Sample Category Title

The U.S. dollar was seen posting gains on Friday as price action remained strong toward the close of the week. The economic data was quiet for the most part. Switzerland's PPI figures released earlier in the day showed a 0.2% increase on the month as expected.

The U.S. import prices fell 0.4% missing estimates of a 0.1% increase instead. Previous month's data was revised higher to 0.9%.

Earlier in the day, China’s GDP report showed that the economy advanced 6.7% matching estimates. Industrial production was however weaker, rising just 6.0% and falling short of the 6.5% forecast.

The economic dataincrease on the month as expected. for the day includes the U.S. retail sales figures. Economists forecast that headline retail sales increased 0.4% on the month. This marks a slower pace of increased compared to the 0.8% gain seen the month before. Core retail sales are also forecast to rise 0.4%.

New Zealand will be releasing its quarterly CPI later tonight. Forecasts point to a 0.5% increase in inflation during the second quarter.

Rates: Risk sentiment, Powell's testimony and US eco data to colour trading week

The US S&P 500 tested final resistance before the all-time high on Friday, but a break didn't occur. Are earnings this week strong enough to clear the hurdle? Apart from risk sentiment, bond traders eye US eco data, Fed Powell's testimony before US Congress and heavy EMU bond supply this week. US Treasuries could outperform German Bunds.

Currencies: Dollar momentum eases. EUR/USD tries to go higher in established range

On Friday, the dollar momentum turned a bit softer. The move was probably mainly technical in nature. Today, the US retail sales might be ok, but maybe not strong enough to sustain further USD gains. Fed's Powell

The Sunrise Headlines

• US equity markets closed on Friday with limited gains, ranging from 0.03% (Nasdaq) to 0.38% (Dow Jones). Asian equities are trading in red with China underperforming (-0.7%). Japanese markets are closed for Marine Day.
• Chinese Q2 GDP increased 1.8% QoQ and 6.7% YoY, down from 6.8% last quarter. Chinese retail sales in June rose to 9.0% YoY (vs. 8.5% in May) while its industrial production growth slowed to 6.0% YoY (coming from 6.8% in May).
• U. of Michigan consumer sentiment declined from 98.2 to 97.1, due to rising concerns about the negative effects of the trade policy on growth, according to the survey's chief economist.
• Oil retreated below $71 (WTI) and $75 (Brent) after Saudi Arabia was said to offer extra crude supplies to some customers whereas the US considers tapping into its strategic oil reserves in an attempt to keep oil prices in check.
• Fitch downgraded Turkey to BB (neg outlook) citing the widening current account deficit, a steep rise of inflation (+15%) and the negative effects of the plunge in the exchange rate on the private's sector foreign-denominated debt
• Stakes for the Helsinki summit between US President Trump and his Russian counterpart Putin have risen as 12 Russian intelligence officers were indicted on Friday for their alleged role in the email hack during the US elections.
• Today's eco calendar contains US retail sales (June) and the NY Empire Manufacturing index (July). Blackrock (12:00), Bank of America (12:45) and Netflix (22:05) are releasing Q2 earnings

Currencies: Dollar Momentum Eases. EUR/USD Tries To Go Higher In Established Range

EUR/USD to drift higher in established range?

On Friday, Investors were looking for a new story as the trade war moved to the background. European equities traded modestly positive, but move wasn't really convincing. Initially, the dollar maintained the benefit of the doubt. EUR/USD dropped to the 1.1615 area. Later, the USD momentum eased, maybe as a first set of US bank earnings were mixed. Consumer confidence was also softer than expected. EUR/USD reversed its initial decline and finished at 1.1685. The USD/JPY rally also stalled. This morning, Asian equities mostly trade with modest losses. Japanese markets are closed. China Q2 GDP printed at 1.8% Q/Q and 6.7% Y/Y, marginally stronger than expected. Still, the data weren't able to remove uncertainty the trade war. The yuan holds near its recent bottom against the dollar. At the same time, the dollar trades slightly in defensive against the euro (EUR/USD high 1.16 area) and even the Aussie dollar. The positive USD momentum from mid last week eased. Today, US retail sales and the Empire manufacturing are interesting. Retail sales are expected to hold a positive momentum. We don't have strong reasons to take a different view from the consensus. Question is whether an in-line report will be enough to support further USD gains. Later this week, Fed's Powell will hold its semiannual testimony before Congress and the (US) earnings season will come in full swing. Uncertainty on the trade war might make Powell's message less hawkish than would otherwise have been the case. Mid last week, the dollar got the benefit of the doubt, but USD momentum eased end last week. EUR/USD still hovers in the 1.15/1.1850 trading range. As the downside looks blocked for now, maybe there is some room for EUR/USD to go back higher in the range, if US data/news is not really strong.

