Credit Suisse discusses USD/JPY outlook and outlines the following 2 reasons holding off long positions:

"1. Long USDJPY and also cross -JPY still seems to be a favourite structural position, both anecdotally and also looking at indicators like IMM speculative positioning. 2. Despite the sharp drop in US – Japan yield differentials and also US real yields this month, USDJPY has mostly held above the 110 level, encouraged by generally low FX / asset price volatility, still -tight US credit spreads and new record highs for US equities," CS notes. 

"In short, trade location has simply not been attractive to go long given macro developments and positioning risks," CS adds. 

• AUD/USD rally off July 21 low halts near 21-DMA, bear flag top on day chart

• Pair falls sharply today, slips back below 10-DMA, nears bear flag base

• Daily RSI turns down after oversold unwind, monthly RSI falls further

• Break of bear flag base implies next leg of bear trend is beginning

• Completion of bear flag suggests test of 38.2% Fib of 0.5510-0.8007 possible

• Nov 2020 monthly low at 0.6990 targeted should that Fibo break

• For more click on FXBUZ

ANZ Research discusses NZD/USD outlook and likes buying dips over the coming weeks.

"The NZD has slightly underperformed expectations, trading sideways through July. Even against currencies with much more dovish central banks, the NZD has struggled for traction. This underscores the importance of the global cycle for the high beta currencies, with waning enthusiasm for the reflation trade offsetting the positive domestic backdrop,' ANZ notes. 

"We think any dips in the currency will be well bought, however, with the RBNZ’s aggressive stance providing a floor for any weakness," ANZ adds. 

GBP/USD was little changed on Friday but on course to end the week higher and close out July near its peak for the month, and possibly end the session above the 10-week moving average at 1.3911, which would enhance cable's bullish outlook.

U.S.
PCE data nL1N2P52DB held little sway over forex markets, though slightly below-consensus core PCE prices appeared to support the Fed's cautious approach to discussing asset purchase tapering at this week's meeting.

That reluctance has helped GBP/USD recover from its recent slide to 1.3573.

With several BoE members shifting to more hawkish bias, and short-sterling futures indicating a earlier BoE rate hike than the Fed 0#FSS:0#ED:, GBP bulls are being drawn to the Aug.
2 cloud twist just above today's 1.3984 high.

A close above the 10-WMA at 1.3911 would give bullish momentum to sterling ahead of the Aug.
5 BoE meeting, and a hawkish tone there could send it through resistance at June 23's 1.4001 high, putting it on a path toward June 1's 1.4250 high.

For more click on FXBUZ

Bank of America Global Research discusses USD/JPY outlook and awaits a dip buying opportunity over the coming weeks.

"We discuss recent political developments and what could be at stake in the upcoming elections in the fall. With political uncertainty and August seasonality, JPY’s corrective strength could continue through the summer but US factors and JPY’s structural flow remain supportive for USD/JPY over the medium term," BofA notes. 

"A dip in USD/JPY could provide a buying opportunity, though patience may be needed," BofA adds. 

MUFG Research discusses USD/JPY outlook and sees a limited scope for the pair to trend higher in the near-term.

"The swing in July was certainly extreme and unlikely to be replicated but it does highlight one of the fundamental factors limiting the scope for the yen to depreciate on any kind of a sustained basis at levels over 110.00. At the lower bound with investors holding little confidence in the BoJ’s ability to lift inflation, real yields are likely to remain relatively attractive," MUFG notes. 

"Add to this a structurally stable current account surplus over 3% of GDP and a currency that on many metrics is about 10% undervalued, the prospect of USD/JPY trending higher from here looks limited. Yes, a rebound in US nominal yields can play a role in lifting USD/JPY as correlations show but the correlations weaken at higher levels over 110.00 and over a medium term timeframe, valuation, external positions and real yields suggest downside risks," MUFG adds.

• Cable hit 1.3983 after rising from 1.3935 amid month-end USD supply talk

• 1.3983 is fractionally fresh five-week peak (1.3982 was Thursday's high)

• 1.3935 was early London low (which a Fibo level helped define) nL1N2P60M3

• Sell orders expected by 1.40, inclusive of profit-take interest nL1N2P60M3

• 1.3768 was Tuesday's low, before fix-related buying of GBP nL8N2P44XS

• Powell bets U.S. economy will navigate new coronavirus surge nL1N2P51JW

• Q2 preliminary GDP data beat fuels economic recovery hopes nL8N2P63NF

• Provides additional support to EUR/USD amid weak post Fed USD backdrop

• EUR/USD tests 30 June high 1.1909, next up are 29-28 June highs 1.1929-44

• Thurs break/close above 23.6% of 1.2266-1.1752 can target 38.2% 1.1948

• However, market still lacks conviction and month end flows cloud picture

• 2-billion 1.1900-20 option expiry resistance, more below nL1N2P60CU

• Option risk reversals regain topside vol premium, but still tiny @ 0.05

  
  

  
  

  
  

