Sample Category Title

EURUSD: ⬇️ Sell

• EURUSD falling inside accelerated impulse wave c
•  Likely fall to support level 1.1200

EURUSD currency pair recently broke the support trendline from February, coinciding with the 38.2% Fibonacci correction of the upward impulse 1 from May.

The breakout of these support levels accelerated the active impulse wave c, which then broke the support at 1.1460.

EURUSD currency pair can be expected to fall further to the next support level 1.1200 (former strong support from May).

EURJPY: ⬇️ Sell

• EURJPY reversed from the resistance zone
• Likely fall to support level 169.60

EURJPY currency pair recently reversed down from the resistance zone between the resistance level 174.00, the upper daily Bollinger Band and the resistance trendline of the daily up channel from February.

The downward reversal from this resistance zone created the daily Japanese candlesticks reversal pattern, Bearish Engulfing.

EURJPY currency pair can be expected to fall further to the next round support level 169.60 (former resistance from the end of June).

Gold: ⬇️ Sell

• Gold falling inside wave b
• Likely fall to support level 3250.00

Gold is under bearish pressure after the price broke the two upward-sloping support trendlines from May and February.

The breakout of these support trendlines accelerated the active short-term correction b – which belongs to the impulse wave 3 from June.

Gold can be expected to fall further to the next round support level 3250.00 (former low of waves 2 and (b) from May and June).

Fed held interest rates unchanged at 4.25–4.50% as widely expected, but a rare split emerged within the Committee. Governors Michelle Bowman and Christopher Waller dissented, voting in favor of a 25bps cut. Their push to begin easing suggests that internal debate is intensifying, even as the broader Committee maintains a cautious stance.

The statement offered few surprises, characterizing economic activity as having “moderated” in the first half of the year. Labor market conditions remain "solid" with "low" unemployment, while inflation remains “somewhat elevated.”

Fed reiterated its vigilance toward risks on "both sides of its dual mandate", but stopped short of signaling a policy shift.

Full FOMC statement here.

Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action were Michelle W. Bowman and Christopher J. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Absent and not voting was Adriana D. Kugler.

As widely expected, the Bank of Canada held the overnight rate steady for a third consecutive meeting, while leaving the door open to future cuts -- the overnight rate has remained at 2.75% since March, after 7 consecutive rate cuts lowered it from last year’s peak of 5%.

The message from the rate announcement was nuanced. The BoC acknowledged softening Canadian economic growth since January but also pointed to recent data reports remaining broadly resilient relative to more significant downside scenarios that appeared likely in the spring, and upside inflation surprises as reasons not to reduce interest rates further.

The potential “need for a reduction in the policy interest rate” was again reinforced, if there’s further net downward pressure on inflation stemming from a weakening economy. But it would likely take a significantly larger international trade shock than is currently in place to prompt that reaction, and the central bank will also need to continue to take into account fiscal policy loosening, which is better suited to deliver targeted relief to trade impacted sectors than interest rate policy.

With the interest rate decision aligning with expectations, we’ll focus more on the scenario analysis that was again presented in the MPR instead of a central forecast – although with a third current tariff scenario added to the two (upside and downside) scenarios provided in April.

This approach is unusual but allows the central bank to avoid speculating on event probabilities amid extraordinary uncertainty, and instead present a range of potential outcomes.

Bank of Canada’s scenario analysis and how it tracks ours

In the current tariff scenario that tracks the closest to our own base case assumptions, tariffs are assumed to stay unchanged to leave the average U.S. tariff at the 13% level today.

The BoC’s calculation of the current effective U.S. tariff rate on imports from Canada at ~5% is consistent with our own calculations, as is the calculation that the vast majority of Canadian exports are currently exempt from tariffs via compliance with the USMCA/CUSMA free trade agreement.

GDP growth in this scenario is projected be soft but positive in the second half of this year with inflation expected to hover around the 2% target as pressures from tariffs and economic softening roughly offset – that is also consistent with our own current base-case projections.

In the other two scenarios, the average U.S. tariff rate ranges from the 10% in the de-escalation scenario to 28% in the escalation scenario. In the former, Canada's economy recovers somewhat faster while inflation remains persistently below target. On the other hand, the escalation scenario triggers a prolonged recession lasting until early 2026, with inflation rising above 2.5% later in 2026.

