eFXplus DATA

TD Research discusses EUR/USD outlook and thinks that dips around current levels should provide good entry levels for establishing fresh longs.

"In Europe, the EUR looks set to play its 1.1550 to 1.1850 range while the Brexit bill votes will carry some weight in GBP.

We still believe that the market has priced much much of the bad news in Europe, offering good entry levels here. Most of these currencies screen around 2-sigmas cheap to HFFV and data momentum has recovered smartly.

GBPUSD should be trading around 1.35 and the EURUSD around 1.19," TD argues. 

Bear sentiment has hit AUD/USD again and lower levels are likely after Fed chair Powell took a more hawkish stance than the RBA minutes.
Powell's tip to gradual rate hikes being the best path forward carried more weight with traders than the RBA reinstating in their minutes a suggestion the next rate move is likely up.
Although the RBA's next move could be up it's unlikely to be soon, with markets not expecting hikes until after 2019.
The Fed and RBA rhetoric highlights divergent monetary policy paths, which should keep the greenback's yield advantage intact for the foreseeable future.
AUD/USD should trade heavy and any rallies seen are likely to be sold into as traders gear up for a run to new long-term lows.
Daily lows in the 0.7360 area are immediate support ahead of bigger 0.7300/30 support.
Breaks of those supports seem likely now as AUD/USD trades below the 10 and 21-DMAs and RSIs are biased down again.
Should bears clear the 0.7300/30 zone they will then target significant support in the 0.7110/60 zone.

Fed Chief Powell stirred EUR/USD bears from their slumber.
Downward pressure on EUR/USD took after he gave short shrift to market concerns on U.S. trade policies while noting the economy is nearing the cusp of "several years" of strong jobs markets with inflation hovering near the Fed's 2 percent target.
Powell also left the expected rate hike path intact after noting that the best path forward is to keep gradually raising rates.
The hawkish comments diverge with those of Draghi and the ECB who are set to remain patient on tightening monetary policy.
EUR/USD bears are clearly in charge, with the pair falling sharply from the daily cloud base and 55-DSMA and now threatening to break the 21-DMA.
DE-U.S.
yield spreads edge wider to further weigh upon EUR/USD.
RSIs have turned lower and a daily bearish engulfing candle forms which have technicals favoring the downside.
The July 13 low is support below the 21-DMA.
If that's cleared 1.1500/10 support likely gets tested.
A break there could see the next leg of the long-term bear market take hold.

ING discusses USD/JPY technical outlook and maintains an 'UP rating and recommends buying on dips into the 111.35 breakout level.

"'The daily chart shows a pause within the uptrend after the recent bullish break above the horizontal resistance around 111.35.

There is a target at 118.00 after completing a long-term bottom formation above 110.40, but overhead horizontal resistance comes in between 114.45-115.50 with first resistance coming in at the upper end of the rising trend channel around the 114.20 level.

We recommend buying on weakness towards the recent breakout level around 111.35," ING argues.

EUR/USD bulls remain in control on Tuesday before congressional testimony by Federal Reserve Chair Jerome Powell, which traders will scrutinise for clues on the pace of U.S. interest rate increases and risks emanating from trade conflicts.
Powell is expected to continue his upbeat message on the U.S. growth, but if the market is left underwhelmed by his testimony, EUR/USD bulls could tighten their grip and force the market up towards the top of the thick daily Ichimoku cloud -- which currently spans the 1.1741-1.1962 region.
Watch for a daily close above the 1.1723 Fibonacci level, a 61.8 percent retrace of the 1.1790 to 1.1613 July setback.
That would confirm the bullish bias is very much intact.
EUR/USD left a hammer on Friday's candlestick, which is sign the downside has been rejected and the risk of a squeeze higher has increased.
Daily close back below the kijun line, now at 1.1681, will mean bears are back in control.

NAB discusses AUD/USD technical outlook and notes that the recent 5 consecutive weekly closes within a 40 pip range confirm that 0.7310/30 support has some significance.

"The lack of a material reversal implies that 0.7500/50 will continue to cap a short squeeze...