For more click on FXBUZ

• USD/CAD by Thurs 1.2432 low after break/close below key Fibo at 1.2501

• 1.2501 was 38.2% retrace of recent 1.2007-1.2806 rally, 50% is 1.2406

• 1.2406 break/close opens 100-dma 1.2368, then cloud twist 5 Aug 1.2307-33

• Talk of stops lowered to Thurs 1.2530 peak, reinforced by 21-dma 1.2519

• Strong Cnd GDP (-0.3% exp vs -0.3% prior) should help CAD bulls

• Month end flows may cloud picture, said to be USD negative

For more click on FXBUZ

• Cable threatens 1.3982 (Thurday's five-week high) after rallying from 1.3935

• 1.3935 was early London low, courtesy of a decline in risk appetite

• See: nL1N2P60ET. Offers expected pre-1.40 if GBP/USD extends north

• 1.3991 = 61.8% Fibo of 1.4250 (June 1 high) to 1.3573 (July 20 low)

• Recently instigated GBP shorts have been squeezed during climb from 1.3573

• IMM specs flipped to first net GBP short since Dec in week ended July 20

• See: nL1N2P20AZ. CFTC data for the week ended July 27 is due at 1930GMT

• EUR/USD's post Fed recovery matches 6 July 1.1895 peak Friday

• Close above 23.6% of 1.2266-1.1752 fall at 1.1873 opens 38.2% 1.1943

• However, huge 5-billion options between 1.1850-1.1920 expire 10-am NY

• Related delta hedging could certainly have some influence - add resistance

• EUR/USD implied volatility finds mild support after post Fed setback

• 1-month risk reversals show a tiny topside vol premium emerging

• Options focus volatility premium on Jackson hole and Sept Fed nL1N2P50XA

For more click on FXBUZ

• EUR/USD recovery moves has broken and closed above the 1.1873 Fibo

• 1.1873 Fibo is a 23.6% retrace of the 1.2266 to 1.1752 (May to July) fall

• That has unmasked the 1.1948 Fibo, a 38.2% of the same drop

• Fourteen-day momentum has turned positive, risk shifts to the upside

• We remain short at 1.1835, a bearish resumption is badly needed

• Fed has blown the dollar's rise off course nL1N2P50QO

• EUR/USD Trader TGM2334. Previous update nL1N2P50F9

• FX options expire 10-am New York/3-pm London - Friday July 30

• EUR/USD: 1.1850 (1.5BLN), 1.1865-75, 1.1900 (1.3BLN), 1.1910-20 (700M)

• USD/CHF: 0.9225 (250M). EUR/NOK: 10.35 (520M). AUD/USD: 0.7340 (205M)

• EUR/GBP: 0.8470-80 (810M)

• GBP/USD: 1.3800 (381M), 1.3900-05 (425M), 1.4000 (270M)

• USD/CAD: 1.2400 (785M), 1.2450 (735M), 1.2500 (835M), 1.2545 (431M)

• USD/JPY: 109.00 (537M), 109.25-35 (500M), 110.25 (315M), 110.40 (280M)

  
  

