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Another factor that pressures the greenback is Trump again criticized the person he chose as Fed chair, Jerome Powell.

The occasion was a fund raiser at the Hamptons on Friday. Bloomberg reported that Trump said he expected Jerome Powell to be a "cheap-money" Fed chairman and lamented that his nominee instead raised interest rates.

Just a month ago, Trump already verbally intervened by saying in a CNBC interview that he was unhappy with Fed's rate hikes. And that a strong dollar is disadvantageous to the US.

Anyway, if Trump did have that expectation and Powell turned out to be not what he expected, it's obvious that Trump is blind. Powell has been consistent with who he is, till now,  since taking up the job as Fed Governor.

Also, there is a voting system in Fed. Being cheap-money or not, Powell only has one vote. Or, a dictator forgot this simple fact? Or is Trump just scapegoating a single person again?

Atlanta Fed President Raphael Bostic's comments seem to be a factor that's weighing down Dollar slightly in a slow market today.

Bostic said that Fed is doing well on inflation now, and the economy doesn't need as much stimulus as it had before. Also, GDP is strong and unemployment is "very, very low" historically". This part seems to be a bit hawkish.

However, Bostic also warned that yield curve is currently "extremely flat" and fed has concerns over the flatness. He went further to emphasize that he won't vote for anything that knowingly inverts yield curve.

The Japanese yen has posted losses in the Monday session. In the North American session, USD/JPY is trading at 110.46, down 0.04% on the day. In economic news, there are no data releases out of the U.S or Japan.

Is the yen headed below the 110 line? This last occurred in late June, but recent losses in USD/JPY could send the pair into 109-territory as early as this week. The yen has posted gains of 1.2% in August, with the currency benefitting from the risk apprehension due to the rash of tariffs that the U.S has slapped on its major trading partners, including Japan. However, there is some hope that things are on the mend, as the U.S and China have agreed to hold low-level trade talks this week in Washington. Traders shouldn’t expect a dramatic breakthrough, but the fact that the two sides are talking has investors cheering. The U.S is unhappy with the Chinese protection of local markets and technology transfers required in order for U.S businesses to operate in China, but it’s questionable if the Chinese will show much flexibility. Both sides have slapped tariffs of $34 billion on each other’s products, with another $16 billion in tariffs scheduled for August 23. If the talks show some progress, such as the cancellation of the upcoming tariffs, we could see some volatility from the currency markets.

Markets:

Global core bonds eked out some gains today. The move occurred from the start of US trading. Volumes were extremely thin with the eco/event calendar empty apart from tonight’s speech by Atlanta Fed governor Bostic. The voting FOMC member has a rather neutral stance. Talking in favour of two more rate hikes this year could offer some counterweight to current moves. While stock markets perform well today, some of the core bond flows could nevertheless be related to new minor selling pressure in the likes of TRY (two downgrades over the weekend) or BRL. The US yield curve bull flattens at the time of writing with yields declining by 1 bp (2-yr) to 2.9 bps (30-yr). The German curve flattens as well with yield changes ranging between +0.5 bps (2-yr) and -0.7 bps (5-yr). 10-yr yield spread changes vs Germany narrow up to 4 bps (Portugal & Spain).

Due to lack of data, dollar trading largely traced back to technical considerations. Initially, the dollar possibly profited from investors’ renewed hope in the midlevel trade talks between the US and China taking place this Wednesday. The Turkish lira (and other EM currencies) remain in the defensive, perhaps supporting the dollar also via safe haven flows, despite American and European stocks suggesting a moderate risk on environment. Fortunes changed in the early afternoon as the greenback lost most of the intraday gains. We didn’t identify any specific triggers for this turnaround. Instead, US markets entering the trading arena on a typical low volume Summer day might be the most important instigator. At the time of writing, EUR/USD is changing hands around 1.1430, only marginally lower than Friday’s close. USD/JPY initially edged higher before trading back lower at 110.40.

EUR/GBP traded with a negative bias today as the currency pair slipped throughout the day, failing to hold on to Friday’s gains. In absence of any relevant market data or meaningful brexit headlines, EUR/GBP mimicked to some extend its dollar counterpart. Investors probably await tomorrow’s revival of the brexit talks between Brexit minister Raab and EU’s chief negotiator Barnier before placing any bets. EUR/GBP currently trades around 0.895 (-0.30%). Cable gains (currently at 1.2775) as the dollar lost steam this afternoon.

News Headlines:

China’s state-backed funds, or the so-called national team, purchased blue-chip stocks at the end of today’s Asian session to support the A-share market. They bought shares with the aim to stabilize the market, not to push up stock prices. The China Securities Regulatory Commission didn’t respond to questions on the matter (Bloomberg).

After Germany’s economy expanded faster than expected in Q2, the economic growth should remain on a solid growth path in Q3, according to the Bundesbank. The industry would only add little to the growth. Instead, private consumption would be the main driver of the expansion.

A diverse set of US businesses have warned that the new tariffs on $200bn of Chinese import will raise the price of day-to-day products for households. Unlike former US tariffs, who target Chinese industrial machinery and other intermediate goods, the new tariffs could directly hit thousands of consumer products.

