Forex Today: Antipodeans slip amid mild risk-off; US Q2 GDP on tap
Forex today was a quiet Asian affair on the final trading day of this week, with most majors remained in tight trading ranges, as the dust settled over the European Central Bank (ECB) policy decision aftermath. Meanwhile, markets remained wary ahead of the key US growth numbers and next week’s US-China trade talks and FOMC decision.
The USD/JPY pair corrected its latest rally to 108.75 on the back of negative Asian equities and Treasury yields. However, the retreat remained capped near 108.55 region amid mixed Japanese inflation data and South Korea-Japan trade headlines. The Aussie lost further ground and hit 2-week lows of 0.6940 on aggressive RBA’s rate cut bets while the Kiwi extended losses to test the 0.6650 support, in the wake of reduced appetite for risk assets. The safe-haven gold benefited from risk-aversion and traded steady near $ 1415 levels, but gains appeared limited. Meanwhile, both crude benchmarks stabilized following the overnight drop.
Heading into Europe, the EUR/USD pair trades flatlined below 1.1150 level, consolidating ECB-backed wild ride. The Cable remains exposed to further downside risks, as Brexit jitters are back in play.
Main Topics in Asia
Gold technical analysis: Eyes 50-day MA support after bearish outside day
WTI leans against key rising support at 55.80
US Official: Aware Iran launched the missile on Wednesday
China’s Assistant CommerceMin: US firms keen to participate in China's import expo despite trade spat
Sources: Japan’s Motegi to meet with the USTR Lighthizer in Washington on August 1st for trade talks
Japan could rule to remove S. Korea from white list trade status as early as Aug 2nd – Kyodo
Japan’s Suga: Nothing decided yet on timeframe of decision on removing S. Korea from trade white list
Key Focus Ahead
Friday’s EUR macro calendar remains a light one, following Thursday’s key ECB event. The German Import Price Index (June) will kick-off the calendar at 0600 GMT, followed by second-liner releases from Italy and France that may have virtually no impact on the shared currency.
Hence, the focus shifts towards the NA calendar, with the US Preliminary Q2 GDP and Personal Consumption Expenditures Prices data likely to hog the limelight at 1230 GMT. Also, of note remains the Baker Hughes US Oil Rig Count data, due at 1700 GMT, for fresh impetus on oil prices.
Meanwhile, all eyes remain on the US-China trade talks scheduled on Monday ahead of next Wednesday’s FOMC monetary policy decision.
EUR/USD: Seller exhaustion ahead of US GDP
The EUR/USD market is showing signs of seller exhaustion ahead of the all-important US second-quarter economic growth figures. That seller exhaustion candle indicates scope for a rise to 1.12. A better-than-expected US GDP could yield broad-based USD rally.
GBP/USD: Bears back in charge amid renewed Brexit jitters, ahead of US GDP
Following a volatile Thursday, GBP/USD sees a calm session so far this Friday, with the bias leaning to the downside amid increased odds of a no-deal Brexit and cautious sentiment ahead of the key US macro data, Fed and trade talks.
Gold: Eyes 50-day MA support after bearish outside day
Gold risks falling to the 50-day moving average (MA) support, currently at $1,406, having created a bearish outside day candle on Thursday. A bearish outside day occurs when the day begins on an optimistic note.
US Q2 GDP: Risks skewed to the downside - BNZ
Analysts at Bank of New Zealand (BNZ) offer a sneak peek at what to expect from Friday’s US Q2 Preliminary GDP report due on the cards at 1230GMT.