• AUD/USD finishes flat Wed after surging in wake of U.S. inflation data

• U.S. Jul CPI: headline +3.4% y/y, core +2.5% y/y (inline with Reuters polls)

• Some investors pushing out Fed rate hike predictions to later in year

• Iran states no progress on effort to reach permanent ceasefire with U.S.

• AUD failed to break 0.7085-90 resistance zone cleanly, drift lower likely

• RBA Assistant Governor Christopher Kent fireside chat in Sydney Thur

• Overnight range 0.7057-91 support 0.6920 0.6866, resistance 0.7090 0.7200
AUD Daily 55-DMA


AUD Hourly Bollinger Study


US Inflation & Interest Rates

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

Deutsche Bank Research discusses the biggest market dislocations right now.

"Right now, markets are pricing a goldilocks combination where growth remains strong, central banks only hike a bit, that the supply shocks will prove temporary, and oil prices fall back again. This is clearly a very benign scenario, but it leaves next to no margin for error," DB notes.

"In other words, it's hard to imagine this entirely benign set of conditions happening simultaneously, and that's before we consider any future shocks that might occur. After all, if growth does remain strong and financial conditions stay accommodative, that itself increases the pressure on central banks to hike, particularly if inflation remains above target. That's particularly acute right now, as the global economy is facing multiple supply shocks, like the closure of the Strait of  Hormuz, that have persistently kept inflation elevated for longer than many expected. So even as markets are pricing in benign conditions, which makes  change  from several early-August periods in recent years, the risk is there's little margin for error," DB adds.

• GBP$ under pressure in NY afternoon trade, -0.11% at 1.3494; Wed range 1.3540-1.3492

• Post-CPI gain to 1.3540 evaporated as UST yields rose off session lows

• US consumer inflation mild in July, economy still not out of the woods

• For all the CPI noise, GBP$ remains anchored by 1.35 awaiting econ, c.bank, geopol news

• Next week's UK CPI now in focus for clues to speed and tenor of BoE policy path

• indicates Fed, BoE on parallel paths likely hikes in Oct/Nov, +26bp by Dec meets

• GBP$ supt 1.3485 daily low Aug 10, 1.3471 daily conversion line, 1.3399 daily cloud top

• Res 1.3540 ed high, 1.3556 daily high July 15, 1.3658 daily high May 1

Chart:


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

• NY opened near 1.1535 after EUR/USD drifted downward in overnight trading

• Pair rallied after US July CPI met estimates sank USD, US rates

• US-German yield spreads tightened to add fuel to the rally

• Gains in stock, gold, silver and USD/CNH's drop also added buoyancy

• EUR/USD hit 1.1566, sellers emerged however and the pair turned lower

• USD buying emerged, USD/CNH moved upward & stocks, gold, silver eroded some gains

• EUR/USD fell to 1.1522, the pair traded down -0.18% in NY's afternoon

• Techs now worry bulls; daily inverted hammer formed, daily RSI is falling

• August's monthly gravestone doji adds to concerns for EUR/USD bulls
eurusd


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

• NY opened near 0.7065 after 0.7054 traded overnight, rally extended early

• USD, US yields , USD/CNH fell after in line US July CPI report

• Gold, silver, copper & equities rallied which helped add weight on the USD

• AUD/USD rallied above the 50% Fib of 0.7277-0.6867, traded 0.7091

• Sellers emerged as USD buying took hold & gold, silver eroded some gains

• USD/CNH rallied towards flat, helped weigh down AUD/USD

• AUD/USD sat near 0.7065 late, traded up only +0.05% in NY's afternoon

• Daily RSI didn't confirm today's high, daily inverted hammer formed

• The daily signals could be concerns for AUD/USD bulls
audusd


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

Morgan Stanley Research previews the US initial jobless claims and the UK monthly GDP print due on Thursday.

"UK Monthly GDP: We expect a small drop in activity in June (-0.1%M), and 0.3%Q growth in 2Q26. Peru BCRP Monetary Policy Meeting: We expect BCRP to keep rates constant at 4.25% while remaining vigilant as supply shocks unwind," MS notes.

"US Jobless Claims: We forecast a rebound in new jobless claims to 210k but little change in continuing claims," MS adds.