GBPAUD is paring some of the losses from previous days but remains in a descending movement that has been holding since April 26. The pair exited from the trading range between 1.8180 and 1.8475 around mid-May and retreated sharply, posting a seven-month low of 1.7280 on August 9.

The technical indicators, though, are sending neutral to positive signals, suggesting that a bullish retracement is possible in the near term. The RSI indicator is positively-sloped in negative territory, while the MACD oscillator jumped above its trigger line though it still remains below the zero line.

Should the price continue to extend gains in the next few days, traders could look for resistance at the 1.7655 barrier, taken from the high on August 14. In the case of an upward penetration, the pair could overcome the downtrend line and reach the 50- and then the 200-day SMA near 1.7715 and 1.7754 respectively. More gains could push the price towards the 1.7820 hurdle, identified by the August 2 peak.

On the downside, a decline could find support at the 1.7280 level, while if the bearish moves appear stronger, the price could hit the 1.7100 strong psychological level.

To sum up, GBPAUD stands below the 50- and 200-day SMAs signaling downside pressure, however, a climb above them could shift the medium-term bias from bearish to bullish.

WTI oil price stands at the back foot at the beginning of the week, following fall after strong upside rejection on Friday, weighed by weak industrial data from China and concerns over emerging market economies, with focus on Turkey. Strong bearish close last week, accompanied with last Friday's shooting star pattern, maintain negative tone and keep the downside at risk for renewed attempt at key support (200SMA at $64.68) which repeatedly contained bearish attempts last week. Firm break here would open way towards next key support at $63.58 (18 June trough). Bearish daily techs support scenario, with falling 10SMA ($68649) expected to cap and maintain bearish pressure.

Res: 65.39; 66.49; 67.71; 68.35
Sup: 64.68; 63.58; 62.62; 60.00

Copper price hit new recovery high at $2.6810 on Monday, in extension of two-day rally from last week's low at $2.5510 (the lowest since June 2017. Easing trade tensions between the US and China, as well as signs of stronger demand, boosted metal's price. Bounce from $2.5510 low retraced so far nearly 50% of $2.8170/$2.5510 bear-leg, but holds for now below pivotal barrier, provided by falling 10SMA ($2.6931) break of which would generate fresh bullish signal for extended recovery. On the other side, daily MA's remain in firm bearish setup and momentum is weakening, which signals that broader bears are going to resume after limited corrective action. Upticks should be ideally capped below $2.70 to keep bears intact for fresh push lower. Last week's low at $2.5510 marks initial pivot, guarding key points at $2.50 (psychological) and $2.4720/$2.4647 (May 2017 trough/Fibo 61.8% of larger $1.9360/$3.3200 ascend).

Res: 2.6930; 2.7000; 2.7154; 2.7375
Sup: 2.6410; 2.6000; 2.5510; 2.5000

Daily Pivots: (S1) 110.20; (P) 110.62; (R1) 110.94; More...

Intraday bias in USD/JPY stays neutral and outlook is unchanged. The corrective decline from 113.17 might extend lower. But downside should be contained by 38.2% retracement of 104.62 to 113.17 at 109.90 to bring rebound. On the upside, above 111.42 will target 112.14 minor resistance first. Break will argue that larger rally is possibly resuming for above 113.17.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.36 support holds.

Daily Pivots: (S1) 0.9933; (P) 0.9956; (R1) 0.9980; More....

No change in USD/CHF's outlook as it's staying in consolidation between 0.9894/9984. Intraday bias remains neutral at this point. On the upside, above 0.9984 will resume the rebound from 0.9866 to retest 1.0067 high. Decisive break there will resume whole rally from 0.9186. On the downside, below 0.9894 might extend the consolidation pattern from 1.0056 with another falling leg, possibly through 0.9787 support. But downside should be contained by 38.2% retracement of 0.9186 to 1.0056 at 0.9724 to bring rebound.

In the bigger picture, current development suggests that the consolidation pattern from 1.0056 is extending. As long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds, we'd expect rise from 0.9186 to resume at a later stage to retest 1.0342 key resistance (2016 high). However, sustained break of 0.9724 fibonacci level will bring deeper fall, as another declining leg in the long term range pattern.

Daily Pivots: (S1) 1.1387; (P) 1.1417 (R1) 1.1467; More.....

Intraday bias in EUR/USD remains mildly on the upside as recovery from 1.1300 short term bottom is in progress for 1.1509 support turned resistance. However, we'd expect upside to be limited below 1.1745 resistance to bring down trend resumption. On the downside, break of 1.1300 support is now needed to confirm down trend resumption. Otherwise, near term outlook is neutral for more consolidation first.

In the bigger picture, the down trend from 1.2555 medium term is in progress for 61.8% retracement of 1.0339 to 1.2555 at 1.1186. Note again that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Sustained break of 1.1186 could pave the way back to retest 1.0339 low. For now, outlook will remain bearish as long as 38.2% retracement of 1.2555 to 1.1300 at 1.1779 holds, even in case of strong rebound.