Safe haven yen and franc outperform on recessionary fears
Oil dip sends Canadian dollar lower, USD/JPY and USD/CHF both drop as safe haven demand surges.

EURUSD: Negative technical bias persists as bear trend channel holds, negative DMI cross occurs
Eurozone data was a worrisome to say the least yesterday, starting with its manufacturing powerhouse Germany's preliminary Q2 figures contracting at 0.1%, final French CPI figures failing to move above 0%, and EZ industrial production contracting at a faster than expected pace. Recessionary fears are in focus via the bond market with the US 2 & 10-year yield curves inverted, German 10-year yields plummeting further into negative territory, and the manufacturing sector that's been hit by the trade war. Pressure is now piling on the ECB to cut rates come September, with markets still fully pricing in one out of the Fed despite Tuesday's better than expected US CPI figures. On the political front, the Italian senate has summoned the PM to parliament on August 20, where he could possibly face a vote of no-confidence.

GBPUSD: Better than expected CPI figures keep the pound from suffering fresh lows
CPI figures were the main item of mention yesterday with regards to the pound, following a better than expected reading of 2.1% and overshooting the BoE's target. Core CPI was also a notch above expectations at 1.8%, with PPI input and output figures positive and healthy. The readings are as of July, and hence once factoring in the weaker pound's effect on future imports for a nation that has a trade deficit could result in figures higher than the current ones, and force the UK's central bank into acting and raising interest rates at a time when global central banks are pursuing lower/negative rates and monetary easing. In Brexit news, the Telegraph reported that the House of Commons speaker will attempt to block the PM from a no-deal Brexit.

USDJPY: Recessionary fears keep demand for safe haven currencies high, yen outperforms
Trade tariff delay may have aided safe haven products on Tuesday, but a different front in the form of recessionary fears ensured that the flight to safety hasn't been eroded completely, with the yen outperforming for the session alongside the safe haven franc and keeping its stalling bear trend technical overview intact and more in line with its long-term consolidatory outlook that's showing heavy negative technical bias. Germany's GDP contraction is the first for the second quarter, and focus will be on other preliminary GDP releases in the coming weeks to see whether it has spread to other countries effected directly or indirectly by the trade war.

USDCAD: Commodity currencies underperform, CAD hit by falling oil prices
Recessionary fears have a tendency to dent oil's price, and that as a result hurt CAD's energy underlying in the process, with a red day for oil translating into a red day for the Canadian dollar, and hence a green one for USD/CAD. That has kept its technical overview showing a stronger touch of positive bias, crossing and finishing above its 100-day and 200-day moving averages in the process. However, keep in mind the source of movement is the bond market, and hence recent moves could accelerate or be undone based on where US yields end up. As for today's economic calendar, while ADP will be released, US data will hold far more significant with retail and manufacturing data at a time when both are under pressure from rising tariffs on Chinese imports and weakening global demand.

AUDUSD: Lagging the most amongst the FX majors yesterday, but up today morning on better data
Recession fears dominated on Wednesday following Germany's contracting Q2 preliminary GDP figure and an inverted US yield curve, and as a result commodity prices and commodity currencies were in retreat, undoing gains made the day before following the trade tariff delay out of the US. As for data directly effecting the Australian data, employment figures were better than expected this morning, taking the commodity currency’s price towards its 1st Resistance level. With Australian data out of the way, attention will now shift towards US retail data later in the day, expected to be a notch lower on last month's 0.4% reading.

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