wednesday's Joint Ministerial Monitoring Committee (JMMC) meeting, Reuters reported, citing OPEC+ sources. Sources further told Reuters that there are no proposals so far to extend record cuts of 9.7 million bpd. "OPEC+ oil cuts in August-September is expected to 7.7 million bpd plus 0.842 million bpd of compensations by Iraq and others." Market reaction Crude oil prices largely ignored this headline. As of writing, the barrel of West Texas Intermediate was up 1.25% on the day at $40.90.

The AUD/USD pair finished the day modestly higher on Tuesday and preserved its bullish momentum on Wednesday. After rising above 0.7000, the pair exte

AUD/USD is rising for the second straight day on Wednesday.Upbeat market mood dampens demand for safe-haven greenback.Focus shift to mid-tier data releases from the US.The AUD/USD pair finished the day modestly higher on Tuesday and preserved its bullish momentum on Wednesday. After rising above 0.7000, the pair extended its climb and touched its highest level in nearly five weeks at 0.7024. As of writing, the pair was up 0.7% on the day at 0.7022. Risk rally picks up steam Earlier in the day, the data from Australia showed that the Westpac Consumer Confidence Index in July slumped to -6.1% from 6.3% in June. However, despite the disappointing data, coronavirus vaccine hopes provided a boost to market sentiment and helped the risk-sensitive AUD gather strength against its peers. Reports suggesting that vaccines developed by Moderna and Oxford showing positive results allowed risk flows to start dominating financial markets. Reflecting the positive market environment, major European equity indexes are up between 1.75% and 2% and S/P 500 futures are gaining 1.3%. On the other hand, the greenback is having a tough time attracting investors as a safe haven with the US Dollar Index dropping below 96 for the first time in more than a month. In the second half of the day, Industrial Production, Capacity Utilization and Federal Reserve Bank of New York's Empire State Manufacturing Survey will be looked upon for fresh catalysts. Meanwhile, market participants will keep a close eye on Wall Street and a decisive rally in US stocks could force the USD to continue to weaken. Technical levels to watch for  

S&P 500 has held key price and 13-day average support, starting at 3144 and stretching down to 3116 to keep the immediate risk higher. Only below 3116

S&P 500 has held key price and 13-day average support, starting at 3144 and stretching down to 3116 to keep the immediate risk higher. Only below 3116/13 would warn a further correction lower, according to analysts at Credit Suisse. Key quotes “The S&P 500 yesterday tested and is so far holding what we have flagged as key support, seen starting now at its 13-day exponential average at 3144 and stretching down to last week’s low at 3116 and the subsequent rebound has recovered much of the losses from Monday. With the market also back above its downtrend from February this sees a mild upside bias again in what remains seen as a broader sideways range.” “Resistance is seen next at 3214, above which can see a move back to 3224, then the 3233/35 highs, with fresh sellers expected here. Above can see a challenge on the bottom of the February ‘pandemic’ gap at 3260.”  “Support is seen at 3166, then the 13-day average and price support at 3154/44, which we look to try and hold. Only below 3116/13 would mark a top to warn of a more concerted correction lower within the broader range.”  

The NZD/USD pair dropped to 0.6500 on Tuesday but closed the day flat at 0.6540. With risk-on flows starting to dominate the financial markets on Wedn

NZD/USD pushes higher after testing 0.6500 on Tuesday.US Dollar Index drops below 96.00 amid positive market sentiment.Industrial Production data will be featured in the US economic docket.The NZD/USD pair dropped to 0.6500 on Tuesday but closed the day flat at 0.6540. With risk-on flows starting to dominate the financial markets on Wednesday, the pair gained traction and rose to a daily high of 0.6572. As of writing, NZD/USD was trading a couple of pips below that level, gaining 0.47% on a daily basis. Upbeat mood weighs on USD In the absence of significant macroeconomic data releases on Wednesday, risk perception remains as the primary driver of currencies' performance. Earlier in the day, reports showed that Moderna's coronavirus vaccine candidate showed promising results. Additionally, ITV's political editor Robert Peston said Oxford's COVID-19 vaccine was generating "the kind of antibody and T-cell (killer cell) response that the researchers would hope to see." Boosted by these developments, the risk-sensitive NZD is gathering strength against its rivals. On the other hand, the greenback continues to lose interest as a safe-haven with the US Dollar Index slumping to fresh five-week lows below 96.00. In the second half of the day, Industrial Production and NY Empire State Manufacturing data will be featured in the US economic docket. More importantly, investors will keep a close eye on Wall Street's performance. At the moment, the S&P 500 futures are up 1.1% on the day. Technical levels to watch for  

EUR/JPY has cleared key resistance at 122.13, as currently sits around 122.30, to confirm a base to see the core trend turn higher again for an eventu

EUR/JPY has cleared key resistance at 122.13, as currently sits around 122.30, to confirm a base to see the core trend turn higher again for an eventual move back to the 124.44 June high, the Credit Suisse analyst team reports. Key quotes “EUR/JPY strength has continued after holding key price support at 120.32/27 for the expected break above pivotal resistance from the top of the sideways range of the past month at 121.96/122.13. This sees the looked for base established to see the core trend turn higher again with resistance seen next at the 61.8% retracement of the June fall at 122.48/51. Whilst a pause here should be allowed for, a break in due course can see resistance next at 123.52/62 and eventually the 124.44 June high.” “Big picture, with our broader outlook for the EUR higher we look for a move above here in due course also, with resistance then seen next at 125.94 – the 50% retracement of the 2018/2020 downtrend.” “Near-term support moves to 121.97, then 121.78, with 121.48/46 now ideally holding to keep the immediate risk higher. A break can see a retreat back into the range with support then seen next at 121.22, then 120.75.”  

United States MBA Mortgage Applications climbed from previous 2.2% to 5.1% in July 10

Oxford's COVID-19 vaccine that is backed by AstraZeneca is reportedly generating "the kind of antibody and T-cell (killer cell) response that the rese

Oxford's COVID-19 vaccine that is backed by AstraZeneca is reportedly generating "the kind of antibody and T-cell (killer cell) response that the researchers would hope to see," Robert Peston, ITV News’ political editor, wrote on Wednesday. "As I understand, not all of the many vaccines under development across the world increase both antibodies and T-cells. But the Oxford vaccine looks as though it has this twin effect," Peston added. Market reaction Risk-on flows continue to dominate financial markets on Wednesday. As of writing, major equity indexes in Europe were up between 0.95% and 1.2% and the S&P 500 were gaining 0.8% on the day.

The buying pressure in the Japanese yen has forced EUR/JPY to abandon the area of new multi-week highs near 122.50 recorded earlier in the session. EU

EUR/JPY clinched new 5-week tops in the 122.50 region.The better tone in the Japanese safe haven caps the upside.The BoJ left its monetary policy stance unchanged earlier on Wednesday.The buying pressure in the Japanese yen has forced EUR/JPY to abandon the area of new multi-week highs near 122.50 recorded earlier in the session. EUR/JPY shifts its focus to YTD highs After climbing as high as the vicinity of 122.50 during early trade, EUR/JPY sparked a correction lower to the current 122.20 region amidst the persistent selling bias in the dollar (thus lending oxygen to the Japanese safe haven and dragging USD/JPY lower). In the meantime, the risk-on sentiment remains firm in the global markets, this time fuelled by news of a probable COVID-19 vaccine (this time under development by US biotech Moderna, Inc,) and usual optimism over the global economic recovery. Earlier on Wednesday, the Bank of Japan (BoJ) left its monetary conditions unchanged, with the key rate at -0.10% and the yield of the 10-year JGB at 0.00%, all matching consensus estimates. At his press conference following the bank’s decision, Governor H.Kuroda, reiterated the need to rump up stimulus if needed and the appropriateness of aggressive bond purchases. Later in the NA session, Industrial/Manufacturing Production figures are due followed by the NY Empire State index and the publication of the Fed’s Beige Book. EUR/JPY relevant levels At the moment the cross is advancing 0.01% at 122.25 and faces the next up barrier at 122.49 (monthly high Jul.15) followed by 122.87 (monthly high Jan.16) and finally 124.43 (2020 high Jun.5). On the other hand, a drop below 120.26 (monthly low Jul.1) would expose 119.77 (200-day SMA) and then 119.31 (monthly low Jun.22).

Euro Stoxx 50 is set to test key resistance from the 200-day average and June high at 3358/95 and a close above here would change the tactical view of

Euro Stoxx 50 is set to test key resistance from the 200-day average and June high at 3358/95 and a close above here would change the tactical view of the Credit Suisse analyst team to positive.  Key quotes “Euro Stoxx remains well supported and is now seeing a fresh challenge on its 200-day average, currently at 3358. A close above here would significantly increase the risk the range of the past month is in the process of being resolved higher, with a move above the 3395 high of June needed to confirm a conclusive break to change our tactical view to positive and neutralize our negative one month view, with resistance then seen next at the late February/early March price gap and price resistance at 3438/48.”  “Support is seen initially at 3277, then 3241/39, below which would ease the immediate upside bias to reinforce the sideways range with support then seen next at the potential uptrend from March, currently at 3223.”  

Today, the Bank of Canada (BoC) Interest Rate Decision scheduled at 14:00 GMT and as we get closer to the release time, here are the expectations as f

Today, the Bank of Canada (BoC) Interest Rate Decision scheduled at 14:00 GMT and as we get closer to the release time, here are the expectations as forecasted by the economists and researchers of nine major banks, regarding the upcoming announcement. The market consensus is for the Boc to leave the rates unchanged at 0.25%. What’s more, Governor Macklem’s first Monetary Policy Report will be released at 15:00 GMT.  TDS “We do not expect any change to BoC policy which should keep the focus centered around the Bank's messaging and updated forecasts in the July MPR. The latter will be key to the overall tone and we expect the Bank's central scenario to project a contraction of roughly 6.0% in 2020 with the economy returning to pre-COVID levels around the end of next year. The statement should continue to emphasize heightened uncertainty and a widening output gap that will weigh on inflation. While we expect the Bank to maintain its messaging that LSAP will continue until the recovery is well underway, there is some scope for the Bank to announce further scaling back of its smaller and less utilized liquidity programs.” ING “With negative interest rates not being seriously considered, this suggests the policy rate will remain at 0.25% for a prolonged period – perhaps two years in our view – with any additional support most likely to come through additional asset purchases. However, we don't think there is any urgency for a policy change via this tool. there is a risk of CAD having more sensitivity than the previous meetings even if no new policy measure is announced, as investors will be looking for any hint that Macklem’s policy stance is different from the previous governor. However, we do not expect CAD's reaction to be very pronounced or long-lived.” CIBC “Judging by the rough scenarios laid out in April and the data since then, the better end of BoC scenarios could imply a narrow enough output gap to be consistent with a first hike in the latter half of 2022. But expect the report to emphasize greater risks to downside. This MPR is unlikely to deliver a major rethinking of the BoC’s asset purchase program, under the grounds that if it ain’t broke, don’t fix it. But doing what it takes to keep yields in check could soon require greater weekly bond purchases, given the increases we’re seeing in the issuance calendar to meet rising government financing needs. The Bank has only set minimum purchase levels for Government of Canada bonds, so strictly speaking it doesn’t need to actually announce a higher floor to ramp up its purchases if need be. But we expect to see it use this opportunity to at least remind investors of its willingness to do so.” NBF “Taking rates into negative territory does not seem to be in the plans of the central bank, and we therefore believe rates will remain unchanged this week. We don’t expect any change to the asset purchase program either, with the Bank likely to reaffirm that large scale asset purchases will continue “until the economic recovery is well underway”. At some point in the future as the economic outlook become clearer, Macklem and the Bank will need to provide more guidance on the policy rate. We expect this to come in the form of explicit forward guidance, likely in the fall.” RBC Economics “Central Bank Governor Macklem’s first Monetary Policy Report is expected to provide a ‘central scenario’ outlook. This comes after policymakers opted to show just a range of (all-bad) future possibilities in the April report. The BoC’s Q2 Business Outlook Survey highlighted some of the challenges expected once the initial rebound dims. Businesses were clearly concerned that demand would be slow to recover, and cut investment and hiring plans in response. And some form of containment measures are likely to remain for the foreseeable future. Our own current projection has GDP still 5.2% below its year-ago level in Q4 2020, and not fully recovered to pre-shock levels until beyond 2021. That demand shortfall will keep monetary policymakers focused on downside more than upside risks to inflation, and should reinforce expectations the central bank will continue to provide as much liquidity as necessary to ensure interest rates remain low and financial markets continue to function well. On that front, continued narrowing in credit spreads from April highs should provide reassurance that exceptional monetary policy interventions have been working (and also argue that additional significant measures are not needed at this point.)” Citibank “BoC is expected to keep rates unchanged and retain its weekly bond purchases of CAD 5 billion. The July meeting will also feature an updated Monetary Policy Report to serve as BoC’s base case for activity this year. Inflation estimates will likely show inflation below the 2% target in 2020 and into next year.” Rabobank “We expect the Bank of Canada to leave the policy rate unchanged at 0.25%. This is fully expected by both analysts (Bloomberg survey) and traders (CAD OIS). We expect the policy rate to remain at 0.25% at least through 2020 and 2021. In light of the plan to issue CAD 400 billion this year (more than triple last year), we may see an upsizing of the BoC’s asset purchase programme but don’t expect any fireworks in terms of market reaction. In fact, if we don’t see an upsizing, or at least a nod to potential upsizing, then this would likely trigger a larger reaction. USD/CAD is still primarily at the mercy of equities in line with the general ‘risk on, risk off’ (RoRo) dynamic driving price action. USD/CAD trading so far in Q3 feels similar to the range-bound nature of early Q2, although we are of course five big figures lower this time around.” Westpac “Both Westpac and the market expect the BoC to keep rates at the lower bound (0.25%) in the face of COVID headwinds.” Credit Suisse “Any assertion suggesting a more open mind towards easing further to 0% and below would represent a major dovish surprise, as Canada currently has the highest forward OIS rate across G10. Our bias is to expect the BoC to want to retain full optionality on the composition and timing of purchases, and as such would not expect this meeting to bring a stated end date for asset purchases. Any temporal deadline, especially if in 2021, would also represent an upset compared to market expectations, which are set for close to one 25bp hike in the first half of 2022. An increase in the nominal weekly purchase amount however is a distinct possibility, in the light of the government’s increased issuance schedule, and it would represent a dovish development overall. One of the measures discussed in the press is the possible introduction of a yield curve control type framework, along the lines of 3-year government bond yield target. While we do not deem such an outcome as completely unlikely, we point out that it might be a premature measure, with front-end yields still pricing in hikes 18 months out. We suspect that other dovish steps would likely precede such policy decision. Today’s rate decision will also feature a monetary policy report. While normally this would attract a certain amount of attention, we suspect that curiosity about the new Governor, combined with the highly uncertain nature of the economic outlook (and therefore healthy scepticism of any sort of medium-term economic forecast), might result in reduced market focus this time.”  

