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USD/CHF stayed in consolidations above 0.7871 last week and outlook is unchanged. Initial bias remains neutral this week first. Stronger recovery might be seen but upside should be limited by 0.8054 support turned resistance. On the downside, firm break of 0.7871 will extend the larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757.

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.

In the long term picture, price action from 0.7065 (2011 low) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). It's uncertain if the fall from 1.0342 is the second leg of the pattern, or resumption of the down trend. But in either case, outlook will stay bearish as long as 0.9200 resistance holds. Retest of 0.7065 should be seen next.

AUD/USD's breach of 0.6589 last week suggests that rise from 0.5913 is resuming. Initial bias stays on the upside this week for 0.6713 fibonacci level. On the downside, however, firm break of 0.6484 support will now indicate short term topping, and turn bias back to the downside for 0.6372 support.

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).

In the long term picture, fall from 0.8006 is seen as the second leg of the corrective pattern from 0.5506 long term bottom (2020 low). Hence, in case of deeper decline, strong support should emerge above 0.5506 to contain downside to bring reversal. On the upside, firm break of 0.6941 will argue that the third leg has already started back to 0.8006.

USD/CAD recovered last week but lost momentum quickly. Initial bias stays neutral this week first. Overall, price actions from 1.3538 are seen as a corrective pattern, which is now in its third leg. Stronger rise could be seen and above 1.3728 will target 1.3797 resistance and probably above. On the downside, break of 1.3637 minor support will bring retest of 1.3538/55 support zone.

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.

In the long term picture, as long as 55 M EMA (now at 1.3494) holds, up trend from 0.9056 (2007 low) should still resume through 1.4791 at a later stage. However, sustained trading below 55 M EMA will argue that the up trend has already completed, with rise from 1.2005 to 1.4791 as the fifth wave. 1.4791 would then be seen as a long term top and deeper medium term down trend should then follow.

GBP/JPY edged higher to 199.80 last week but turned sideway since then. Initial bias remains neutral this week and more consolidations could be seen. Further rise is expected as long as 195.33 support holds. On the upside, break of 199.80 will resume the rally from 184.35 and target 100% projection of 180.00 to 199.79 from 184.35 at 204.14.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

In the long term picture, there is no sign that the long term up trend from 122.75 (2016 low) has concluded. But firm break of 208.09 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

EUR/JPY's rally from 154.77 continued last week and the late breach of 172.25 temporary top suggests that it's resuming after brief consolidations. Initial bias is back on the upside this week for 138.2% projection of 154.77 to 164.16 from 161.06 at 174.03. On the downside, below 170.78 support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, price actions from 175.41 (2024 high) are seen as correction to up trend from 114.42 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. Meanwhile, decisive break of 175.41 will confirm long term up trend resumption.

In the long term picture, there is no sign that the long term up trend from 94.11 (2021 low) has concluded. But firm break of 175.41 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

EUR/GBP stayed in consolidation below 0.8668 last week. Initial bias remains neutral this week first, and further rise is expected as long as 0.8573 resistance turned support holds. Above 0.8668 will resume the rally from 0.8354 to retest 0.8737 high.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, firm break of 0.8737 will still pave the way to 61.8% retracement of 0.9267 to 0.8221 at 0.8867.

In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.

EUR/AUD edged higher to 1.8094 last week but reversed from there. The development suggests that rebound from 1.7245 has completed with three waves up to 1.8094. Initial bias stays on the downside this week. Sustained trading below 55 D EMA (now at 1.7694) will argue that corrective pattern from 1.8554 is already in the third leg. Deeper fall should then be seen back to 1.7245 support. Nevertheless, strong rebound from 55 D EMA will maintain near term bullishness for another rise through 1.8094 later.

In the bigger picture, price actions from 1.8554 medium term are seen as a corrective pattern. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is expected to resume at a later stage.

In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6365) holds, this second leg could still extend higher.

EUR/CHF edged lower to 0.9297 last week but quickly turned sideway again. After all, range trading continued between 0.9260/9428. Initial bias remains neutral this week first. On the upside, break of 0.9428/45 resistance zone will resume the rebound from 0.9218. On the downside, firm break of 0.9260 will bring retest of 0.9218 low instead.

