Earnings season hits full stride next week, with several of the market's biggest companies set to report.
Source: Finnhub
USD/CAD has posted a net gain on the week despite experiencing significant volatility, with the pair bouncing sharply off the key psychological support level at 1.4000. The pair printed a weekly low of 1.4003 on Monday, narrowly holding above Friday's low and the critical round-number support, which attracted strong buying interest. The subsequent recovery pushed USD/CAD back above the falling 100-hour moving average, signaling a shift in short-term momentum. By Tuesday, bullish pressure intensified as the pair initially stalled near the 200-hour moving average before buyers successfully drove price above this key technical barrier, confirming stronger upside conviction. The rollercoaster price action highlights the importance of the 1.4000 level as a significant demand zone for USD/CAD traders. Near-term support is established at 1.4003 (weekly low) and the 100-hour moving average, while the 200-hour moving average now serves as a potential support-turned-resistance level. Traders should monitor whether the pair can sustain momentum above the 200-hour MA for continued bullish follow-through.
USDCAD
Sentiment:
Positive
Source: Finnhub
Global markets are trading in a subdued tone as a confluence of bearish factors dampens risk appetite, lending support to the US dollar as a safe-haven currency. A recent spike in crude oil prices has reignited inflation concerns, fueling expectations that central banks, particularly the Federal Reserve, may pursue additional interest rate hikes to contain price pressures. Simultaneously, elevated valuations in the technology sector have triggered profit-taking, adding to the risk-off sentiment across equity and currency markets. The combination of higher energy costs and tighter monetary policy expectations is pressuring commodity-linked currencies such as AUD/USD and USD/CAD, while strengthening the dollar against major counterparts including EUR/USD and GBP/USD. Traders should monitor upcoming CPI data and Fed commentary for further clarity on the rate trajectory. Near-term, the DXY dollar index is likely to find support from hawkish rate expectations, while risk-sensitive pairs may face continued downward pressure. Oil-exporting currency pairs like USD/CAD could see mixed dynamics as higher crude prices offset broader USD strength.
EURUSD
GBPUSD
AUDUSD
USDCAD
USDJPY
Sentiment:
Negative
Source: Marketaux
Market pricing for interest rate hikes by year-end shows the Reserve Bank of New Zealand leading with 57 basis points of expected tightening, followed by the Federal Reserve at 42 bps and the European Central Bank at 41 bps. The Bank of England is priced for 37 bps, while the Reserve Bank of Australia sits at 28 bps. The Bank of Japan trails at 25 bps, with the Bank of Canada at 20 bps and the Swiss National Bank at just 15 bps. Despite a relatively quiet week with no major data releases or central bank events, these expectations remained largely stable from the prior week. The NZD continues to command the highest rate differential expectations, potentially supporting NZD crosses. The narrow spread between Fed and ECB expectations (just 1 bp) suggests EUR/USD may remain range-bound in the near term. Traders should monitor upcoming economic data releases that could shift these expectations, particularly for pairs like NZD/USD, EUR/USD, and GBP/USD where rate differentials are key drivers.
NZDUSD
EURUSD
GBPUSD
AUDUSD
USDJPY
USDCAD
USDCHF
Sentiment:
Neutral
Source: Finnhub
Market pricing for interest rate hikes by year-end shows the Reserve Bank of New Zealand leading with 57 basis points of expected tightening, followed by the Federal Reserve at 42 bps and the European Central Bank at 41 bps. The Bank of England is priced for 37 bps, while the Reserve Bank of Australia sits at 28 bps. The Bank of Japan trails at 25 bps, with the Bank of Canada at 20 bps and the Swiss National Bank at just 15 bps. Despite a relatively quiet week with no major data releases or central bank events, these expectations remained largely stable from the prior week. The NZD continues to command the highest rate differential expectations, potentially supporting NZD crosses. The narrow spread between Fed and ECB expectations (just 1 bp) suggests EUR/USD may remain range-bound in the near term. Traders should monitor upcoming economic data releases that could shift these expectations, particularly for pairs like NZD/USD, EUR/USD, and GBP/USD where rate differentials are key drivers.
NZDUSD
EURUSD
GBPUSD
AUDUSD
USDJPY
USDCAD
USDCHF
Sentiment:
Neutral
Source: Finnhub
Oil prices retreated modestly during the European session on Friday, pulling back from significant weekly gains of approximately 9-11% across major benchmarks. The easing in crude prices triggered a corresponding decline in bond yields from their session highs, providing temporary relief to risk-sensitive currencies. Despite the intraday pullback, oil remains on track for substantial weekly gains, which have been a dominant theme driving broader market dynamics including forex positioning. The correlation between falling oil prices and declining bond yields suggests reduced inflation expectations in the near term, which could weigh on USD strength if sustained. Currency pairs with commodity exposure, particularly USD/CAD and AUD/USD, are likely to remain sensitive to further oil price fluctuations. Markets appear to be taking a breather heading into the weekend, with traders likely to reassess positioning ahead of next week's calendar. The pullback represents consolidation rather than a trend reversal, and traders should watch for Monday's open for directional cues across major pairs.