• Ether rallied above the 10-DMA, hit 1920.82 earlier in the session

• Most of the gains have been erased, Ether is back below the 10-DMA

• Ether slipped from its high despite lower US yields , equity gains

• Rallies in gold and silver were also unable to prevent Ether's pull back

• A daily inverted hammer candle formed which could be a worry for bulls

• Hold below the 50% Fib of 2464.54-1506.93 adds to their concerns

• Ongoing consolidation of drop from April's high reinforces bear signals

• Ether bulls need break & hold above 1985.00-2020.00 to gain some control
eth


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

MUFG Research discusses BoJ rate outlook and the latest wave of yen-buying intervention.

"The release of the latest CFTC report at the end of last week did show that that intervention triggered a sharp squeeze of speculative short yen positions.  Short yen positions held by leveraged funds fell sharply by around 40% in the week ending 4^th August to 60,825 contracts. If there is no change in fundamentals, speculators will be encouraged to rebuild short yen positions at a time when stable financial market conditions remain supportive for carry trades," MUFG notes.

"One potential change in fundamentals is that it appears more likely now that the BoJ will speed up the pace of rate hikes. Recent hawkish rhetoric from the BoJ and joint intervention alongside the US to support the yen have given market participants more confidence that the BoJ will hike rates sooner. The Japanese rate market has moved more in line with our view to price in around 19bps of tightening from the BoJ by September. However, the hawkish repricing of the BoJ rate hike expectations has so far failed to prevent the yen from re-weakening," MUFG adds. 

EUR/USD's risk profile tilted modestly higher on Wednesday as recent U.S. data prompted investors holding long-dollar positions to reconsider their conviction. The catalyst was the in-line July U.S. CPI report, which eased fears that inflation might surprise to the upside and force the Fed into a September rate hike. In response, both the dollar and the broader U.S. interest-rate complex weakened, with markets paring the probability of a September Fed hike to below 37%, according to CME FedWatch. This shift was mirrored in rates markets, where SOFR futures rallied and the dollar's yield advantage over the euro narrowed, pushing U.S.-German 2-year yield spreads to their tightest levels since July 20.

Positioning dynamics could amplify further dollar softness. CFTC data show net-long dollar positions were trimmed from the previous reporting period but remain elevated, suggesting that continued weakness in U.S. rates could trigger additional unwinding of long-dollar bets, a dynamic that would likely support EUR/USD.

Technical indicators reinforce the bullish tone: rising daily and monthly RSIs, still below overbought territory, point to building upward momentum, while EUR/USD's position above its 10-, 21-, and 55-day moving averages provides further confirmation.

Looking ahead, attention now turns to Thursday's July PPI release. Should the data print in line with or below expectations, it could provide further momentum for a EUR/USD rally, extending the dollar's recent vulnerability.
eurusd


srah27


deus


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

Bank of America Global Research discusses the latest wave of yen-buying intervention.

"As we argued previously a break above 160 would likely be interpreted as a sign of limited policy resolve, while successful intervention that pushes USD/JPY below 155 would have strengthened perceptions of strong commitment at least until recently.

The immediate focus is therefore the risk of USD/JPY moving above 160. Following the weaker-than-expected US July employment report released on 7 August, authorities had an opportunity to conduct a "follow-through" intervention and push USD/JPY below 155. Instead, no intervention materialized, and the pair has since traded back in the 159s," BofA notes.

"Confidence in Japan's commitment to defending the yen improved after coordinated intervention with the US on Jul 31. However, as USD/JPY has rebounded without any intervention over the past week, that credibility appears to have eroded," BofA adds.

CIBC Research reviews today's US July CPI report.

"No surprise today with the July CPI release in the US. Headline inflation rose 0.1% in July, in line with consensus expectation. The tame headline increase was helped by lower gasoline prices. The core measure grew 0.2% in July, also in line with expectation. Commodities less food and energy rose 0.2% after two consecutive monthly declines. Shelter increased by 0.1%, as it did in June. Motor vehicle insurance continued to decline (-0.2%), the third consecutive monthly declines. Medical services accelerated to 0.6% following a 0.1% decline in June, led by hospital services. The annual pace of total CPI continued to gradually decline from 3.5% in June to 3.4% and core CPI from 3.5% to 3.4% in July," CIBC notes

"With core inflation in line with consensus, and inflation continue to decelerate on an annual basis, this should bring some comfort some members of FOMC and we continue to expect the Fed to hold rates in the September FOMC meeting," CIBC adds.

