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In June, personal income rose 0.4%, above expectation of 0.3%. Personal spending rose 0.3%, matched expectations. Headline PCE was unchanged at 1.4% yoy, missed expectation of 1.5% yoy. Core PCE inflation accelerated to 1.6% yoy, up from 1.5% yoy, but missed expectation of 1.7% yoy.

The lack of materialistic acceleration in core inflation does nothing to alter FOMC policymakers' mind regarding tomorrow's rate decision. For now, Fed is still generally expected to cut interest rate by -0.25bps to 2.00-2.25%. The main question is whether Fed would explicitly say that it's a one-off, or it's a start of a policy easing cycle.

Full release here.

USD/JPY is steady after the release, staying a little bit soft. After temporary top was formed after failing to break through 108.99 resistance earlier this week. But for now, further rise is expected as long as 107.93 support holds. Break of 108.99 should eventually be seen.

Euro is lifted mildly by stronger than expectation German inflation data. But upside is capped by deteriorating confidence indicators. German CPI rose 0.5% mom in July, above expectation of 0.5% mom. Annually, CPI accelerated to 1.7% yoy, beat expectation of 1.5% yoy.

Eurozone economic confidence dropped to 102.7 in July, down from 103.3 but matched expectation. Industrial confidence dropped to -7.4, missed expectation of -6.7. Services confidence dropped to 10.6, missed expectation of 10.7. Consumer confidence was finalized at -6.6. Business climate indicator dropped to -0.12, missed expectation of 102.7.

EUR/USD's recovery is rather weak and outlook remains unchanged. In case of another rise, upside should be limited well below 1.1282 resistance. Break of 1.1101 and sustained trading below 1.1107 key support will resume larger down trend from 1.2555.

Equity markets are trading in negative territory on Tuesday, with some disappointing earnings weighing heavily in Europe and perhaps a little profit taking also kicking in ahead of the Fed decision on Wednesday.

With US equity markets sitting around record highs, a lot is hanging on the Fed to deliver not only the bare minimum of a 25 basis point rate cut but also guidance that more will follow. Investors seem a little nervous following some less dovish commentary prior to the blackout period and then an ECB meeting that didn't go entirely to plan. Perhaps this is weighing on sentiment a little today.

Trade talks resume today in Shanghai but there isn't much optimism around the talks, perhaps a reflection of the belief that we've been here before and not got anyway. Of course, as time ticks by the sense of urgency will ramp up but for now, there is a feeling that these talks will drag on and little is likely to be achieved this week.

The data today could be of more interest, with income, spending and inflation data due out of the US. It's not going to have any impact on tomorrow's decision but it could help shape what they do in the coming months, with a lack of inflation one of the key arguments for the central bank to keep cutting rates.

Sterling taking a pounding on no-deal Brexit fears

Brexit taking its toll on the pound is not a new story but Johnson's new team has been on a PR offensive in recent days and the currency is once again taking a beating. Johnson is adamant to avoid the mistakes of his predecessor and have his no-deal threats be taken seriously by Brussels as he seeks to renegotiate the backstop and deliver Brexit on 31 October.

Traders are clearly sitting up and taking notice, with the pound slipping again on Tuesday, dropping to its lowest since March 2017 and looking susceptible to further pain. Johnson's camp won't be concerned by this, quite the opposite, they'll be happy that the market is taking them at their word and hoping Brussels does to. Still, it could be a long few months.

Oil edges higher ahead of API report

We've seen some consolidation in oil recently but it's being given a slight lift ahead of the API report on Tuesday. A huge drawdown was largely shrugged off last week due to the temporary shutdowns in the Gulf of Mexico as a result of Tropical Storm Barry. Traders may be less forgiving if we see a similar result today and perhaps that's what's being anticipated as oil creeps higher.

Gold treading water ahead of Fed decision

Gold is holding its ground ahead of the Fed decision, with traders maybe a little nervous at the central banks ability or willingness to live up to aggressive market expectations. Policy makers have worked hard to temper expectations of a 50 basis point cut ahead of the meeting but traders haven't been deterred when it comes to the months ahead. Markets could therefore be prone to disappointment which could weigh on the yellow metal, putting $1,400 support under pressure.

The USDTRY holds in red for the fourth straight day and cracked key support at 5.5658 (200DMA) today. Lira advanced strongly after Turkey's central bank surprised markets by 4.25% rate cut last week against expectations for 2.5% cut. Improved CBRT's economic outlook and signs of falling inflation, justify central bank's action and add to improved lira's sentiment. Bears may show hesitation to break very strong 200DMA support (reinforced by Fibo 61.8% of 5.1595/6.2445 ascend at 5.5740) in first attempt, as oversold daily stochastic and fading bearish momentum suggest a pause. Consolidation and possible stronger upticks towards a cluster of daily MA's (5/10/20) at 5.65/67 zone will be seen as positioning for final push through 200DMA that would open for further lira's advance and expose psychological 5.50 support. Only firm break above 20DMA (5.6679) would sideline bears and signal rejection at 200DMA support.

