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Britain’s Consumer Borrowing Advanced In June
For the 24 hours to 23:00 GMT, the GBP rose 0.23% against the USD and closed at 1.3136.
On the macro front, UK's net consumer credit climbed £1.6 billion in June, compared to a revised similar rise in the prior month. Market participants had envisaged net consumer credit to advance £1.4 billion. Moreover, the nation's mortgage approvals rose to a 5-month high level of 65.6K in June, more than market expectations for a rise to a level of 65.5K. Number of mortgage approvals had registered a revised reading of 64.7K in the previous month.
In the Asian session, at GMT0300, the pair is trading at 1.3119, with the GBP trading 0.13% lower against the USD from yesterday's close.
Overnight data indicated that GfK consumer confidence unexpectedly dropped to a level of -10.00 in July, defying market expectations for a steady reading. In the prior month, the consumer confidence had registered a reading of -9.0. Additionally, the nation's Lloyds business barometer in the UK remained steady at a level of 29.0 in July.
The pair is expected to find support at 1.3094, and a fall through could take it to the next support level of 1.3069. The pair is expected to find its first resistance at 1.3148, and a rise through could take it to the next resistance level of 1.3177.
In absence of key economic releases in the UK today, traders would keep an eye on global macroeconomic factors for further direction.
The currency pair is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.
Japan’s Jobless Rate Rises In June, While Industrial Production Falls In The Same Month
For the 24 hours to 23:00 GMT, the USD declined slightly against the JPY and closed at 111.02.
In the Asian session, at GMT0300, the pair is trading at 111.16, with the USD trading 0.13% higher against the JPY from yesterday's close.
Overnight data indicated that Japan's unemployment rate climbed to 2.4% in June, following a rate of 2.2% in the prior month. Market participants had anticipated unemployment rate to rise to 2.3%. Moreover, the nation's flash industrial production unexpectedly declined 1.2% on a yearly basis in June, defying market expectations for an advance of 0.6%. In the preceding month, industrial production had increased 4.2%.
The pair is expected to find support at 110.97, and a fall through could take it to the next support level of 110.79. The pair is expected to find its first resistance at 111.28, and a rise through could take it to the next resistance level of 111.41.
Looking ahead, investors will keep an eye on Japan's consumer confidence index for July, along with housing starts and construction orders, both for June, set to release in a while.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Switzerland’s KOF Economic Barometer Dropped In July
For the 24 hours to 23:00 GMT, the USD declined 0.66% against the CHF and closed at 0.9882.
In the economic news, Switzerland's KOF economic barometer fell to a level of 101.0 in July, more than market expectations for a drop to a level of 101.5. In the previous month, the KOF economic barometer had recorded a revised reading of 101.3. Other data showed that, total sight deposits eased slightly to a level of CHF576.3 billion in the week ended 27 July, from CHF576.4 billion in the previous week.
In the Asian session, at GMT0300, the pair is trading at 0.9881, with the USD trading a tad lower against the CHF from yesterday's close.
The pair is expected to find support at 0.9850, and a fall through could take it to the next support level of 0.9820. The pair is expected to find its first resistance at 0.9934, and a rise through could take it to the next resistance level of 0.9988.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Loonie Trading Lower In The Asian Session
For the 24 hours to 23:00 GMT, the USD declined 0.32% against the CAD and closed at 1.3030.
In the Asian session, at GMT0300, the pair is trading at 1.3064, with the USD trading 0.26% higher against the CAD from yesterday’s close.
The Canadian dollar weakened against the US dollar, amid reports that Canada has been rejected from US-Mexico NAFTA talks.
The pair is expected to find support at 1.3007, and a fall through could take it to the next support level of 1.2951. The pair is expected to find its first resistance at 1.3108, and a rise through could take it to the next resistance level of 1.3153.
Trading trend in the Loonie will be determined by Canada’s gross domestic product (GDP) data for May, slated to release later in the day.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Australia’s Building Approvals Rebounded In June
For the 24 hours to 23:00 GMT, the AUD rose 0.19% against the USD and closed at 0.7409.
LME Copper prices declined 1.1% or $66.5/MT to $6185.0/MT. Aluminium prices declined 0.1% or $1.0/MT to $2054.0/MT.