USDCAD
AUDUSD
Sentiment:
Neutral
Source: Finnhub
GBP/USD is receiving strong bullish support after UK July flash PMI data significantly beat expectations across all sectors. The services PMI surged to 51.8, well above the 49.4 consensus and the prior reading of 48.8, marking a decisive return to expansion territory. Manufacturing PMI also impressed at 52.8 versus 52.0 expected, while the composite PMI jumped to 52.1 from 49.3, smashing the 49.7 forecast. Chris Williamson, Chief Business Economist at S&P Global, noted that UK businesses reported stronger activity in July, pointing to a faster pace of economic growth at the start of Q3. The broad-based improvement suggests the UK economy is regaining momentum after a soft patch, which could complicate the Bank of England's rate-cutting calculus if inflation remains sticky. Traders should monitor whether this strength sustains into August data. Near-term, the data provides a solid fundamental floor for sterling, with potential upside pressure on GBP/USD and GBP/EUR crosses.
GBPUSD
EURGBP
Sentiment:
Very Positive
Source: Finnhub
A new market analysis from JustMarkets highlights how currency markets respond more aggressively to the gap between actual CPI data and market expectations rather than the headline inflation figure itself. The research underscores that surprise deviations in Consumer Price Index readings are the primary catalyst for sharp forex movements, as traders rapidly reprice interest rate expectations when actual data diverges from consensus forecasts. For instance, a higher-than-expected CPI print in the US typically strengthens the dollar as markets price in a more hawkish Federal Reserve stance, impacting pairs like EUR/USD and GBP/USD. Conversely, softer-than-expected inflation data can trigger rapid dollar selling. This dynamic applies across all major currencies, with the magnitude of the forex reaction proportional to the size of the CPI surprise. Traders are advised to focus on the deviation from consensus rather than absolute CPI levels when positioning around inflation releases. Understanding this relationship is critical for managing risk during high-impact data events across all major currency pairs.
EURUSD
GBPUSD
USDJPY
Sentiment:
Neutral
Source: Marketaux
EUR/USD is gaining upward momentum after Eurozone flash PMIs for July delivered across-the-board beats, signaling the first rise in business activity in four months. The composite PMI climbed to 51.9 versus the 50.3 consensus and prior reading, while services hit a 5-month high of 51.6 against 49.8 expected, and manufacturing reached a 3-month high of 52.0 versus 51.5 forecast. The data reflects a meaningful rebound in demand conditions across both sectors, suggesting the Eurozone economy is building positive momentum entering Q3. However, the ECB is expected to remain primarily focused on inflation data when calibrating monetary policy, which may temper the euro's gains. Markets may also partially overlook the PMI strength given the prevailing focus on US-Iran geopolitical developments. Technically, the strong data provides fundamental support for EUR/USD, though traders should watch for resistance at key psychological levels and consider positioning ahead of US flash PMI releases later in the session.
EURUSD
Sentiment:
Very Positive
Source: Finnhub
EUR/USD is finding support as Germany's composite PMI climbed back into expansion territory at 51.2 in July, beating the 49.8 consensus and ending a three-month contraction spell. The manufacturing sector led the recovery with a PMI of 52.2, significantly above the 50.5 expected and prior 50.3, while services improved to 49.6 from 48.6, though remaining in contraction. Phil Smith of S&P Global noted the German economy made a positive start to Q3, with manufacturing production driving the turnaround following disruptions from earlier geopolitical tensions. The manufacturing outperformance is particularly notable for Germany's export-oriented economy, suggesting improved global demand conditions may be filtering through. While the services sector remains a relative weak spot, the upward trajectory is encouraging. For EUR/USD traders, the German data reinforces the broader Eurozone recovery narrative. However, the ECB's primary focus on inflation rather than activity data means rate expectations may not shift materially on this release alone.
