Headlines:

• A double boost for the aussie today
• Tech shares stay on the heavy side so far on the day
• China onshore yuan finishes the domestic session by erasing yesterday’s losses
• Japan government cuts economic growth forecast for the current fiscal year
• Germany June PPI -0.3% vs -0.4% m/m expected
• France July business confidence 100 vs 100 prior
• Eurozone May current account balance €9.1 billion vs €4.0 billion prior
• Switzerland June trade balance CHF 4.82 billion vs CHF 5.48 billion prior

Markets:

• AUD leads, GBP lags on the day
• European equities slightly higher; S&P 500 futures down 0.2%
• US 10-year yields up 4.5 bps to 3.787%
• Gold up 0.2% to $1,981.65
• WTI crude up 0.1% to $75.45
• Bitcoin up 1.0% to $30,272

It was a relatively quiet session as markets are taking things a little slower on the day. There wasn’t any big data but there were some interesting stories carrying over from Asia.

The Australian dollar remains buoyed and is leading gains after a more solid labour market report, but also helped out by a stronger Chinese yuan. On the latter, the PBOC moved to ease cross-border funding but also hammered down speculators with a much stronger fix for the onshore yuan.

AUD/USD has been holding gains since, up 0.8% to 0.6830 currently. Meanwhile, the dollar itself is a little mixed but marginally lower. EUR/USD is up slightly to 1.1205 with large option expiries near 1.1200 helping to keep price action more sticky. Then, USD/JPY continues to keep below 140.00 and is down 0.1% to 139.55.

The pound is the laggard, carrying over the losses from yesterday with GBP/USD testing waters just below 1.2900 again now.

In other markets, equities were steadier mostly in Europe but tech stocks are the ones trailing today. That comes after investors react negatively to the Tesla and Netflix earnings.

And in the bond market, we are seeing the strong bids since last week hit pause as yields trend a little higher on the day – at least for now.

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

Last week the US CPI report missed across the board and led to a
strong rally in GBPUSD as the market priced out the more hawkish path for the
Fed and now expects the July hike to be the last one. The resilient labour
market, the rising consumer sentiment and the better than expected Retail Sales, have also increased the chances of
getting a soft landing which contributed to the positive risk sentiment and the
USD weakness.

Conversely, the UK CPI this week missed expectations across the board
and triggered a big repricing in interest rates expectations. In fact, the
market was pricing a higher chance of a 50 bps hike prior to the report given
the higher wages data in the previous UK employment report. Now, the market sees a higher
chance that the BoE hikes by 25 bps at the upcoming meeting.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD had a
massive run to the upside since bottoming out on the red 21 moving average. After
the quick rally following the miss in the US CPI report, the price started to
pull back as the stronger US Retail Sales gave the USD some support. The price
is now close to a key support zone
where we can find the previous swing high level, the 50% Fibonacci retracement level
and the red 21 moving average for confluence. The
buyers are likely to step in here with a defined risk below the level and
target a new high.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more closely the
key support zone near the 1.2847 level. The price will need to bounce here to
give the buyers the conviction to target new highs as a break lower would
trigger a selloff into the 1.2680 level where we can also find the trendline. That
would also be the first target for the sellers if the price breaks below the
1.2847 level.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
selloff following the miss in the UK CPI report bottomed out on the 50%
Fibonacci retracement level and the price has even broke above the downward
trendline. This might be a sign that the bearish momentum has weakened, and the
buyers may have the upper hand. The price will need to create a new higher high
breaking above the swing high at 1.2962 to confirm the change in trend and see
more buyers piling in.

Upcoming Events

Today the market will
focus on the US Jobless Claims report as the labour market data continues to be
at the top of the market’s attention. A small miss or beat shouldn’t be market
moving as the market is more likely to move on big deviations given the
volatility of the report. In fact, a big beat should give the USD some support,
while a big miss should pressure it even more as the market would bring forward
the rate cuts expectations.

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

They also moved to trim its 2024 growth forecast for the euro area to 0.7%, down from 0.8% previously. In case you missed the headline from earlier today, BofA moved to cut China’s growth forecast to 5.1% from 5.7% previously here.

