EUR/USD's risk profile tilted modestly higher on Wednesday as recent U.S. data prompted investors holding long-dollar positions to reconsider their conviction. The catalyst was the in-line July U.S. CPI report, which eased fears that inflation might surprise to the upside and force the Fed into a September rate hike. In response, both the dollar and the broader U.S. interest-rate complex weakened, with markets paring the probability of a September Fed hike to below 37%, according to CME FedWatch. This shift was mirrored in rates markets, where SOFR futures rallied and the dollar's yield advantage over the euro narrowed, pushing U.S.-German 2-year yield spreads to their tightest levels since July 20.

Positioning dynamics could amplify further dollar softness. CFTC data show net-long dollar positions were trimmed from the previous reporting period but remain elevated, suggesting that continued weakness in U.S. rates could trigger additional unwinding of long-dollar bets, a dynamic that would likely support EUR/USD.

Technical indicators reinforce the bullish tone: rising daily and monthly RSIs, still below overbought territory, point to building upward momentum, while EUR/USD's position above its 10-, 21-, and 55-day moving averages provides further confirmation.

Looking ahead, attention now turns to Thursday's July PPI release. Should the data print in line with or below expectations, it could provide further momentum for a EUR/USD rally, extending the dollar's recent vulnerability.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research discusses the latest wave of yen-buying intervention.

"As we argued previously a break above 160 would likely be interpreted as a sign of limited policy resolve, while successful intervention that pushes USD/JPY below 155 would have strengthened perceptions of strong commitment at least until recently.

The immediate focus is therefore the risk of USD/JPY moving above 160. Following the weaker-than-expected US July employment report released on 7 August, authorities had an opportunity to conduct a "follow-through" intervention and push USD/JPY below 155. Instead, no intervention materialized, and the pair has since traded back in the 159s," BofA notes.

"Confidence in Japan's commitment to defending the yen improved after coordinated intervention with the US on Jul 31. However, as USD/JPY has rebounded without any intervention over the past week, that credibility appears to have eroded," BofA adds.

CIBC Research reviews today's US July CPI report.

"No surprise today with the July CPI release in the US. Headline inflation rose 0.1% in July, in line with consensus expectation. The tame headline increase was helped by lower gasoline prices. The core measure grew 0.2% in July, also in line with expectation. Commodities less food and energy rose 0.2% after two consecutive monthly declines. Shelter increased by 0.1%, as it did in June. Motor vehicle insurance continued to decline (-0.2%), the third consecutive monthly declines. Medical services accelerated to 0.6% following a 0.1% decline in June, led by hospital services. The annual pace of total CPI continued to gradually decline from 3.5% in June to 3.4% and core CPI from 3.5% to 3.4% in July," CIBC notes

"With core inflation in line with consensus, and inflation continue to decelerate on an annual basis, this should bring some comfort some members of FOMC and we continue to expect the Fed to hold rates in the September FOMC meeting," CIBC adds.

• AUD/USD dipped down to 0.7054 overnight then rallied to 0.7071

• NY opened near 0.7065, AUD/USD traded up +0.05% in early action

• Soft USD, US yields & USD/CNH drop helped buoy the pair

• Rallies in gold, silver, copper and equities added buoyancy to AUD/USD

• Consolidation of recent gains persists while below 50% Fib of 0.7277-0.6867

• Rising RSIs, pair's hold above 10-, 21- 55- & 200-DMAs are bullish signals

• US July CPI in focus, a downside surprise could see AUD/USD rally sharply
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• USD/JPY drops from 159.46 in Asia, briefly to 158.60 in London, before rebounding

• Some nervousness still over FX intervention but most say unlikely now

• Scope is growing for a bigger rise and break above the 159.59 level

• 159.59 is a 50% retrace of 163.99-155.20 intervention fueled slump

• However beware USD/JPY and EUR/JPY usually struggles in August

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Correlation Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• USD/JPY saw a big rise on Monday, closing up 208 pips, largest one-day since Dec

• Spot has seen a modest 159.20-159.46 EBS range, on Wednesday

• Some nervousness still over FX intervention but most say unlikely now

• Scope is growing for a bigger rise and break above the 159.59 level

• 159.59 is a 50% retrace of 163.99-155.20 intervention fueled slump

• Spot is now trading within the thick 158.92-161.38 daily cloud

• However beware USD/JPY and EUR/JPY usually struggles in August

USD/JPY Daily Rise Table


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

Aug 12 (Reuters) - The British pound usually struggles against the U.S. dollar in August, but that is not the case so far this year.

