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General trend

• Hang Seng again weighed down by TECH index.
• Shanghai Composite ended morning trading off of the lows [Consumer Staples and Financial indices declined; IT index gained].
• Nikkei has extended decline; Companies expected to report earnings include Nomura Holdings, Mizuho Financial, Hitachi, Komatsu, Sumitomo Mitsui Financial, Takeda, ANA Holdings, Mazda, Japan Tobacco, KDDI, NEC, Makita, Seiko Epson.
• S&P ASX 200 has outperformed [Financials rise after NAB’s buyback announcement].
• Companies due to report during the NY morning include AbbVie, Aon, American Axle, Booz Allen Hamilton, Bloomin Brands, Caterpillar, CBOE, Charter Communications, Colgate, Capri Holdings, Chevron, Dana Inc, Enbridge, W.W. Grainger, Huntsman Corp, Johnson Controls, Lazard, LyondellBasell, Newell, Restaurant Brands, TELUS, Uxin Limited, VF Corp, Weyerhaeuser, Exxon.
• China official PMI data is due on Saturday (Jul 31st) [Friday night in the US].

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened flat.
• (AU) Australia Jun Private Sector Credit M/M: 0.9% v 0.5% prior; Y/Y: 3.1% v 1.9% prior.
• (AU) Australia Q2 PPI Q/Q: 0.7% v 0.4% prior; Y/Y: 2.2% v 0.2% prior.
• (AU) Australia sells A$700M v A$700M indicated in 2.75% Nov 2027 bonds, avg yield 0.7316%, bid to cover 5.5x.
• (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$342.9B v A$344.1B prior.
• (NZ) New Zealand Jun Building Permits M/M: +3.8% v -2.4% prior.
• (NZ) New Zealand July Consumer Confidence Index: 113.1 v 114.1 prior.

China/Hong Kong

• Hang Seng opened -1.0%, Shanghai Composite -0.4%.
• (CN) China State Planner (NDRC): Key fertilizer companies in China will suspend exports of fertilizer; summoned certain key fertilizer companies for talks.
• DiDi: Responds to Certain Market Speculation; Confirms not considering going private.
• (CN) China National Reserve Administration (SRB) provides update on its 2nd batch of base metals on July 29th; Released 170K tons of copper, aluminum and Zinc; Will continue to release metals in the near term based upon supply and demand.
• (CN) China Finance Ministry (MOF): To remove steel products tax rebates for 23 items, confirms to raise export tariffs for certain steel products from Aug 1st.
• (CN) China PBOC Depuy Gov Pan Gongsheng: Should promote an orderly and steady opening up for high-level capital accounts as well as the liberalization and ease of cross-border trade.
• (CN) China Sec Journal: China residents are showing increased interest in China equity assets.
• (CN) China Banking and Insurance Regulatory Commission (CBIRC): Places ban on trust firms establishing non-financial units.
• (CN) China 1-day repo rate increases to 2.1234%, +~50bps [ahead of month end].
• (CN) China PBOC Open Market Operation (OMO): Injects CNY30B in 7-day reverse repos v CNY30B in 7-day reverse repos prior; Net CNY20B v Net inject CNY20B prior.
• (CN) China PBOC sets Yuan reference rate: 6.4602 v 6.4942 prior.

Japan

• Nikkei 225 opened -0.4%.
• (JP) Bank of Japan Board member Noguchi: BoJ may be able to begin debate on strategy for hitting price target around end 2021.
• (JP) JAPAN JUN PRELIMINARY INDUSTRIAL PRODUCTION M/M: 6.2% V 5.0%E (fastest gain M/M since July 2020); Y/Y: 22.6% V 20.7%E.
• (JP) Japan Govt Official: Global chip shortage is continuing, but impact is easing, helping auto output stage sharp rebound in June.
• (JP) JAPAN JUN RETAIL SALES M/M: 3.1% V 2.7%E; Y/Y: 0.1% V 0.2%E.
• (JP) JAPAN JUN JOBLESS RATE: 2.9% V 3.0%E.
• (JP) Japan confirms to seek continuation of state of emergency in Tokyo until Aug 31st; confirms to add surrounding Tokyo area to state of emergency.

Korea

• Kospi opened -0.3%.
• (KR) South Korea Jun Industrial Production M/M: 2.2% v 1.5%e; Y/Y: 11.9% v 9.6%e.
• (KR) South Korea Jun Cyclical Leading Index Change: 0.3 v 0.4 prior.
• (KR) South Korea Aug Business Manufacturing Survey: 92 v 99 prior.
• (KR) South Korea Jun Retail Sales M/M: +1.4% v -1.8% prior.

Other Asia

• (PH) Philippines Central Bank (BSP) Gov Diokno: Sees Jul CPI at 4.3%.
• Taiwan Semi: Said to report gas contamination at key chip plant that is an Apple supplier – Press.
• Taiwan Semi Statement: As of now the incident does not have an ‘obvious’ impact on the operation.

North America

• Amazon [AMZN]: Reports Q2 $15.12 v $12.22e, Rev $113.1B v $115.1Be; Guides Q3 Rev $106-112B +10-16% y/y v $119.2Be; Guides Q3 op income $2.5-6.0B v $8.1Be.
• (US) Q2 ADVANCE GDP ANNUALIZED Q/Q: 6.5% V 8.5%E; PERSONAL CONSUMPTION: 11.8% V 10.5%E.

