Insights 
VT 
Upcoming US quarterly earnings from major banks may be impacted by key inflation data.
This week kicks off the quarterly earnings reports, starting with major banks and financial institutions. Six companies from the Dow 30, including J.P. Morgan and Goldman Sachs, are set to announce their earnings. Additionally, important economic reports like the US CPI, PPI, and retail sales data will be released.
Canada’s CPI is expected to rise by 0.2% month-over-month (m/m). In the US, inflation figures predict a 0.3% increase for both Core and headline CPI m/m. Projections for the US PPI suggest a slight rise of 0.2% in Core PPI m/m and 0.3% in headline PPI m/m. Meanwhile, the UK’s CPI year-on-year (y/y) is anticipated to stay steady at 3.4%, putting pressure on the Bank of England. Australia is expected to add 21,000 jobs, keeping its unemployment rate at 4.1%.
China’s GDP y/y is forecasted to be 5.1%, with a significant rise in new loans to 1,960 billion yuan. In Germany, the ZEW Economic Sentiment is likely to increase to 50.8, reflecting growing optimism about its economic outlook. The Empire State Manufacturing Index is expected to remain negative, while UK labor data shows easing wage pressures. The Philly Fed Index and the University of Michigan (UoM) Consumer Sentiment Index are expected to improve.
This week places traders in a dynamic environment influenced by both earnings reports and a busy calendar of inflation and growth data, which could lead to quicker and possibly more volatile price movements. Bank earnings typically act as a benchmark for broader financial conditions. Reports from major firms like J.P. Morgan provide insights into credit quality, loan growth, and consumer behavior—important for short-term pricing.
With CPI and PPI data coming in, inflation is central to macro trades. The expected 0.3% month-on-month increase in both headline and core US CPI indicates that disinflation hasn’t yet taken hold convincingly. Recent months have shown that even slight differences in these metrics can significantly adjust expectations. The projected 0.2% rise in US core PPI aligns with consumer trends, suggesting that pricing power remains strong among many producers. These values likely keep current rate expectations stable, without needing drastic adjustments.
Canadian CPI offers cross-asset traders the chance to consider correlation trades, especially since oil-sensitive currencies may diverge more sharply. The forecasted 0.2% monthly increase suggests stability, allowing us to monitor the Bank of Canada’s next moves without the risk of overheating. It provides space for carry trades but still requires attention, especially if global inflation data is strong.
Across the Atlantic, the expected steady UK CPI at 3.4% y/y may relieve pressure on the gilt markets, but its durability depends on labor data. Slowing wage growth is positive, but the strength of hiring announcements later this week will add more depth. Traders interested in inflation swaps or short-term interest rate options may find new opportunities here. Reduced pressure on the Bank of England suggests a softer tone at the next meeting, as long as employment data remains stable.
In Australia, the job forecast is to add 21,000 jobs while keeping unemployment at 4.1%, affecting APAC markets, particularly in rates and currency volatility. We need to monitor changes in workforce participation and types of jobs created. A focus on full-time positions would support a neutral Reserve Bank of Australia stance, favoring relative yield strategies.
China’s GDP is projected at 5.1% y/y, which not only looks good domestically but also benefits exporters and resource-sensitive investments elsewhere. The increase in new loans to nearly two trillion yuan demonstrates efforts to boost credit without aggressively cutting rates. This situation encourages optimism for steel, copper demand, and equities in shipping and energy sectors, which are often subject to volatility.
Germany’s increasing ZEW expectations, now over 50, indicate a short-term confidence boost that might lift European indices slightly. However, the key question is whether this optimism corresponds with actual industrial output. This index usually leads by several months, and without confirmation from hard data, it remains a soft signal. Still, momentum traders on DAX futures could find opportunities if forward multiples rise alongside consistent sentiment.
In the US, the Empire State Index remaining negative is expected, and its prolonged decline caps manufacturing optimism. In contrast, the Philadelphia Fed Index is anticipated to strengthen, highlighting differences in regional performance. The University of Michigan sentiment could reinforce consumer resilience just as retail sales data comes in. Strength in consumption could shift Fed expectations quickly, leading to rapid adjustments across government bonds and related options volatility.
We remain observant. Each data point this week carries weight—not just for their immediate impact but also for their implications on central banks and liquidity flow, all crucial for planning trading strategies in the upcoming sessions.
