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For the 24 hours to 23:00 GMT, the USD declined 0.27% against the JPY and closed at 107.96.

In the Asian session, at GMT0300, the pair is trading at 107.74, with the USD trading 0.20% lower against the JPY from yesterday’s close.

Overnight data showed that Japan posted a merchandise (total) trade surplus of ¥589.5 billion in June, following a revised deficit of ¥968.3 billion in the previous month. Markets had expected the nations to post a surplus of ¥403.5 billion.

The pair is expected to find support at 107.48, and a fall through could take it to the next support level of 107.22. The pair is expected to find its first resistance at 108.16, and a rise through could take it to the next resistance level of 108.58.

Looking ahead, investors would await Japan’s National consumer price index for June, scheduled to release overnight.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.08% against the CHF and closed at 0.9872.

In the Asian session, at GMT0300, the pair is trading at 0.9853, with the USD trading 0.19% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9833, and a fall through could take it to the next support level of 0.9812. The pair is expected to find its first resistance at 0.9891, and a rise through could take it to the next resistance level of 0.9928.

Trading trend in the Swiss Franc today, is expected to be determined by Switzerland’s trade balance data for June, set to release in a while.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.24% against the CAD and closed at 1.3053.

Data showed that Canada's consumer price index (CPI) rose 2.0% on an annual basis in June, more than market expectations for an advance of 1.9%. The CPI had recorded a gain of 2.4% in the previous month. Further, the nation's manufacturing shipments rebounded 1.6% on a monthly basis in May, compared to a revised fall of 0.4% in the prior month. Market participants had envisaged the manufacturing shipments to record a climb of 2.0%.

In the Asian session, at GMT0300, the pair is trading at 1.3050, with the USD trading a tad lower against the CAD from yesterday's close.

The pair is expected to find support at 1.3030, and a fall through could take it to the next support level of 1.3009. The pair is expected to find its first resistance at 1.3077, and a rise through could take it to the next resistance level of 1.3103.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the AUD slightly declined against the USD and closed at 0.7010.

LME Copper prices declined 0.6% or $37.0/MT to $5922.0/MT. Aluminium prices rose 0.1% or $1.0/MT to $1819.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7029, with the AUD trading 0.27% higher against the USD from yesterday's close.

Overnight data showed that Australia's seasonally adjusted unemployment rate remained unchanged at 5.2% in June. Meanwhile, the nation's NAB business confidence advanced to a level of 6.0 in the Q2 2019, compared to a reading of -1.0 in the prior quarter.

The pair is expected to find support at 0.7007, and a fall through could take it to the next support level of 0.6985. The pair is expected to find its first resistance at 0.7040, and a rise through could take it to the next resistance level of 0.7051.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Gold rose 1.71% against the USD and closed at USD1430.10 per ounce, amid weakness in the greenback.

In the Asian session, at GMT0300, the pair is trading at 1423.90, with gold trading 0.43% lower against the USD from yesterday’s close.

The pair is expected to find support at 1406.17, and a fall through could take it to the next support level of 1388.43. The pair is expected to find its first resistance at 1436.77, and a rise through could take it to the next resistance level of 1449.63.

The yellow metal is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver rose 2.76% against the USD and closed at USD16.01 per ounce, tracking gains in gold prices.

In the Asian session, at GMT0300, the pair is trading at 16.13, with silver trading 0.78% higher against the USD from yesterday’s close.

The pair is expected to find support at 15.76, and a fall through could take it to the next support level of 15.40. The pair is expected to find its first resistance at 16.32, and a rise through could take it to the next resistance level of 16.52.

The white metal is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Crude Oil declined 1.74% against the USD and closed at USD56.59 per barrel, after US crude supplies dropped less-than-expected and gasoline inventories climbed significantly.

Meanwhile, the Energy Information Administration (EIA) report indicated that US crude oil stockpiles fell 3.1 million barrels to 455.9 million in the week ended 12 June 2019.