Having faced rejection below Monday’s high in Asia, S&P 500 futures, the risk barometer, holds sizeable gains to battle 3200 levels amid broad market

Upside appears more compelling amid a potential bull flag.  A test of 3250 likely as buyers cheer vaccine hopes.3191 is the level to beat for the bears in the near-term. Having faced rejection below Monday’s high in Asia, S&P 500 futures, the risk barometer, holds sizeable gains to battle 3200 levels amid broad market optimism, courtesy of Moderna’s coronavirus vaccine progress. The price has entered a phase of consolidation since then, which has now taken the form of a bullish flag on the hourly chart. This is a bullish continuation pattern and an hourly close above the falling trendline resistance at 3210 will confirm the formation. The bulls will likely target Monday’s high at 3226 en route the psychological level of 3250 in the near-term. Alternatively, the immediate downside will be limited by the falling trendline support at 3197, below which the bullish 21-hourly Simple Moving Average (HMA), now placed at 3,191, will test the bears’ commitment. The next support awaits at the 50-HMA of 3180, which could offer some temporary respite to the bulls. All in all, the path of least resistance appears to the upside, with bullish hourly Relative Strength Index (RSI) at 58.81. S&P 500 Futures: Hourly chart

Germany 10-y Bond Auction dipped from previous -0.38% to -0.46%

WTI (August futures on Nymex) broke the Asian consolidative mode to the upside in Europe, as the bulls tested the 41 mark amid a fresh risk-on wave th

WTI sees a fresh leg higher as OPEC+ meeting gets underway. Risk-on mood amid virus hopes adds to oil’s uptick.All eyes on EIA data and OPEC+ outcome for fresh directives. WTI (August futures on Nymex) broke the Asian consolidative mode to the upside in Europe, as the bulls tested the 41 mark amid a fresh risk-on wave that gripped the markets. Moderna's promising results towards a coronavirus vaccine lifted the overall market sentiment. Further, traders resorted to cover their shorts positions ahead of the key OPEC and its allies’ (OPEC+) decision on the output cuts policy. The black gold dipped as low as 39.13 on Tuesday after expectations over OPEC+ easing output cuts picked-up pace. The cuts are expected to taper to 7.7 million bpd until December. The oil bulls, however, were rescued by a bigger-than-expected drop in the US crude inventories, as reported by the American Petroleum Institute (API). The API data showed late Tuesday, the US crude stockpiles fell by 8.3 million barrels in the week to July 10, beating expectations for a decline of 2.1 million barrels, per Reuters. Looking ahead, it remains to be seen if the upside bias remains intact in the barrel of WTI ahead of the critical OPEC+ decision and Energy Information Administration (EIA) weekly crude supplies report. The sentiment on the global market will also remain in play. WTI technical levels to watch “In a case where the oil prices remain weak past-$39.15, the late-June month’s bottom surrounding $37.10 should return to the charts. Alternatively, a clear break beyond $41.00 needs validation from June month’s top of $41.65 and 200-day EMA, currently around $41.80, to aim for February’s low close to $44.00,” explains Anil Panchal, FXStreet’s Analyst. WTI additional levels   

The heavily offered tone surrounding the greenback pushed the USD/JPY pair further below the 107.00 mark, back closer to the lower end of its weekly r

USD/JPY came under some intense selling pressure amid a broad-based USD weakness.The risk-on mood, a goodish pickup in the US bond yields failed to impress the USD bulls.Technical selling below the 107.15-10 support aggravated the intraday bearish pressure.The heavily offered tone surrounding the greenback pushed the USD/JPY pair further below the 107.00 mark, back closer to the lower end of its weekly range. As investors looked past the BoJ policy decision, the pair met with some aggressive supply during the early European session and broke down of its early consolidative range amid a broad-based US dollar weakness. The latest optimism over a possible vaccine for the highly contagious disease dented the greenback's status as the global reserve currency and turned out to be one of the key factors exerting pressure on the USD/JPY pair. Meanwhile, worries about worsening US-China relations further benefitted the Japanese yen's relative safe-haven status against its American counterpart. It is worth recalling that the US President Donald Trump on Tuesday signed a bill sanctioning Chinese officials involved in enacting Hong Kong’s national security laws. China was quick to respond and threatened to impose retaliatory sanctions against US individuals/entities. This comes on the back of a surge in new COVID-19 cases in the US, which pushed Californian back into lockdown and further undermined sentiment surrounding the greenback. A goodish pickup in the US Treasury bond yields failed to impress the USD bulls. Even the prevalent upbeat market mood, which tends to dent the Japanese yen's safe-haven demand, also did little to stall the USD/JPY pair's sharp intraday downfall. Adding to this, possibilities of some short-term trading stops being triggered on a sustained break below the 107.15-10 horizontal support further seemed to have aggravated the selling pressure. Some follow-through weakness below weekly lows, around the 106.80-75 region, will now be seen as a fresh trigger for bearish traders. The USD/JPY pair might then accelerate the fall to mid-106.00s before eventually dropping to challenge the 106.00 mark. Market participants now look forward to the US economic docket, highlighting the release of Empire State Manufacturing Index and Industrial Production. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session. Technical levels to watch  

GBP/USD has been advancing amid coronavirus vaccine hopes and upbeat UK CPI but Britain's relations with China and Brexit uncertainty may weigh on ste

GBP/USD has been advancing amid coronavirus vaccine hopes and upbeat UK CPI but Britain's relations with China and Brexit uncertainty may weigh on sterling, according to FXStreet’s analyst Yohay Elam. Key quotes “The British government decided to phase out its dependence on Huawei amid concerns about having backdoors to the Chinese army. Beijing responded angrily and stated that the UK breached promises, accusing it of political manipulation.” “Back in the days of the Empire, Britain held onto Hong Kong, and the city-state is another point of contention. Prime Minister Boris Johnson opened the door to receiving mass immigration from HK, a response to China's tighter grip on the territory.”  “Brexit talks remain deadlocked, with progress expected only closer to the year-end, when the transition period expires.” “Pound bulls may be encouraged by the stronger-than-expected increase in annual inflation. CPI rose by 0.6% yearly, showing stability and a lower chance of disinflation. Nevertheless, Silvana Ternyero, a member of the BoE, said that she would vote for further stimulus if needed.”  “GBP/USD has been benefiting from dollar weakness, stemming from hopes for a coronavirus vaccine. Moderna, a Massachusetts-based pharma firm, reported further progress in developing immunization after 45 humans developed a robust level of antibodies.”  

EUR/USD is posting strong gains for the fourth session in a row and flirting with a Fibo level in the mid-1.1400s on Wednesday. If the buying bias pic

EUR/USD keeps the firm note and advance beyond the 1.14 mark.Further upside could see the yearly highs below 1.1500 re-tested.EUR/USD is posting strong gains for the fourth session in a row and flirting with a Fibo level in the mid-1.1400s on Wednesday. If the buying bias picks up pace, there is increasing chances of a move to the 2020 peaks in levels just shy of 1.15 the figure (March 9). Further out, as long as the 200-day SMA, today at 1.1053, holds the downside, further gains in EUR/USD remains well on the table. EUR/USD weekly chart  

DXY has intensified the sell-off on Wednesday, breaking below the key support at the 96.00 mark and exposing further downside in the short-term horizo

DXY remains under heavy pressure around the 96.00 yardstick.A deeper pullback exposes June’s lows in the 95.70 region.DXY has intensified the sell-off on Wednesday, breaking below the key support at the 96.00 mark and exposing further downside in the short-term horizon. The ongoing price action opens the door to another visit to the June lows in the 95.70 zone (June 10) ahead of 2020 low at 94.65 recorded on March 9. The negative outlook on the dollar is expected to remain unaltered while below the 200-day SMA, today at 98.22. DXY daily chart  

EUR/JPY briefly tested the mid-122.00s earlier in the session on Wednesday, losing some upside momentum soon afterwards. If the buying interest picks

EUR/JPY extends the weekly recovery to levels beyond 122.00.Further up emerges the YTD peaks in the 124.40/45 band.EUR/JPY briefly tested the mid-122.00s earlier in the session on Wednesday, losing some upside momentum soon afterwards. If the buying interest picks up pace and manages to clear this region, there is a minor hurdle at the January’s top at 122.87 ahead of the 2020 peaks beyond the 124.00 mark. As long as the 200-day SMA at 119.77 holds the downside, the outlook on the cross is seen as constructive. EUR/JPY daily chart  

AUD/USD has reverted back higher from key support at 0.6922/21 as trades up 0.34% on the day to 0.70. A break above 0.7005 would see a breakout from t

AUD/USD has reverted back higher from key support at 0.6922/21 as trades up 0.34% on the day to 0.70. A break above 0.7005 would see a breakout from the near-term consolidation range with next resistance seen at 0.7032, per Credit Suisse sources.  Key quotes “AUD/USD has sharply reverted back higher from key support at 0.6922/21 as expected, maintaining the bull ‘triangle’ continuation pattern, with the market now testing above the upper end of its consolidation range at 0.7005.” “We keep our bias to the upside and look for a closing break above 0.7005 in due course, removal of which would see a breakout from the nearterm consolidation range, with resistance seen thereafter at the more important 0.7032/63 highs, where we would expect the market to take a breather at first. Above here in due course would see the ‘neckline’ to the 2019 top at 0.7076 and the 78.6% retracement of the 2019/2020 fall at 0.7092 next.”  “Support is initially seen at 0.6980, then 0.6962, ahead of 0.6922/21, which ideally continues to hold. Below here would negate the bullish pattern to see the rangebound environment extend further, with support seen next at 0.6902/00, which then ideally holds if reached.”  

Gold (XAU/USD) caught a fresh bid-wave and hit the highest levels in four days at $1815.10 in the last hour, helped by a fresh leg lower in the US dol

Gold eyes $1818.17 and beyond going forward.Dollar weakness amid risk-on mood boosts XAU bulls.Technical set up suggests additional upside. Gold (XAU/USD) caught a fresh bid-wave and hit the highest levels in four days at $1815.10 in the last hour, helped by a fresh leg lower in the US dollar across the board amid the risk-on market mood. The European traders cheered the optimism over Moderna’s coronavirus vaccine while the US-China escalation also offered fresh impetus to the gold bulls. From a near-term technical perspective as well, gold remains poised for further upside, especially after it managed to reverse a quick dip below the 21-hourly Simple Moving Average (HMA), then placed at $1806.13. The bulls also cleared the stiff horizontal barrier placed at $1813 while they now target the eight-year highs at $1818.17. Further north, the round figure of $1820 could be put to test. The hourly Relative Strength Index trades at 61 levels, suggesting more room for upside. Meanwhile, the bullish bias will likely remain intact in the near-term as long as the spot holds above the upward sloping 21-HMA, now seen at $1808.78. On an hourly closing below the latter, strong support around $1805 will be back in play. That level is the confluence of the 50 and 100-HMAs. Gold: Hourly chart   Gold: Additional levels to consider  

The GBP/USD pair has recovered the 1.26 level though Wednesday's 4-hour chart is showing that momentum remains weak. Yohay Elam, an analyst at FXStree

The GBP/USD pair has recovered the 1.26 level though Wednesday's 4-hour chart is showing that momentum remains weak. Yohay Elam, an analyst at FXStreet, signals tough resistance for the cable at 1.2670 whereas initial support is seen at 1.2570. Key quotes “While GBP/USD has been moving up from the lows and above the 50, 100, and 200 Simple Moving Averages on the 4-hour chart, momentum remains to the downside. Moreover, the cable faces fierce resistance at 1.2670, which held it down three times in recent days.”  “The daily high of 1.2627 is the first cap, ahead of 1.2670 mentioned earlier. It is closely followed by 1.2690, a peak that was seen in early June.” “Support is awaited at 1.2570, a low point last week, and then by 1.2510, a swing low from last week. The next line to watch is 1.2480, the weekly low.”  

Lee Sue Ann, Economist at UOB Group, suggested the Federal Reserve could implement Yield Curve Control (YCC) at the September meeting. Key Quotes “The

Lee Sue Ann, Economist at UOB Group, suggested the Federal Reserve could implement Yield Curve Control (YCC) at the September meeting. Key Quotes “The Fed has demonstrated it will do whatever it takes, beyond interest rate cuts and asset buying, to restore financial market stability, smooth out US dollar funding conditions and safe-guard the economy.” “Going forward, we expect the Fed to keep its rates near 0% until at least 2022 and the next move will be to introduce Yield Curve Control (in Sep) to make monetary policy even more accommodative.”

The USD selling picked up pace during the early European session and lifted the EUR/USD pair closer to mid-1.1400s – highest since March 10. The pair

EUR/USD gained traction for the fourth straight session on Wednesday amid sustained USD weakness.The prevalent risk-on environment weighed heavily on the safe-haven USD and remained supportive.The strong intraday positive move took along some short-term trading stops near the 1.1410-15 area.The USD selling picked up pace during the early European session and lifted the EUR/USD pair closer to mid-1.1400s – highest since March 10. The pair prolonged its recent positive momentum and gained strong follow-through traction for the fourth consecutive session on Wednesday. The upbeat market mood continued denting the US dollar's relative safe-haven status and was seen as one of the key factors driving the EUR/USD pair higher. The optimism over a vaccine for the highly contagious disease overshadowed concerns about a surge in COVID-19 cases across the world. The global risk sentiment was further supported by receding fears about deflationary pressures stemming from the economic downturn led by coronavirus-induced lockdowns. On the other hand, the shared currency benefitted from hopes that European Union leaders may agree on stimulus and deepen fiscal integration to shield the Eurozone economy from the pandemic. The EUR/USD pair surged to over four-month tops and took along some trading tops near the 1.1410-15 region. It will now be interesting to see if bulls maintain their dominant position or opt to take some profits off the table ahead of the ECB policy decision on Thursday. In the meantime, the US economic docket – featuring the release of Empire State Manufacturing Index and Industrial Production data – will be looked upon for some short-term trading opportunities later this Wednesday. Technical levels to watch  

The Bank of England (BOE) policymaker Silvana Tenreyro, in a scheduled speech on Wednesday, talks about the disinflationary pressures and on further m

The Bank of England (BOE) policymaker Silvana Tenreyro, in a scheduled speech on Wednesday, talks about the disinflationary pressures and on further monetary policy action. Key quotes “Headline inflation will continue to weaken in the near term, given a continuing sizeable impact from lower energy prices, and a negative contribution from the recent cut in VAT.” “Already seeing indications of a sharp recovery in purchases that were restricted by business closures.” “Believes that recovery will be interrupted by continued risk aversion and voluntary social distancing in some sectors.” “Ready to vote for further action as necessary to help the economy.”

USD/JPY slides below the 107.00 level as the 107.42 resistance remains intact. The pair faces next support at 106.65, as Credit Suisse’s analysts note

USD/JPY slides below the 107.00 level as the 107.42 resistance remains intact. The pair faces next support at 106.65, as Credit Suisse’s analysts note. Key quotes “USD/JPY remains capped at its downtrend from early June, 13 and 55-day averages and price resistance at 107.32/42.” “Whilst low conviction the immediate risk is seen staying marginally lower whilst below here with support seen at 107.15/11 initially and with a move below 106.65 needed to clear the way for a retest of the lows from May and June and ‘neckline’ support at 106.12/105.98. Beneath here would see the completion of an important top to mark a more significant and concerted turn lower with support then seen next at 105.20/14 – the 61.8% retracement of the March rally.”  “Above 107.42 would see the downtrend break to see the trend shift neutral again. Only back above 107.80 would reassert an upward bias for a move back to the early July high at 108.17.”  

EUR/USD is trading at its highest level since March, near 1.1440, up 0.35% on the day. The rally comes after Moderna reported progress in developing a

EUR/USD is trading at its highest level since March, near 1.1440, up 0.35% on the day. The rally comes after Moderna reported progress in developing a coronavirus vaccine, Yohay Elam, an analyst at FXStreet, informs. Key quotes “Massachusetts-based Moderna is moving markets up, and not for the first time. The highly-regarded New England Journal of Medicine reported that the pharma company's test produced neutralizing antibodies – four times more than in recovered patients – among the 45 human subjects and with little side effects.”  “California, which imposed a sweeping lockdown, hit a record number of cases, and so did Texas, which took only minor steps. Total US infections have surpassed 3.6 million, and deaths topped 136,000. Mortalities are on the rise.”  “In the old continent, the disease remains under control despite several local flareups. The focus is on deliberations between EU members on the proposed recovery fund. German Chancellor Angela Merkel hosted Spanish Prime Minister Pedro Sánchez on Tuesday and said she is willing to compromise to get the deal over the line.” “Markets have brushed aside Sino-American tensions. President Donald Trump has ended Hong Kong's special status in response to China's tighter grip on the city-state. Nevertheless, the world's largest economies continue to uphold the trade deal.”  

The EUR/GBP cross quickly recovered around 25 pips from session lows and was last seen trading in the neutral territory, around the 0.9070-75 region.

EUR/GBP reversed an early dip to mid-0.9000s amid a pickup in demand for the shared currency.A strong bid tone surrounding the British pound might keep a lid on any strong gains for the cross.Investors might also refrain from placing aggressive bets ahead of the ECB decision on Thursday.The EUR/GBP cross quickly recovered around 25 pips from session lows and was last seen trading in the neutral territory, around the 0.9070-75 region. The cross extended the previous day's late pullback from two-week tops – levels beyond the 0.9100 mark – and remained depressed through the first half of trading action on Wednesday. The early downtick was sponsored by some follow-through buying around the British pound, which got an additional boost following the release of hotter-than-expected UK consumer inflation figures. In fact, the headline CPI rose by 0.6% in June as compared to a modest downtick to 0.4% anticipated from 0.5% previous. The yearly rate also came in better than market expectations and edge higher to 1.1% from 1.0% recorded in May. The data eased worries about deflationary pressures from the economic downturn led by the coronavirus-induced lockdowns and underpinned the sterling. The early downtick turned out to be short-lived, rather attracted some dip-buying near mid-0.9000s. A strong pickup in demand for the shared currency was seen as one of the key factors behind the pair's sudden bounce during the early European session. However, the upside is likely to remain capped as investors might refrain from placing fresh bullish bets ahead of the ECB on Thursday. Nevertheless, the near-term bias still seems tilted in favour of bullish traders. A move back above the 0.9100 mark will reinforce the positive outlook and lift the EUR/GBP cross back towards June monthly swing highs resistance near the 0.9175 region. Technical levels to watch  

Italy Consumer Price Index (MoM) meets forecasts (0.1%) in June

Italy Consumer Price Index (EU Norm) (YoY) in line with forecasts (-0.4%) in June

Italy Consumer Price Index (EU Norm) (MoM) meets forecasts (0%) in June

Italy Consumer Price Index (YoY) meets forecasts (-0.2%) in June

South Africa Consumer Price Index (MoM) below expectations (-0.5%) in May: Actual (-0.6%)

South Africa Consumer Price Index (YoY) registered at 2.1%, below expectations (2.2%) in May

Ho Woei Chen, CFA, Economist at UOB Group, assessed the latest Chinese trade data for the month of June. Key Quotes “China’s exports and imports beat

Ho Woei Chen, CFA, Economist at UOB Group, assessed the latest Chinese trade data for the month of June. Key Quotes “China’s exports and imports beat consensus expectation, with both posting gains in June. In USD-terms, exports were up 0.5% y/y from -3.3% y/y in May while imports rebounded 2.7% y/y from -16.7% y/y in May, its first expansion in four months. The stronger rebound in imports resulted in the narrowing of China’s trade surplus to US$46.42 billion from US$62.93 in May.” “Overall, China’s exports rebounded to a growth of +0.1% y/y in 2Q from -13.3% y/y in 1Q but the imports contraction worsened to -9.7% y/y from -2.9% y/y in 1Q. At the half-year mark, China’s trade surplus stood at US$167.80 billion YTD compared to US$176.67 billion in 1H19.” “In the first half, China’s exports and imports with the US contracted by -11.1% y/y and - 4.4% y/y respectively. Against China’s YTD exports (-6.2% y/y) and imports (-7.1% y/y) performance, we note that the contraction in exports to the US was sharper. Although China’s imports from the US fell, the decline was less compared to China’s total imports contraction YTD.” “Bloomberg had estimated that China only met 1/5 of its merchandise imports commitments in the first five months of the year under the Phase One trade deal. Under the agreement, China commits to increase purchase of US products (manufacturing, energy and agriculture) and services by at least US$200 bn over the next two years (with 2017 as the base year for comparison), of which US$77 bn increase is targeted for 2020. US-China tensions remain one of the key risk factors for China’s trade outlook in the remainder of this year and beyond.”

