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Daily Pivots: (S1) 197.53; (P) 198.52; (R1) 200.08; More...

GBP/JPY rebounded after brief dip to 196.95 and intraday bias is turned neutral. Consolidations from 199.96 might still extend and below 196.95 will target 193.99 cluster support (38.2% retracement of 184.35 to 199.96 at 193.99). Nevertheless, firm break of 199.96 will resume larger rise from 184.35.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 170.41; (P) 171.37; (R1) 173.03; More...

EUR/JPY rebounded strongly after diving to 169.69 and intraday bias is turned neutral. Corrective pattern from 173.87 might extend with a another falling leg. But downside should be contained by 38.2% retracement of 161.06 to 173.87 at 168.97. Firm break of 173.87 will resume larger rally from 154.77.

In the bigger picture, considering current strong momentum as seen in the rally from 154.77, corrective pattern from 175.41 could have already completed. Decisive break there will confirm long term up trend resumption. Next target is 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, rejection by 175.41, followed by firm break of 55 D EMA (now at 168.69) will delay this bullish case.

Daily Pivots: (S1) 0.8597; (P) 0.8628; (R1) 0.8676; More...

EUR/GBP recovered after dipping to 0.8609 and intraday bias is turned neutral first. While correction from 0.8752 might extend, strong support should emerge from 55 D EMA (now at 0.8576) to bring rebound. On the upside, above 0.8684 minor resistance will turn intraday bias neutral first. However, sustained trading below 55 D EMA will raise the chance of near term bearish reversal.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, further rise is expected to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. This will remain the favored case as long as 55 W EMA (now at 0.8486) holds.

Daily Pivots: (S1) 1.7694; (P) 1.7746; (R1) 1.7819; More...

EUR/AUD recovered after dipping to 1.7671 and intraday bias is turned neutral first. Fall from 1.8094 is still seen as the third leg of the corrective pattern from 1.8554. Risk will stay on the downside as long as 1.7972 resistance holds. Below 1.7671 will target 1.7459 support next. Firm break there will solidify this case and target 1.7245 low.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 1.1391; (P) 1.1426; (R1) 1.1449; More...

Intraday bias in EUR/USD remains on the downside at this point. Fall from 1.1829 is seen as a correction to rally from 1.0176. Further decline should be seen to 38.2% retracement of 1.0176 to 1.1829 at 1.1198. On the upside, break of 1.1502 minor resistance will turn intraday bias neutral first.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 149.29; (P) 150.07; (R1) 151.54; More...

Intraday bias in USD/JPY remains on the upside for 100% projection of 139.87 to 148.64 from 142.66 at 151.43, which is close to 151.22 fibonacci level. Decisive break there could prompt upside acceleration to 161.8% projection at 156.84 next. On the downside, below 149.51 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 1.3167; (P) 1.3225; (R1) 1.3263; More...

Intraday bias in GBP/USD remains on the downside as fall from 1.3787 short term top is in progress for 100% projection of 1.3787 to 1.3363 from 1.3587 at 1.3163. Firm break there will target 161.8% projection 1.2901 next. On the upside, above 1.3281 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 1.3363 support turned resistance holds, in case of recovery.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3045) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8105; (P) 0.8130; (R1) 0.8148; More….

Intraday bias in USD/CHF stays on the upside for the moment. Rise from 0.7871 is at least correcting the fall from 0.9200. Further rally should be seen to 38.2% retracement of 0.9200 to 0.7871 at 0.8379 next. On the downside, below 0.8086 minor support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Key insights from the week that was.

All eyes were on the long-awaited Q2 CPI in Australia. In the event, the data confirmed that inflation is on track to sustainably return to the centre of the RBA’s 2-3% target range. The disinflationary pulse was clearly on display across the bulk of the consumer basket, with the crucial trimmed mean measure tracking a 6-month annualised pace only a whisker above the midpoint (2.6%yr). The 0.7% gain in headline inflation brought the annual pace down towards the bottom of the band at 2.1%yr, as energy rebates continued to supress electricity prices through the year – note, this dynamic is set to reverse in coming quarters.

Following the Q2 CPI release, Chief Economist Luci Ellis reaffirmed our call for RBA rate cuts in August, November, February and May for a terminal rate of 2.85% -- which we see as the lower end of the neutral range. With inflation now clearly on a sustainable path towards the midpoint, the other side of the Board’s mandate – full employment – will become the focus of analysis. This was alluded to in the RBA Deputy Governor’s ‘fireside chat’ this week, with Hauser stating that keeping the economy balanced “won’t be an easy task” and that, if unemployment were to rise sharply, they would “have to react”.

We also received constructive updates on the Australian consumer this week. For retail sales, nominal trade beat expectations, rising 1.2% in June and 0.8% through Q2. However, price growth was the primary support for nominal sales during the quarter, real retail sales rising just 0.3%. The signal from personal credit growth was also promising, suggesting credit card activity may have picked up towards the end of Q2. While it remains to be seen if these outcomes are more signal than noise, following such a lengthy period of disappointment, these outcomes are certainly welcome. For our in-depth take on the health of the Australian consumer, please see our latest Red Book.

