Cable was again the centre of attention on Friday, and having begun the session looking quite well bid it continued its recent choppy action by heading sharply lower following the release of the very weak UK Services PMI. We now have to see how it reacts to the important UK data due this week, headed by the Inflation Report Hearing and the Q2 GDP.
Elsewhere the currency markets were mixed, but the US$ retained a solid tone and edged higher, putting it on track for its fifth consecutive weekly gain as expectations of a rate increase from the Fed have come back into play following the recent upbeat data, while other central banks are seen heading in the opposite direction.
The coming week will start slowly with regards to data, with the German IFO Business Climate/Expectations and the Dallas Fed Mfg Business Climate being the main features for the coming session. Tuesday will have plenty of secondary US data, while Wednesday will be the key focus of the week, with the FOMC Meeting and interest rate decision although no change to policy is expected by anyone despite the recent improvement in the US economic outlook. The latter half of the week will be busy too, with Thursday focusing on the German CPI and then on Friday we get the BOJ Interest Rate Decision and the Q2 GDP from both the EU and the US.
EURUSD: 1.0970 
Chart: EUR/USD 4hr
24 Hour Bias: Mildly Bearish
Medium Term Bias: Mildly Bearish
The Euro traded within a fairly tight range again on Friday but dropped quite sharply from above 1.1000 to the weekly low of 1.0955 before finishing at 1.0970. From a technical perspective, the 4 hour indicators continue to look a little negative, so further downside momentum may be in order in the short term although the dailies remain fairly neutral. If pushed, the preference is still mildly to the downside, possibly for an eventual look at the 10 March low at 1.0821.
Economic data highlights will include:
M: German IFO Business Climate/Expectations, Dallas Fed Mfg Business Climate
T: German Import/Export Index, US Case Shiller House Price Index, Consumer Confidence, New Home Sales, Richmond Fed Mfg Index, Markit Flash Services/Composite PMIs, API weekly Crude Oil Stock Inventory
W: German Consumer Confidence Survey (Aug), EU Private Loans, US Durable Goods, Pending Home Sales, EIA weekly crude oil stock change, FOMC Meeting/IR Decision
T: EU Consumer Confidence, Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, German CPI, US Jobless Claims, Kansas Fed Mfg Activity
F: EU Q2 GDP, Unemployment, CPI, US Q2 GDP, Unemployment, Personal Consumption/Expenditure, Chicago Purchasing Managers Index, Rts/Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count, Fed’s Williams Speech
USDJPY: 106.00 
Chart: USD/JPY 4hr
24 Hour Bias: Neutral
Medium Term Bias: Prefer to buy dips – SL below 105.20
Having made a new trend high on Thursday (107.48) the dollar fell sharply on some reported comments from the BBC that the BOJ’s Kuroda sees no further reason for extra stimulus. After the dollar had fallen to a low of 105.41, the BBC then indicated that the comments were recorded in June which saw the dollar regain some of the lost ground, before bouncing around into the end of the session, to currently sit at 104.75. Technically, the dailies still look bullish, but having broken above, and then back below the descending trend resistance, some caution is warranted on the topside as the dollar has today made a bearish key reversal, hinting at the chance of further losses ahead. As we said before, the markets will increasingly turn their attention to the July 29 BOJ Meeting and the chances of further economic stimulus following the recent comments from the PM, Abe. This should ensure that further Yen strength is rather curtailed unless we see a need for safe haven assets, so cautiously buying dips in the dollar remains the preferred medium term strategy.
Economic data highlights will include:
M: Trade Balance
T:
W:
T: Foreign Bond/Stocks Investment, BOJ Press Conference,
F: Japan CPI, Unemployment, Industrial Production, Retail Trade, Housing Starts, Construction Orders, BOJ Interest Rate Decision, Outlook
GBPUSD: 1.3078
Chart: GBP/USD 4hr
24 Hour Bias: Neutral - Choppy
Medium Term Bias: Cautiously Bullish
Cable remains volatile within the broad 1.3000/1.3400 rage and this may continue to be the case early in the week. Unless we break below 1.3000 I still prefer to look for a dip to buy into, hoping for another recovery towards 1.3400, and if the head/shoulder neckline is broken (which looks a little unlikely), the chance of a move to 1.4000. SL on long positions should be around 1.2950.
Economic data highlights will include:
M: CBI Industrial Trends Survey
T: Inflation Report Hearing
W: Provisional UK Q2 GDP, CBI Distributive Trades Survey - Realised
T:
F: UK Consumer Confidence
USDCHF: 0.9870 
Chart: USD/CHF 4hr USDCHF - Support and Resistance Levels
24 Hour Bias: Neutral
Medium Term Bias: Mildly Bullish
USDCHF remains fairly choppy within the 0.9800/0.9900 range but retains a mildly bid tone which saw it reach 0.9895 on Friday. The momentum indicators are not telling us much although if anything both the 4hour/daily momentum indicators still look mildly positive, so buying dips, trading from the long side remains the preferred plan - but with a tight stop loss placed below 0.9800.
Economic data highlights will include:
- n/a
AUDUSD: 0.7460
Chart: AUD/USD 4hr
24 Hour Bias: Mildly Bearish
Medium Term Bias: Prefer to sell rallies
The commodity bloc remained under pressure heading into the weekend, with the Aud breaking below the rising trend support and heading down to a low of 0.7442. Further losses look possible and the RBA will now begin to come increasingly in to focus as they meet on Aug 2, particularly so after the dovish lean of the minutes of the previous meeting, released last Tuesday. The market is looking forward to the chances of a cut and possibly to other forms of economic stimulus which could see an acceleration lower. We shall see, but in the meantime, thoughts of further easing should limit the upside for the Aud and therefore I still prefer to look for levels to sell into and 0.7500/20 again looks rather toppish although I doubt we see it up there today.
Economic data highlights will include:
M: Import/Export Price Index
T:-
W: CPI
T:
F: PPI, Private Sector Credit
NZDUSD: 0.6985 
Chart: NZD/USD 4hr NZDUSD - Support and Resistance Levels
24 Hour Bias: Prefer to sell rallies
Medium Term Bias: Mildly Bearish
Having had a sharp run to the downside, the Kiwi consolidated on Friday close to 0.7000 and, while the 4 hourly charts do look mildly supportive in the short term the dailies remain strongly negative so selling into short term rallies seems to be the theme. I still prefer to trade the Kiwi from the short side from a structural standpoint and further out look for a return towards the 200 DMA 0.6775 and possibly to the major rising trend support/channel base at 0.6640 (see daily chart below).
Economic data highlights will include:
M: Trade Balance (June), RBNZ Governor Wheeler Speech
T:
W:
T:
NZ Building Permits, ANZ Business Confidence, Activity Outlook
Originally published by AxiTrader