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

The miss in the US CPI report
last week triggered a heave US Dollar selling across the board. The market
started to price out the more hawkish expectations and now sees the July hike
as the last one for this cycle. Moreover, the resilient labour market and the
rising consumer sentiment point to
a soft-landing scenario where inflation comes down to target without affecting
too much economic growth. In fact, even the US Retail Sales recently
beat expectations on the Control Group, which is a better gauge of consumer
spending.

The ECB has already committed to a rate hike in
July, so even if the data disappoints going forward, it’s more likely to affect
the September decision rather than the July one. In fact, the ECB members keep
repeating that the September hike is more uncertain, and it will depend on the
incoming data.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD had a
massive rally since bottoming out on the red 21 moving average near the
1.08 handle. After breaking out of the upper bound of the rising wedge pattern
though, the bullish momentum started to wane and the price is now pulling back
into the blue 8 moving average and the top trendline of the
pattern.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
broken below the blue upward trendline that defined the rally since the
breakout of the descending triangle. This led to a pullback into the top
trendline of the wedge pattern and we can see that we have also the 23.6% Fibonacci retracement level
for confluence. We
should see the buyers stepping in here with a defined risk below the trendline
to target new higher highs. On the other hand, if the price breaks below the
trendline, it might mean that the upside breakout was just a fakeout and could
lead to a massive downside into the 1.08 handle with the sellers piling in
aggressively.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the current consolidation just above the top trendline and we can also
notice that the price has already bounced on the 23.6% Fibonacci retracement
level. If the uptrend has already restarted, we should see the price breaking
above the most recent higher low at 1.1240 and see the buyers piling even more
to target the 1.15 handle.

Upcoming Events

Today the main event
will be the US Jobless Claims report. The market is still trading on the
soft-landing hopes, so a small miss to the expectations is unlikely to cause
big movements and it may even be an opportunity to buy the dip. We should focus
more on big deviations from the expected numbers. In fact, a beat should give
the USD some support and a miss may weaken it even more as the market would
bring forward rate cuts expectations.

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

Conflux Network, the first regulatory-compliant public blockchain
in China, has today announced a new collaboration with World Mobile, the only
global mobile network built on the blockchain.

The
partnership comes on the heels of the successful launch of the Conflux BSIM
card earlier this year and will see the two companies work together initially
in four areas:

1)
Public Bridging

World Mobile Token (WMT) will bridge from Cardano
blockchain into the Conflux blockchain ecosystem and will be the first bridge
outside the Cardano ecosystem for the mobile network’s native token.

2) Tech Integration

World Mobile and Conflux will collaborate on the technical
integration of the Conflux network into World Mobile’s sidechain, AyA, bringing
EarthNode capabilities and financial settlement to the Conflux network.

3) Asian and African Market Expansion

Conflux and World Mobile enjoy a strong presence in the
Asian and African markets, respectively. The two businesses will work together
to leverage these strengths to increase connectivity, drive user acquisition
and further market penetration in key markets. Conflux’s CFX now ranks top 3 in
most popular crypto currencies in Nigeria. This is especially relevant as
Nigeria holds nearly 68% of crypto interest in Africa. World Mobile has
recently concluded successful field tests of its hybrid dynamic network in
Nigeria, following a successful commercial launch in Zanzibar earlier this
year.

4) Blockchain-based SIM card development

World Mobile and Conflux will collaborate on how the mobile
network can best utilize Conflux’s blockchain-based SIM card to increase access
to digital connectivity across the world.

YuanJie Zhang, Co-Founder of Conflux, said of the
partnership: “Conflux Network takes its mission to push the frontier of Web3
adoption at a low cost, with fast speed and decentralized security very
seriously. One important strategy is to promote collaboration with
telecommunication service providers all over the world. World Mobile is the
next significant partner Conflux brings on board after China Telecom.