The USDJPY is rising and targeting June’s high, aided by key technical levels and strong buying support.
USDJPY is on the rise as trade tensions continue, largely due to tariffs imposed by President Trump on Japanese goods. Effective August 1, there is a 25% tariff on all imports from Japan, along with additional tariffs on automobiles and auto parts starting in March 2025. By June 2025, there will also be 50% tariffs on steel and aluminum imports.
Looking at the technical side, USDJPY shows a positive trend. The price has risen above the 38.2% retracement level of 147.135, measured from the 2025 high to low. The hourly chart shows the price finding support at this level, indicating that buyers are active at important technical points. Last week, the price engaged with the rising 100-hour moving average during two drops, and buyers stepped in to halt any declines, reinforcing this moving average as a crucial support area.
The Bullish Outlook
Staying above these key technical levels, like moving averages and retracement points, boosts the bullish outlook. These levels serve as important decision points where buyers typically re-enter the market to maintain the upward trend. In simple terms, the yen is losing value compared to the dollar. Traders are anticipating higher risks of inflation in Japan due to tariffs and an overall stronger dollar. The recent U.S. policy changes targeting Japanese exports have increased pressure on the yen while driving up demand for the dollar. The market charts illustrate this sentiment. The movement above the 38.2% retracement offers strong confirmation that buyers are confident in this area. The steady support around the 100-hour moving average, even through minor sell-offs, shows that demand remains strong. These dips haven’t changed the overall trend; instead, they signal increased market engagement. To act on this, there are a few practical steps we can take. As long as support holds at these retracement levels and moving averages, there’s potential for further upside. We should treat these levels as critical turning points—places where interest has previously stopped declines. If buyers don’t show up at these spots in the coming days, it would signal a possible change in market structure.Approach For Tracking Movements
As a group, our focus shouldn’t just be on following the major trend, but also on having a plan for when momentum shifts. If we see buyers retreat—like if the price dips below the 100-hour average without recovering—we should reconsider our position. It’s essential to be prepared for this actively rather than just watching. For now, the respect for these technical markers provides a clear framework for action. It’s also important to remember that when tariffs are announced over several months, markets may not respond immediately. The staggered implementation—starting in August and continuing into March and June of next year—means reactions might stretch over time rather than being instant. This timeline allows for adjustments as more information comes in. Paying attention to the dollar side of the pair is just as crucial. Any changes in U.S. interest rate expectations due to these policies—especially if economic data suggests fewer or delayed cuts—could increase upward pressure on USDJPY. Recent market behavior indicates that macroeconomic developments are being considered alongside technical data. This combination of macro and technical analysis tends to yield the clearest signals for action. Moving forward, the best strategy is to treat key levels as clear indicators—deciding if the price will hold or break through these points. Whether we keep our leverage or reduce our exposure will depend on how these levels perform in the coming week. It’s also worth noting that movements in other yen pairs suggest broader market trends are aligning. As we continue to monitor each hourly candle and daily close, the market pattern becomes easier to follow. We should maintain our strategy as long as the structure remains intact and react swiftly if it changes. That’s our objective path from here. Create your live VT Markets account and start trading now.BoE hints at rate cuts while the Euro strengthens against a declining British Pound
UK Economy Shrinks
The Euro is gaining strength against the British Pound due to weak economic numbers from the UK and comments from the Bank of England hinting at a more relaxed monetary policy. Even with trade tensions between the EU and US, the Euro appears stable, trading near a two-week high of around 0.8710 EUR/GBP. New data shows the UK’s economy shrank by 0.1% in May, following a 0.3% drop in April. This decline is driven by weaknesses in manufacturing, industrial production, and construction. Bank of England Governor Andrew Bailey suggested that interest rates may gradually decrease because of emerging economic weaknesses and pressures like higher national insurance contributions for employers. The job market is also slowing down, with more staff available and a sharp drop in permanent job vacancies. The unemployment rate has climbed to 4.6%, the highest level in four years. Many expect a potential interest rate cut from the Bank of England in August. Upcoming inflation data from the UK and Eurozone will be crucial for policy expectations. If UK inflation softens, it could support a rate cut by the BoE. The different monetary strategies of the BoE and the ECB favor the Euro over the Pound. The Bank of England influences the Pound’s value through methods like setting interest rates and controlling money supply. With the Pound under pressure due to disappointing economic figures and cautious comments from policymakers, the EUR/GBP pair remains strong, reaching levels not seen since late June. The Euro’s continued strength, despite EU-US trade tensions, shows greater investor confidence in the Eurozone. This trend has become clearer over the last two weeks.Diverging Economic Trends
