• The euro slipped a quarter of a percent on Tuesday as investors warily eyed business activity data that will shed light on whether growing rhetoric over a trade war between the U.S. and its trading partners in recent weeks has dampened sentiment.
In early London trading, the single currency was down 0.3 percent at $1.1654. It hit a near two-week high in the previous session at $1.1750.
The Japanese yen trimmed most of its gains against its rivals on Monday as traders dampened expectations about whether the Bank of Japan will launch a fresh round of stimulus at a scheduled policy meeting next week.
Japan’s central bank is debating changes to its interest-rate targets and stock-buying techniques, people familiar with the central bank’s thinking told Reuters, sending bond yields and the yen rocketing higher on Monday.
The yen JPY=EBS was broadly flat against the dollar at 111.21 yen and a touch stronger against the euro EURJPY=EBS and sterling GBPJPY=EBS.
However, expectations of further loosening in monetary conditions drove the offshore yuan down half a percent to a 13-month low of 6.8448 yuan per dollar, its lowest since June 2017.
• As of writing the index is up 0.16% at 94.79 facing the next resistance at 94.81 (high Jul.24) seconded by 95.53 (high Jun.28) and finally 95.65 (2018 high Jul.19). On the downside, a breach of 94.27 (55-day sma) would target 94.21 (low Jul.223) en route to 93.71 (low Jul.9).
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• EUR/USD traded sideways to down throughout this Monday, consolidating the recent 170-pip bull move started last Thursday.
EUR/USD is forming a bull flag and is consolidating near the 200-period simple moving average (SMA) just below the 1.1700 figure. The next scaling points to the downside are seen in the 1.1640-1.1649 area and 1.1600-1.1613 zone; a bear breakout below that level would likely negate the bullish scenario.
The bulls objective is to break above 1.1730-1.1740 area in order to initially target the 1.1760-1.1795 zone. The bull case is still in place despite EUR/USD about to close near its low.
• In an interview with CNBC on July 20, US President Donald Trump warned that he could ratchet his measures up to US$500 billion in Chinese imports - all of what China sells to the US in a year - if Beijing continues to retaliate.
• Several U.S. companies are putting in place measures to cushion the impact of escalating trade tensions between the United States and China.
In his latest threat to the Asian nation, U.S. President Donald Trump has said he was ready to impose tariffs on all $500 billion worth of Chinese imports.
• The United States Trade Representative's office said on Monday (July 23) that it would hold public hearings on July 24 and July 25 on its proposal to impose tariffs on a list of US$16 billion (S$22 billion) worth of Chinese goods.
The proposed tariffs are in response to China's practices related to technology transfer, intellectual property and innovation, the office said in a statement.
The US in June announced 25 per cent tariffs on a total of US$50 billion worth of Chinese goods.
• Euro zone business growth slowed more than expected this month as fears over a trade war with the United States and a weaker global expansion put another dent in optimism, a survey showed on Tuesday.
But growth remained robust, and as it was accompanied by rising prices, the survey is unlikely to concern policymakers at the European Central Bank too much as they look to move away from their ultra-loose monetary policy.
IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), seen as a good guide to economic health, dipped in July to 54.3 from June’s 54.9, coming in below all forecasts in a Reuters poll in which the median was 54.8.
• Europe will not bow to threats from the United States in a trade dispute and wants to resolve it via negotiation, German Foreign Minister Heiko Maas said on Tuesday before European Commission President Jean-Claude Juncker heads to Washington for talks on the issue.
• Satellite images indicate North Korea has begun dismantling key facilities at a site used to develop engines for ballistic missiles, a first step toward fulfilling a pledge made to U.S. President Donald Trump, a Washington-based think tank said on Monday.
• Iran will respond with equal countermeasures if the United States tries to block its oil exports, the foreign ministry in Tehran said on Tuesday.
U.S. officials are stepping up diplomatic efforts to pressure countries to stop importing Iranian oil.
• Oil prices were mixed on Tuesday as benchmark Brent crude rebounded from earlier losses with market participants divided in their concerns amid rising tensions between the United States and OPEC producer Iran and signs of oversupply.
Brent crude oil was up 6 cents at $73.12 a barrel by 0706 GMT, after settling down 1 cent on Monday. U.S. West Texas Intermediate crude was down 3 cents at $67.86 a barrel, clawing back earlier losses. The contract fell 37 cents the previous day.
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• Crude oil made an attempt to break above $69.00 a barrel for the third time in three days but failure to hold prices above 69.00 was likely to be met with selling pressure.
Crude oil bull case has weakened and bears are now getting ready for the next leg down towards 66.53 and possibly beyond.
On the flip side, bulls might try to save the uptrend by trying to keep prices above 67.72 to reconquer the 69.00 once again
Reference: Reuters, CNBC
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