• Prior +0.5%; revised to +0.4%

UK house price growth slowed in June, missing on estimates as Nationwide notes weaker demand following the increase in stamp duty at the start of April. The outlook is still supportive though with Nationwide expecting a pick up as the summer progresses, despite ongoing economic uncertainties.

This article was written by Justin Low at www.forexlive.com.

The forum this year carries the broader theme of “Adapting to change: macroeconomic shifts and policy responses”. However, the event later will be a general policy panel discussion so expect that to involve basically anything to everything. And we are going to get all the big guns attending. The panel will begin at 1330 GMT and here are the list of participants:

• Jerome Powell, Chair, Board of Governors of the Federal Reserve System
• Christine Lagarde, President, European Central Bank
• Andrew Bailey, Governor, Bank of England
• Kazuo Ueda, Governor, Bank of Japan
• Chang Yong Rhee, Governor, Bank of Korea
• Moderator: Francine Lacqua, Anchor and Editor-at-large, Bloomberg Television

It will certainly be an interesting one, especially for Powell after Trump continued to lambast him yesterday here. That picture on world central bank rates though. 🤣

This article was written by Justin Low at www.forexlive.com.

“Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate. It is ridiculous, and was always a major part of my campaign. Electric cars are fine, but not everyone should be forced to own one. Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!”

This of course comes as Musk continued his criticism on Trump’s “big, beautiful bill” as he also warned any lawmakers that backed it that he will unseat them “if it is the last thing I do on this Earth”.

So, now Trump is hitting back at Tesla’s electric car business while also delivering a bit of a warning to Musk on government subsidies.

This article was written by Justin Low at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 1 July 2025

What happened in the U.S. session?

The Chicago PMI remained somewhat unchanged in June with a reading of 40.4, marginally higher than the prior month’s figure of 40.5, missing market expectations of 42.7, which would have signalled a slight improvement in business activity. This index has now stayed below the 50-point threshold for 19 straight months and sits 7.2 points below March’s high of 47.6. The decline was driven by lower readings in supplier deliveries, production, employment, and order backlogs, partially offset by a rebound in new orders. Despite another round of deteriorating PMI activity, financial markets were buoyed by Canada’s decision to retract its Digital Services Tax plan, leading to U.S. President Donald Trump’s announcement to resume trade talks. Both the S&P 500 and Nasdaq closed at new all-time highs and posted robust quarterly gains, driven by improving trade relations and growing anticipation of rate cuts by the Federal Reserve, which lifted market sentiment.

What does it mean for the Asia Session?

Manufacturing activity in Japan returned to expansion for the first time since May 2024 with a reading of 50.1. June’s figure edged higher from 49.4 in the previous month, but it fell short of the market forecasts of 50.4. Despite production output rising for the first time in ten months, demand conditions remained subdued as sales declined further. However, employment continued its upward trend as confidence grew around the outlook for the year ahead. Demand for the yen resumed on Monday as USD/JPY fell over 0.5% as Asian markets came online on Tuesday – this currency pair looks set to fall under 143.50 as the day progresses.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell’s Speech (1:30 pm GMT)

ISM Manufacturing PMI (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell will be participating in a panel discussion titled “Policy Panel” at the ECB Forum on Central Banking in Sintra alongside his fellow counterparts from the E.U., the U.K. and Japan, followed by the release of the ISM Manufacturing PMI and JOLTS Job Openings reports. The combination of central bank chiefs speaking and key U.S. macroeconomic data are likely to inject higher volatility not only for the greenback but also for the broader financial markets.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 18 June 2025.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run; uncertainty around the economic outlook has diminished but remains elevated.
• The Committee is attentive to the risks to both sides of its dual mandate and judges that the unemployment rate remains low, labour market conditions remain solid, but inflation is somewhat elevated.
• Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.
• GDP growth forecasts were revised downward for 2025 (1.4% vs. 1.7% in the March projection) while PCE inflation projections have been adjusted higher for 2025, with core inflation expected to reach 3.1% (vs. 2.8% in the March projection), partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 29 to 30 July 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Fed Chair Powell’s Speech (1:30 pm GMT)

ISM Manufacturing PMI (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell will be participating in a panel discussion titled “Policy Panel” at the ECB Forum on Central Banking in Sintra alongside his fellow counterparts from the E.U., the U.K. and Japan, followed by the release of the ISM Manufacturing PMI and JOLTS Job Openings reports. The combination of central bank chiefs speaking and key U.S. macroeconomic data are likely to inject higher volatility not only for gold but also for the broader financial markets. After falling as low as $3,247.54/oz, spot prices rebounded nearly 2.3% by the onset of Tuesday’s Asia session and look set to climb higher.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

With the greenback continuing to face intense overhead pressures, the Aussie jumped 0.8% on Monday as it hit an overnight high of 0.6583 – this currency pair pulled back slightly as Asian markets came online on Tuesday. With no major domestic catalysts scheduled for today, the Aussie is likely to be impacted by key U.S. macroeconomic data on manufacturing and labour.

