EUR/USD

We see that the pair has become very well supported above 1.22 on the disappointing US non-farm pay roll of July last Friday. This sentiment towards the USD can be prolonged this week or may be this month. The ECB can encourage this sentiment by its comments on the inflation and the impact of the high oil prices on the price stability in the euro zone, if it is to continue above 40$ for the barrel for a longer time and it will as it looks on the current strong demand.

GBP/USD

GBP was disappointed today by the weaker than expected CPI rate of July. It has come just at 1.4% yearly. The market is still looking for a further rate hike on GBP this year to contain inflation and to keep the GBP strong to in the face of the oil prices too and to contain the inflation under the BOE target. However we see a continuation of the high housing prices and mortgage and consuming lending in UK in the short run and the market will be very sensitive to the inflation data from UK and this week UK July Claimant Unemployment.

USD/CHF

There is no geopolitical concerns impact right now on the currency market as the focus is on the US labor market and the rate decision on USD which can be exposed to further selling on a profit taken wave after the rate decision with the quarter rate hike and it can be disappointing further if there is no hike. Also the market is waiting for weak trade data from the US trade balance later this week as usual and the market can start pricing on these data after the rate decision especially as it is widely expected that there is no signs of more than this quarter this year even if it is not today.

USD/JPY

JPY is still the most vulnerable currency to the recent high oil prices which had a negative impact on the demand for the Japanese stocks and also can threat the global growth and consuming demand. The market needs to watch this week Q2 GDP as the main JPY key of this week.

Best Wishes