EUR/USD is posting gains today, trading up 0.3% on a day to 1.1437, while Wednesday's 4-hour chart is showing the pair is at a critical juncture. Yoha

EUR/USD is posting gains today, trading up 0.3% on a day to 1.1437, while Wednesday's 4-hour chart is showing the pair is at a critical juncture. Yohay Elam, an analyst at FXStreet, notes that EUR/USD after breaking above 1.1425 the pair can run toward levels not seen since March. Key quotes “EUR/USD is trading below an uptrend resistance line that has been accompanying it since early July. That line now converges with 1.1425 – the currency pair's peak in early June. Breaking above this critical resistance line would open the door to the highest levels since March.” “Momentum on the 4-hour chart is to the upside and EUR/USD is trading above the 50, 100, and 200 Simple Moving Averages. The Relative Strength Index is below 70 – thus outside overbought conditions.”  “Resistance above 1.1425 is at 1.1495, March's peak, and then 1.1560.” “Support awaits at 1.1375, a stepping stone on the way up, followed by 1.1350, a swing high from early in the month.”  

The GBP/JPY cross held on to its modest gains through the early European session, albeit has retreated around 20 pips from daily tops. The cross built

GBP/JPY recovers further from one-week lows amid a modest pickup in the GBP demand.Hotter-than-expected UK CPI figures provided an additional boost to the British pound.The risk-on mood, dovish BoJ weighed on the safe-haven JPY and remained supportive.The GBP/JPY cross held on to its modest gains through the early European session, albeit has retreated around 20 pips from daily tops. The cross built on the previous day's goodish intraday bounce from sub-134.00 level, or one-week lows and gained some follow-through traction on Tuesday. A strong bid tone surrounding the British pound was seen as one of the key factors driving the GBP/JPY cross higher amid the prevalent risk-on mood. The global risk sentiment remained well supported by the optimism about a potential vaccine for the highly contagious coronavirus disease. This, in turn, undermined demand for the safe-haven Japanese yen (JPY) and remained supportive of the GBP/JPY pair's move to the key 135.00 psychological mark. The JPY was further weighed down by the Bank of Japan's (BoJ) dovish outlook, forecasting that the domestic economy could contract by 4.7% in fiscal 2020. Adding to this, the BoJ Governor Haruhiko Kuroda, in the post-meeting press conference, showed readiness to ease monetary policy further. On the other hand, the sterling benefitted from Wednesday's hotter-than-expected UK consumer inflation figures. In fact, the headline CPI rose by 0.6% in June and the yearly rate also came in better than market expectations, easing worries about deflationary pressures from the economic downturn. Despite the supporting factors, the GBP/JPY cross lacked any strong follow-through as investors remained concerned over worsening US-China relations. This coupled with the continuous surge in the number of COVID-19 cases might keep a lid on any runaway rally, at least for the time being. Technical levels to watch  

The buying interest around the single currency remains well and sound for yet another session on Wednesday, with EUR/USD trading in fresh 4-month peak

EUR/USD reclaimed the 1.1400 barrier and above on Tuesday.Solid risk-on sentiment keeps bolstering the upside in the pair.EU-India Summit will be the only event of note in Europe.The buying interest around the single currency remains well and sound for yet another session on Wednesday, with EUR/USD trading in fresh 4-month peaks in the 1.1430/35 band. EUR/USD looks to risk trends, pandemic EUR/USD is up for the fourth consecutive session on Wednesday, trading on a firm note and always underpinned by the broad-based weakness surrounding the greenback. Propping up the risk-on mood, news that a potential COVID-19 vaccine could be delivered earlier than expected boosted further the risk-universe on Tuesday after auspicious headlines from US biotech Moderna (NASDAQ: MRNA). In the calendar, the EU-India Summit will be the salient event later on Wednesday. Across the pond, Industrial/Manufacturing Production will take centre stage seconded by the NY Empire State index and the publication of the Fed’s Beige Book. In addition, FOMC’s T.Harker will speak and the EIA will release its weekly report on crude inventories. What to look for around EUR EUR/USD is challenging multi-month peaks beyond 1.1400 the figure, always on the back of the upbeat risk appetite trends and helped at the same time by better-than-forecasted results in some key fundamentals in the region. Also supportive of a strong euro appears the solid stance of the current account in the euro area. EUR/USD levels to watch At the moment, the pair is gaining 0.30% at 1.1434 and a breakout of 1.1448 (50% Fibo of the 2017-2018 rally) would target 1.1495 (2020 high Mar.9) en route to 1.1514 (high Jan.31 2019). On the other hand, immediate contention is located at 1.1186 (61.8% Fibo of the 2017-2018 rally) seconded by 1.1168 (monthly low Jun.19) and finally 1.1147 (high Mar.27).

Responding to the UK’s Huawei ban, China’s Foreign Ministry said in a statement on Wednesday, it strongly condemns the UK move. Further comments Hopes

Responding to the UK’s Huawei ban, China’s Foreign Ministry said in a statement on Wednesday, it strongly condemns the UK move. Further comments Hopes UK can maintain fairness. China will take all measures to safeguard its interests. Trump's comments on Huawei proves the latest ban is not about national security but political manipulation. more to come ....

After having its best quarter since 2010, copper has surged again in early-June to reach a two-year high just above $6,600/t. Nevertheless, as the pac

After having its best quarter since 2010, copper has surged again in early-June to reach a two-year high just above $6,600/t. Nevertheless, as the pace of demand growth normalizes and disrupted supply returns to the market, the red metal could be set to revert lower. Therefore, strategists at TD Securities see copper prices falling toward $5,400/t. Key quotes “TD Securities model projects that demand will still be lower in 2021 than it was in 2019, with a surplus growing to some 850k t over the next eighteen months. Based on the fundamentals, which include supply, demand, inventories and cost structure, the red metal should average at around $5,600/t not the current $6,500/t.” “A catalyst which is likely to come in the form of economic data disappointments, after numerous beats, as US coronavirus infections slow the normalization process, will be needed to force prices lower. We suspect that the reopening of mining facilities later in the year, after a flurry of mine disruption in Peru and Chile amid COVID cases rising in the region over the past couple of months and the sharp reversal in seasonally-driven demand growth, will add to the negative price moves later in the year.”  “Based on recent normal volatility of $1,000/t peak to-trough from the fundamentally determined levels, copper could easily drop to just below $5,400/t, if not lower.”  

EUR/GBP is down -0.3% today to 0.9055 as the pair takes a breath from its recovery towards the five-month resistance line at 0.9124. Axel Rudolph, Sen

EUR/GBP is down -0.3% today to 0.9055 as the pair takes a breath from its recovery towards the five-month resistance line at 0.9124. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes EUR/GBP advances gradually since April and expects a move above the 0.9178 June high to target the 0.9323 mark. Key quotes “EUR/GBP’s recovery rally from the current July low at 0.8931 is taking it towards the five-month resistance line at 0.9124. Above it beckons the June peak at 0.9178.”  “A move above the 0.9178 June high would trigger a rise to 0.9323. It is the location of the 78.6% Fibonacci retracement.” “Below this week’s low at 0.8931 lies the June low at 0.8864.”  

Gold traded with a mild negative bias through the early European session, albeit has still managed to hold above the $1800 mark. The precious metal fa

The prevalent risk-on mood exerted some pressure on the safe-haven precious metal.Concerns over worsening US-China relations, surging COVID-19 cases helped limit losses.Weaker USD extended some additional support, warranting caution for bearish traders.Gold traded with a mild negative bias through the early European session, albeit has still managed to hold above the $1800 mark. The precious metal failed to capitalize on the previous day's goodish intraday bounce from one-week lows and witnessed a modest pullback from the $1810-11 resistance zone. The prevalent risk-on environment was seen as one of the key factors that undermined demand for traditional safe-haven assets and exerted some pressure on the safe-haven commodity. The global risk sentiment remained well supported by the latest optimism over a potential vaccine for the highly contagious coronavirus disease. The upbeat market mood was evident from strong gains in the equity markets. However, the downside seemed cushioned amid concerns over the continuous surge in COVID-19 cases globally and worsening US-China relations. It is worth reporting that the US President Donald Trump signed a bill, sanctioning Chinese officials involved in enacting Hong Kong’s national security laws. Trump also signed an executive order that ends Hong Kong’s preferential trade status. China was quick to respond and threatened to impose retaliatory sanctions against US individuals/entities. This coupled with the emergence of some fresh US dollar selling extended some additional support to the dollar-denominated commodity and should help limit any deeper losses, at least for the time being. This makes it prudent to wait for some strong follow-through selling before traders start positioning for any meaningful corrective slide. Market participants now look forward to the US economic docket, highlighting the release of Empire State Manufacturing Index and Industrial Production. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session. Technical levels to watch  

Further comments are flowing in from the Bank of Japan (BOJ) Governor Haruhiko Kuroda, as he continues to address the post-monetary policy decision. “

Further comments are flowing in from the Bank of Japan (BOJ) Governor Haruhiko Kuroda, as he continues to address the post-monetary policy decision. “Will strive to support financial market stability, corporate financing for time being.” “Various measures are available for further easing including interest rate cuts.”

Economists at ANZ Bank expect the Bank of Korea (BoK) to keep its policy rate unchanged and the small prospects of quantitative easing to support the

Economists at ANZ Bank expect the Bank of Korea (BoK) to keep its policy rate unchanged and the small prospects of quantitative easing to support the South Korean won. What’s more, they forecast USD/KRW at 1,170 by end-2020 and at 1,135 by end-2021. Key quotes “The improving performance of various economic indicators suggests a revival is now in motion, with domestic demand leading the way. The recent uptick in infection cases has not derailed the recovery. While the outlook remains highly uncertain, South Korea’s economy is well positioned to capitalise on signs of an upturn in global demand.” “We don’t expect the BoK to cut its policy rate again but maintain its current low of 0.5%. While the central bank may shed some more light on its unconventional policy tools framework at its upcoming meeting on 16 July, the recent improvement in activity has reduced the impetus for it to undertake a more active stance.” “The reduced prospects of quantitative easing by the BoK will be supportive of the KRW, as should the likelihood of South Korea’s economy being among the leaders in the COVID-19 recovery. The domestic revival is already underway, and the export sector is well-positioned to catch up, thereby lifting the overall pace of recovery. We expect the KRW to be an outperformer in the region, and our forecast is for the USD/KRW to end this year at 1,170 and next year at 1,135.”  

AUD/USD is looking to regain the upside momentum while trading back above the 0.7000 level in early European trading, as the sentiment remains underpi

AUD/USD regains poise in Europe amid an upbeat market mood.Coronavirus vaccine hopes overshadow US-China tensions?Attention turns to virus stats, US-China updates and US data.AUD/USD is looking to regain the upside momentum while trading back above the 0.7000 level in early European trading, as the sentiment remains underpinned by the Moderna vaccine optimism.  With the upbeat market mood extending into Europe, the US dollar returns to the back foot across its main peers following a brief recovery attempt seen on the renewed US-China escalation. The risk appetite, overnight, was boosted by Moderna Inc. coronavirus vaccine tests’ promising results. The phase one results showed that the COVID-19 vaccine is safe and induces an immune response. The risk-on market profile downed the safe-haven US dollar and prompted a rally in the higher-yielding assets such as the aussie dollar. In the Asian trades, however, the Aussie’s upside lost legs after hitting five-days high at 0.7018, as the US-China tensions intensified over the Hong Kong (HK) issue and limited the optimism on the Asian equities. Beijing vowed retaliatory sanctions against the US after President Donald Trump signed an order end to HK’s special status under US law to punish China. The spot will continue to remain driven by the risk sentiment, in light of the US-China spat, coronavirus fears and vaccine optimism. The US Industrial Production data and the Fed’s Beige Book will be also eyed for fresh dollar trades. AUD/USD technical levels The immediate support is seen at 0.6965/58 (5-DMA/ pivot point), below which the 20-DMA at 0.6921 will be tested. On the flip side, the recovery will likely face stiff hurdle at 0.7018 (daily high). The next resistance is aligned at 0.7063 (June 10 high). AUD/USD additional levels  

EUR/JPY is trading in one-month highs, currently at 122.30, up 0.06% on a day. The pair has the 122.88 January high in its sights and is underpinned b

EUR/JPY is trading in one-month highs, currently at 122.30, up 0.06% on a day. The pair has the 122.88 January high in its sights and is underpinned by 120.66 and 120.28, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, informs. Key quotes “EUR/JPY is trading in one-month highs and has the January high at 122.88 in its sights.”  “We will retain our bullish outlook while three-month support line at 120.66 and the current July low at 120.28 underpin.” “We are still looking for the cross to rise further and expect the 200-week moving average at 124.70 to eventually be revisited. It guards the 2014- 2020 resistance line at 128.15.”  “Below 120.28 the 200 and 55-day moving averages as well as the June low can be spotted at 119.81/119.31.”  

EUR/USD has backed off from one-month high at 1.1422 reached during the early Wednesday. If the pair is able to break clearly the mentioned level, EUR

EUR/USD has backed off from one-month high at 1.1422 reached during the early Wednesday. If the pair is able to break clearly the mentioned level, EUR/USD could test the 1.15 mark next week, per OCBC Bank. Key quotes “The spike in the EUR/USD towards 1.1420 keeps the upside momentum in the pair, with the long bets extending in expectation of the passing of the virus recovery plan at the EU Summit starting Friday. Note however, that short-term implied valuations have turned sideways, and the gap with spot has widened quickly. This has left us slightly sceptical on the upside extension.”  “A clean break of 1.1400/20 zone should see the EUR/USD pair try for 1.1500 next week.”  “Firmer downside support at the 200-week MA at 1.1336.”  

