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Daily Pivots: (S1) 0.8423; (P) 0.8453; (R1) 0.8474; More...

Intraday bias in EUR/GBP is turned neutral with current recovery, but further decline is expected as long as 0.8552 minor resistance holds. Rebound from 0.8201 should have completed at 0.8720, after rejection by 0.8697 medium term fibonacci level. Below 0.8401 ill target a test on 0.8201/48 support zone next.

In the bigger picture, rejection by 38.2% retracement of 0.9499 to 0.8201 at 0.8697 argues that rebound from 0.8201 is merely a corrective move. That is, down trend from 0.9499 (2020 high) is now over. Sustained break of 0.8201 will resume such decline and target 61.8% retracement of 0.6935 to 0.9499 at 0.7917. This will now remain the favored case as long as 0.8720 resistance holds.

Daily Pivots: (S1) 1.4809; (P) 1.4862; (R1) 1.4937; More...

Intraday bias in EUR/AUD remains neutral and outlook is unchanged. Further decline is in favor with 1.5043 minor resistance intact. Decisive break of 1.4759 support should confirm that corrective rise from 1.4318 has completed at 1.5396 after rejection by 1.5354 support turned resistance. Deeper fall should then be seen back to retest 1.4318 low. On the upside, however, break of 1.5043 will bring stronger rebound back towards 1.5396.

In the bigger picture, rejection by 1.5354 support turned resistance, as well as 55 week EMA (now at 1.5398), maintain medium term bearishness. That is, larger down trend from 1.9799 is not completed yet. Break of 1.4318 low will target 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). This will remain the favored case now as long as 1.5396 resistance holds.

Daily Pivots: (S1) 0.9807; (P) 0.9846; (R1) 0.9884; More....

EUR/CHF is losing some downside momentum as seen in 4 hour MACD. But further decline is still in favor with 0.9953 minor resistance intact. Current down trend should target 0.9650 long term projection level. On the upside, above 0.9953 minor resistance will turn intraday bias back to the upside for stronger rebound first.

In the bigger picture, rejection by 55 week EMA affirmed medium term bearishness. Long term down trend from 1.2004 (2018 high) is expected to target 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. On the upside, break of 1.0513 resistance is needed to indicate medium term bottoming. Otherwise, outlook will stay bearish in case of strong rebound.

Daily Pivots: (S1) 1.2988; (P) 1.3019; (R1) 1.3055; More...

Range trading continues in USD/CAD and intraday bias remains neutral. Further rise is mildly in favor with 1.2818 support intact. On the upside, break of 1.3082 and sustained trading above 1.3022 fibonacci level will carry larger bullish implications, and bring up trend resumption. Next target is 100% projection of 1.2005 to 1.2947 from 1.2401 at 1.3343. On the downside, break of 1.2818 minor support will bring deeper fall back to 1.2516 support instead.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness.

Daily Pivots: (S1) 0.6721; (P) 0.6762; (R1) 0.6799; More...

AUD/USD is losing some downside momentum. But further decline is expected with 0.6873 resistance intact. Current down trend from 0.8006 should target next fibonacci level at 0.6461. On the upside, break of 0.6873 minor resistance will turn bias back to the upside for stronger rebound instead.

In the bigger picture, price actions from 0.8006 could still be a corrective pattern to rise from 0.5506 (2020 low). But current downside acceleration is raising the chance that it's a bearish impulsive move. In either case, outlook will remain bearish as long as 0.7282 resistance holds. Next target is 61.8% retracement of 0.5506 to 0.8006 at 0.6461.

Daily Pivots: (S1) 1.0000; (P) 1.0037; (R1) 1.0074; More...

Further decline is still expected with 1.0189 minor resistance intact. Current down trend should target 100% projection of 1.1184 to 1.0348 from 1.0773 at 0.9937. Firm break there could prompt downside acceleration to 161.8% projection at 0.9420. On the upside, break of 1.0189 minor resistance will turn bias back to the upside for stronger rebound.

In the bigger picture, down trend from 1.6039 (2008 high) is still in progress. Next target is 100% projection of 1.3993 to 1.0339 from 1.2348 at 0.8694. In any case, outlook will stay bearish as long as 1.0773 resistance holds, in case of rebound.

Daily Pivots: (S1) 1.1823; (P) 1.1895; (R1) 1.1962; More...

GBP/USD is staying in consolidation from 1.1806 temporary low and intraday bias remains neutral. Further decline is expected with 1.2055 resistance intact. Break of 1.1806 will resume larger down trend to 100% projection of 1.2666 to 1.1932 from 1.2405 at 1.1671. Decisive break there will target a test on 1.1409 long term support. On the upside, above 1.2055 minor resistance will now indicate short term bottoming, and turn bias to the upside for stronger rebound.

In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2666 resistance holds. Next target is 1.1409 low. However, firm break of 1.2666 will bring stronger rise back to 55 week EMA (now at 1.3065).

