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For the 24 hours to 23:00 GMT, Gold declined 0.42% against the USD and closed at USD1241.10 per ounce on Friday, amid strength in US dollar and US equites.

In the Asian session, at GMT0300, the pair is trading at 1242.40, with gold trading 0.10% higher against the USD from Friday’s close.

The pair is expected to find support at 1236.53, and a fall through could take it to the next support level of 1230.67. The pair is expected to find its first resistance at 1247.93, and a rise through could take it to the next resistance level of 1253.47.

The yellow metal is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver declined 0.85% against the USD and closed at USD15.83 per ounce on Friday, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 15.84, with silver trading 0.06% higher against the USD from Friday’s close.

The pair is expected to find support at 15.69, and a fall through could take it to the next support level of 15.55. The pair is expected to find its first resistance at 15.99, and a rise through could take it to the next resistance level of 16.15.

The white metal 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, Crude Oil rose 0.63% against the USD and closed at USD70.65 per barrel on Friday, as strike actions in Norway and Iraq hit supplies.

Separately, fresh figures from Baker Hughes disclosed that the number of active US oil rigs remained steady at 863 in the week ended 13 July 2018.

In the Asian session, at GMT0300, the pair is trading at 70.62, with oil trading a tad lower against the USD from Friday’s close, as worries over supply disruptions faded and Libyan ports resumed export activities.

The pair is expected to find support at 69.75, and a fall through could take it to the next support level of 68.89. The pair is expected to find its first resistance at 71.57, and a rise through could take it to the next resistance level of 72.53.

Crude oil is showing convergence with its 20 Hr and 50 Hr moving averages.

First, a review of last week's forecast:

EUR/USD. The forecast for this pair turned out to be absolutely correct. Recall that it assumed first a small growth of the pair to the resistance of 1.1800 (in reality, it rose to the height of 1.1790), and then a fall (it fell to the level of 1.1620). After that, a rebound followed, and the pair completed the trading session in a strong support/resistance zone 1.1685;

GBP/USD. Despite the fact that the volatility was somewhat less than expected, the main trends for this pair were fairly accurately pointed by the graphical analysis on H4 and D1. According to its scenario, the pair was expected to grow to the 1.3400 zone (it rose to 1.3360), and then a sharp drop to the horizon of 1.3000 was expected (it fell to the level of 1.3100).
As expected, another blow to the pound was caused by the government of Great Britain. Last week, key Brexit ministers resigned - Foreign Minister Boris Johnson and Secretary for Brexit David Davis, which put an extra pressure on the pound;

USD/JPY. Despite the trade war between the US and China and the growing demand for the yen as a safe haven, the super soft monetary policy of the Bank of Japan still plays against the currency of this island nation. The main blow to the yen was caused by the rapid growth of Asian stocks and, accordingly, the indices Nikkei and MSCI Asia Pacific. As a result, it fell against all G-10 currencies and lost more than 240 points against the US dollar.

At the end of the five-day period, the traditional correction followed, and the pair froze at 112.35;

Cryptocurrencies. We warned that in the event of any negative news, the ascending trend of bitcoin could very quickly turn from bullish into bearish, leading the pair to June lows. It was said multiple times that in fact all this news is only a virtual excuse, using which large speculators start moving virtual currencies up or down. How, for example, could the theft from the Swiss platform Bancor "some" $23.5 million ($13.5 million according to other sources) affect the sinking of the whole market? No way it could, but as a result, bitcoin collapsed by almost 11%, dragging along all the main altcoins as well.

As for the forecast for the coming week, summarizing the opinions of a number of analysts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

EUR/USD. Oscillators on both H4 and D1 are in complete disarray as to the future of this pair - about a third of them are green, one third are red and one third are neutral gray. As for analysts, 80% of them, supported by graphical analysis on D1, believe that the pair will continue its movement to the horizon 1.1500. Nearest supports are at the levels of 1.1625, 1.1590 and 1.1550.

The upcoming meeting of the presidents of the United States and Russia on Monday, July 16 may strengthen the dollar. Experts do not expect any significant breakthrough from this meeting, but if both leaders express certain optimism on its results, this can play into the hands of the American currency.

An alternative point of view is represented by only 20% of analysts. In their opinion, the pair can once again test the level of 1.1790 and, if successful, rise to resistance 1.1830;

GBP/USD. The resignation of the two main Brexit negotiators means that British Prime Minister Teresa May chose a soft option for her country to leave the EU. And if she keeps her post, this can strengthen the position of the pound in the future. However, right now the market is negative and most analysts (70%) predict the continuation of the fall of the pair GBP/USD first to the level of 1.3100, and then another 50 points lower.

