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Daily Pivots: (S1) 0.7220; (P) 0.7245; (R1) 0.7261; More...

AUD/USD's fall accelerates to as low as 0.7178 so far today and intraday bias stays on the downside. Current decline from 0.8006 is in progress for 161.8% projection of 0.8006 to 0.7530 from 0.7890 at 0.7120. We'd look for strong support from around 0.6991 to bring rebound. On the upside, above 0.7268 minor resistance will turn intraday bias neutral first. But outlook will stay bearish as long as 0.7425 resistance holds, in case of recovery.

In the bigger picture, rise from 0.5506 medium term bottom could have completed at 0.8006, after failing 0.8135 key resistance. Correction from there could target 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051). We'd look for strong support from there to bring rebound. However, sustained break of this level would argue that the whole medium term trend has indeed reversed.

On Wednesday, the Eurozone single currency declined by 29 pips or 0.25% against the US Dollar. The currency pair breached the lower boundary of a descending channel pattern during the Asian session on Thursday.

All things being equal, the EUR/USD exchange rate could continue to drop within the following trading session. The possible target for sellers will be near the 1.1659 level.

However, the weekly support level at 1.1670 could provide support for the currency exchange rate within this session.

Since the second half of yesterday's trading session, the British Pound has declined by 58 pips or 0.42% against the US Dollar. The currency pair tested the lower line of a descending channel pattern at 1.3714 on Thursday morning.

Given that the GBP/USD exchange rate is currently trading near the lower boundary of the channel pattern, a breakout could occur within the following trading session.

However, if the descending channel holds, bullish traders might drive the price of the currency exchange rate higher today.

On Wednesday, the US Dollar surged by 55 pips or 0.51% against the Japanese Yen. A breakout occurred through the upper line of a descending channel pattern during yesterday's trading session.

Given that a breakout has occurred, buyers could continue to drive the price higher within this session. The potential target for the exchange rate will be near the 110.60 area.

However, bullish traders could encounter resistance at 110.40 within the following trading session.

On Wednesday, the yellow metal's price declined by 108 pips or 0.61%. The commodity breached the 55– hour simple moving average during yesterday's trading session.

The exchange rate breached the lower boundary of an ascending channel pattern during the Asian session on Thursday. Most likely, bearish traders could continue to drive the price lower today.

On the other hand, the XAU/USD exchange rate might reverse from a support level formed by the 100– hour SMA at 1779.2 within this session.

Technical analysis

The Ichimoku indicator gives a possible bearish signal

The RSI is under the line 50, indicating that a downtrend may prevail

The CCI suggests a possible upwards correction.

What the possible outcomes are

Gold prices fell as the U.S. dollar strengthened after U.S. Federal Reserve’s policy meeting minutes showed that almost all its officials agreed to start easing bond purchases this year.

In our most likely scenario, XAUUSD may decline towards the first support level of 1,775.

If the pair falls below the first support level, we can expect a continued downtrend towards 1,769.

Contrarily, the pair may rise towards the first resistance level of 1,783.

If the price passes the initial resistance level, it could test the next higher at 1,792.

Key levels

Support 1,769 1,775

Resistance 1,783 1,792

Market movers today

• Today, Norges Bank is expected to stay on hold, but to confirm an upcoming rate hike in September (for more details, see the Nordic Macro section below).
• In the US, jobless claims will attract some attention as focus among the Fed members is currently on job market recovery.
• The regional Philly Fed is expected to rebound in August after several months with weak readings.

The 60 second overview

Macro: FOMC Minutes did not offer much new information to the market on the path towards tapering of bonds - as expected most participants 'judged that it could be appropriate to start reducing the pace of asset purchases this year'. However, investors still reacted negatively to the prospects about US monetary policy tightening amid weakening global macro momentum, as global risk sentiment weakened with equity markets sell-off (see below) and EUR/USD breaking through the 1.17 level overnight. Next focal point is the Jackson Hole conference next week, where markets will focus on any taper comments. We expect an announcement in the fall and tapering to start in December.

Equities: Global equities lower yesterday dragged down by US stocks taking a sharp drop the last trading hour. Sell-off in US stocks relatively broad based while defensive did a lot better than cyclicals in in Europe. Consumer discretionary got a little tailwind in the US after very solid earnings results and Tesla moving higher. Worth having in mind the VIX index higher for its third session and now topping 21. This does not match the very solid macro picture we still have but is more a picture of how unsafe professional investors feel in the current bull market. Asian markets are weaker this morning dragged down by Hang Seng. European futures lower by 0.5% this morning as they are catching up with the weak US session yesterday. US futures in a small decline.

FI: European rates traded mostly sideways, while waiting for the FOMC minutes, with mixed performance of the intra-euro area spreads to Bunds. The FOMC minutes yesterday was on the slight dovish side leaving US Treasuries 2bp lower at 1.27%.

FX: Amid little actual news EUR/USD went below 1.17 yesterday. We continue to see downside risk to spot.

Credit: Sentiment stabilized in credit markets yesterday. iTraxx Xover tightened 1.3bp (to 235bp) and Main 0.2bp (to 46.4bp). HY bonds finished around ½bp wider and IG was unchanged.

Nordic macro

Today, Norges Bank is expected to stay on hold, but to confirm an upcoming rate hike in September. The meeting is a so-called intermediate meeting, which means no new monetary policy report and there will be no press conference. Norges Bank will only issue a press release. See our preview: Norges Bank Preview No change, but paving the way for a September hike, 18 August 2021.

