EUR/USD and broader risk-sensitive pairs are benefiting from improved market sentiment following a surprisingly soft US CPI report, which has reduced expectations for additional Federal Reserve tightening. The European session ahead features only low-tier releases, including final Spanish CPI and Eurozone Industrial Production, neither of which is expected to materially shift ECB rate expectations or generate significant market reaction. The softer US inflation data has provided a notable breather for markets, encouraging positive risk sentiment and reducing dollar demand. Focus now shifts to the US session, where PPI data and Fed Chair Powell's testimony are anticipated as the next major catalysts. These events carry the potential to either reinforce or reverse the current dovish repricing of Fed policy. Traders should remain alert for volatility around Powell's remarks, which could set the tone for USD pairs through the week. In the interim, EUR/USD is expected to trade in a narrow range during European hours, with directional conviction likely deferred to US session developments.
EURUSD
Sentiment:
Positive
Source: Finnhub
The US dollar came under pressure following the June CPI report, which printed at 3.5% versus the 3.8% consensus forecast, providing markets with a notable dovish signal. The softer inflation reading initially triggered broad USD selling across major pairs, though analysts caution that the decline was largely driven by a marked fall in gasoline prices rather than a broad-based disinflationary trend. Core components of the report may still reflect persistent underlying price pressures. The cooler headline figure has reignited speculation that the Federal Reserve could adopt a more accommodative stance in upcoming policy meetings, potentially bringing forward rate cut expectations. For USD pairs, traders should monitor whether the dollar weakness extends or stabilizes as markets digest the details behind the headline miss. Key levels to watch include DXY support near recent lows, with resistance at pre-CPI levels. The data provides temporary relief for risk assets, but traders should remain cautious as gasoline-driven disinflation may prove transitory, limiting sustained dollar downside.
EURUSD
GBPUSD
USDJPY
Sentiment:
Negative
Source: Finnhub
Asian-Pacific markets navigated a volatile session as China's Q2 GDP growth slowed to 4.3% year-over-year, the weakest pace in three and a half years, while geopolitical tensions between the US and Iran escalated dramatically. China's June retail sales rose a tepid 1.0% y/y, while industrial output held at 5.3% y/y. New home prices fell for a fourth consecutive year, declining 3.3% y/y in June, underscoring persistent weakness in the property sector. These figures weigh heavily on CNH, AUD, and NZD as China-sensitive proxies. Meanwhile, US military strikes on Iranian sites near the Strait of Hormuz triggered retaliatory attacks on US bases in Bahrain, Kuwait, and Jordan, sending oil prices sharply higher and boosting safe-haven flows into JPY and CHF. The Korea Exchange halted trading amid the turmoil. The Nikkei posted modest gains but was capped by caution ahead of ASML earnings. Traders should brace for elevated volatility across oil-linked and safe-haven currencies, with USD/JPY likely pressured lower on risk-off sentiment.
USDJPY
USDCNH
AUDUSD
NZDUSD
USDCHF
USDKRW
Sentiment:
Very Negative
Source: Finnhub
AUD/USD faces downward pressure following China's Q2 GDP print of 4.3% year-on-year, significantly missing the 4.5% consensus forecast and marking the weakest growth pace in three and a half years, down sharply from Q1's 5.0%. The quarter-on-quarter figure came in at 0.9%, matching expectations but decelerating from the prior 1.3%. The GDP miss is compounded by Iran-linked oil supply disruptions adding an external drag to China's persistent property downturn, creating a challenging dual headwind for growth. While industrial output and exports showed resilience, fixed asset investment remained weak, highlighting an increasingly unbalanced growth composition. For AUD traders, China's status as Australia's largest trading partner makes this data critical. The narrowing policy options for Beijing — particularly the reluctance to address the property sector directly — suggest sustained economic headwinds that could weigh on commodity demand. Traders should monitor USD/CNH for directional cues, while AUD/USD may test nearby support levels if risk sentiment deteriorates further on China growth concerns.
AUDUSD
USDCNH
Sentiment:
Very Negative
Source: Finnhub
USD/CNH is poised for upside after China reported Q2 GDP growth of 4.3% year-on-year, well below the 4.5% forecast and a sharp deceleration from Q1's 5.0% pace. On a quarter-on-quarter basis, growth printed at 0.9%, matching expectations but slowing from the prior 1.3%. The H1 2026 national urban surveyed unemployment rate averaged 5.2%, pointing to lingering labor market softness that could constrain consumer spending. The weaker-than-expected annual growth figure increases the probability of additional People's Bank of China easing measures, including potential reserve requirement ratio cuts or targeted lending facilities, which would weigh on the yuan. The divergence between the in-line quarterly figure and the annual miss suggests that growth momentum faded meaningfully through the quarter. For forex traders, this data strengthens the case for CNH weakness against the dollar in the near term. Key resistance for USD/CNH sits at recent highs, while any PBOC stimulus announcements could trigger volatility. AUD and NZD crosses also remain vulnerable given their China-sensitive trade profiles.