Before moving offshore, it is also worth noting that dwelling approvals surprised sharply to the upside in June, up 11.9% (27.4%yr). Most of the heavy lifting was done by the often-volatile private units component, while the more stable private detached houses segment continued to track a flat trend. The outlook remains positive given the promise of RBA rate cuts, a labour market in robust health and housing demand clearly in excess of available supply.

Offshore, the US was the dominant market for both policy and data developments this week.

At their July meeting, the FOMC voted to leave the fed funds rate unchanged, albeit with two dissents – Bowman and Waller preferring to cut. The statement outlined that, while growth moderated in H1 2025, labour market conditions remain solid. Inflation meanwhile "remains somewhat elevated", running at an above-target rate abstracting from the impact of tariffs. Made clear in the press conference is that while activity growth is positive and the labour market in balance, i.e. the unemployment rate is stable, the majority of the Committee believe it is appropriate to keep pressure on inflation to bring it closer to target.

The FOMC are mindful of the potential for downside risks to compound, however. While US GDP rose 3.0% annualised in Q2, this was primarily the result of a reversal of Q1’s abnormal trade flows to get ahead of the implementation of tariffs. Domestic demand grew just 1.4% annualised through H1 2025, half the average of the prior 10 years. Consumption was weaker still, registering growth of just 0.9% annualised over the first 6 months of the year while housing investment contracted 3.0% annualised. Government demand was flat over the period, and business investment growth weak at 1.9% annualised in Q2 after Q1’s 10.3% annualised surge. If these trends continue, the labour market will weaken further in coming months and the FOMC will be justified in moving closer towards a neutral setting. Note though, because of the presence of structural supports for inflation as well as tariffs, we continue to expect just 50bps of easing in H2 2025 and an unchanged stance thereafter versus the market expectation of around 110bps of easing through to end-2026. We also see the US 10-year continuing to drift higher on fiscal concerns.

Other data released this week was relatively insignificant. And both the Bank of Canada and Bank of Japan kept their policy stance and tone unchanged.

In the Bank of Canada’s messaging, notable was the resilience of Canada and the global economy to the trade uncertainty created by the US. In Canada, trade-exposed sectors have shown weaker demand for labour, but other sectors are in robust shape, seeing excess supply only slowly trend up in aggregate. Ahead, this disinflationary pressure will be judged against the inflationary consequence of tariffs to gauge the appropriate stance for policy. Downside risks for employment and activity will also be closely monitored but, to a degree, have already been protected against by the Bank of Canada returning policy near neutral.

For the Bank of Japan, higher near-term inflation has not shifted their perspective on policy or the known risks to the outlook. FY2025 annual inflation (to March 2026) is now expected to come in at 2.7%yr, up from 2.2%yr. However, being the result of a one-off surge in the price of rice, it is being looked through, with the BoJ’s focus remaining on wage outcomes and their impact on demand-driven inflation. Corporate profit margins are supportive of further robust wage gains, but the uncertainty clouding the global outlook is not. Our base expectation is that the BoJ will remain patient and only raise their policy rate again in March 2026. But we are mindful of their take on the summer bonuses data due late August. If this shows enough promise, and global uncertainty ebbs, the next rate hike could come in January 2026 instead.

Before concluding for the week, it is worth highlighting that the White House continues to announce updated tariff rates for nations across the world, effective 7 August. This week, the administration announced that country’s who have a trade deficit with the US will have a minimum tariff of 10% (Australia included), and those with a trade surplus a minimum rate of 15%. Individual country rates vary significantly though, with recent examples including: Switzerland, 39%; Canada, 35% (excluding USMCA goods); South Africa, 30%; India, 25%; Taiwan, 20%; and Thailand / Cambodia, 19%. Industry tariffs are still be assessed by the administration and there is the potential for retaliation. US trade policy is therefore likely to remain a focus for markets in the weeks to come ahead of clear evidence of the policy’s impact on the US economy – which is likely into Q4.

Gold (XAUUSD) appears poised for a double correction from its 16 June 2025 high. A double three consists of two corrective patterns, typically zigzags. From the June peak, wave (W) concluded at 3246.55, and wave (X) rallied to 3438.58, as shown on the 1-hour chart. Wave (Y) is now unfolding lower with internal subdivision as a zigzag. From wave (X), wave ((i)) ended at 3351.17, and wave ((ii)) peaked at 3377.45. Wave ((iii)) declined to 3324.80, followed by a wave ((iv)) rally to 3340.34. The final wave ((v)) completed at 3311.62, forming wave A in a higher degree. A corrective wave B rally reached 3345.35 before gold resumed its downward move.

Within wave C, wave ((i)) finished at 3301.47, and wave ((ii)) rallied to 3334.08. Wave ((iii)) dropped to 3267.94, with wave ((iv)) ending at 3314.85. Gold should continue lower in wave ((v)) to complete wave C. The potential target lies within the 100%–161.8% Fibonacci extension from the 16 June high. This projects a support zone between 3104 and 3230, where a three-wave rally is anticipated. Traders should monitor this area for potential reversal signals, as it may offer support for a corrective bounce.

Gold (XAUUSD) – 60-Minute Elliott Wave Technical Chart:

XAUUSD – Elliott Wave Technical Video:

https://www.youtube.com/watch?v=9ko6UqLOTd8