On Friday, diffuse Brexit headlines continued to set the tone for sterling trading. Initially negative comments from US president Trump on US-UK trade deal in case of a soft Brexit weighed on sterling, but the UK currency regained some ground later in the session. In a broader perspective, sterling held in the 0.88/0.89 consolidation pattern. Today, May will face another Brexit test in Parliament. Her plans probably will survive, but the broader Brexit process remains highly uncertain. Especially with EUR/USD receiving a better bid, we assume that there is not much room for further sterling gains against the euro.

EUR/USD: downside test rejected for now. Pair to drift higher in the range?

Daily Pivots: (S1) 1.3145; (P) 1.3193; (R1) 1.3284; More...

GBP/USD's rebound from 1.3102 extends higher today. With 1.3244 minor resistance breached, intraday bias is mildly on the upside for 1.3362 for extending the consolidation pattern from 1.3048. Nonetheless, upside should be limited by 1.3471 to bring larger decline resumption eventually. On the downside, break of 1.3048 will resume fall from 1.4376 for 1.2874 fibonacci level next.

In the bigger picture, whole medium term rebound from 1.1936 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4179). Fall from 1.4376 should extend to 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 next. We'll pay attention to the reaction from there to asses the chance of long term down trend resumption. On the upside, sustained break of 38.2% retracement of 1.4376 to 1.3048 at 1.3555 is needed to indicate medium term bottoming. Otherwise, outlook will remain bearish in case of strong rebound.

Daily Pivots: (S1) 0.9996; (P) 1.0033; (R1) 1.0053; More...

Intraday bias in USD/CHF remains neutral as consolidation from 1.0067 temporary top is still in progress. Deeper retreat could be seen but downside should be contained by 4 hour 55 EMA (now at 0.9958) to bring another rally. The rise from 0.9186 should have just resumed. Above 1.0067 will target 61.8% projection of 0.9186 to 1.0056 from 0.9787 at 1.0325, which is close to 1.0342 key resistance.

In the bigger picture, rise from 0.9186 is seen as a leg inside the long term range pattern. After drawing support from 55 day EMA, it's now resuming for 1.0342 key resistance. For now, we'd still cautious on strong resistance from there to limit upside. Meanwhile, break of 0.9787 support is needed to signal completion of the rise. Otherwise, outlook will remain bullish even in case of deep pull back.

The S&P 500 rose 1.5% last week for the second week in a row, reflecting the return of risk appetite and putting the trade war noise in the back seat. The index is currently up 4.8% year-to-date and trading above the key level of 2,800. Whether the rally in equities will be sustained this week will likely depend on multiple factors including earnings, politics and monetary policy.

So far, earnings from the big U.S. banks have been mixed. J.P. Morgan Chase, Citigroup,and Wells Fargo all saw their shares decline after reporting results on Friday. However, out of the 5% of companies who announced actual results, 89% of the S&P 500 companies managed to beat EPS which sounds encouraging. Investors shouldn't just focus on Q2 figures but also on the guidance for coming quarters, especially given that the stronger Dollar and trade worries may start having a negative impact on forecasts.

Last week, the U.S. proposed fresh tariffs on $200 billion worth of Chinese goods;China still has yet to respond to the new threat which is likely to dominate the headlines again. It will also be interesting to see if today's E.U. -China summit will lead to a stronger coalition between the two economic powers as both continue to struggle with Trump's administration.

The summit between presidents Trump and Putin will also take centre stage today, especially after 12 Russian agents were indicted in Mueller Investigation. The summit also comes after Trump clashed with his NATO allies last week in Brusselsover their defense spending policies. It's hard to expect the outcome of the meeting, but the U.S' current European allies are certainly worried.

Investors and traders will also keep a close eye on Fed Chair Jerome Powell, who will deliver his semi-annual testimony before Congress on Tuesday. Although he's likely to remain upbeat on the U.S' economic growth prospects, he still needs to address how central bank will react if the ongoing trade disputesescalate further in the coming months. Any signs of slowing down the pace of interest rate hikes will drag the Dollar lower.

Sterling will facea new test today, as Theresa May's Brexit strategy will be put to vote in Parliament. Brexiters want May to change course on her strategy,which has already led to several resignations from senior Tories. Although May is not likely to be defeated in this vote, a high number of oppositionis still likely to undermine negotiations going forward.

The British pound has regained bullish momentum against the US dollar, after US President Donald Trump's speech with British Prime Minister Theresa May reaffirmed the two countries commitment to a future trade deal. The GBP/USD pair has now moved back above the key 1.3205 level and is currently testing the 200-period moving average on the four-hour time frame.

