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USD/CAD gyrated lower last week but lost momentum ahead of 1.3538 support. Initial bias is turned neutral this week first. On the downside, decisive break of 1.3538 will resume whole fall from 1.4791. Nevertheless, break of 1.3666 will turn bias to the upside, and extend the corrective pattern from 1.3538 with another rising leg to 1.3797 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.

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 retreated last week as rise from 184.35 turned into consolidations. Initial bias remains neutral this week first and further rally is expected as long as 193.99 support holds. Break of 198.78 will target 199.79 resistance. Break there will 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 rise from 154.77 extended higher last week and met 100% projection of 154.77 to 164.16 from 161.06 at 170.45 already. Initial bias stays on the upside this week. Sustained trading above 170.45 will target 138.2% projection at 174.03. On the downside, however, break of 168.44 support will indicate short term topping, and turn bias to the downside for deeper pullback.

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's rise from 0.8354 accelerated higher to 0.8668 last week, before forming a temporary top there and retreated. Initial bias remains neutral this week and more consolidations could be seen. But further rise is expected as long as 0.8506 support holds. Above 0.8668 will target a retest on 0.8737 high. Decisive break there will resume the whole rise from 0.8221 low.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the downside 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 continued to trade sideway last week and outlook is unchanged. Initial bias remains neutral this week first. Further rise is expected as long as 1.7809 support holds. Above 1.7989 will target 61.8% retracement of 1.8554 to 1.7245 at 1.8054. Sustained break there will pave the way to 1.8554. However, firm break of 1.7809 and sustained trading below near term channel support will argue that rise from 1.7245 might have completed. Intraday bias will turn back to the downside for 1.7626 support next.

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 gyrated lower to 0.9305 last week but quickly recovered after drawing support from 0.9306. Overall, range trading is still in progress. Initial bias stays neutral this week first. On the upside, break of 0.9428/45 resistance zone will resume the rebound from 0.9218. On the downside, break of 0.9305 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 0.9898) holds.

Monday, Jul 7, 2025

Tuesday, Jul 8, 2025

Wednesday, Jul 9, 2025

Thursday, Jul 10, 2025

Friday, Jul 11, 2025

Week in review: Strictly risk-on Markets, Non-Farm Payrolls beat & US Deals

This week was heavily focused around the US with Indices hitting almost daily all-time highs in a stringent euphoric mood, with markets turning from War fears back to "TACO" trades, bullish on global economic outlook.

One thing to note is that asset managers are increasingly more bullish on stocks and market mood maybe a bit too euphoric, which may pull positioning too far on one side and lead to higher volatility in case of bad news – with some catalysts coming with the July 9th Trump deadline.

In terms of data, markets saw ECB inflation rates consolidating around 2% with some policymakers, the latest with Banque de France's Villeroy commenting on the potential deflationary impact of a stronger Euro.

More directly market moving however was the streak of positive data releases for the United States, particularly as it comes to employment with NFP at +37K vs expectations and a beat on JOLTS.

One thing to be wary about in the solidity of that data point is the major rise in Government Jobs, providing a boost to the data without generating direct contribution to GDP.

Only ADP Private Employment missed, and and the miss was not a small one: -33K vs 97K expected.

This point of data tends to be less market moving than NFP, however Jerome Powell had previously mentioned private employment as a reason for the last year's one-off 50 Bps cut from the FED.

The Week ahead: RBA and RBNZ rate decisions, July 9th Trump deadline, FOMC Minutes and BRICS Meeting

The week ahead will shift the market's focus back to central banks and geopolitics, as participants brace for a series of global catalysts that could reintroduce uncertainty after several weeks of sustained positive sentiment.

Asia-Pacific Markets

Reserve Bank of Australia Rate Decision

The Reserve Bank of Australia, after cutting its cash rate by 25 bps to 3.85 % in May (its first trim since January), is widely expected to shave another 25 bps to around 3.60 % at its upcoming meeting as inflation cools but global headwinds linger.

The decision will be released in the July 7th to 8th overnight session at 00:30 A.M. (8/07).

Reserve Bank of New Zealand Rate Decision

The Reserve Bank of New Zealand—having lowered its OCR by 25 bps to 3.25 % in May—is forecast to hold rates at 3.25 % on Tuesday July 8th at 10:00 PM, though markets see further easing into early 2026 amid a still‑negative output gap.

