• The dollar traded lower or unchanged against most of its G10 counterparts during the European morning Monday. It was lower against GBP, CHF, AUD and NZD in that order, while it remained virtually unchanged against EUR, SEK, and JPY. The greenback outperformed only CAD and NOK.

• In the absence of any major market moving news so far today, Germany’s Ifo survey showed that business sentiment deteriorated by less than expected in July, despite the outcome of the “Brexit” referendum. The expectations index fell to 102.2 from 103.1 in June, beating its forecast for a bigger decline to 101.2. The current conditions index actually rose to 114.7 from 114.5 previously, defying expectations of a decline. The better-than-expected Ifo report comes in contrast to the ZEW survey for the month, which showed that sentiment among German economists and analysts deteriorated by more than anticipated. The reaction in EUR remained somewhat limited at the release of the Ifo prints, perhaps because of the discrepancy between the Ifo and ZEW results. We believe that investors and ECB policymakers are likely to wait for more economic data regarding the post-referendum era before jumping to any conclusions about the effects of “Brexit” on the German economy and by extent, the Eurozone as a whole.

• EUR/JPY traded in a consolidative manner during the European morning Monday, staying slightly above the support zone of 116.40 (S1). A break below that zone would confirm a forthcoming lower low on the 4-hour chart and perhaps open the way for our next support level of 115.45 (S2), marked by the low of the 15th of July. Taking a look at our short-term momentum studies, I see that the RSI oscillates around its 50 line, while the MACD stands near zero and points sideways, indicating that further consolidation may be in the works before and if the bears decide to push the rate below 116.40 (S1). As for the broader trend, given that the rate is trading below the downtrend line taken from the peak 29th of January, I would consider the longer-term trend to be bearish. I would treat the 11th – 15th recovery as a corrective phase and I would expect sellers to eventually take charge again.

• Support: 116.40 (S1), 115.45 (S2), 114.90 (S3)

• Resistance: 117.50 (R1), 118.45 (R2), 119.15 (R3)