Levels as of 01:20 ET

• Nikkei 225, -1.8%, ASX 200 -0.2% , Hang Seng -2.4%; Shanghai Composite -0.9% ; Kospi -1.1%.
• Equity S&P500 Futures: -0.9%; Nasdaq100 -1.4%, Dax -0.8%; FTSE100 -0.7%.
• EUR 1.1894-1.1877 ; JPY 109.60-109.36 ; AUD 0.7405-0.7379 ;NZD 0.7019-0.6993.
• Gold -0.2% at $1,827/oz; Crude Oil -0.6% at $73.19/brl; Copper -0.2% at $4.5118/lb.

As the 55-hour simple moving average approached the USD/JPY from above, it pushed the USD/JPY down. At midnight to Friday, the rate had shortly reached below the 109.40 mark. Afterwards, the pair tested the resistance of the 109.60 mark and the weekly S1 simple pivot point at 109.58.

However, a decline of the rate could first find support in the mentioned 109.40 level. Afterwards, note the lower trend line of a channel down pattern near the 109.30 mark. Below the 109.30 level, the July low level near 109.07 might provide support.

The GBP/USD failed to reach the 1.4000 mark. On Thursday, the rate bounced off the resistance of the 1.3983 level. On Friday morning, the rate appeared to be retracing down and looking for support.

The currency exchange rate could find support in the 55-hour simple moving average near 1.3920 and the weekly R2 simple pivot point at 1.3919. In addition, support could be provided by the previous July high zone above the 1.3900 mark.

Meanwhile, take into account that a potential resumption of the surge would most likely encounter resistance, as it approaches the 1.4000 mark. Above the 1.4000, the pair could find resistance at 1.4050, which is strengthened by the weekly R3 simple pivot point.

During the GMT midnight hour to Friday, the EUR/USD approached the resistance of the weekly R3 simple pivot at 1.1897 and the 1.1900 mark. However, the rate reversed its direction on Friday morning and retraced down.

An extension of the decline could look for support in the weekly R2 simple pivot point at 1.1864 and the 55-hour simple moving average, which during the morning hours was located near the 1.1850 level. Below these levels, the 1.1850 mark and the 100-hour SMA could provide support.

On the other hand, a potential surge would have to test the recent Thursday high levels, the weekly R3 simple pivot point at 1.1897 and the 1.1900 mark. Above these levels, the 1.1950 level and the June high near 1.1980 could provide resistance.

Daily Pivots: (S1) 1.2409; (P) 1.2470; (R1) 1.2508; More...

USD/CAD's break of 1.2485 resistance turned support argues that rise from 1.2005 might have completed at 1.2805 already. Intraday is now on the downside for next cluster support at 1.2301 (61.8% retracement of 1.2005 to 1.2805 at 1.2311). Also, for now, risk will stay mildly on the downside as long as 1.2605 resistance holds, in case of recovery.

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) 0.7364; (P) 0.7389; (R1) 0.7419; More...

Intraday bias in AUD/USD remains neutral as consolidation from 0.7288 is still extending. Further fall is expected as long as 0.7443 support turned resistance holds. On the downside, break of 0.7288 will resume the whole decline from 0.8006 to 161.8% projection of 0.8006 to 0.7530 from 0.7890 at 0.7120 next. On the upside, break of 0.7443 will indicate short term bottoming, and bring stronger rebound to 0.7530 support turned resistance instead.

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.

Daily Pivots: (S1) 1.1853; (P) 1.1873; (R1) 1.1905; More...

Focus remains on 1.1880 resistance in EUR/USD. Firm break there will firstly indicate short term bottoming at 1.1751, on bullish convergence condition in 4 hour MACD. Intraday bias will be turned back to the upside for 1.1974 resistance first. Sustained break there will argue that whole corrective pattern from 1.2348 has completed, and bring stronger rise back to 1.2265/2348 resistance zone. On the downside, break of 1.1751 will resume the fall from 1.2265, as the third leg of correction from 1.2348, to 1.1703 support.

In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1602 support holds. Reaction from 1.2555 should reveal underlying long term momentum in the pair. However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again.

Daily Pivots: (S1) 1.3912; (P) 1.3947; (R1) 1.3996; More....

GBP/USD's rise from 1.3570 is still in progress and intraday bias stays on the upside. Consolidation form 1.4240 could have completed with three waves to 1.3570 already. Further rise should be seen to retest 1.4248 high next. On the downside, below 1.3841 minor support will turn intraday bias neutral and bring retreat first, before staging another rally.

In the bigger picture, as long as 1.3482 resistance turned support holds, up trend from 1.1409 should still continue. Decisive break of 1.4376 resistance will carry larger bullish implications. However, firm break of 1.3482 support will argue that the rise from 1.1409 has completed. GBP/USD would then be seen in another leg of long term range pattern between 1.1409 and 1.4376. Deeper fall could then be seen to 61.8% retracement of 1.1409 to 1.4248 at 1.2493, and even below.

Daily Pivots: (S1) 0.9044; (P) 0.9073; (R1) 0.9090; More....

USD/CHF's fall from 0.9273 is still in progress and intraday bias remains on the downside. Next target is 0.8925 low. On the upside, above 0.9116 support turned resistance will mix up the near term outlook and turn intraday bias neutral first.

In the bigger picture, medium term outlook is currently neutral with focus on 0.9471 resistance. Sustained break there will indicate completion of whole decline from 1.0342 (2016 high). Medium term outlook will be turned bullish for a test on 1.0342 high. But, rejection by 0.9471 again will revive bearishness for another fall through 0.8756 low.

Daily Pivots: (S1) 109.29; (P) 109.62; (R1) 109.82; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, break of 109.05 will resume the decline from 111.65. Next target is 38.2% retracement of 102.58 to 111.65 at 108.18. On the upside, break of 110.58 will resume the rebound from 109.05, for retesting 111.65 high.

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. For now, outlook won't turn bullish as long as 111.71 resistance holds, even in case of strong rebound.