Headlines:

• China appoints Pan Gongsheng as new PBOC governor
• Eurozone firms‘ demand for credit falls to lowest on record in Q2 – ECB survey
• Germany July Ifo business climate index 87.3 vs 88.0 expected
• UK July CBI trends total orders -9 vs -18 expected
• AUD/USD keeps the early week bounce going

Markets:

• AUD leads, EUR lags on the day
• European equities a touch higher; S&P 500 futures up 0.1%
• US 10-year yields up 4.3 bps to 3.900%
• Gold up 0.1% to $1,956.83
• WTI crude up 0.2% to $78.87
• Bitcoin down 0.1% to $29,120

It was a quiet session as markets are preparing themselves for a host of major central bank decisions to come later this week. The first of which will be the FOMC meeting tomorrow.

In light of that, there was little appetite among traders in Europe today with light changes all across the board. The dollar is keeping steady with the euro still feeling the hangover from yesterday’s PMI slump.

EUR/USD remains little changed, down slightly to 1.1045 on the day. The rest of the other dollar pairs showed extremely little poise, with USD/JPY keeping flattish around 141.40 levels through the session.

The aussie is up slightly, benefiting from the stronger Chinese yuan today. But even AUD/USD is up just 0.3% to 0.6760 and still limited by key near-term technical levels.

In the equities space, European stocks are not doing a whole lot and US futures are also mostly little changed. Tech shares are up slightly so we’ll see if that can carry sentiment when Wall Street enters later.

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

Beijing has moved to remove Yi Gang from the post of PBOC governor and he has been replaced with Pan Gongsheng. Meanwhile, Qin Gang has been removed from the post of foreign minister and will be replaced with Wang Yi. From before:

• ICYMI: China made a big change at the country’s central bank this week (4 July)

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

The miss in the US CPI
report triggered a big selloff in the USD, but the greenback came back pretty
fast as the US data kept on surprising to the upside with the last week US Initial Claims falling back to record low levels
confirming once again the strength of the labour market. The US PMIs yesterday showed a mixed picture though with
the Services PMI missing expectations, although remaining in expansionary
territory, and the Manufacturing PMI jumping from 46.2 to 49.0 although still
in contraction.

The RBA, on the other hand,
kept its cash rate unchanged with the usual hawkish comments and the promise of
doing more if the data suggests so. In fact, the recent RBA meeting minutes showed that there was a strong case
for a rate hike but the central bank decided that holding steady was a better
choice and they will reconsider at the August meeting. The data for now points
to another rate hike as the Australian Jobs report last week surprised again to the
upside.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD couldn’t
break above the 0.69 resistance again
and sold off all the way down to the 0.6720 level basically erasing all the
gains after the miss in the US CPI report. The price has bounced on the red 21 moving average and it’s
now testing the resistance at 0.6781.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a good
resistance level at 0.6781 where we can also find the 50% Fibonacci retracement level
for confluence. We
should see the sellers leaning on this level with a defined risk above the
resistance and target the 0.67 support first, and upon a breakout, the 0.6563
level. The buyers, on the other hand, will need the price to break above the
resistance to pile in and target the 0.69 handle again.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more closely
the key resistance to watch. This is where the market should decide where it’s
going to go in the next days or weeks. Above the resistance, the bias is
bullish, while below the level it’s bearish.

Upcoming Events

Today we have the US
Consumer Confidence report. This report is usually not a market mover, but if
we get some big surprise, we should see the market reacting to it. Tomorrow, we
will see the latest inflation figures for Australia, and they will be decisive
for the next RBA meeting. Later in the day, the Fed is expected to hike by 25
bps, but the market will want to see if there are any hints to something else
or they just reaffirm their data dependency. On Thursday, the US Jobless Claims
is likely to lead to more USD strength if the data beats expectations and some
weakness if the data misses. Finally, on Friday, we will see the latest US PCE
and ECI reports with the market likely to be more focused on the wages data
given the tightness of the labour market.

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

The dollar is little changed on the day as markets are not showing much enthusiasm so far in European trading. It’s one of those placeholder days as we await the Fed policy decision tomorrow. EUR/USD is down 0.15% to 1.1045 currently and with exception of the aussie, the rest of the major currencies are keeping less than 0.1% changed against the dollar now.

As for AUD/USD itself, I shared some thoughts earlier here already. In other markets, European equities are keeping steady while US futures are also little changed. Tech shares are slightly higher with Nasdaq futures up 0.3% but S&P 500 futures and Dow futures are flattish for now.

In the bond market, yields are keeping higher with 10-year Treasury yields up 4 bps to 3.90% as we see a bounce back following the drop after the sluggish European PMI data yesterday.

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

• Prior -15

The decline in UK manufacturing orders is now at the weakest rate so far this year but overall conditions are still rather poor to say the least. That said, the quarterly business optimism index did improve to +6 from -2 previously and that marks the highest reading since July 2021. But the overall picture still remains subdued. As the BOE hikes rates further, that is also going to weigh on investment plans among firms.

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