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Bitcoin surges past 120,000 today and is closing in on new record. Market dynamics points to a powerful short squeeze as a large liquidity pool near current levels is forcing traders with bearish bets to buy back at higher prices, adding fuel to an already rapid climb. Short sellers appear increasingly vulnerable as momentum accelerates.

Behind the rally is a significant policy shift from Washington. Last Thursday, US President Donald Trump signed an executive order permitting cryptocurrencies and other alternative assets in 401(k) retirement accounts. The decision could, in theory, unlock trillions in retirement capital for Bitcoin and other digital assets, bolstering the longer-term demand outlook.

Technically, Bitcoin is on track to break through 123,231 and extend toward the 61.8% projection of 98,418 to 123,231 from 111,889 at 127,390.

However, the current advance from 111,889 could be the fifth wave of the entire rally from 74,373. In Elliott Wave theory, wave three is almost always the strongest and cannot be the shortest of the three upward waves. That places a logical cap on upside below 100% projection at 136,927.

Medium-term channel resistance near 131,580 reinforces this potential ceiling. The 130k zone will be a critical inflection point that could limit the current rally.

China’s headline CPI registered 0.0% yoy in July, slipping from June’s 0.1% yoy but avoiding the small -0.1% yoy decline economists had forecast. Core inflation picked up to 0.8% yoy, the highest since February 2023, driven largely by firmer service prices which went up 0.5% yoy. Food prices fell -1.6% yoy.

On a monthly basis, CPI rose 0.4% mom, with the statistics bureau noting visible results from measures to expand domestic demand.

PPI stayed deep in deflation at -3.6% yoy for a second month, extending its contraction streak to 34 months. The NBS attributed the weakness to seasonal factors and global trade uncertainties. On a monthly basis, PPI slipped -0.2% mom.

Fed Governor Michelle Bowman signaled strong support for beginning interest rate cuts soon, saying in a speech over the weekend that tariff-driven price increases are a "one-time effect" and should fade without derailing the path back to 2% inflation. She argued that policy should “look through” temporary inflation spikes to avoid damaging the labor market.

She called for a gradual move toward the neutral rate, warning that delaying action risks a sharper deterioration in employment and slower economic growth. Bowman stressed that a "proactive approach" now would help avoid the need for larger policy corrections later if labor conditions worsen.

Bowman’s own Summary of Economic Projections still calls for three rate cuts this year, a view she has held since December. She noted that recent labor market data reinforce this stance, while reiterating that policy is not on a preset path. Bowman was one of two Fed governors to dissent last month against holding rates at 4.25%–4.50%, along with Christopher Waller.

Full speech of Fed's Bowman here.

The market continued to analyze the previous week’s poor U.S. employment data, which boosted expectations for a Fed rate cut in September. Focus then turned to tariff negotiations as President Trump announced new duties on multiple countries, including Switzerland and Brazil. Switzerland’s gold exports to the U.S. will now face a 39% tariff, driving safe-haven demand and pushing gold higher. Trump’s team is also searching for the next Fed Chair, with speculation that the choice will favor lower interest rates. U.S. PMI data beat expectations, providing support for the dollar.

In the UK, the Bank of England cut interest rates by 0.25% as anticipated, but the decision was closer than expected, with several policymakers opposing the move. This surprise dissent helped the pound strengthen despite the cut. Meanwhile, U.S. equities staged a strong recovery, led by gains in technology stocks on optimism surrounding artificial intelligence.

The U.S. dollar tested lower, continuing the weakness from the U.S. employment data, but found support late in the week and closed near its highs. Gold extended gains on the Swiss tariff news, while risk sentiment improved as investors balanced ongoing trade tensions with positive U.S. earnings reports.

