LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)

• RES 3: 148.74 - High Jul 24 (cont)
• RES 2: 147.74 - High Jan 15 and bull trigger (cont)  
• RES 1: 144.88/145.95 - High May 8 / High Mar 25
• PRICE: 142.93 @ 14:49 BST Jul 26
• SUP 1: 142.23 - Low Jul 02
• SUP 2: 141.57 - 1.0% 10-dma envelope
• SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing    

JGB futures looked to finish the week comfortably off the mid-week lows, although still lower since Monday’s open. The price action across Thursday & Friday trade snaps the losing streak off the mid-July highs and eyes the 50-dma resistance above at 143.07. Clearance here would shift the near-term outlook more positive, and eye 143.57 as the next key level. This week’s lows of 142.42 mark first support.

• RES 4: 1.3899 High Nov 1 and a key resistance    
• RES 3: 1.3866 1.0% 10-dma envelope
• RES 2: 1.3855 High Nov 10 2023
• RES 1: 1.3849 High Jul 25
• PRICE: 1.3814 @ 15:36 BST Jul 26
• SUP 1: 1.3778 Low Jul 24   
• SUP 2: 1.3715 20-day EMA 
• SUP 3: 1.3690 50-day EMA
• SUP 4: 1.33657 Low Jul 17 

The impulsive rally in USDCAD persists, with the pair showing above 1.3792 resistance this week, topping out at 1.3849. This has resulted in a print above key resistance at 1.3846, the Apr 16 high. Conditions are overbought, however, a clear break of 1.3846 would strengthen the bull theme and pave the way for a continuation higher, towards 1.3899, the Nov 1 high ‘23 and a key resistance. Firm support lies at 1.3690, the 50-day EMA.

We've just published our preview of the July 30-31 FOMC meeting - PDF here (and emailed to clients):

• The Fed will hold rates for an 8th consecutive meeting at its July meeting, putting immediate attention on any signals about rate cuts beginning in September.
• While inflation and the labor market cooled in the second quarter, providing a clear path to rate cuts by year-end, underlying demand has remained resilient in defiance of what FOMC officials see as “sufficiently restrictive” policy.
• With the lingering memory of various data "head fakes" in mind on both the upside and downside of the inflation and rate cycles, yet a “soft landing” still seen in reach, the FOMC is likely to express only cautious optimism.
• The policy statement is due for key adjustments to the characterization of recent inflation and employment, and perhaps to the shifting balance of risks – but it’s not clear the Committee will adjust the forward rate guidance, in contrast to previous cycles where it explicitly signaled that it could move rates at an upcoming meeting.
• That would put the focus on Chair Powell to deliver the message at the press conference that the FOMC is cautiously open to cuts at upcoming meetings.
• The absence of a clear signal about an upcoming rate cut would disappoint current market pricing for 2 to 3 rate cuts by year-end, which is more aggressive than the 1 to 2 cuts the FOMC eyed just 6 weeks ago.