The USD/JPY pair lacked any firm directional bias on Wednesday and remained confined in a narrow trading band, around the 107.20-30 region. A combinat

USD/JPY was seen oscillating in a range through the Asian session on Wednesday.The upbeat market mood undermined the safe-haven JPY and extended support.Weaker USD, concerns about US-China tensions kept a lid on any meaningful gains.The USD/JPY pair lacked any firm directional bias on Wednesday and remained confined in a narrow trading band, around the 107.20-30 region. A combination of diverging forces failed to provide any meaningful impetus to the pair and led to a subdued/range-bound price action through the Asian session. The upbeat market mood undermined demand for the safe-haven Japanese yen and was seen as one of the key factors lending some support to the USD/JPY pair. The latest optimism about a potential coronavirus vaccine overshadowed concerns about surging COVID-19 cases in the US, which pushed California back into lockdown. This, in turn, bolstered investors' appetite for perceived riskier assets and the same was evident from strong follow-through gains in the US equity futures. The Japanese yen was further weighed down by the Bank of Japan's (BoJ) dovish outlook, forecasting that the economy could contract by 4.7% in fiscal 2020. Meanwhile, the BoJ, as was widely expected, maintained its -0.1% short-term interest rate target and a pledge to cap 10-year government bond yields around zero. However, nervousness over rising Sino-US tensions, coupled with a broad-based US dollar weakness kept a lid on any strong gains. The US President Donald Trump signed a bill sanctioning Chinese officials in response to Beijing's national security law for Hong Kong and an executive order that ended preferential treatment for Hong Kong. This makes it prudent to wait for a sustained move in either direction before positioning for any meaningful trading opportunities. Market participants now look forward to the US economic docket, highlighting the release of Empire State Manufacturing Index and Industrial Production. The data might influence the USD price dynamics and provide some impetus to the USD/JPY pair. Technical levels to watch  

FX Strategists at UOB Group believe USD/CNH could slip back to the 6.9500 level in the next weeks. Key Quotes 24-hour view: “We highlighted yesterday

FX Strategists at UOB Group believe USD/CNH could slip back to the 6.9500 level in the next weeks. Key Quotes 24-hour view: “We highlighted yesterday that USD ‘could test the 7.0200 resistance’ but held the view that ‘a sustained advance above this level is not expected’. USD subsequently touched a high of 7.0254 before dropping back down to close at 7.0122. The weak price action after opening this morning has resulted in a quick pick-up in momentum and from here, barring a move above 7.0150, USD could decline further but the prospect for a break of last week’s low at 6.9815 is not high (6.9950 is already quite a strong support).” Next 1-3 weeks: “In our previous update from last Tuesday (07 Jul, spot at 7.0150), we highlighted that USD ‘is under pressure’. We added, ‘a daily closing below 6.9950 could potentially lead to further sharp loss’. USD subsequently dropped to a low of 6.9815 on Thursday (09 Jul) before closing at 6.9970. USD rebounded last Friday (10 Jul) and while downward momentum has been dented, only a break of 7.0390 (‘strong resistance’ level previously at 7.0550) would indicate that the current downside risk has dissipated. Until then, USD could weaken further to 6.9650 with lower odds for extension to 6.9500. Meanwhile, oversold shorter-term conditions could lead to a few days of consolidation.”

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, is wobbling around the 96.00 neighbourhood on Wednesday. U

DXY struggles for direction and trades close to the 96.00 level.Risk appetite trends continue to weigh on the dollar on Wednesday.Industrial Production, NY Empire State index next of relevance.The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, is wobbling around the 96.00 neighbourhood on Wednesday. US Dollar Index looks to risk trends, data The index briefly tested lows in the 96.00 region – coincident with a Fibo level – and is now struggling for direction against the backdrop of investors’ preference for riskier assets. In fact, Tuesday’s news involving the progress of a vaccine candidate developed by US biotech Moderna (NASDAQ: MRNA) seems to have boosted traders’ morale accentuated the selling bias in the buck in favour of its riskier peers. Later in the US docket, MBA’s Mortgage Applications are due in first turn seconded by the NY Empire State index, Industrial/Manufacturing Production, Capacity Utilization, Export/Import Prices and the EIA’s weekly report on crude oil supplies. In addition, the Fed will publish its Beige Book and Philly Fed T.Harker (voter, hawkish) is due to speak. What to look for around USD The relentless advance of the COVID-19 pandemic in the US and across the world vs. news of a potential vaccine that could be developed before markets’ expectations plus the ongoing reopening of global economies are all driving the sentiment in the global markets and keep the dollar under pressure. On the constructive view of the dollar, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value. US Dollar Index relevant levels At the moment, the index is losing 0.07% at 96.12 and faces the next support at 96.06 (monthly low Jul.15) seconded by 96.03 (50% Fibo of the 2017-2018 drop) and then 95.72 (monthly low Jun.10). On the other hand, a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.22 (200-day SMA).

Bank of Japan (BOJ) won't hesitate to ease policy further while closely watching coronavirus developments, said Governor Haruhiko Kuroda in his schedu

Bank of Japan (BOJ) won't hesitate to ease policy further while closely watching coronavirus developments, said Governor Haruhiko Kuroda in his scheduled press conference after the monetary policy decision announced earlier in Wednesday’s Asian session. Further comments “BOJ’s coronavirus response has produced results.” “Economy is recovering sharply.” “Economic recovery will be moderate ahead.”   more to come ....

EUR/USD has reached the June peak at 1.1422 as expected and has declined since then to 1.1407. This mentioned level along with the 1.1495 high at 1.14

EUR/USD has reached the June peak at 1.1422 as expected and has declined since then to 1.1407. This mentioned level along with the 1.1495 high at 1.1495 are tough resistances for the pair, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports.  Key quotes “The 1.1422 June high, together with the March high at 1.1495, represents quite formidable resistance which we would expect to cap at first.”  “However, a break higher is eventually favoured and would target the 2019 high at 1.1570, then 1.1815/22, the 61.8% Fibonacci retracement of the move down from the 2018 peak and the September 2018 high. These levels will remain in play while the cross remains above the two month support line at 1.1290 and, more importantly, above the 1.1168 June 22 low.” “Immediate upside pressure should be maintained above Friday’s low at 1.1255.”   

In opinion of FX Strategists at UOB Group, the outlook for USD/JPY remains mixed for the time being. Key Quotes 24-hour view: “USD traded between 107.

In opinion of FX Strategists at UOB Group, the outlook for USD/JPY remains mixed for the time being. Key Quotes 24-hour view: “USD traded between 107.10 and 107.42 yesterday, narrower than our expected consolidation range of 106.95/107.45. The quiet price action offers no fresh clues and USD could continue to trade sideways for today, likely between 107.00 and 107.45.” Next 1-3 weeks: “USD rose to a high of 107.42 yesterday, just a few pips below our ‘strong resistance’ level of 107.45. Downward momentum has eased considerably and our view from Monday (13 Jul, spot at 106.90) wherein USD ‘is expected to trade with a downward bias towards 106.25’ is unlikely to materialize. From here, the outlook is mixed and USD could trade between 106.70 and 107.70 for a while.”

CME Group’s flash data for Natural Gas futures markets noted open interest and volume shrunk by around 660 contracts and by more than 21K contracts, r

CME Group’s flash data for Natural Gas futures markets noted open interest and volume shrunk by around 660 contracts and by more than 21K contracts, respectively, on Tuesday. Natural Gas still faces a probable move to $1,67 Tuesday’s uptick in prices of Natural Gas was in tandem with shrinking open interest and volume, hinting at the likeliness that gains still remain capped and the door remain open for a decline to the $1,67 area.

The GBP/USD pair maintained its bid tone near session tops, around the 1.2580 region and moved little post-UK inflation figures. The pair caught some

GBP/USD regained traction on Wednesday built on the overnight rebound from one-week lows.The risk-on mood undermined the safe-haven USD and extended some support to the major.Hotter-than-expected UK CPI remained supportive of the bid tone surrounding the British pound.The GBP/USD pair maintained its bid tone near session tops, around the 1.2580 region and moved little post-UK inflation figures. The pair caught some bids on Wednesday and built on the previous day's solid intraday bounce of around 85 pips from the 1.2480 region, or one-week lows. The positive move was sponsored by a weaker tone surrounding the US dollar, which remained depressed amid the upbeat market mood. The latest optimism about a coronavirus vaccine overshadowed concerns about surging COVID-19 cases in the US, which pushed California back into lockdown. This, in turn, bolstered investors' appetite for perceived riskier assets and continued undermining demand for the safe-haven USD. Meanwhile, the British pound was further supported by Wednesday’s release of hotter-than-expected UK consumer inflation figures. In fact, the headline CPI rose by 0.6% in June as compared to a modest downtick to 0.4% anticipated from 0.5% previous. The yearly rate also came in better than market expectations and edge higher to 1.1% from 1.0% recorded in May, easing worries about deflationary pressures from the economic downturn. The pair, however, had a rather muted reaction and lacked any strong follow-through buying, possibly on the back of persistent Brexit-related uncertainties. With the key UK macro data out of the way, the broader market risk sentiment and the USD price dynamics should continue to play a key role in influencing the GBP/USD pair's momentum on Wednesday. Later during the early North American session, the US economic docket – highlighting the release of Empire State Manufacturing Index and Industrial Production – will be looked upon for some meaningful trading opportunities. Technical levels to watch  

Extra gains are expected in AUD/USD if the 0.7010 level is cleared in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Our

Extra gains are expected in AUD/USD if the 0.7010 level is cleared in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectation for AUD ‘to dip below 0.6910” yesterday was wrong as it staged a sharp reversal after touching a low of 0.6922. The solid bounce could edge above the strong 0.7010 level but is unlikely to challenge the next resistance at 0.7050. Support is at 0.6960 followed 0.6940. The 0.6922 low is expected to be ‘safe’ for today.” Next 1-3 weeks: “AUD closed on a firm note at 0.6975 yesterday (+0.52%) and upward momentum is beginning to improve. From here, if AUD closes above 0.7010, it would indicate further AUD strength towards the June’s peak of 0.7067. At this stage, the prospect for such a scenario is quite high as long as AUD does not move below 0.6920 within these 1 to 2 days.”

United Kingdom Producer Price Index - Output (MoM) n.s.a came in at 0.3%, above expectations (0.2%) in June

United Kingdom Producer Price Index - Input (MoM) n.s.a registered at 2.4%, below expectations (3%) in June

The UK Consumer Prices Index (CPI) 12-month rate came in at +0.6% in June when compared to +0.5% booked in May while matching expectations of a +0.4%

UK CPI rises 0.6% YoY in June vs. +0.4% expected.Monthly UK CPI arrives at +0.1% in June vs. 0% expected.GBP/USD heads back towards 1.2588 on the data release.The UK Consumer Prices Index (CPI) 12-month rate came in at +0.6% in June when compared to +0.5% booked in May while matching expectations of a +0.4% print, the UK Office for National Statistics (ONS) reported on Wednesday.  Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at +1.4% YoY last month versus +1.2% booked in May while beating the consensus forecast of +1.2%. The monthly figures showed that the UK consumer prices arrived at +0.1% in June vs. 0% expectations and 0% last. more to come ...

United Kingdom Producer Price Index - Input (YoY) n.s.a came in at -6.4%, above forecasts (-6.5%) in June

United Kingdom PPI Core Output (YoY) n.s.a came in at 0.5%, below expectations (0.6%) in June

United Kingdom Retail Price Index (YoY) came in at 1.1%, above forecasts (1%) in June

United Kingdom Retail Price Index (MoM) in line with forecasts (0.2%) in June

United Kingdom PPI Core Output (MoM) n.s.a in line with expectations (0%) in June

United Kingdom Producer Price Index - Output (YoY) n.s.a came in at -0.8%, above expectations (-1.1%) in June

United Kingdom Core Consumer Price Index (YoY) above forecasts (1.2%) in June: Actual (1.4%)

United Kingdom Consumer Price Index (YoY) came in at 0.6%, above expectations (0.4%) in June

USD/CAD drops to 1.3595, down 0.13% on a day, during the pre-European trading on Wednesday. The loonie pair drops for the first time in five days ahea

USD/CAD upside from 1.3586 fades momentum from 1.3607.Market sentiment remains mixed amid hopes of virus vaccine, Sino-US tussle.WTI stays clueless above $40.00 as US dollar trims gains.BOC is expected to keep the benchmark rate unchanged at 0.25%, quarterly monetary policy report, press conference in focus.USD/CAD drops to 1.3595, down 0.13% on a day, during the pre-European trading on Wednesday. The loonie pair drops for the first time in five days ahead of the Bank of Canada’s (BOC) monetary policy report. Even so, the quote remains near the highest in two weeks as the US dollar bounces off monthly low. Commodity currencies, like the Canadian dollar, picked up bids during the early Asian session after news from Moderna, followed by comments from US President Donald Trump, confirmed nearness to the coronavirus (COVID-19) vaccine. Recent statistics from the US, Australia and Tokyo have been worrisome and updates suggesting the cure gains welcome. However, America’s shunning of Hong Kong’s special trading status and anticipated retaliation from China kept the moves capped afterward. Market’s risk-tone sentiment remains mildly positive with the US stock futures adding nearly 1.0% while Asia-Pacific shares, ex-China, following the suit. Additionally, US 10-year treasury yields add 1.6 basis points to extend the previous day’s recovery moves past-0.63%. Talking about oil, Canada’s main export item, WTI has been trading in a choppy range around $40.60/50 after stepping back from a four-day high of $41.08 before a few hours. On the other hand, the US dollar index (DXY), a gauge of the greenback versus the major currencies, bounces off the lowest since June 11 to 96.21 by the press time. With no major moves in WTI confronting US dollar pullback, amid risk-on mood, traders are struggling for a clear direction. As a result, today’s BOC meeting will be the key despite widely anticipated status-quo. The reason is the quarterly rate statement and press conference by Governor Tiff Macklem and Deputy Governor Carolyn A. Wilkins. Traders will look for mildly bearish comments to extend the latest pullback of USD/CAD, failing to do so can accelerate the moves to attack late-June tops. TD Securities said, “We do not expect any change in policy which will leave the focus centered around messaging and forecast updates. The latter will be key to the overall tone while the statement should emphasize heightened uncertainty and disinflationary pressures amid a widening output gap. Manufacturing sales for May and existing home sales for June round out the calendar; TD looks for manufacturing sales to rebound by 9.0% m/m, in line with consensus, while existing home sales are expected to surge 65% m/m by the market.” Technical analysis Unless providing a daily closing below 21-day EMA, currently near 1.3595, sellers are less likely to revisit and sloping trend line from June 10, at 1.3525 now. On the contrary, the pair’s successful trading above 50-day EMA level of 1.3665 could quickly pierce 1.3700 round-figures to aim for June 26 top near 1.3715.  

Traders increased their open interest positions in crude oil futures markets by around 47.2K contracts on Tuesday, in light of advanced figures from C

Traders increased their open interest positions in crude oil futures markets by around 47.2K contracts on Tuesday, in light of advanced figures from CME Group. In the same line, volume reversed the previous drop and rose by around 83.8K contracts. WTI now targets the 200-day SMA near $43.70 The barrel of West Texas Intermediate (WTI) continues to navigate within a side-lined theme around the key $40.00 mark. Tuesday’s positive price action was amidst rising open interest and volume, allowing for a potential move to the 200-day SMA around $43.70 in the near-term.

United Kingdom Consumer Price Index (MoM) came in at 0.1%, above expectations (0%) in June

Norway Trade Balance declined to -10.2B in June from previous -1.2B

Cable could trade within a downward bias but the move is expected to remain within the broader 1.2430/1.2650 range, suggested FX Strategists at UOB Gr

Cable could trade within a downward bias but the move is expected to remain within the broader 1.2430/1.2650 range, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Yesterday, we held the view that GBP ‘could break 1.2500 but is unlikely able to maintain a toehold below this level’. Our expectation was not wrong as GBP dropped to a low of 1.2480 before staging a sharp and swift rebound (overnight high of 1.2563). While the rapid bounce appears to be running ahead of itself, there is scope for GBP to extend towards 1.2605. For today, the major resistance at 1.2650 is not expected to come under threat. Support is at 1.2530 followed by 1.2500. The 1.2480 low is not expected to come into the picture.” “We highlighted yesterday (13 Jul, spot at 1.2625) that GBP ‘appears to be struggling to maintain its momentum’. We added, ‘while the outlook is still deemed as positive, GBP has to close above the major 1.2685 resistance before further sustained gains can be expected’. GBP subsequently plunged to an overnight low of 1.2551 before extending its decline after NY close. While our ‘strong support’ at 1.2520 is still intact, the price action is enough to indicate that the positive phase that started earlier this month has run its course. The current pull-back has scope to extend lower but at this stage, any weakness is viewed as part of a 1.2430/1.2650 range. In other words, GBP is unlikely to weaken significantly below 1.2430.”

GBP/USD is looking for a new direction after the UK clashed with China over Huawei and ahead of all-important inflation, jobs, and retail sales figure

GBP/USD is looking for a new direction after the UK clashed with China over Huawei and ahead of all-important inflation, jobs, and retail sales figures from the UK.  How is the currency pair positioned?  The Technical Confluences Indicator is showing that cable faces a wall of resistance at 1.2589, which is a dense cluster including the Bollinger Band 15min-Upper, the Pivot Point one-day Resistance 1, the BB 4h-Middle, the Simple Moving Average 4-one-day, the Fibonacci 38.2% one-week, the BB 1h-Upper, the Fibonacci 38.2% one-month, and more.  Further above, the next cap is at 1.2673, which is the convergence of the PP one-day R3 and the previous weekly high.  Support awaits at 1.2535, which is the confluence of the SMA 10-one-day and the Fibonacci 61.8% one-week. Further down, the next cushion is at 1.2490, which is the meeting point of the BB one-day Middle and the SMA 100-4h.  This is how it looks on the tool:Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas. Learn more about Technical Confluence

According to preliminary figures from CME Group for Gold futures markets, open interest went up by around 9.6K contracts, reaching the second build in

According to preliminary figures from CME Group for Gold futures markets, open interest went up by around 9.6K contracts, reaching the second build in a row. Volume followed suit and resumed the upside by nearly 32K contracts. Gold seen challenging YTD peaks The positive performance of prices of the ounce troy of Gold on Tuesday was on the back of rising open interest and volume, opening the door to a probable continuation of the uptrend in the short-term horizon.

