Credit Agricole CIB Research highlights the suggested flow into this month-end fixing.

'Global equity markets were somewhat mixed in July. In FX, the USD was somewhat mixed on the month," CACIB notes.

"Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest that month-end portfolio-rebalancing flows are likely to be mild USD buying across the board with the strongest buy signal in the case of the USD vs the CAD," CACIB adds.

• AUD/USD 0.6977-0.6937 traded overnight, NY opened near 0.6940, down -0.49% early NY

• Below estimate Australia Q2 CPI report weighed on the pair overnight

• Australia government yields sank as bets for RBA rate hikes were pared back

• Firm US yields , drops in gold, copper helped keep AUD/USD trading heavy

• The pair fell below the 21-DMA, broke the base of its recent consolidation range

• Those are bear signals as are falling daily RSI, July's inverted hammer candle

• Fed is in focus and is expected to keep rates unchanged, press conference will be key
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 14.5 pip range since the London open; 1.3294-1.33085

• 1.33085 is 2.9 pips shy of Tuesday high. 1.3274 was four-week low Tuesday

• Dollar will react to Fed rate decision at 1800 GMT; hold or hike?

• GBP/USD could tumble towards 1.3200 if the Fed raises rates today

• Cable was last at 1.3200 on June 29 (1.3220 was July 1 low)

• UK consumer lending rises at fastest pace since July 2018, BoE data says

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• AU Q2 CPI undershot consensus, consistent with downside signals flagged into the release

• Markets scale back RBA tightening expectations, August hike now effectively priced out

• Follows on from Governor Bullock’s more cautious tone highlighting incomplete policy transmission of prior hikes

• AUD offered across the board, weakness most evident on crosses

• AUD/NZD preferred expression of AUD downside

• Cross has been tightly correlated with rate differentials, softer CPI shifts bias toward further retracement

• Initial support at 1.1900, clean break opens 200DMA at 1.1850

• Recent rebound rejected at 100DMA - former trend support (1.09-1.23 move) now acting as resistance

• Technical rejection reinforces bearish bias, scope for extension lower on sustained AUD pressure
AUDNZD daily


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• AUD/USD slid to 0.6937 in Asia on softer than expected Australian CPI data

• 0.6937 is the lowest level since July 14 (0.6913 was the low that day)

• Westpac no longer expects the RBA to raise interest rates this year

• Risk-sensitive AUD also hurt by more Japanese, South Korean stock losses

• USD will react to Fed rate decision at 1800 GMT: hold or hike?

• Australia confirms H5N1 bird fly spreading in native bird population

AUDUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 21.5 pip range thus far Wednesday; 1.32815-1.3303

• 1.3303 is 8.4 pips shy of Tuesday top. 1.3274 was four-week low on Tuesday

• Dollar will react to Fed interest rate decision at 1800 GMT; hold or hike?

• BoE MPA Thursday: 7 of 9 Times shadow MPC members advocate rate hold

• The other two say BoE should raise rates. BoE MPC may vote 6-3 for hold

• Oil prices rise after US, Saudis attack Iran-backed groups in Iraq

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Nikkei off more today and talk some foreign players paring positions

• This would inevitably mean the taking off of currency hedges on the buys

• Nikkei has reversed most of its gains from May, off another 1.6% today

• USD/JPY slump from 163.91 EBS high earlier to 163.28 on back of these flows

• Support still eyed ahead of 163.00 on Japanese importer and other demand

• Specs may also buy further dips on view Fed may hike tonight

• Tech support from ascending 200-HMA at 163.19

• Massive $1.4 bln in option expiries today between 163.00-25 too

• $1.6 bln in expiries between 163.50-90 now to help cap upside?

• Related , for more click on [FXBUZ]

USD/JPY hourly:


Nikkei 225:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Shares of OD6 Metals advance 7.1% to A$0.105

• Rare earths explorer identifies gold samples at Quinn Fluorspar Project in Nevada, U.S.