10% of oscillators agree with this forecast, indicating that the pair is overbought, as well as graphical analysis on D1. At the same time, the latter points out that the pair can move in the side corridor in the range 1.3 190-1.3285 for a while;

Also, 70% of experts expect strengthening of the dollar to the Japanese yen as well. In their opinion, the pair USD/JPY will seek to reach the highs of last December in the zone of 113.50. The next goal for it is the last November high. - 114.75.

The graphical analysis on H4 also agrees with this development of events. But on D1, it draws an opposite picture - the fall into the zone 110.25-111.15, and then even lower - to support 109.35.

It should be noted that even now a number of analysts are calling for being very cautious with the dollar, as this currency, according to their forecasts, has already approached the overbought state;

Cryptocurrencies. We listed the factors that could positively affect the growth of the pair BTC / USD, in the previous forecast. Now, a couple of words about the negative side.

In fact, it was quite simple to predict the drop of bitcoin last week - it is enough to connect the points A, B, C and D on the chart to see the attenuation of the rising trend. Now the capitalization of the market is again near the 2018 lows and is about $240 billion. If such drying continues, according to some experts, the process can acquire the character of a collapse. As a result, the bitcoin will be around $3000, and the total market capitalization will not exceed half of the current market capitalization.

Meanwhile, the pair BTC/USD is trading roughly midway between the June lows ($5,790) and the July highs ($6,830) and, if nothing extraordinary happens, it will likely stay in this corridor for a few more weeks.

Daily Pivots: (S1) 130.90; (P) 131.21; (R1) 131.62; More....

EUR/JPY's rally resumes after brief consolidation and breaches 131.52 temporary top. Intraday bias is turned back to the upside. Current rise from 14.61 should target 100% projection of 124.61 to 130.33 from 127.13 at 132.85 next. On the downside, below 130.79 minor support will turn bias to the downside and bring deeper retreat, possibly to 4 hour 55 EMA (now at 130.22) and below. But downside should be contained by 129.55 resistance turned support to bring another rally.

In the bigger picture, the strong break of channel resistance from 137.49 suggests that the decline from there as completed. The three wave structure suggests that it's a correction. With 124.08 key resistance turned support intact, medium term bullishness is also retained. Break of 133.47 will affirm this bullish case and target 137.49 and above. This will now be the favored case as long as 127.13 support holds.

Asian markets are weighed down slightly by a batch of soft economic data from China, but loss is limited so far. At the time of writing, China Shanghai SSE is down -0.47% and stays above 2800 key level throughout the session. Hong Kong HSI is down -0.17%. Singapore Strait Times is down -0.84%. Nikkei is on holiday today. In the currency markets, Yen is trading broadly lower with EUR/JPY and GBP/JPY breached last week's highs. Dollar also weakens mildly as recent near term consolidation is set to extend with another pull back. Sterling is trading as the second strongest one for today. But it's going to face a look of political an data risks ahead in the week.

Released in Asian session, China GDP growth slowed to 6.7% yoy in Q2, down from 6.8% yoy and met expectation. Industrial production growth slowed to 6.0% yoy in June, down from 6.8% yoy and missed expectation of 6.5% yoy. Fixed assets investment growth slowed to 6.0% yoy, down from 6.1^ yoy and missed expectation of 6.2% yoy. Retail sales offered a brighter spot as they grew 9.0% yoy, up from 8.5% yoy and matched expectations. Eurozone trade balance will be featured in European session. But major focus will be on US retail sales, and Empire state manufacturing index.

Technically, as we pointed out in the weekly report that Dollar's up trend is not ready to resume yet. We'll likely see more pull back against Europeans, and possibly against Australian Dollar too. But we're not anticipate steep selloff there. Two Euro crosses are worth a watch today. EUR/GBP's rally attempt failed last week but it's staying above 0.8808 minor support, thus retaining near term bullishness. However break of 0.8808 will be a sign of near term bearish reversal. Similar, despite all the volatility, EUR/AUD is holding above 1.5696 minor support and stays near term bullish. But a solid break of this support level will also be a sign of near term bearish reversal.

EU Tusk and Juncker in China for talk on trade, investment and climate change

European Council President Donald Tusk and European Commission President Jean-Claude Juncker will meet with Chines Premier Li Keqiang in Beijing today for discussions on some practical discussions. Ahead of the meeting European Commission spokesman Margaritis Schinas said the meeting will focus on "trade and investment, on the commitment to combating climate change and investing in clean energy and on foreign and security issues, including the situation on the Korean peninsula". And, the two sides will also talk on the joint commitment to the Iran nuclear deal.