Here is what you need to know on Wednesday, July 15: The market mood is upbeat after Moderna reported progress in developing a vaccine for coronavirus

Here is what you need to know on Wednesday, July 15: The market mood is upbeat after Moderna reported progress in developing a vaccine for coronavirus. Concerns about the spread of the disease in America, the Bank of Canada's decision, and tensions around Hong Kong are eyed.Moderna times: A vaccine candidate by Moderna has seen promising results, with high levels of antibodies and no significant secondary effects in patients. The publication of progress in the New England Journal of Medicine boosted stocks worldwide and weighed on the safe-haven US dollar.  US President Donald Trump has ordered an end Hong Kong's special status in retaliation to China's new security law against the territory. Beijing vowed to hit back with sanctions of its own. The UK will phase out the usage of Huawei technology.Coronavirus cases have surpassed 3.4 million in the US and deaths surpassed 136,000. California, which announced a sweeping shutdown, has seen a record number of cases, and so has Texas, which has only taken small measures. Figures from these states and Florida are eyed.  The Bank of Japan left its policy unchanged, as expected. Governor Haruhiko Kuroda and his colleagues reiterated their commitment to act without hesitation. The bank continues aiming for having 10-year bond yields at around 0%. The Tokyo coronavirus panel raised the infection alert rate to 3, the highest level.  The Bank of Canada is set to leave the interest rate unchanged at 0.25%. Tiff Macklem, the new governor, is set to maintain his cautious tone.  See Bank of Canada Preview: Data confirms a bottom, policymakers to remain cautiousUS industrial output and the Empire State Manufacturing Index are of interest after inflation figures for June beat expectations. Investors are awaiting Thursday's all-important Retail Sales release for June. EUR/USD is trading on high ground around 1.14 as German Chancellor Angela Merkel and Spanish Prime Minister Pedro Sánchez committed to moving forward with the EU Fund. A full summit begins on Friday. The pressure to sign off the accord is also coming from the European Central Bank.  See ECB Preview: EUR/USD depends on Lagarde's fearless nudging of the Frugal FourGBP/USD is trading just below 1.26 as the gradual reopening of the economy continues. Gross Domestic Product growth disappointed with only 1.8% in May, a slow bounce from the downfall in March and April. Consumer Price Index statistics for June are set to show stability.AUD/USD is flirting with the 0.70 level ahead of the release of Australian job figures for June and China's GDP for the second quarter. Melbourne remains under lockdown. NZD/USD is trading around 0.6550 ahead of New Zealand's inflation figures.Gold is trading above $1,800, consolidating previous gains. WTI Oil is hovering around $40 ahead of inventory data. Cryptocurrencies are stable with Bitcoin trading just below $9,300, Ethereum around $250, and XRP just under $0.20. 

FX Strategists at UOB Group expect EUR/USD to trade on a positive mood in the near-term. Key Quotes 24-hour view: “Yesterday, we highlighted that EUR

FX Strategists at UOB Group expect EUR/USD to trade on a positive mood in the near-term. Key Quotes 24-hour view: “Yesterday, we highlighted that EUR ‘could test the major resistance at 1.1380 first before the current upward pressure should ease’. We added, ‘the next resistance is at 1.1405’. In other words, we did not anticipate the sudden surge in momentum as EUR soared to an overnight high of 1.1408 before extending its gains this morning. Upward momentum remains robust and from here, a break of the June’s peak of 1.1422 would not be surprising. In view of the overbought conditions, the next resistance at 1.1460 could be just out of reach. Support is at 1.1390 followed by 1.1365.” Next 1-3 weeks: “While we noted yesterday (14 Jul, spot at 1.1345) that ‘if EUR closes above 1.1380 within these few days, a break of the June’s peak of 1.1422 would not be surprising’, we held the view that ‘the prospect for such a scenario is not high’. However, EUR soared to a high of 1.1408, closed on a strong note at 1.1396 (up by +0.49%) before extending its advance after NY close. Rapid pick-up in momentum suggests EUR could continue to advance towards the year-to-date high at 1.1492 even though the current momentum may not be enough to carry EUR above this major level. Overall, EUR is expected to trade with a positive note as long as it does not move below 1.1320 (‘strong support’ level).”

FX option expiries for July 15 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1290 601m 1.1350 681m 1.1400 1.7bn

FX option expiries for July 15 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1290 601m 1.1350 681m 1.1400 1.7bn 1.1450 824m - USD/JPY: USD amounts          107.00 755m 107.25 709m 107.30 473m

USD/INR drops to 75.28, down 0.05% on a day, ahead of the European session on Wednesday. In doing so, the pair steps back from the highest since July

USD/INR extends weakness from 75.57, snaps four-day winning streak.11-week-old horizontal support grabs bears’ immediate attention, bulls will have a bumpy road ahead.Normal RSI suggests the pullback to fade momentum once reaching the nearby support.USD/INR drops to 75.28, down 0.05% on a day, ahead of the European session on Wednesday. In doing so, the pair steps back from the highest since July 01 while respecting 50-day SMA as the key resistance. Considering the pair’s repeated failures to cross the key SMA since June 23, the quote is likely to revisit multi-day-old horizontal support near 75.00. Though, its further downside could be challenged by RSI and MACD conditions. If at all the quote remains weak past-75.00, the monthly bottom near 74.52 and a late-March low of 74.40 could challenge the sellers ahead of highlighting 74.00 on their radars. Meanwhile, the pair’s successful break above 50-day SMA level of 75.55 will have to clear 75.80 resistance to aim for the May-end peak near 76.10. Even so, the bulls won’t have a proper grip over the USD/INR pair as a falling trend line from April 06, at 76.19 now, stands tall to challenge the further upside. USD/INR daily chart Trend: Pullback expected  

Tokyo Governor Yuriko Koike is back on the wires this Wednesday, via Reuters, urging citizens to refrain from leaving the Japanese capital where possi

Tokyo Governor Yuriko Koike is back on the wires this Wednesday, via Reuters, urging citizens to refrain from leaving the Japanese capital where possible. Meanwhile, the Asian Nikkei Review reported that the Tokyo coronavirus panel raised the infection alert to the highest level. The panel reaffirmed that circumstances are "clearly different" from the first wave of the outbreak seen a few months back. Earlier today, the Economy Minister Yasutoshi Nishimura said that the COVID-19 infection state has not developed into a major wave yet.     Officials confirmed 143 new infections in the capital on Tuesday, bringing the total number to nearly 8,200 in the city of 14 million. Market reaction Amid mixed market sentiment, with escalating virus concerns and US-China tensions on one hand and vaccine hopes on the other, USD/JPY trades listless around 107.25. The spot paid little heed to the BOJ’s status-quo decision.

Asian equities track Wall Street’s gains as nearness to the coronavirus (COVID-19) cure pleases the bulls. Market sentiment turned positive after Mode

Asian shares, ex-Beijing, cheer hopes of coronavirus vaccine.US President Trump signed an executive order in response to Hong Kong security law, China to implement sanctions on American policymakers.BOJ held status-quo with mixed signals from the quarterly report.Asian equities track Wall Street’s gains as nearness to the coronavirus (COVID-19) cure pleases the bulls. Market sentiment turned positive after Moderna cited upbeat results of its third round of vaccine tests. The mood got an extra boost as US President Donald Trump said the COVID-19 vaccine will be out soon. While cheering the optimism surrounding the virus vaccine, traders paid a little heed to the US-China tussle. American President Trump signed an executive order to defy Hong Kong’s special trading status, which in turn was reflected by Beijing’s readiness to sanction US diplomats. On Tuesday, the world’s two largest economies had arguments over the South China Sea. Also challenging the risk-tone could be downbeat comments from New Zealand PM Jacinda Ardern and Australia’s Chief Health Officer Professor Brett Sutton. Elsewhere, the Bank of Japan held its monetary policy unchanged. However, the Japanese central bank did cite economic fears in its second quarter (Q2) Outlook Report while anticipating a recovery in GDP during the later part of the year. Against this backdrop, the MSCI index of Asia-Pacific shares outside Japan gain 0.10% while Japan’s Nikkei 225 rises 1.56% to 22,945 while heading into the European session on Wednesday. Australia’s ASX 200 and New Zealand’s NZX 50 both ignore virus woes with 1.75% and 1.20% gains respectively. However, stocks in China snap the recent run-up as the Sino-American tension gets heated. Additionally, Indonesia’s IDX rise 0.12% to 5,085 after trade numbers whereas South Korea’s KOSPI gains extra positives with weaker than anticipated 4.5% Unemployment rate. Indian equity bulls are also cheering the globally upbeat sentiment despite worrisome virus numbers and growing angst against the government at home. Moving on, market players now await BOJ Governor Haruhiko Kuroda’s speech while keeping eyes on the risk catalysts for immediate direction.

According to the latest trade data published by the Indonesian Statistics Bureau, the country posted a bigger-than-expected trade surplus in June. Ind

According to the latest trade data published by the Indonesian Statistics Bureau, the country posted a bigger-than-expected trade surplus in June. Indonesia reported a trade surplus of $1.27 billion vs. $1.11 billion expected and $2.09 billion previous. The imports and exports came in at -6.36% and +2.28% respectively vs. -18.70% and -12.26% expectations and -42.2% and -28.95% respective priors. About Indonesia’s Trade Balance The Trade Balance released by Statistics Indonesia is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. If a steady demand in exchange for Indonesian exports is seen, the Rupiah will receive a positive (or bullish) effect, while a low reading is seen as negative (or bearish).  

Indonesia Trade Balance came in at $1.27B, above forecasts ($1.11B) in June

Indonesia Imports above expectations (-18.7%) in June: Actual (-6.36%)

Indonesia Exports registered at 2.28% above expectations (-12.26%) in June

USD/CHF seesaws in a choppy range between 0.9400 and 0.9405, currently at 0.9403, during the pre-European session on Wednesday. The pair paused the pr

USD/CHF struggles to extend recent recoveries from 0.9392.200-HMA restricts the pair’s moves since last two weeks, short-term falling trend line adds to the upside barriers.Multiple supports below 0.9400 question bears amid bullish MACD.USD/CHF seesaws in a choppy range between 0.9400 and 0.9405, currently at 0.9403, during the pre-European session on Wednesday. The pair paused the previous three-day rise on Tuesday but turned down the bears afterward. Even so, key short-term resistances stand tall to challenge pullback moves. Considering the bullish MACD signal, the pair may portray another attempt to cross the 200-HMA level of 0.9415. Though its failure to bounce back from the same, as it has been so far during July, could push the buyers towards confronting a descending trend line from July 01, presently around 0.9425. If at all the USD/CHF prices manage to cross 0.9425 resistance line, 0.9450 might offer an intermediate halt during the rise to refresh the monthly top of 0.9494 with 0.9500 threshold. Should the pair stays below 200-HMA, 0.9385 and 0.9370 will become immediate support ahead of the Thursday low of 0.9362. It should also be noted that 0.9322/18 area comprising multiple lows marked during the early March can act as additional support for the pair below 0.9400 and before 0.9300 round-figure. USD/CHF hourly chart Trend: Bearish  

EUR/USD has backed off from one-month highs reached during the early Asian trading hours, possibly tracking signs of nervousness in some of the Asian

EUR/USD has declined to 1.1396 from the one-month high of 1.1423 reached early Tuesday. Losses in the Chinese stock markets seem to have put a bid under the US dollar. Risk assets remain vulnerable to Sino-US tensions despite the coronavirus vaccine news.EUR/USD has backed off from one-month highs reached during the early Asian trading hours, possibly tracking signs of nervousness in some of the Asian markets.  The pair is currently trading marginally weaker on the day at 1.1398, having put in a high of 1.1423 early Tuesday. That level was last seen on June 10.  The dollar seems to have picked up a bid in response to the weakness in stock markets in China and Hong Kong. As of writing, the Shanghai Composite is down nearly 1.4% on the day and Hong Kong's Hang Seng index is down 0.5%.  Indeed, the S&P 500 futures are still flashing green and so are other Asian indices like Japan's Nikkei and South Korea's Kospi. However, their upward momentum has stalled with equities in China flashing red.  Chinese stocks are facing selling pressure, possibly due to rising Sino-US tensions. President Trump, on Tuesday, signed a bipartisan bill into law, sanctioning Chinese officials involved in undermining rights to free speech and assembly in Hong Kong. Meanwhile, China decided early Tuesday to implement retaliatory sanctions on US officials. Looking ahead, the escalating tensions may overshadow hopes for coronavirus vaccine and push the global stock markets lower, in which case, EUR/USD may suffer deeper losses. The US stock futures picked up a bid early Tuesday on reports stating that  Moderna Inc.’s Covid-19 vaccine has produced antibodies to the coronavirus in all patients tested in an initial safety trial.  Technical levels  

The cost of living in the UK as represented by the Consumer Price Index (CPI) for June month is due early on Wednesday at 06:00 GMT. Considering the p

The UK CPIs Overview The cost of living in the UK as represented by the Consumer Price Index (CPI) for June month is due early on Wednesday at 06:00 GMT. Considering the pair’s recent upward trajectory, in contrast to the increasing odds of BOE’s rate cut, the inflation numbers will be the key for GBP/USD pair. The headline CPI inflation is expected to arrive at 0.4% on an annual basis, softer than the previous 0.5%. The Core CPI that excludes volatile food and energy items is likely to remain unchanged at 1.2% on a YoY basis. In this regard, analysts at TD Securities said, We look for inflation to dip a bit lower in June, with core CPI falling to 1.1% y/y (expected 1.2%), and headline CPI to 0.4% y/y (forecast 0.5%). As the UK economy began opening up in June, we believe that retailers likely provided deeper discounts than normal in order to clear their old stock, and to lure consumers back to the shops. They may also need to continue providing deeper discounts in order to compete with online retailers, as so much of consumer purchasing has shifted online now. External MPC member Silvana Tenreyro delivers a speech on COVID-19 and the economy at 9 am BST. Deviation impact on GBP/USD Readers can find FXStreet's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips. How could it affect GBP/USD? By the press time of pre-London open on Wednesday, GBP/USD eases from intraday top of 1.2587 to 1.2567, up 0.12% on a day, while defying the previous two-day losing streak. The pair’s recent gains could be attributed to the increasing hopes of further stimulus from the UK government as well as broad US dollar weakness. However, the latest risk-on mood, amid expectations of nearness to the coronavirus (COVID-19) vaccine, compress the pair’s upside. It should also be noted that the chatter concerning the BOE’s negative rates has been gaining momentum off-late. As a result, below-forecast UK price pressures data can weigh on the pair’s recent recovery. However, any surprises following mixed UK GDP figures might not hesitate to probe the monthly top near 1.2670 ahead of challenging the June month top close to 1.2813. Key notes GBP/USD Forecast: UK data hits the Pound GBP/USD Price Analysis: Bulls breaking up through critical 4HR structure, blue skies on horizon About the UK CPIs The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

Gold consolidates the recent pullback well above the $1800 mark, as the coronavirus vaccine hopes boost the equities and downs the greenback. Are gold

Gold consolidates the recent pullback well above the $1800 mark, as the coronavirus vaccine hopes boost the equities and downs the greenback. Are gold bulls bidding up for a test of the multi-year highs?   The Technical Confluences Indicator shows that the yellow metal continues to face stiff resistance around $1813, the confluence of the previous day high and Bollinger Band four-hour Upper and The next resistance is aligned at $1818, the multi-year high. Acceptance above the latter awaits the power barrier at $1821, which is the pivot point one-month R1. On the flip side, the bulls will continue to find bids at $1806, where the Fibonacci 23.6% one-day and one-week coincide. Further south, the convergence of the Fibonacci 38.2% one-day and Bollinger Band 4H Middle at $1804 is the level to beat for the bears. A sharp decline towards the downside target of $1796 cannot be ruled on a break below the latter. That target is the confluence of the Bollinger Band one-hour lower and pivot point one-day S1. Here is how it looks on the tool   Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.Learn more about Technical Confluence

USD/IDR prints 0.28% intraday gains while trading around 14,605 amid the early Wednesday. The pair portrays a third positive day following its upside

USD/IDR stays near the highest levels in seven weeks ahead of the key Indonesian trade numbers.Forecasts suggest decline in headline Trade Balance from $2.09B to $1.11B, Exports and Imports are likely to recover.Monthly ascending trend channel could restrict the pair’s run-up beyond the key EMA.USD/IDR prints 0.28% intraday gains while trading around 14,605 amid the early Wednesday. The pair portrays a third positive day following its upside break of 50-day EMA on Tuesday. Even so, traders are waiting for June month Indonesian trade numbers to predict near-term moves inside an upward sloping trend channel established since June 10. Should the Indonesian economics continues to linger, the pair might attack 14,750/70 resistance confluence comprising 23.6% Fibonacci retracement of April-June fall and the upper line of the said channel. In a case where the bulls manage to cross 14,770 barriers, they can aim for 15,000 thresholds before confronting late-May top near 15,020. Alternatively, upbeat data could drag the pair back to a 50-day SMA level of 14,480. Though, the further downside will be challenged by the channel’s support of 14,335. It should be noted that any downside past-14,335 will not only be detrimental for 14,000 mark but can also challenge June month’s low near 13,850. USD/IDR daily chart Trend: Pullback expected  

West Texas Intermediate (WTI) oil is currently trading largely unchanged on the day at $40.50 per barrel, having failed to take out resistance at $40.