USDCNH
AUDUSD
NZDUSD
Sentiment:
Negative
Source: Finnhub
AUD/USD remains under bearish pressure as data shows new home prices in China continued declining in June, extending the downturn to a fourth consecutive year. While the pace of deterioration showed marginal signs of easing on both a year-on-year and month-on-month basis, the broader trend remains firmly negative, indicating the property market has yet to find a floor. China's housing sector, a critical driver of domestic consumption and commodity demand, continues to weigh on growth expectations and risk-sensitive currencies including the Australian and New Zealand dollars. The persistent property weakness limits the effectiveness of monetary easing measures already deployed by the PBOC, as credit transmission remains impaired by weak housing demand. For AUD/USD traders, the prolonged Chinese property downturn reinforces a cautious stance, particularly given Australia's heavy reliance on iron ore and other commodity exports tied to Chinese construction activity. Near-term price action will likely hinge on whether Beijing introduces more aggressive property-specific stimulus measures. Traders should also watch copper and iron ore prices as leading indicators for AUD direction.
AUDUSD
NZDUSD
USDCNH
Sentiment:
Negative
Source: Finnhub
The US dollar faced broad selling pressure during Monday's Americas session as lower-than-expected CPI data fueled risk-on sentiment across markets. Crude oil settled at $79.34, gaining $1.20 on the session, providing a tailwind for commodity-linked currencies. Fed Chair Warsh's testimony on Capitol Hill struck a cautious tone despite the softer inflation print, suggesting the Federal Reserve remains data-dependent and is not ready to signal imminent rate cuts. The combination of easing inflation pressures and persistent central bank caution created a mixed backdrop for USD pairs. Equity markets responded positively, with the NASDAQ climbing approximately 204 points (0.80%) and the S&P 500 advancing 0.37%, reflecting improved risk appetite. For forex traders, the softer CPI reading could weigh on the dollar in the near term if subsequent data confirms a disinflationary trend. Key focus shifts to upcoming Fed commentary and next economic releases for further directional cues on USD positioning.
AUDUSD
EURUSD
GBPUSD
Sentiment:
Negative
Source: Finnhub
The U.S. dollar showed muted reaction as geopolitical developments in the Middle East took center stage, with reports from Axios revealing that President Trump has privately urged Israeli Prime Minister Netanyahu to withdraw Israeli soldiers from Lebanon. The timing of this diplomatic push is notable, coming just a day after Trump escalated rhetoric around a potential Iran conflict, suggesting a dual-track strategy of military posturing combined with behind-the-scenes peace negotiations. For forex traders, the implications center on risk sentiment and safe-haven flows. A de-escalation in the region could reduce demand for traditional safe havens like the Swiss franc and Japanese yen, while supporting risk-sensitive currencies such as the Australian and New Zealand dollars. Crude oil markets are also closely tied to these developments, with any easing of Middle Eastern tensions likely to weigh on energy prices and, by extension, commodity-linked currencies like the Canadian dollar. Traders should monitor headlines closely as shifts in geopolitical risk could trigger rapid repositioning across major pairs.
USDCHF
USDJPY
USDCAD
AUDUSD
NZDUSD
Sentiment:
Neutral
Source: Finnhub
EUR/USD rallied sharply following a softer-than-expected U.S. CPI report before retreating to retest the 200-hour moving average, where buyers stepped in to defend the level. Both headline and core inflation readings came in below consensus forecasts, reinforcing the narrative that U.S. inflation pressures continue to moderate and prompting traders to pare back expectations for near-term Federal Reserve tightening. The initial spike higher reflected dollar selling as markets recalibrated rate expectations, but the pair subsequently pulled back as sellers emerged near resistance, highlighting the ongoing tug-of-war between bulls and bears. The 200-hour moving average has emerged as the key technical pivot; a sustained hold above this level could open the door for a retest of session highs, while a decisive break below would shift near-term momentum in favor of sellers. Traders should watch for follow-through in upcoming sessions, particularly around Fed speaker commentary and additional U.S. economic data that could further shape monetary policy expectations.
EURUSD
Sentiment:
Positive
Source: Finnhub
The U.S. dollar held firm as President Trump announced plans for expanded oil and trade deals with Iraq during a meeting with the Iraqi prime minister at the Oval Office. Trump stated the U.S. would be 'taking a lot of oil out' of Iraq and highlighted that several countries had expressed interest in investing directly in the United States rather than paying transit fees for Strait of Hormuz passage. The comments carry significant implications for energy markets and commodity-linked currencies. Increased U.S. oil procurement from Iraq could exert downward pressure on crude prices over time, potentially weighing on the Canadian dollar and Norwegian krone. The investment redirection narrative also underscores Trump's broader strategy to attract capital inflows into the U.S., which is structurally supportive for the dollar. For forex traders, the key takeaway is the intersection of energy policy and trade diplomacy, which could influence USD pairs, particularly USD/CAD and broader risk sentiment. Near-term, oil price reactions will be the primary transmission channel to currency markets.