Central Bank Notes:

• The RBA reduced its cash rate by 25 basis points (bps), bringing it down to 3.85% on 20 May, following a pause on 1 April.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.
• Data on inflation for the March quarter provided further evidence that inflation continues to ease. At 2.9%, annual trimmed mean inflation was below 3% for the first time since 2021 and headline inflation, at 2.4%, remained within the target band of 2 to 3%.
• While recent tariff announcements have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries, contributing to a weaker outlook for growth, employment and inflation in Australia.
• Private domestic demand appears to have been recovering, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
• At the same time, a range of indicators suggests that labour market conditions remain tight. Employment is continuing to grow, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers.
• Looking through quarterly volatility, wage growth has softened over the past year or so but productivity growth has not picked up and growth in unit labour costs remains high.
• There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments. While the central projection is for growth in household consumption to continue to increase as real incomes rise, recent data suggest that the pick-up will be a little slower than was expected three months ago.
• There is a risk that any pick-up in consumption is even slower than this, resulting in continued subdued growth in aggregate demand and a sharper deterioration in the labour market than currently expected.
• With inflation expected to remain around target, the Board therefore judged that an easing in monetary policy at this meeting was appropriate, assessing that this move would make monetary policy somewhat less restrictive.
• The Board will be attentive to the data and the evolving assessment of risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
• The next meeting is on 8 July 2025.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi rallied 1% as it came within a whisker of the 0.6100 threshold. With no major domestic catalysts lined up for Tuesday, this currency pair will take its cue from key U.S. macroeconomic data on manufacturing and labour that are scheduled for release later today.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 25 basis points bringing it down to 3.25% on 28 May, marking the sixth consecutive rate cut.
• The Committee stated that annual consumer price index inflation increased to 2.5% in the first quarter of 2025 while inflation expectations across firms and households have also risen.
• However, core inflation is declining and there is spare productive capacity in the economy; these conditions are consistent with inflation returning to the mid-point of the 1 to 3% target band over the medium term.
• The New Zealand economy is recovering after a period of contraction as high commodity prices and lower interest rates are supporting overall economic activity but recent developments in the international economy are expected to reduce global economic growth.
• Both tariffs and increased policy uncertainty overseas are expected to moderate New Zealand’s economic recovery and reduce medium-term inflation pressures. However, there remains considerable uncertainty around these judgements.
• Labour market conditions remain weak while the unemployment rate is expected to peak this quarter at 5.2%.
• Inflation is within the target band, and the Committee is well placed to respond to domestic and international developments to maintain price stability over the medium term.
• The next meeting is on 9 July 2025.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

S&P Global Manufacturing PMI (12:30 am GMT)

What can we expect from JPY today?

Manufacturing activity in Japan returned to expansion for the first time since May 2024 with a reading of 50.1. June’s figure edged higher from 49.4 in the previous month, but it fell short of the market forecasts of 50.4. Despite production output rising for the first time in ten months, demand conditions remained subdued as sales declined further. However, employment continued its upward trend as confidence grew around the outlook for the year ahead. Demand for the yen resumed on Monday as USD/JPY fell over 0.5% as Asian markets came online on Tuesday – this currency pair looks set to fall under 143.50 as the day progresses.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 17 June, by a unanimous vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs. The scheduled amount of monthly long-term government bond purchases will, in principle, be reduced by about ¥400 billion each quarter from January to March 2026, and by about ¥200 billion each quarter from April to June 2026 onward, aiming for a level of around ¥2 trillion in January to March 2027.