The contraction in output for May, following a poor showing in April, highlights deeper weaknesses across key sectors. Manufacturing and construction are particularly lacking, sending a clear signal about economic activity as summer progresses. These figures are likely to impact market participants looking to forecast monetary policy for the next two quarters. Bailey’s recent comments about economic softness and rising employer costs have added to this sentiment. There’s now a strong belief that rate cuts could happen as soon as August, rather than just in early autumn. Markets have already adjusted Gilt yields accordingly. Labour data further emphasizes the situation. A 4.6% unemployment rate isn’t just a number; it influences policymaking. Fewer permanent job vacancies and increased labor supply weaken the Bank of England’s hawkish position. Traders are already showing this change in their strategies, particularly in short Sterling futures and overnight index swaps, which now reflect over a 65% chance of a rate cut by late Q3. Meanwhile, sentiment in the Eurozone remains steady. The ECB, while cautious, does not share the same immediate concerns. This difference is important, as it makes the Euro more favorable compared to the Pound. Even though EU data has its challenges, it’s clear that one central bank is looking for economic weaknesses while the other is managing them. We expect upcoming CPI data from both the UK and the Eurozone to be significant. If UK inflation decreases, the BoE may feel confident to change its approach, leading to more downward pressure on the Pound. On the other hand, if Eurozone inflation remains stable or increases, it could support the ECB’s hawkish stance further. For traders involved in interest rate futures or currency options, these reports will impact volatility and market direction. The market is already adjusting to these differences. Forward guidance on interest rates is being reflected in currency pairs. We’ve seen increased activity favoring Euro strength, especially in options markets nearing September deadlines. Notably, there’s been a rise in implied volatility skews on EUR/GBP call options, indicating a push for protection or speculation around further Pound weakness. Now is the time to refine strategies with greater accuracy. A clear direction based on data is about to take shape, but misinterpretations could lead to significant risks. While short-term interest rate futures are currently active, it may benefit traders to consider a broader date range, particularly as we approach late-Q3 central bank meetings. As economic trends diverge and sentiment shifts toward a more dovish UK policy, pricing across short-duration UK risk instruments will likely reflect these growing imbalances quickly. Create your live VT Markets account and start trading now.ECB to reassess projections amid recent tariff concerns, affecting EURUSD movement
Sources say the European Central Bank (ECB) will discuss a more negative economic outlook next week due to recent tariff threats. However, at the meeting on July 24, the ECB is expected to keep interest rates steady, focusing on how tariffs might affect the economy.
A decision to lower rates may be postponed until September. Following this news, the EURUSD has dropped below the 1.3663 – 1.3691 range seen in both daily and hourly charts.
The report shows the ECB is taking a cautious approach as it prepares for its meeting next week. The central bank is paying attention to the economic strains caused by rising tariff issues, which are impacting previously steady growth forecasts. While no rate changes are expected this month, the ECB is modeling weaker economic scenarios. Changing monetary policy now might be too soon, especially since we don’t yet know the full impact of tariff threats on Europe’s economy.
With the ECB likely to hold off on action in July, focus will shift to the September meeting. By then, the ECB will have summer economic data and a clearer picture of trade policies. Meanwhile, the euro has reacted predictably to the softer outlook—it’s falling. The drop below the 1.3663 to 1.3691 range indicates expectations for European growth and monetary policy are changing.
For those analyzing market changes related to derivatives, the EURUSD’s decline requires adjustments. The previous levels acted as minor supports on daily and intraday charts. Since those levels have been crossed, prices could move closer to short-term selling targets. The directional bias has shifted from neutral.
From a strategy standpoint, short-term bearish approaches should be preferred while downward momentum persists. Delta should be adjusted because implied volatility may rise as we anticipate stronger ECB comments in September. We expect larger fluctuations in FX volatility, especially before major economic releases. We will need to reassess exposure further out as guidance becomes clearer. Gamma will mostly favor defensive strategies unless we see significant changes.