Together, affordable and applicable blockchain technology
is bridged beyond Asia to the rest of the world.”Zachary Vann, Head of Token,
World Mobile Token added: “We are excited to work with Conflux to build a more
connected and inclusive future. This partnership will accelerate our market
expansion in Asia and to provide connectivity globally. The Conflux network has
a unique, regulatory-compliant blockchain, and the world’s first
blockchain-based sim cards bring many opportunities to our mobile network and
our AyA chain. This is our most significant partnership to expand our network
and sharing economy into the Asian markets and beyond.”

About Conflux

Conflux Network (https://confluxnetwork.org/) is a
permissionless Layer 1 blockchain connecting decentralized economies across
borders and protocols. Recently migrated to hybrid PoW/PoS consensus, Conflux
provides a fast, secure, and scalable blockchain environment with zero
congestion, low fees, and improved network security.

As the only regulatory-compliant public blockchain in
China, Conflux provides a unique advantage for projects building and expanding
into Asia. Conflux has collaborated with global brands and government entities
in the region on blockchain and metaverse initiatives, including the city of
Shanghai, McDonald’s China, and Oreo.

About World Mobile

World Mobile was founded with a far-reaching goal: to
connect everyone, everywhere while advocating for economic freedom and dignity.
Unlike traditional mobile networks, World Mobile is based on blockchain and
incentivizes people to be part of a sharing economy that taps into the trillion
dollar global telecom market. Individuals and business owners around the world
can operate nodes on its network and bring their community online while earning
revenue.

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

Headlines:

• UK June CPI +7.9% vs +8.2% y/y expected
• Sterling falls on softer UK inflation numbers
• UK bond yields sharply lower after inflation data earlier
• BOE watch: A 25 bps rate hike is now more favoured in August
• USD/JPY moves towards 140.00 as Ueda casts doubts on imminent policy tweak
• Aussie holds lower on softer Chinese yuan today
• Eurozone June final CPI +5.5% vs +5.5% y/y prelim
• US MBA mortgage applications w.e. 14 July +1.1% vs +0.9% prior

Markets:

• USD leads, GBP lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields down 2.9 bps to 3.760%
• Gold down 0.3% to $1,973.18
• WTI crude up 0.2% to $75.88
• Bitcoin up 0.8% to $30,018

UK inflation was the highlight of the session and it didn’t disappoint, or at least unless you are a sterling bull. The numbers pointed to an easing in price pressures for June, which sent the pound and UK yields lower on the day.

Markets worked to reprice the more hawkish BOE rate outlook, with a 25 bps rate hike now preferred over a 50 bps move for August. GBP/USD fell sharply from 1.3030 to 1.2905 and is holding near the lows now, with a firmer dollar also helping to keep the downside pressure on the pair.

There were several other decent movers on the session but they all owed much to separate factors.

USD/JPY pushed higher towards 140.00 from around 139.30, helped by the more dovish remarks by BOJ governor Ueda from yesterday. Meanwhile, the antipodean currencies are marked lower due to a softer Chinese yuan on the day. AUD/USD is down 0.7% to 0.6765 after having seen USD/CNY push up from 7.18 to near 7.22 in trading today.

In other markets, equities kept steadier across the board after the gains from yesterday while bond yields are generally lower – with UK yields leading the downside push after the softer inflation numbers.

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

• Prior +0.9%
• Market index 210.7 vs 208.4 prior
• Purchase index 163.2 vs 165.3 prior
• Refinance index 446.4 vs 416.0 prior
• 30-year mortgage rate 6.87% vs 7.07% prior

Mortgage applications increased slightly again in the past week, owing this time to a notable decline in the average rate of the most popular US home loan. That comes alongside a heavy slide in US bond yields, following the softer CPI report.