• Japan’s economy, while showing some weak movements in certain areas, is recovering moderately. Overseas economies, though partly exhibiting weakness due to the effects of various countries’ trade policies, are generally growing at a moderate pace. Exports and industrial production, while showing some last-minute demand due to the U.S. tariff increases, are basically moving sideways.
• On the price front, looking at the year-on-year rate of change in consumer prices (excluding fresh food), the rate is currently in the mid-3% range, reflecting continued pass-through of wage increases to sales prices, as well as the effects of past rises in import prices and recent increases in food prices such as rice. Expected inflation rates are rising moderately.
• As for consumer prices (excluding fresh food), the effects of past import price increases and recent rises in food prices such as rice, which have pushed up inflation so far, are expected to wane. During this period, the underlying rate of increase in consumer prices may stagnate somewhat due to the slowdown in growth pace.
• Looking ahead, the Japanese economy is expected to slow its growth pace, as overseas economies decelerate due to the effects of various countries’ trade policies, putting downward pressure on Japanese corporate profits, etc., although accommodative financial conditions will provide some support. Thereafter, as overseas economies return to a moderate growth path, Japan’s growth rate is expected to increase.
• As the growth rate rises, labour shortages intensify, and medium- to long-term expected inflation rates rise, inflation is expected to gradually increase. In the latter half of the projection period in the “Outlook Report,” inflation is expected to move at a level generally consistent with the “price stability target”.
• There are various risk factors, but in particular, the outlook for the development of trade policies in various countries and the resulting uncertainty regarding overseas economic and price trends is extremely high. It is necessary to closely monitor the impact on financial and foreign exchange markets, as well as on Japan’s economy and prices.
• The next meeting is scheduled for 31 July 2025.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

S&P Global Manufacturing PMI (8:00 am GMT)

CPI (9:00 am GMT)

What can we expect from EUR today?

The final manufacturing report for the Euro Area is expected to show an unchanged reading of 49.4, the same as the flash report as well as the prior month’s reading. This sector has remained in contraction since the second half of 2022, but that has not weighed on the Euro in 2025. This currency pair continues to remain buoyed due to the U.S. dollar falling heavily out of favour with investors and traders alike. Meanwhile, consumer inflation is expected to remain somewhat unchanged in July, based on preliminary data. With the universal 10% tariffs effective since April, the path forward for inflation could be more ‘bumpy’ than originally anticipated.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 5 June to mark the seventh successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.15%, 2.40% and 2.00% respectively.
• Inflation is currently at around the Governing Council’s 2% medium-term target. In the baseline of the new Eurosystem staff projections, headline inflation is set to average 2.0% in 2025, 1.6% in 2026 and 2.0% in 2027. The downward revisions compared with the March projections, by 0.3 percentage points for both 2025 and 2026, mainly reflect lower assumptions for energy prices and a stronger euro. Staff expect inflation excluding energy and food to average 2.4% in 2025 and 1.9% in 2026 and 2027, broadly unchanged since March.
• Staff see real GDP growth averaging 0.9% in 2025, 1.1% in 2026 and 1.3% in 2027. The unrevised growth projection for 2025 reflects a stronger-than-expected first quarter combined with weaker prospects for the remainder of the year. While the uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term, rising government investment in defence and infrastructure will increasingly support growth over the medium term.
• Higher real incomes and a robust labour market will allow households to spend more. Together with more favourable financing conditions, this should make the economy more resilient to global shocks. Wage growth is still elevated but continues to moderate visibly, and profits are partially buffering its impact on inflation.
• The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. Especially in current conditions of exceptional uncertainty, it will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
• The Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission, and it is not pre-committing to a particular rate path.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The next meeting is on 24 July 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

Retail Sales (6:30 am GMT)

Procure Manufacturing PMI (7:30 am GMT)

What can we expect from CHF today?

Key Swiss macroeconomic data will be released before the start of the European trading hours on Tuesday. Economic growth was anticipated to slow in the second quarter of this year, and that impact could be reflected in the latest reports for consumer spending and the manufacturing sector. A weak set of results will certainly pave the way for a seventh successive rate cut at the upcoming central bank meeting in September.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.25% to 0% on 19 June 2025, marking the sixth consecutive reduction.
• Inflationary pressure has decreased further as compared to the previous quarter, decreasing from 0.3% in February to -0.1% in May, mainly attributable to lower prices in tourism and oil products.
• Compared to March, the new conditional inflation forecast is lower in the short term. In the medium term, there is hardly any change from March, putting the average annual inflation at 0.2% for 2025, 0.5% for 2026 and 0.7% for 2027.
• The global economy continued to grow at a moderate pace in the first quarter of 2025 but the global economic outlook for the coming quarters has deteriorated due to the increase in trade tensions.
• Swiss GDP growth was strong in the first quarter of 2025, but this development was largely because, as in other countries, exports to the U.S. were brought forward.
• Following the strong first quarter, growth is likely to slow again and remain rather subdued over the remainder of the year; the SNB expects GDP growth of 1% to 1.5% for 2025 as a whole, while also anticipating GDP growth of 1% to 1.5% for 2026.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 25 September 2025.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

S&P Global Manufacturing PMI (8:30 am GMT)

What can we expect from GBP today?