Markets This Week

U.S. Stocks

U.S. equities recovered last week, reversing the losses from the weak employment data as better-than-expected earnings eased fears over new tariffs. Many companies producing in the U.S. were exempted from the harshest measures, while expectations for potential Federal Reserve interest rate cuts also supported sentiment. The rebound is encouraging, but the Dow continues to lag behind the S&P 500 and Nasdaq, with the 10-day moving average still pointing lower. Sideways movement in the Dow is likely to continue in the near term. Resistance levels are at 44,000, 44,500, and 45,000, while support lies at 44,000, 43,000, 42,000, and 41,750.

Japanese Stocks

The Nikkei 225 surged over 4% last week, returning close to historical highs as optimism grew that trade with the U.S. will be more favorable for the Japanese economy than initially expected. Strong earnings, particularly from SoftBank, also helped lift the index. The strength of the rally surprised the market and is positive for the medium-term outlook. However, in the short term the market appears overbought and remains below key resistance at historical highs, making it preferable to wait for a pullback before buying. Resistance is seen at 42,474円 and 43,000円, while support lies at 41,500円, 41,000円, and 40,000円.

USD/JPY

USD/JPY spent the week trading sideways as the shock of the poor U.S. employment data kept volatility low. The market is now focused on signals of when Japan might raise interest rates and when the U.S. could start lowering rates. Support held last week, with the 10-day moving average pointing sideways. Range trading remains the preferred strategy this week, with U.S. inflation data in focus. Resistance is at 148, 149, and 150, while support is at 147, 146, and 145.

Gold

It was a strong week for gold prices as expectations of lower U.S. interest rates and ongoing tariff tensions encouraged buying. The latest gains were driven largely by the U.S. decision to impose steep tariffs—up to 39%—on certain Swiss gold bars, pushing U.S. gold futures to record highs. Gold remains within the wide $3,250 to $3,450 range but shows signs of breaking resistance in the coming sessions, making buying on dips the preferred strategy. Resistance is at $3,450, while support is at $3,350, $3,300, and $3,250.

Crude Oil

WTI crude closed below the key $65 support last week, falling every day on concerns over weaker global demand from new U.S. tariffs, ongoing geopolitical uncertainties, and fears of oversupply following OPEC+ output increases. Hopes for a potential diplomatic resolution between the U.S. and Russia over the Ukraine conflict also encouraged selling. With the market now below $65, a test of $60 and potentially lower is expected. Conditions are slightly oversold, so selling into strength remains the preferred strategy. Resistance is seen at $65, $70, and $75, while support is at $60 and $55.

Bitcoin

Bitcoin rose over the week as buying support emerged near the previous record highs around $112,000, helped by improved risk sentiment. While new tariffs are seen as a negative for Bitcoin, the 10-day moving average is pointing sideways, suggesting limited upside in the short term. However, the medium-term outlook remains positive, making buying on weakness the preferred strategy. Resistance is at $120,000, $125,000, and $150,000, with support at $112,000, $110,000, and $105,000.

This Week’s Focus

• Tuesday: Australia RBA Interest Rate Decision, U.K. Unemployment Rate, E.U. ZEW Economic Sentiment, U.S. CPI
• Thursday: Australian Unemployment Rate, U.K. GDP, E.U. GDP, U.S. PPI, U.S. Jobless Claims
• Friday: Japan GDP, Japan Industrial Production, U.S. Retail Sales, U.S. Industrial Production, U.S. Michigan Consumer Sentiment

This week, traders will be watching important U.S. economic data, with both inflation and retail sales reports expected to have a big impact on market direction. Another key focus is the U.S.–China trade situation, as the two countries have not yet agreed to extend their 90-day tariff truce, which is due to expire on August 12. This deadline, and any new trade headlines, could quickly change market sentiment and drive sharp moves.

Markets are also paying close attention to discussions over the next U.S. Federal Reserve Chair, as President Trump looks to influence the Fed’s approach to interest rates. With prices stuck in a range last week, the mix of key data releases, trade deadlines, and political developments means this could be an active week with plenty of short-term trading opportunities as the market searches for a breakout.