Daily Pivots: (S1) 0.9752; (P) 0.9794; (R1) 0.9830; More...

Intraday bias in USD/CHF remains neutral first and further rally is expected with 0.9680 minor support intact. Consolidation pattern from 1.0063 should have completed with three waves down to 0.9493 already. Further rise would be seen to retest 1.0063 high first. Decisive break there will resume larger up trend. On the downside, break of 0.9670 minor support will dampen this bullish view and bias back to the downside for 0.9493 support instead.

In the bigger picture, medium term up trend from 0.8756 (2021 low) is still in progress. Next target is 1.0342 (2016 high). Sustained break there will resume long term up trend from 0.7065 (2011 low). This will remain the favored case as long as 0.9471 resistance turned support holds.

WTI crude oil futures found a strong obstacle at the 200-day simple moving average (SMA), failing to continue the selling interest to the downside after the fall beneath the 100.00 level.

The downside reversal in the RSI and the slowdown in the Stochastics justify the diminishing buying pressure, and both currently remain in the negative thresholds keeping the short-term risk skewed to the downside. The MACD is also comfortably within the bearish territory and is losing some steam below its red signal line losing some steam, while in trend indicators, the bearish cross between the 20- and 40-day simple moving averages (SMAs) is still a negative sign.

Should selling forces strengthen, the 200-day SMA at 93.40 will be the highlight before the market flirts with the 92.20 barrier. Moving lower, the 85.35 and the 81.92 supports would put the downside correction under examination.

Alternatively, a close above the immediate resistance of 96.90 and the short-term SMAs at 105.23 and 109.74 correspondingly will brighten the broader outlook, pushing the price towards the 113.80 key level. Beyond that, the rally may gear up to 121.00.

In brief, WTI futures are facing a weakening bullish bias, where a drop below the 200-day SMA is expected to enhance selling interest.

The US inflation report was ugly. Inflation in the US advanced to 9.1% in June, from 8.6% a month earlier, and there was nothing toppish about yesterday’s inflation report, apart from the fact that gasoline prices which soared 60% since last year was the main responsible for the further advance in inflation, and gasoline prices have been trending lower since a couple of weeks now.

Due today, the producer price index is expected to stabilize a touch below the 11% mark.

A CPI figure above the 9% psychological level boosts the idea that the Federal Reserve (Fed) won’t hesitate to continue its aggressive rate increases to abate inflation. Pricing on Fed funds futures now gives more than 80% chance for a 100bp hike at the next FOMC meeting, due by the end of this month. That results in a stronger dollar, higher yields and a further selloff in equities.

More importantly, there is little between now and the Fed decision to reverse the pricing.

Post-CPI

The US dollar index consolidates above the 108 mark, and the bulls have their eyes set at the 110 level.

The 10-year yield remains a touch below the 3% mark, but the 2-year yield continues pushing higher, pushing the 2-10-year portion of the yield curve to a deeper inverted territory.

Gold dived to $1707 per ounce yesterday, not because the market doesn’t buy the inflation rhetoric as claims Cathie Wood, but the rising US yields continue weighing on the precious metal, even when the risk sentiment is off.

And crude oil tipped a toe below the 200-DMA, near $93pb. The tighter monetary policies, the recession talks and prospects of slower demand should keep the bears in charge of the market.

Elsewhere

The Bank of Canada raised its rate by 100bo yesterday, sending the Canadian stocks lower, and the loonie just a little bit higher against the US dollar. But the US dollar remains so strong, that no currency defies its strength.

The data released in Europe was quite mixed. The British GDP grew 3.5%, as both the industrial and manufacturing production surprised to the upside in May. The better-than-expected economic data gave a small boost to Cable at yesterday’s session, but Cable remains under the growing pressure of a stronger US dollar, and will hardly fight back the 1.20 offers.

In the eurozone, the inflation figures were mixed. The German inflation stabilized at 7.6% as expected in June, that was slightly lower than the 7.9% printed a month earlier. The French inflation rose less than expected, advancing from 5.2% to 5.8%, instead of 6.5% expected by analysts. Spanish inflation confirmed a read above 10% in June.

But there was one good news: industrial production in Europe somehow rebounded in May, to 1.8%, versus 0.3% printed a month earlier. I doubt that it would help keeping the EURUSD above parity.

There is a solid support near the 1.00 level, and stops below that level. If the 1.00 support is broken, we could rapidly see the EURUSD slip lower on stops.

Earnings

JP Morgan and Morgan Stanley will go to the earnings confessional today, BlackRock, Citigroup and Wells Fargo are due to release their earnings tomorrow.

The higher interest rates may have increased the banks’ interest margins, but inflation certainly ate a part of that margin. Plus, lower trading volumes and slower loan activity due to the recession fears may have weighed on 2Q earnings.