FX News Today

  • FOMC minutes of the June meeting were a little anti-climactic following Fed Chair Powell’s testimony. However, there were “many” indications that an easier policy stance was the more desired outcome.

  • 10-year Treasury yields dropped -2.3 bp to 2.039% overnight, and reopened soft, stopped at 2.064% tailing out from the 2.057%

  • US stocks rise, yields drop, Powell’s testimony supported rate cut expectations.

  • The S&P 500 briefly topped the 3000 mark for the first time, but the index didn’t manage to hold these levels as stocks generally came off highs.

  • USD lower as Powell signals July FOMC rate cut.

  • The WTI future is trading at $60.57 per barrel, amid reports that Iranian boats attempted to “impede” the passage of a British tanker.

Charts of the Day

Majors

 

Technician’s Corner

FX Update: The USD posted fresh lows during the pre-Europe session in Asia as markets continued to readjust Fed easing expectations in the wake of Chairman Powell’s testimony yesterday, which was consistent with a 25 bp rate cut at the end of this month with an addendum stipulating that the Fed has the tools needed and could use them “aggressively” if necessary. The narrow trade-weighted USD index (DXY) has declined by about 0.6% over the last day, earlier printing a six-day low at 96.90, while EURUSD rose to a six-day high at 1.1280 and USDJPY posted a six-day low at 107.86. The U.S. currency saw a similar similar magnitude of decline against other currencies. In the mix has been an unexpected upward revision to June German HICP, to 1.5% y/y from 1.3% y/y, while news that Iran tried to intercept a British tanker in the Strait of Hormuz (London claiming that its navel ship HMS Monrose saw off three Iranian vessels with “verbal warnings”) saw front-month WTI crude prices spike above $60.0, the first time above this level since late May.

Main Macro Events Today

  • Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP inflation is expected to hold at 1.3% y/y for June.

  • Consumer Price Index and Core (USD, GMT 12:30) – May’s CPI has been estimated at a -0.1% drop for headline PPI in June, and a 0.2% rise in the core index. As expected readings would result in a y/y gain of 1.4% for headline PPI, slowing from a 1.8% pace in May, and a 2.1% y/y rise for the core, versus 2.3% in May.

  • Fed Chair Powell Testimony 2nd day (USD, GMT 14:00)

Support and Resistance levels

fxsoriginal

 

Currencies

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD registers an inside day ahead of German Zew survey

EUR/USD created an inside day or inside bar candlestick pattern on Monday, indicating investor indecision and impending volatility and has made Tuesday's close pivotal. A bullish close could be seen if the German Zew Survey data betters expectations by a big margin.

EUR/USD News

GBP/USD: Inside day makes Tuesday's close pivotal

GBP/USD created an inside bar candlestick pattern on Monday, making Tuesday's GMT close pivotal. An inside bar occurs when the daily high and low falls within the preceding day's trading range. The pair hit a high at 1.2650.

GBP/USD News

USD/JPY unchanged on 108 handle in Tokyo opening hour, eyes on key events

USD/JPY is steady in Tokyo's opening hour, down -0.02% despite the concerns over the 'Phase1' deal made between China and the US on Friday. Looking ahead, eyes are on US Industrial Production and Fed speakers.

USD/JPY News

UK jobs report preview: GBP/USD set to react to figures that go with the Brexit mood

Finding a job in the UK is more accessible than in the past and pay is rising – but that does not move the pound these days. The employment report is scheduled two days ahead of the critical EU Summit and 16 ahead of Brexit Day. 

Read more

Gold: Bears look for a break below the trendline support

The price had been sent lower below the 21 and 50-day MA converging and the 7th Oct lows. Trendline support guards a test of a 50% mean reversion of the late June swing lows to recent highs around 1480 will be encouraged. 

Gold News

Forex Majors

Cryptocurrencies

Signatures