Also, we’ve noticed that regular correlations between interest rate expectations and spot prices are returning. These movements are not random. It’s important to respond to established expectations rather than just headlines. As the euro weakens due to worsening forecasts, it becomes easier to adjust trades connected to central bank responses.
Finally, hedging portfolios that focus on September rate expectations may gain importance in the coming days. This is not the time to chase rebounds in the euro without a solid reason. Instead, it makes sense to adjust option strike levels, keeping costs efficient while capturing opportunities based on increasingly negative policy scenarios.
Beth Hammack from the Federal Reserve Bank of Cleveland emphasizes economic strength despite ongoing inflation above target.
Beth Hammack from the Federal Reserve Bank of Cleveland says the economy is strong, but inflation is still higher than the Fed’s target. Monetary policy is currently tight, and there’s no immediate need to lower interest rates, even with uncertainties that could affect business plans and investments.
With concerns about possible economic slowdown, the Fed is staying alert. The effects of tariffs on the economy are still unclear, but it seems the neutral interest rate is close.
Bitcoin Soars and Euro Weakens
Bitcoin has reached new heights, crossing $122,000, with hints of more gains ahead. At the same time, the EUR/USD pair has softened due to a stronger US Dollar and worries about a potential trade conflict between the US and EU. Gold prices are around $3,350, influenced by new trade worries. Meanwhile, the GBP/USD continues to drop, impacted by trade and budget concerns. Trading forex with margin involves high risk and may not be suitable for everyone, as leverage can lead to significant losses. It’s important to understand these risks and seek independent financial advice when considering forex trading. Hammack’s views indicate that the economy is holding strong, but inflation is still a concern. Currently, monetary policy remains strict, with tighter borrowing conditions to control demand and address price pressures. There’s no rush to change interest rates, despite emerging challenges in business investments. This suggests a cautious approach, remaining restrictive but open to adjustments if the data worsens.Market Sentiments and Policy Approach
The Fed seems to be treading carefully, not wanting to loosen policy too soon while also being wary of tightening too much as some indicators weaken. Market watchers will likely pay closer attention to labor and inflation data. A wrong move by policymakers—either keeping rates too long or cutting them too soon—could lead to heightened volatility in longer-term contracts. Comments on the trade environment are carefully measured. There’s a growing awareness that tariff policies may cause unexpected disruptions. The exact impact on import prices and demand is still unclear, but Hammack suggests that the policy rate is at a neutral level—balancing stimulation and restraint. This is a factor to consider when planning positions based on long-term rate predictions. On the technical side, Bitcoin’s rise past $122,000 has garnered significant attention. Momentum traders are driving this upward trend, backed by strong breakout signals across key timeframes. This trend may have broader implications beyond digital assets. With tighter liquidity elsewhere, more investments in cryptocurrency indicate a higher risk appetite, complicating options positioning in short-term contracts. Timing is crucial; waiting for confirmation from key moving averages is wiser than predicting reversals. The EUR/USD is vulnerable, having softened due to US dollar strength and renewed trade disputes. If economic pressures, especially diverging paths between the US and EU, continue, we expect this trend to persist. However, positioning related to differing policies is becoming crowded. Speculators with leveraged long positions may face liquidity issues during short-term dollar rallies if US CPI or employment data exceeds expectations. Gold’s close to $3,350 suggests a cautious market. This price likely reflects a desire for hedges related to geopolitical concerns and falling yields, not just inflation worries. With relatively high real rates, metal prices may not hold unless there is a surge in safe-haven demand. Options traders may continue to prefer risk-reversals, with stable costs for downside hedging. GBP/USD remains under pressure due to broader economic issues like ongoing trade disputes and fiscal challenges. These worries are not fleeting. Officials’ forward guidance has not alleviated investor concerns. The pound’s path in the coming weeks may depend as much on domestic budget decisions as on global economic data. Given this sensitivity, we’re closely monitoring implied volatility, especially on longer contracts where premiums are high. These developments highlight how interconnected these issues have become—trade concerns, policy uncertainty, and market changes are influencing each other. It’s essential to remain flexible. Our trading strategy for the next two weeks needs to adapt to how quickly sentiment can shift. The mismatch between fundamental outlooks and price movements is the biggest source of friction in structured derivatives. Create your live VT Markets account and start trading now.Meta plans to invest significantly in computing to lead in superintelligence and gather AI expertise.