Central Bank Cut/Hike Market Pricing

Central Bank Cut/Hike market pricing – Source: Forexlive.com

BRICS Meeting in Rio De Janeiro

Brazil, Russia, India, China, and South Africa will convene this week in Rio de Janeiro, July  6 and 7 to discuss current geopolitical issues, including US tariffs, recent Middle East developments and other habitual subjects (expansion, climate action, commodity demand, development goals, ...).

Economic Data from Europe, UK and North America

North America will mostly be concerned with the July 9th deadline from the Trump Administration to start imposing tariffs, which even though it had been priced in severely in the beginning of this year, has been broadly downplayed in the "TACO" trade trend.

Don't forget the few bouts of CAD moving data with Ivey PMI on Tuesday at 10:00 A.M. and Canadian Employment on Friday at 8:30 ET.

In European markets, economic releases will mostly focus on the Eurozone Retail Sales and some ECB Speakers – the rest will be lower-tier data.

Key Events coming up next week (Hier-Tier Data only) – MarketPulse Economic Calendar

US Dollar performance versus other Forex Major counterparts

US Dollar Performance since the Beginning of the Trading Week, July 4, 2025 – Source: TradingView

The US Dollar has seen a decent rebound in the latter part of this week but still finishes down against most of its major counterparts – The CAD has however held particularly strong against the USD in the end of the week, something to check in the upcoming week.

CHF and the EUR have also had a consistent decent performance in the beginning of the week particularly but have started to show signs of potential tops – This will depend heavily on an upcoming potential US Dollar rebound, scenario explored in our latest Dollar Index analysis.

Weekly Asset Performance

Cross-Asset Weekly Performance, July 4, 2025 – Source: TradingView

Gold has bulls have seen some newfound strength but Ethereum takes the crown for this week's cross asset performance.

The US Dollar and 30Y Bonds have on the other hand been the laggers of the week, again. Let's see if the Dollar regains some ground after the positive NFP report from Thursday.

Safe Trades in the upcoming week!

• July 9 tariff deadline looms as trade deals remain elusive.
• Fed minutes to be watched after positive jobs report.
• RBA expected to cut but RBNZ to likely stay on hold.
• OPEC+ to probably raise output again.
• UK GDP, Canadian employment and Chinese CPI data also on tap.

The race to the finish line

It’s been three months since President Trump delayed the start of the punitive reciprocal tariffs, allowing negotiators time to strike more favourable trade deals with America’s main trading partners. However, as the July 9 deadline approaches, the US has only signed two trade deals – with the United Kingdom and Vietnam – while it has agreed a formal trade truce with China that has, at least temporarily, massively lowered the triple digit tariff rates.

However, despite repeated reports that trade talks with India, Japan and South Korea are progressing well, no deal has been reached with any of those countries, and in a surprise turnaround, negotiations with the European Union appear to be going somewhat better. A deal with Canada is also possible in the coming days.

But even if there are several announcements incoming on or before July 9, it’s looking increasingly likely that the White House’s aim of completing deals with all 18 of America’s biggest trading partners won’t be possible by that deadline. This then raises the question of whether Trump will extend the deadline with those countries that no agreement has been reached yet, or will he re-impose the reciprocal tariffs.

The most likely outcome is that Trump will make some threats to slap levies that are much higher than the ones announced on ‘Liberation Day’ to squeeze enough concessions from those countries that the US is still negotiating with before granting a further extension.

As for the market reaction, that will probably depend on how many deals are signed over the coming week. If there are agreements with just a handful of countries and they don’t include any of the major ones such as Japan, India and the EU, then only a cautious sense of optimism is to be expected, which would modestly boost risk assets but may not necessarily do much in lifting the US dollar.

Fed minutes to dominate in quiet data week

Investors will also be preoccupied with how soon the Fed will cut rates again. Hopes of a July cut were dashed following the stronger-than-expected nonfarm payrolls report for June. But if the data continues to surprise to the upside, the odds of a September move may also start to dwindle.

But any update on the economy will have to wait for mid-July as there aren’t any major releases on the agenda next week and traders will be getting their cues from Wednesday’s minutes of the Fed’s June policy meeting and the limited Fedspeak that’s on the schedule.

After the dollar staged a much-needed recovery in the past few days, a hawkish tone from the FOMC minutes could help it extend its rebound.

RBA set to cut for third time

The Reserve Bank of Australia has lagged other central banks in lowering rates, mainly due to inflation in Australia being more persistent. But it now appears to be well and truly on an easing path, and it is widely expected to trim its cash rate by a further 25 basis points on Tuesday when it meets.

