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Yen profit taking is coming The USDJPY pair extends gains for a seventh day in a row on Thursday, with the price is testing more that two-week lows in the 110.60 area. Interestingly, the dollar is not inspired by a rise in the 10-year US Treasury yield to a six-week high close to 3%, and it looks like the pair is set for further losses in the short term. The greenback has been trading on the defensive against major rivals this week, but the pressure in the USDJPY pair is especially strong. The yen bulls’ enthusiasm is due to the recent speculations around the possible Bank of Japan policy shift, with traders hope that the central bank will announce a change to the negative interest rate settings. However, the regulator will likely refrain from major adjustments during the upcoming meeting early next week. Therefore, there is a risk of a massive profit-taking in the USDJPY pair, which could open the way to the 111.50 area. Meanwhile, the greenback could continue its decline in the short term, though the 110.00 figure should serve as a support area.
by HelenRush
EURUSD struggles for direction ahead of Trump-Juncker talks The EURUSD pair continues to tread water around the 1.17 handle, unable to attract buying interest ahead of the key event of this week – the EU-US trade talks which could give a more directional impulse to the single currency. The pair failed to make a clear break above the mentioned resistance on several occasions, which points to a lack of bullish enthusiasm among traders. A cautious tone is explained by the upcoming Trump-Juncker meeting where the two leaders will discuss trade relations between the EU and the US. The talks are a wildcard for the euro as trade rhetoric could either send the pair lower amid a risk aversion, or inspire euro bulls should the European Commission President cheer Trump’s call to drop all trade barriers and tariffs with each other so that to encourage free trade. Depending on the outcome, EURUSD could jump to 1.1750 and higher, or drop to the 1.1620-1.16 area. Anyway, the bullish scenario looks less likely, considering that the EU is reported to be preparing counter tariffs of $20B on US goods. Ad for tomorrow’s ECB meeting, it could be a non-event for the pair this time.
by HelenRush
EURUSD: dollar looks to move north The greenback has digested the recent Trump’s verbal interventions and looks to move higher against the majors again, though lacks the impetus so far. The EUEUSD pair has been trading with a mild upside bias on Tuesday, but the recovery attempts look too shallow to allow for a consistent rally from here. The downside pressure on the buck has eased after Trump’s hints at much stronger-than-expected US Q2 GDP of 4.8% due on Friday. The estimate is really much higher than market expectations of around 4% or slightly higher. On the other hand, should the results come in lower than Trump indicated, the dollar bulls will be disappointed. By the way, the euro is yet to have a test by EU-US trade negotiations and the ECB meeting on Wednesday and Thursday, respectively. The market doesn’t expect any “hawkish” surprises from Draghi who could express cautious tone amid the rising trade tensions and risks for the region’s economy.  So traders will likely refrain from buying the single currency ahead of risk events. The short-term outlook for EURUSD points to a decline below the 1.17 and under the 20-DMA, with the next target at 1.1630.
by HelenRush
GBPUSD shifts focus from politics to BoE The pound has recovered on Friday, fuelled by comments by Trump criticizing the dollar’s strength. The USD index retreated from one-year highs as a result and paved the way for a recovery in major currencies. GBPUSD rose from ten-month lows below 1.30 and reached the 1.3150 area, just ahead of the 20-DMA at 1.3180. As the UK parliament starts its summer recess this week, market focus will gradually shift from politics to the upcoming Bank of England meeting due next week. Most traders expect the central bank to hike rates despite the dismal CPI and retail sales data published last week. So, should the regulator refrain from further tightening, the sterling bulls will be heavily disappointed. Meabwhile, investors will continue to follow Brexit developments down the road as markets are now waiting for Brussel’s reaction to London’s plans and proposals. Against the backdrop of the lingering uncertainty around the “divorce” process and a limited nature of the downside pressure on the greenback, the pound will remain on the defensive for now. The immediate
by HelenRush
EURUSD on the defensive ahead of ECB meeting and trade talks The single currency set for a second week of losses, with EURUSD has been trading with a mild bullish bias on Friday, after a brief break below the 1.16 handle yesterday. The dollar demand has abated somehow after Trump’s verbal interventions, but the overall sentiment around the greenback remains fairly robust. The ECB July meeting will take place next week. But the euro will hardly get a boost from this event as the macroeconomic picture barely changed over the last month, and the first rate hike is not expected before the fall of 2019. So, the reaction to the meeting and Draghi’s comments is going to be quite muted. Meanwhile, the general dollar sentiment will continue to set the tone for the pair. The buck remains within a bullish trend – not least due to the lingering trade jitters. So the widespread USD demand will accelerate in case of escalation of the situation. Therefore, the EURUSD pair remains vulnerable to further losses, especially against the backdrop of the upcoming arrival of the EU officials to Washington next week for trade talks.