Chinese Ambassador to the EU Zhang Ming wrote in an article in the official People's Daily, urging to deepen cooperation to address global challenges. In particular, he said both sides should "send out a positive message to safeguard multilateralism, liberalize and facilitate trade and investment." Zhang added that "Both of them recognize the necessity to firmly resist unilateralism and trade protectionism, guard the rule-based multilateral trading system with the WTO at its core, push economic globalization in the direction of becoming more open, inclusive, balanced and beneficial to all, reform multilateral trading system with the times, and perfect global economic governance system.

Hard-line Brexiteers to show strength of support to PM May in the Commons

UK Prime Minister Theresa May is going to face tough challenges on her Brexit Plan and even her political survival this week. The Brexit Taxation (Cross-Border Trade) Bill will return to the Commons today. Hard-line Brexiteers are planning to show their strength in support with new amendments, which May is expected to defend. For now it's unlikely for May to be defeated on the amendments. But the debates and vote could reveal the extend of objections to the compromised Brexit plan made at the Chequers. Then the Brexit Trade Bill will come to the commons for third reading on Tuesday. Wednesday is seen as an informal deadline to hold a no-confidence vote in May or there won't be enough time before parliament breaks up for the summer.

Ex-Brexit Minister David Davis blasted May's plan in an article in the Sunday Times, saying it was an "astonishingly dishonest claim" to said there is no worked-out alternative. And he warned that "be in no doubt: under the government's proposal our fingers would still be caught in this mangle and the EU would use it ruthlessly to punish us for leaving and handicap our future competitiveness."

Bundesbank Weidmann told Cabinet: As political risks increase, the government should be prepared to tackle the next crisis

According to a report by Handelsblatt, Bundesbank head Jens Weidmann warned the German Federal Cabinet last week that that even though growth is still "intact", political risks would "increase". More importantly, Weidmann pointed to the slow down in momentum and the downward revision in 2018 growth forecasts from 2.5% to 2.0%. The drop in momentum, according to Weidmann, is a prove that "good economic development could not go on forever". The risks include US protectionist trade policy, Brexit and new geopolitical conflicts.

Weidmann urged the government to prepare for worse times. It takes some time to normalize monetary policy. And for now, ECB "could not react in the next downturn". And because of that, fiscal policy must take on the task should there be a new crisis. But due to their high debt levels, many Eurozone countries would also have limited ability to "cushion" a down turn.

Italy agrees to take some Libya migrants as some EU countries offer help

Italy's far right Interior Minister Matteo Salvini said on Sunday that the country is allowing some of the asylum seekers from Libya to disembark in Sicily. Prime Minister Giuseppe Conte set letters to head of state of other EU nations asking to share responsibility on the Libya migrants. In response, Germany, France, Spain, Portugal and Malta have agreed to take 50 people each.

"Spain will take in 50 of the people rescued yesterday in the Mediterranean. This shows our commitment to offer solutions to migration flows and solidarity with the humanitarian drama," Spanish Prime Minister Pedro Sanchez confirmed and tweeted.

Trump and Putin to meet with low expectations

Trump and Russian President Vladimir Putin are going to have their first ever summit today in the Finnish capital Helsinki. Ahead of the meeting Trump said he was going in with "low expectations". National security adviser John Bolton said the meeting would be "unstructured" and the US was not looking for "deliverable". Russian Foreign Minister Sergei Lavrov echoed and said he had low expectations too.

Trump said last week, before the NATO summit, that Putin "may be the easiest" among NATO and UK. And asked if Putin is a friend of foe, Trump said "I really can't say right now. As far as I'm concerned, a competitor." Later on Sunday, Trump said in a CBS interview that "I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now you wouldn't think of the European Union but they're a foe." He added that "Russia is a foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn't mean they are bad. It doesn't mean anything. It means that they are competitive." So it doesn't matter what the meaning of "foe" is as Trump sees Russia, China and EU as "they".

On the other side, EU seems to be having some emotional responses to what Trump said. European Commission Vice President Frans Timmermans said on Twitter that "calling your best friends foes only makes your real foes happy." And, "Europeans and Americans are bound by history and their shared values. Europeans will never give up on America because America never gave up on us. That's what friends are for." European Council President Donald Tusk said on Twitter that "America and the EU are best friends. Whoever says we are foes is spreading fake news."