Investors have priced in two more cuts of similar size after the July meeting so the focus will be on whether or not Governor Michele Bullock will signal a rate path that is steeper or shallower than that implied by the markets. In the absence of explicit clues, investors will be watching how worried Bullock will sound about the impact of the trade war on the economy.

But with the Australian dollar having just recorded its fourth straight month of gains versus the US dollar, a dovish set of remarks risks sparking a near-term correction in the pair.

RBNZ expected to go on pause

Across the Tasman Sea, the Reserve Bank of New Zealand will also be setting policy 24 hours after its Aussie counterpart. Unlike the RBA, the RBNZ has been quite aggressive in slashing rates, lowering the cash rate six times by a cumulative 225 basis points since last August.

Recent data have been mixed: the unemployment rate is stuck at the cycle peak of 5.1%, but GDP posted a solid rebound in the first quarter, while inflation edged up to 2.5%.

Investors think there’s about an 80% probability that the RBNZ will keep the cash rate on hold at 3.25% on Wednesday but foresee one final 25-bps cut by year-end. If the Bank signals that it’s done with rate cuts, the New Zealand dollar could appreciate against the greenback. But should it keep the door wide open, the kiwi could slip slightly.

OPEC+ could opt for a larger output hike

Amid the ongoing trade uncertainty and recent geopolitical flare-up, one relief for central banks has been the speed at which oil prices tumbled back down after Israel and Iran agreed a ceasefire, lowering the risks to inflation. Moreover, there’s strong indications that OPEC and its non-OPEC allies are not deterred by this pullback and will push for another monthly output hike when they meet on July 5.

The OPEC+ alliance has shifted its stance from supporting high oil prices to defending its market share during 2025. The problem isn’t just other producers such as the US gaining a bigger market share but also member countries like Kazakhstan overproducing and refusing to abide by their supply quotas.

If there is a surprise from the OPEC+ meeting over the weekend, it’s more likely to be an output increase that’s greater than the 411,000 barrels per day that was agreed for May, June and July.

Should that turn out to be the case, there’s a good chance oil futures will start the week in the red.

Canadian jobs depressed by trade war with US

Elsewhere, investors will be keeping an eye on some major economic releases due in Canada, China, Japan and the United Kingdom. Starting with the Canada where the June employment report is out on Friday, another lackluster print could see the odds of a rate cut later this month rising from the current 25%.

the odds of a rate cut later this month rising from the current 25%.

There was some good news for the Bank of Canada when two of three core inflation readings eased in May. So, unless there was some kind of a rebound in the jobs market in June, the BoC could well cut interest rates again at its July meeting, or strongly signal one later in the year, especially if there’s still no permanent trade deal in place with Washington.

The loonie, however, is more likely to be driven by the strength or weakness of the US dollar.

Key data from China, Japan and UK

In China, CPI and PPI numbers are due on Wednesday. Both consumer and producer price inflation have been negative since February. If this trend remains unchanged in June, worries about a worsening deflation picture in China could weigh on market sentiment.

One country that is definitely glad to be out of deflation is Japan, where inflation has been strong enough for the Bank of Japan to finally exit negative interest rates. With the energy shock now fully faded, the BoJ is focusing primarily on sustained wage growth for guiding it on when to resume its policy tightening.

Wage growth figures for May are out on Monday and corporate good prices for June will follow on Thursday. The Japanese yen could strengthen slightly if wage growth comes in hotter than expected.

Finally in the UK, the focus is again on the government’s mismanagement of public finances, which triggered a spike in gilt yields during the past week, pushing the pound lower. Next Friday’s monthly GDP readings could help sterling regain its positive footing, as stronger growth tends to boost government revenue and would lessen the pressure for spending cuts or tax increases.

We expect possible tariff increases on July 9 to remain smaller in scale compared to the salvo announced on April 1st 'Liberation Day'.

US could strike preliminary deals with trading partners to buy time for more thorough negotiations. Treasury Secretary Bessent has appeared ready to postpone the deadline towards fall for countries negotiating in 'good faith'.

Legality of country-specific 'reciprocal tariffs' and the unclear outlook for new sectoral tariffs complicate the negotiations. Stricter stance on limiting re-routing of trade could mean higher tariffs for especially SEA countries, and cause tariffs to bite harder on the American consumer.

Full report in PDF.