Ethereum: ⬆️ Buy

• Ethereum broke the resistance level 3925.00
• Likely to rise to resistance level 4108.00

Ethereum cryptocurrency recently broke the resistance level 3925.00 (which stopped the previous impulse wave 1 at the end of July).

The breakout of the resistance level 3925.00 continues the active impulse wave 3, which started earlier from the support zone lying at the intersection of the support level 3400.00 and the upper trendline of the daily up channel from April.

Given the clear daily uptrend, Ethereum cryptocurrency can be expected to rise to the next resistance level 4108.00 (multi-month high from December) – the breakout of which can lead to further gains toward 4400.00.

Last week’s FX leaderboard was dominated by growth-linked and higher-yield currencies, with Sterling, Aussie, and Kiwi outpacing the field. At the other end, traditional safe havens found themselves out of favor, with Yen and Swiss Franc bringing up the rear.

Sterling’s climb came on the back of a narrow 5–4 BoE rate cut vote and sharply upgraded inflation forecasts, reinforcing the message that the UK’s easing path will remain gradual at best. In contrast, Franc’s slide reflected both the economic sting of a steep new US tariff and ebbing defensive demand in a risk-on environment.

Australian and New Zealand Dollars drew strength from buoyant equity markets, underpinned by record-breaking US tech gains and a sharp rebound in Japan’s Nikkei. Euro and Loonie sat mid-pack, with modest gains against the softer Dollar.

Dollar weakness was linked less to outright selling pressure and more to recalibrated Fed expectations. A chorus of policymakers signalled growing concern over the labor market, keeping September rate cut bets firm. Yen’s underperformance reflected the dominance of risk-on flows, which overshadowed any revival in BoJ tightening expectations.

Tech Surge, Fed Signals Lift Wall Street, Dollar Stays Heavy

US investor sentiment showed remarkable resilience last week, with equity markets extending their winning streak despite heightened trade policy noise from Washington. DOW rose 1.4%, S&P 500 advanced 2.4%, and NASDAQ surged 3.9% to a record close. The rally was anchored by technology stocks, which extended their dominance as market leaders.

Apple was at the center of the action, gaining 13% in its strongest week since mid-2020. The jump followed the company’s announcement of a USD 600 billion US investment plan spanning four years, a decision interpreted as a pragmatic concession to US President Donald Trump amid heightened trade scrutiny. The move bolstered the S&P 500’s tech sector and provided significant upward momentum to the NASDAQ Composite.

Tech stocks also drew comfort from the perception that the newly announced semiconductor tariffs were less damaging than feared, thanks to a broad slate of exemptions. Trump’s “reciprocal” tariffs, effective from Thursday midnight, were met with muted reaction as traders looked beyond the immediate trade shock.

Technically, however, NASDAQ is now pressing against long-term rising channel resistance. Daily MACD continues to show bearish divergence, hinting at waning momentum. Rejection at these levels followed by a drop below 20,560.17 would signal a short-term top at least, with scope for a deeper pullback toward the 55 W EMA (now at 18630.48).

Conversely, a decisive break above the channel with acceleration could unleash further gains, targeting 100% projection from 10088.82 to 20204.58 from 14784.03 at 24899.78 in the medium term. The coming weeks will determine whether momentum can override structural resistance.

A supportive macro driver also came from evolving Fed rhetoric. Several FOMC members signaled a shift toward prioritizing labor market risks over inflation control, raising the odds of a September rate cut. This shift followed a weaker-than-expected July employment report and prior-month revisions pointing to a slowdown.

To name a few, San Francisco Fed President Mary Daly said inflation was easing absent tariffs and that rate cuts would likely be needed in coming months to address a slowing economy. Fed Governor Lisa Cook called the jobs data “concerning” and warned of corporate uncertainty weighing on growth. Minneapolis Fed President Neel Kashkari said he was open to cutting sooner if inflation keeps easing, while Boston Fed President Susan Collins labeled the data a “clear signal” of softening and urged against delays that could deepen a downturn.

