AUD/USD was choppy in the Asian session

0.7251 0.7339 0.7440 0.7560 0.7701 0.7835
•AUD/USD was choppy in the Asian session. The pair posted slight losses in European trade and is unchanged early in the North American session
•0.7440 is under strong pressure in support
•0.7560 is has strengthened in resistance following gains by AUD/USD on Wednesday
•Current range: 0.7440 to 0.7560
AUD/USD ratio has shown movement towards long positions. Currently, long positions retain a majority (58%), indicative of trader bias towards AUD/USD reversing directions and moving higher.
The Australian dollar has posted losses on Wednesday, erasing the gains from the Tuesday session. In the North American session, AUD/USD is trading slightly above the 0.7470. On the release front, Australian CPI posted a gain of 0.4%, matching the forecast. In the US, economic indicators were dismal. Core Durable Goods Orders and Durable Goods Orders both posted declines. As well, Pending Homes Sales posted a small gain of 0.2%, well below expectations. Later in the day, the Federal Reserve will conclude its meeting and issue a policy statement. On Thursday, the US will release Unemployment Claims.
Australia released a highly-anticipated CPI reading for the second quarter on Wednesday. The index rebounded nicely, posting a gain of 0.4%, compared to a decline of 0.2% in the first quarter. It’s not clear how the RBA, which will set interest rates next week, will respond to the CPI release. The markets have priced in a 50% chance that the bank will lower rates, and an unexpected CPI reading could have swayed the odds of a rate cut. However, the reading matched the forecast, so the question of whether the RBA will act remains up in the air. The annual inflation rate stands at just 1.0%, well below the RBA’s stated target of 2% to 3%. Will this be enough of a factor to prod the RBA into action? We’ll have to wait and see. Many economists see interest rates steadily declining, with Capital Economics chief analyst Paul Dales projecting that rates could drop as low as 1%.

The USD/JPY ratio has shown gains in long positions

•USD/JPY has posted gains in the Asian and European sessions
•104.99 has switched to support following gains by USD/JPY in the Wednesday session
•105.87 was tested earlier in resistance and remains a fluid line
•Current range: 104.99 to 105.87
The USD/JPY ratio has shown gains in long positions. Currently, long positions have a majority (63%), indicative of trader bias towards USD/JPY continuing to move towards higher ground.
The Japanese yen has reversed directions on Wednesday, posting considerable losses. USD/JPY is currently trading at 105.70. On the release front, there are no Japanese releases. In the US, the Federal Reserve will set the benchmark rate and issue a policy statement. As well, we’ll get a look at durable good orders and pending home sales.
There was positive news out of the US on Tuesday. CB Consumer Confidence dipped to 97.3 points in July, lower than the June reading of 98.0, but nonetheless another excellent release. New Home Sales followed suit, jumping to 592 thousand in June. This figure easily beat the forecast of 560 thousand. There was more good news from the manufacturing sector, as the Richmond Manufacturing Index surged, posting a reading of plus-10 points. This crushed the forecast of minus-4 points.
The Abe government is planning a significant fiscal spending package, but how big is big? On Wednesday, Abe announced a spending package of JPY 28 trillion, higher than the markets had expected. This report sent the yen lower. On Tuesday, a Nikkei report stated that the government would unveil a direct fiscal stimulus of about JPY 6 trillion yen over the next few years, pushing the Japanese currency higher. We can expect further volatility from USD/JPY as additional details about the fiscal package are released. The BoJ will issue a policy statement late Thursday, and it remains unclear if the bank will adopt further easing measures.

The dollar sunk Tuesday to its weakest level against the yen

The dollar sunk Tuesday to its weakest level against the yen in nearly two weeks amid reports that Japanese stimulus efforts might fall short of investors’ expectations.
The greenback  tumbled 1.3% to ¥104.37 in recent trade, its weakest level since July 14, compared with ¥105.81 late Monday in New York.
A Nikkei report published over the weekend said a fiscal stimulus package planned by the government would be much smaller than expected. Taro Aso, Japan’s finance minister, played down the report, saying the government had not yet decided on the size of the package.
Aso’s comments undermined expectations for a sizable expansion of the Bank of Japan’s easing efforts on Friday following the close of its two-day policy meeting, according to a team of currency strategists at Scotiabank. The BOJ might want to gauge the size of the government’s fiscal stimulus before deciding whether supplemental measures are needed, the team said.
The greenback plunged to its weakest level against the yen in more than two years late last month after the U.K. voted to leave the European Union, sending investors scrambling into safety plays like the yen and gold.
But it has risen off its lows against the yen this month after Prime Minister Shinzo Abe’s ruling coalition won a decisive electoral victory, increasing the likelihood of more monetary and fiscal stimulus measures.
“I’d be surprised if they hesitate,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. “Because that would see the yen rocket higher and that’s something policy makers in Japan want to avoid at all costs.”
 