Meta CEO Zuckerberg has announced a massive investment in computing, focusing on developing super intelligence, with plans to spend hundreds of billions of dollars. This investment is backed by Meta’s strong business foundation. The company intends to build a high-talent team and initiate a project called Hyperion, which aims for a capacity of 5 gigawatts (GW).
### Key Insights
Meta is determined to lead in the AI field, with financial resources rivaling those of governments and other tech giants. This indicates a strong commitment to building infrastructure for artificial general intelligence, highlighted by projects like Hyperion and the Prometheus cluster, which is projected to launch in 2026.
### The Impact on AI Talent and Industry
This initiative could pull top AI talent into Meta, making it tougher for smaller companies to hire and potentially driving industry consolidation. By boosting the computing power available to each researcher, Meta hopes to increase productivity, enhance experimentation, and spur innovation.
This strategy puts Meta in direct competition with companies like OpenAI and Google DeepMind, possibly igniting an “arms race” in AI development and attracting regulatory scrutiny.
Meta’s shares have risen by 0.85%, trading at $723.56, staying above a key support level of $708, which is seen as optimistic. Since the beginning of the year, Meta’s shares have increased by 23.62%.
Ultimately, this shift emphasizes a major move from just discussing AI capabilities to funding and building them on an industrial scale. Zuckerberg’s announcement is not just another tech promise—it signifies Meta’s capability to invest vast sums, reportedly in the hundreds of billions, into infrastructure purely for artificial intelligence. This effort is targeted; they are making strategic investments in systems designed for future demands.
### Meta’s Ambitious Plans with Hyperion
The goals for Hyperion showcase an ambition rarely seen in commercial projects. A target of 5 GW would position it not just as a computing cluster but as a facility competing with national energy outputs. AI development is evolving beyond simple coding in small server rooms. We are now considering energy resources, supply chains, chips, labor, and real estate—elements typically associated with national infrastructure initiatives.
Much of this investment appears focused not on consumers but on boosting high-end research productivity. Increasing computing power per researcher allows for more experiments in a shorter time, leading to quicker testing of hypotheses and faster improvements in AI models. This should lead to significant advancements in AI capabilities in a fairly short time.
Moreover, this will attract top talent. With projects like Prometheus in development, Meta may draw researchers away from academia and smaller startups that rely on limited funding. This talent shift could reduce diversity in ideas across the ecosystem. While Meta gains from scale and control, other areas may experience fragmentation.
We believe these strategies will significantly impact how AI supplier stocks and indices perform in the short to medium term. Companies that provide computing power, data center specialists, and chip manufacturers might see increased orders before delivery. Additionally, mergers and acquisitions could rise as competitors rush to secure critical resources.
On the other hand, companies lacking integration capabilities could struggle. Those relying on renting computing resources may find themselves at a disadvantage. These contrasts are likely to become evident in options pricing, especially for firms heavily involved in cloud-based AI.
As regulatory scrutiny increases—not just speculation, but due to the scale of concentration—we may see new licensing rules or reporting standards come into play. This could create challenges for some stocks more than others, particularly those operating outside traditional regulatory frameworks.
Even though shares are performing well, we notice that implied volatility has slightly risen around earnings dates. This might not lead to immediate changes in pricing, but it suggests that investors are starting to account for greater uncertainty regarding profit margins, competitive responses, and how companies like Meta will be regulated in the future.
Many view this early phase of infrastructure change as a pivotal moment for reallocating investment exposure. What once took months now occurs in weeks. For now, speed is crucial.
**[Create your live VT Markets account](https://www.vtmarkets.com/trade-now/) and [start trading](https://myaccount.vtmarkets.com/login) now.**
Canada’s wholesale sales in May exceeded forecasts with a 0.1% increase, surpassing the expected decline of 0.4%
Canada’s wholesale sales increased by 0.1% in May, surprising experts who had predicted a 0.4% decline. This rise occurs amid fluctuating global markets due to various trade issues.
In the forex market, the AUD/USD pair found slight support around the 0.6480 level before climbing back to around 0.6550, influenced by the strength of the US Dollar and ongoing trade concerns.