General trend

• NZ bond yields extend declines following Wed RBNZ decision, NZD also drops.
• Nikkei is currently near the opening level [Financials track declines on Wall St; Iron & Steel, Auto, Electric Appliance and Transport firms also decline].
• Financials trade lower in Shanghai and Hong Kong after prior gains [Huarong finally issued profit warning]; Property firms also decline.
• HK Tech index drops over 1.5% [Tencent in focus after recently reported earnings].
• Hang Seng is due to hold next index review on Aug 20th (Fri).
• S&P ASX 200 has been weighed down by Iron-ore producers [Chinese ore FUTS drop over 7%]; Newcrest rises after earnings report and guidance.
• Taiex and Taiwan Semi drop over 2% [Hon Hai, UMC and Nanya decline over 3%]; Taiwan gov’t said to call on local banks to support the equity market.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) AUSTRALIA JULY EMPLOYMENT CHANGE: +2.2K V -43.1KE; UNEMPLOYMENT RATE: 4.6% V 5.0%E (12 year low).
• (NZ) Reserve Bank of New Zealand (RBZN) Gov Orr: Do not have regrets about reducing interest rates to very low levels to support the economy, employment and inflation expectations remains consistent with mandate, financial system is robust.
• NCM.AU Reports FY21 Underlying Net $1.16B v $750M y/y; EBITDA $2.44B v $1.84B y/y; Rev $4.58B v $3.92B y/y.
• (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$361.3B v A$358.6B prior (record high).
• (AU) New South Wales to extend lockdowns across the state through Aug 28th (Sat).

Japan

• Nikkei 225 opened -0.7%.
• (JP) Liberal Democratic Party lawmaker Hakubun Shimomura considering running against PM Suga in LDP party leadership election - Japan press.
• (JP) Japan Investors Net Buying of Foreign Bonds: +¥661.8B v -¥1.1T prior; Foreign Net Buying of Japan Stocks: +¥198.8B v ¥104.9B prior.
• (JP) Japan Chief Cabinet Sec Kato: Sees serious problem to relations with South Korea on seizure of payments to Mitsubishi Heavy being enforced.

Korea

• Kospi opened -0.6%.
• (KR) South Korea COVID cases rise to over 2,000, Korea expected to extended is tougher measures.
• 029780.KR Seeking to sell 19.9% stake in Renault Korea unit – press.
• (KR) North Korea issued navigational warning for East Sea in indication of missile launch preparations - Yonhap.

China/Hong Kong

• Hang Seng opened -0.3%; Shanghai Composite opened -0.3%.
• (CN) China Academy of Social Sciences (CASS) Blue Book Report: China's fiscal policy is at a turning point and Govt must shift focus to long term development, such as enhancing human capital to boost international competitiveness, rather than prioritizing short term growth - SCMP.
• (CN) China Ministry of Industry and Information Technology (MIIT) finds 43 apps have violated data transfer rule, have ordered parent companies to address issues by Aug 25th or be punished; Some notable violators include Tencent, Trip.com, Alibaba and iQiyi.
• (CN) China NPC standing committee: Despite pandemic and domestic economic development challenges, China's economy has sustained a steady recovery since the start of 2021, laying a solid foundation for achieving its 2021 economic and social development targets.
• (CN) China July Swift Global Payments (CNY): 2.19% v 2.46% prior.
• (CN) China PBOC sets Yuan reference rate: 6.4853 v 6.4915 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.
• 700.HK Reports Q2 (CNY) adj Net 34.0B v 32.8Be, Rev 138.3B v 138.2Be.
• (CN) China regulators said to be putting together tighter measures on real estate financing; CBIRC has comes up with a list of banks with relatively high proportion of new real estate loans.- local press.

North America

• HOOD Reports Q2 -$2.16 v +$0.09 y/y, Rev $565M v $244M y/y; Q2 is first quarter where a larger share of new customers placed their first trade in crypto rather than equities.
• (US) FOMC JULY MINUTES: OFFICIALS WOULD EVALUATE BOND TAPER PROSPECTS OVER COMING MEETINGS; SUBSTANTIAL FURTHER PROGRESS HAD NOT BEEN MET PARTICULARLY IN TERMS OF LABOR MARKET.

Levels as of 01:15ET

• Hang Seng -1.8%; Shanghai Composite -0.6%; Kospi -1.5%; Nikkei225 -0.7%; ASX 200 -0.5%.
• Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 -0.7%.
• EUR 1.1717-1.1666; JPY 110.22-109.76 ;AUD 0.7243-0.7193; NZD 0.6896-0.6846.
• Commodity Futures: Gold -0.2% at $1,780/oz; Crude Oil -1.4% at $64.25/brl; Copper -0.7% at $4.08/lb.

Daily Pivots: (S1) 1.2619; (P) 1.2640; (R1) 1.2682; More...

Intraday bias in USD/CAD remains on the upside for retesting 1.2805 resistance. Firm break there will resume the rise from 1.2005 to 1.3022 fibonacci level next. On the downside, break of 1.2597 minor support will turn intraday bias on the downside, to extend the corrective pattern form 1.2805 with another fall.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

Daily Pivots: (S1) 109.48; (P) 109.77; (R1) 110.07; More...

Intraday bias in USD/JPY remains neutral for the moment. On the upside, break of 110.79 will resume the rebound form 108.71 to retest 111.65 high. On the downside, break of 109.10 will target 108.71 support first. Firm break there will resume the decline from 111.65 and target 38.2% retracement of 102.58 to 111.65 at 108.18 next.

In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. The pattern from 101.18 could still extend with another falling leg. Sustained trading below 55 day EMA will bring deeper fall to 107.47 support and below. Nevertheless, strong break of 111.71 resistance will confirm completion of the corrective decline from 118.65 (2016 high). Further rise should then be seen to 114.54 and then 118.65 resistance.