Common assumptions for all three scenarios

Perhaps more revealing are the assumptions common across all three scenarios, one of them being that 75% of tariff-related cost increases will be passed on to consumers over six quarters. Our own assumptions are for a smaller but more rapid pass-through effect, of roughly half of tariffs-related cost increases passed on to consumers within one to two quarters.

Another key assumption concerns fiscal policy, as projections only incorporate already announced federal and provincial measures. Additional spending could lend to upside in growth in 2026. Our own assumptions in comparison, allow for some additional support from government spending on top of actual budgeted spending included in the BoC’s projections.

Importantly, U.S. tariffs are treated as permanent fixtures that will impact the economy well beyond the current cycle through reduced investment and productivity. This outlook aligns well with ours, and is particularly concerning given Canada’sdecade-long productivity slump that preceded the current trade disruptions.

Final thoughts and going back to our base case…

Despite recent decisions to hold, past rate cuts from the BoC are likely still taking time to support the economy. But with mortgage rates mostly stabilizing near or above origination back in 2020-2021 origination levels, the effect on households is more like easing off the brakes than pressing on the gas.

Today, the car is in neutral and the outlook is still hazy. Tariffs in place today have been less severe than feared but Canada as one of the largest trade partners to the U.S., remains particularly vulnerable to protectionist U.S. trade policies. In two days, the latest U.S. self-imposed trade negotiation deadline could result in escalated tariffs beyond today's targeted but relatively limited levels.

A significantly more negative outlook, one that resembles spring remains a downside risk. While the BoC projects inflation will rise in that kind of a scenario as tariff impacts outweigh economic weakness, further rate cuts would be appropriate if it became clear that the economy was sliding into recession. Barring such deterioration and following our base case, we expect the BoC will maintain current rates going forward.

Markets have just received the data for both ADP Private Employment (104K vs 78K estimate) and the Annualized US GDP Data (3% vs 2.4% exp), with both showing strong signs for the largest Economy yet again.

Equity Markets have been moving choppy since the weekly gap at the open, and as the US Dollar is making fresh new highs, it is a good time to look at US Treasury Bonds.

These are not the most commonly traded asset class by Retail Traders but they still represent a gigantic volume of financial transactions daily, particularly US Treasuries.

Bonds have been struggling to find strong demand despite the June war-fears and the few bouts of flight-to-safety that markets have seen.

Between record deficits, an isolationist Trump Administration Policy, tariffs leading to much higher inflation expectations (bad for bonds) and a general rewiring of financial flows throughout 2025, Gold and the CHF really have been the standout performers in term of Safe-Havens at the cost of USTs.

Is there anything that could prop the bonds to rally despite the strong data which would on paper make it more interesting to invest in risk assets?

For those who don't know, bonds and their supply/demand move the yields that we see on TV: US 10Y Yield, it might also be common to see the US 30Y Yield with its relation to borrowing rates.

For a straightforward explanation, higher demand for bonds (bonds up) = Lower Yields (generally).

Let's take a look at the US Treasury curve and spot technical clues on US 10Y Bonds for future price action.

Taking a look at the US Yield Curve

US Treasuries Yield Curve, July 30, 2025 – Source: TradingView

On this chart above, we see the tenures for Yields of different bond durations.

The Purple line shows the 1-year ago, flattened yield curve from higher main policy rates leading to lower inflation expectations (hence lower longer duration yields)

The Red line shows the 1-month ago curve, with the same shape as the current one but with higher yields across.

The yield curve is currently steep as Markets price in lower rates in the upcoming 2 years, leading to higher long-term inflation expectations (even higher than before due to tariffs).

The pricing of interest Rate cuts tend to steepen the curve.

No cuts are expected for this meeting but there is still about 50 bps of cuts expected to the current 4.50% Main Policy Rate.

Comparative Performance for different Bond tenures

Bond Performances since March 2025 to today – Source: TradingView

As seen with this comparative performance chart, higher inflation expectations and deficits combined with a lower general trust for what was considered one of the safest hedge against risk has propped up longer-run bonds quite largely.

This is in part one of the reasons why Borrowing Rates are so high in the US (look at the 2 and 10 Year bond perf vs the 30Y).