In the bigger picture, while downside momentum has been diminishing as seen in W MACD, there is no sign of bottoming yet. EUR/CHF is still staying below 55 W EMA (now at 0.9437) and well inside long term falling channel. Outlook will stay bearish as long as 0.9660 resistance holds. Break of 0.9204 (2024 low) will confirm resumption of down trend from 1.2004 (2018 high).

In the long term picture, overall long term down trend is still in progress in EUR/CHF. Outlook will continue to stay bearish as long as 55 M EMA (now at 0.9877) holds.

Week in review: Tariff Uncertainty Drags On

The July 9 tariff deadline has come and gone and market participants are still left with a lot of questions. Trade deals have begun to filter through but the majority of countries are still locked in negotiations with the US as the tariff implementation date of August 1 beckons.

The lack of high impact US data this week left markets with tariffs and trade deals to focus on. In typical Donald Trump style, the US President did not disappoint. Levying new tariffs on allies and other countries while urging them to ‘keep working hard’ in the tariff discussions.

The Fear and Greed index remains comfortably in greed territory despite the uncertainty which continued this week.

Source: FinancialJuice

On Thursday, Trump announced a 35% tariff on Canadian imports starting next month, increasing from the 25% set in March. He also warned the tariff could go even higher if Canada fights back.

Trump also suggested raising tariffs on other countries to 15% or 20%, up from the current 10%.

Source: LSEG

The market reacted more calmly to the new tariff announcements compared to the sharp drops seen after April's "Liberation Day," when major indexes had their worst weekly losses in nearly six years.

The S&P 500 and Nasdaq are heading for a slight drop this week, while the Dow is set to break its three-week winning streak, the longest since January. Nvidia (NVDA.O) made history by becoming the first company to reach a $4 trillion valuation, with its shares hitting a new record high.

The reaction by Gold may be a sign that market participants are still concerned about the uncertainty. The precious metal roared to life at the back end of the week, rising to trade at 3365/oz at the time of writing.

Cryptocurrencies were another winner this week with Bitcoin in particular faring excellently. The World's largest cryptocurrency rose to fresh all-time highs as institutional investors continue to pile in.

Earnings Season is Back. What to Expect?

Earnings season will kick into gear in the US next week and with tariffs yet to begin one wonders if it may mirror the Q1 run with a lot of caution and concerns being noted by major corporations.

Investors are looking ahead to understand how trade issues have affected businesses in the US and what are businesses expecting moving forward into Q3 and beyond. Given that tariffs are yet to be implemented, market participants may be left with more questions than answers once more and such uncertainty could weigh on US equities.

However, if companies do provide optimistic updates and we do get a flurry of trade deal announcements, US equities could continue to advance.

Source: Interactive Investor

The Week Ahead: Flurry of Inflation Data, Earnings Season Returns and Tariff Uncertainty Lingers

The week ahead has several important data releases lined up. The US and UK will release inflation data with key GDP data from China and manufacturing data from Japan.
Asia Pacific Markets

In China, Trade data on Monday is expected to show slight growth in exports and imports, with little sign of trade frontloading during the tariff pause.

Second-quarter GDP is expected to stay around 5% year-on-year. Housing price data will reveal if recent declines continue or were temporary. Another big drop may lead to more real estate stimulus, with a possible meeting in the week ahead to discuss it.

Retail sales have been strong, but industrial production and investment have weakened. Markets expect this mixed trend to continue in June.

In Japan, June exports are expected to rebound, with stronger growth to Asia (excluding China) and the EU, while exports to China and the US may lag due to tariffs.

Machinery orders are expected to show a slight increase supported by strong tech investment. Friday's CPI report should show a slight drop in pressure due to capped energy and food prices, but inflation will likely stay above 3%.