In the Asian session, at GMT0300, the pair is trading at 56.80, with oil trading 0.37% higher against the USD from yesterday’s close.

The pair is expected to find support at 55.89, and a fall through could take it to the next support level of 54.97. The pair is expected to find its first resistance at 58.04, and a rise through could take it to the next resistance level of 59.27.

Crude oil is trading below its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 107.81; (P) 108.07; (R1) 108.20; More...

Intraday bias in USD/JPY is turned to the downside with break of 107.79 temporary low. Corrective rebound from 106.78 should have completed at 108.99, after rejection by 55 day EMA. Break of 106.78 support will resumer larger decline from 112.40 to retest 104.69 low. On the upside, break of 108.99 resistance is needed to confirm resumption of rebound from 106.78. Otherwise, risk will remain on the downside in case of recovery.

In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we'd expect strong support above 98.97 (2016 low) to contain downside to bring rebound. In any case, break of 112.40 is needed to the first serious sign of medium term bullishness. Otherwise, further decline will remain in favor in case of rebound.

Dollar is back under pressure following weakness in US stocks and yields overnight. But it remains largely in range, except versus Yen. Indeed, Yen buying seems to be picking up momentum again, in tandem with steep decline in Nikkei in Asian session. But risk aversion is having little impact on Australian Dollar, which ignores weaker than expected job data and strengthens broadly. Bond markets in Europe and US could guide the next move in the currency markets ahead.

Technically, USD/JPY's break of 107.79 minor support suggests resumption of fall from 108.99. Break of 107.53 should bring retest of 106.78 low. EUR/JPY is set to test 120.78 and break will resume larger fall from 127.50, to 118.62 low. GBP/JPY is on track to 131.51 low. AUD/USD recovered after drawing support from 4 hour 55 EMA, maintaining near term bullishness. Focus is back on 0.7047 resistance today.

In Asia, Nikkei is down -1.74%. Hong Kong HSI is down -0.49%. China Shanghai SSE is down -0.65%. Singapore Strait Times is down -0.30%. Japan 10-year yield is down -0.0081 at -0.133. Overnight, DOW dropped -0.42%. S&P 500 dropped -0.65%. NASDAQ dropped -0.46%. 10-yer yield dropped -0.061 to 2.061.

Australian employment grew 0.5k, unemployment rate unchanged at 5.2%

Australia employment grew just 0.5k in June, below expectation of 9.1k. Full-time jobs increased 21.1k while part-time jobs decreased -20.6k. Unemployment rate was unchanged at 5.2% with participation rate steady at 66.0%.

ABS Chief Economist Bruce Hockman said, "Australia's participation rate was at 66 per cent in June 2019, which means nearly two of every three people are currently participating in the labour market. The participation rate for 15 to 64 year olds was even higher and closer to four out of every five people."

Australian NAB quarterly business confidence improved, but likely short-lived

Australia NAB quarterly Business Confidence index rose from 0 to 6 in Q2. Current Business Conditions index dropped from 4 to 1. Next 12 months Business Conditions index rose from 22 to 23. Next 12 months Capex Plans rose from 22 to 24.

Alan Oster, NAB Group Chief Economist said the down tend in conditions continued. And, the quarterly survey has now show a below average reading, for the first time since 2014. The decline in conditions suggests "business sector has lost significant momentum over the past year", and "we are unlikely to see a substantial pickup in growth in the Q2 national accounts".

On the other hand, "the strong lift in confidence appears to be related to the outcome of the Federal election, with the bulk of the survey conducted post election day and also around the time of firming expectations of rate cuts". But such lift should be short-lived as already shown in the June monthly business survey.

Japan's export dropped for the seventh straight month

In non seasonally adjusted terms, Japan exports dropped -6.7% yoy to JPY 6.585T in June. That's the seventh straight month of decline. Imports dropped -5.2% yoy to JPY 5.995T. Trade surplus came in at JPY 0.589T.