Euro and Dollar Dynamics
The EUR/USD is trading below 1.1700 due to stronger demand for US Dollars. Recent tariff announcements by Donald Trump have affected currency markets and pressured the Euro. Gold prices are currently around $3,350 per troy ounce, facing downward pressure after three days of gains. The market is paying attention to upcoming US inflation data, especially in light of new tariff threats. Ethereum is trading close to $3,000 after BitMine reported significant ETH holdings. Additionally, over $990 million has flowed into Ethereum exchange-traded funds recently. Financial markets are reacting to global trade dynamics and potential tariff changes. This week, the focus will be on US economic data and trade policy updates.Canada Wholesale Sales and Domestic Impact
Canada’s 0.1% rise in wholesale sales offers a glimpse of resilience in domestic supply chains, especially given expectations of decline. Even small growth during global trade challenges can have a stabilizing effect. Imports and wholesale distribution are sensitive to broader policy changes, so any positive surprises in these figures could impact pricing trends in other industries. If wholesale activity strengthens despite external pressures, it may provide moderate support for Canadian interest rate expectations, even if overall inflation remains low. The bounce of the AUD/USD from the 0.6480 level back to 0.6550 indicates short-term market movements rather than long-term commitment. There’s a balance between improving local data and ongoing US strength. For those involved in derivatives, the bounce may provide an opportunity for covered call strategies or a reassessment of short positions. The pair remains affected by commodity sentiment and China’s industrial outlook, both of which lack stability. Future positioning should consider the likelihood of renewed US Dollar buying against news from Beijing. For the Euro, its performance below 1.1700 against the dollar is typical—capital usually flows to the dollar in times of risk aversion. However, Trump’s new tariff discussions have had quick effects, causing capital to leave Europe. The Euro’s weakness may persist until the European Central Bank more directly addresses growth disparities. We’re observing the EUR/USD options skews since they seem to underprice significant downside risk, creating unique opportunities for those structuring straddles or ratio puts. Gold prices at $3,350 are softening after three days of increases, reflecting shifting inflation expectations. The recent tariff spike hasn’t prompted the typical surge in bullion demand. Instead, even slight adjustments in real rates are tightening conditions. If US inflation surprises arise soon, gold may test lower levels near $3,280, especially if futures liquidity declines. Notably, UVXY and call hedge volumes are low. In the crypto market, Ethereum’s price near $3,000 following BitMine’s disclosures shows that investors are focusing on bulk holdings, not just headline flows. The inflow of $990 million into Ethereum-linked ETFs indicates strong institutional interest. If derivative volumes keep rising without a solid support above $3,100, we may experience increased volatility in weekly expirations. This situation requires wider stops and adjustments for those managing systematic options overlays. Global trade changes and upcoming US economic data are primed for significant reactions, but the next few weeks may also clarify the persistence of trade aggression. For short-term traders, it’s more about aligning their exposure to assets likely to respond sharply when market trends shift than about predicting policy announcements. Statistics will influence sentiment, but positioning will dictate prices. Create your live VT Markets account and start trading now.GBP/USD hits a three-week low, indicating sellers take control if it stays below 1.3448
GBPUSD has hit a new low for the past three weeks, with sellers taking charge. The price has dipped below an important area between 1.3448 and 1.3475 on the hourly chart, giving sellers more influence.
On the weekly chart, GBPUSD has returned to a range between 1.3411 and 1.3514. If the price stays below 1.3411, it would strengthen the bearish outlook from a technical perspective.
The recent drop below the hourly swing zone indicates that sellers are gaining momentum. Previous support levels now act as obstacles for any potential recovery. Staying below 1.3448—especially after clearly breaking through that range—shows that the downward trend is supported by broader technical indicators.
Looking at the weekly timeframe, the pair has moved back into a larger area between 1.3411 and 1.3514 that had previously seen some consolidation. Being near the lower edge of this range suggests that shorter-term movements are aligning with a longer-term trend. Continued trading below 1.3411 may lead to more selling, especially from traders watching how this level has reacted in the past.
From a trading perspective, this structural shift calls for careful monitoring of intraday bounces, particularly those that fail to push past retested resistance levels. Retracements that respect former hourly support areas now confirmed as resistance provide clearer guidance for managing risk.
It’s also important to look at volume profiles and open interest where applicable. When directional moves like this show higher volume, we can be more confident in the strength of the trend. Conversely, weak follow-through might indicate profit-taking rather than a broader move.