Adding to the intrigue, Trump announced his intention to nominate Stephen Miran, chair of the White House Council of Economic Advisers, to fill a Fed board seat vacated by Adriana Kugler. If approved, Miran would serve until January 31, 2026. The appointment, albeit temporary, could increase Trump’s sway over the central bank at a time when he is pressing for faster rate cuts.

Dollar remained soft, weighed down by Fed easing expectations and buoyant risk appetite. Dollar Index edged lower last week but momentum has been relatively weak. Outlook is unchanged that price actions from 96.37 short term bottom are forming a corrective pattern to the down trend from 110.17. The question is whether it has completely completed at 100.25, or that's just the first leg.

In any case, outlook will stay bearish as long as 101.97 support zone holds, (38.2% retracement of 110.17 to 96.37 at 101.64). Break of 96.37 to resume larger down trend is still in favor.

Nikkei Eyes Break Above Record, AUD/JPY Rebound With Risk-on Mood

Japan’s Nikkei ended the week with strong momentum, reversing early weakness to close sharply higher. The index is now within striking distance of a record high again, buoyed by a resolution to a brief US-Japan trade hiccup that had initially rattled sentiment.

Thursday’s implementation of new US tariffs on Japanese goods sparked unease after reports suggested rates exceeded the agreed 15% limit under the bilateral deal. Markets took relief when Tokyo’s top trade negotiator confirmed that Washington had acknowledged the error and would make corrections, clearing the way for renewed optimism.

The BoJ’s July Summary of Opinions captured the improved tone from the trade deal, even though policymakers were cautious, stressing that it would take two to three months of incoming data to judge the real impact of US tariffs. Some members suggested that if the US economy remains resilient, Japan’s downside risks would diminish. Such an environment could allow the BoJ to contemplate a year-end policy adjustment, moving further along the normalization path.

Technically, near term outlook in Nikkei will stay bullish as long as 39850.52 support holds. Retest of 42426.77 record high should be seen next. Decisive break there will resume the long term up trend. Next medium term target is 100% projection of 25661.89 to 42426.77 from 30792.74 at 47557.62.

Yen’s performance last week reflected a familiar dynamic. While revived expectations of a BoJ rate hike later this year provided some theoretical support, risk-on flows — both domestic and global — completely overshadowed safe-haven demand for the currency.

In cross-market terms, AUD/JPY's extended bounce suggests that near term correction from 97.41 has completed at 94.88, after hitting 55 D EMA (now at 95.09). Rise from 86.03 should be ready to resume through 97.41 to 61.8% projection of 92.30 to 97.41 from 94.88 at 98.03.

Whether the rally can extend toward 100% projection at 99.99 will depend in part on Wall Street’s ability to break NASDAQ's long-term channel resistance mentioned above, as well as Nikkei's momentum after clearing the record high.

GBP/CHF Jumps 1.85% on BoE Hawkishness and Swiss Trade Woes

Sterling closed last week as the strongest G10 currency, lifted by BoE’s surprise hawkish tilt despite delivering its expected quarter-point rate cut. The Monetary Policy Committee voted 5–4 to reduce the Bank Rate to 4.00%, with the narrow margin underscoring the internal debate over inflation risks and signalling caution over further near-term easing.

The August Monetary Policy Report reinforced that message, with the BoE sharply revising its inflation projections higher. Q4 CPI is now forecast at 3.8% in 2025, 2.7% in 2026, and 2.0% in 2027, compared with May’s 3.5%, 2.4%, and 1.9%. The upgraded outlook effectively removes any scope for accelerating the easing cycle beyond the current pace of one cut per quarter.

A further 25bps reduction in November remains the base case, completing this year’s easing cycle. However, despite growing concerns about labour market softening and sluggish growth, policymakers appear unwilling to front-load additional support. Instead, any extra stimulus is more likely to be delivered via an extended run of smaller cuts into 2026.

