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Daily Pivots: (S1) 0.8075; (P) 0.8113; (R1) 0.8189; More….

Intraday bias in USD/CHF remains on the upside or the moment. Rise from 0.7871 is at least corrective fall from 0.9200. Further rise should be seen to 38.2% retracement of 0.9200 to 0.7871 at 0.8379 next. On the downside, below 0.8037 minor support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 1.3778; (P) 1.3812; (R1) 1.3864; More...

Intraday bias in USD/CAD remains on the upside for the moment. Rise from 1.3538 is seen as correcting the decline from 1.4791. Further rise should be seen towards 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 14017). But strong resistance should be seen there to limit upside. On the downside, below 1.3757 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Daily Pivots: (S1) 0.6397; (P) 0.6463; (R1) 0.6500; More...

AUD/USD's break of 0.6453 support confirms short term topping at 0.6624, on bearish divergence condition in D MACD. Fall from there is tentatively seen as a correction to rise from 0.5913. Intraday bias is now on the downside for 38.2% retracement of 0.5913 to 0.6624 at 0.6352. Strong support is expected from 0.6352 to bring rebound. Above 0.6528 minor resistance will turn intraday bias neutral first.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Dollar remains the clear outperformer this week, holding firm despite mild retreat in Asian session. Stronger-than-expected US Q2 GDP data have prompted a significant paring back of expectations for a September Fed rate cut. Adding to the hawkish tilt, Fed Chair Jerome Powell struck a more guarded tone at the post-meeting press conference. Markets are now keenly focused on today’s PCE inflation and Friday’s non-farm payrolls for further clues.

Across the broader currency market, Yen ranks second strongest behind Dollar. BoJ's upgraded inflation forecasts signal greater comfort that inflation will eventually trend sustainably around target, thus supporting further tightening ahead. Loonie is also gained ground, as the BoC struck a balanced tone by keeping the door open for further easing but offering no clear timeline. ON the other hand, Euro, Aussie, and Kiwi lag behind. Sterling and Swiss Franc sit in a neutral zone.

On the trade front, US President Donald Trump declared a “Full and Complete” trade agreement with South Korea. The deal caps blanket tariffs on Korean exports at 15%, down from the 25% initially threatened. Auto tariffs were also reduced from 25% to 15%. The timing of the agreement is critical, coming just ahead of the August 1 implementation window for new tariffs.

The pact also includes a USD350 billion South Korean investment package into the U.S., which Trump said will be “owned and controlled” by the US government and guided by presidential authority. Commerce Secretary Howard Lutnick elaborated that 90% of the profits from those funds would flow directly to American interests. The structure mirrors elements of the US–Japan agreement signed earlier this month.

However, South Korean President Lee Jae-myung offered a different framing, stressing that the investment aims to support Korean companies in entering high-tech US industries such as shipbuilding, semiconductors, and biotech. Of the total, USD 150 billion will target shipbuilding collaboration, aimed at cementing a competitive foothold in the US industrial base. Lee emphasized that mutual benefit—not unilateral concessions—must be the goal of any agreement with Washington.

While Seoul secured a deal, India is under renewed pressure. Trump announced a 25% tariff on Indian imports effective Friday, citing excessive trade barriers and India’s participation in BRICS. The president accused India of undermining US interests with non-monetary trade barriers and continued purchases of Russian oil and arms. However, he hinted that negotiations are ongoing and a resolution could still be reached by the end of the week. The move highlights Trump’s broader effort to isolate BRICS-aligned economies and reward cooperative partners with reduced trade penalties.

Technically, EUR/CAD's steep decline this week confirm short term toping at 1.6116, just ahead of 1.6151 key resistance (2018 high). Fall from there is seen as correcting the five-wave rally from 1.4483. Deeper decline would be seen to 1.5598 support or even further to 38.2% retracement of 1.4483 to 1.6116 at 1.5492.

In Asia, at the time of writing, Nikkei is up 1.10%. Hong Kong HSI is down -1.26%. China Shanghai SSE is down -0.80%. Singapore Strait Times is down -0.73%. Japan 10-year JGB yield is down -0.001 at 1.562. Overnight, DOW fell -0.38%. S&P 500 fell -0.12%. NASDAQ rose 0.15%. 10-year yield rose 0.046 to 4.376.