Next major support where the May 2017 low coincides with the 61.8% retracement of the 2016/2018 uptrend and 2-3 year parallel uptrend channel at 0.7310/30.

A monthly close below 0.7310/30 will imply a full retracement of the 2016/2018 uptrend to 0.6800/50," NAB argues. 

Nomura Research discusses USD/JPY outlook and flags a scope for further gains on an de-escalation in US-China trade tensions.

"We sees risks of a relief rally in risk assets if negotiations between the US and China materialize.

On the JPY flow side, Japanese investors resumed foreign bond purchases last week. They bought JPY818bn (USD7.4bn) of foreign bonds, the largest net purchases in three weeks," Nomura argues. 

Brexit and associated political uncertainty has clouded GBP/USD short-term direction, but the weekly chart highlights the potential for a sterling recovery.
Jitters over Brexit are not going to go away anytime soon, but technically room may exist for a bullish sterling impulse before lower levels are explored again.
Much depends on price holding above a weekly ichimoku cloud base, now close to market at 1.3228, and closing above the 10-WMA at 1.3306.
Recent weekly lows, 100-WMA and 30-WMA, and lower Bollinger line back the cloud base up between 1.3050 and 1.3080.
A series of weekly hammer candles have amounted to little in the way of bullish progress but continue to highlight that sterling supply might be fading.
Conflicting signals from weekly momentum and slow stochastic argue for range trade action, and such consolidation could lead into a down leg, but for now there is scope for a break higher and out of the 1.3050-1.3363 five-week range.
Note that the monthly chart is trying to base at levels around the 21-MMA at 1.3170.

A NZD/USD rally that followed inflation data is not based on a change in fundamentals.
It's the correction of bearish excess that will provide an opportunity to sell, to bank on a further widening in the rate gap in favour of the USD.
NZD/USD has rallied 0.78 percent today, but the warning signs of an overly short market were already evident.
The pair rallied by a similar degree before the data release, when NZD/USD was around 1.4 percent above the July low.
Those betting on a steeper fall are not wrong, but markets do not move in straight lines.
With bets on a NZD/USD drop close to multi-year peaks, the rebound should not surprise.
That said, a short-lived bounce is likely, with a shelf life that could be limited by today's speech by the head of the Fed nL1N1UD04Q.
NZD/USD CPI rose but missed forecasts and is below the RBNZ target nL4N1UC5GM while further U.S. hikes are assured, making a now higher-yielding USD the asset to hold versus NZD nL1N1U81JU.

• Doji left on Monday's candle highlights a market undecided about direction
• Doji is where opening and closing prices are the same or similar
• We are bullish as spot registered biggest 1-wk points rise since Sept
• USD/JPY managed to a one-pip close at the end of Fri above 112.33 Fibo
• 112.33 Fibo -- 76.4% of the 114.73 to 104.56 (Nov to Mar) fall (EBS)
• USD/JPY biggest 2018 one-week rise closed above Fibo, bullish nL1N1UC03V

• Cable up to 1.3257 in early European trade. 1.3228-1.3249 was Asia range
• Scope for further gains towards 1.33 if UK earnings better than expected
• Headline earnings f/c +2.5%, ex-bonus number f/c +2.7%. Data due 0830GMT
• Offers ahead of 1.33 kept lid on GBP/USD Monday, before drop to 1.3217
• Drop to 1.3217 influenced by PM May bowing to Brexit pressure nL8N1UC1H8
• Concessions may make it even harder for EU to accept May's Brexit plan

• USD/JPY from 112.20 to 112.56 in Asia but no further, good offers.
• Offers trailed up from 112.50, some at 112.50-55 absorbed, more above.
• Large bids below too at 112.00, below, pair effectively bracketed.
• USD590 mln option expirations at 112.50 strike later tethered market.
• Good support from ascending 100-HMA at 112.23, 55-HMA 112.42.
• Risk on-ish, Nikkei +0.8% at @22,771, US yields firms, Tsy 10s @2.865%.