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

After the
news of BlackRock filing a Bitcoin ETF on June
15th, we saw the cryptocurrency surging in value going briefly from the 25K
level to the 31K one. Bitcoin resilience has been remarkable given the hawkish
repricing in interest rates expectations and the regulatory crackdowns we saw
in the past weeks/months. The struggle to break above the 31K level though suggests
that we might be at a point where if the risk sentiment turns negative, Bitcoin
can selloff pretty hard. In fact, despite the positive risk sentiment in the
markets due to the miss in the US CPI report
and the soft-landing vibes, Bitcoin couldn’t rally. This is a worrying sign.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that after breaking
above the trendline and
rallying into the 31K resistance, Bitcoin
stalled and started to range just beneath the level. The moving averages have
crossed to the downside, but they are not reliable in rangebound markets. It
looks like we will need some big fundamental catalyst to make it breakout on
either side.

Bitcoin Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
range created between the 29500 support and the 31000 resistance. The best
strategy would be to just sit and wait until we get a clear breakout supported
by a fundamental catalyst, but more aggressive traders can “play the range” by
buying at support and selling at resistance.

Bitcoin Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that we
have a mid-range level that acted as kind of a sentiment line where the bias
becomes more bearish below the level and more bullish above it. In fact, we
should see the buyers leaning on the 29500 support to target the resistance and
the eventually the breakout, but we should also see more buying pressure as
soon as the price rises above the sentiment line. Conversely, the sellers are
likely to lean on the resistance to target the break below the support, and
then increase the selling pressure if the price falls below the sentiment line.

Upcoming Events

The next data to watch will
be the US Jobless Claims report on Thursday. Given the current soft-landing
narrative, a small miss to the expectations shouldn’t cause much damage and in
fact an eventual spike might be faded soon after. A big miss, on the other
hand, should give the markets recessionary vibes again and lead to more
weakness in Bitcoin. Conversely, a big beat should support the idea of a soft
landing and support the cryptocurrency.

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

In case you missed Ueda’s remarks from yesterday, you can check them out here. That is weighing on the Japanese yen as he certainly doesn’t sound like he is about to bring about any imminent changes to the BOJ policy settings. USD/JPY is up over 100 pips currently to 139.80 as buyers set their sights on the 140.00 mark:

The pair is also running into some near-term resistance from the 200-hour moving average (blue line) at 139.74. If buyers keep a hold above that, it will see the near-term bias turn more bullish but I would argue that will be more so the case on a break back above 140.00 nonetheless.

If you’re wondering why the yen is rather sensitive to remarks from Ueda, you can check out my earlier posts since last week below:

• Higher Japanese yields tees up potential for another BOJ disappointment
• The Fed and ECB may not be the biggest central bank risks to markets this month

Should Ueda not deliver again next week, that should lead to added selling in the currency considering the positioning flows that we have seen in the past two weeks. The feeling among yen bulls right now:

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

The OPEC+ production cuts
and the expectations of more economic stimulus in China following the dismal
inflation numbers, gave Crude Oil enough strength to break above the key
resistance zone around the $75 level. After a brief rally, the price stalled and
reversed as the PBoC held off from delivering more rate cuts. This week we got
a spike in the price as there was a report that Saudi Arabia wanted to extend the cuts
until the end of the year, but the move was quickly faded as the report was
eventually withdrawn.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil has
finally managed to break above the resistance zone
around the $75 level, but the rally stalled at a trendline and fell
back into the resistance now turned support. The
price has bounced on the support and it’s now targeting again a breakout of the
trendline. If we do get a breakout, Crude Oil is likely to rally all the way up
to the $83 resistance.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
bounced on a strong support zone where we had the upward trendline and the 50% Fibonacci retracement level.
We should now see the price rallying into the downward trendline again and
challenge a breakout.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price is now contained in what could end up being a triangle
pattern. The buyers will need the price to break above the downward trendline
to pile in and extend the rally into the $83 resistance. The sellers, on the
other hand, will want to see the price breaking below the $75 support zone to
invalidate the bullish setup and take the price back into the $67 region.

Upcoming Events

The next data to watch for will
be the US Jobless Claims on Thursday. The market is likely to react more to big
deviations from the expected numbers. In fact, a big miss is likely to weaken
Crude Oil as the fears of a recession should pressure the commodity. On the
other hand, given the current soft-landing narrative, a big beat should give
the Oil market a boost and lead to the break higher.

See also the video below:

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