BoJ holds at 0.50%, lifts 2025 inflation projections sharply on food costs

The BoJ kept its short-term policy rate unchanged at 0.50% as expected, reaffirming its cautious stance in the face of growing external risks. While the central bank reiterated its intention to continue normalizing policy in light of improving economic and price conditions, it also cited heightened uncertainty around global trade and policy developments as justification for a steady hand.

In its latest quarterly outlook, the BoJ sharply raised its inflation forecasts. Core CPI for fiscal 2025 was lifted from 2.2% to 2.7%. Core-core CPI, which excludes both fresh food and energy, jumped from 2.3% to 2.8%. The upward revisions were largely attributed to food price increases, though the BoJ still sees underlying inflation remaining subdued in the first half of the forecast horizon.

For fiscal 2026, core CPI was revised slightly higher from 1.7% to 1.8%, and core-core CPI from 1.8% to 1.9%. Projections for fiscal 2027 remained unchanged at 2.0% for both measures. The Bank noted that inflation will pick up toward levels “generally consistent” with the price stability target in the second half of the projection period.

Growth outlooks were little changed. The fiscal 2025 GDP forecast was lifted modestly to 0.6% from 0.5%, while estimates for fiscal 2026 and 2027 were held at 0.7% and 1.0%, respectively. The Bank continues to expect a slow but steady recovery, supported by resilient domestic demand and improvements in global conditions.

BoJ emphasized that the risk balance for growth remains tilted to the downside for 2025 and 2026, though price risks are now broadly balanced.

Fed Powell’s caution cools September cut bets, stocks end mixed

U.S. stocks ended mixed overnight after the Fed held its policy rate steady at 4.25–4.50%, in line with market expectations. The dissenting votes from Governors Christopher Waller and Michelle Bowman in favor of a cut came as little surprise, reflecting known dovish leanings. However, Chair Jerome Powell’s tone in the press conference struck a more cautious chord than markets had anticipated.

Powell pushed back against speculation of a near-term pivot, stating firmly, “We have made no decisions about September.” That effectively left the door open, but offered little for those hoping for imminent easing. Powell also warned that while tariff-driven inflation may be transitory, “more persistent” effects couldn’t be ruled out.

Between now and the next FOMC meeting, two additional rounds of jobs and inflation reports will be released—giving the Fed a wider lens to assess policy needs.

Traders responded by paring back bets for a September cut. Market pricing now sees just a 43% chance of easing at the next meeting, down from 65% a day earlier. The message: the Fed may be approaching the end of its pause, but it’s not ready to blink just yet.

Technically, while S&P 500's up trend continued this week, it's clearly continuing to lose upward momentum as seen in bearish divergence condition in D MACD. 6500 psychological level is likely to cap upside and bring consolidations. That's slightly above a major fibonacci level of 61.8% projection of 3491.58 to 6147.43 from 4835.04 at 6476.35. Break of 6281.71 support will indicate that a near term correction has already started towards 55 D EMA (now at 6110.15).

Asia data wrap: Japan and Australia outperform but China falters

Asian economies delivered mixed signals as fresh data highlighted strength in Japan and Australia while exposing continued softness in China.

Japan’s industrial production rose 1.7% mom in June, defying forecasts for a -0.7% mom decline. The surge was driven by a 14.8% mom jump in transport equipment excluding autos and strength in electronics, a positive surprise despite ongoing US tariffs. Retail sales also rose 2.0% yoy, slightly beating forecasts of 1.8% yoy.

Australian retail sales posted an impressive 1.2% monthly gain in June, sharply above the 0.4% mom consensus. The ABS attributed the spike to widespread discounting and new product launches.

Meanwhile, China's July PMIs disappointed. The NBS Manufacturing PMI dipped from 49.7 to 49.3, remaining in contraction for the fourth straight month. The export component showed no signs of recovery, marking 15 months of sub-50 readings at 47.1 Non-Manufacturing PMI also weakened from 50.5 to 50.1, its lowest since November.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6397; (P) 0.6463; (R1) 0.6500; More...