• Discovery of separate gold enhances the upside of key project while safeguarding the quality of its core deposits, MD says

• Stock up 23.5% YTD
(Reporting by Shravya Marakini in Bengaluru)

• EUR/USD up from 1.1354 EBS low yesterday but still heavy, Asia 1.1383-96

• Market on tenterhook ahead of FOMC tonight, hike would send EUR/USD down

• This despite growing expectations of an ECB hike this fall

• Daily Ichimoku tenkan 1.1402, kijun 1.1403 just above

• Descending 200-HMA 1.1403 above too, 100-HMA 1.1385 below, cloud 1.1382-91

• In option expiries today, between 1.1300-55 E5.4 bln, 1.1360-95 E949 mln

• Between 1.1400-40 above, total E3.2 bln in expiries, effective cap?

• EUR crosses buoyant and mostly holding bid

• EUR/JPY well bid, 186.42-56 EBS, above 186.27-42 tapering hourly Ichi cloud

• EUR/CHF 0.9324-32 EBS, high today best since 0.9350 on January 14

• EUR/GBP bid too, 0.8570-73, best since 0.8617 July 1 on way down to 0.8455

• Nearby option expiries 0.8525 E547 mln, 0.8575 E667 mln, 0.8600 E347 mln

• Related comments , , , also
EUR/USD hourly:


EUR/JPY hourly:


EUR/CHF hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD -0.7% from Tue 0.6996 high after Q2 CPI gives RBA breathing room

• Inflation updates broadly below expectations, Q2 trimmed mean +3.6% y/y

• AUD pushing lower hourly Bollinger band, progress lower may slow short term

• FOMC meeting outcome Wed, focus on statement with FFR unlikely to change

• Iran launches missiles at U.S. base in Jordan, Brent crude +4.6% in Asia

• Range Asia 0.6937-77 support 0.6866 0.6834, resistance 0.7027 0.7088
AUD Hourly Bollinger Study


AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.35% Wed in wake of softer than anticipated inflation update

• AU Q2 CPI +0.6% q/q, +4.0% y/y (poll consensus +0.7%, +4.1% respectively)

• Q2 trimmed mean CPI +0.8% q/q (poll +0.9%), +3.6% y/y (poll +3.7%)

• Iran launches missiles at U.S. base in Jordan, Brent crude +4.6% in Asia

• FOMC meeting outcome Wed, focus on statement with FFR likely unchanged

• AUD resistance 0.7025-30 likely holds as expectations of RBA hikes moderate

• Range Asia 0.6937-77 support 0.6866 0.6834, resistance 0.7027 0.7088
AUD Hourly Bollinger Study & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY remains bid, likely to remain so into FOMC policy announcement

• Fed meeting seen "live", 25 bp hike seen possible

• JGB-US Treasury rate differentials on hold, in 2s @280, in 10s @184 bps

• USD/JPY offers still ahead of 164.00 but stops eyed above

• 164.00 seen as an option barriers level, massive barriers above at 165.00

• In vanilla expiries today, between 164.00-25 $750 mln, 163.50-90 $1.6 bln

• More vanillas below, between 163.00-25 $1.4 bln, 162.00-25 $1.6 bln

• Market likely to remain nervous on possible Japan FX intervention

• That said, MOF has not intervened recently, maybe difficult with USD bid

• Hourly chart tech supports at 163.72 Ichimoku kijun, 163.70 tenkan

• Ascending 100-HMA 163.67, hourly Ichimoku cloud 163.63-64, 200-HMA 163.16

• Related comments , , ,

• And , , , also

• On US markets , , ,

• On the Middle East , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD -0.3% from Tue 0.57986 high as pair struggles to maintain traction

• Iran launches missiles at U.S. base in Jordan, WTI jumps 4.1% in early Asia

• FOMC meeting outcome Wed, statement critical with FFR change unlikely

• Gulf states propose voluntary fees to Iran for using Strait of Hormuz

• NZD likely to drift lower unless broader USD move develops momentum

• Range NZ 0.57805-885, support 0.5627 5580, resistance 0.5873 0.5990-95
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.2% Tue, trading subdued as markets brace for high impact events

• AU Q2 CPI 0130 GMT Wed, Reuters poll consensus +0.7% q/q, +4.1% y/y

• FOMC meeting outcome also due Wed, dialogue crucial, FFR change not expected

• Gulf states propose voluntary fees to Iran for using Strait of Hormuz

• Oil prices fall further on rising Middle East peace hopes, Brent crude -4.5%

• Break above 0.7026 unlikely without fresh uptick in RBA hike expectations

• Overnight range 0.6963-86 support 0.6866 0.6834, resistance 0.7027 0.7088
AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Credit Agricole CIB Research previews the July BoE decision on Thursday.