That's another effect of the Trump Steepening effect, infamous among bond traders.

Technical Analysis for the most commonly traded US Treasury: The 10-Year Bond

Weekly Chart for the US 10Y Bond

US 10 Year Bond Weekly Chart, July 30, 2025 – Source: TradingView

Since the end of the hike cycle in July 2023, bonds have been stuck in rangebound trading.

Bond Markets have been in a unique phase after decades of lower yields and Quantitative Easing leading to Central Banks buying Bonds to lower yields further (similar to what the Bank of Japan has been doing since the end of the 1990s).

Particularly with the ongoing diversification from US Investments from actors like China for example (who used to be huge bidders for USTs), it is difficult to look at the past to spot similar conditions.

Anyhow, prices have been consolidating for almost 2 years in a 7 handle range (107.00 to 114.00 with a few fakeouts) and Participants are still looking to get a better view on the effect of inflation on tariffs.
Prices are just passing above the flat 50-Week MA – reactions here will be interesting.

Part of the reason why the FED is reluctant to cut rates is due to the ongoing strong US economy.
Any cut right now would lead to much higher expected inflation in the future and may bring up longer-run borrowing rates too much for the Economy to handle, despite lower short-term policy rates.

Daily Chart

US 10 Year Bond Daily Chart, July 30, 2025 – Source: TradingView

There is an ongoing triangle formation looking closer to the daily charts, with Bonds freshly rebounding on the lower trendline (supported by the 50 and 200-Day MAs).

However, the fun for Bonds was short-lived with this morning's Beat on US Data which brought some supply.

Looking at the RSI and the flat Moving Averages, the action is more neutral than anything, and it seems that markets have priced in the impact of tariffs – The rest will be to see if data comes in worse or better than the current pricing.

Spot the reactions as we approach to the top or bottom of the Triangle formation.

Support Levels:

• 50-Day MA 110.90
• 110.50 Lower bound of Triangle formation
• 109.00 to 110.00 Main Support

Resistance Levels:

Mid-range Pivot acting as immediate resistance 111.50

July 1st Highs 112.38

Intermediate Resistance around 112.50

113.00 to 114.00 Main Resistance

4H Chart for the 10Y Bond

US 10 Year Bond 4H Chart, July 30, 2025 – Source: TradingView

We are seeing the establishment of a Pre-FOMC range between the 110.74 Lows and the 111.42 Highs – These will be the levels to watch for relative bull/bear strength as volatile trading after the rate decision may easily test these boundaries and potentially break them.

The rest is to see if we break higher or lower, depending on the communication regarding future cuts.

Safe Trades and good luck for the upcoming FED Meeting!

EUR/USD extends the sharp fall into third consecutive day, losing about 2.5% since Monday opening.

Fresh strength of dollar on very favorable for the US trade deal with EU and much stronger than expected US economic growth in the second quarter, keep the single currency under increased pressure.

Significantly weaker technical picture on daily chart following break of trendline support, completion of bearish failure swing pattern and the latest violation of the top of ascending daily Ichimoku cloud (1.1485) which underpinned the larger uptrend since early March, contribute to strong bearish signals on daily chart..

Fresh bearish signals are also developing on weekly and monthly charts as the pair is on track for the biggest weekly drop since mid-September 2022 and formation of bearish engulfing pattern and also for the first monthly loss in seven months.

Daily close below broken Fibo support at 1.1537 (38.2% retracement of 1.1065/1.1830) is the minimum requirement for fresh bears to remain fully in play, with penetration of daily cloud and break below 1.1447 (50% retracement) would further weaken near term structure and expose next key levels at 1.1357 (Fibo 61.8% / daily cloud base).

Strengthening negative momentum on daily chart and Tenkan/Kijun-sen bear-cross add to negative near term outlook.

Fed’s verdict (due later today) will be next top event, with wide expectations to keep rates on hold and more focus on comments about the central bank’s steps in the near future.

The Euro will extend its current free fall if the Fed keeps its hawkish stance, while the dollar may come under pressure if Powell & Co soften their interest rate rhetoric.

Res: 1.1485; 1.1537; 1.1572; 1.1623.
Sup: 1.1447; 1.1371; 1.1357; 1.1245.