In the Asian session, at GMT0300, the pair is trading at 0.7419, with the AUD trading 0.13% higher against the USD from yesterday's close.
Data released overnight indicated that, Australia's seasonally adjusted building approvals rebounded 6.4% on a monthly basis in June, more than market expectations for a rise of 1.0%. In the previous month, building approvals had registered a revised drop of 2.5%.
Elsewhere in China, Australia's largest trading partner, manufacturing PMI eased to a level of 51.2 in July, compared to market expectations of a drop to a level of 51.3. The PMI had registered a reading of 51.5 in the prior month.
The pair is expected to find support at 0.7395, and a fall through could take it to the next support level of 0.7372. The pair is expected to find its first resistance at 0.7433, and a rise through could take it to the next resistance level of 0.7448.
Going forward, traders will closely monitor Australia's AiG performances of manufacturing index for July, slated to release overnight.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Extends Its Losses In The Morning Session
For the 24 hours to 23:00 GMT, Gold declined slightly against the USD and closed at USD1230.40 per ounce, ahead of the Federal Reserve’s monetary policy meeting.
In the Asian session, at GMT0300, the pair is trading at 1229.9, with gold trading a tad lower against the USD from yesterday’s close.
The pair is expected to find support at 1227.10, and a fall through could take it to the next support level of 1224.30. The pair is expected to find its first resistance at 1233.40, and a rise through could take it to the next resistance level of 1236.90.
The yellow metal is showing convergence with its 20 Hr and 50 Hr moving averages.
Silver: While Metal Trading On A Weaker Footing In The Asian Session
For the 24 hours to 23:00 GMT, Silver rose 0.23% against the USD and closed at USD15.52 per ounce.
In the Asian session, at GMT0300, the pair is trading at 15.48, with silver trading 0.23% lower against the USD from yesterday’s close.
The pair is expected to find support at 15.41, and a fall through could take it to the next support level of 15.34. The pair is expected to find its first resistance at 15.56, and a rise through could take it to the next resistance level of 15.64.
The white metal is showing convergence with its 20 Hr and 50 Hr moving averages.
Crude Oil: Oil Trading Higher, Ahead Of API’s Weekly Crude Oil Stockpiles Data
For the 24 hours to 23:00 GMT, Crude Oil rose 1.64% against the USD and closed at USD70.07 per barrel, amid strong demand and ongoing concerns over global supply.
In the Asian session, at GMT0300, the pair is trading at 70.16, with oil trading 0.13% higher against the USD from yesterday's close.
The pair is expected to find support at 69.17, and a fall through could take it to the next support level of 68.18. The pair is expected to find its first resistance at 70.79, and a rise through could take it to the next resistance level of 71.42.
Crude oil is trading above its 20 Hr and 50 Hr moving averages.
USD/JPY Daily Outlook
Daily Pivots: (S1) 110.92; (P) 111.04; (R1) 111.20; More...
USD/JPY spikes higher to 111.43 earlier today but upside is limited below 111.53 minor resistance. Intraday bias stays neutral for consolidation above 110.58 temporary low. with 111.53 intact, deeper fall is expected. On the downside, below 110.58 will extend the corrective fall from 113.17. But in that case, we'd expect strong support from 38.2% retracement of 104.62 to 113.17 at 109.90 to bring rebound. On the upside, break of 111.53 will turn bias to the upside for retesting 113.17 high.
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.
BoJ: Growth to slow in 2019/20, inflation expectations lagging behind
In the latest Outlook for Economic Activity and Prices, BoJ said the economy is "likely to continue growing at a pace above its potential in fiscal 2018". For fiscal 2019 through fiscal 2020, the expanding trend is expected to continue, "partly supported by external demand", but pace will "decelerate" due to "cyclical slowdown in business fixed investment" and the impact of planned sales tax hike.
Year-on-year ex-food CPI stayed positive but continued to show "relatively weak developments". And, rise in medium- to long-term inflation expectations has been "lagging behind". BoJ noted that's because "the mindset and behavior based on the assumption that wages and prices will not increase easily have been deeply entrenched". But inflation is still expected to increase gradually towards 2% target, "although it will take more time than expected".
For fiscal 2018, risks are generally balanced. But risks are skewed to the downside for fiscal 2019.