• May Canada retail sales +0.2% vs +0.5% expected
• Canada June new housing price index +0.1% vs +0.1% prior
• Trump classified documents trial date set for May 20, 2024
• An update on the most-important chart in the economic world
• Earnings calendar heats up next week along with key central bank policy announcements.

Markets:

• Gold down $8 to $1961
• WTI crude oil up $1.27 to $76.92
• US 10-year yields down 1.7 bps to 3.83%
• S&P 500 down 2 points to 4564
• CHF leads, JPY lags

The economic calendar was light and there was little in the way of unscheduled news to jar the market. Heavy options expiries in stocks and the Nasdaq rebalancing drew some interest but price action was ultimately subdued, though not entirely quiet.

The big mover on the day was what looks like a BOJ leak to Reuters that the BOJ isn’t planning to change up yield curve control next week. That kicked off big yen sales across the board and a rise in USD/JPY to 141.95 before sales at the figure capped an almost-200 pip rally. There was some consolidation early in US trade down to 141.26 but the pair rose 50 pips from there in a second round of strength.

The US dollar was generally strong and particularly so early in the day as the euro and pound hit session lows at 1.1109 and 1.2817, respectively. It’s been a quick reversal in cable in a sixth-straight decline after touching a one-year high last week. The softer UK CPI data was undoubtedly the main economic data point of the week.

For Canada though, it was today’s softer retail sales report. It hints that BOC hikes are beginning to bite and the advance reading for June was flat again. The loonie slumped on the results despite a strong day for oil (which touched above the 200dma). USD/CAD rose 50 pips on the results to 1.3226 at the high and only backing off slightly.

NZD/USD was hit particularly hard this week, despite a high inflation reading. The market isn’t impressed with what China has offered in terms of stimulus so far and it’s been six straight days of good-size selling in the kiwi, taking it down to 0.6166 and only slightly outperforming the battered yen on Friday.

The week ahead is a big one, with rate decisions from the Fed, ECB and BOJ along with a busy week of earnings. Have a great weekend.

This article was written by Adam Button at www.forexlive.com.

The Dow industrial average kept its winning streak alive with a slim gain of 0.01% today. The S&P index also rose modestly. The NASDAQ index fell for the 2nd consecutive day and is closing lower on the week.

The final numbers are showing:

• Dow industrial average up 2.5 points or 0.01% at 35227.70
• S&P index up 1.48 points or 0.03% at 4536.34
• NASDAQ index fell -30.51 points or -0.2% at 14032.80

This week:

• The Dow industrial average is now risen for 10 consecutive trading days
• The Dow streak is the longest since August/September 2017
• On Thursday the NASDAQ index had its worst day since March
• Healthcare, energy and financials were the biggest gainers this week
• Dow is up for the 2nd consecutive week

The final numbers for the week are showing:

• Dow industrial average +2.08%
• S&P index rose 0.69%
• NASDAQ index fell -0.57%

For the month of July with 6 more trading days left:

• Dow industrial average is up 2.38%
• S&P index is up 1.93%
• NASDAQ index is up 1.78%

Big week next week for earnings. You can find the list of major releases by clicking HERE.

This article was written by Greg Michalowski at www.forexlive.com.

The EURGBP is major cross-currency pair that rose sharply this week. With the ECB meeting ahead next week, understanding the technical levels in play could open the door for trading opportunities.

Technically as well, the market traders have used the technicals on the extremes to define support and resistance, and the correction off the high this week, has seen a swing level/area do a good job of holding support.

Looking at the 4-hour chart below, the pair on Monday and Tuesday based at the 100/200 MA. The basing at the level, gave the buyers the go ahead to push higher. On Wednesday and Thursday, the price raced higher but found resistance sellers against the 100 day MA at 0.8701. The highs got within a couple pips of those highs this week.

The subsequent move lower saw the pair move down below the 38.2% retracement at 0.86455, but held support near a swing area near 0.86357. That level./area between 0.86357 and 0.8655 will be a key barometer in the new trading week. Stay above is more bullish. Move below would increase the bearish bias once again.

For more details, watch the video above.

This article was written by Greg Michalowski at www.forexlive.com.

WTI crude oil has been flirting with the 200-day moving average all week and finally had a look above it, rising to $77.29. However it wasn’t able to break the weekly high of $77.32 and has backtracked slightly to $77.06.

In all, I wouldn’t be comfortable calling that a technical break but it sets up next week to be an interesting moment in the crude oil market. We should hear soon about Saudi plans on whether to extend voluntary cuts through September so that could be the headline that does it. If not, the market will be looking carefully at US inventory data in the hope that summer inventory draws will pick up.

This article was written by Adam Button at www.forexlive.com.

I have showed this chart before because it shows how the CPI chart laps some very easy comps soon.

What has emerged, pointed out by Omair Sharif, is that the numbers used on the chart are non-seasonally adjusted, which isn’t what is commonly (universally, frankly) used for the m/m CPI numbers.

What it showed was that even if CPI ran at 0.2% m/m until January, the year-over-year reading would rise to 3.9%.

This is problematic for two reasons:

1) If you use the standard seasonally-adjusted numbers, a 0.2% m/m reading would get CPI back to 2.5% in January.

2) If you insist on using non-seasonally-adjusted numbers, there’s a strong downward bias late in the year (because price hikes are usually done at the turn of the year).

Here is what the chart (by Preston Caldwell) shows if re-done for the standard seasonally-ajdusted numbers.