Markets

We’ve been treated with a slew of GDP numbers today. Europe kicked off yesterday with Belgium (0.2% q/q) and a stronger-than-expected outcome for Spain (+0.7% q/q). Both also released the first inflation numbers for July (HICP: 2.6%, down from 2.9% and 2.7%, up from 2.3% respectively). French this morning topped estimates as well with a 0.3% print, be it almost exclusively on the account of inventory building. Italy (-0.1%) disappointed while the German economy contracted the expected 0.1% but with a downward revision to Q1. The euro area as a whole unexpectedly expanded by 0.1% (thanks to French and Spanish beat). That’s nothing to brag about but with some kind of a trade agreement finally in place that’s reducing the uncertainty to a certain extent, hope is that it gets better from here on out. Euro rates shrugged and the common currency drifted further south against the dollar, extending this week’s downleg. This also followed a stronger-than-expected ADP job report of 104k vs 76k expected. Next up was US Q2 GDP. Annualized quarterly growth came in at 3%, recovering from Q1’s -0.5% and topping the 2.5% estimates. Details show the expected reversal of import flows from the pre-tariff frontloading phase in Q1. Net exports as a result supported the headline outcome with by 5 ppts. This was only partially offset by inventory reduction (-3.17 ppts). This process (ie destocking the cheaper pre-tariff products) by the way helps explain why inflation numbers do not show the full impact of Trump’s tariffs just yet. The remainder of growth came from consumer spending, adding around 1 ppt to quarterly annualized growth. Both fixed investment and government consumption were marginal (+0.08 ppts). Published with the GDP numbers were the Q2 PCE price indices. They showed a sub-consensus 2% (from 3.8% in Q1) for headline PCE but the core gauge was a higher than anticipated 2.5% (from 3.5% in Q1). The combined releases trigger further dollar strength and UST underperformance vs Bunds. EUR/USD is nearing the 1.1431 support (23.6% retracement on the 2025 rally) and US rates are adding 4.4-5.4 bps across the curve.

Following the data deluge, the Fed policy meeting tonight is now at the center of attention. Powell is bound to leave rates unchanged at 4.25-4.5%, despite calls from Waller (and to a lesser extent Bowman). Markets are particularly on the lookout for any hint regarding future easing now some (though definitely not all) of the tariff fog is ebbing away. The Fed chair did subtly change his tone before Congress, saying rates could be cut sooner rather than later if tariff inflation remains limited and/or the labour market deteriorates. The former is still unclear. The most recent CPI has shown signs of higher tariff-induced prices kicking in but they were marginal. They have of course potential to intensify in coming months. The labour market meanwhile is holding up well. Against the backdrop of talks with another major trading partner, China, still ongoing (and probably to be extended) and apparently a more than resilient economy, we assume Powell to stick to a wait-and-see approach. Money markets price in a 65% chance for a cut in September, meaning that in the event of concrete guidance for near-term rate reductions, we will see downward pressure on both US rates and the dollar.

News & Views

Czech GDP continued to grow by +0.2% q/q and 2.4% y/y in the second quarter of this year. The result is close to KBC Economics’ estimate and not far from the Czech National Bank's latest staff forecast (2.3% YoY). Quarterly dynamics slowed compared to previous quarters (from 0.8% and 0.7%). There’s no detailed breakdown of GDP yet, but the statistical office noted that foreign trade and industry contributed negatively to quarterly growth, while everything else contributed positively (on the demand side, especially consumption). At this point, KBC economics has no reason to change our relatively conservative outlook for the economy (2.1% for 2025 and 1.8% for 2026). The CNB meets next week and comes with updated staff forecasts. The Czech crown trades higher on the day with EUR/CZK moving to 24.57 and closing in on the YtD (and 2024) highs.

The Hungarian economy accelerated with the Q2 number printing a better than expected 0.4%. This comes after a upwardly revised -0.1% in Q1. Services (particularly ICT) carried growth last quarter. The year-on-year figure remains mired to near-zero levels, though, highlighting the ongoing struggles. The Hungarian forint nevertheless trades higher on the day, pushing EUR/HUF back below 400. Investors were bracing for a (much) weaker outcome after economy minister Nagy’s dire comments yesterday.