GBP/USD's August performance since 2000 shows it has fallen in 17 of the past 26 years, or 65% of the time. Seasonality should not be considered in isolation — it needs to be corroborated by other factors. The cable overall bias remains on the upside, and it could well break above the July 1.3556 peak. 14-day momentum remains positive and spot is underpinned by a key 1.3432 Fibonacci level, a 38.2% retrace of the recent 1.3274 to 1.3530 rise. These technical factors are reducing the likelihood that GBP/USD will close down in August. It opened the month at 1.3477 and is now consolidating above.

However, a break and daily close below the 1.3432 Fibo would shift overall bias back to the downside and put it on course to close August in negative territory.
GBP/USD Seasonality Chart


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own; Editing by Kevin Liffey and Jan Harvey)

• Gold up to $4434/oz on Aug 11

• Gold has broken and closed above daily Ichimoku cloud

• Chance of a bullish close above 100-DMA at $4387/oz

• The influential 200-DMA is $4498/oz

• Gold rises have tended to precede USD drops

• Traders heavily long USD ahead of US CPI report

•
Gold


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Bullish signal if 21-DMA 1.1470 rises over 55-DMA 1.1482

• Speculators are betting over $8 billion that the euro drops

• Bets on a drop were created when pair was lower

• Few shorts have been pared during 1.1352-1.1580 rise

• Short squeeze may follow any close over 100-DMA at 1.1567

• Traders heavily long USD ahead of US CPI report

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Australian copper stocks rise vs broader benchmark's 0.6% fall

• Copper prices edged up on supply fears after a temporary shutdown at a major Indonesian smelter, ahead of key U.S. inflation data [MET/L]

• Sandfire Resources rise as much as 1.9% to A$21.72, highest level since January 30

• Sandfire on track for ninth straight day of gains

• Australia-listed shares of Capstone Copper gain as much as 2% to A$16.2, highest since February 16

• Capstone on track for seven-session winning run
(Reporting by Nikita Maria Jino in Bengaluru)

• Australian gold miners rise as much as 1.2%, while the broader benchmark slips 0.7%

• Sub-index on track for ninth consecutive day of gains, if trends hold

• Bullion prices rise nearly 1% ahead of key U.S. inflation data that would provide monetary policy clues, while the Gulf conflict kept concerns about oil-driven inflation elevated [GOL/]

• Northern Star Resources rises as much as 2.1%

• Evolution Mining advances as much as 1.1% in its ninth straight day of gains

• YTD, AXGD down 1.8%, including the day's moves, lagging behind AXJO's 5.4% rise

(Reporting by Nikita Maria Jino in Bengaluru)

• JPY crosses bid alongside USD/JPY, on Nikkei buy and currency hedges?

• EUR/JPY 183.60-88 EBS, in area of ascending 200-DMA at 183.85

• Buoyant, in area of 183.81 hourly Ichimoku tenkan, kijun 183.51 below

• CHF/JPY 196.11-51, sub-196.67 high Mon, at top of 195.63-196.23 hourly cloud

• GBP/JPY 214.88-215.25, at top of 214.12-215.27 daily Ichimoku cloud

• Also above its ascending hourly Ichimoku cloud between 213.51-214.52

• AUD/JPY 112.32-57 and at base of its 112.47-113.01 daily Ichimoku cloud

• Above its ascending hourly Ichimoku cloud between 111.69-112.12

• NZD/JPY 93.48-71, above its 92.42-93.21 daily Ichimoku cloud

• Still above its ascending hourly Ichimoku cloud between 93.16-45 too

• JPY under the gun across the board, eyes still on USD/JPY, intervention?

• Related , for more click on [FXBUZ]

EUR/JPY:


GBP/JPY:


AUD/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD steady Wed as Iran peace hopes ebb & markets await U.S. inflation

• Iran says Strait of Hormuz will stay closed unless U.S. meets its demands

• U.S. Jul CPI due Wed, Reuters poll: headline +3.4% y/y, core +2.5% y/y

• AUD 0.7088 level a likely inflection point, stop-loss buying if breaks above

• RBA Assistant Governor Christopher Kent fireside chat in Sydney Thur

• Range Asia 0.70595-685 support 0.6920 0.6866, resistance 0.70885 0.7200
AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY consolidating on 159 while Tokyo slept, Asia today 159.26-32 EBS

• Seems some nervousness over fresh Japan FX intervention still but nothing

• Could be Japan awaiting September's likely BOJ hike but already discounted?

• Only fresh intervention will get JPY higher but effectiveness questioned

• USD on back foot elsewhere, USD up vs JPY on fresh hedging of stock buys?

