• Welcome to Fed day
• Eurozone June M3 money supply +0.6% vs +1.0% y/y expected
• France July consumer confidence 85 vs 86 expected
• Switzerland July Credit Suisse investor sentiment -32.6 vs -30.8 prior
• Japan official citing BOJ’s Ueda says long-term yields remain stable under YCC
• Japan keeps overall view on the economy in July
• NAB now sees no RBA rate hike in August

Markets:

• JPY leads, AUD lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields down 2.5 bps to 3.886%
• Gold up 0.4% to $1,972.53
• WTI crude down 1.0% to $78.80
• Bitcoin down 0.1% to $29,202

It was a quiet session for the most part but there were some decent moves in the market as we await the Fed policy decision later this week.

The dollar is keeping more mixed but slightly lower on the balance of things while European equities are seeing a minor selloff, led by French stocks after LVMH earnings weigh on luxury stocks.

USD/JPY held higher in Asia near 141.00 but is dragged lower to 140.20 currently, as we see some positioning flows come in with both the Fed and BOJ in play this week. Of note, there was a FT report late yesterday suggesting a potential BOJ surprise tweak so perhaps traders are reacting to that.

Besides that, the euro and pound are just mildly higher against the dollar while the commodity currencies are lagging. USD/CAD is up 0.3% to just above 1.3200 as oil prices are lower. Meanwhile, AUD/USD is down 0.6% to 0.6750 after a softer CPI report earlier in the day.

There’s not much else really driving trading sentiment as we count down to the Fed decision later, which will have a significant impact on how things will play out for the rest of the week.

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

After the
news of BlackRock filing a Bitcoin ETF on June
15th, we saw the cryptocurrency surging in value going briefly from the 25K
level to the 31K one. Bitcoin resilience has been remarkable given the hawkish
repricing in interest rates expectations and the regulatory crackdowns we saw
in the past weeks/months. The struggle to break above the 31K level though suggests
that we might be at a point where if the risk sentiment turns negative, Bitcoin
can selloff pretty hard. In fact, despite the positive risk sentiment in the
markets due to the miss in the US CPI report and the soft-landing vibes,
Bitcoin broke below a key support level which may signal a bigger selloff into
the previous support at 25231.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that after failing
to break above the 31K resistance multiple
times, Bitcoin started to lose its bullish momentum and the price eventually
fell below the key support level at 29500 that defined the month-long range.
The bias has now switched to bearish, and the sellers will look for key levels
where they can lean on to extend the fall into the 25231 support.

Bitcoin Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that the first try
for the sellers should come right at the broken support turned resistance at the
29500 level. In fact, we can also find the 38.2% Fibonacci retracement level
and the red 21 moving average for confluence. The
buyers, on the other hand, will want to see the price breaking above the
resistance with conviction to start piling in and target the 31K level again.

Bitcoin Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that if
there won’t be enough bullish momentum to push the price into the resistance,
the sellers may enter also when the price breaks below the recent swing low at
29070.

Upcoming Events

Today the Fed is
expected to hike by 25 bps and the market will be focused on signals of future
policy moves and if it’s likely that the Fed will pause or continue to hike.
Tomorrow, the focus will switch on the US Jobless Claims where a big miss
should weigh on risk sentiment and lead to more downside for Bitcoin, whole a
big beat should support the cryptocurrency in the short-term. Finally, on
Friday, we will see the latest US PCE and ECI reports with the market likely to
be more attentive to the wages data.

This article was written by FL Contributors at www.forexlive.com.

• Prior +1.1%
• Market index 206.9 vs 210.7 prior
• Purchase index 159.2 vs 163.2 prior
• Refinance index 444.5 vs 446.4 prior
• 30-year mortgage rate 6.87% vs 6.87% prior

Mortgage applications fell in the past week with both purchases and refinancing activity showing declines. The overall market remains rather subdued after the drop in sentiment since last year, as the Fed’s tightening policy weighs on housing conditions.

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

This is looking like positioning flows ahead of the Fed and BOJ, more than anything else if you ask me. There was a bit of a pop yesterday as well amid light trading to 141.70 before a quick retreat to 141.20 again. That is now followed by a further decline to a low of 140.24 earlier, and we are just off that now.

The downside move also gained some traction after a fall below the 100-hour moving average (red line) earlier. As such, that opens up room to maneuver towards 140.00 next potentially as well.

As much as we are seeing yen bulls get their hopes squandered ahead of the BOJ decision on Friday, there’s still an outside risk of the central bank surprising. And as mentioned here, that would be the biggest surprise definitely this week if it were to happen.

So far today, the drop here is still suggestive of a more mixed dollar mood. EUR/USD is up slightly by 0.15% to 1.1070 but GBP/USD is down 0.05% to 1.2893. Meanwhile, the commodity currencies are also holding lower with USD/CAD inching just above 1.3200 and AUD/USD still down 0.5% to 0.6755 at the moment.

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

The weakness in the global manufacturing sector and
especially in the Chinese economy have been weighing a lot on Copper prices. We
had a good rally after the Chinese inflation data raised the risks of deflation
in China and the market expected more easing measures from the central bank.
Unfortunately, those expectations were wrong and the PBoC didn’t do anything on
the rates front causing a disappointment in the market and another selloff. On
Monday, China pledged more stimulus to support
the economy and Copper prices rallied consequently.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that after the news
of more stimulus coming from China, Copper rallied again all the way back to
the key 3.9575 resistance where we
have also the 61.8% Fibonacci retracement level.
The buyers will need the price to break above this strong level to get the
conviction for more upside and target the 4.1855 swing level.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the first try
of a breakout failed and the price got rejected from the resistance as the
sellers stepped in to position for another low. We can notice that the price
action is forming a major ascending triangle pattern.
The price can break on either side of such patterns, but what follows a
breakout is generally a strong move. So, this is something to watch out for.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is testing a strong support level where we have the previous swing high
level and the 38.2% Fibonacci retracement level. The buyers may lean on this
level with a defined risk below to target the breakout. The sellers, on the other
hand, will want to see the price breaking lower to pile in and extend the fall
into the 3.8245 support.

Upcoming Events

The most likely report that can move the
market will be the US Jobless Claims on
Thursday. The data needs to deviate notably from the expected figures though as
numbers more or less in line with expectations are unlikely to be market moving.
Anyway, a big miss should weigh on Copper as the market may get some
recessionary vibes, while a big beat should support the Copper prices as the
soft-landing narrative would remain intact.

This article was written by FL Contributors at www.forexlive.com.