USDCAD
USDNOK
Sentiment:
Positive
Source: Finnhub
GBP/USD has reversed its post-CPI gains and slipped back below the critical 100-day and 200-day moving averages, signaling a bearish technical shift after buyers failed to sustain momentum above the 1.3442 level. The pair initially surged following the softer-than-expected U.S. CPI print, climbing toward a key swing resistance zone between 1.3446 and 1.3465, but the rally was promptly rejected as sellers reasserted control. The failure to break and hold above this resistance cluster is a significant technical development, suggesting that near-term upside remains capped despite the supportive inflation data. With the pair now trading below both major daily moving averages, downside risks have increased. Traders should watch for a potential retest of recent support levels as the next bearish target. A recovery back above the 100/200-day MA convergence zone would be needed to neutralize the bearish signal. Sterling traders should also monitor upcoming UK economic releases for additional directional catalysts.
GBPUSD
Sentiment:
Negative
Source: Finnhub
Crude oil prices declined sharply after President Trump backtracked on his proposed 20% reimbursement fee for vessels transiting the Strait of Hormuz, unwinding much of the previous session's surprise rally that the announcement had triggered. The administration is now pivoting toward securing direct investment commitments in the United States, though the framework for structuring, monitoring, and enforcing such pledges remains vague. The reversal in oil prices has direct implications for commodity-linked currencies, particularly the Canadian dollar, which typically moves in correlation with crude. A sustained decline in oil could weigh on CAD, pushing USD/CAD higher. Additionally, lower energy costs feed into the broader disinflationary narrative, potentially reinforcing expectations that the Federal Reserve can maintain a patient stance on rate cuts. For forex traders, the key risk is policy unpredictability — Trump's rapid shifts on trade and energy proposals continue to inject volatility across asset classes. Near-term crude support levels and any further policy clarification will be critical for directional conviction.
USDCAD
Sentiment:
Negative
Source: Finnhub
President Trump announced the removal of the 20% toll on vessels transiting the Strait of Hormuz, declaring that 'oil is flowing like never before' thanks to US military presence in the region. The move has significant implications for crude oil supply dynamics and, by extension, commodity-linked forex pairs such as USD/CAD. The removal of the transit toll is expected to lower shipping costs and ease supply constraints, potentially putting downward pressure on oil prices over the medium term — a factor that could weaken the Canadian dollar given Canada's status as a major oil exporter. Trump credited Secretary of War Pete Hegseth and CENTCOM Commander Admiral Brad Cooper for the military operations supporting the initiative. For forex traders, the geopolitical development reduces a key risk premium in energy markets. Near-term, USD/CAD may see upward pressure if oil prices soften on improved supply flow expectations. Traders should monitor crude oil price reactions closely for directional cues on CAD pairs.
USDCAD
Sentiment:
Neutral
Source: Finnhub
AUD/USD surged to a fresh session high during Monday's trading as risk-on sentiment drove the Australian dollar higher against a weakening US dollar. The rally was underpinned by better-than-expected US CPI data, which eased inflation concerns and boosted expectations for a more accommodative Federal Reserve stance. Fed Chair Warsh's ongoing testimony on Capitol Hill maintained a cautious tone, but markets focused on the positive inflation surprise. US equities reflected the bullish mood, with the NASDAQ rising approximately 204 points (0.80%) and the S&P 500 gaining 0.37%, reinforcing the risk-on environment that typically benefits the growth-sensitive Australian dollar. Technically, AUD/USD has broken above prior resistance to establish a new high, suggesting further upside momentum if risk appetite persists. Traders should watch for potential resistance at nearby psychological levels and monitor any shifts in Fed rhetoric that could alter rate cut expectations. Continued equity strength and supportive commodity prices could sustain the pair's bullish trajectory in the near term.
AUDUSD
Sentiment:
Very Positive
Source: Finnhub
The US dollar is falling sharply against all major currencies following a significantly softer-than-expected June CPI report. Headline CPI dropped 0.4% month-over-month, well below the -0.1% consensus, while the year-over-year reading came in at 3.5% versus 3.8% expected, down from the prior 4.2%. Core CPI was flat at 0.0% m/m against expectations of +0.2%, with the year-over-year core reading at 2.6% versus 2.8% forecast. The disinflation was broad-based: core goods prices fell for a second straight month, core services excluding housing declined 0.2%, and shelter costs rose a modest 0.12%. The data has dramatically repriced Fed rate expectations, with Fed funds futures pricing in significantly fewer hikes at the July 29 meeting and through year-end. Traders are also digesting testimony from Fed Governor Warsh, adding another layer of uncertainty. Technical charts across major dollar pairs are signaling further downside for the greenback, with key support levels being tested. The combination of cooling inflation and shifting rate expectations suggests continued dollar weakness in the near term.