by HelenRush
GBPUSD: BoE rate hike in doubt The greenback extends gains across the board on Thursday, with the GBPUSD pair failed to hold above the key 1.30 level, sliding down to fresh 10-month lows in the 1.2980 area. Sterling has been declining for a third day in a row, extending losses for a fourth month already. The key reason behind the pair’s bearishness is the dollar demand which resurged strongly after positive Rowell’s comments this week as the Fed Governor confirmed that the central bank will proceed with gradual policy tightening, citing healthy economic fundamentals. Moreover, the buck is also supported by the lingering trade-war worries. The additional pressure on the pound came from the dismal UK economic numbers. The wages, CPI and retail sales data have disappointed this week and raised concerns about the BoE rate hike in August. The situation is compounded by the fact that the threat of a “chaotic” no-deal Brexit. As such, the pair looks poised for further losses in the short term unless the central bank officials reassure markets on rate hike. So far, the pound could drop to 1.29, before buyers reemerge.
by HelenRush
GBPUSD hits a danger zone The pound has been nursing significant losses for a second day in a row. The GBPUSD pair slipped from the 1.33 area to fresh one-year low of 1.30, a danger zone, which if broken, could bring another wave of a massive sell-off. The downside pressure on the sterling came from the resurged USD demand on the back of quite positive comments by the Fed Governor Powell, who dismissed risks from the US trade policy. The sentiment around the pound has also worsened after the BoE head Carney highlighted the risks from a no-deal Brexit scenario. Meanwhile, the latest macroeconomic data failed to inspire the sterling bulls as the CPI numbers came in lower than expected. So, it’s evident that inflation pressures in the UK are abating despite the weaker currency and high oil prices. This could pose a threat for the BoE rate hike in August, should other data confirm that the economy shows signs of weakness. However, for the time being, the expectations remain high, though the probability of a hike next month has fallen to 70% from 77% before the release. Tomorrow, the pound will have another test by retail sales data. Should the numbers disappoint, the pair could extend losses. Meanwhile, in the short term, a mild upside correction could take place.
by HelenRush
GBPUSD: the hard way north The GBPUSD pair continues its marginal ascent on the back of dollar retreat across the board. Safe haven demand has abated as trade-war worries have stepped back for now, which derails the greenback’s attractiveness. Besides, the buck is cautious ahead of the upcoming Fed’s Powell testament. The pound has also received an additional boost from the UK wages data which came in at 2.5% in June, as expected, while the unemployment rate remained unchanged at the four-decade low of 4.2%. Despite the figures are not spectacular, the report confirms that the economy is quite ready for the BoE rate hike in August, which supports sterling demand. However, as other important UK releases are due in coming days – CPI and retail sales – the pair’s near-term upside potential is limited. The price struggles to get back above the 1.33 threshold for the last seven days, and the downside risks remain as long as the pound remains below this local resistance level. The price needs to keep gains above the 20-DMA at 1.3220 in order not to lose the upside potential.
by HelenRush
EURUSD still depends on dollar sentiment EURUSD declined last week after three weeks of gains. The pair looks neutral on Monday, changing hands around the 1.17 threshold, which serves as the key barrier for short-term buyers. USD index looks quite stable, but has started the week mainly on the back foot, which raises a chance for a more sustainable rebound in the single currency. The general sentiment around the greenback remains the key river for the pair. As trade-war fears have abated somewhat, the overall sentiment in the global financial markets remains cautious, which supports safe-haven USD demand. In the short term, US June retail sales data will be in market focus. Should the numbers disappoint, the euro could regain the 1.17 mark and target the 1.1760 area which comes as the intermediate resistance on the way to 1.18. As long as the price remains below this barrier, downside risks will prevail. As the broader picture shows, EURUSD remains within a bearish trend, and there is a risk of a decline towards the lows around 1.15 as the buck could regain the impetus due to trade-war jitters and further “hawkish” signals from the Fed down the road.
