Mexico's central bank Banxico is set to raise its key interest rate today by another 75 basis points. As in the market it seems to be largely priced in, the statement will determine if the Mexican peso can strengthen, economists at Commerzbank report.

Open interest in natural gas futures markets extended the downtrend and shrank by just 169 contracts on Wednesday, noted preliminary readings from CME Group. On the other hand, volume resumed the uptrend and went up by around 53.4K contracts, partially offsetting the previous drop.

USD/TRY pares recent losses ahead of the key Turkish data. Fed policymakers resist praising downbeat US inflation. Turkiye reported downbeat Unemployment Rate for June previously. Turkish President Erdogan is also up for a speech, Ankara braces for record Current Account Deficit.

NZD/USD sports a 0.64 handle for the first time since early June. Economists at ANZ expect the kiwi to receive further support from the Reserve Bank of New Zealand (RBNZ) next week.

While the FX market still seems to see a soft landing in the US at least within the realm of possibility, the ship has probably sailed in the United Kingdom. Economists at Commerzbank expect the British pound to face a tough time to attain gains.

EUR/USD has tumbled below 1.0300 amid a notable recovery in the US dollar. Risk remains in a weaker spot amid US-Sino tensions and China's covid woes, underpinning the dollar's safe-haven appeal. Investors reassess Fed rate hike expectations after soft US CPI. 

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, the current upward bias could encourage NZD/USD to advance to the 0.6475 level in the short term.

Considering advanced prints from CME Group for crude oil futures markets, traders scaled back their open interest positions by around 2.7K contracts on Wednesday, resuming the downtrend following Tuesday’s daily build. Volume, instead, went up for the second straight session, now by around 70.3K contracts.

The 200-period EMA is acting as a major barricade for the counter. A bullish flag formation adds to the upside filters. The RSI (14) is attempting a break above 60.00, which will strengthen the oil bulls.

EUR/USD snaps three-day uptrend, grinds lower at intraday bottom. MACD, RSI hint at a gradual upward trajectory but 1.0370 is the key hurdle. Further downside can aim the 1.0190 support confluence.

“Daily closing below the bearish 50-Daily Moving Average (DMA) at $1,784 will extend the corrective decline towards the $1,770 round figure, below which the $1,750 support zone will be tested again.”

“The 100 and 200 DMA bear cross is playing out and weighing negatively on the bright metal even though the 14-day Relative Strength Index (RSI) still remains above the midline.”

“On the upside, acceptance above the $1,800 mark is critical to resume its recovery momentum. The monthly high at $1,808 and the July 5 high at $1,812 will be next on buyers’ radars.”

 

Chinese leaders had been “trying to push their way” toward their goals on Taiwan.” 

“What we saw with China is they were trying to establish sort of a new normal.”

“And we just can’t let that happen.”

EUR/JPY is declining gradually after failing to sustain above the critical hurdle of 137.00. The shared currency bulls are facing the heat as German Lindner has displayed a gloomy Eurozone outlook. Despite the prolonged ultra-loose monetary policy, the BOJ is failing to inflation rate above 2%.

24-hour view: “We did not expect the outsized advance in GBP as it surged to 1.2277 before easing off to close at 1.2217 (+1.18%). The sharp and swift rise appears to be running ahead of itself and GBP is unlikely to advance further. For today, GBP is more likely to trade between 1.2160 and 1.2260.”

Next 1-3 weeks: “On Monday (08 Aug, spot at 1.2065), we highlighted that the risk for GBP is tilted to the downside but it has to crack the major support at 1.2000 before a sustained decline is likely. However, GBP did not break 1.2000 as it surged to a high of 1.2277 during NY session. The rapid build-up in upward momentum suggests that the risk for GBP has shifted to the upside. That said, it has to crack the major resistance at 1.2300 before further sustained advance is likely. The upside risk is intact as long as GBP does not move below the ‘strong support’ level at 1.2125 within these couple of days.”

Shiba Inu price has managed to stay above the POC at $0.0000118, indicating support from bulls. A continuation of this momentum could trigger a 60% rally to $0.0000200.  A daily candlestick close below the $0.0000106 support level will invalidate the bullish thesis for SHIB.

Gold price remains pressured around intraday low, extends pullback from one-month high. US dollar traces Treasury yields as Fed policymakers reject post US CPI optimism. Headlines surrounding China also underpin the US dollar’s safe-haven demand.

CME Group’s flash data for gold futures markets noted open interest rose by around 2.6K contracts on Wednesday, extending the current erratic performance. In the same line, volume went up for the second session in a row, this time by around 40K contracts.

24-hour view: “EUR lifted off during NY session and rocketed to 1.0368 before coming back down to close at 1.0297 (+0.84%). The strong surge appears to be overdone and EUR is unlikely to advance further. For today, EUR is more likely to trade sideways between 1.0260 and 1.0350.”

Next 1-3 weeks: “After trading within a 1.0100/1.0300 range for a few weeks, EUR lifted off and cracked 1.0300 during NY session (high has been 1.0368). Further EUR strength appears likely even though overbought shorter-term conditions suggest a slower pace of advance. The next resistance level of note is at 1.0400. On the downside, a break of 1.0230 (‘strong support’ level) would indicate that the current rapid build-up in upward momentum has fizzled out.”

EUR/USD has tumbled to near 1.2850 amid a significant recovery in the DXY. A lower US CPI print has trimmed the odds of hawkish guidance while rate hike odds are solid. This week, the US Michigan CSI data will be of utmost importance.

Shiba Inu price has managed to stay above the POC at $0.0000118, indicating support from bulls. A continuation of this momentum could trigger a 60% rally to $0.0000200.  A daily candlestick close below the $0.0000106 support level will invalidate the bullish thesis for SHIB.

Steel prices remains pressured as softer US dollar couldn’t impress buyers amid concerns over China, costing at home. Increased prices of coke, easing production strain also weigh on the metal prices. Headlines surrounding China, US consumer sentiment will be important for fresh impulse.

USD/CAD prints mild gains as it consolidates the biggest daily fall in two-months. Six-week-old support line, 200-DMA challenged bears but 100-DMA guards recovery moves. Sluggish MACD, RSI (14) fail to support recovery moves from the lowest levels since early June.

USD/JPY is auctioning in a balanced profile above 133.00 as DXY extends recovery. A downward US CPI will result in a trimmed extent of hawkish guidance by the Fed. An ongoing Japan cabinet re-shuffle will keep the yen bulls on the tenterhooks.