• Nikkei decent rise Monday to 67,006.84, when USD/JPY broke back above 159

• Nikkei maybe heavier today with Wall St off overnight but downside limited?

• Japanese importers look to buy into any dips as heretofore

• Technically, USD/JPY back in 158.92-161.38 daily Ichimoku cloud

• 100-DMA 160.01 in cloud, 200-DMA below cloud at 158.15

• Hourly Ichimoku kijun 159.16, cloud 158.02-82 below, supportive too

• Option expiries likely to help contain spot action today with market thin

• 159.00 $1.3 bln, 159.05-45 total $473 mln, 159.50-75 $1.3 bln

• JGB-US Treasury rate differentials narrower still but shrugged off

• In 2s differential to @258 bps, in 10s holding @184 bps

• Related comments , , ,

• Also , on US rates

• US markets , , ,

• More on crude , on Middle East ,
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JGB-US Treasury interest rate differential:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• USD/KRW remains heavy, veering toward test of 1400 psych barrier

• But tentative USD/JPY bounce back above 159 may slow USD/KRW

• USD/KRW last 1412.5, after Tues pullback to 1413.0 erased Mon gain

• Bollinger downtrend channel guides lower still, capping at 1419.0

• If 1400 barrier breaks, Fibo at 1393.0 will be targeted by shorts

• S. Korea unemployment rate rises though more jobs added
KRW


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• NZD/USD continues to tread water ahead of critical U.S. inflation update

• U.S. Jul CPI due later Wed, Reuters poll: headline +3.4% y/y, core +2.5% y/y

• Iran says Strait of Hormuz will remain closed until U.S. meets its demands

• Release of RBNZ Q3 expectations survey Thur will be closely watched

• NZD well supported near 0.5850, break below requires shift in RBNZ narrative

• Futures pricing currently implies 86.4% chance of 25 bps RBNZ hike Sep 2

• Range NZ 0.58775-825, support 0.5850 0.5627, resistance 0.5990-95 0.60925
NZD Hourly Bollinger Study & DXY Daily 55-DMA


NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Bank of America Global Research previews the US July CPI report due on Wednesday.

"After a notably soft June CPI report, we expect the July CPI to print more in-line with recent trends, including 0.1% m/m in headline and 0.2% in core. We go into the data maintaining our call for 3 Fed hikes this year, even after last week's soft labor report. Overall labor conditions remain stable, with Fed's reaction function still skewed to the inflation side of the mandate," BofA notes.

"We expect US rates and the USD to react more to a downside print than to an equally sized upside print. While an upside print should put the Sept FOMC firmly in play, the decision would still likely hinge on August data, given Chair Warsh's apparent reluctance to hike. Conversely, a soft print would all but rule out a September hike and notably challenge market pricing of ~30bp of hikes through December. UST positioning and to a lesser extent USD positioning point marginally in this direction," BofA adds.

• AUD/USD +0.3% from Tue 0.70375 low; RBA highlights inflation-fighting focus

• RBA says further OCR hike possible with inflation risk tilted to the upside

• Iran adamant Strait of Hormuz to remain closed unless U.S. meets its demands

• AUD resistance at 0.7088 pivotal, expect stop-loss buying if breaks above

• U.S. Jul core CPI update Wed, Reuters poll consensus +0.2% m/m, +2.5% y/y

• RBA Assistant Governor Christopher Kent fireside chat in Sydney Thur

• Overnight range 0.7047-695 support 0.6920 0.6866, resistance 0.70885 0.7200
AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• NY opened near 1.1535 after 1.1548-1.1532 traded in Asia & Europe

• The pair lifted early on USD, USD/CNH, US yield moves lower

• 1.1548 traded; upward moves in gold, silver, stocks aided the lift

• Sellers then emerged as USD firmed up while gold, silver & stocks turned down

• Oil gains also helped EUR/UDS turned lower on the session

• EUR/USD sat near 1.1535 late in the day, it traded down -0.06%

• Rising monthly RSI, pair's hold above 10-, 21- & 55-DMAs are bullish signals

• US July CPI is now inf focus, an upside surprise could send EUR/USD downward
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7060 after 0.7038 traded overnight, the rally extended early

• USD, US yield , USD/CNH drops helped AUD/USD hit 0.7070

• Rallies in stocks, gold, silver and copper also contributed to the pair's rally

• Sellers emerged however and the pair fell below 0.7060 late in the day

• USD firmed up while stocks, gold, silver traded down and USD/CNH turned up

• AUD/USD was up +0.08% in NY's afternoon which helped techs lean bullish

• Rising RSIs, daily bull hammer, hold above 10-, 21- & 55-DMAs are bull signals

• US July CPI due Wednesday, a below estimate result could rally AUD/USD
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Morgan Stanley Research previews the US July CPI report due on Wednesday.