Carney’s earlier approach to controlling inflation through tighter policies has already influenced many forward rate expectations. However, the recent price action hints that these expectations are being weighed against the latest economic data and geopolitical factors, rather than being adjusted upward.
In the coming week, it will be useful to observe whether sellers continue to add to their positions during minor pullbacks. Moving below recent lows without hesitation could fuel further momentum. We need to see if the lower boundary holds or if prices dip deeper towards Q4 2023 levels.
With this in mind, traders should look for confirmation of continued bearish trends through rejection candles or momentum indicators that fail to regain strength above the broken swing region. Quick failures near 1.3448, if tested from below, would be a significant signal.
As always, reactions to key economic announcements scheduled for the coming days may validate or contradict the current price direction. Pay close attention not only to the headline numbers but also to how the market responds immediately after the news, especially in the context of the broken structure.
UOB Group analysts predict that the USD will not drop below 7.1630 against the CNH.
The US Dollar may drop slightly against the Chinese Yuan, but it is unlikely to go below 7.1630. In the near future, the USD is expected to move between 7.1550 and 7.1920.
In the last 24 hours, the USD was forecasted to trade between 7.1730 and 7.1880 but actually moved within a narrower range of 7.1660 to 7.1834. The USD faces resistance at 7.1780 and 7.1830, with a decrease not expected to fall below 7.1630.
Medium Term Outlook
Looking at the next 1 to 3 weeks, the recent upward trend for the USD has decreased, making it unlikely to surpass 7.1900. The strong support level at 7.1630 remains, as the USD is expected to stay in the 7.1550 to 7.1920 range. The data provided comes with risks and uncertainties, and accuracy or timeliness is not guaranteed. It’s crucial to do thorough research before making investment choices because investing carries financial risk and emotional stress. All related risks, losses, and costs are the responsibility of the individual. Currently, the US Dollar appears to be stabilizing against the Chinese Yuan. While it was previously expected to trade between 7.1730 and 7.1880, actual movement was slightly lower and tighter. This suggests less upward momentum, though no significant drops have occurred. Short-term forces seem to be steady without a strong bias in either direction. Resistance around 7.1830 has held firm, with insufficient volume to push confidently above this level. On the other hand, dips toward 7.1660 have been quickly recovered, indicating that buyers are active when prices reach those points. This shows a pattern of range-bound trading rather than distinct directional movement.Strategic Considerations
From a medium-term perspective (1 to 3 weeks), the idea of the Dollar breaking sharply above 7.1900 is losing traction. The earlier upward momentum appears to be weakening. Support at 7.1630 is still solid, signifying a consistent range without much deviation. Therefore, for those analyzing price changes, it’s important to look for any signs that disturb this balance. A break above 7.1920 or below 7.1550 would indicate a shift in liquidity and order flow. Until then, we can expect a steady movement that may attract mean-reversion strategies. As this unfolds, risk management is crucial. Tight spreads and stable volatility allow for leverage, but sentiment can shift quickly. If market participants adjust their expectations regarding monetary policy or if economic data comes in unexpectedly, those boundaries could break. While recent price activity helps identify key technical levels, we shouldn’t assume these levels will hold permanently. Events that alter historical correlations or shifts in central bank policies can have a significant impact, especially if positions are heavily concentrated. It’s advisable to closely monitor the reaction to any retests of 7.1630. If this level fails to attract buyers reliably, a bearish trend could develop. Conversely, repeated rejections near 7.1830 would suggest that the current ceiling remains intact without stronger momentum. In summary, the present situation suggests a strategy focused on adhering to the range, but it’s essential to be prepared with predefined levels and remain alert to broader factors. Those trading derivatives linked to this pair should ensure their models can adjust quickly if the range is breached, as this compression phase won’t last forever. Create your live VT Markets account and start trading now.The technology sector struggled while financial stocks showed strength, leading investors to evaluate new opportunities.
The US stock market had mixed results. Technology stocks struggled, while financial stocks showed stability. In the tech sector, Microsoft fell by 0.34%, Oracle dropped by 1.69%, NVIDIA declined by 0.73%, and Micron Technologies plummeted by 4.70%.
On the other hand, the financial sector performed well. Visa rose by 0.83%, driven by strong consumer spending. JPMorgan Chase gained slightly at 0.17%, and Bank of America remained stable with small changes. These trends indicate strong confidence in finance amid the current economic landscape.
