Above: EUR/USD, 4 hour chart
The week was ending with the dollar picking up a generally bid tone after the release of some strong data, putting the possibility of a 2016 Fed rate hike back on the table. The figures included a solid US Retail Sales reading for June (+0.6% vs 0.1%), with the June PPI also strong, up to 0.5%, the largest increase in over a year, and the June Industrial Production, up 0.6% against previous -0.4%. The dollar then accelerated higher once again when the news of the attempted coup in Turkey hit the wires, which immediately accelerated the Euro losses, with Sterling also heading sharply lower. Another round of demand for safe-haven assets saw the Yen leading the way higher, reversing its earlier slide to 4 week lows while the commodity bloc also finished Friday on a weak note, along with US stocks, as traders avoided risk assets.
The focus for the coming week will be the ECB Interest Rate Decision and Mario Draghi’s Press Conference. Analysts generally seem to think that continuing QE beyond March 2017 is necessary although there is no immediate pressure to take action and that policy will probably remain unchanged. We shall see.
Today is a Japanese holiday and so it may be relatively quiet in Asia although the week kicks off with the NZ Q2 CPI (exp +0.5% qq) which will cause the Kiwi to jump around. There is little else besides, with a fairly empty calendar in both the EU and the US. The main events through the rest of the week will be the RBA Minute, EU ZEW and UK CPI (Tues), UK Unemployment (Wed) and then a fair selection of US data on Thursday, including the Existing Home Sales, Chicago Fed National Activity Index, Philadelphia Fed Mfg Survey. Friday will round out the week with the global Flash PMIs.
EURUSD: 1.1030 
24 Hour Bias: Mildly Bearish
Medium Term Bias: Prefer to sell rallies
The dollar picked up some positive momentum following Friday’s solid US data and accelerated higher still after the news of the attempted Turkish coup hit the wires. The 4 hour momentum indicators look heavy, so further downside momentum may be in order although the dailies remain fairly neutral, so until the ECB meeting on Thursday it may remain choppy but without too much direction. If pushed, the preference is mildly to the downside.
Economic data highlights will include:
- M: German Buba Monthly Report, NAHB Housing Market Index
T: German/EU ZEW Economic Sentiment Survey, US Building Permits
W: German PPI, EU Current Account, Consumer Confidence, US EIA weekly crude oil stock change
T: ECB Interest Rate Decision/Press Conference/Statement, US Existing Home Sales, CB Leading Economic Index, Chicago Fed National Activity Index, Jobless Claims, Philadelphia Fed Mfg Survey
F: EU Flash Mfg/Services/Composite PMIs, US lash Mfg PMI, Baker Hughes Oil Rig Count
USDJPY: 104.85 
Chart: USD/JPY 4hr
24 Hour Bias: Mildly Bearish
Medium Term Bias: Prefer to buy dips
Having already retreated from the 106.30 trend high, the Yen saw further demand on safe-haven demand following the news of the Turkish coup. The 4-hour momentum indicators look negative, suggesting a test of Friday’s lows and possibly lower although a Japanese holiday today may diminish the enthusiasm to get too involved. On the other side of the coin, the dailies remain constructive, so the theme of looking to buy dips remains intact. Overall a choppy session looks to lie ahead but with a mild downside bias, but with direction tied to the flows of risk sentiment.
Economic data highlights will include:
M: Public Holiday
T:
W:
T:
F: Foreign Bond/Stocks Investment, Nikkei Flash Mfg PMI, All Industry Activity Index
GBPUSD: 1.3180
Chart: GBP/USD 4hr
24 Hour Bias: Prefer to buy dips
Medium Term Bias: Cautiously Bullish
Cable remains very choppy, and after having made a new 3 week high of 1.3480, it reversed sharply to close the week at 1.3180 after heading to a low of 1.3130, so caution on both sides is warranted. As we said before we may be building a reverse head shoulders, although the parameters are moving sharply, but if this turns out to be the case then we are currently in the process of forming the right hand shoulder, while the neckline now sits at 1.3470. This is currently some way off, but if reached/broken it would have an eventual target now at around 1.4000. That remains to be seen but the dailies are still constructive, so another attack on the neckline could yet be in store. If wrong look for a return to 1.3000 and possibly lower. Below 1.2795 would negate the head-shoulder theory, but until then I still prefer to buy dips. There is some important UK data due this week, but it will more likely be politics/Brexit considerations that dictate the direction.
Economic data highlights will include:
M:
T: CPI, PPI, RPI
W: Unemployment
T: Retail Sales, PSNBR
F:
USDCHF: 0.9810 
Chart: USD/CHF 4hr USDCHF - Support and Resistance Levels
24 Hour Bias: Neutral
Medium Term Bias: Mildly Bullish
USDCHF remains choppy but largely untouched by the bullish dollar move seen on Friday as safe-haven demand for the Chf kept the pair pretty much rangebound. The daily momentum indicators still look very mildly positive, so buying dips, trading from the long side remains the preferred plan but with a tight stop loss placed below 0.9740.
Economic data highlights will include:
M:
T:
W: ZEW Expectations
T: Trade Balance
F:
AUDUSD: 0.7568 
Chart: AUD/USD 4hr
24 Hour Bias: Mildly Bearish
Medium Term Bias: Prefer to sell rallies
The Aussie was trading comfortably above 0.7600 until late in the Friday session when the news of the Turkish coup saw a quick rush away from risk associated assets. The Aud headed to a low of 0.7557 and closed the week nearby, and from the look of the short term momentum indicators there could be further downside ahead today/tomorrow. The Aud made a key reversal and so the dailies also suggest that the downside maybe the path of least resistance and so selling rallies is now preferred. The RBA meet on Aug 2 and the market is now looking forward to the chances of a cut and possibly to other forms of economic stimulus. We shall see, but in the meantime, thoughts of further easing should limit the upside for the Aud. I still prefer to look for levels to sell into, but from lower levels than before, and 0.7600/20 now looks rather toppish.
Economic data highlights will include:
M: China House Price Index
T: RBA Minutes
W: WBC Leading Economic Index, China Leading Economic Index
T: NAB Business Confidence (Q2)
F:
NZDUSD: 0.7117 
Chart: NZD/USD 4hr NZDUSD - Support and Resistance Levels
24 Hour Bias: Mildly Bearish
Medium Term Bias: Possible Topping Formation
The Kiwi did break the rising trend support that we outlined last week and then accelerated towards the 0.7100 target (low 0.7106). The 4 hourlies continue to hint at some downside pressure and with the dailies also looking increasingly heavy, I still prefer to trade from the short side, while looking for levels to sell into. 0.7075/80 should provide decent interim support. Watch out for the Q2 CPI today.
Economic data highlights will include:
M: Q2 CPI
T:
W:
T: Visitor Arrivals
F:
Originally published by axitrader.com.au