• AUD/USD eased from 0.6935/40 to below 0.6930 on jobs number miss nAZN0FTH83

• Despite the big miss on jobs, the unemployment rate fell to 3.4% from 3.5%

• The AUD/USD has recovered to 0.6940 after the brief dip lower

• The market is now pricing in an 80% chance RBA will cut 25 BPs in Sept

• AUD/USD support at 50% of 0.6682/0.7146 move at 0.6909

• Resistance is at the 21-day MA at 0.6985

• For more click on FXBUZ

• +0.1% after closing up just 0.05%, supported by EUR/GBP demand +0.5%

• EUR supported by a jump in EZ yields after UK CPI hit 10.1% nL8N2ZT21F

• 5, 10 & 21 day moving averages crest, neutral daily momentum studies

• 21 day Bollinger bands flat line - signals show no strong bias

• 1.0116, lower 21 day Bolli and 1.0111 61.8% Jul/Aug rise a base Tuesday

• Support around 1.0100 should be resilient - a potential range base

• Close above 1.0210 21 day moving average to target 1.0303 upper 21 day Bolli

• 1.0165/75 1.611 BLN and 1.0200/15 2.778 BLN are Thursday's close strikes

  For more click on FXBUZ

• USD/JPY well supported in early Asia after closing 0.5% higher Wednesday

• Boosted by higher US yields on expectations Fed will maintain hawkish policy

• Fed minutes show more rate hikes in pipeline,but pace could slownL1N2ZT0WB

• USD nears top end of broad 130.50-135.50 range; pivotal resistance 135.57

• Range may hold ahead of Jackson Hole Aug 25-27; clear break resets uptrend

• More resistance at 135.95-136.00; supports 134.75-80, 134.25-30

• For more click on FXBUZ

• EUR/USD opens a few pips higher as EUR gained against all the majors

• EUR/USD resilience due to sharp rise in German bund yields nL8N2ZT21F

• Resistance is at the 21-day MA at 1.0209 and 10-day MA at 1.0216

• Support is at the 61.8 of the 0.9952/1.0369 move at 1.0111

• Range trading likely in Asia as various factors offset

• Key will be EUR/JPY flows after cross rose over 2% last two days

• EUR/USD may see short-squeeze while 1,0111 holds on dips

• For more click on FXBUZ

• AUD/USD opens -1.22%, as higher US yields and sinking commodities weighed nL1N2ZT1W4

• AUD was worst performing currency as slide in iron ore added extra weight nL1N2ZT0FX

• A slight dovish turn in RBA expectations following Aus WPI also weighed

• AUD/USD closed below 21-day MA (0.6984) and it is now resistance

• Support is at the 50% of the 0.6682/0.7136 move at 0.6909

• A break below 0.6900 targest the 61.8 of the move at 0.6855

• AUD will likely remain vulnerable as global growth concerns escalate

• For more click on FXBUZ

The dollar index dropped back to +0.1% on Wednesday, losing earlier gains after Fed meeting minutes failed to live up to hawkish comments policymakers had made since the July 26-27 policy gathering.

The minutes nFOMHJEI0C made clear that the pace of future rate hikes would be data-dependent, bolstering dovish interpretations in light of July CPI, which was released after the meeting and came in flat.

Treasury yields and September Fed rate-hike pricing retreated enough to weaken the dollar against the euro and trim its gains elsewhere.

U.S.
retail sales were flat overall, but an above-forecast 0.8% monthly rise in core sales nL1N2ZS1HC supported the spillover rise in Treasury yields from gilts before slipping on the Fed minutes.

Earlier, sterling captured the spotlight, falling after UK inflation nL8N2ZT1CC posted a rise to 10.1%, raising fear that a tougher BoE inflation response would increase recession risks as two-year gilt yields rose more than 30bp on the day to a 14-year high of 2.453%.

Sterling recovered most of its losses -- which had taken it down toward August's 1.2004 lows -- after the Fed minutes.

EUR/USD was up 0.1% in choppy trading, while the broader dollar index was also up 0.1% after again failing to clear Tuesday and August's highs by the 50% Fibo of the July-August drop at 106.93-96.