• AUD/USD dragged higher on the coattails of a nasty NZD short squeeze
• NZD/USD up 1.2% since post-CPI dip, core inflation seen strong nMNS1k84gh
• AUD/USD initial resistance at Mon high of 0.7443, 50% retrace at 0.7455
• Decent support forming at 21 DMA at 0.7399, close below negates move up
• Retest of double top at 0.7484 likely if short squeeze extends nL1N1UD024
• Fed Chair Powell's semi-annual testimony to Congress the main event Tuesday

NAB Research discusses EUR/USD outlook and maintains a neutral bias over the coming months.

"Given the potential economic effect of tariffs on EU car exports (particularly on Germany), it is unlikely the EUR can make a sustained break outside of the recent 1.15-1.1875 range it has been in since mid-2017 until a resolution on trade is closer.

We stick with EUR forecasts into H2 (now 1.15 for end September and 1.18 for December) with EUR still likely to be range-bound against a stronger USD, even as Eurozone data is evidently ticking higher. The one caveat to this view is whether trade tensions start to weigh on sentiment in the US and on data, with some evidence US economic surprises are starting to turn, while Eurozone data has started to surprise to the upside," NAB argues. 

• USD/JPY getting leg up on post-long weekend demand, 112.20 to 112.56.
• Offers in place from 112.50-55, absorbed, more above to 112.80, @113.00.
• Japanese exporters, longs booking profits amongst those on offer.
• USD590 mln in option expiries at 112.50 strike a tether of sorts still.
• Pair through 55-HMA at 112.44, now support with kijun/tenkan at 112.38.
• Ascending 100-HMA below at 112.18, hourly Ichi cloud 112.34-41.

• NZ CPI missed expectations of a 1.6% rise, coming in at 1.5% nL4N1UC5GM
• RBNZ remains on extended hold with no significant inflationary pressure
• NZD initially touched 0.6756, but bid since, trading just below 0.6790
• Market appears to have been positioned for a softer number - now covering
• Primary trend has been down since mid June; 0.6810 21 DMA pivotal resistance
• Close above would initially target 0.6859 July peak, then 0.6898 50 DMA

• EUR/USD opens 0.25% higher after ending 4-days of lower daily highs
• Move up despite solid US Retail Sales & higher US yields a concern for longs
• Close above 10-day MA (1.1697 on Monday) suggests S/T bottom forming
• A break and close above the 55-day MA (1.1729) targets July 9 high at 1.1790
• Consolidation expected in Asia ahead of Fed's Powell testimony today

• Little changed early, closed -0.1%, as Tokyo return from the long weekend
• Last weeks rise stalled at 112.80 - interesting to see how Tokyo respond
• Neutral momentum studies, horizontal Tenkan & Kijun lines, no trending setup
• Return toward flat lining cloud & 200 DMA around 110.00 viable on soft close
• Major resistance at 113.26/27, 200 Week MA & 61.8% 2016/18 fall should cap
• Yesterday's 112.10 early Asian low & London 112.53 high support/resistance

AUD/USD bulls shouldn't expect the rally off July's low to extend much further as key risks approach.
Minutes of the RBA's July 3 meeting are due later.
The meeting itself leaned somewhat dovish as the bank noted inflation and wage growth are likely to remain low for some time.
Tonight's minutes are likely to give deeper insight into those comments.
Should those insights hint at greater concerns on inflation and wages then AUD/USD should trade heavily as AU-U.S.
yield spreads should add to the greenback's advantage.
Fed chief Powell's testimony this week might also weigh on the pair. If Powell shrugs off the possibility of slowing global growth due to U.S. trade policy markets will expect Fed rate hikes to move forward.
Meanwhile the market expects the RBA to keep rates on hold for the foreseeable future.
Those diverging rate paths should limit any AUD/USD rally.
Technicals suggest the downside is favored.
The pair is consolidating long-term losses while the 55-Day SMA and 50 Fib of 0.7677-0.7311 have capped recent gains.
A break of 0.7300/15 should usher in the next AUD/USD bear leg.