• AUD/USD dipped down to 0.7054 overnight then rallied to 0.7071

• NY opened near 0.7065, AUD/USD traded up +0.05% in early action

• Soft USD, US yields & USD/CNH drop helped buoy the pair

• Rallies in gold, silver, copper and equities added buoyancy to AUD/USD

• Consolidation of recent gains persists while below 50% Fib of 0.7277-0.6867

• Rising RSIs, pair's hold above 10-, 21- 55- & 200-DMAs are bullish signals

• US July CPI in focus, a downside surprise could see AUD/USD rally sharply
audusd


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

• USD/JPY drops from 159.46 in Asia, briefly to 158.60 in London, before rebounding

• Some nervousness still over FX intervention but most say unlikely now

• Scope is growing for a bigger rise and break above the 159.59 level

• 159.59 is a 50% retrace of 163.99-155.20 intervention fueled slump

• However beware USD/JPY and EUR/JPY usually struggles in August

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• USD/JPY saw a big rise on Monday, closing up 208 pips, largest one-day since Dec

• Spot has seen a modest 159.20-159.46 EBS range, on Wednesday

• Some nervousness still over FX intervention but most say unlikely now

• Scope is growing for a bigger rise and break above the 159.59 level

• 159.59 is a 50% retrace of 163.99-155.20 intervention fueled slump

• Spot is now trading within the thick 158.92-161.38 daily cloud

• However beware USD/JPY and EUR/JPY usually struggles in August

USD/JPY Daily Rise Table


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

Aug 12 (Reuters) - The British pound usually struggles against the U.S. dollar in August, but that is not the case so far this year.

GBP/USD's August performance since 2000 shows it has fallen in 17 of the past 26 years, or 65% of the time. Seasonality should not be considered in isolation — it needs to be corroborated by other factors. The cable overall bias remains on the upside, and it could well break above the July 1.3556 peak. 14-day momentum remains positive and spot is underpinned by a key 1.3432 Fibonacci level, a 38.2% retrace of the recent 1.3274 to 1.3530 rise. These technical factors are reducing the likelihood that GBP/USD will close down in August. It opened the month at 1.3477 and is now consolidating above.

However, a break and daily close below the 1.3432 Fibo would shift overall bias back to the downside and put it on course to close August in negative territory.
GBP/USD Seasonality Chart


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own; Editing by Kevin Liffey and Jan Harvey)

• Gold up to $4434/oz on Aug 11

• Gold has broken and closed above daily Ichimoku cloud

• Chance of a bullish close above 100-DMA at $4387/oz

• The influential 200-DMA is $4498/oz

• Gold rises have tended to precede USD drops

• Traders heavily long USD ahead of US CPI report

•
Gold


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Bullish signal if 21-DMA 1.1470 rises over 55-DMA 1.1482

• Speculators are betting over $8 billion that the euro drops

• Bets on a drop were created when pair was lower

• Few shorts have been pared during 1.1352-1.1580 rise

• Short squeeze may follow any close over 100-DMA at 1.1567

• Traders heavily long USD ahead of US CPI report

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Australian copper stocks rise vs broader benchmark's 0.6% fall

• Copper prices edged up on supply fears after a temporary shutdown at a major Indonesian smelter, ahead of key U.S. inflation data [MET/L]

• Sandfire Resources rise as much as 1.9% to A$21.72, highest level since January 30

• Sandfire on track for ninth straight day of gains

• Australia-listed shares of Capstone Copper gain as much as 2% to A$16.2, highest since February 16

• Capstone on track for seven-session winning run
(Reporting by Nikita Maria Jino in Bengaluru)

• Australian gold miners rise as much as 1.2%, while the broader benchmark slips 0.7%

• Sub-index on track for ninth consecutive day of gains, if trends hold

• Bullion prices rise nearly 1% ahead of key U.S. inflation data that would provide monetary policy clues, while the Gulf conflict kept concerns about oil-driven inflation elevated [GOL/]

• Northern Star Resources rises as much as 2.1%

• Evolution Mining advances as much as 1.1% in its ninth straight day of gains

• YTD, AXGD down 1.8%, including the day's moves, lagging behind AXJO's 5.4% rise

(Reporting by Nikita Maria Jino in Bengaluru)

• JPY crosses bid alongside USD/JPY, on Nikkei buy and currency hedges?