WTI surrenders gains after facing rejection at key trendline hurdle. Fears that OPEC+ may ease output cuts look to be capping the upside. West Texas Intermediate (WTI) oil is currently trading largely unchanged on the day at $40.50 per barrel, having failed to take out resistance at $40.86 early Tuesday. That level is housing the trendline connecting June 23 and June 8 highs.  The black gold rose nearly 0.5% on Tuesday, as US crude inventories fell by 8.3 million barrels in the week to July 10, beating analysts’ expectations for a decline of 2.1 million barrels. However, the recovery from $39 ran out of the steam at the trendline hurdle early Tuesday, possibly due to fears that the OPEC+, a group of major producers led by Saudi Arabia and Russia, may decide to raise output on Wednesday.  Key members of OPEC and allies including Russia, a group known as OPEC+, are set to decide whether to extend output cuts of 9.7 million barrels per day (bpd) that end in July or ease them to 7.7 million bpd, according to Reuters. A taper cannot be ruled out, as oil prices have quadrupled since hitting lows below $10 in April.  “OPEC+ decision on production cut tapering will set the tone for the oil market,” ANZ Research said in a note, according to Reuters.  A bigger-than-expected taper will likely yield a notable price pullback, more so, as the resurgence of coronavirus in the US is derailing reopening plans.  Technical levels  

Speaking in a Fox News interview on Wednesday, White House (WH) Economic Adviser Larry Kudlow said that the trade deal with China is 'still engaged'.

Speaking in a Fox News interview on Wednesday, White House (WH) Economic Adviser Larry Kudlow said that the trade deal with China is 'still engaged'. US President Donald Trump is putting China on notice for Hong Kong misdeeds, Kudlow added.   more to come ...

USD/JPY is barely moving in response to the Bank of Japan's latest decision to keep key monetary policy tools unchanged. The central bank retained the

BOJ keeps key policy tools unchanged, USD/JPY remains comatose. Risk-on could keep the yen under pressure during the day ahead. BOJ's dismal economic forecasts may add to bearish pressures around the Yen. USD/JPY is barely moving in response to the Bank of Japan's latest decision to keep key monetary policy tools unchanged.  The central bank retained the 10-year government bond yield target at 0.00% and kept the policy balance rate unchanged at -0.10%, as widely expected. As such, there is little reason for traders to buy or sell the Japanese yen aggressively.  However, the BOJ said that the Japanese economy is in an extremely severe situation and could contract by 4.7% in the financial year 2020. In addition, the central bank expects the core consumer price index to decline to -0.5% in 2020. These dismal forecasts may weigh over the Japanese yen during the day ahead.  The anti-risk yen could also face selling pressure due to the uptick in the stock markets. At press time, the futures on the S& 500 are reporting a 0.75% rise, possibly on the back of potential coronavirus vaccine showing positive results in a safety trial.  As of writing, USD/JPY is trading largely unchanged on the day near 107.25, having witnessed a 5-pip rise to 107.31 immediately following the BOJ rate decision.  Technical levels  

BOJ Quarterly Report: Risks to Japan’s economic, price outlook skewed to downside more to come ....

BOJ Quarterly Report: Risks to Japan’s economic, price outlook skewed to downside   more to come ....

South Korea Money Supply Growth above forecasts (7.9%) in May: Actual (8.6%)

Japan BoJ Interest Rate Decision meets forecasts (-0.1%)

At its July monetary policy review meeting concluding on Wednesday, the Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps wh

At its July monetary policy review meeting concluding on Wednesday, the Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps while maintaining a 10yr JGB yield target at 0.00%.   more to come ...

The outlook for the US economy remains highly uncertain and we may not see the effect of the recession right away due to all the stimulus, Jamie Dimon

The outlook for the US economy remains highly uncertain and we may not see the effect of the recession right away due to all the stimulus,  Jamie Dimon, CEO of JPMorgan, the largest U.S. lender, said on Tuesday, according to Reuters.  Key quotes We are just guessing. . . We are prepared for the worst case. We simply don't know. I don't think anyone knows. . . it's unprecedented. You will see the effect of this recession. You're just not going to see it right away because of all the stimulus. We can easily get through very, very tough times and never cut the dividend.

In an interview with CNBC, Goldman Sachs’ co-head of global foreign exchange, Zach Pandl, offers his upbeat outlook on the Chinese yuan over the long-

In an interview with CNBC, Goldman Sachs’ co-head of global foreign exchange, Zach Pandl, offers his upbeat outlook on the Chinese yuan over the long-term. Key quotes “Health of the Chinese economy, the domestic picture in China looks pretty solid.” “China pretty good rebound from the coronavirus pandemic.” I think we need to recognize that the US dollar is a safe-haven and tends to go up against almost all currencies when the global economy's turning over. If we find out that we don't really have the virus under control, we're going back into a double-dip recession ... that would be major risk for all our currency forecasts.” “The relationship between Beijing and Washington ahead of elections in November. “

Japanese Economy Minister Yasutoshi Nishimura said in a statement on Wednesday, the COVID-19 infection state has not developed into a major wave yet.

Japanese Economy Minister Yasutoshi Nishimura said in a statement on Wednesday, the COVID-19 infection state has not developed into a major wave yet.     He added that his government is doing the utmost to avoid a state of emergency. This comes after Tokyo Governor Koike said that the current virus situation in Tokyo is very severe. On Tuesday, Nishimura said that the government could declare an emergency if infections grow further. Market reaction USD/JPY trades flat in a narrow range around 107.25, unperturbed by the risk-on rally in the Asian equities and broad US dollar weakness, as markets await the Bank of Japan (BOJ) decision for a fresh direction.

AUD/JPY takes the bids near 75.13, up 0.44% on a day, during the early Wednesday. The pair recently surged to the highest in over a monthly amid a bro

AUD/JPY prints three-day winning streak to refresh the highest levels since June 10.An upward sloping trend line from June 16 guards immediate advances.200-bar EMA, short-term ascending support line gains more attention amid nearly overbought RSI conditions.AUD/JPY takes the bids near 75.13, up 0.44% on a day, during the early Wednesday. The pair recently surged to the highest in over a monthly amid a broad rise in the Australian dollar. However, RSI conditions and an immediate resistance line question the bulls off-late. Hence, sellers will look for entry if the pair slips below Monday’s high of 75.00. Though, 200-bar EMA and a rising trend line from June 21, respectively, around 74.30 and 74.20, will restrict the quote’s further weakness. In a case where the AUD/JPY sellers dominate past-74.20, the bearish formation named rising wedge will be confirmed, which in turn could drag the quote towards 72.00. On the flip side, a sustained run-up past-75.00 enables the bulls to aim for June 10 high near 75.60. Further, the pair’s ability to stay strong above 75.60 will easily cross the 76.00 threshold to challenge the previous month’s peak surrounding 76.80. AUD/JPY four-hour chart Trend: Pullback expected 

NZD/USD is trading at 0.6558 at press time, representing a 0.43% gain on the day. The pair has charted a golden crossover on the daily chart. The gold

NZD/USD's daily chart shows a golden cross of 50- and 200-day SMAs. Crossovers are lagging indicators and move above 0.66 is needed to revive a bullish trend.NZD/USD is trading at 0.6558 at press time, representing a 0.43% gain on the day.  The pair has charted a golden crossover on the daily chart. The golden cross refers to the bullish cross of the 50- and 200-day simple moving averages (SMAs) is an indicator of a long-term bull market.  However, SMA studies are based on past data. As such, crossovers are not reliable indicators.  Besides, a close above 0.66, the high of the Doji candle created on July 9, is needed to revive the uptrend from the low of 0.55 observed in March. That would open the doors for 0.6756 (Dec. 31 high).  Meanwhile, on the lower side, 0.6503 (Tuesday's low) is key support, which if breached, could cause more sellers to join the market, leading to a deeper drop to 0.64. Daily chartTrend: Neutral Technical levels  

Despite the country succeeding in combating the coronavirus outbreak, New Zealand (NZ) Prime Minister (PM) Jacinda Ardern warned on Wednesday that the

Despite the country succeeding in combating the coronavirus outbreak, New Zealand (NZ) Prime Minister (PM) Jacinda Ardern warned on Wednesday that they must be prepared for new outbreaks as the pandemic spreads globally. Key quotes (via Reuters) “Will not drop its elimination strategy if community transmission was discovered.” “The epidemic was now exploding outside New Zealand and countries that had been models in the fight against COVID-19 had now experienced further community outbreaks.”

In the view of analysts at Goldman Sachs, the US benchmark index, the S&P 500, is poised for additional returns after forecasting solid returns in the

In the view of analysts at Goldman Sachs, the US benchmark index, the S&P 500, is poised for additional returns after forecasting solid returns in their previous estimate. Key quotes “Will deliver an average annualized total return of 6% during the next 10 years. Distributions best describe the potential path of the market and reflect the uncertainty inherent in forecasting the future. Returns of 2%-11% capture one standard deviation around our mean estimate.  In July 2012, we predicted US equities would generate an 8% annualized return during the coming 10 years, with a range of 4%-12%. S&P 500 actually returned 13.6% annually since we published our report eight years ago.  Pretty good.   Our equity return forecast combined with the current record low 0.7% ten-year US Treasury yield suggests stocks have a greater than 90% likelihood of outperforming bonds through 2030. In this report, we use five approaches to forecast prospective equity returns: (1) starting absolute valuation, (2) starting relative valuation, (3) aggregate equity allocations, (4) dividend yield and growth, and (5) economic modelling. Each approach has its benefits and drawbacks. De-globalization, tax rates, margins, demographics, and constituent turnover in equity indices represent risks to our forecast.”

Early on Wednesday, around 03:00 AM GMT, the Bank of Japan (BOJ) will provide the decision of its routine monetary policy meeting. The central bank is

Early on Wednesday, around 03:00 AM GMT, the Bank of Japan (BOJ) will provide the decision of its routine monetary policy meeting. The central bank is widely expected to offer no change to its present monetary policy. In doing so, the BOJ will keep the short-term interest rate target at -0.1% and directing 10-year government bond yields toward zero. However, the quarterly publication of the economic outlook makes the event the key. It’s worth mentioning that the recent escalation of the coronavirus (COVID-19) cases in Tokyo could push policymakers towards adding further downbeat comments in the rate statement. Other than the BOJ action, Governor Haruhiko Kuroda’s speech at 06:00 GMT will also become the key for the yen pair. Major five banks including TD Securities and Standard Chartered are of the view that the BOJ will again portray a bearish halt to the monetary policy. Though, the appointment of the new monetary policy team head could offer surprises. Read: BoJ Preview: Five major banks expectations How could it affect the USD/JPY? USD/JPY struggles to keep the recent run-up past-107.00 ahead of the BOJ on Wednesday. The pair earlier benefited from hopes of virus vaccine and upbeat earnings but fears of the highest alert in Tokyo questions the bulls. Talking about the monetary policy decision, a lack of major moves could keep the traders looking for details in the rate statement and the second-quarter economic outlook. Hence, downbeat forecasts, which are more likely, can help the pair in refreshing the monthly top. However, any surprise moves might not refrain from offering a knee-jerk reaction to the markets. Technically, a daily closing beyond 50-day SMA, currently near 107.50, becomes necessary for the bulls to challenge the monthly high of 108.17. Meanwhile, an ascending trend line from June 23, at 106.75 now, becomes the key short-term support. Key Notes BOJ Preview: No changes in policy, but forecast downgrades expected USD/JPY: All eyes on BOJ to extend run-up past-107.00About BoJ Rate DecisionBoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.

South Korea Trade Balance down to $3.632B in June from previous $3.67B

Tensions between both China and the US is garnering attention financial markets again. We are seeing tit for tat sanctions between Beijing and Washing

Tensions between both China and the US is garnering attention financial markets again. We are seeing tit for tat sanctions between Beijing and Washington with the latest headline, China to implement sanctions on US officials, entity over Hong Kong in retaliation for the signed HK executive order by US President Donald Trump. Meanwhile, war is a real scenario. The Global Times reports that US Secretary of State Mike Pompeo's Monday announcement of the US' formal rejection of China's claims in the South China Sea means that Washington is no longer pretending to remain neutral on territorial disputes in the waters. It signals the US has decided to take a clear-cut position and it wants a showdown with Beijing on the issue.  China has numerous cards to play. The only matter is whether or not Beijing wants to play them as it never wishes to see tensions running high in the region or deteriorating ties with its neighboring countries.  The US' latest statement may send a wrong message to other claimant countries in the South China Sea that the US encourages them to provoke China over territorial disputes and make them believe the US has their back. The truth is, when tensions escalate in the waters with even possibilities of military conflicts and regional security crises, it is those peripheral countries that will pay the highest prices. The US, after driving a wedge between China and other regional countries, will then be delighted to take a back seat to watch the scene.  Market implications The hype is risk asset negative. AUD also trades as a proxy to the spat between the two countries.  Here is a view on USD/JPY from the NY session which takes into account the prospects of worsening friction between the two nations: USD/JPY: Bears eye 61.8% Fib, but H&S could be in the making first 

The Aussie dollar and other high beta currencies are drawing bids on Tuesday with the US stock futures flashing green on the back of potential coronav

AUD/USD rises above 0.70 as US stock futures cheer coronavirus vaccine news. Risk-on is overshadowing the Sino-US tensions and weak Aussie data. Australia's consumer confidence dropped in July on the resurgence of the virus. The Aussie dollar and other high beta currencies are drawing bids on Tuesday with the US stock futures flashing green on the back of potential coronavirus vaccine showing positive results in a safety trial.  AUD/USD is trading at 0.7014 at press time, the highest level since June 10, having opened the day at 0.6974. The pair is reporting a 0.52% gain on the day. Meanwhile, the futures on the S&P 500 are up over 0.80%.  Futures jumped after the news hit the wires that Moderna Inc.’s Covid-19 vaccine produced antibodies to the coronavirus in all patients tested in an initial safety trial. It's the first vaccine tested in the U.S. to publish results from its trials in a peer-reviewed journal, according to U.S. News.  The risk-on is overshadowing the weak Aussie data released early Wednesday and the Sino-US tensions and keeping the safe-haven US dollar under pressure.  Australia's consumer confidence index published by Westpac fell to -6.1% in July, almost entirely reversing the 6.1% rise seen in June. Confidence looks to have been shaken by the rise in the number of coronavirus cases in Australia.  Meanwhile. President Trump on Tuesday signed a bipartisan bill into law, sanctioning Chinese officials who undermine the rights to free speech and assembly in Hong Kong. As per the latest reports, China has decided to implement retaliatory sanctions on US officials. The AUD and other risk assets may come under pressure if the tension between Washington and Beijing continues to heighten. Technical levels
 

USD/ZAR drops to 16.66 during Wednesday’s Asian session. In doing so, the pair revisits the lowest levels in five weeks amid bearish MACD. However, 50

USD/ZAR extends the previous day’s losses to test the lowest since June 11.50% Fibonacci retracement questions immediate downside ahead of the key EMA.A three-week-old falling trend line guards nearby rise.USD/ZAR drops to 16.66 during Wednesday’s Asian session. In doing so, the pair revisits the lowest levels in five weeks amid bearish MACD. However, 50% Fibonacci retracement level of its January-April upside restricts the immediate declines. Other than the crucial Fibonacci retracement level near 16.60, a 200-day EMA level of 16.43 also questions the pair bears ahead of the June month’s low near 16.30. Given the quote’s sustained downside past-16.30, 16.00 threshold and 61.8% Fibonacci retracement level near 15.97 will be important supports to watch. Meanwhile, the weekly top near 16.89 and 17.00 round-figures might entertain short-term buyers. Though, a descending trend line from June 25, at 17.15 now, will guard the further pair’s upside. USD/ZAR daily chart Trend: Bearish  

China to implement sanctions on us officials, entity over Hong Kong. The headline follows US Pres. siging of the HK executive order: Trump's US Presid

China to implement sanctions on us officials, entity over Hong Kong. The headline follows US Pres. siging of the HK executive order: Trump's US President Donald Trump: Signed executive order to hold China accountable for its actions against Hong Kong US President Trump: You'll see more coming on actions towards China Key points Trump says Hong Kong’s people’s freedom has been taken away. Trump says he signed executive order ending preferential treatment for Hong Kong. Trump says he has convinced many countries not to use Huawei. Trump says he holds china fully responsible for concealing the coronavirus and unleashing it on the world. Trump says the rise of China is not a positive development for US. more to come...