AUD/USD's break of 0.6453 support confirms short term topping at 0.6624, on bearish divergence condition in D MACD. Fall from there is tentatively seen as a correction to rise from 0.5913. Intraday bias is now on the downside for 38.2% retracement of 0.5913 to 0.6624 at 0.6352. Strong support is expected from 0.6352 to bring rebound. Above 0.6528 minor resistance will turn intraday bias neutral first.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Key Highlights

• WTI Crude Oil prices started a fresh increase above the $68.00 zone.
• It cleared many hurdles near $68.00 and $68.80 on the 4-hour chart.
• Gold could extend losses below the $3,300 support.
• EUR/USD dived and traded below the 1.1500 zone.

WTI Crude Oil Price Technical Analysis

WTI Crude Oil price formed a base above $66.00 against the US Dollar. There was a fresh increase above the $67.00 and $68.00 resistance levels.

Looking at the 4-hour chart of XTI/USD, the price cleared a key bearish trend line with resistance at $67.20. The price even settled above the $68.00 level, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour).

Finally, the price surpassed the $70.00 level and started a consolidation phase. On the upside, immediate resistance is near the $70.80 level. The first key resistance sits near the $71.20 level.

The main hurdle is now near the $72.00 zone, above which the price may perhaps accelerate higher. In the stated case, it could even visit the $73.50 resistance. Any more gains might call for a test of the $75.00 resistance zone in the near term.

On the downside, the first major support sits near the $69.50 zone. The next support could be $68.50. A daily close below $68.50 could open the doors for a larger decline. The next major support is $66.65. Any more losses might send oil prices toward $65.00 in the coming days.

Looking at Gold, the bears are active below the $3,350 level, and they might aim for a drop toward the $3,250 level.

Economic Releases to Watch Today

• US Initial Jobless Claims - Forecast 224K, versus 217K previous.
• US Personal Income for June 2025 (MoM) - Forecast +0.2%, versus -0.4% previous.
• US Core Personal Consumption Expenditure for June 2025 (MoM) - Forecast +0.3%, versus +0.2% previous.

Asian economies delivered mixed signals as fresh data highlighted strength in Japan and Australia while exposing continued softness in China.

Japan’s industrial production rose 1.7% mom in June, defying forecasts for a -0.7% mom decline. The surge was driven by a 14.8% mom jump in transport equipment excluding autos and strength in electronics, a positive surprise despite ongoing US tariffs. Retail sales also rose 2.0% yoy, slightly beating forecasts of 1.8% yoy.

Australian retail sales posted an impressive 1.2% monthly gain in June, sharply above the 0.4% mom consensus. The ABS attributed the spike to widespread discounting and new product launches.

Meanwhile, China's July PMIs disappointed. The NBS Manufacturing PMI dipped from 49.7 to 49.3, remaining in contraction for the fourth straight month. The export component showed no signs of recovery, marking 15 months of sub-50 readings at 47.1 Non-Manufacturing PMI also weakened from 50.5 to 50.1, its lowest since November.

The BoJ kept its short-term policy rate unchanged at 0.50% as expected, reaffirming its cautious stance in the face of growing external risks. While the central bank reiterated its intention to continue normalizing policy in light of improving economic and price conditions, it also cited heightened uncertainty around global trade and policy developments as justification for a steady hand.

In its latest quarterly outlook, the BoJ sharply raised its inflation forecasts. Core CPI for fiscal 2025 was lifted from 2.2% to 2.7%. Core-core CPI, which excludes both fresh food and energy, jumped from 2.3% to 2.8%. The upward revisions were largely attributed to food price increases, though the BoJ still sees underlying inflation remaining subdued in the first half of the forecast horizon.

For fiscal 2026, core CPI was revised slightly higher from 1.7% to 1.8%, and core-core CPI from 1.8% to 1.9%. Projections for fiscal 2027 remained unchanged at 2.0% for both measures. The Bank noted that inflation will pick up toward levels “generally consistent” with the price stability target in the second half of the projection period.

Growth outlooks were little changed. The fiscal 2025 GDP forecast was lifted modestly to 0.6% from 0.5%, while estimates for fiscal 2026 and 2027 were held at 0.7% and 1.0%, respectively. The Bank continues to expect a slow but steady recovery, supported by resilient domestic demand and improvements in global conditions.

BoJ emphasized that the risk balance for growth remains tilted to the downside for 2025 and 2026, though price risks are now broadly balanced.

Full BoJ Outlook for Economic Activity and Prices.