The yen, with JGB yields stuck near zero, struggled against the dollar, euro and sterling early on.

USD/JPY retreated well off its high of 135.50 on EBS, by the 50-DMA and August's highs, but held onto gains of 0.6%.

Upcoming options expiries at 136 and the nearby 61.8% Fibo of the July-August correction still look attractive, particularly after Wednesday's 134.91 low found buyers exactly at the 200-hour moving average.

Twelve consecutive months of Japan trade deficits and the recent flip to a current account deficit suggest the yen's tumble this year hasn't been a magic bullet for the export-led economy nL1N2ZT016.

The Australian dollar fell 1.3%, coming off its 0.6909 low by the daily kijun line that also supported the Aug.
5 intra-month lows.
Slightly below-forecast Australian wage growth tamped down RBA rate hike pricing nL1N2ZT02P before spillover from surging gilts yields lifted them.

Bitcoin fell about 2% in line with broader degrees of derisking.

Thursday's U.S. releases include jobless claims, which have been slowly inching higher from very low levels, Philly Fed August manufacturing data, existing home sales and leading indicators.

For more click on FXBUZ

• USD/JPY rallied to 135.50 on surging Tsy-JGB yields spreads nL1N2ZT12M

• But gains were trimmed as Tsy yields were slipped on Fed minutes

• Minutes didn't live up to hawkish post-meeting Fed speeches nL1N2ZT0WB

• The session high was by the 50-DMA shy of Aug's 135.585 highs on EBS

• Wed's 133.91 low was made on a strong 200-HMA base, now at 134.05

• Initial support is by Tuesday's 134.685 high

• US core retail sales +0.8%, overall flat nL1N2ZS1HC a decent result

• Jobless claims, Philly Fed mfg and existing home sales on tap Thursday

• USD/JPY uptrend intact while above 100-DMA, closes above 132.87 cloud base

For more click on FXBUZ

• EUR/USD traded a tight range overnight, NY opened near 1.0175, drop ensued

• US rate EDZ2US10YT=RR rise after sales data nL1N2ZT0WW lift US$

• EUR/USD hit 1.0146 on EBS then hit 1.0199, as US rates softened & yen sold

• EUR/JPY rally to 137.88 on EBS wasn't enough to help EUR/USD upside extend

• Rates firmed & US$ stayed buoyant, EUR/USD neared 1.0170 into Fed minutes

• Yields US2YT=RR slid after Fed minutes nFOMHJEI0C, EUR/USD neared 1.0195

• Diverging Fed, ECB paths should limit EUR/USD downside nL1N2ZT17V

• For more click on FXBUZ

Societe Generale Research likes AUD vs GBP (short GBP/AUD) as a long-term trade.

"The RBNZ raised rates by 50bp to 3% and with Australian wage growth looking optically a lot lower than in many developed economies, AUD/NZD longs have been squeezed and AUD/USD is back under 0.70," SocGen notes. 

"August isn't historically a good month for the Antipodeans, but it may be useful to provide a major long-term buying opportunity for AUD, perhaps against GBP," SocGen adds. 

EUR/USD traded flat on Wednesday after clawing back some earlier losses following July U.S. sales data nL1N2ZS1HC, with technicals indicating a resumption of losses even though diverging central bank expectations could prevent a major collapse.

Eurodollar futures show investors expect the Fed to begin cutting rates in mid-2023 EDU3 with a total of nearly 140bp of loosening expected by Q3 2026 EDH26.

Euribor futures indicate the ECB is still expected to hike rates until Q3 of 2023 FEIU3, with no cuts priced in thereafter.

This divergence should keep EUR/USD from falling sharply even though technicals highlight downside risks.

EUR/USD is consolidating losses from the August 10 daily high while it holds below the 10- and 21-DMAs.
Monthly RSI is oversold but not diverging and a monthly inverted hammer candle has formed.

Investors will focus on Fed rhetoric regarding inflation.
Should the Fed minutes and Fed speakers hint that inflation may be moderating EUR/USD is unlikely to fall at all.

For more click on FXBUZ

MUFG Research discusses GBP form the positioning front.