Fed Powell to testify this week

The upcoming week is important for a number of currencies. Fed Chair Jerome Powell's Congressional testimonies will catch most attentions. US will also release retail sales while Fed will release Beige book report. Nonetheless, we're not expecting any change to Fed's rate outlook out of the week. UK will release the last batch of key economic data before BoE meeting on August 2. CPI, employment and retail sales will be featured. Upside surprises in these data will nail the case of an August hike. Other events to pay attention to include RBA minutes and Australia employment, New Zealand CPI, Japan CPI, Canada retail sales and CPI.

Here are some highlights for the week ahead

• Monday: China GDP, fixed asset investment, industrial production, retail sales, unemployment rate; Eurozone trade balance; Canada foreign securities purchase; US retail sales, Empire State manufacturing, business inventories;
• Tuesday: New Zealand CPI; RBA minutes; UK employment; US industrial production; NAHB housing index
• Wednesday: UK CPI, PPI; Eurozone CPI final; US housing starts and building permits; Fed's Beige book report
• Thursday: Japan trade balance; Australia employment; Swiss trade balance; UK retail sales; US Philly Fed survey, jobless claims; leading index
• Friday: Japan national CPI, all industry index; German PPI; UK public sector net borrowing; Canada CPI, retail sales

EUR/JPY Daily Outlook

Daily Pivots: (S1) 130.90; (P) 131.21; (R1) 131.62; More....

EUR/JPY's rally resumes after brief consolidation and breaches 131.52 temporary top. Intraday bias is turned back to the upside. Current rise from 14.61 should target 100% projection of 124.61 to 130.33 from 127.13 at 132.85 next. On the downside, below 130.79 minor support will turn bias to the downside and bring deeper retreat, possibly to 4 hour 55 EMA (now at 130.22) and below. But downside should be contained by 129.55 resistance turned support to bring another rally.

In the bigger picture, the strong break of channel resistance from 137.49 suggests that the decline from there as completed. The three wave structure suggests that it's a correction. With 124.08 key resistance turned support intact, medium term bullishness is also retained. Break of 133.47 will affirm this bullish case and target 137.49 and above. This will now be the favored case as long as 127.13 support holds.

Economic Indicators Update

UK Prime Minister Theresa May is going to face tough challenges on her Brexit Plan and even her political survival this week. The Brexit Taxation (Cross-Border Trade) Bill will return to the Commons today. Hard-line Brexiteers are planning to show their strength in support with new amendments, which May is expected to defend. For now it's unlikely for May to be defeated on the amendments. But the debates and vote could reveal the extend of objections to the compromised Brexit plan made at the Chequers. Then the Brexit Trade Bill will come to the commons for third reading on Tuesday. Wednesday is seen as an informal deadline to hold a no-confidence vote in May or there won't be enough time before parliament breaks up for the summer.

Ex-Brexit Minister David Davis blasted May's plan in an article in the Sunday Times, saying it was an "astonishingly dishonest claim" to said there is no worked-out alternative. And he warned that "be in no doubt: under the government's proposal our fingers would still be caught in this mangle and the EU would use it ruthlessly to punish us for leaving and handicap our future competitiveness."

STOCKS

Dow (25019.41, +0.38%) and Dax (12540.73, +0.38%) have risen about 0.38% and looks bullish just now with an upside target of 25250 and 12800 respectively.

Nikkei (22597.35, +1.85%) is trading just below important resistance near 22800 and while that holds, Nikkei could come off in the next few sessions towards 22200. A break above 22800 is necessary to indicate bullishness for the near term.

Shanghai (2808.79, -0.79%) is quiet for the last 2-sessions. A break above 2850 would take the index towards 2900+ levels. But while it remains below 2850, downside chances of re-testing 2750 or lower cannot be negated.

Nifty (11018.90, -0.039%) saw a slight dip on Friday from levels below 11100. Resistance at 11150 on the daily candles may hold in the near term, pushing the index back towards 10900. For now, immediate upside could be limited near 11150-11200 levels.

COMMODITIES

Brent (74.84, -0.65%) has bounced from support as seen on the daily candles and while that holds, Brent is bullish towards 78-79 in the near term. Nymex WTI (70.60, -0.58%) on the other hand has room on the downside but could be pulled up towards 73 on a rise in Brent.

Gold (1242.40, +0.10%) is trading near important support near 1240. While that holds, the price could be stable near current levels for some more time before eventually moving higher in the medium to longer term. A break below 1240, if seen would make it vulnerable to a test of 1230-1225 on the downside.

Copper (2.7795, +0.14%) has immediate resistance near 2.875-2.900 and if that holds, the price could fall back to 2.80 or lower in the near term. A sustained break above 2.90 is required for Copper to pick up upside momentum for the near to medium term.