U.S. stocks ended mixed overnight after the Fed held its policy rate steady at 4.25–4.50%, in line with market expectations. The dissenting votes from Governors Christopher Waller and Michelle Bowman in favor of a cut came as little surprise, reflecting known dovish leanings. However, Chair Jerome Powell’s tone in the press conference struck a more cautious chord than markets had anticipated.

Powell pushed back against speculation of a near-term pivot, stating firmly, “We have made no decisions about September.” That effectively left the door open, but offered little for those hoping for imminent easing. Powell also warned that while tariff-driven inflation may be transitory, “more persistent” effects couldn’t be ruled out.

Between now and the next FOMC meeting, two additional rounds of jobs and inflation reports will be released—giving the Fed a wider lens to assess policy needs.

Traders responded by paring back bets for a September cut. Market pricing now sees just a 43% chance of easing at the next meeting, down from 65% a day earlier. The message: the Fed may be approaching the end of its pause, but it’s not ready to blink just yet.

Technically, while S&P 500's up trend continued this week, it's clearly continuing to lose upward momentum as seen in bearish divergence condition in D MACD. 6500 psychological level is likely to cap upside and bring consolidations. That's slightly above a major fibonacci level of 61.8% projection of 3491.58 to 6147.43 from 4835.04 at 6476.35. Break of 6281.71 support will indicate that a near term correction has already started towards 55 D EMA (now at 6110.15).

Summary

• The FOMC left the federal funds rate unchanged for the fifth consecutive meeting. The post-meeting policy statement had minimal changes and continued to characterize inflation as "somewhat elevated," the unemployment rate as "low" and labor market conditions as "solid." The pace of balance sheet runoff, also known as quantitative tightening, was left unchanged.
• Governors Waller and Bowman dissented against the decision to hold rates steady, preferring instead to cut the fed funds rate by 25 bps. This marked the first time multiple governors formally dissented since December 1993.
• To some extent these dissents reflect political jockeying, as Jerome Powell's term as Chair comes to an end next spring. But, we suspect the dissents reflect at least some genuine disagreement among Committee participants as they grapple with the appropriate stance of monetary policy amid the stagflationary impulse from higher tariffs.
• In the post-meeting press conference, Chair Powell was very careful to play his cards close to the chest regarding the outlook for a rate cut at the September meeting. Chair Powell cited easing financial conditions, a low unemployment rate and still-above target inflation as reasons to keep rates on hold. But, he highlighted potential downside risks to the labor market as a key reason to remain nimble when thinking about the path forward for the fed funds rate.
• Economic and policy developments between now and the next FOMC meeting on September 16-17 will be critical to determining the path forward for monetary policy. The FOMC will receive two more employment reports (including Friday's jobs data) and two more months of inflation data between now and then. Furthermore, although we doubt full clarity on tariffs is coming anytime soon, we should know more about the administration's tariff intentions and the economy-wide average effective tariff rate come mid-September.
• As we go to print, markets are pricing roughly a 49% chance of a 25 bps rate cut at the September FOMC meeting. Our current forecast looks for the FOMC to cut the fed funds rate by 25 bps at its September, October and December meetings, with risks skewed toward pushing back the timing of those cuts. We intend to adjust our fed funds forecast, if necessary, after the dust has settled following Friday's employment report.

The Center Holds

As was widely expected, the FOMC left the fed funds target range unchanged at the conclusion of its meeting today (Figure 1). The Committee has held the policy rate steady at 4.25%-4.50% this year as the economy's resilience has afforded the FOMC time to see how inflation and the labor market fare in the face of higher tariffs. However, Committee members are no longer all on board with this wait-and-see approach. Governors Waller and Bowman dissented in favor of reducing the fed funds rate by 25 bps at today's meeting.

Yet, there were no hints in the statement that other Committee members may soon be ready to follow their lead. The majority of voters still see policy as appropriately positioned to support the Committee's inflation and employment objectives. The statement continued to characterize inflation as "somewhat elevated," as the core PCE deflator has been running above the FOMC's 2% target for four years and counting (Figure 2). At the same time, labor market conditions remain "solid." The Committee did note some loss of momentum in economic growth recently, which was evident in the details of second quarter GDP. That said, the statement does not seem overly worried about current activity, noting it has moderated, rather than expanded at a "solid" pace recently. The only other change to the statement was the removal of uncertainty as "having diminished;" it now simply states that uncertainty remains elevated.

