<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/nfp-in-focus-to-wrap-up-the-week-20220805/“>NFP in focus to wrap up the week</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-bailey-interest-rates-are-not-going-back-to-pre-gfc-levels-20220805/“>BOE’s Bailey: Interest rates are not going back to pre-GFC levels</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-pill-should-not-assume-boe-would-raise-rates-by-50-bps-in-september-20220805/“>BOE’s Pill: Should not assume BOE would raise rates by 50 bps in September</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-june-industrial-output-04-vs-03-mm-expected-20220805/“>Germany June industrial output +0.4% vs -0.3% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-june-trade-balance-billion-131-vs-126-billion-expected-20220805/“>France June trade balance billion -€13.1 vs -€12.6 billion expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-july-halifax-house-prices-01-vs-18-mm-prior-20220805/“>UK July Halifax house prices -0.1% vs +1.8% m/m prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-says-will-sanction-us-house-speaker-pelosi-over-taiwan-visit-20220805/“>China says will sanction US House speaker Pelosi over Taiwan visit</a></li></ul><p>Markets:</p><ul><li>USD leads, AUD lags on the day</li><li>European equities lower; S&P 500 futures flat</li><li>US 10-year yields up 0.4 bps to 2.694%</li><li>Gold down 0.3% to $1,786.43</li><li>WTI crude down 0.4% to $88.19</li><li>Bitcoin up 3.6% to $23,320</li></ul><p style=““ class=“text-align-justify“>It was a quiet session in Europe today as all eyes are fixed on the US jobs report later today.</p><p style=““ class=“text-align-justify“>Equities were tepid while bonds also showed little appetite to chase any moves on the day. In the major currencies space, the dollar is steady amid narrow ranges with some light extension without much direction in general.</p><p style=““ class=“text-align-justify“>Most dollar pairs are observing small changes with only USD/JPY being a notable mover in Asia, climbing to 133.45 before falling back to 132.90 in Europe and then settling around 133.10 currently. That isn’t indicative of much as the pair continues to see some large swings below 135.00 on the week.</p><p style=““ class=“text-align-justify“>A placeholder session best describes the last eight to ten hours as we count down to the US non-farm payrolls to provide some final action before the weekend.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>For those following the oil market closely, it is hard to believe that there is such a compelling argument that oil prices should move lower significantly. Yet, markets are acting that way based on data which may not actually be credible. Adam provided a very comprehensive overview on that yesterday <a target=“_blank“ href=“https://www.forexlive.com/news/the-data-thats-driving-the-rout-in-oil-prices-is-barely-believable-20220804/“ target=“_blank“>here</a>. It is a must read if you’re looking into what’s driving the oil market at the moment.</p><p style=““ class=“text-align-justify“>As much as conditions remain tight and supply from most key producers are at capacity, adding to the fact that global inventories are low, oil prices haven’t shown much confidence since the middle of June. In fact, prices look set for another weekly decline that will make it a drop in 7 out of the past 9 weeks.</p><p style=““ class=“text-align-justify“>I wouldn’t doubt that there are still plenty of oil bulls around. I for one am still in that camp but as a trader, you always have to respect the technicals. That is the number one rule as that is how you define and limit your risk.</p><p style=““ class=“text-align-justify“>The picture above is rather bleak for oil, to say the least. The break back below $90 and a drop below both its 100 and 200-day moving averages is suggesting that selling pressures are picking up and there is potentially more downside to follow. Sellers are in control now and sentiment is leaning more bearish. I wouldn’t want to be fighting that, as much as I believe oil prices are going to come back.</p><p style=““ class=“text-align-justify“>The trendline support (yellow line) is the next key level to watch and that holds closer to $80 before we get to the figure level itself. A further drop below that will leave very little in the way of a plunge back towards the December lows closer to $63 to $65. I would argue that might be where oil may look like a fire sale but we’ll have to see how market sentiment continues to play out before jumping to any firm conclusions.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li style=““ class=“text-align-justify“>We’re trying to ensure there’s an element of flexibility given the uncertainties we face</li><li style=““ class=“text-align-justify“>We need flexibility either to go further, or to stay where we are</li><li style=““ class=“text-align-justify“>The pace at which we go further can vary according to circumstances</li><li style=““ class=“text-align-justify“>Rejects criticism that BOE had been behind the curve in stopping inflation surge</li><li style=““ class=“text-align-justify“>Investors should not assume September would also be a 50 bps rate hike</li></ul><p style=““ class=“text-align-justify“>This was already communicated by Bailey in his press conference yesterday but Pill is providing a bit more colour to it. That said, the statement in itself was already rather clear after the BOE took a page out of the RBA’s playbook in saying that „policy is not on a pre-set path“. We’re into the second-half of the central bank tightening cycle now i.e. where the early aggression and frontloading is being dialed back as economic conditions worsen. For central banks, it is about trying to navigate a ’soft landing‘.</p>

This article was written by Justin Low at www.forexlive.com.