Morgan Stanley Research previews the US July retail sales report due on Friday.

"We forecast headline sales were flat in July on a m/m basis, as were the headline ex-autos. We expect that auto sales forecasts were up 0.2%m/m, sales of building materials were flat. In our forecast, we pencil in a decline in the sales at gasoline stations (down 1.5%m/m), and also soft restaurant sales (down 0.2%)," MS notes. 

"For the retail control, we expect a slower pace of increase than previous months at 0.2%m/m. The slowdown in labor income growth, weakness in transactions data, pull-forward of Prime Day and other competing promotions to June, all weigh on our forecast. Positive control group prices, early back-to-school spending activity, and seasonal factors all provide a mild positive boost," MS adds.

Sterling remains range-bound, as recent economic data from both the U.S. and the UK have failed to provide a strong impetus for either bullish or bearish sentiment, keeping the pair within its 1.3475-1.3556 range. Today's mixed UK GDP and output figures had little impact on the general direction of GBP/USD. Meanwhile, U.S. Producer Price Index (PPI) data, which came in slightly below expectations, offered some support to the pound, helping it recover from session lows below 1.35 to trade around 1.3510. This was accompanied by a slight dip in U.S. Treasury yields and a continued softening of Federal Reserve hike expectations. October rate futures show a 55% probability of a 25 bp Fed hike, with 24 bps priced in for the December FOMC meeting. For the Bank of England, today's UK data did little to alter the policy outlook, with a November hike still seen at 60% and a total of 27 bps of hikes priced in by the December MPC meeting.

With both the UK and the U.S. following comparable rate paths, and with the likelihood of sustained high inflation due to oil prices, we may see continued short covering by GBP speculators. This could establish a floor for the pound just below 1.35, with stronger support at the 200-day moving average of 1.3413 and the daily cloud top at 1.3399. However, without a distinct yield or growth advantage for the UK, sterling is likely to encounter resistance initially at the July 15 high of 1.3556, followed by the early-May highs in the mid-1.36s.
GBP Chart:


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

ANZ Research discusses USD/JPY outlook for the coming week.

USD/JPY retraced sharply from its post-intervention low, reaching 159.54, around the 50% Fibonacci retracement of the 164–155 intervention move and close to 160 (100-dma). The next key retracement level is around 160.5, the 76.4% area. We do not rule out a breach of 160, largely from the USD leg of the pair, but are cautious about chasing it higher beyond this level knowing that both Japanese and US officials are on standby to defend JPY weakness.

Fundamentals have not materially changed. Wide rate differentials, Japan’s fiscal constraints and terms-of-trade pressures still argue against a durable JPY recovery. What has changed is the cost of testing official resolve. Pushing USD/JPY back toward 160 is now more expensive and reported intervention may have been absorbing a meaningful share of Japan’s readily available USD bills, even though deposits at foreign central banks and the FIMA facility remain available backstops," ANZ notes.

"Next week will bring Q2 GDP. Q1 GDP grew annualised 1.8% q/q exceeding expectations and the BoJ’s potential growth estimate of 0.7%. Continued support from government consumption and net exports will likely be a feature for Q2, although higher energy costs may see a squeeze in household budgets and consumption. National CPI figures for July are due, along with flash PMIs for August," ANZ adds.

• 0.7044-0.7067 traded overnight, NY opened near 0.7055, down -0.13%

• Balanced risks helped to keep the range tight ahead of US July PPI

• USD, US yield , USD/CNH drops helped limit the downside

• Price drops in gold, silver and copper helped to limit AUD/USD's topside

• The pair held above the 10-DMA but below the 50% Fib of 0.7277-0.6867

• Rising monthly RSI, pair's hold above 10-, 21- & 55-DMA are bull signals

• A below estimate July US PPI could give AUD/USD a lift
audusd


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

Aug 13 (Reuters) - AUD/USD usually struggles in August and that could well be the case once again in 2026 due to two key technical factors.

While AUD/USD in August has dropped in 18 of the 26 years since 2000, or 69% of the time, seasonality cannot be considered in isolation and instead needs to be corroborated by other factors. AUD/USD has dropped from Wednesday's 0.7091 10-week peak even as the Reserve Bank of Australia talks up rate hike risks. That fall helped to leave a long upper shadow on Wednesday's candlestick and that points to a rejection of the upside and could well see a bigger drop in coming sessions.

Spot failed to sustain the recent trading above the 0.7072 level, a 50% retrace of the 0.7270 to 0.6867 (May to June) drop, setting up a bull trap which occurs when a market breaks above a technical level but subsequently reverses and is usually a bearish sign.
Daily Chart


AUD/USD Seasonality Chart


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

• GBP trades in a narrow 27pip range as spot slips back below 1.35. Overnight range = 1.3475-1.3502

• UK Q2 GDP came in at 0.4%, in-line with consensus but market shrugged it off - no catalyst to break the range

• Wednesday's U.S. CPI report offered little surprise, keeping USD flows more two-way but directionless

• Initial support comes in 1.3470-76 (200-hour MA cluster), then 1.3445-50 (pre-payrolls level)

• Resistance unchanged at 1.3556 - likely to hold unless a clear macro catalyst underpins topside momentum
GBPUSD hourly chart


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

• USD/JPY has seen a 159.18-159.48 EBS range, on Thursday, trading within the thick daily cloud

• The daily cloud currently spans the 158.92-161.42 region

• Spot stuck below 159.59, 50% retrace of 163.99-155.20 intervention fueled slump