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by HelenRush
EURUSD: room for further losses The single currency remains under pressure these days, with the EURUSD is on track to finish the week in the negative territory after three weeks of gains. The price slipped to multiday lows of 1.1625 and now threatens the 1.16 threshold as the sentiment around the buck remains upbeat. The pair managed to bounce from lows yesterday, but failed to get back above the 1.17 key figure despite the US CPI data came out mixed. The greenback received a local boost from positive comments by the Fed chair Powell who said the country’s economy is in good place at the moment. The overall USD bullishness still comes from safe haven demand amid trade war jitters, as well as from Fed’s tightening path in contrast with the uncertain outlook for the ECB policy. The technicals point to the lingering downside risks in the short term, with the immediate outlook has worsened following a break below the 1.1650 support one. However, should the greenback fail to receive the additional bullish boost in the nearest future, the pair may well stay above the 1.16 area.
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by HelenRush
Brent licks wounds after rout Crude oil price suffered a steep decline yesterday, extending losses to the $73 level, -7.5% on the day. On Thursday, Brent makes recovery attempts, with the initial resistance now comes at $75. Despite the sell-off has stopped, prices still look vulnerable as the recovery momentum is too weak so far. Libya has resumed production earlier than expected, while Saudi Arabia reported a decent jump in output for June, which, coupled with trade war jitters, triggered a free fall in the market and outweighed supply shortage concerns. By the way, the retracement was overdone and too emotional as in the wider picture, the market remains tight and broadly balanced. Moreover, US shale production continues to stagnate, while inventories decline further. In the short term, Brent needs to regain the $75 figure with the next target at $77. The obstacle for bulls is market worries over the trade war consequences for global oil demand. The rising dollar restrains the buying pressure as well. On the other hand, against the positive fundamental background, Brent looks attractive for opening new longs at current levels.
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by HelenRush
EURUSD: 1.17 in focus EURUSD ended flat on Tuesday, with the pair has been trading under a mild bearish pressure today as the greenback attempts to regain ground. The US dollar receives some support amid the risk-off environment that resumed after the Washington announced 10% tariffs on USD200B Chinese imports. The price faced a stiff resistance level of 1.18 earlier this week, and since then, the euro struggles to resume the upside impetus, despite the bullish bias in the buck is rather muted. The recent pressure on the euro came from dismal German data as ZEW Economic Sentiment dropped to its lowest reading since August 2012, fueling concerns over the state of the largest euro area economy. The single currency is looking forward to receive a fresh impetus which could come from Draghi’s speech later today. Any comments on the ECB’s monetary policy outlook could stir volatility in euro pairs. Should Draghi be cautious or mention concerns over trade tensions and the regional economy, the EURUSD pair will challenge the 1.17 level once again, where the 20-DMA around 1.1650 will serve as rather a stiff support. Should the ECB governor not mention the monetary policy theme, the pair will continue to be guided by the overall USD sentiment.
by HelenRush
Gold: technicals improve, but risks remain Gold prices hit a two-week high yesterday, but trimmed intraday gains afterwards. The yellow metal touched levels marginally below the $1,266 figure and closed below $1,260. On Tuesday, gold has been trading just above $1,255, with a mild bearish bias. The precious metal gained last week due to dollar weakness which continues these days. The cautious investor tone amid Brexit uncertainty and trade war jitters give only a marginal support to the metal as its safe haven status has been eroding lately. Despite the overall technical picture has improved recently, gold remains vulnerable to fresh losses in the short term. The dollar dynamics remains the key driver for the bullion. As the pressure on the greenback has been easing today, the short-term outlook for gold looks cloudy at this stage. The price needs to get back firmly above the $1,260 area to regain the upside impetus, while the key on the upside is the $1,266 level. On a weekly basis, US CPI data due on Thursday could fuel gold demand should the numbers disappoint the USD bulls.
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by HelenRush
EURUSD: focus on Draghi and US CPI The EURUSD pair surged to almost one-month highs around 1.1780 on Monday, extending gains after three weeks of recovery from 2018 lows marginally above the 1.15 figure reached in June. The main driver behind the price rise is the abating dollar impetus within the bullish trend. The latest pressure on the greenback came from dismal US wages data on Friday. Despite better-than-expected employment data, the buck remained on the defensive following the release as weak wages growth signals moderate inflation which in turn confirms that the Fed tightening path should be gradual. In the short term, the euro could turn more volatile as traders wait for ECB Draghi’s speech due later today. Hawkish twists in the central bank governor’s speech may send the single currency even higher, probably to the 1.18 area. However, chances for a decisive break above this level are still low as traders will be cautious ahead of this week’s US CPI report. Technically, EURUSD needs to confirm a break above the 1.1750 region in order not to stage a retreat from current levels. The immediate upside target comes at 1.18. A break above this level will open the way to 1.1850. The risk for this scenario is the recovery in USD demand.