For more click on FXBUZ

• -0.05%, towards the base of a 1.3945-1.3971 range, as the USD firmed

• Subdued Amazon Q3 outlook, fell 7% after hours, weighing on risk in Asia

• Amazon issues not seen in other major tech results - modest impact likely

• Month end flows often create short term volatility in sterling

• Charts; 5, 10 & 21 daily moving averages climb - momentum studies rise

• Bullish setup after four days of higher highs and seven higher lows

• 1.3985 upper 21 day Bolli and 1.3991 61.8% June July fall cap at present

• 1.4000 break opens the door to 1.4090 76.4% retracement of June July fall

  For more click on FXBUZ

• Steady in a busy 0.7381-0.7403 range, capped by soured risk appetite in Asia

• Amazon fell 7% after hours on subdued Q3 growth expectations nL4N2P53XQ

• E-mini S&P futures -0.65%, Nikkei -1.35%, AsiaxJP -0.6% & commodities lower

• Sydney COVID-19 cases ease slightly as lockdown rules tightened nL1N2P600F

• Charts; momentum studies flat line, 5, 10 & 21 DMAs conflict - mixed signals

• The June/July downtrend remains in play while trades below 0.7422 21 DMA

• Sustained 0.7422 break would open the door to 0.7519, 38.2% May-July fall

  For more click on FXBUZ

• Flat after closing up 0.3%, amid risk 'on' safe haven USD weakness

• Sydney under strict new lockdown rules as cases soar nL1N2P537S

• PPI and credit data due at 11.30 AEST - unlikely to impact AUD

• E-mini S&P -0.55% may cap risk - Amazon off 7% nL4N2P53XQ

• Charts; momentum studies flat line, 5, 10 & 21 DMAs conflict

• Mixed signals, but the downtrend remains in play while 0.7422 21 DMA caps

• Sustained 0.7422 break would open the door to 0.7519, 38.2% May-July fall

• NY 0.7377 low and early London 0.7413 high initial support-resistance

For more click on FXBUZ

• +0.1% after closing up 0.4%, supported by broad based USD weakness

• UK government to invest 338 mln pounds to boost cycling, walking in England

• Gov't hopes increased exercise during COVID-19 will continue nL1N2P526O

• Charts; 5, 10 & 21 daily moving averages climb - momentum studies rise

• Bullish setup saw a fresh high for this bounce, with further gains viable

• 1.3989 upper 21 day Bolli and 1.3991 61.8% June July fall cap at present

• Break would open the door to 1.4090 76.4% retracement of June July fall

• 1.3941 NY base then 1.3900 426M strikes are first supports

For more click on FXBUZ

• Steady after closing up 0.35% on broad based risk on USD weakness

• ECB focusing on medical data when declaring end to emergency nF9N2N6018

• Charts; 5, 10 & 21 daily moving averages climb, 21 day Bolli bands expand

• Positive setup targets a return to the 1.2000 200 daily moving average

• 1.1894 rising upper 21 day Bollinger band capped in NY, today at 1.1900

• 1.1850 early European low 1.1847 5 day moving average is initial support

• 1.1865/75 1.342 BLN and 1.1900 1.225 BLN strikes likely contain in Asia

  For more click on FXBUZ

• AUD/USD opens 0.25% higher on softer-than-forecast U.S. economic data

• Boosted by growing perception that Fed will remain patient on tapering

• Buoyed by elevated risk mood as China calms investors nerves nL1N2P50RW

• Upside limited as Sydney lockdown clouds economic recovery outlook

• RBA meets Tuesday, widely expected to reverse taper decision nL1N2P5043

• Resistance 0.7415-20, 0.7445-50, support 0.7375-80, 0.7355-60

• For more click on FXBUZ

Credit Agricole CIB Research discusses the latest reading from its Risk Index.

"At -0.56 (vs -0.58 last week) our Risk Index remains broadly unchanged in risk-seeking territory. This is mostly due to lower equity market volatility and tightening credit spreads. FX volatility, in contrast, rose," CACIB notes.

"In addition, defensive stock market sectors such as utilities have been outperforming. While this could be reflective of increased caution among investors, it may also mean that there is less scope for material corrective downside from current levels," CACIB adds.

• AUD/USD rallies to a 9-session high in Europe's am, hits 0.74135

• Pair nears 0.7400 into NY's open, choppy trading then takes hold

• US claims nAQN04GULD, GDP nS0N2OE01T drive US rates, US$ lower

• AUD/USD lifts briefly then sinks near 0.7375 before rallying again

• Equity ESv1, copper HGv1 gains, USD/CNH fall help AUD/USD rally

• 0.7410 trades but AUD/JPY drop halts gains, AUD/USD near 0.7400 late

• AUD/USD rally seems corrective, likely a bearish opportunity nL1N2P521E

• For more click on FXBUZ

• Euro buoyed by above estimate German July CPI/HICP data nAPN000X00

• US$ weighed down on claims nAQN04GULD, GDP nS0N2OE01T misses

• Eurodollar prices rally while euribor prices drop slightly

• EUR/USD opens NY near 1.1870 after gains in Europe am, rally extends

• Hits 1.1891 on EBS, eyes top of 1.1750/1.1900 range, near high late in day

• EUR/USD gains aided by equity ESv1, oil LCOc1 & EUR/JPY rallies

• EUR/USD upside potential grows on inflation, jobs data nL1N2P51JL

• July bull hammer, rising RSIs, hold above 10 & 21-DMAs are bull signals

• For more click on FXBUZ

• GBP/USD ends NY +0.42% at 1.3964, NorAm range 1.3982-1.3952

• Pair adds to post-Fed gains after tepid US GDP, jobless claims data

• Rise above 1.3911's 50% fib of 1.4250-1.3573, takes out 100/55-DMA 1.3925/69

• Pair eyes upper 30-d Bolli at 1.3995 and 1.4001's Jun 23 high

• BoE MPC meet on Aug 5 in focus, hawkish tone puts June's 1.4250 high in view

• GBP bears need a dip below 1.3777, 50% of 1.3573-1.3982 to slow bullish rise

• EUR/GBP dips 0.1% to 0.8511; Thurs range 0.8520-0.85; BoE to move ahead of ECB favors GBP bulls

Bank of America Global Research discusses the US 10y yields outlook.

"One of the most frequent client questions we tackle these days is: Why are US interest rates so low and can this persist? Clients point to strong growth - currently tracking 4.1% for 3Q - and CPI inflation running above 5%. But we think the rates market is focused on 2023 and beyond, and are increasingly questioning the ability of the Fed to deliver a substantial hiking cycle. The most important driver of long-term rates, in our view, is the market's perception of where the Fed will stop hiking after it begins its cycle of policy normalization," BofA notes.

"We have not changed our forecast for 10y rates at 1.9% by year-end, but downside risks to our forecast have increased. We also continue to like 2y-10y steepeners as better-carry alternative to an outright short in 10y rates," BofA adds.