EUR/USD Chart

Summary :
Target Level : 1.106
Target Period : 3 days
Analysis :
Falling Wedge identified at 25-Jul-20:00 2016 GMT. This pattern is still in the process of forming. Possible bullish price movement towards the resistance 1.106 within the next 3 days.
Resistance Levels :
( B ) 1.106Last resistance turning point of Falling Wedge.
Support Levels
( A ) 1.0955Last support turning point of Falling Wedge.

Chart date range : 07-Jul-08:00 GMT-> 26-Jul-08:00 GMT Data interval : 4 hour RSI: 34 Candles MA: 34 Candles

US crude has dropped sharply on Monday

US crude has dropped sharply on Monday, continuing the downward trend seen late last week. In the North American session, WTI/USD futures are trading at $43.19. Brent crude is trading at $44.80, as the Brent premium stands at $1.59. It’s a quiet start to the trading week, with no US releases on the schedule. On Tuesday, there are two key releases, CB Consumer Confidence and New Home Sales.
Crude prices continue to slide. WTI/USD has plunged 4.9% since Wednesday, dropping close to the $43 level. US crude inventory reports continue to point to declines week after week, but crude prices haven’t rebounded, due to the oversupply of crude. Drilling activity in the US is on the upswing, as the number of US drilling rigs continues to increase. This is raising concerns that higher production levels in the US will exacerbate supply levels and push down crude prices even further. In late June, US crude broke above the $50 level, but has since dropped sharply, losing more than 12 percent in that time.

The British pound

The British pound is unchanged at the start of the new trading week. Early in the North American session, GBP/USD is trading slightly at the 1.31 line. On the release front, it’s a quiet start to the week, with just one event on the schedule. British CBI Industrial Order Expectations came in at -4 points, within expectations. There are no US releases on Monday. On Tuesday, the US releases CB Consumer Confidence and New Home Sales, both key indicators.•GBP/USD was flat in the Asian session and has posted sharp losses in the European session. The pair is showing limited movement early in the North American session
•1.3142 has switched to a resistance role following sharp losses by GBP/USD in the European session
•1.3064 is providing support. It is a weak line and could be tested in the North American session
GBP/USD ratio is showing gains in long positions on Friday, consistent with the sharp losses recorded by GBP/USD. Currently, long positions have a majority (54%), indicative of trader bias towards GBP/USD reversing directions and moving higher.

The Japanese yen is almost unchanged in the Monday

The Japanese yen is almost unchanged in the Monday session, as USD/JPY is trading slightly above the 106 level. On the release front, Japanese Trade Balance came in at JPY 33 trillion, easily beating expectations. Later in the day, Japan releases the Services Producer Price Index, which measures inflation in the corporate sector. The markets are expecting a weak gain of 0.1%. In the US, there are no events on the schedule. On Tuesday, the US releases CB Consumer Confidence and New Home Sales, both key indicators.
Although there were no major releases out of Japan last week, the yen showed a fair bit of volatility. Much of the movement can be attributed to market speculation as to what measures the Abe government and Bank of Japan will take in the next few weeks. The yen slipped on Wednesday on speculation that the government was planning a large fiscal spending package. However, the currency reversed directions and climbed on Thursday after BoJ Governor Haruhiko Kuroda flatly rejected the use of “helicopter money” – or increasing the budget deficit by a permanent increase in monetary base – in order to combat deflation. This tool is seen as an alternative to quantitative easing and some economists have suggested it could be used in Japan, with interest rates in negative territory and the economy in danger of recession. Kuroda added that the bank has not changed its stance of adopting further easing by way of quantitative easing, qualitative easing or lowering interest rates. The Bank of Japan meets for a policy meeting on Thursday and the markets will be looking for hints as to what, if any, monetary steps the bank will choose to implement.
The USD/JPY ratio is currently showing long positions with a majority (55%), indicative of trader bias towards USD/JPY breaking out and moving towards higher ground.