The People’s Bank of China (PBOC) injected 400 billion yuan via one-year medium-term lending (MLF) facility on Wednesday. The Chinese central bank iss

The People’s Bank of China (PBOC) injected 400 billion yuan via one-year medium-term lending (MLF) facility on Wednesday. The Chinese central bank issued the one-year MLF at 2.95%, unchanged from the previous operation. more to come ...

Chief health officer, Prof Brett Sutton, has warned that there will be more deaths from the current wave of coronavirus cases in Victoria. When we hav

Chief health officer, Prof Brett Sutton, has warned that there will be more deaths from the current wave of coronavirus cases in Victoria. When we have 238 cases every day we are looking at 2-3 deaths in a week’s times, so we have to have these numbers decrease. He said the numbers appear to be stabilising right now, but said there is “no guarantee of a drop off” in case numbers. Whether it happens will depend on how well people are obeying the stay at home orders, he says. more to come...

USD/JPY seesaws around the intraday high if 107.30 amid the initial hour of Tokyo open on Wednesday. The yen pair gained bids as market sentiment chee

USD/JPY refreshes the intraday high following a U-turn from 107.15.Increasing hopes of virus vaccine follow Wall Street's performance to recall the bulls.News that Tokyo will raise the pandemic to the highest levels, fears of an escalation in the US-China tussle challenge sentiment.BOJ will be the key despite no change expected in the monetary policy.USD/JPY seesaws around the intraday high if 107.30 amid the initial hour of Tokyo open on Wednesday. The yen pair gained bids as market sentiment cheers upbeat earnings from major US banks and further news suggesting the coronavirus (COVID-19) vaccine is nearby. However, the bulls remain cautious ahead of the key monetary policy meeting of the Bank of Japan (BOJ). Cautious optimism eyes BOJ… With the upbeat earnings from JP Morgan and Citi, Wall Street took a sigh of relief after Monday’s weakness. Dow Jones gained 2.13% to 26,642.59 whereas S&P 500 and Nasdaq also added near 1.0% profits by the end of Tuesday’s trading. To extend the optimism, updates from Moderna and US President Donald Trump, signaling proximity to the vaccine, played their role. However, news that Tokyo will escalate alerts to the highest of four levels on Wednesday caps the risk-on mood. While conveying the  data, Reuters said, “daily coronavirus cases exceeded 200 in four of the last six days, touching an all-time high of 243 cases last Friday as testing among workers in the metropolis’s red-light districts turned up infections among young people in their 20s and 30s.” Additionally, US President Donald Trump’s threat to have more actions for China, followed by Global Times’ comments defying the warnings, offer an extra burden on the risk-takers. While portraying the market sentiment, the US 10-year Treasury yields and stocks in Asia-Pacific remain bid. Looking forward, the BOJ remains as the key event for pair traders even if the policymakers are neither anticipated to alter the current benchmark rate nor the bond purchase program. The reason is the presence of a quarterly economic forecast. Bears are looking for downbeat expectations to break 107.00. Read: BOJ Preview: No changes in policy, but forecast downgrades expected Other than the BOJ, risk catalysts will also be the key as the latest optimism has many barriers to convince bulls for a long time. Technical analysis A daily closing beyond 50-day SMA, currently near 107.50, becomes necessary for the bulls to recall the above-108.00 area.  

Gold is sidelined around $1,809 per ounce at press time with the daily chart MACD histogram, an indicator used to identify trend changes and trend str

Gold's daily chart shows a bearish divergence of the MACD, a sign of uptrend exhaustion. A break below the 10-day SMA could prove costly.Gold is sidelined around $1,809 per ounce at press time with the daily chart MACD histogram, an indicator used to identify trend changes and trend strength, reporting a bearish divergence.  A bearish divergence occurs when an indicator prints a lower high, contradicting a higher high on price and is reflective of buyer exhaustion.  As such, the metal looks vulnerable to price pullback. Moreover, the bearish divergence of the MACD would remain valid as long as prices are held below the recent high of $1,818.  The immediate support is seen at $1,795 (10-day simple moving average). Acceptance under that support line could cause some buyers to exit the market, leading to a deeper pullback. This is because sellers have failed multiple times to establish a strong foothold below the 10-day simple moving average in the last four weeks.  On the higher side, $1,818 is the level to beat for the bulls.  Daily chartTrend: Buyer exhaustion Technical levels  

Victorian premier Daniel Andrews says 27,040 coronavirus tests were conducted yesterday, and almost 1.2m tests have been conducted since 1 January. He

 NSW records 13 new cases of coronvirus overnight.That’s 13 new cases in the 24-hours to 8pm last night.The Guardian reported that Victorian premier Daniel Andrews says 27,040 coronavirus tests were conducted yesterday, and almost 1.2m tests have been conducted since 1 January. He says the testing rate per 100,000 head of population remains “one of the highest in the world” but doesn’t say what it is. It includes 10 cases connected to the Crossroads Hotel cluster, bringing the size of that cluster to 30. Andrews said that most people are doing the right thing and obeying the stage three restrictions, but that if people do not follow the rules those restrictions could tighten. If the rules are not followed, Andrews said, 'we will have to move to additional restrictions being put in place and we will have to prolong the period that the restrictions were put in place.' He says he is concerned about the situation Melbourne is in. These hospitalisation numbers are of great concern to us.

Texas coronavirus cases rise by at least 10,677 to 284,729 on Tuesday according to a Reuters tally which stated that Texas coronavirus deaths rose by

Texas coronavirus cases rise by at least 10,677 to 284,729 on Tuesday according to a Reuters tally which stated that Texas coronavirus deaths rose by 133 to 3,454 on Tuesday, which was biggest daily increase ever. Meanwhile, Brazil's COVID-19 death toll tops 74,000, according to the Xinhua News Agency. Brazil on Tuesday reported 1,300 deaths from COVID-19 in a single day, taking its death toll to 74,133. In the past 24 hours, tests detected 41,857 new cases of infection, taking the total to 1,926,824, the Health Ministry said. Brazil has the world's second-largest outbreak after the United States, in both numbers of deaths and infections. The novel coronavirus pandemic has now killed more than 576,000 people worldwide. Over 13.2 million people across the globe have been diagnosed with COVID-19. The actual numbers are believed to be much higher though due to testing shortages and unreported cases.  The United States has become the worst-affected country, with more than 3.4 million diagnosed cases and at least 136,458 deaths. Meanwhile, the good news is that Moderna released data from its Phase 1 trial Tuesday, saying the trial was relatively safe and that all 45 people who were given the vaccine developed COVID-19 antibodies. These antibodies are believed to provide some level of immunization, but how much immunization and for how long is still to be determined. The trial was made up of three groups with 15 people in each group. Each group received a different dose of the vaccine -- low, medium or high, ABC News reported.         

The People's Bank of China (PBOC) has set the yuan reference rate at 6.9982 versus Tuesday's fix at 6.9996.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.9982 versus Tuesday's fix at 6.9996.

With US virus cases spiking and the death toll mounting, more on that here, Coronavirus Update: Texas hospitalizations mark daily record with 10,745 i

With US virus cases spiking and the death toll mounting, more on that here, Coronavirus Update: Texas hospitalizations mark daily record with 10,745 increase, Nevada joins the league, there was a glimmer of hope from the following news: Moderna says its coronavirus vaccine trial produced ‘robust’ immune response in all patients – CNBC Meanwhile, Reuters reported that China reported on Wednesday six new coronavirus cases in the mainland for July 14, up from three cases a day earlier, the health authority said. All of the new infections were imported cases, the National Health Commission said in a statement. There were no new deaths. China also reported four new asymptomatic patients, down from five a day earlier. As of July 14, mainland China had a total of 83,611 confirmed coronavirus cases, it said. China's death toll from the coronavirus remained unchanged at 4,634. As for Australia, the Federal health minister Greg Hunt will give a national coronavirus update about 12.15pm local time.  The number of confirmed cases of COVID-19 in Australia surpassed 10,000 on Tuesday. As of Tuesday afternoon there have been 10,251 confirmed cases of COVID-19 in Australia. Here are yesterday's Victoria numbers while we await the updates.  As of 14 July 2020, As of 14 July 2020, the total number of coronavirus (COVID-19) cases in Victoria is 4,224 with 270 new cases since yesterday's report. The overall total has increased by 257, with 13 cases reclassified, largely due to duplication. Of the new cases, 28 are linked to outbreaks and 242 are under investigation. No new cases have been detected in a returned traveller in hotel quarantine. 752 cases may indicate community transmission. 85 people are in hospital, including 26 patients in intensive care. There have been two deaths reported since yesterday. To date, 26 people have died. There are 1,803 cases currently active in Victoria. 2,395 people have recovered. Of the total cases, 3,799 are from metropolitan Melbourne and 298 are from regional Victoria. More than 1,170,300 test results have been received by the department since 1 January 2020. Further details can be found in today's coronavirus (COVID-19) media release. An update to the Case and Contact Management Guidelines (Word) (v23 10 July 2020) has been made and relates to the assessment of close contact in healthcare workers who wear masks. Up-to-date epidemiological data is available on our website          

Economists at Goldman Sachs are forecasting a partial V-shaped recovery in the US economy, which would include a reversal of more than half the 2020 e

Economists at Goldman Sachs are forecasting a partial V-shaped recovery in the US economy, which would include a reversal of more than half the 2020 economic contraction by September, but no full recovery in GDP to pre-coronavirus levels until mid-2021, according to MarketWatch. The forecast, however, is based on the assumption that there is premature fiscal tightening or resurgence in the number of coronavirus cases.  Key quotes The rise in the Institute for Supply Management’s manufacturing index suggests that the economy was already rebounding quickly in sequential terms in June. A “multi-month decline in the PMIs to 45 or below” would be a warning sign of stalling momentum, they add, while a sustained period of PMIs of 55 or more would signal a true “V-shaped” recovery.

S&P 500 Futures print 0.80% gains on a day while taking rounds to 3,210 during the initial hour of Tokyo open on Wednesday. The risk barometer jumped

S&P 500 Futures stay positive around Monday’s top, bulls catching a breather though.Upbeat earnings, increasing odds of nearness to virus cure keep the risk-on mood intact.US President Trump signed executive order to shun Hong Kong’s special trading status, also said more to come for China.S&P 500 Futures print 0.80% gains on a day while taking rounds to 3,210 during the initial hour of Tokyo open on Wednesday. The risk barometer jumped the previous day following an upbeat performance by the US banks and the gains were stretched as latest updates suggest nearness to the coronavirus (COVID-19) vaccine. However, bulls seem to catch a breather off-late as pandemic figures from the US states suggest the worst isn’t over. Earnings from major banks like JP Morgan and Citi made it clear that the policymakers’ pumping of the economy has its benefits. The upbeat announcements helped Wall Street benchmarks to lure the bulls on Tuesday. The moves to additional push after Moderna cited ‘robust’ outcome of the third trial and US President Trump reiterated that the vaccine will be out soon. However, the signing of the executive order to take away Hong Kong’s special trading status and alleging China for the global virus outbreak by the US leader tame the bulls. The Republican leader also cited more hardships for china. Though, Global Times shrugs off the action while indicating that Beijing expected more from the US. Other than the anticipated escalation in the Sino-American tussle, rising pandemic numbers from the key US states also challenge the latest risk-on sentiment. Be it Texas or Nevada, not to forget Los Angeles County, Americans are the major sufferers of the deadly virus. The latest coronavirus update marks another round of record numbers from the world’s largest economy. Amid all these plays, US 10-year Treasury yields increase 2.2 basis points to extend the previous day’s run-up towards 0.64%. Further to portray the risk-on mood, Japan’s Nikkei 225 and Australia’s ASX 200 are both flashing gains over 1.0% by the press time. Looking forward, traders will keep eyes on the Bank of Japan’s (BOJ) monetary policy meeting while also taking note of the risk catalysts for near-term trade direction.

The pound has been one of the best-performing G10 currencies of late. Investors have been encouraged by an improvement in the coronavirus statistics f

GBP bulls taking over and seeking out a break from key support.Blue skies are on the horizon, but there is plenty of leg work to do yet. The pound has been one of the best-performing G10 currencies of late. Investors have been encouraged by an improvement in the coronavirus statistics for the UK as well as the easing of the lockdown.  In yesterday's note, GBP/USD is a loaded pair of fundamentals, technically ripe for the bears, the June 24th highs were targetted for which the price met and exceeded with a bullish pin bar.  While the fundamentals have not changed from a longer-term perspective, which could be troublesome for the following bullish technical outlook, there is still some topside analysis worth exploring this juncture.  Let's start at the top and work our way in.  Firstly, we can see that the longer-term charts have the pair trapped between monthly support and weekly resistance.  Then, we can see that the price made it back to yesterday's said target and has held at the structure. Blue skies on the horizon On a wave count of impulse and corrections, we would expect to see the resistance structure, on a daily basis, be tested again. A failure there would open prospects of the 4th wave, (correction), being supported for a higher low at current resistance before wave 5, (impulse), has a chance to test back at the resistance and break higher for blue skies.  The only thing that is required for this scenario to unfold is nearer-term price action holding above the support structure that it has just penetrated in recent trade (early Asia). At this juncture, a retest of the structure would be a compelling entry point if the price doesn't just continue higher. However, we need to see momentum in the bullish territory from a 4HR perspective for additional confirmation as well as price moving through the 21 moving average.       

Australia Westpac Consumer Confidence declined to -6.1% in July from previous 6.3%

WTI trims early-day gains while declining to $40.72 during the initial hour of Tokyo open on Wednesday. In doing so, the energy benchmark portrays one

WTI takes a U-turn from $41.08 to mark fifth failure to stay beyond the $41.00 threshold.21-day EMA, a three-week-old support line restrict immediate downside.June month high, 200-day EMA offers strong resistance.WTI trims early-day gains while declining to $40.72 during the initial hour of Tokyo open on Wednesday. In doing so, the energy benchmark portrays one more failure to stay beyond $41.00. The quote bounced off 21-day EMA the previous day. With the bearish MACD joining the black gold’s repeated failures to cross $41.00, sellers are rolling up their sleeves for $40.00 psychological magnet. Though, 21-day EMA near $39.50 and an upward sloping trend line from June 25, at $39.15 now, could challenge the bears. In a case where the oil prices remain weak past-$39.15, the late-June month’s bottom surrounding $37.10 should return to the charts. Alternatively, a clear break beyond $41.00 needs validation from June month’s top of $41.65 and 200-day EMA, currently around $41.80, to aim for February’s low close to $44.00. WTI daily chart Trend: Pullback expected  

EUR/USD jumped to a four-month high of 1.1423 soon before press time, taking the week-to-date gain to 1.10%. The pair closed well above 1.1349 on Tues

EUR/USD prints a four-month high of 1.1423 in Asia. The pair witnessed a bullish breakout above 1.1349 on Tuesday. EUR/USD jumped to a four-month high of 1.1423 soon before press time, taking the week-to-date gain to 1.10%.  The pair closed well above 1.1349 on Tuesday, invalidating the bearish lower high setup created on the daily chart on June 23 and bolstering the bullish view put forward by a descending triangle breakout witnessed earlier this month.  As such, the pairs move to four-month highs is not surprising. Further gains could be seen during the day ahead as the daily chart MACD histogram has crossed into the bullish territory above zero. In addition, the 14-day relative strength index (RSI) is reporting bullish conditions with an above-50 print.  The bullish bias, however, would be invalidated if the currency pair drops below the ascending 10-day simple moving average (SMA) currently located at 1.1316. Daily chartTrend: Bullish Technical levels  

NZD/USD rises to the intraday high of 0.6547 during the initial Asian session on Wednesday. The kiwi pair recently benefited from the market’s risk-on

NZD/USD recedes from 0.6545 following the previous day’s bounce off 0.6502.Upbeat earnings report, hopes of virus cure keep buyers hopeful.NZ PM Ardern cited fears of wave 2.0 leading to local lockdowns but refrained from limiting travel to Australia.US President shuns Hong Kong’s special trading status but Beijing shrugs it off.NZD/USD rises to the intraday high of 0.6547 during the initial Asian session on Wednesday. The kiwi pair recently benefited from the market’s risk-on mood while extending the previous day’s recovery moves. However, worrisome comments from New Zealand (NZ) Prime Minister (PM) Jacinda Ardern tame the bulls. In her latest speech, NZ PM Ardern suggested increased possibilities that the coronavirus (COVID-19) re-enter the nation via borders. If that happens, the national leader said, “first response may be localized lockdowns.” Though, resistance to close borders with the largest trading partner Australia keeps the buyers hopeful. Earlier during the day, pair traders cheered upbeat performance of Wall Street after major US banks managed to print welcome results. Further magnifying the optimism were US President Donald Trump’s signals for the nearness to the virus vaccine. The Republican leaders’ comments followed Moderna’s statements conveying ‘robust’ results of the third trial, which in turn helps to plaster the market mood and favor the NZD/USD pair. Though, US President Trump said, “You’ll see more coming on actions towards China” and suggests escalations of the Sino-American tussle. On the other hand, Beijing frets about the cancellation of Hong Kong’s special trading session, per Global Times, while saying they were expecting more. Amid all these catalysts, S&P 500 Futures remain on the front foot above 3,200, up 0.86% on a day, whereas the US 10-year Treasury yields extend the previous day’s rise by 2.4 basis points to .638%. Considering the lack of major data/events, the pair traders will have to pay close attention to risk catalysts for immediate direction. In doing so, virus updates and US-China story might be in the spotlight. Technical analysis The pair’s failure to close below a two-month-old support line, currently around 0.6540, propels it towards the monthly top near 0.6600.  