Manufacturing activity in the U.K. is expected to contract for the ninth consecutive month with a reading of 47.7 for June, a slight improvement from May’s figure of 46.4. Despite the improvement, this sector continued to face headwinds, with manufacturers reporting another decline in export orders, largely driven by the impact of U.S. tariffs, heightened geopolitical uncertainty, and strong global price competition. Output also fell solidly during June, while total new work from abroad dropped for the eighth straight month. However, the rate of decline in export sales eased to the slowest in five months, suggesting some stabilisation. Despite another month of deterioration for the manufacturing sector, the Pound will likely remain bid due to the ongoing sell-off in the greenback.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.25% on 19 June 2025, with three members preferring to reduce the Bank Rate by 25 basis points.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100 billion over the next 12 months to a total of £558 billion, starting in October 2024. On 19 June 2025, the stock of UK government bonds held for monetary policy purposes was £590 billion.
• There has been substantial disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations.
• Twelve-month CPI inflation increased to 3.4% in May from 2.6% in March, in line with expectations in the May Monetary Policy Report. The rise was largely due to a range of regulated prices and previous increases in energy prices.
• Underlying UK GDP growth appears to have remained weak, and the labour market has continued to loosen, leading to clearer signs that a margin of slack has opened up over time.
• Measures of pay growth have continued to moderate and, as in May, the Committee expects a significant slowing over the rest of the year.
• Global uncertainty remains elevated while energy prices have risen owing to an escalation of the conflict in the Middle East, prompting the Committee to remain sensitive to heightened unpredictability in the economic and geopolitical environment.
• There remain two-sided risks to inflation. Given the outlook and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate and the Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 7 August 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

Canada Day (Bank Holiday)

What can we expect from CAD today?

Canada’s Toronto Stock Exchange and banks will be closed in observance of Canada Day, where the Loonie could face lower liquidity during the U.S. session. Meanwhile,  Canada’s decision to retract its Digital Services Tax plan led to U.S. President Donald Trump’s announcement of resuming trade talks on Monday, bolstering demand for the Loonie – USD/CAD tumbled 0.6% overnight.

Central Bank Notes:

• The Bank of Canada maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70% on 4th June – marking the second consecutive meeting where rates were kept on hold.
• The Governing Council noted that the ongoing increase and decrease of various U.S. tariffs, coupled with highly uncertain outcomes of bilateral trade negotiations and tariff rates remaining well above their levels at the beginning of 2025, placed downside risks on growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing.
• The higher uncertainty stemmed from the absence of a clear tariff path by the U.S. and persistent threats of new trade actions, which prompted the BoC Governing Council to highlight risks such as the extent to which higher US tariffs reduce demand for Canadian exports.
• Canada’s economic growth in the first quarter came in at 2.2%, slightly stronger than the original forecast, while the composition of GDP growth was largely as expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence.
• Housing activity was down, driven by a sharp contraction in resales, while government spending also declined. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.
• The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9% while CPI inflation eased to 1.7% in April, as the elimination of the federal consumer carbon tax reduced inflation by 0.6%.
• The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up, while recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs.
• The Governing Council will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs while proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy.
• The Governing Council will focus on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval by supporting economic growth while ensuring that inflation remains well-controlled.
• The next meeting is on 30 July 2025.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

Oil prices slipped on Monday as investors assessed reduced tensions in the Middle East and the potential for an OPEC+ production hike in August, with WTI oil futures falling as low as $64.50 per barrel. The quickly arranged ceasefire between Israel and Iran seems to be holding for now, leading to a rapid reduction in the previously applied supply risk premium. Moving over to U.S. inventories, the API stockpiles have drawn down stronger than originally anticipated over the past five weeks, coinciding with the beginning of the peak summer driving season in the Northern Hemisphere. This has resulted in a weekly average draw of 4.5 million barrels of crude over this period, signalling higher fuel demand. However, another week of higher drawdowns may not be enough to support oil prices in the near term.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 1 July 2025 first appeared on IC Markets | Official Blog.