Looking at some details, exports to China dropped -10.1 yoy and imports dropped -5.3% yoy. That's the fourth straight month of decline in exports to China. Exports to US rose 4.8% yoy while imports dropped -2.5% yoy. That's the ninth straight month of increase in exports to US.

In seasonally adjusted terms, exports rose 4.8% mom to JPY 6.554T in June. Imports dropped -4.4% mom to JPY 6.568T. Trade deficit came in at JPY -0.014T.

Fed's Beige Book: Outlook generally positive for the coming months

Fed's Beige Book noted that outlook generally was "positive for the coming months" with expectations of "continued modest growth". Though, there were "widespread concerns about the possible negative impact of trade-related uncertainty".

Employment grew at a "modest pace" but "slightly slower" than previous reporting period. Compensation grew at a "modest-to-moderate pace" but some contacts "emphasized significant increases in entry-level wages".

Rate of price inflation was "stable to down slightly" from prior period. Districts generally saw "some increase in input costs, stemming from higher tariffs and rising labor costs". However, the ability to pass on to final prices was "restrained by brisk competition".

Looking ahead

UK retail sales will be the main focus in European session while Swiss trade balance will also be featured. Later in the day, US will release Philly Fed survey, jobless claims and leading index.

USD/JPY Daily Outlook

Daily Pivots: (S1) 107.81; (P) 108.07; (R1) 108.20; More...

Intraday bias in USD/JPY is turned to the downside with break of 107.79 temporary low. Corrective rebound from 106.78 should have completed at 108.99, after rejection by 55 day EMA. Break of 106.78 support will resumer larger decline from 112.40 to retest 104.69 low. On the upside, break of 108.99 resistance is needed to confirm resumption of rebound from 106.78. Otherwise, risk will remain on the downside in case of recovery.

In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we'd expect strong support above 98.97 (2016 low) to contain downside to bring rebound. In any case, break of 112.40 is needed to the first serious sign of medium term bullishness. Otherwise, further decline will remain in favor in case of rebound.

Economic Indicators Update

Details better than headline

On the headline, the June employment report for June didn’t look too impressive, with a mere net 500 jobs added in the month. However, drilling down into the details showed that 21,100 full-time jobs made up the total with a loss of 20,600 part-time ones. The rest of the numbers held no surprises, with the unemployment rate steady at5.2% with an unchanged participation rate at 66%.

The initial reaction in the currency markets was slow, but once the full-time category figures were known, AUD/USD jumped up to an intra-day high of 0.7027 and then subsequently extended the climb to 0.7030. The FX pair has climbed above the 55-hour moving average for the first time in two days and likely has eyes on the Fibonacci retracement level at 0.7034 on the hourly charts.

AUD/USD Hourly Chart

Bank of Korea joins the doves

In an unexpected move, the Bank of Korea trimmed its seven-day repo rate by 25bps to 1.50% at its policy meeting today. The decision was not unanimous among the board members, with one members preferring to keep rates unchanged. The majority of analysts polled had expected the Bank to remain on hold, preferring to wait until the Fed had made its move.

At the same time, the Bank cut its 2019 GDP growth forecast to 2.2% from 2.5%, mostly due to slower exports, and provided initial guidance for 2020 at 2.5% to 2.6%. The inflation forecast was cut to 0.7% for this year from 1.1% and is seen gradually rising during 2020 to the mid-1% levels.

UK retail sales on tap

Retail sales in the UK are expected to fall 0.3% m/m in June, according to the latest survey of economists, a slight improvement from May’s 0.5% decline. The US data slate has only second-tier data with the Philadelphia Fed manufacturing survey seen rebounding to 5.0 in July after a disappointing 0.3 reading in June. We also have speeches from Fed’s Bostic and Williams, a dove and a hawk respectively, who are unlikely to contradict the Fed’s current guidance of a rate cut this month.