EUR/USD, USD/JPY flows - quiet day, oil still drifting out
Quiet out of Japan holiday,
Oil drifts out as Iran deal elusive and bogged down in rhetoric
Still a continued leaking out in oil, Brent has filled the end-Jul gap move and nudging back towards $90 again. It was difficult to envisage Trump not biting and firing back with his own rhetoric after recent Iran flexing, and his calls for Iran to pay reparations shows the ongoing political and psychological obstacles to a tidy solution. The market still holds on to some hopes its all bluster otherwise Brent would be back at $95-100 already.
It’s otherwise a quiet day, still largely waiting on Wed’s key US data now, after the RBA didn’t offer any surprises. Japan holiday so that keeping the yen quiet after Monday’s corrective action. Press leaks suggesting the BoJ may go for a Sep hike could offer some support but recent FX moves have been largely technical, and the charts still see a bit more headroom left for this backfilling corrective move on USD/JPY (159 ½ to 160 or even 160 ½ ) and crosses, before then running into supply and fresh downside weight.