US Stocks Drive to Fresh Record Levels – S&P up 0.5%

The three major US stock indices all finished off the quarter in style yesterday as the Nasdaq and S&P again hit fresh record closing levels. Trade deal optimism and anticipated Fed rate cuts helped to propel the indices higher. The Dow added 0.63%, the S&P 0.52%, and the Nasdaq 0.47%. The dollar dropped further south against the majors, the DXY down 0.42% to 96.78, whilst treasury yields also fell, the 2-year off 2.9 basis points to 3.719% and the 10-year down 4.9 basis points to 4.228%. Oil prices drifted lower as Middle East tensions eased further, Brent down 0.36% to $66.57 and WTI down 0.89% to $64.97 a barrel. Gold rose on the back of the weaker dollar, up 0.87% on the day to $3,302.55.

Central Bankers Chat in Focus Today

Investors are expecting to see some strong moves in markets today with the unusual occurrence of several key central bankers sitting down for a quiet chat. The ECB’s central bank forum will see the heads of the European Central Bank, the Bank of England, the Bank of Japan, and the Federal Reserve all participate in a policy panel. Traders will not only be focusing on any hints on rate moves and timing but also on where the banks are positioned with regard to the uncertainty in markets created by the US administration’s tariff plans. As always, Fed Chair Jerome Powell will probably have the largest lens on what he says; however, we could see bigger moves in other products if some of the other participants introduce anything new to the market. FX markets, in particular, could see a big jump in volatility, especially if there are any updates that point to fresh interest rate differential opportunities.

Market Volatility to Pick Up Today

Market sentiment has driven higher over the last few days as the conflict in the Middle East has died down significantly and US traders have priced in higher probabilities of rate cuts in the world’s largest economy. Market focus will move to fundamentals as the week progresses, with key US jobs data out in the next few days and the ECB’s central bank forum taking place in Portugal over the next couple of days. There is little on the calendar in the Asian session today; however, updates will pick up after the European open. EU CPI numbers are due out, with an expected 2.0% increase for the headline number and a 2.3% increase for the core data, but traders are expecting to see bigger moves across various markets once attention moves south to Sintra. Central bank heavyweight heads Christine Lagarde (ECB), Jerome Powell (Fed), Andrew Bailey (BOE), and Kazuo Ueda (BOJ) are all taking part in a panel discussion entitled “Policy Panel,” and updates with regard to rate moves are expected. The New York session sees this week’s US data drop kick off in earnest with the JOLTS Job Openings (exp. 7.32 mio) and the ISM Manufacturing PMI (exp. 48.8) numbers both due out early in the session.

The post General Market Analysis – 01/07/25 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could bounce off the pivot and rise toward the 1st resistance.

Pivot: 96.66

Supporting reasons: Identified as a pullback support that aligns with the 161.8% Fibonacci extension, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 95.40

Supporting reasons: Identified as a support that aligns with the 161.8% Fibonacci extension, indicating a potential area where the price could stabilize once again.

1st resistance: 97.60
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 1.1630

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 1.1446
Supporting reasons: Identified as an overlap support, indicating a potential area where the price could again stabilize.

1st resistance: 1.1909

Supporting reasons: Identified as an overlap resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 167.50

Supporting reasons: Identified as a pullback support that aligns closely with the 38.2% Fibonacci retracement, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 165.21
Supporting reasons: Identified as an overlap support that aligns closely with the 50% Fibonacci retracement, indicating a potential area where the price could again stabilize.

1st resistance: 169.73
Supporting reasons: Identified as a multi-swing-high resistance and acting as a key area that could halt any further upward movement.

EUR/GBP: 

Potential Direction: Bullish
Overall momentum of the chart: Bullish

The price is falling toward the pivot and could potentially make a bullish rise toward the 1st resistance. 

Pivot: 0.8531

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 0.8484
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8585
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 1.3616

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 1.3454
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once more.

1st resistance: 1.3790
Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential level that could cap further upward movement.

GBP/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

The price is falling toward the pivot and could potentially make a bullish bounce off and rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 196.76

Supporting reasons: Identified as a pullback support that aligns closely with the 38.2% Fibonacci retracement, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 194.99

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 198.95
Supporting reasons: Identified as a pullback resistance, acting as a key area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

The price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support. Additionally, the price is below the Ichimoku Cloud, which adds further significance to the strength of the bearish momentum.