In stark contrast, Swiss Franc ended as the worst performer of the week. Slightly stronger-than-expected July CPI, ticking up to 0.2% yoy suggested less urgency for the SNB to push its policy rate from 0.00% into negative territory, but it was overshadowed by a severe new external headwind.

That headwind came in the form of a 39% US tariff on Swiss imports — among the highest applied under Washington’s global tariff overhaul. Only a handful of countries, including Brazil and India at 50%, face higher levies. The rate stands in sharp contrast to the 15% applied to EU goods and the 10% on UK exports, delivering a blow to Switzerland’s export-reliant manufacturing base.

The combined impact of BoE policy hawkishness and Swiss trade vulnerability propelled GBP/CHF higher by 1.85% last week, making it the biggest mover. The rally reflects both fundamental divergence and shifting capital flows into Sterling.

Technically, the strong bounce confirms short term bottoming at 1.0658 in GBP/CHF. Immediate focus is on 55 D EMA (now at 1.0815). Sustained trading above there will argue that fall from 1.1204 has completed. Rise from there is then seen as the third leg of the pattern from 1.0610, and should target 61.8% retracement of 1.1204 to 1.0658 at 1.0995, or even further to 1.1204 and above.

EUR/USD Weekly Outlook

EUR/USD's rebound from 1.1390 extended to 1.1698 last week but retreated since then. Initial bias remains neutral this week first. Outlook is unchanged that correction from 1.1829 should have completed with three waves down to 1.1390. Above 1.1698 will bring retest of 1.1829. However, break of 1.1526 support will dampen this bullish view and bring deeper fall back to 1.1390 instead.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

In the long term picture, a long term bottom was in place already at 0.9534, on bullish convergence condition in M MACD. Further rise should be seen to 38.2% retracement of 1.6039 to 0.9534 at 1.2019. Rejection by 1.2019 will keep the price actions from 0.9534 as a corrective pattern. But sustained break of 1.2019 will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

EUR/USD's rebound from 1.1390 extended to 1.1698 last week but retreated since then. Initial bias remains neutral this week first. Outlook is unchanged that correction from 1.1829 should have completed with three waves down to 1.1390. Above 1.1698 will bring retest of 1.1829. However, break of 1.1526 support will dampen this bullish view and bring deeper fall back to 1.1390 instead.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

In the long term picture, a long term bottom was in place already at 0.9534, on bullish convergence condition in M MACD. Further rise should be seen to 38.2% retracement of 1.6039 to 0.9534 at 1.2019. Rejection by 1.2019 will keep the price actions from 0.9534 as a corrective pattern. But sustained break of 1.2019 will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

USD/JPY edged lower to 146.61 last week but turned sideway since then. Initial bias remains neutral this week first. As long as 145.84 support holds, larger rebound from 139.87 is still expected to continue. On the upside, above 148.07 minor resistance will bring retest of 150.90 high first. However, decisive break of 145.84 will indicate near term bearish reversal and target 142.66 support next.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

In the long term picture, there is no sign that up trend from 75.56 (2011 low) has completed. But then, firm break of 161.94 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

GBP/USD's extended rebound and firm break of 1.3363 support turned resistance last week suggests that correction from 1.3787 has completed with three waves down to 1.3140, after hitting 38.2% retracement of 1.2099 to 1.3787 at 1.3142. Initial bias remains on the upside for 1.3587 resistance first. Firm break there will pave the way to retest 1.3787 high. However, break of 1.3344 minor support will dampen this bullish case and turn bias neutral again first.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3055) holds, even in case of deep pullback.

In the long term picture, for now, price actions from 1.0351 (2022 low) are still seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. However, firm break of 1.4248 resistance (38.2% retracement of 2.1161 to 1.0351 at 1.4480) will be a strong sign of long term bullish reversal.