FOREX

Euro (1.1682): As per our expectation, Euro broke below the 21 days MA near 1.165 on Friday but is again trading above it currently. Another week of range trade between 1.175-1.16 could follow now. The 1st part of this week could see an upmove towards 1.175 followed by a dip to 1.16 in the latter part.

Dollar Index (94.73): Dollar Index has dipped from resistance (earlier support trendline) near 95 on daily candles. A dip towards support near 94.0-94.2 (in the channel being formed on daily candles) is possible in the early part of this week.

Dollar Yen (112.49): After having risen decisively past long term resistance near 112 last week, Dollar Yen is looking bullish in the coming 1-2 weeks. With sustained bullishness, it could test levels near 114 by next week (where it could find some resistance). Higher than that, there is also some resistance near 115. Dips could be restricted at max till 111.5. The bias remains bullish in this week.

Euro Yen (131.42): Euro Yen also breached crucial resistance last week near 130 and is now looking bullish for the next couple of weeks. However there are chances of some pause in the 131.5-132.0 zone since there could be some temporary resistance here. If it moves past this zone, then a test of horizontal resistance near 133.5 is possible by next week. Near term bullishness might be capped till 135 (long term resistance on weekly line chart).

Pound (1.3236): After testing 1.31 on Friday, Pound could test 1.33 in today's session again and then dip towards 1.305 later in the week. Levels near 1.305 are a crucial support zone, which when broken, could make Pound very bearish.

Dollar Rupee (68.525): Dollar rupee likely to hold above support at 68.25/30 and rise back to 68.70 this week.

INTEREST RATES

Lower than expected growth in US CPI m-o-m seems to be taking precedence over the record y-o-y growth figures as yields have dipped after the release. US Retail Sales data is to be released today, which could be another important trigger for yields. In May, the release of higher than expected Retail Sales figures had led to the US 10 Year yield testing a high near 3.125%. Let's see if the release this time can also impact yields as significantly this time.

US 10 year yield (2.827%), 30 Year (2.93%), 5 Year (2.725%), 2 Year (2.578%):

US 10 Year yield trading towards the lower end of the horizontal support zone of 2.84%-2.82%. If Retail sales data comes below the expected 0.4% growth, we could just see a break below 2.82% to target 2.8%.

US 10 year - Japanese 10 Year yield spread (2.79%) has broken below support on medium term chart and could become bearish towards 2.7%. Given that the Japanese 10 Year yield might not rise beyond 0.05%, this could indicate that a dip to 2.7% is very likely for the US 10 Year yield in the weeks to come.

Trump and Russian President Vladimir Putin are going to have their first ever summit today in the Finnish capital Helsinki. Ahead of the meeting Trump said he was going in with "low expectations". National security adviser John Bolton said the meeting would be "unstructured" and the US was not looking for "deliverable". Russian Foreign Minister Sergei Lavrov echoed and said he had low expectations too.

Trump said last week, before the NATO summit, that Putin "may be the easiest" among NATO and UK. And asked if Putin is a friend of foe, Trump said "I really can't say right now. As far as I'm concerned, a competitor." Later on Sunday, Trump said in a CBS interview that "I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now you wouldn't think of the European Union but they're a foe." He added that "Russia is a foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn't mean they are bad. It doesn't mean anything. It means that they are competitive."

So it doesn't matter what the meaning of "foe" is as Trump sees Russia, China and EU as "they".

On the other side, EU seems to be having some emotional responses to what Trump said. European Commission Vice President Frans Timmermans said on Twitter that "calling your best friends foes only makes your real foes happy." And, "Europeans and Americans are bound by history and their shared values. Europeans will never give up on America because America never gave up on us. That's what friends are for." European Council President Donald Tusk said on Twitter that "America and the EU are best friends. Whoever says we are foes is spreading fake news."

According to a report by Handelsblatt, Bundesbank head Jens Weidmann warned the German Federal Cabinet last week that that even though growth is still "intact", political risks would "increase". More importantly, Weidmann pointed to the slow down in momentum and the downward revision in 2018 growth forecasts from 2.5% to 2.0%. The drop in momentum, according to Weidmann, is a prove that "good economic development could not go on forever". The risks include US protectionist trade policy, Brexit and new geopolitical conflicts.

Weidmann urged the government to prepare for worse times. It takes some time to normalize monetary policy. And for now, ECB "could not react in the next downturn". And because of that, fiscal policy must take on the task should there be a new crisis. But due to their high debt levels, many Eurozone countries would also have limited ability to "cushion" a down turn.