• NY opened near 0.6940 after 0.6977 traded overnight, pair rallied in early NY

• 0.6955 was neared on the back of broad based USD selling & equity gains

• Comments from President Trump & soured risk helped to send the pair downward

• Aussie struck the day's low near 0.6923 well before the Fed and was near 0.6935 before the announcement

• Low stopped before touching 200-DMA at 0.6909

• Then struck a post-Fed high of 0.6989, climbing back above the 21-DMA and stopping near the 10-DMA

• Big rebound leaves long-legged doji on the day's candle
AUD closer


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

• GBP$ boosted in NY afternoon, +0.23% at 1.3322; NorAm range 1.3345-1.3280

• Post-Fed hold rally after vote came in 9-3, Hammack, Kashkari & Logan vote to hike

• Warsh says will not hesitate to act, nominal/real yields higher, inflation can't be cured in 9 wks

• Discussion centered on 5 yrs high inflation, recent econ shocks, oil price rise, monpol tools

• Markets react to less-hawkish hold; hike odds, USD and front-end yields lower

• BoE Thursday moves into focus, no change expected; dovish lean may reverse today's rise

• GBP$ res 1.3345 the post-Fed rise, 1.3362 the 50-DMA, 1.3398/99 200-DMA/daily cloud top

• Supt 1.3300 psychological lvl, 1.3280/74 Wed/Tues low area, 1.3213 June 30 low

GBP Chart:


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

Nomura Research likes long EUR on some crosses

"With oil prices almost back to the ECB’s June “baseline” and gas prices closer to the “adverse” scenario, it seems highly likely that a second hike in the cycle will be delivered in September (in line with expectations), and with some upside risk as two hikes (including the one delivered in June) were in the baseline scenario," Nomura notes.

"While EUR/USD is at the mercy of commodity prices, we think there could be value in being long EUR on some crosses, which have already diverged from rates pricing and where further monetary policy divergence might become more apparent. EUR/GBP has started to bounce, while EUR/AUD and EUR/CAD are also potentially attractive on these factors," Nomura adds.

Months of persistent dip-buying continue to underpin USD/JPY, though a decisive break above 164.00 is still needed to reignite bullish momentum.

Buyers again emerged on Tuesday's dip to 163.28, extending a pattern since May as dollar longs continue to build since July 21.

Yet there remains little evidence of aggressive momentum buying at current levels. Open interest in yen futures recorded its first meaningful decline since early July, suggesting traders are trimming yen short exposure as spot USD/JPY struggles to surpass last week's multi-decade peak at 163.99.

That hesitation has emerged in relatively light trading conditions, leaving the pair trapped between solid demand around 163.00-20 and equally firm offers just below 164.00. With overnight implied volatility above 14%, those boundaries appear vulnerable after the Fed decision.

One-week options are pricing in an eventual break of 164 that exposes topside barriers. Supporting that view are firmer oil prices, expectations for a hawkish Fed outcome, and the prospect that intervention fears could ease temporarily after Friday's Bank of Japan meeting.

Alternatively, rising FX and equity volatility into August could pressure yen crosses as carry trades unwind, increasing the risk of a broader USD/JPY reversal if expectations for additional Fed tightening fade and long dollar positions unwind.

Technically, a sustained move through 164.00 would likely push USD/JPY into overbought territory, with an upper Bollinger near 164.25 acting as initial resistance. However, a close above the Bollinger top would likely fuel momentum toward the key 165.00 threshold.

On the downside, a break below the Tenkan-sen near 163.00 and the 21-day moving average around 162.65 would open a path toward the cloud top and lower Bollinger near 161, potentially forcing an unwind of crowded dollar long positions.
Yen


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

Bank of America Global Research highlights the expected flows from this month-end rebalancing.

"We estimate FX rebalancing needs based on a conventional 60/40 portfolio of global equities & bonds," BofA notes.

"Our estimates point to outperformance of GBP denominated assets over July.  This scope for rebalancing out of GBP (-1.5σ) and relatively muted inflows into EM and other DM denominated currencies (ex-JPY)," BofA adds.

(Updates)

• Shares of Allied Gold fell more than ~18% to C$24.29

• AAUC says its planned C$5.5 billion ($3.90 billion) sale to China's Zijin Gold was terminated after the companies concluded they were unlikely to satisfy closing conditions by the agreed deadline

• "The termination of the Arrangement Agreement relates to broader external factors applicable to cross-border transactions of this scale" - AAUC

• Says Zijin agreed to invest $295 million for a 9.2% stake in AAUC

• Including session's moves, AAUC shares were down 23.3% YTD

(Reporting by Sumit Saha and Dharna Bafna in Bengaluru)

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)