• EUR/JPY 183.60-88 EBS, in area of ascending 200-DMA at 183.85

• Buoyant, in area of 183.81 hourly Ichimoku tenkan, kijun 183.51 below

• CHF/JPY 196.11-51, sub-196.67 high Mon, at top of 195.63-196.23 hourly cloud

• GBP/JPY 214.88-215.25, at top of 214.12-215.27 daily Ichimoku cloud

• Also above its ascending hourly Ichimoku cloud between 213.51-214.52

• AUD/JPY 112.32-57 and at base of its 112.47-113.01 daily Ichimoku cloud

• Above its ascending hourly Ichimoku cloud between 111.69-112.12

• NZD/JPY 93.48-71, above its 92.42-93.21 daily Ichimoku cloud

• Still above its ascending hourly Ichimoku cloud between 93.16-45 too

• JPY under the gun across the board, eyes still on USD/JPY, intervention?

• Related , for more click on [FXBUZ]

EUR/JPY:


GBP/JPY:


AUD/JPY:

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

• AUD/USD steady Wed as Iran peace hopes ebb & markets await U.S. inflation

• Iran says Strait of Hormuz will stay closed unless U.S. meets its demands

• U.S. Jul CPI due Wed, Reuters poll: headline +3.4% y/y, core +2.5% y/y

• AUD 0.7088 level a likely inflection point, stop-loss buying if breaks above

• RBA Assistant Governor Christopher Kent fireside chat in Sydney Thur

• Range Asia 0.70595-685 support 0.6920 0.6866, resistance 0.70885 0.7200
AUD Weekly 52-WMA

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

• USD/JPY consolidating on 159 while Tokyo slept, Asia today 159.26-32 EBS

• Seems some nervousness over fresh Japan FX intervention still but nothing

• Could be Japan awaiting September's likely BOJ hike but already discounted?

• Only fresh intervention will get JPY higher but effectiveness questioned

• USD on back foot elsewhere, USD up vs JPY on fresh hedging of stock buys?

• Nikkei decent rise Monday to 67,006.84, when USD/JPY broke back above 159

• Nikkei maybe heavier today with Wall St off overnight but downside limited?

• Japanese importers look to buy into any dips as heretofore

• Technically, USD/JPY back in 158.92-161.38 daily Ichimoku cloud

• 100-DMA 160.01 in cloud, 200-DMA below cloud at 158.15

• Hourly Ichimoku kijun 159.16, cloud 158.02-82 below, supportive too

• Option expiries likely to help contain spot action today with market thin

• 159.00 $1.3 bln, 159.05-45 total $473 mln, 159.50-75 $1.3 bln

• JGB-US Treasury rate differentials narrower still but shrugged off

• In 2s differential to @258 bps, in 10s holding @184 bps

• Related comments , , ,

• Also , on US rates

• US markets , , ,

• More on crude , on Middle East ,
USD/JPY:


Nikkei 225:


JGB-US Treasury interest rate differential:

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

• USD/KRW remains heavy, veering toward test of 1400 psych barrier

• But tentative USD/JPY bounce back above 159 may slow USD/KRW

• USD/KRW last 1412.5, after Tues pullback to 1413.0 erased Mon gain

• Bollinger downtrend channel guides lower still, capping at 1419.0

• If 1400 barrier breaks, Fibo at 1393.0 will be targeted by shorts

• S. Korea unemployment rate rises though more jobs added
KRW


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• NZD/USD continues to tread water ahead of critical U.S. inflation update

• U.S. Jul CPI due later Wed, Reuters poll: headline +3.4% y/y, core +2.5% y/y

• Iran says Strait of Hormuz will remain closed until U.S. meets its demands

• Release of RBNZ Q3 expectations survey Thur will be closely watched

• NZD well supported near 0.5850, break below requires shift in RBNZ narrative

• Futures pricing currently implies 86.4% chance of 25 bps RBNZ hike Sep 2

• Range NZ 0.58775-825, support 0.5850 0.5627, resistance 0.5990-95 0.60925
NZD Hourly Bollinger Study & DXY Daily 55-DMA


NZD Daily 55-DMA

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