• The long tail on the Wednesday candlestick points to a rejection of the downside

• 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)

• One-month EUR/USD sinks to 2026 low around 4.5

• Lowest ever traded was just below 4 in 2020

• Option traders are expecting little to happen

• Other major currencies are also quietening

• Quiet FX, booming stocks favour carry trades

•
EURUSD


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

• EUR/USD repeatedly failing to sustain rises above 100-DMA at 1.1567

• Higher oil weighing while covering spec shorts provides support

• On Thursday pair rose to 1.1566 after US CPI but closed 1.1525

• Potential buy signal should 21-DMA 1.1473 rise over 55-DMA 1.1479

• Break outside daily Ichimoku cloud 1.1451-1.1561 needed to excite

•
EURUSD


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

• Australian mining stocks fall as much as 1%, adding to the broader benchmark's 0.2% decline

• Copper prices fell alongside broader industrial metals as the dollar strengthened after U.S. inflation data left expectations for next month's Federal Reserve interest rate decision unaffected

• Sector leaders BHP and Rio Tinto fall as much as 0.7% and 3.8%, respectively

• Both stocks on pace for second straight day of losses

• YTD, AXMM up 18.2%, including the day's moves, eclipsing AXJO's 5.4% rise

(Reporting by Nikita Maria Jino in Bengaluru)

• AUD/USD -0.2% Thur as downside drift begins to look more like a downswing

• AUD near 0.7047 lower hourly Bollinger band, may pare momentum short term

• U.S. initial jobless claims (Reuters poll 202k), and Jul PPI due Thur

• Broad USD index struggle to break clear above 100.00 level continues

• Iran says no progress on negotiations to reach permanent ceasefire with U.S.

• RBA Assistant Governor Kent indicates RBA maintaining rate hike optionality

• Range Asia 0.7047-665 support 0.6920 0.6866, resistance 0.7090 0.7200
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

(Corrected headline)

• EUR/USD on back foot in Asia, 1.1523-31 EBS after fall from 1.1566 yesterday

• Well ensconced in 1.1451-1.1561 daily Ichimoku cloud, 100-DMA 1.1566 above

• Tracking away from 1.1536 200-HMA, 1.1539-48 hourly Ichimoku cloud

• Looking to test 1.1520 low yesterday?

• Massive nearby option expiries to help contain spot action again however

• 1.1400-95 E7.4 bln, 1.1500-25 E5.6 bln, 1.1530-95 E9 bln, 1.1600-65 E6 bln

• EUR/GBP also heavy, indicated 0.8541 after push down to 0.8533 yesterday

• Between 0.8520 daily Ichimoku kijun and 0.8557 daily tenkan

• In area of 0.8539 hourly Ichimoku tenkan and 0.8541 hourly kijun

• Nearby option expiries today between 0.8540-50, total E532 mln

• EUR/JPY 183.63-68 EBS, holding under 183.88 200-DMA, 183.94 high yesterday

• Holding above 182.62-183.49 hourly Ichimoku cloud

• E709 mln option expiries today between 183.00-40, E550 mln 183.90-184.10

• Still in recently higher range however, eyeing USD/JPY for direction?

• EUR/CHF outlier, remains bid on carry demand, Asia 0.9373-78 EBS

• Uptrend looking to continue for now

• Related comments , , also
EUR/USD:


EUR/USD nearby option expiries into next week:


EUR/CHF:

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

• USD/THB opens lower, rally in gold prices weigh

• Spot gold last at $4441/oz, +0.75%

• Oil prices off overnight highs, Brent -0.91% to $88.17/bbl

• USD/THB traded 32.99-33.12 range in NY, closed at 33.06

• Supports at 33.0, 32.90 intraday, resistance at 33.20, 33.40

• USD bounces despite mild US CPI data, DXY last at 99.93

• UST yields stay firm on underlying inflation worries, 10yr last 4.68%
THB

(Catherine Tan is a Reuters market analyst. The views expressed are her own.)

• USD/JPY fell to 158.60 EBS overnight after mild CPI data, has bounced since

• Bounce to 159.55 before peaking out, Asia so far today 159.29-44

• Out of, below daily Ichimoku cloud for a bit, back in, cloud 158.92-161.41

• Underlining support eyed at ascending 200-DMA at 158.18

• Back above hourly Ichimoku cloud between 158.56-159.29, 100-HMA 158.82

• More massive option expiries scheduled for today, to help contain spot

• 158.00-50 $2.6 bln, 159.00 $1.9 bln, 159.05-80 $1.9 bln, 160.00 $1 bln

• JGB-US rate differentials narrower still, in 2s to @256 bps, 10s @183 bps

• Tokyo market to remain thin this week on annual O-Bon holidays

• Japanese importer bids at fix, on dips, foreign stock-buy ccy hedges too

• Related comments , , , also

• US markets , , ,

• On US data , , on US-Iran
USD/JPY:


USD/JPY nearby option expiries into next week:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD -0.4% from Wed 0.58835 high, at risk of break below 0.5850 support

• Release of RBNZ Q3 expectations survey 0300 GMT Thur will garner attention

• U.S. inflation data as expected, Fed rate hike conversation remains live

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

• Futures pricing currently implies 87.7% chance of 25 bps RBNZ hike Sep 2

• Range NZ 0.5856-60, support 0.5850 0.5627, resistance 0.5990-95 0.60925
NZD Daily 55-DMA

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

• 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)