FOREX.com

Nikkei futures look like a market where bulls and bears are waging war, all while the price continues to coil up within a symmetrical triangle, waiting for a potential explosive break.

Moments after my colleague David Scutt warned of another round to the carry-trade unwind, the BOJ hit the wires with a fresh round of hawkish comments. US yields were also under pressure following the Harris-Trump debate, which was the ideal scenario to send USD/JPY below 141 for the first time since January.

Riskier asset classes have often performed well ahead of US CPI reports recently. For AUD/USD and Australia’s ASX 200 SPI futures, such an environment should be advantageous for near-term gains.

EUR/USD has managed to recoup some of last week’s losses as we head into Friday’s nonfarm payroll report. But for it to stand any chance of to a fresh YTD high, US CPI likely needs to continue softening and the ECB surprise with a less-than-expected dovish cut on Thursday.

Even though lower borrowing costs and a weaker US dollar would normally boost the gold price, in the near-term, rate cuts – be they big or small – may deliver a bust for bullion bulls.

If 144.00 gives way, a continuation toward the 13-month low around 140.75 could be next for USD/JPY.

Gold, silver and copper were dragged lower with appetite for risk on Tuesday, although it may be the latter two which show the greater potential for bears going forward.

Hopes that the US driving season would propel prices to new 2024 highs this summer failed to materialise as demand remained weak in key economic regions like China. At the same time, the OPEC+ appeared content with plans to increase output from the fourth quarter.

GBP/USD eases lower despite consumer spending rising. USD/JPY looks to ISM manufacturing PMIs ahead of a busy week.