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EURUSD extended pullback from a multi-month high (1.0948) and cracked pivotal supports at 1.0840/33 (Fibo 38.2% of 1.0666/1.0948 / 20DMA) but struggling to make a clear break lower.

Oversold conditions on daily chart provided headwinds, suggesting that bears may take a breather, as markets await release of US July PMI data, due later today.

Traders also focus on US Q2 GDP (due on Thursday) and June PCE (Friday) for more details about the condition of the economy and inflation, the key factors to Fed’s decision about the start of rate cutting cycle.

Limited recovery should provide better selling opportunities for extension towards 1.0807/00 (daily Kijun-sen / psychological) and 1.0788 (top of thinning daily cloud).

Only lift and close above daily Tenkan-sen (1.0886) to sideline bears on completion of bear-trap and reversal signal.

Res: 1.0861; 1.0886; 1.0902; 1.0948.
Sup: 1.0840; 1.0825; 1.0807; 1.0788.

AUDUSD remains in red for the eighth consecutive day and fell to the lowest in six weeks in early Wednesday.

Aussie dollar remains under increased pressure from stronger US dollar, falling prices of commodities and concerns about China’s economic growth.

Bears cracked pivotal support at 0.6580 (200DMA / 50% retracement of 0.6362/0.6798) after Tuesday’s close below Fibo 38.2% and break below 100DMA in early Wednesday’s trading.

The price is holding in the middle of thick daily Ichimoku cloud, with formation of daily Tenkan / Kijun-sen bear cross adding to bearish near term outlook.

However, strongly oversold conditions warn that bears may pause for consolidation, with 200DMA producing headwinds and keeping the price action for now.

Corrective upticks should be capped under cloud top (0.6642) to keep bears in play and offer better selling opportunities for fresh push lower and attack at 0.6538/28 targets (daily cloud base / Fibo 61.8%).

Res: 0.6607; 0.6631; 0.6642; 0.6663.
Sup: 0.6580; 0.6538; 0.6528; 0.6465.

UK PMI data for July reveals a promising start to the second half of the year. PMI Manufacturing rose to 51.8, exceeding expectations of 51.1 and marking a 24-month high. PMI Services also increased slightly from 52.1 to 52.4, though just below the forecast of 52.5. The overall PMI Composite index improved from 52.3 to 52.7.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted, "The flash PMI survey data for July signal an 'encouraging start' to the second half of the year, with output, order books, and employment all growing at faster rates amid rebounding business confidence, while price pressures moderated."

Post-election business sentiment has surged, with increased demand and hiring in both manufacturing and services sectors. Despite the slowest price rise in three and a half years, suggesting potential for a summer rate cut, caution remains.

"Policymakers will likely take a cautious approach to loosening policy amid signs of inflationary pressures pivoting away from services towards manufacturing, where Red Sea shipping delays and higher freight prices are adding to costs again," Williamson added. The renewed hiring trend could also sustain wage pressures, keeping inflation somewhat persistent.

Full UK PMI release here.

Economic activity in Eurozone weakened in July, with PMI Manufacturing dipping from 45.8 to 45.6, a seven-month low, and missing expectations of 46.3. PMI Services also declined from 52.8 to 51.9, below the anticipated 52.9, marking a four-month low. Consequently, PMI Composite fell from 50.9 to 50.1, a five-month low.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that the Eurozone economy "barely moved" in July. He highlighted that the manufacturing sector "deteriorated significantly," offsetting "moderate growth" in the services sector.

While current growth data might justify a September rate cut by ECB, inflation data complicates this decision. De la Rubia noted that input prices in the services sector rose faster, and selling prices remained steady. Manufacturing input prices, which had fallen for over a year, have increased for two consecutive months. Output prices only marginally decreased.

De la Rubia added "Our conclusion is that while a September rate cut will most probably be exercised, it will be much trickier to follow this path in the months thereafter, unless the downturn morphs into a deep recession."

Full Eurozone PMI release here.

Daily Pivots: (S1) 0.9665; (P) 0.9678; (R1) 0.9688; More....

