• US futures keep the calm so far on the day
• Euro stays little changed after flurry of data
• Eurozone July final consumer confidence -13.0 vs -13.0 prelim
• Eurozone Q2 preliminary GDP 0.3% vs. 0.2% Q/Q expected
• Italy Q2 preliminary GDP 0.2% vs 0.2% Q/Q expected
• Germany Q2 preliminary GDP -0.1% vs. 0.1% Q/Q expected
• Bavaria July CPI +2.5% vs +2.7% y/y prior
• What are the main events for today?
• European equities mostly a touch higher to start the day
• Switzerland July KOF leading indicator index 101.0 vs 102.4 expected
• Spain July preliminary CPI +2.8% vs +3.0% y/y expected
• Spain Q2 preliminary GDP 0.8% vs 0.5% Q/Q expected
• USD/JPY claws its way back up above the 155.00 mark
• Earnings maketh the market
• Eurostoxx futures +0.2% in early European trading
• China’s Politburo holds meeting to set out economic priorities for H2 2024
• France Q2 preliminary GDP +0.3% vs +0.2% q/q expected
• USD/JPY creeps a little higher on the day
• FX keeps the calm ahead of busy calendar day in Europe

The
European session was relatively calm. The Eurozone Flash Q2 GDP showed a pickup in the
second quarter, which is something we already knew from the PMIs, while the
German economy continues to be the “sick man of Europe” as GDP disappointed
showing a contraction.

We also got
some CPI readings from Spain and Germany which showed further easing in
inflation with the focus now switching to the Eurozone Flash CPI being released
tomorrow. The market is seeing 50 bps of easing by year-end with a 63%
probability of a rate cut in September.

The notable
mover has been the JPY as it continues to drift lower heading into the BoJ
decision tomorrow. We got a breakout of a key trendline in USD/JPY today which
might have increased the bullish momentum but overall, it seems like there’s
some general squaring of positions into the risk event.

Looking
elsewhere, we are basically flat across all the other markets. The US Dollar,
equities, bonds and gold are slightly positive, while crude oil and bitcoin are
slightly negative on the day.

The focus will now switch to the US data with Job Openings and Consumer Confidence being released at 14:00 GMT/10:00 ET.

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

They were down roughly 0.3% earlier in Asia trading but have kept largely steady in European morning trade thus far. Both Nasdaq futures and Dow futures are also up 0.1%, reflecting a more tentative mood overall I would say. There will be a couple of modest earnings releases coming up but all eyes will be on Microsoft after the close: Earnings maketh the market

Besides that, investors will have to continue the waiting game ahead of the BOJ and Fed meetings tomorrow. Don’t forget that it is also NFP week, so the relevant figures from the US are also on the radar this week.

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

The USD has been rallying
steadily against most major currencies in the recent couple of weeks, although the
catalyst behind the move has been unclear. A good argument has been that most
of the moves we’ve been seeing in the past 10 trading days were driven by
deleveraging from strengthening Yen.

Basically, the squeeze on
the carry trades impacted all the other markets. Given the magnitude of the
recent appreciation in the Yen and the correlation with many other markets, it
looks like this could be the reason indeed.

From the monetary policy
perspective, nothing has changed as the market continues to expect at least two
rate cuts by the end of the year and sees some chances of a back-to-back cut in
November.

The data continues to
suggest that the US economy remains resilient with inflation slowly falling
back to target. Overall, this should continue to support the soft-landing
narrative and be positive for the general risk sentiment.

The CAD, on the other hand,
has been supported against the US Dollar in the past months mainly because of
the risk-on sentiment, although the recent events with the Yen boosted the US
Dollar against many major currencies. On the monetary policy front, the BoC
cut rates by 25 bps to 4.50% as expected last week signalling more to come
if inflation were to keep falling.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD eventually managed to break above the 1.3785 resistance zone and extended the rally into
the key 1.3860 level. This is where we can expect the sellers to step in with a
defined risk above the level to position for a drop back into the 1.36 support.
The buyers, on the other hand, will want to see the price breaking above the
resistance to increase the bullish bets into the 1.40 handle next.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a trendline defining the bullish momentum. The
buyers will likely keep on leaning on the trendline to target a break above the
resistance. The sellers, on the other hand, will want to see the price breaking
below the trendline to increase the bearish bets into the 1.36 support.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that if the price were to fall below the trendline, the buyers will have
another opportunity to step in around the previous resistance
now turned support at 1.3785. A further break below that support will
likely see the bearish momentum increasing with the sellers piling in for a
drop into the 1.36 support. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Job Openings and the US Consumer Confidence reports. Tomorrow,
we have the BoJ Policy Decision, the Canadian GDP, the US Employment Cost Index
and the FOMC Policy Decision. On Thursday, we get the latest US Jobless Claims
figures, the Canadian Manufacturing PMI and the US ISM Manufacturing PMI.
Finally, on Friday, we conclude the week with the US NFP report.

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