by HelenRush
EURUSD: all eyes on NFP The euro has established a recovery path and gas been trading with mostly bullish bias for a third week in a row. This comes amid some signs of USD rally exhaustion, as the greenback doesn’t already receive a strong boost from trade-war worries and the hawkish Fed. The single currency rebound was fuelled these days by robust German data, with industrial orders and industrial production both came out much better than expected, which has partly alleviated concerns over the state of the euro area economy. The recent optimistic signals from the ECB added to the bullish pressure either. Now, the market is focused on the upcoming US employment report. The data could attract USD buying interest should the numbers come out positive and confirm that the labor market remains tight and healthy. So, EURUSD could continue its corrective rebound from 2018 lows at 1.15 if only the numbers disappoint. In this case, the pair will challenge the 1.1720 intermediate resistances and may push to 1.1750, where profit-taking could take place.
by HelenRush
Trump pushes oil price lower Brent crude made another failed attempt the challenge the $78 immediate resistance which attracts profit-taking this week. Crude oil markets look rather stable in a wider picture, while short-term charts highlight the nervous behavior of traders lately. One of the reasons behind the mixed dynamics in prices and the lack of bullish impetus are Trump’s tweets on the oil market. This time, the US leader demanded that OPEC reduce prices for crude. The aggressive US pressure on the cartel erodes the incentives for bulls to push oil price higher as there are increasing concerns that the group of producers will intensify their efforts in increasing output on the back of global markets rebalancing. On the other hand, Brent stays relatively afloat not far from 3.5-year highs due to supply concerns amid the declining production in Venezuela and the upcoming US sanctions on Iranian crude exports. In the short-term, traders will focus on fresh weekly numbers from EIA. Should the report point to further decline in inventories and the continuing pause in shale production, prices could stage a local recovery and get back above $78. But in a wider picture, Brent remains vulnerable amid the rising OPEC production.
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by HelenRush
USD looks for a boost from FOMC minutes The greenback is attempting to regain ground Wednesday, showing mixed dynamics against major rivals. The overall sentiment around the greenback remains rather muted this week as traders are cautious ahead of the key events – the FOMC meeting minutes and NFP employment report on Thursday and Friday respectively. The EURUSD pair failed to make a clear break above the 20-DMA and remained below the key 1.17 barrier. The price has resumed the downside move today, with stronger-than expected euro zone service PMI haven’t provided a bullish boost to the pair. This confirms that the general USD sentiment remains the main driver for the pair for the time being. The downside pressure on the euro could increase should the release of minutes of the Federal Reserve’s June 12-13 policy meeting provide further hawkish clues. The risk for the dollar is the potentially more cautious tone by the Fed amid the escalating trade tensions between the US and its trading partners. The base case scenario implies that EURUSD will further lose ground by the end if this week and derail the 1.16 support once again.
by HelenRush
Brent crude targets $80 again Following yesterday’s correction, Brent crude has resumed the ascent and targets the recent highs once again as the price received a local psychological support in the $77 area on Monday. The immediate upside target comes at $78, and a break above will open the way to $80. The reason behind the rebound were the reports that Libya’s National Oil Corporation declared force majeure on substantial volumes of its supply from two major ports, resulting in total production losses of 850,000 bpd. This adds to market concerns over global supply shortage and adds to the bullish pressure on prices. On the other hand, OPEC production increase continues to drag on the markets. Against this background, traders will pay close attention to US inventory and production data this week. Should the stockpiles continue to decline, Brent will receive the additional impetus amid the lingering supply concerns. In the best case scenario, prices will retest the $74.50 and will challenge the key $80 level. However, Brent will need additional support for a sustained break above this psychological mark.