EURUSD
Sentiment:
Positive
Source: Finnhub
EUR/USD faces mixed signals from French July flash PMI data, which showed a strong services rebound offset by a softening manufacturing sector. The services PMI surged to a 7-month high of 49.8, well above the 47.5 forecast and prior 46.8, with demand for services rising for the first time since November. However, the manufacturing PMI slipped to 50.0 from 51.2, missing the 51.0 consensus and sitting right on the expansion-contraction boundary. The composite PMI improved to 49.6 versus 47.8 expected, still technically in contraction but marking a significant improvement from June's 47.2. The services recovery is the standout, suggesting domestic consumption may be stabilizing in France's consumption-driven economy. The manufacturing step-back warrants monitoring as it could signal fading momentum in the industrial sector. For traders, the net effect is modestly positive for the euro, as the services improvement carries greater weight in the French economy, though the below-50 composite reading limits bullish enthusiasm.
EURUSD
Sentiment:
Positive
Source: Finnhub
Major forex pairs including EUR/USD and GBP/USD face a session dominated by flash PMI releases and geopolitical uncertainty surrounding US-Iran developments. The European session features flash PMIs for major Eurozone economies and the UK, while the American session brings US flash PMIs. Market analysts note the PMI data is unlikely to shift expectations for the ECB or Bank of England, as both central banks remain primarily focused on inflation metrics when guiding monetary policy decisions. Traders are advised that markets may largely discount the PMI readings unless significant deviations from consensus occur, given that attention remains firmly fixed on US-Iran geopolitical tensions which carry risk-off implications for currency markets. The geopolitical backdrop could drive safe-haven flows into JPY and CHF if tensions escalate, while risk-sensitive currencies may face headwinds. For positioning, traders should monitor both the data releases and any geopolitical headlines, as the interplay between economic fundamentals and risk sentiment will likely determine intraday direction across major pairs.
EURUSD
GBPUSD
USDJPY
USDCHF
Sentiment:
Negative
Source: Finnhub
German GfK consumer sentiment for August came in at -29.6, slightly worse than the expected -28.5, signaling continued deterioration in household confidence heading into the second half of the year. While economic expectations showed marginal improvement, income expectations remain firmly depressed, reflecting ongoing concerns among German households about their financial outlook over the coming year. Notably, the willingness to save among consumers increased, indicating a more cautious spending posture that could weigh on domestic demand and broader Eurozone economic growth. This weaker-than-expected reading adds downside pressure on EUR/USD, as persistent consumer pessimism in Europe's largest economy raises questions about the ECB's ability to tighten further without exacerbating economic weakness. The data suggests that despite improving macro sentiment, the transmission to household-level confidence remains incomplete. EUR crosses may face headwinds as traders factor in the risk of slower Eurozone recovery. Near-term EUR/USD support levels will be closely watched, with the pair vulnerable to further softness if upcoming Eurozone data confirms the cautious consumer trend.
EURUSD
EURGBP
EURJPY
Sentiment:
Negative
Source: Finnhub
Safe-haven flows are intensifying as Iran rejected a ceasefire proposal from the US, relayed through Iraqi intermediaries, citing unresolved control over the Strait of Hormuz. Iran's refusal to accept what it termed a 'temporary deal' raises the prospect of prolonged geopolitical instability heading into the weekend, a period traders often approach with caution given the risk of gap openings. The rejection has fueled a spike in crude oil prices, with direct implications for commodity-linked currencies such as CAD and NOK, while traditional safe havens including the US dollar, Japanese yen, and Swiss franc are seeing increased demand. Gold, despite its typical safe-haven role, has slipped below $4,040 as rising yields offset geopolitical bid. Traders should monitor USD/JPY and USD/CHF for continued safe-haven positioning, while AUD/USD and NZD/USD face downside pressure from risk-off sentiment. Weekend holding risk is elevated, and reduced liquidity could amplify moves on any further escalation or diplomatic breakthrough.
USDJPY
USDCHF
USDCAD
AUDUSD
NZDUSD
Sentiment:
Negative
Source: Finnhub
Asian equity markets slumped sharply during the July 24 session as a confluence of negative catalysts weighed on risk appetite. Iran's rejection of a US ceasefire offer intensified geopolitical fears, driving crude oil higher and pressuring risk-sensitive assets. Simultaneously, renewed concerns over AI-related capital spending rattled tech-heavy indices across the region. Gold extended its decline below $4,040 support to test $4,025 as rising bond yields offset safe-haven demand. The Bank of Japan is expected to hold rates steady at its meeting next week while maintaining its inflation overshoot warning, keeping USD/JPY sensitive to any hawkish shifts in forward guidance. The yen saw mixed flows — supported by risk aversion but capped by the BOJ's dovish hold outlook. AUD/USD and NZD/USD remain under pressure from the broad risk-off tone and falling equity markets. Traders should watch the $4,025 gold support level and BOJ commentary for near-term directional cues across JPY crosses and commodity currencies.
USDJPY
AUDUSD
NZDUSD
Sentiment:
Very Negative
Source: Finnhub