The dissents of Governors Waller and Bowman were telegraphed ahead of today's meeting and thus do not come as a surprising development. As the only two governors appointed by President Trump, the breaking of ranks could be viewed as jockeying for position in the race for the next Fed chair given that the administration has made no secret in its preference for lower rates. After all, a double dissent by governors has become extraordinarily rare, with the last one occurring in 1993.

That said, dissents are not uncommon around policy turning points. A directional bias among Committee members to lower rates has been in place since the last rate reduction in December, even as there remains disagreement over the precise timing and magnitude (Figure 3). The more formal, vocal support by Waller and Bowman could slightly hasten the timing to which the Committee decides to next move rates lower, especially as Governor Waller has served as a bellwether for the Committee the past few years.

Committee members will not have to wait long for the picture to be filled in. Friday will bring the July employment report. Last year's July job report also was released just days after the FOMC's meeting, and it showed more pronounced softness in the labor market that started the FOMC down the path of eventually cutting the fed funds rate by 50 bps at its subsequent meeting in September. While Friday's jobs report will not be the only major data release before the FOMC's next meeting on September 17 (there will be one additional employment report and two more months of inflation data), we view a weaker employment report as a necessary condition for the FOMC to cut rates as soon as its next gathering (Figure 4). Our current forecast looks for the FOMC to cut the fed funds rate by 25 bps at its September, October and December meetings, with risks skewed toward pushing back the timing of those cuts. We intend to adjust our fed funds forecast, if necessary, after the dust has settled following Friday's employment report.

July was a rough month for both the GBP and the JPY which were the worst performing currencies in the Major FX space against the Greenback (which also sparked a market-shaking comeback).

The past week however did see the return of some strength for the Yen after observing a lot of bad talk around the Nippon currency– As if bearish positioning for the Yen was at an extreme.

Positioning now seems more balanced as players have reduced their positions to prepare for tonight's Bank of Japan Rate Decision.

No hike is expected but the BoJ tends to surprise markets so always stay ready, this one would shock the Trading World.

Markets are expecting a 25 bps rate cut from the upcoming Bank of England meeting on August 7.

The meeting will also see the release of the Quarterly Monetary Policy Report which will provide more details on the views from the UK Central Bank amid their ongoing Cut cycle – Cuts are currently priced in for one out of two meetings.

Taking a look at the GBPJPY Technicals

GBPJPY Daily

GBPJPY Daily Chart, July 30, 2025 – Source: TradingView

The most volatile FX pair has started to show some signs of retraction from its Range Extremes, right after reaching 199.976 (the pair did not breach the 200.00 level).

Momentum is actually starting to confirm a potential reversal around here with the RSI going towards bearish (still at a neutral level for now).

Expect whipsawing volatility between tonight's BoJ Rate Decision and next week's Bank of England meeting.

The most important aspect to spot is actually the confirmation of the range after bulls tried to break higher and saw some consequent sharp reversals.

Support Levels:

• 50 4H-MA 197.75 immediate support
• Intermediate Range Resistance Zone turned pivot near 196.00
• Range Intermediate Support Zone around the 190.00 level

Resistance Levels:

• Resistance Zone extremes 199.00 to 200.00
• Weekly highs 199.220
• 20 4H-MA 198.25

GBPJPY 4H

GBPJPY 4H Chart, July 30, 2025 – Source: TradingView

Looking closer to the 4H timeframe, we are spotting a trendline break-retest pattern.

This would be a decent sign of reversal if it wasn't for the 4H 200-period MA holding prices – Therefore, keep this one closely in check to get a better idea of the immediate strength for bulls and bears.

With the MA 20 also passing as resistance, it will be interesting to see how the action reacts in the waiting of tonight's BoJ Meeting.

GBPJPY 1H Chart

GBPJPY 1H Chart, July 30, 2025 – Source: TradingView

Looking even closer, we are seeing that the ongoing action is evolving within a downwards channel formed since the July 8th pivot.

The lower bound of the Channel is currently below 197.40 to 197.50 and its higher bound is around 198.90 – It would be uncommon to see any major breakout before tonight's BoJ Meeting.

The pair will be extremely important to watch as European currencies start to show signs of weakness – Stay ready for the key Rate Decisions coming up soon.

Safe Trades and good luck for tonight's Bank of Japan Meeting!