Res: 5.5977, 5.6201, 5.6499, 5.6679
Sup: 5.5658, 5.5520, 5.5000, 5.4709

The British pound has continued to plummet lower against US dollar as Brexit no-deal fears intensify across financial markets. The next key technical support level to watch is the March 2017 trading low, at 1.2110, which provides the foremost support prior to the 1.1985 level. Overall, selling rebound in the GBPUSD pair is the favoured strategy until the 1.1985 level is reached.

The GBPUSD pair is heavily bearish while trading below the 1.2280, key support is found at the 1.2110 and 1.1985 levels.

If the GBPUSD pair trades above the 1.2280 level, key resistance is found at the 1.2350 and 1.2380 levels.

The euro currency is creeping higher against the US dollar, although the pace of the pairs recent recovery is starting to slow down. EURUSD bulls face tough resistance from the 1.1160 level, while the 1.1187 level is the major technical area buyers need to breach. Overall, buyers may start to switch to a EURUSD buy positions if we continue to see failure before the 1.1160 level.

The EURUSD pair is only bearish while trading below the 1.1160 level, key support is found at the 1.1100 and 1.1050 levels.

If the EURUSD pair trades above the 1.1160 level, bulls could test back towards the 1.1187 and 1.1215 levels.

The UK100 stock index recorded its best daily gain in more than three years on Monday, while early on Tuesday the market opened even higher to top at 7728, the highest price since last August.

According to the stochastics, there is still some room for improvement as the indicator is positively sloped and has yet to print a bullish cross above its 80 overbought mark. The MACD is picking up steam as well and is above its red signal line, increasing optimism for another bullish session ahead.

Resistance to upside movements could be detected around last summer’s peaks of 7,790 if the market continues its rally. Crawling further up, the bulls would have to face next the 2018 high of 7,900.

In case of a downside reversal, the focus will shift to the 7,600 former resistance level, while a fall under the 20-period simple moving average (SMA) may find support near the 7,460 barrier. Yet, the downfall would be seriously considered if the bearish action extends below the ascending line drawn from the 6,535 low (December 2018). Such a move would also switch the bullish medium-term profile into a bearish one, but the rising 50-day SMA suggests that an outlook reversal may rather come with a delay.

In brief, the UK100 stock index is facing stronger bullish pressures both in the short- and the medium-term picture

The US dollar has updated two-month highs in expectation of the Fed meeting. The US dollar index (#DX) closed in the green zone (+0.05%). Investors have taken a wait-and-see attitude before the Fed’s decision on a key interest rate. According to experts, the regulator will reduce the interest rate by 25 basis points – from 2.50% to 2.25% per annum. However, yesterday, US President, Donald Trump, wrote on his Twitter that a small rate cut would not be enough. The President criticized and raised pressure on the US Central Bank again, having accused it of being too cautious compared to China and Europe.

The British pound has updated two-year lows due to concerns about no-deal Brexit. Michael Gove, an official in the new British government, said it was highly likely that the UK would exit from the EU on October 31 without a deal that could cushion the blow to the country's economy. However, British Prime Minister, Boris Johnson, has repeatedly said that there was only one chance out of a million that Britain would leave the EU without a deal. At the same time, there is no time for new talks before Brexit.

The Japanese yen shows a variety of trends after the meeting of the Bank of Japan. Following the meeting, the Central Bank of Japan left the key marks of monetary policy at the same level. However, the regulator has worsened forecasts for economic growth and consumer prices in the country. The Bank of Japan will also be ready to take decisive measures to support the economy in case of significant risks.

The bullish sentiment prevails in the "black gold" market. At the moment, futures for the WTI crude oil are testing the mark of $57.40 per barrel. At 23:30 (GMT+3:00), API weekly crude oil stock will be published.

Market Indicators

• Yesterday, there was a variety of trends in the US stock markets: #SPY (-0.18%), #DIA (+0.10%), #QQQ (-0.34%).
• The 10-year US government bonds yield fell slightly. Currently, the indicator is at the level of 2.05-2.06%.

The news feed for 2019.07.30:

• Personal spending in the US at 15:30 (GMT+3:00);
• CB consumer confidence index in the US at 17:00 (GMT+3:00);
• Pending home sales index in the US at 17:00 (GMT+3:00).

On Tuesday morning, the EUR/USD was finding support in the 55 and 100-hour simple moving averages near 1.1135. Meanwhile, the rate was facing the resistance of the weekly pivot point at 1.1153.

In general, the pair was expected to break the technical resistance of the weekly pivot point. In the aftermath of such event the rate would surge up to the 200-hour simple moving average, which on Tuesday was located at the 1.1175 level.

On the other hand, the weekly PP at 1.1153 could hold its ground forcing the pair to trade sideways.

On Tuesday morning, the decline of the GBP/USD had reached below the last weekly pivot point. Namely, the rate had no technical support as low as the historical low level of 2017 at 1.1978.

Although, note that most likely round levels will provide psychological support to the currency exchange rate. Namely, the decline could pause at 1.2100, 1.2050 and 1.2000.

On the other hand, the rate most likely will trade sideways until the Federal Reserve Interest Rate announcement on Wednesday at 18:00 GMT.