USD/CAD trades around 1.3600 amid the early Asian session on Wednesday. The loonie pair remains on the back foot for the second day while testing 21-d

USD/CAD remains depressed despite the latest bounce off 1.3595.50-day EMA offers strong resistance, a five-week-old support line adds to the support.Repeated failures to rise past-50-day EMA joins normal RSI to favor the sellers.USD/CAD trades around 1.3600 amid the early Asian session on Wednesday. The loonie pair remains on the back foot for the second day while testing 21-day EMA. The quote earlier refreshed the monthly high to 1.3646 on Tuesday but failed to cross 50-day EMA. Considering the bulls’ inability to cross 50-day EMA, coupled with normal RSI conditions, the USD/CAD prices are likely to remain downbeat. However, sellers are waiting for a clear break below the 21-day EMA level of 1.3595 to beat the optimism. In doing so, an upward sloping trend line from June 10, at 1.3525 now, will be on their radars. During the quote’s additional weakness past-1.3525, 1.3490/85 area, comprising the monthly bottom near 1.3490, becomes the key support zone. On the contrary, the pair’s successful trading above 50-day EMA level of 1.3665 could quickly pierce 1.3700 round-figures to aim for June 26 top near 1.3715. Though, 50% Fibonacci retracement of May-June fall around 1.3745 will challenge the quote’s further upside. USD/CAD daily chart Trend: Further weakness expected  

Looking at the recent coronavirus (COVID-19) numbers from the US, it becomes clear that the pandemic spread hasn’t faded in the world’s largest econom

Looking at the recent coronavirus (COVID-19) numbers from the US, it becomes clear that the pandemic spread hasn’t faded in the world’s largest economy. Texas marked another daily record for the news cases while adding 10,745 numbers to 275,058 on Tuesday. Further details suggest that the death toll shot by 87 to 3,322 whereas hospitalizations grew 164 to new high at 10,569. Los Angeles County followed the footsteps of Texas and marked the biggest daily increase in new cases since the pandemic started. The new cases of the deadly disease rose by 4,244 to 140,307. Further, hospitalizations rose by 47 to record high of 2,103 while the deaths toll jumped by 73 to 3,894. Furthermore, pandemic figures from Nevada also reflected worries while suggesting a leap in the new cases by 1,104 to 29,619. FX implications Although the news carries a market-negative update, S&P 500 Futures remain solid above 3,200 by the press time. The reason could be traced from upbeat earnings and more clues that the virus cure is nearby.

Gold drops to $1,808.30 during the pre-Tokyo open Asian session on Wednesday. The bullion has so far remained in the positive territory during the wee

Gold bulls catch a breather near the weekly top around $1,810.US President Trump signed a bill to punish China for the Hong Kong security law.Vaccine news, equity earnings keep the optimism alive.BOJ, risk catalysts will be in the spotlight amid a light calendar.Gold drops to $1,808.30 during the pre-Tokyo open Asian session on Wednesday. The bullion has so far remained in the positive territory during the week. Though, $1,807 to $1,811 area seems to restrict the quote’s immediate upside moves. The safe-haven asset recently took clues from the market’s upbeat mood. While Wall Street’s performance offered initial push to the risk-on sentiment, increasing odds of the coronavirus (COVID-19) vaccine helped to extend the optimism. In doing so, the Sino-American tension and surge in the pandemic figures seem to have been ignored. Bulls cheer nearness to virus cure, upbeat earnings… In their latest earnings reports, the key US banks like JP Morgan and Citi portrayed the success of the government’s efforts to fuel the economy. The updates not only helped Wall Street to shrug off the previous day’s pessimism but propel the S&P 500 Futures to remain solid by the press time. Also supporting the risk-on mood could be upbeat signals form Moderna and US President Donald Trump concerning the COVID-19 vaccine. While the leading pharmacy marked ‘robust’ results during the third round of trials, American President Trump also cited nearness to the cure. On the contrary, the Sino-American tension gets heated as the US rolls out sanctions on diplomats from Beijing while also defying Hong Kong’s special treatment. Further portraying the tussle among the world’s top two economies are threats from the Republican leaders to China. Additionally, rising pandemic cases in Nevada, Los Angeles County and Texas, not to forget recent worries from Tokyo, keep the risk-on mood chained. Against this backdrop, S&P 500 Futures prints 0.90% gains to 3,212 but the US 10-year Treasury yields await fresh clues to extend the latest recoveries beyond 0.62%. Moving on, the Bank of Japan’s (BOJ) monetary policy meeting, at 0.3:00 GMT, could offer immediate direction while updates concerning the US-China story and the virus woes will also be the key to follow. Technical analysis Unless slipping below the month-start top near $1,790, bulls are less likely to forget aiming for the multi-year high of $1,818.17.  

South Korea Unemployment Rate: 4.3% (June) vs previous 4.5%

During the early Wednesday morning in Asia, Bloomberg came out with the news, citing Japanese press Asahi, with signs that Tokyo will escalate the cor

During the early Wednesday morning in Asia, Bloomberg came out with the news, citing Japanese press Asahi, with signs that Tokyo will escalate the coronavirus (COVID-19) alert to the highest levels. Market implications The news seems to have capped the market’s latest risk-on mood. As a result, USD/JPY drops to 107.25 ahead of the key Bank of Japan (BOJ) monetary policy meeting, up for publishing at 03:00 GMT. Read: BOJ Preview: No changes in policy, but forecast downgrades expected

While offering additional signals of the US-China tussle, American President Donald Trump recently defied speculations that he will speak to Chinese c

While offering additional signals of the US-China tussle, American President Donald Trump recently defied speculations that he will speak to Chinese counterpart Xi Jinping. The Republican leader earlier criticized the dragon nation for Hong Kong security law and held it accountable for the coronavirus (COVID-19) outbreak during his on-going Rose Garden press conference. Also read: US President Donald Trump: Signed executive order to hold China accountable for its actions against Hong Kong Key quotes We can impose massive tariffs on China if we desire. You'll see more coming on actions towards China. China is buying a lot of agricultural products. Will sign something related to merit-based immigration and DACA. Has no plans to speak to China’s President Xi. Expect good news on COVID-19 vaccine very quickly. China held undue influence in the world health organization, even as it contributed far less than the United States. If it is necessary we would urge americans to wear masks during COVID-19 pandemic. FX implications The news failed to dim the market’s current risk-on mood despite carrying signals of escalations in the Sino-American tussle. The reason could be traced from indications of a sooner cure to the pandemic. As a result, S&P 500 Futures flash 0.86% gains to 3,211 by the press time.

New Zealand’s (NZ) Prime Minister (PM) Jacinda Ardern recently crossed wires, via Reuters, increasing the odds of the coronavirus (COVID-19) resurgenc

New Zealand’s (NZ) Prime Minister (PM) Jacinda Ardern recently crossed wires, via Reuters, increasing the odds of the coronavirus (COVID-19) resurgence in the nation. Key quotes NZ must prepare for the virus getting through the border. Elimination strategy will stay in place. First response may be localized lockdowns. FX implications Considering the recent risk-on sentiment, driven by upbeat equities and hopes of virus vaccine, NZD/USD refrains from stepping back on the news. That said, the kiwi pair remain bid around 0.6540 by the press time.

AUD/JPY takes rounds to 74.80 amid the early Wednesday morning in Asia. In doing so, the pair keeps the previous two-day rise while also portraying th

AUD/JPY seesaws around weekly high, prints three-day winning streak.A three-week-old support line joins the near-term key EMA to challenge the bears.Monthly high becomes an immediate upside barrier ahead of the early-June levels.US President Trump’s comments offer the latest moves, BOJ in the spotlight.AUD/JPY takes rounds to 74.80 amid the early Wednesday morning in Asia. In doing so, the pair keeps the previous two-day rise while also portraying the pullback from 21-day EMA. On the fundamental side, US President Donald Trump’s strong signal for the coronavirus (COVID-19) vaccine follows upbeat indications from Moderna to help the quote remain firm off-late. However, the Republican leader’s passage of the sanctions on China over the Hong Kong security bill tames the optimism. It should also be noted that the traders’ caution ahead of the BOJ also limits the AUD/JPY prices. Read: BOJ Preview: No changes in policy, but forecast downgrades expected With the pair’s ability to stay beyond immediate EMA, also above a short-term support line, it becomes capable to aim for the monthly high near 75.15/20. Though, bearish MACD signals may restrict the quote’s further upside. If the recent optimism pushes the quote to break above 75.20, the early June levels surrounding 75.60 and 76.00 round-figures might offer intermediate halts during the run-up to challenge the previous month’s top near 76.80. Meanwhile, 23.6% Fibonacci retracement of May-June upside, around 74.60, offers immediate support to the pair before highlighting the 74.25/20 confluence including 21-day EMA and aforementioned rising trend line from June 22. AUD/JPY daily chart Trend: Bullish  

AUD/USD remains on the front foot around 0.6980 at the start of Wednesday’s Asian session. The pair snapped the previous three-day losing streak the p

AUD/USD bulls attack 0.6980 following the latest bounce off 0.6961.Market sentiment remains mixed with equities on the positive side amid better earnings reports, virus woes, Sino-American tussle prevail.Second-tier Aussie data can offer immediate direction, risk catalysts to keep the driver’s seat.AUD/USD remains on the front foot around 0.6980 at the start of Wednesday’s Asian session. The pair snapped the previous three-day losing streak the previous day after reversing from 0.6920. Though, 0.7000 threshold remains as the key resistance for the bulls to clear. While the recent announcement from Moderna offers the latest push to the Aussie pair, upbeat performance by Wall Street benefited the quote before that. It’s worth mentioning that the risk-on mood has nothing to do with the US-China tension with fewer positives from the coronavirus (COVID-19) front. Bulls track Wall Street gains… The returns of the equity buyers renewed optimism in the global markets. Upbeat earnings from the key banks like JP Morgan and Citi managed to dim the previous economic fears. It should, however, be noted that the banks are direct beneficiaries of the latest stimulus and hopes of some more adds to the upbeat trading sentiment. Read: Wall Street Close: Bulls clinch onto bullish territory by the tops of their hooves Recently, Moderna came with the news, per CNBC, suggesting that their vaccine produced a ‘robust’ immune response during the third trial. The update follows other positive announcements that have crossed wires off-late suggesting that the global pharmacy companies are near to a cure to the pandemic. Talking about the tensed relations among the world’s top two economies, namely the US and China, the South China Sea has recently been in limelight after US Secretary of State Mike Pompeo defied Beijing's claim over the region and the dragon nation responded accordingly. In his latest press conference, US President Donald Trump said to sign the previously approved bill by the House to levy sanctions on China over the Hong Kong security bill. Concerning the data, American inflation numbers came in mixed after upbeat marks of the National Australia Bank’s Business Confidence and Business Conditions. Further, China’s trade data also suggests that the dragon nation is gradually overcoming the virus-led economic halt. Moving on, global traders will keep eyes on the pandemic updates, Sino-American tension for fresh impulse. Additionally, Australia’s Westpac Consumer Confidence and HIA New Home Sales, for July and May respectively, will also be followed for fresh impetus. While the economics and vaccine news might help the quote to keep 0.7000 on the bulls’ radars, other factors concerning China could question further upside. Technical analysis Unless witnessing a daily close beneath the monthly support line, currently around 0.6925, buyers are less likely to forget attacking 0.7000 mark.  

US President Donald Trump is hosting a news conference, citing two administration officials, Reuters reported that Trump's remarks would be related to

US President Donald Trump is hosting a news conference,  citing two administration officials, Reuters reported that Trump's remarks would be related to Hong Kong and China. He was expected to sign the Hong Kong legislation.  He has done just that. He signed legislation and an executive order to hold China accountable for its actions against Hong Kong. Trump says Hong Kong’s people’s freedom has been taken away.   More to come...     Market implications The yen, AUD, USD and global equities are all tied up into this.  Key notes:S&P 500 Index bull-trap set-off, drops into the bear's lair as bank's earnings get underwayS&P 500 Index Forecast: Bank's earnings in focus, COVID-19 induced insolvency fears simmer awayUSD/JPY: Bears eye 61.8% Fib, but H&S could be in the making first     

Moderna’s potential vaccine to prevent Covid-19 which was first reported to be appearing to be safe back in mid-May, offering a glint of hope, has jus

Moderna’s potential vaccine to prevent Covid-19 which was first reported to be appearing to be safe back in mid-May, offering a glint of hope, has just been reported by CNBC to have produced neutralizing antibodies in all 45 patients in its early stage human trial. Key points Moderna’s potential vaccine to prevent Covid-19 produced neutralizing antibodies in all 45 patients in its early stage human trial, according to newly released data. The findings provide more promising data that the vaccine may give some protection against the coronavirus. At 5pm EST, CNBC released a report that started with the opening paragraphs as follows: Lead paragraphs Moderna’s potential vaccine to prevent Covid-19 produced a “robust” immune response in all 45 patients in its early stage human trial, providing more promising data that the vaccine may give some protection against the coronavirus, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine. All 45 patients produced neutralizing antibodies, which scientists believe are important for gaining protection against the virus. In the trial, each participant received a 25, 100 or 250 microgram dose, with 15 people in each dose group. Participants received two doses of the potential vaccine. After two vaccinations, the vaccine elicited a “robust” immune response in all participants in all dose cohorts, Moderna said. The company said the levels of neutralizing antibodies in patients in the high dose group were fourfold higher than in recovered Covid-19 patients.  Market implications Moderna’s stock rose more than 9% in after-hours trading on the news.  The news could help to push the bulls back into full control on Wall Street whereby they are otherwise vulnerable to bank's guidance and earnings this week.  More on this below:S&P 500 Index bull-trap set-off, drops into the bear's lair as bank's earnings get underwayS&P 500 Index Forecast: Bank's earnings in focus, COVID-19 induced insolvency fears simmer away 

Wall Street rose on Tuesday, but it was a volatile two-days and for one moment, it seemed as though the bull's had finally given up the ghost. However

The Dow Jones unofficially closes up 561.66 points, or 2.15%, at 26,647.46The NASDAQ unofficially closes up 101.43 points, or 0.98%, at 10,492.27.The S&P 500 unofficially closes up 42.54 points, or 1.35%, at 3,197.76.Wall Street rose on Tuesday, but it was a volatile two-days and for one moment, it seemed as though the bull's had finally given up the ghost. However, stocks on Tuesday rebounded led by gains in energy and materials, as investors looked beyond a recent surge in coronavirus cases. Instead, earnings were the main focus with Amazon and other recent strong performers helping to push the bulls along out of the danger zones.S&P 500 Index bull-trap set-off, drops into the bear's lair as bank's earnings get underwayThe S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 26 new highs and 28 new lows. The main focus was on the S&P 500 banks. The iS&P 500 banks index lost 1.6% as the three banks set aside a combined $28 billion to cover potential losses on loans to borrowers hurt by the coronavirus pandemic. JPMorgan Chase & Co, the largest US lender, gave some impressive results, albeit jarred by pessimism in the guidance. The stock rose 0.3% after it posted a smaller-than-expected 51% drop in second-quarter profit. Wells Fargo & Co dropped a large 5.3% after booking a quarterly loss for the first time since the 2008 financial crisis.  Citigroup Inc also fell 3.6% as it reported a steep fall in quarterly profit. Negotiations over Phase 4 of the US fiscal response are still ongoing Meanwhile, analysts at ANZ Bank noted that the negotiations over Phase 4 of the US fiscal response are still ongoing. Senate Democrats are pushing Fed Chair Powell and Treasury Secretary Mnuchin for more state aid, highlighting the need for a balanced recovery. Policymakers are looking to minimise fiscal tightening in late July and early August, provide support for furloughed workers, and support the broader economy through stimulus. DJIA levels    

South Korea Export Price Growth (YoY) came in at -6%, above expectations (-8%) in June

South Korea Import Price Growth (YoY) below forecasts (-4.5%) in June: Actual (-7.3%)

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