EURUSD
GBPUSD
USDJPY
USDCHF
AUDUSD
USDCAD
NZDUSD
Sentiment:
Very Negative
Source: Finnhub
The US June CPI report delivered a significant downside surprise, with headline inflation dropping to 3.5% year-over-year versus the 3.8% consensus and well below the prior 4.2%. Monthly CPI fell 0.4% against expectations of -0.1%, with an unrounded reading of -0.349%. Core inflation was equally soft, printing at 2.6% y/y versus 2.8% expected and down from 2.9% prior, while the monthly core reading was flat at 0.0% against the +0.2% forecast (unrounded +0.011%). The data has sent immediate shockwaves through rate markets. Prior to the release, Fed funds futures had priced in 9.2 basis points of hikes at the July 29 meeting and 41 bps through year-end. Post-release, those expectations have fallen sharply as markets reassess the Federal Reserve's tightening path. Traders are simultaneously processing comments from Fed Governor Warsh, creating additional volatility. The dollar has weakened across the board as the inflation trajectory increasingly supports a pause or potential end to the hiking cycle.
EURUSD
GBPUSD
USDJPY
USDCHF
AUDUSD
USDCAD
NZDUSD
Sentiment:
Very Negative
Source: Finnhub
The US dollar opened the North American session with broad-based strength ahead of the critical June CPI release and Fed Governor Warsh's testimony. NZD/USD suffered the largest decline among major pairs, falling 0.89% to 0.5799, making the New Zealand dollar the worst-performing G10 currency. AUD/USD was the next weakest, declining 0.35%, followed by losses in USD/CAD, USD/CHF, GBP/USD, USD/JPY, and EUR/USD. The New Zealand dollar's underperformance is attributed to a reversal following last week's hawkish shift from the Reserve Bank of New Zealand, which had temporarily lifted the kiwi. Pre-CPI positioning saw traders favoring the greenback as markets braced for a potentially market-moving inflation report. The broad dollar bid reflected cautious sentiment, with traders unwilling to take directional bets against the USD ahead of key data. However, this pre-CPI dollar strength was subsequently reversed following the softer-than-expected inflation print, which triggered a sharp dollar selloff across all major pairs.
NZDUSD
AUDUSD
USDCAD
USDCHF
GBPUSD
USDJPY
EURUSD
Sentiment:
Positive
Source: Finnhub
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.
EURUSD
GBPUSD
USDJPY
Sentiment:
Positive
Source: Finnhub
The US NFIB Small Business Optimism Index surged to 97.4 in June, significantly beating the expected 95.7 and the prior reading of 95.3. The 2.1-point jump brings the index near its 52-year historical average of 98.0, signaling improving confidence among small business owners. The primary drivers were substantially improved expectations for better business conditions and real sales expectations. However, the Uncertainty Index, while declining 2 points from May to 89, remains well above its historical average of 68, suggesting lingering caution. The NFIB Small Business Employment Index held essentially flat at 100.2, indicating stable but unexciting labor conditions in the small business sector. For USD traders, the stronger-than-expected data supports the case for continued economic resilience and may reinforce the Federal Reserve's cautious stance on rate adjustments. The upbeat reading could provide near-term support for the dollar across major pairs, particularly ahead of the upcoming US CPI release, which will be the next key catalyst for directional moves.
EURUSD
GBPUSD
USDJPY
Sentiment:
Positive
Source: Finnhub
GBP/USD and crude oil markets are drawing trader attention as both assets navigate critical technical levels. The British pound continues to trade against the US dollar amid shifting expectations for both the Bank of England and Federal Reserve monetary policy paths. Crude oil prices, tracked through WTI futures, remain a key influence on risk sentiment and commodity-linked currencies. For GBP/USD, traders are monitoring whether the pair can sustain momentum or faces rejection at current levels, with upcoming US inflation data and UK economic releases likely to serve as decisive catalysts. Oil price movements carry broader implications for global growth expectations and inflation dynamics, directly feeding into central bank policy calculations. The interplay between energy markets and currency valuations remains significant, as rising oil prices tend to support inflationary pressures that could delay rate cuts. Traders should watch for breakout or breakdown signals on both assets, as correlated moves could amplify volatility across forex markets in the sessions ahead.
GBPUSD
Sentiment:
Neutral
Source: Marketaux