The GBPUSD pair is only bearish while trading below the 1.3205 level, key technical support is found at the 1.3170 and 1.3133 levels.

If the GBPUSD pair starts to trade above the 1.3235 level, buyers will likely target the 1.3255 and 1.3300 resistance levels.

Daily Pivots: (S1) 112.14; (P) 112.48; (R1) 112.69; More...

Intraday bias in USD/JPY remains neutral as consolidation from 112.79 temporary top is in progress. Deeper retreat could be seen. But downside should be contained well above 111.13 resistance turned support to bring rally resumption. Current development affirms the case of medium term reversal. Above 112.79 will target 61.8% projection of 104.62 to 111.39 from 109.36 at 113.54 first. Break will put focus on 114.73 key resistance for confirming our bullish view.

In the bigger picture, current development, with the solid break of medium term channel resistance from 118.65 (2016 high), affirm our view that corrective fall from there has 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 now be the preferred case as long as 119.36 support holds.

The euro currency has once again recovered upside momentum against the greenback, after the US dollar index failed to hold onto gains above the 95.00 level during the US trading session on Friday. The EURUSD pair is now trading above its 200-period moving average on the four-hour timeframe, whilst the MACD indicator on the four-hour timeframe is currently pointing to further upside.

The EURUSD pair is bullish while trading above the 1.1681 level, key resistance is now found at the 1.1700 and 1.1750 levels.

If the EURUSD pair moves below the 1.1681 level, key technical support is found at the 1.1650 and 1.1630 levels.

Investors are bracing for a highly active week in the financial markets, with economic data, central bankers and corporate earnings in focus. On Monday, a high-profile meeting between US President Donald Trump and Russian counterpart Vladimir Putin will draw headlines.

The Trump-Putin meeting will take place in Helsinki. President Trump is expected to press his Russian counterpart on allegations of meddling in the US presidential election. However, Trump told CBS over the weekend that he has “low expectations” for the upcoming summit.

In terms of economic data, the Italian government will report on its trade balance with the European Union and the rest of the world at 08:00 GMT. One hour later, the European Commission's statistical agency will do the same. Brussels' trade surplus is forecast to rise to a seasonally adjusted €19.7 billion in May compared with €18.1 billion the previous month.

Shifting gears to North America, the US Department of Commerce will issue its June retail sales report at 12:30 GMT. Receipts at retail stores are projected to rise 0.6% for June compared with a 0.8% increase in May. Excluding the volatile automobile component, retail sales likely rose 0.4%, according to a median estimate of economists.

Separately, the New York Federal Reserve Bank will issue the Empire State manufacturing index for July. The monthly reading is projected to slide to 22.75 from 25.00 in June.

Later in the session, the US government will report on May business inventories – a figure that is expected to rise 0.4% month-on-month for May.

EUR/USD

Europe's common currency rebounded sharply on Friday after hitting more than one-week lows. EUR/USD bottomed near 1.1627 before recovering near 1.1690 later in the session. At the time of writing, the pair is trading at 1.1678, declining 0.1% from the previous close. From a technical perspective, EUR/USD is trading above the 20-day moving average, which offers immediate support near the 1.1650 level. On the opposite side of the ledger, resistance is likely found at 1.1695.

GBP/USD

Cable staged a dramatic recovery on Friday, rebounding more than 100 pips to reach a high near 1.3240. Although downside risks remain, GBP/USD has found support at the 10-day moving average. Investors should remain on high alert for Brexit negotiations, which have been a source of anxiety and confusion for sterling now that the UK is pursuing a soft exit from the European Union.

USD/JPY

USD/JPY has defied the correction that befell other dollar pairs on Friday. The pair continues to trade at six-month highs, with prices now treading near 1.1240. Immediate resistance is likely found at 1.1280, which represents the high from 10 January. On the opposite side of the ledger, immediate support is located at 112.00, the low from 12 July.

Daily Pivots: (S1) 147.97; (P) 148.36; (R1) 149.08; More...

GBP/JPY's rebound resumed after brief retreat and intraday bias is back on the upside Current rise should target 149.99 resistance first. Break there will add more credence to the larger bullish case and target 153.84 resistance next. On the downside, though break of 146.79 will argue that the rebound from 143.76 might be finished and turn bias back to the downside

In the bigger picture, no change in the view that decline from 156.59 is a corrective move. In case of another fall, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. Meanwhile, break of 153.84 should confirm that the correction is completed and target 156.59 and above to resume the medium term up trend.