"We forecast core CPI at 0.24% m/m (2.5% y/y) and headline CPI at 0.10% m/m (3.4% y/y), with the rebound driven primarily by core services returning toward their underlying trend and a pickup in core goods. Headline inflation should remain softer than core due to continued declines in energy prices-we forecast headline at 0.10%m/m (3.4%y/y, NSA index: 334.029). We think a core print rounding to 0.3% is more likely than one rounding to 0.1%," MS notes.

"The main upside risk is a larger rebound in non-housing core services than we anticipate, particularly in lodging away from home, medical services, and communication services. Downside risks appear more limited. On the goods side, apparel inflation could come in softer than expected, while a sharper-than-anticipated deceleration in household operations, a historically volatile category, could also bring down services ex-housing inflation relative to our numbers," MS adds," MS adds.

Sterling appears to have adopted a near-term bearish tilt as recent attempts to break above 1.35 have repeatedly faltered, potentially prompting some bulls to retreat, especially in a thinly traded summer market.

Despite these rejections, the subsequent pullbacks have been rather modest, suggesting underlying demand for the pound could be forming. The recent gains in sterling have been buoyed by shifting market expectations for Federal Reserve policy. Following the Fed's decision to leave rates unchanged, which was interpreted as dovish, and subsequent soft U.S. payrolls data, traders have adjusted their outlook, reducing expectations for rate hikes in the second half of the year. This backdrop has provided some support for GBP, but the upcoming U.S. Consumer Price Index (CPI) data on Wednesday will be crucial for gauging market sentiment. The Reuters consensus calls for a slight increase in both core and headline month-on-month readings, alongside a modest decline in year-on-year measures.

Additionally, next week's UK CPI data will provide insight into domestic inflation trends. However, given the recent instability in the Middle East and its impact on energy prices, investors may place less weight on the U.S. and UK inflation data due to the recent surge in oil prices following the breakdown of the U.S.-Iran memorandum of understanding.

For now, GBP/USD is encountering resistance at recent daily highs of 1.3530 and 1.3556. Support is likely to hold firm within the 1.3423-1.3408 zone, an area reinforced by a convergence of daily moving averages.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research previews the US July CPI report due on Wednesday.

 "We expect a 0.19% increase in July core CPI (vs. +0.2% consensus), corresponding to a year-over-year rate of +2.47% (vs. +2.5% consensus). We expect a 0.05% increase in headline CPI (vs. +0.1% consensus), reflecting lower energy prices. Our forecast is consistent with a larger 0.26% increase in core PCE in July, reflecting a large increase in its portfolio management component," GS notes.

"Looking beyond July, we expect monthly core CPI increases of around 0.2% over the next couple of months, reflecting the continued slowdown in the shelter categories, shrinking contributions from tariff-related price increases, and the reversal of upward pressure on airfares from higher jet fuel prices, though risks are tilted to the upside if disruptions to oil markets and associated oil price increases prove more persistent than expected," GS adds.

AUD/USD has reversed its overnight losses, aided by improved risk sentiment, while recent central bank commentary and technical indicators suggest the odds of a rally have increased. The Reserve Bank of Australia kept rates unchanged at its latest meeting, but Governor Michele Bullock struck a notably hawkish tone in the post-meeting press conference, stating that another rate hike remained "quite possible" and confirming that a hike was actively discussed during the meeting. This rhetoric fueled a rally in Australian interest rates, with the 3-year government bond yield climbing to a nine-session high.

The combination of hawkish RBA signaling and broader risk-on sentiment has pushed technical indicators for AUD/USD further into bullish territory. After dipping toward the 10-day moving average, the pair rebounded, forming a bullish daily hammer candlestick, while the daily RSI turned higher once again. The pair's ability to hold above its 10-, 21-, and 55-day moving averages reinforces this positive structure. On a longer-term basis, monthly signals are equally supportive, with the RSI pointing to sustained upward momentum and a monthly bull hammer forming in August.

Attention now shifts to upcoming U.S. July CPI and PPI data. Should the figures align with expectations or point toward disinflation, markets may price in a less hawkish Fed stance , likely putting downward pressure on U.S. yields

and the dollar. Such an outcome could reignite AUD/USD's rally from its June low, with bulls potentially targeting key resistance near 0.7200.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)