Immediate focus is now on 0.9641 temporary low in EUR/CHF. Firm break there and sustained trading below 38.2% retracement of 0.9476 to 0.9772 at 0.9659 will extend the fall from 0.9772 to 61.8% retracement at 0.9589 and possibly below. On the upside, above 0.9690 minor resistance will turn bias back to the upside for 0.9972 instead.

In the bigger picture, rebound from 0.9252 medium term bottom might not be completed yet. But even in case of resumption, strong resistance could emerge from 1.0095 to limit upside. Medium term outlook will be neutral at best as long as 1.0094 structural resistance holds. Meanwhile, break of 0.9476 will bring retest of 0.9252 low.

• NZDUSD dives almost 4% from the July high of 0.6150
• Price may rebound off 0.5875
• 20- and 200-day SMAs record a bearish cross
• Momentum oscillators indicate upside correction

NZDUSD has been creating an aggressive bearish rally since the break beneath the short-term uptrend line, diving almost 4% after the pullback from the 0.6150 resistance. The pair posted a fresh 12-week low of 0.5913 today and is also recording its fifth consecutive red day.

The 20- and 200-day simple moving averages (SMAs) established a negative crossover, confirming the recent negative move; however, the technical oscillators indicate an end to the bearish momentum. The stochastic posted a bullish cross within its %K and %D lines in the oversold area, while the RSI has slipped below the 30 level.

More downside pressures could push the bears towards the 0.5875 support level before testing the 0.5850 bar, which was achieved on April 19.

In the positive scenario, a rebound off the latest low could open the way towards the 0.5980 resistance, taken from the inside swing low on May 8, before challenging the 0.6035 resistance and the 200-day SMA at 0.6075.

All in all, the current picture in NZDUSD is bearish unless there is a significant climb back above the SMAs, the new downtrend line, and, more importantly, beyond the previous peak of 0.6220.

Daily Pivots: (S1) 199.97; (P) 201.57; (R1) 202.38; More...

GBP/JPY's fall from 208.09 accelerates to as low as 198.95 so far, breaking through 55 D EMA. Intraday bias stays on the downside for for 38.2% retracement of 178.32 to 208.09 at 196.71 next. For now, risk will stay on the downside as long as 202.08 support turned resistance holds, in case of recovery.

In the bigger picture, medium term outlook will stay bullish as long as 188.63 resistance turned support holds. Long term up trend remains in favor to continue through 208.09 at a later stage. However, firm break of 188.63 will be a strong sign of bearish trend reversal.

Daily Pivots: (S1) 168.13; (P) 169.61; (R1) 170.38; More...

EUR/JPY's fall from 175.41 resumed after brief consolidations and dives to as low as 167.42 so far. Intraday bias is back on the downside for 38.2% retracement of 153.15 to 175.41 at 166.90. Some support could be seen there to bring rebound, on first attempt. But break of 169.98 support turned resistance is needed to signal short term bottoming. Firm break of 166.90 will pave the way to medium term channel support (now at 165.46).

In the bigger picture, medium term outlook will stay bullish as long as 164.29 resistance turned support holds. Long term up trend is still in favor to continue through 175.41 at a later stage. However, firm break of 164.29 will be a strong sign of bearish trend reversal.

Daily Pivots: (S1) 0.8395; (P) 0.8411; (R1) 0.8424; More....

Intraday bias in EUR/GBP remains neutral as consolidations continue above 0.8382 low. While rebound from 0.8382 could extend higher, outlook will stay bearish as long as 0.8498 resistance holds. Larger down trend should resume through 0.8382 at a later stage.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 key support (2022 low). For now, outlook will remain bearish as long as 0.8643 resistance holds, even in case of stronger rebound.

Daily Pivots: (S1) 1.6384; (P) 1.6407; (R1) 1.6428; More...

EUR/AUD's correction from 1.0762 has possibly completed with three waves down to 1.5996, after hitting 1.6000 fibonacci support. Break of 1.6148 resistance affirms this case. Intraday bias stays on the upside for 1.6742 resistance next. On the downside, below 1.6384 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, fall from 1.7062 medium term top is seen as a correction to the up trend from 1.4281 (2022 low) only. Strong support is still expected between 1.5846 and 38.2% retracement of 1.4281 to 1.7062 at 1.6000 to bring rebound. Break of 1.6742 resistance indicate that the up trend is ready to resume through 1.7062.