"The weekly IMM positioning data revealed an interesting jump in appetite for holding the pound. Leveraged funds GBP long position jumped to just over 32,500 contracts, which is the largest net long position since the extreme period of volatility immediately following the covid pandemic market turmoil in March 2020. If you exclude that brief period when positioning was larger, this is the largest long position since April 2018. Using our z-score measure to gauge how extreme positioning is (standard deviation from a 2-year average), the current level is over 2 standard deviations from the average," MUFG notes.

"Across the G10 space, the GBP position is the standout with all other G10 currencies less than one standard deviation. Again, for GBP, 2018 was the last time we had a z-score of 2.0 when GBP/USD was trading above the 1.4000 level," MUFG adds. 

• Cable elicited support by 1.2050 after extending south from 1.2143

• Slide extension followed U.S. July retail sales data nL1N2ZT0WW

• There is a 1.2050 option expiry for the 10am ET NY cut nL1N2ZT0XI

• 1.2143 was knee-jerk high after hot UK July inflation data nL8N2ZT1CC

• FOMC minutes at 1800 GMT may point to rationale for size of futures hikes

• See: nL1N2ZT0WB. Truss determined to deliver NI protocol bill nL8N2ZT3M8

Credit Agricole CIB Research discusses its reaction to this week's RBNZ policy decision. 

"The RBNZ raised its OCR by 50bp to 3% as widely expected, but what surprised the market and us was its ramping up of its hawkish rhetoric and the increase in the central bank’s forecast peak in the OCR. Relative to its May MPS, the RBNZ increased the peak in the OCR by 20bp to 4.1% (to between 4-4.25%) and brought forward this peak by 3 months to Q2 2023," CACIB notes.

"The two key factors for the NZD in the coming twenty-four hours will be the NZ government bond curve as deepening inversions post hawkish RBNZ meetings have held the NZD back in the past. The 2s10s spread has inverted by a few more basis points post today’s meeting. And, whether or not other central banks, especially the Fed, also remain hawkish. The RBNZ has been a leading indicator for other G10 central banks so far this cycle. The FOMC Minutes later today will be important on this front," RBNZ adds.

Credit Suisse discusses EUR/USD outlook and maintains a bearish bias targeting 0.9700 by the end of Q3

"The divergence in global natural gas and oil prices over recent weeks is also striking. We see this as driven by Europe’s Russia -driven shortage of natural gas leading to a global spike in that commodity’s price, even as better supply dynamics and a weaker global economic outlook pull down oil prices," CS notes. 

"Either way, we prefer to look at Europe’s future terms -of - trade risks through the natural gas prism as opposed to the oil one, which for us means energy market dynamics remain a negative for EURUSD but also for most key European currencies as well, with CHF being a notable exception as we discussed last week. Our end -Q3 EURUSD target remains 0.9700," CS adds. 

• EUR/USD continues to swing within rough 1.01-1.03 range

• Those prepared to counter moves towards or beyond ether extreme profiting

• July 14 low 0.9952, Jul 21 high 1.0279, Jul 27 low 1.0097, Aug 2 high 1.0294

• Aug 3 low 1.0123, Aug 10 high 1.0369, Aug 16 low 1.0122

• 20-day Bollinger bands 1.0306-1.0211-1.0116 help define ranges

• Break from ranges probably won't happen ahead Sep 8 ECB or poss Sep 21 Fed

• Oil drop nL1N2ZT0GB gas rise nL1N2ZT0HF pull EUR in opposite directions

• Cross beginning to trend despite positive momentum and intraday shadow

• New reversal low and 14-day momentum poised to flip negative

• Small rebound from 0.8390 has formed a long lower candle shadow

• Having peaked at 0.8492 on Aug. 12 price has now dipped under 0.8400

• A cluster of moving average resistance stands over the mkt at 0.8426-38

• Next Fibo level from 0.8341-0.8492 is at 0.8377

• Risk developing for a full retracement to 0.8341, Aug. 2 low

  For more click on FXBUZ

• AUD/USD slides to 0.6965 (one-week low) as iron ore prices tumble

• See: nL1N2ZT0FX. Iron ore is Australia's biggest export earner

• Bids may emerge around 0.6950 if AUD/USD falls further (0.6947 = Aug 10 low)