"This week, next to the newsflow regarding fresh policy initiatives of the Burnham government, FX investors would focus on the outcome of the July BoE policy meeting. We and the UK rate market expect the MPC to keep the bank rate on hold. That said, the UK rates investors are pricing in c.65bp of BoE tightening at the time of writing – which is a very hawkish outlook in our view," CACIB notes.

"We further think that the MPC could remain non-committal with respect to future hikes, notwithstanding the latest increase in global energy prices and given the still challenging outlook for the UK economy. This could deal a blow to the current market rate expectations and thus to the GBP’s relative rate appeal. We maintain a bearish outlook on the GBP from current levels vs the EUR and USD," CACIB adds.

• GBP$ eking out a slight gain, +0.1% at 1.3299; Tuesday range 1.3311-1.3274

• Pair tested July lows near 1.3275 in early NorAm before moving back toward 1.33

• Oman proposes a Gulf-backed plan for Strait, Trump says good talks under way w/Iran

• Oil key metric for inflation expectations down near 5% stokes limited haven unwind

• Rate decisions/pressers in focus; Fed on Wednesday, BoE July 30, no chgs expected

• GBP$ res 1.3311 Tuesday high, 1.3378 the 55-DMA, 1.3411 the daily cloud top

• Supt 1.3274 Tuesday low, 1.3329 78.6% Fib of 1.3140-1.3556, 1.3200 psychological lvl

GBP Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• EUR/USD hit a 1-month low of 1.1354 in Europe, NY opened near 1.1365

• The pair steadily rallied in NY's morning as USD buying dried up & yields fell

• Added weight fell upon USD due to stock gains, bounce in in gold & silver

• EUR/USD turned positive, hit 1.1405, neared 1.1390 late, traded up +0.22%

• Daily RSI diverged on the low and a daily doji candle formed, could worry bears

• EUR/USD remains below 10- & 21-DMAs, trend line off May 11 high, are bear signals

• July's monthly inverted hammer, falling monthly RSI are bearish as well
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.6965 after 0.6996-0.6963 traded overnight, choppy trade early

• Dip toward 21-DMA met buyers as USD buying abated & yields

sank

• Equities turned up & gold, silver, copper bounced off their lows

• AUD/USD neared 0.6990 then dipped a bit, sat near 0.6980 late, was down only -0.09%

• A daily bull hammer formed & consolidation phase persists which are bull signals

• Rising monthly RSI, hold above 21- & 200-DMAs reinforce bullish tech signs
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research notes that the risk of a sudden unwind of JPY short positions looks less likely than in the July 2024 intervention eposide.

"USD/JPY has grinded up to fresh 40-year highs and tactical short JPY positioning stands near the stretched levels reached prior to the July 2024 intervention and subsequent carry unwind in early August. This, combined with the rising volatility around energy, policy, and Al that has so far had less of an impact on FX, has raised some concerns about a sharp drop in USD/JPY yet to come. We think the vulnerability in terms of positioning is similar and should keep investors wary, especially with higher likelihood of repatriation flows. But the risk of a sudden unwind looks a bit lower than it was back then," GS notes.

"Overall, we think the nearer-term pressures will continue to be JPY-negative. But a faster and more disorderly depreciation would likely further raise the risk of intervention and of possibly the most credible form that could also shift the longer-term trajectory," GS adds.

AUD/USD's recent rally has paused as the pair consolidates gains made since the June monthly low—a pattern that is technically bullish. However, far larger gains could materialize if the Federal Reserve fails to adopt the hawkish stance that markets

have recently priced in. Inflation-linked markets suggest the Fed may not need to be as hawkish as investors currently expect. U.S. 2-year and 5-year inflation breakevens have resumed declining from their late April/early May peaks, striking fresh trend lows, while 2-year and 5-year inflation-linked swaps have sunk, erasing nearly all the gains accumulated in July. If the Fed surprises investors by downplaying inflation concerns and signaling that price pressures are less worrisome, U.S. interest rates and the dollar could fall sharply.