By that measure, a 0.2% m/m reading would be fine for getting CPI on track, especially considering that in March of 2024, the y/y comps begin to get easier.

The takeaway here is that we’re closer to 2% than it seems and it’s what the market is implying. That could change if the combo of housing, commodity prices and wages pickup but a 0.2% SA m/m reading is a fine baseline with what we know about the economy.

This article was written by Adam Button at www.forexlive.com.

The last week, the miss in
the US CPI report has led to a big US Dollar selling
across the board as the market expected the Fed to be finished with rate hikes
after the July meeting. The USD started to come back to life though as strong
economic data suggested that the Fed may not be finished yet and may stay at a
higher level for longer than the market expects. In fact, the US retail sales
beat expectations on the Control Group, which is seen as a better gauge of
consumer spending, and yesterday the US initial claims were much better than expected
returning near the record low levels.

The RBNZ, on the other hand, kept its official cash
rate unchanged while stating that it will remain at the restrictive level for
the foreseeable future to ensure that inflation comes down back to target. The
recent New Zealand inflation data though surprised to the upside
which might put some pressure on the central bank and the next rate decision.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD sold off
pretty heavily from the key 0.6389 resistance and
erased all the USD weakness following the miss in the US CPI report. The price
is now testing the red 21 moving average and the
61.8% Fibonacci retracement level where we should find some buyers stepping in
to target another rally into the key resistance level.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a very
good support zone between the 0.62 handle and the 61.8% Fibonacci retracement level.
This is where the buyers should step in with a defined risk below the Fibonacci
level and target an extension to the 0.6389 resistance. The sellers, on the other
hand, will want to see the price breaking below the Fibonacci support to pile
in even more aggressively and extend the fall into the 0.5987 support.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is now testing the Fibonacci retracement level where we should see the
buyers stepping in. Before reaching the key resistance, the buyers will need to
break above the strong 0.63 handle, where we should find the sellers piling in
to target a fall into the support level again and ultimately a break below it. If
the price falls below this support zone without a pullback, we should see the
sellers piling in even more aggressively and extend the fall into the 0.5987
support.

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

Taking that into consideration, it might explain the more cagey mood among major currencies at the moment – barring the Japanese yen of course. The dollar was beaten down heavily last week but is putting its foot down this week, aided by a strong recovery in USD/JPY especially. It looks like we’ll have to wait until the key central bank decisions next week to settle the score next.

Here is the weekly outlook alongside some big data to watch out for:

Monday, 24 July

• France July flash PMI data
• Germany July flash PMI data
• Eurozone July flash PMI data
• US July flash PMI data

Wednesday, 26 July

• Australia Q2 CPI figures
• FOMC meeting policy decision
• Fed chair Powell press conference

Thursday, 27 July

• ECB monetary policy decision
• ECB president Lagarde press conference
• US Q2 advanced GDP figures
• US weekly jobless claims

Friday, 28 July

• BOJ monetary policy decision
• France Q2 preliminary GDP figures
• France July preliminary CPI figures
• Germany July preliminary CPI figures
• US June PCE price data

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

Well, there were certainly no complaints when the yen was strengthening up until the end of last week. But now as yen bulls are throwing in the towel amid the latest round of disappointment from the BOJ, we are starting to see the verbal jawboning return.

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

The miss in the US NFP and CPI reports triggered a selloff in the US Dollar
across the board. The market got increasingly confident that the July hike will
be the last one for this cycle and what will follow are rate cuts sometime in
early 2024. The recent beats in US economic data like the retail sales and the initial claims made the market to reconsider a bit
its expectations and the USD came back to life as we started to see some profit
taking ahead of the next week’s FOMC meeting.

On the other hand, the SNB
raised interest rates by 25 bps as expected at the last meeting and
communicated that additional rate hikes cannot be ruled out as it maintains the
hawkish stance. The recent Swiss CPI data showed the inflation rate
returning back within the SNB target band and should translate into a pause for
the SNB at the next meeting, barring any upside surprise before the meeting.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF was
overstretched at some point as the price was too far from the blue 8 moving average. In such
instances, we can generally see some consolidation or a pullback into the
moving average to bring the market back into equilibrium. If the bearish bias
remains intact, a good resistance for the
sellers would be the 0.8761 level where we will also find the confluence with the
red 21 moving average.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that the bearish
momentum was already waning as depicted by the divergence with the
MACD. In
fact, this is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price has recently broken above the most recent
swing high at 0.8631 and then pulled back to retest it. We should see the
buyers piling in here with a defined risk below the level and target the 0.8761
resistance.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that we
have also the confluence with the 38.2% Fibonacci retracement level near the
0.8631 level. This is a pretty strong support level and if the price breaks
below it, we should see the sellers stepping in and target a new low.

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

The Australian dollar got a double boost in trading yesterday but that is ultimately proving to be short-lived as the currency declines further again today. Against the dollar, AUD/USD traded to a high of 0.6846 yesterday but is now down nearly 100 pips from there to 0.6747 currently.

From a technical standpoint, yesterday’s gains were nothing significant as key resistance in the pair continues to sit closer towards the June highs near 0.6900. That was what helped to stop the strong push higher earlier this month as well.

Considering the latest downdraft, sellers look to continue the corrective move lower and the next target will be the 200-day moving average (blue line) at 0.6716 before looking at the 100-day moving average (red line) at 0.6685 at the moment.

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