FX Markets Consolidate Pre-CPI as Gold, Bonds, and Crypto Await Data

European forex markets traded in a consolidative pattern as traders positioned cautiously ahead of the pivotal US June CPI report. The session saw limited directional conviction across major pairs, with market participants focused on the distribution of CPI forecasts and potential reaction scenarios. Supporting risk sentiment, the US June NFIB small business optimism index surprised to the upside at 97.4 versus 95.7 expected, signaling improved confidence among small businesses. The bond market attracted particular attention as a leading indicator for post-CPI moves, with yields holding steady ahead of the release. In commodity markets, gold faced selling pressure amid a renewed US-Iran crisis, adding a geopolitical dimension to the forex landscape. Crypto markets also traded cautiously, with Ethereum testing key breakout levels. Bank of America noted that long global semiconductors remained the most crowded trade on record, with positioning suggesting no significant short interest. German wholesale data rounded out the European session, though it had minimal forex market impact as all eyes turned to US inflation data.