• USD/JPY slides lower ahead of European morning trade
• USD/JPY Technical Analysis – Keep an eye on this important resistance
• ECB’s Kažimír: Market pricing of two rate cuts by year-end is not entirely misplaced
• Bundesbank calls for rate cuts to be „carefully considered“ as inflation risk persists
• PBOC lowers standing lending facility rates by 10 bps
• SNB total sight deposits w.e. 19 July CHF 461.3 bn vs CHF 458.9 bn prior
• Nvidia reportedly working on version of new flagship AI chip just for Chinese market

Markets:

• JPY leads, AUD lags on the day
• European equities higher; S&P 500 futures up 0.5%
• US 10-year yields down 2 bps to 4.219%
• Gold up 0.1% to $2,402.24
• WTI crude down 0.4% to $78.32
• Bitcoin up 0.7% to $67,470

It was a quiet session as the European calendar is looking to embrace the summer lull. There weren’t any key releases – the same case will be for tomorrow as well – so traders had very little to work with.

The Japanese yen saw a nudge higher early on before European markets opened, with USD/JPY falling from 157.30 to a low of 156.28. The pair bounced back slightly after but is still down 0.5% on the day, seen at 156.60 levels now.

There wasn’t any major catalyst for the move as traders are still sorting out their feet following the news over the weekend that Biden has bowed out of the presidential election. 10-year yields in the US are hanging slightly lower, down 2 bps to 4.219% currently.

Besides that, the dollar is keeping steadier elsewhere with light changes overall. The aussie and kiwi are slightly lower though, owing to a softer Chinese yuan. That comes after the PBOC introduced a number of easing measures earlier in the day, weighing on the yuan currency.

In other markets, equities are looking to bounce back after a disappointing showing last week. Tech shares are leading the charge with Nasdaq futures up nearly 1% now. However, we do have key earnings coming up tomorrow after the close with Alphabet (Google) and Tesla set to report.

It’s a brighter start to the new week after the heavy selloff in the second half of last week. But it’s still too early to say that the optimism here is enough to carry stocks until the end of the week.

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

• Some of the factors supporting the economy are making it more difficult to achieve inflation target
• The labour markets is still operating at a high capacity
• Wage growth is brisk and prices are rising strongly, particularly in the services sector
• Possible further interest rate cuts should therefore be carefully considered in light of current data

Besides that, they noted that the German economy itself likely grew a little slower than anticipated in Q2. Well, that’s not too surprising given that the industrial sector remains in a recessionary state.

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

Bitcoin rallied strongly last
week after a failed attempt to assassinate the former US
President Trump. The market reacted positively to the event because he’s been a
supporter of the crypto industry and Trump’s odds of winning the election
soared.

Last night, the price of
Bitcoin dipped on the news that Biden
dropped out of the presidential race probably on expectations that some
other candidate could have higher chances of beating Trump, but as Biden endorsed
Kamala Harris and others followed suit, Bitcoin erased the losses and rallied
into a new high as the market doesn’t expect Harris to have any better chances of
beating Trump.

Moreover, last week we got
the news that the German government finally offloaded all of its Bitcoin
holdings on July 12th, so that bearish driver is now in the rear-view mirror.
Also, the old crypto exchange Mt. Gox has been repaying its old clients since the
first week of July, so even this news should now be priced in.

So, we are left with lots
of bullish drivers and very few bearish reasons. On the macro level, the
soft-landing narrative strengthened as we continue to see inflation falling while
the economy continues to grow. Last week, we got more positive data with US Retail Sales and Industrial Production beating expectations by a big margin.

So, all
else being equal, we are getting rate cuts into resilient growth which should
ultimately be bullish for Bitcoin.

Bitcoin
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that Bitcoin eventually extended the rally into the key 67.275 resistance
as the bearish drivers dissipated while the bullish reasons increased. The buyers
will want to see the price breaking above the resistance to increase the
bullish bets into a new cycle high. The sellers, on the other hand, will likely
step in around the resistance to position for a drop back into the 60000
support.

Bitcoin Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price is struggling a bit at the resistance. If we get a pullback
from these levels, we can expect the buyers to step back in around the 64000
level where we can find the confluence
of the previous swing high, the trendline
and the 38.2% Fibonacci
retracement level. The sellers, on the other hand, will want to see the
price breaking below the trendline to increase the bearish bets into the 60K
level next targeting a breakout.

Bitcoin Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have some consolidation around the key resistance. We got a spike
lower yesterday on the news that Biden dropped out from the presidential race,
but the buyers bought the dip back quickly. There’s not much else to glean from
this timeframe but the buyers will likely continue to pile in above the 67275
resistance, while the sellers should take back control with a break below the
65700 level. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front. We begin on Wednesday with the
release of the US Flash PMIs. On Thursday, we will get the latest US Jobless
Claims figures. Finally, on Friday we conclude the week with the US PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Copper experienced a strong rout last week with market participants blaming
the soft Chinese economic
data and the increase in inventories in most global warehouses suggesting some
weak demand.

The PBoC tonight surprised with rate cuts across many key
benchmarks. Moreover, the recent PBoC policy framework reform suggests that the
Chinese officials could take more actions to spur growth.

In the big picture, stable global growth and major central banks cutting
rates into resilient economies should be bullish drivers for the copper market and
more expansionary policies from Chinese officials might give an even stronger boost.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper eventually broke through the key 4.35 support where we had also the 50% Fibonacci retracement level for confluence, and extended the drop into the
4.21 level.

There’s not much else to glean
from this timeframe as the sellers might want to see a pullback before piling
back in while the buyers will look for opportunities on the lower timeframes to
position for a rally back above the 4.35 level.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that from a risk management perspective, the sellers will have a much
better risk to reward setup around the 4.35 level where they can step in with a
defined risk above the resistance. The buyers, on the other hand, will want to
see the price rising back above the 4.35 resistance to increase the bullish
bets into the 4.67 level next.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the recent price action formed what looks like a falling
wedge. This is generally a reversal pattern, so the buyers will want to see
the price breaking above the minor downward trendline
to pile in for a move higher.

The sellers, on the other
hand, will likely keep on leaning on the minor trendline to keep pushing lower
but if the price were to break higher, the next entry point for the sellers
should be the trendline around the 2.28 level. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front. We begin on Wednesday with the
release of the US Flash PMIs. On Thursday, we will get the latest US Jobless
Claims figures. Finally, on Friday we conclude the week with the US PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.