The drop today brings us back to where we were on Friday, testing the waters below the 1.0700 mark. The close at the end of last week was just above the figure level, so that will be one to watch again today to see if sellers can find more conviction for a break under.

For the time being, large option expiries at 1.0650-60 and 1.0700 are keeping price action more contained after the earlier fall. The euro area PMI data was softer than anticipated and that weighed on the euro slightly. The low earlier today touched 1.0670.

Sellers are holding control of the pair since last week and have done well to fade the slight bounce earlier in the week. The high this week failed to breach the 200-hour moving average on the near-term chart, for what it is worth.

And that brings us to where we are now. The next key risk event left before the weekend will be the US PMI data for June. That will impact the dollar side of the equation and broader market sentiment. So, we’ll see if the data will side with sellers in chasing a firmer break below the 1.0700 mark to end the week.

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

The subtle dovish hints by the BOE yesterday was enough to pin the pair down, erasing the gains from earlier in the week. That is putting cable near where it left off on Friday but with the low today having tested the 100-day moving average (red line) of 1.2638.

That alongside the 61.8 Fib retracement level of the swing higher since April, at 1.2646, is helping to limit losses as we look towards the final stretch this week.

Keep above the 100-day moving average and buyers are still in to try and look for a rebound momentum. But break below, and sellers will have more conviction in chasing a push towards the 200-day moving average (blue line) next.

Coming up later today, the US PMI data for June will be one to watch in potentially deciding how this plays out before the weekend.

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

Here are the changes among key dollar pairs on the week as we look to the final day of US trading later:

• EUR/USD: -0.1%
• USD/JPY: +0.9%
• GBP/USD: -0.2%
• USD/CHF: +0.3%
• USD/CAD: -0.3%
• AUD/USD: +0.6%
• NZD/USD: -0.2%

Outside of the Japanese yen and perhaps arguably the aussie, the changes on the week are rather insignificant thus far. The mid-week break also didn’t really help in lifting the appetite in markets.

The move higher in USD/JPY owes much to a few reasons, as Adam outlined here. Meanwhile, the aussie is slightly higher after the RBA left the cash rate unchanged at 4.35% on Tuesday. But the central bank did say that they discussed rate hikes at this week’s meeting, so that is helping to put a floor on the currency.

Besides that, the franc is a touch lower after the SNB decided to cut interest rates further. The currency had been enjoying a stellar June up until then, helped by political woes in Europe as well as of late.

Overall, the changes we’re seeing point to a steadier dollar despite US equities keeping its run higher. Instead, the dollar seems to be taking its cue from the bond market. 10-year Treasury yields are also seeing a bit of a back and forth week, seen up just 1.1 bps at 4.234% currently.

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

• The responsibility lies entirely with the EU side
• Hopes that EU would meet China halfway and handle differences through dialogue

For some context, the EU launched five new anti-dumping investigations against China in May. That was seen totaling to roughly $1.71 billion. And they are following that up with proposed tariffs on Chinese electric cars. If China were to retaliate, the likes of Germany would be the most at risk given their exposure to trade with China.

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

• Prior 52.9
• Manufacturing PMI 51.4 vs 51.3 expected
• Prior 51.2
• Composite PMI 51.7 vs 53.1 expected
• Prior 53.0

Election jitters starting to creep in? The headline reading is a 7-month low and that is weighing on the overall UK business activity for June. The only bright side is that manufacturing conditions are seen improving further, with the reading there being a 23-month high. Going back to services activity, S&P Global notes that there is some evidence that the
slowdown was partly driven by a pause in client spending
decisions ahead of the election period.

“Flash PMI survey data for June signal a slowing in the
pace of economic growth, indicating that GDP is now
growing at a sluggish quarterly rate of just over 0.1%.

“The slowdown in part reflects uncertainty around the
business environment in the lead up to the general
election, with many firms seeing a hiatus in decision
making pending clarity on various policies.

“Meanwhile, from an inflation perspective, stubbornly
persistent service sector inflation – a major barrier to lower
interest rates – remains evident in the survey, but should
at least cool further from the current 5.7% pace in coming
months. However, companies‘ costs are rising, most
notably in manufacturing, where shipping costs in
particular are spiking again and adding to a renewed rise
in inflationary pressures from goods.

“In short, while a slowdown in economic growth may prove
temporary, should businesses react positively to the
policies announced by any new government, the
stubbornness of underlying inflationary pressures above
the Bank of England’s target still looks somewhat
engrained.”

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