Such dollar weakness could be amplified by positioning dynamics: CFTC data shows the net-long U.S. dollar position

is at its largest level in 11½ years, leaving considerable room for unwinding. At the same time, net-short Australian dollar positions are at their largest since early December, setting up potential short-covering.

The combination of these position adjustments alongside falling U.S. interest rates could push AUD/USD higher, allowing the pair to complete its current consolidation phase. If this scenario unfolds, AUD/USD could then challenge key resistance in the 0.7150 to 0.7200 region, marking a significant technical and directional shift for the currency pair.
usbei


usinfli


usdcftc


audcftc


audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research maintains a long JPY exposure vs CHF and CAD.

"Several BoJ sources articles last week suggested officials are open to a faster hiking pace and alert to upside inflation risks. Indeed, our economists' inflation expectations indicator rose sharply in 2Q '26, supporting the case for an earlier rate hike  Fresh highs in USD/JPY may have prompted this "jawboning" but ultimately the impact was limited. This is partly because there was no mention of the government's view on monetary policy, which so far has signaled caution on hikes," BofA notes.

"Still, we are closer to, if not beyond, pain thresholds in JPY & JGB levels that may elicit a pivot from the government. The BoJ's communication at this week's meeting may provide clues but also the June meeting minutes (published on 5 Aug) that will update views from government representatives. We maintain long JPY exposure based on the improvement in balance of payments vs. 2025, focusing on non-USD crosses (CHF & CAD), where carry is less punitive," BofA adds.

Cable's early NorAm pop looks fleeting, with the pound climbing to a session high at 1.3306 before running into resistance and settling near 1.3300 in early NorAm trading.

Despite the mini-rally, the GBP/USD outlook remains tipped to the downside.

Today's move most likely reflected position curating ahead of the upcoming Fed and BoE rate announcements. While U.S. and UK front-end futures point to steady rates at both meetings, pricing shows a slightly more hawkish Fed bias into year-end 2026— a Fed 25bp hike seen in September versus a BoE move in November — handing the dollar a modest timing advantage.

Both central banks continue paying homage to data dependence, reluctant to hike aggressively while awaiting the inflation readings from the recent yaw in energy prices and any second-round effects.

This week's events aside, sterling is likely to stay offered given the dour UK inflation and growth dynamic. The recent UK regime change has also renewed long-standing fiscal concerns, with markets awaiting concrete action from PM Andy Burnham to revive the economy without straining the budget.

Technically, today's rise should be taken witAh a grain of salt. Support looks firm, for now, at 1.3276, matching the July 2 low, but momentum favors bears as the series of lows since July 16 shows no sign of reversing. A close below 1.3276 would open the way toward the June 24 low at 1.3140. On the topside, bulls need a rise above the daily cloud spanning 1.3324-1.3411 to stall the bearish tenor.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Nomura Research likes to buy JPY crosses after a potential MoF intervention.

"At this juncture, there are no strong signals suggesting these fundamentals will change in the near-term, so we think establishing a long cross-JPY trade is reasonable. However, with USD/JPY approaching 164-165, we think intervention risk is becoming further elevated, making it unattractive for immediately entering this short JPY trade. Thus, our preferred strategy is to initiate long cross-JPY after the MOF’s intervention, if any, occurs," Nomura adds.

"We believe shorting the JPY after any dips is a sensible strategy. All in all, we like having long EUR/JPY with a conviction level of 2/5, waiting for a better entry level," Nomura adds.

JP Morgan Research previews the July FOMC decision on Wednesday.

"We expect the FOMC will leave rates on hold at the end of this week's meeting. However, we think it will be a contested decision as some on the Committee are losing patience with above-target inflation, and we look for at least two hawkish dissents (Hammack and Logan).

There are no dots or SEP set to be released this week, and it will be interesting to see if the statement evolves, as it has done for much of this century, or whether it is effectively written afresh each meeting. If the former, then we wouldn't foresee many meaningful changes, as there have only been modest changes in the narratives on employment and inflation since the last meeting," JPM notes.

"We think there is a chance the Committee will use the statement to indicate it understands that action may be needed to back up its resolve. We have modest expectations for learning much from the post-meeting press conference," JPM adds.