• 0.7000 is now a resistance level (0.6988 was Asia low; 0.6992 = Tuesday low)

• U.S. retail sales data due 1230 GMT; 0.1% MM f/c. FOMC minutes due 1800 GMT

• Australia Q2 wages up 2.6% YY vs 2.7% f/c nL1N2ZT02PnL4N2ZT0SA

• 1.2119 is cable high water-mark since its 1.2080 intra-day low at 0808 GMT

• Drop to 1.2080 influenced by some profit-taking on long positions

• 1.2143 was knee-jerk high after UK July CPI topped 10% nL8N2ZT1CC

• Hot UK CPI data has spurred hawkish shift in BoE rate expectations

• Money markets see BoE rate rising to 3.75% (vs 3.43% at Tuesday's close)

• 0#BOEWATCH. 1.2143 was six pips shy of Monday's high nL1N2ZT0CX

• Cable spiked to 1.2143 on hotter than expected UK July CPI data

• Up 10.1% YY vs 9.8% f/c nL8N2ZT1CC. 1.2103 = subsequent pullback low

• 1.2143 was six pips shy of Monday's high (1.2008 was Tuesday's low)

• Hot CPI data increases probability of another 50 bps BoE hike in September

• BoE expects CPI to peak at 13.3% in October (2% is BoE's target level)

• 1.2092-1.2122 was GBP/USD range in Asia (before UK CPI data release)

• Fibonacci levels top and bottom just containing recent activity

• Tues rebound from 1.0123 left a 61.8% lvl intact, 1.0111 from 0.9952-1.0369

• Aug 11 rejection from 1.0369 left a 1.0370 50% Fibo intact off 1.0787-0.9952

• Tues Doji candle hints at indecision: could point to a pause in the slide

• A levelling off of the daily cloud also adds to the sideways call

• Neutral momentum and RSI also reflect consolidation risk

• We lean bearish but will stand aside for now

  For more click on FXBUZ

• NZD/USD fails to benefit from RBNZ's 0.5% rate hike and hawkish guidance

• Rises a modest 0.2% despite c.bank lifting its projection for peak in rates

• RBNZ sees rates at 4.0% early next year versus previous projection of 3.7%

• Warns it would have to bring forward future tightening nL1N2ZT04C

• NZD fails to sustain gains as focus turns to Fed July meeting minutes

• Minutes expected to have hawkish tilt, may show Fed considered 100 bps hike

• Support 0.6320-30, 0.6285-90, resistance 0.6375-80, 0.6400-05

• For more click on FXBUZ

• EUR/USD opened +0.12% at 1.0171 after recovering from 1.0122 intraday

• It was largely ignore in Asia and traded in a 1.0166/1.0177 range

• Support is at the 61.8 of 0.9952/1.0369 move at 1.0111

• Resistance is at the 21-day MA at 1.0209 and10-day MA at 1.0222

• EUR/USD likely to drift ahead of the Fed minutes later today

• Some analysts warn the Fed may sound a hawkish note in the minutes

• This is due to the market pricing in a slowing of Fed tightening further out

• US retail sales may also have an impact n sentiment

• For more click on FXBUZ

• AUD/USD eased from 0.7020 to below 0.7000 following softer Aus Q2 WPI nAZN0FQLJP

• RBA closely watches wages and softer number may influence size of next hike

• AUD/USD support at 21-day MA at 0.6986 and break increases downward pressure

• Market will now focus on RBNZ decision to be announced shortly

• For more click on FXBUZ

• Steady after closing up 0.1%, supported by cross demand, EUR/JPY +0.8%

• Post Brexit UK friction - dispute resolution over research nL8N2ZS3WZ

• Liz trust, likely next UK PM behind the move - expect conflict if elected

• 5, 10 & 21 day moving averages crest, negative daily momentum studies

• 21 day Bollinger bands expand - signals remain modestly negative

• 1.0115, lower 21 day Bolli and 1.0111 61.8% Jul/Aug rise a base Tuesday

• Support around 1.0100 likely resilient - potential range base

• 1.0150 394 mln, 1.0175 360 mln, 1.0190/00 726 mln Wednesday's close strikes

For more click on FXBUZ