XAU/USD ratio has shown slight gains in short positions

XAU/USD ratio has shown slight gains in short positions. Long positions command a strong majority (60%), indicative of trader bias towards XAU/USD continuing to move upwards. Gold prices continue to move higher this week as the disappointing US GDP report has weighed on market sentiment. Preliminary GDP for the second quarter disappointed, as the markets had expected a strong gain of 2.6%, while the economy responded with a much smaller gain of 1.2%. A September rate hike appears less likely, given recent economic data. On Sunday, FOMC William Dudley, a close ally of Janet Yellen, said that the Brexit fallout posed a risk to the US economy and urged the Fed to proceed with caution before raising interest rates. The US will release wage growth and nonfarm payrolls later in the week, and these key employment numbers will be carefully monitored by the Fed as it mulls over a possible rate hike. The markets have circled September and December as the most likely dates for a rate hike, but if the Fed isn’t satisfied with the economy’s performance, it could delay any moves until 2017

The USD/JPY ratio has little movement on Tuesday

The USD/JPY ratio has little movement on Tuesday. Currently, long positions have a majority (65%), indicative of trader bias towards USD/JPY reversing directions and moving to higher ground.
•USD/JPY was flat in the Asian session and has posted considerable losses in the European session
•101.20 is providing support
•There is resistance at 102.36
•Current range: 101.20 to 102.36
The Japanese yen has posted gains on Tuesday, following a lackluster start to the week. USD/JPY is currently trading at 101.80. On the release front, Japan announced the first step in its stimulus package, totaling JPY 13.4 billion. Japanese Consumer Confidence came in at 41.3, short of expectations. We’ll get a look at the BoJ minutes later today. In the US, today’s major event is Personal Spending, with the estimate standing at 0.3%. On Wednesday, the US releases two key events – ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change.

Oil chart

Just as it looked as though we may see a correction in Brent crude as it ran into support around a key zone, it’s taken another dip lower breaking through the lower bound of the support zone and the 200-day simple moving average in the process.

 

EUR/USD breaking out and moving lower.

The euro is unchanged on Monday, following sharp gains in the Friday session. EUR/USD is currently trading at 1.1170. On the release front, manufacturing PMIs are in focus in both the Eurozone and the US. German Manufacturing PMI came in at 53.7, while Eurozone Manufacturing PMI showed a reading of 52.0. Both figures were very close to the estimates. Later in the day, the US will release ISM Manufacturing PMI. Little change is expected in the July reading, with an estimate of 53.1 points.
The euro gained closed to 100 points on Friday and closed the week at 1.1170, its highest level since the Brexit vote in late June. The euro took advantage of a surprisingly soft US GDP report. Preliminary GDP for the second quarter was projected at 2.6%, but posted a much smaller gain of 1.6%. The soft reading not only pushed the dollar lower, but has dampened enthusiasm regarding a rate hike by the Fed, which last week stayed on the sidelines yet again.EUR/USD ratio showed gains in long positions on Friday, consistent with strong gains by EUR/USD on Friday. Short positions have a strong majority (63%), indicative of trader bias towards EUR/USD breaking out and moving lower.

GBP/USD ratio is almost unchanged on Monday

GBP/USD ratio is almost unchanged on Monday, consistent with the lack of movement from GBP/USD. Long positions have a majority (55%), indicative of trader bias towards GBP/USD breaking out and moving higher.
•GBP/USD posted gains in the Asian session. The pair reversed directions in the European session and posted sharp losses. The pair is unchanged early in North American trade
•1.3142 is providing support
•1.3219 was tested in resistance earlier and is under pressure
The British pound has posted small losses at the start of the week. In Monday’s North American session, GBP/USD is trading at the 1.32 line. On the release front, British Manufacturing PMI dipped to 48.2 points, below the estimate of 49.1. Later in the day, the US will release ISM Manufacturing PMI, a key indicator. Little change is expected in the July reading, with an estimate of 53.1 points. On Tuesday, the UK will publish Construction PMI, with the markets bracing for a weak reading of 44.2 points.
British PMI reports are important gauges of economic activity, and the week kicked off on a sour note. Manufacturing PMI came in at 48.2 points in July, following the previous release which also indicated contraction in the manufacturing sector. There are growing worries that third quarter data such as PMI reports will point to a weakening British economy, due to the fallout from the Brexit vote. Construction and Services PMIs are also expected to contract, and this could weaken the pound. The markets will also be keeping a close eye on the BoE, which is widely expected to cut interest rates when it meets on Thursday. The BoE surprised the markets in July when it maintained rates at 0.50%, but faces losing credibility if it stays on the sidelines again. The bank hasn’t lowered rates since 2009, so such a dramatic move could push the pound to lower levels.

USD/JPY posted sharp losses in the Asian session

The USD/JPY ratio has shown slight movement towards long positions. Currently, long positions have a majority (62%), indicative of trader bias towards USD/JPY reversing directions and moving to higher ground.
•USD/JPY posted sharp losses in the Asian session. The pair has shown limited movement in the European session
•104.99 is a strong resistance line
•103.73 was tested earlier and is a weak support level. It could see further action in the Friday session
•Current range: 103.73 to 104.99
The Japanese yen has posted strong gains on Friday. In the North American session, USD/JPY is trading at 102.80. On the release front, Japanese consumer inflation and consumer spending indicators disappointed. Tokyo Core CPI posted a decline of 0.4%, while Retail Sales dropped 2.2%. The Bank of Japan surprised the markets as it did not lower interest rates at its policy meeting. The yen continues to improve following a soft GDP report in the US on Friday. Advanced GDP for the second quarter climbed 1.2%, much weaker than the forecast of 2.6%. Later in the day, we’ll get a look at a key consumer confidence indicator, with the release of UoM Consumer Sentiment. The markets are braced for the indicator to dip to 90.2 points

AUD/USD was flat in the Asian session.

•AUD/USD was flat in the Asian session. The pair has posted small gains in European trade
•0.7440 is providing strong support
•0.7560 is under pressure as resistance
•Current range: 0.7440 to 0.7560
Further levels in both directions:
•Below: 0.7440, 0.7339, 0.7251 and 0.7105
•Above: 0.7560, 0.7701 and 0.7835
AUD/USD ratio has shown movement towards short positions. Currently, long positions retain a majority (54%), indicative of trader bias towards AUD/USD continuing to gain ground.
The Australian dollar is subdued on Thursday, as AUD/USD is currently trading at 0.7530. On the release front, Australian Import Prices declined 1.0%, well off the estimate of a 1.6% gain. Later in the day, Australia releases PPI, an important inflation indicator. The markets are expecting a small gain of 0.2%. In the US, there are just two releases, highlighted by Unemployment Claims. The indicator is expected to rise to 261 thousand.
The markets were keeping a close eye on Australia’s CPI release on Wednesday. The index rebounded nicely in the second quarter, 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, plans to respond to the CPI release.