Economic Data from Europe, UK and the US

In developed markets, US inflation takes center stage. Inflation has been steady recently, with monthly increases of 0.1% and 0.2%. However, I expect it would take about three months after the tariffs for their effects to appear. This means the July, August, and September CPI reports will likely show a bigger impact. There is a possibility that core CPI will rise in Tuesday's report and may be worth monitoring.

Looking at the Euro Area, we have a few data releases to pay attention to.

The Euro Area saw strong growth in production and exports in the first quarter, driven by frontloading before “Liberation Day,” April saw declines as those effects faded. However, industrial production in April was still higher than in January.

While new orders show signs of stabilizing, it seems April's production levels were still boosted by frontloading. The key question is whether the tariff pause caused another wave of frontloading or if production and exports have returned to normal or even dropped due to higher tariffs.

May data will be crucial in understanding this and will provide a clearer picture of second-quarter GDP trends.

Moving to the UK, we have both jobs and inflation data on deck next week.

On the inflation front all eyes will be on UK service inflation which is expected to drop further, likely giving the Bank of England confidence to cut rates again in August. There will be even more pressure for a cut after the UK GDP release on Friday.

Job numbers are more important for markets than inflation next week. In May, payrolled employee numbers fell at the fastest rate since 2014 (excluding the pandemic). This data might be revised higher, but if it isn’t and if June’s numbers are also bad, it could push the Bank of England to speed up rate cuts.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Week - Gold (XAU/USD)

This week's Chart of the week is Gold (XAU/USD).

Gold has shrugged off its early week decline with an eye on three successive days of gains to end the week.

The precious metal benefiting from tariffs imposed by Donald Trump this week on a host of countries including neighbor Canada.

The lack of concrete trade deal announcements only adds to the confusion as market participants surely cannot wait for an end to the saga.

From a technical standpoint Gold bounced from the golden pocket fibonacci area between the 61.8-78.6 and printed a fresh high.

The question heading into next week will be whether there will be follow through and if the precious metal can regain the $3400/oz handle.

This is likely to depend on the developments around tariffs and trade deals, which will likely remain the driving factor for the precious metal and either fuel haven demand or lead to some form of unwinding, should a flurry of trade deals be announced.

Gold (XAU/USD) Four-Hour (H4) Chart - July 11, 2025

Source:TradingView.Com (click to enlarge)

Key Levels to Consider:

Support

• 3337
• 3325
• 3300

Resistance

• 3375
• 3400
• 3425

Canadian Highlights

• The tariff roller coaster rumbled on this week with Canada receiving a tariff letter from President Trump announcing a higher 35% tariff rate beginning August 1st.
• The market response to the Canadian news has been muted, and rightfully so, as hope for negotiations persists.
• The labour market offered some good news this morning, with the unemployment rate falling back to 6.9%, on healthy employment gains.

U.S. Highlights

• Trade tensions heated up this week, as President Trump announced higher tariffs on 23 trading partners as well as a 50% tariff on copper imports as of August 1st.
• If implemented, the combined announcements would add over 2 percentage points to the U.S. effective tariff rate, bringing it to a near century high of 17%.
• Minutes from the June 17th-18th FOMC meeting showed a growing divide among policymakers on when to resume rate cuts. A September rate cut is currently 63% priced in by Fed futures markets.

Canada – Good News, Bad News

The tariff roller coaster rumbled on this week with Canada among the list of countries receiving a tariff letter from President Trump. A higher tariff rate of 35% is supposed to take effect August 1st, a date that comes after the one month deadline Prime Minister Carney and President Trump outlined at the G-7 meeting in June. The President also announced a new 50% tariff on copper, and a delay in the threatened pharmaceutical tariff.

The market response to the Canadian news has been muted, and rightfully so as a lot remains unclear. The 35% rate is above the current 25% rate on non-USMCA compliant goods from the fentanyl-related tariffs. However, further muddying the water are emerging reports that USMCA compliant goods might still be eligible for duty free access to the U.S., blunting some of the pain of the higher rate.

Any carve-out is material. Although the top-line tariffs are still high, and together with the sectoral tariffs, are impacting the flows of goods to the U.S., many products (almost 60%) that crossed the border were USMCA compliant in May.