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by HelenRush
EURUSD: risks from Germany persist The euro received a boost on Friday after the EU leaders reached an agreement over the migration issue. The EURUSD rallied but failed to challenge the 1.17 local resistance. The bullish impetus turned out very short term and unsustainable as the situation in Germany remains unresolved, so the pair is losing ground on Monday, remaining above 1.16 so far. Merkel’s coalition is at risk of collapse as the Chancellor’s conservative allies rejected the recent EU migration deal. Against the backdrop of further political crisis escalation in the largest euro zone economy, the euro’s attractiveness is decreasing. Meanwhile, the persistent bullish trend in USD only adds to the pressure. And this week’s FOMC meeting minutes due on Thursday could further undermine the single currency’s positions should the Fed sound hawkish. The technicals point at a neutral stance in the EURUSD for now. The price needs a sustainable break above the 20-DMA at 1.1670 and then a recovery above the 1.17 threshold in order to shrug off some pressure from USD bulls. On the other hand, as long as the pair holds above the 1.15 key support, there is a chance for a rebound above the mentioned levels after the German risks ebb.
by HelenRush
Brent: supply concerns drive prices higher Brent crude has been testing the $78 level once again as the lingering global supply concerns continue to fuel oil demand this week. The price targets the $80 threshold, trending north for a sixth day in a row. However, the risk of profit-taking is rather high at this stage as the positive drivers have been largely priced in already. Market participants continue to wonder how much barrels will disappear from the global market as a result of supply cuts in Venezuela and Iran. On the other hand, trade-war fears have been limiting the bullish potential of oil prices as further escalation of the trade conflict between the US and China could derail global growth and oil demand in the longer term. Technically, a daily close above $78 will open the way to further gains, but traders may opt to take profit at attractive levels ahead of the weekend and drive Brent lower from current monthly highs. The immediate meaningful support comes around $77.40. Baker Hughes data won’t affect the price dynamics much, unless the number of oil rigs drops or rises dramatically.
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by HelenRush
GBPUSD continues to lose ground GBPUSD has been trading under an intense bearish pressure this week, with the pair failed to keep above the 1.31 threshold on Thursday and slipped to fresh mid-November lows around 1.3065. The price has partially recovered since, but remains weak and vulnerable to further losses. Month-end, quarter-end, and half-year-end flows support the greenback across the board, and this only exacerbates the bearish drivers for the pound which continues to bleed amid Brexit uncertainty. In this context, the pair suffered another wave of profit taking ahead of the two-day EU summit starting today, where the “divorce” details will be negotiated. The buck also attracts buying interest amid trade-war worries as European currencies fall the victims of risk aversion against the nervous environment. The short-term GBPUSD dynamics will depend on Brexit developments during the summit, but the key driving force is still the dollar. The greenback will likely remain on the offensive so far, so the downside risks for the pound still prevail. Should the risk sentiment doesn’t improve in the nearest future, the pair may challenge the lows of 1.3060 and get down to the next support area at 1.3025.
by HelenRush
USDJPY: downside bias persists The USDJPY pair managed to stage a solid rebound on Tuesday, but failed to make a clear break above the critical 200-DMA and got back below the 110.00 threshold today. The immediate support now comes around 109.50. The dollar still lacks the upside impetus against the yen as the Japanese currency attracts buying interest as a safe haven currency. The trade-war worries still persist in the global markets, which adds to the bearish pressure on the pair. As long as US-China tension continue to escalate, the upside risks for the yen will remain high and the pair will stay vulnerable to further losses even as the USD index looks relatively strong. From the technical point of view, chances for a more sustainable recovery in the short term are rather low as the price faces a strong hurdle in the 110.20 area, where the 14- and 200-DMAs converge. The pair will likely continue to consolidate around 110.00 with a bearish bias in the foreseeable future. The immediate pressure will ease once USDJPY rises above the 110.80 figure.
by HelenRush
EURUSD: dollar regains allure The EURUSD pair has been correcting lower on Tuesday after three days of gains. The price failed to keep above the 1.17 threshold and is getting back below the 20-DMA, down to session lows around the 1.1670 area. The short-term technical picture points to downside risks for the single currency. The dollar regains the positive momentum today, with risk-off sentiment eases as well as demand for Treasuries. Should Trump refrain from new threats and protectionist rhetoric in the nearest future, the risky assets will stage a more pronounced recovery, and the pressure on the greenback will ebb further. Apart from the overall sentiment around the trade conflicts globally, the US economic data will drive the sentiment in the pair in coming days. Market participants will focus on the US GDP numbers on Wednesday, while the PCE data will be the key release. The euro zone CPI report on Friday will also matter for EURUSD. The pair could lose ground should the US figures come in on the stronger side. On the downside, the key is the 1.1530 support area.
by HelenRush