Ultimately, where the final rate lands is still an open question. The President continues to emphasize room for negotiation, and talks are ongoing. Unfortunately for the Canadian economy, uncertainty abounds amid the multitude of different tariff rates, deadlines and exemptions. Steely patience seems to be a prerequisite as the deadline for a deal approaches.

For Canadians tired of the roller coaster, the labour market brought good news this week. Employment growth popped, outstripping the ongoing strenght of gains in the labour force, to bring the unemployment rate back down to 6.9% (Chart 1). The gains were healthy and broad based, with the private sector leading the way. Even emphasis on part-time job gains this month can’t gloss over the fact that 13k full time positions were added, building on the 58k gain last month, and continuing their recovery from the losses in February and March.

So this is a week of two opposite signals. The tariff threat looms with a new August 1st deadline, but the labour market has shown some verve after the initial shock of uncertainty and fear. A healthier than expected labour market does give the Bank of Canada some additional breathing room, something markets have responded to, now expecting only one cut by the end of the year.

That said, the primary focus remains on inflation, and we will be getting the next iteration of the Consumer Price Index report next week. Canadian tariffs on U.S. goods have targetted food and beverage items, categories that have seen large price gains. However, core goods prices (excluding automobiles) have registered more tepid growth (Chart 2). The name of the game will be looking for hints of further tariff pass through to prices, and whether they seem persistent of temporary.

U.S. – Trade Fireworks in July

Financial markets were jittery to start the week, with the 90-day delay on the April 2nd “reciprocal tariffs” set to expire on Wednesday. While President Trump ultimately extended the deadline for another few weeks, he simultaneously ratcheted up trade threats on various fronts. He announced a 50% tariff on all copper imports, raised the tariff rate on Brazil to 50% and Canada to 35%, all effective August 1st. For Canada, the details remain sparse, but it’s assumed that all exports that are USMCA complaint – which is just under 60% of goods – would remain exempt from these tariffs. In addition, the administration sent letters to 21 other countries, including larger trading partners like Japan and South Korea, also threatening significantly higher tariffs come August. In total, the 23 countries put on notice account for $827B (or 25%) of annual U.S. imports – after accounting for USMCA compliance. Combined, these additional tariffs would raise the effective tariff rate by 2.2 percentage points if they come into effect August 1st, bringing it to 17%, or the highest level in nearly a century (Chart 1).

Investors appear to be taking the latest trade escalation in stride. U.S. equity markets briefly hit a new record high on Thursday, but then retraced on Friday in response to President Trump’s tariff threats on Canada. The S&P 500 looks to end the week 0.4% lower but is still up 6% on the year. Meanwhile, longer-term Treasury yields were a touch higher on the week, despite another healthy 10-year Treasury auction on Wednesday. As of the time of writing, the 10-year sits at 4.41%.

But the recent calm that has descended over global financial markets feels eerily tenuous, particularly amidst the ongoing shifts in trade policy and Q2 earnings season set to kickoff next week. Last quarter, much of the guidance companies were providing was purely speculative, as tariff policies were only in the early stages of being rolled out and were also changing on an almost daily basis. However, now that the tariffs have been in place for some time, companies are likely in a better position to gauge their impact and provide updates to earnings guidance for the second half of the year.

With the inflation impact so far proving more subdued than previously expected, there’s been a growing divide among FOMC members on when to resume rate cuts. Minutes from the June 17-18 meeting released on Wednesday showed that while most committee members favor delaying cuts until there’s more certainty on the inflation and labor market impacts, recent speeches suggest that two board members – Governor Waller and Bowman – support cutting rates as early as July.

This puts next week’s CPI inflation release under the spotlight. We expect the June CPI report to show inflation having strengthened, with both goods and services price pressures having heated up relative to May. But at this juncture, the uptick is unlikely to unnerve policymakers, particularly with inflation expectations remaining well anchored. According to the New York Fed’s Survey of Consumer Expectations, one-year ahead inflation expectations fell to 3.0% in June – returning to its pre-tariff levels (Chart 2). In our view, this supports the Fed remaining on the sidelines until at least September.