Pivot: 0.8042

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.7915
Supporting reasons: Identified as a support that aligns with the 127.2% Fibonacci extension, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8154
Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

The price could rise toward the pivot and potentially make a bearish reversal off this level to fall toward the 1st support. Additionally, the price is below the Ichimoku Cloud, which adds further significance to the strength of the bearish momentum.

Pivot: 144.67

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 142.59
Supporting reasons: Identified as an overlap support, suggesting a potential area where the price could stabilize once more.

1st resistance: 147.68
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance.

Pivot: 1.3601

Supporting reasons: Identified as an overlap support that aligns closely with the 78.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 1.3539

Supporting reasons: Identified as a swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.3694

Supporting reasons: Identified as a swing-high resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price is falling toward the pivot and could potentially make a bullish bounce off this level to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 0.6554

Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 0.6514

Supporting reasons: Identified as a pullback support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6598
Supporting reasons: Identified as a resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price is falling toward the pivot and could potentially make a bullish bounce off this level to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 0.6073
Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 0.6038

Supporting reasons: Identified as an overlap support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.6103

Supporting reasons: Identified as a resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 43,929.56

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 43,231.23

Supporting reasons: Identified as a pullback support, suggesting a potential area where the price could stabilize once again.

1st resistance: 44,729.90

Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price has made a bullish bounce off the pivot and could potentially rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 23,928.80
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 23,750.30

Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 24,166.30
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could potentially make a bullish continuation to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 6,137.70

Supporting reasons: Identified as a pullback support that aligns closely with the 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 6,037.70

Supporting reasons: Identified as a pullback support that aligns closely with the 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 6,265.37

Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 106,009.96

Supporting reasons: Identified as a pullback support that aligns closely with the 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 103,943.66
Supporting reasons: Identified as an overlap support that aligns closely with a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once more.

1st resistance: 108,761.68
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

The price could fall toward the pivot and potentially make a bullish bounce off this level to rise toward the 1st resistance. The presence of the green Ichimoku Cloud adds further significance to the strength of the upward momentum.

Pivot: 2,397.92
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 2,286.73
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 2,552.36
Supporting reasons: Identified as a swing-high resistance that aligns closely with a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price is falling toward the pivot and could potentially make a bullish bounce off this level to rise toward the 1st resistance.

Pivot: 63.36

Supporting reasons: Identified as a pullback support that aligns with a 78.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 59.45
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 66.93
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

The price is trading near the pivot and could potentially make a bearish reversal off this level to fall toward the 1st support. Additionally, the price is below the Ichimoku Cloud, which adds further significance to the strength of the bearish momentum.

Pivot: 3319.12

Supporting reasons: Identified as a pullback resistance that aligns closely with the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 3240.34
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 3343.85
Supporting reasons: Identified as an overlap resistance,  indicating a potential area that could halt any further upward movement.

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The gist of the story is that Trump’s top trade officials are said to be backing down and pulling back from their more ambitious efforts previously. They are now just looking for “agreements in principle” on smaller trade disputes with some countries ahead of the 9 July deadline.

The leaner and narrower trade agreements are a stark contrast to the supposed 90 deals in 90 days that they were aiming for. As things stand, all they have to show is half a trade deal with the UK. And even that looks to have some kinks in the road at the moment.

The report notes that potential new sectoral tariffs by the US is hindering further discussions, though at least the existing levies are eased for now. From yesterday: UK-US trade deal has officially come into force, says UK government

Going back to the overall situation, countries that are able to strike these supposed leaner trade agreements will then be spared a harsh return to reciprocal tariffs. However, the blanket 10% that is on the table now is a compulsory floor it would seem.

Moving forward though, the sources add that Trump is seeking imposing tariffs on critical sectors with the commerce department already launching probes into the likes of copper, lumber, aerospace parts, pharmaceuticals, chips and critical minerals. So, that will all also be part of the consideration for any trade negotiations and deals surely in the future.

The full report here (may be gated).

This article was written by Justin Low at www.forexlive.com.

The Nikkei is down a little over 1%, erasing the gains from the move higher yesterday already. This comes as Trump warned Japan on tariffs amid a lack of progress on trade negotiations. Meanwhile, Japan is continuing to reaffirm that they won’t budge from their original stance of wanting all tariffs to be removed. From overnight:

• Trump to send letter to Japan: Buy rice now
• Japan Hayashi: Japan won’t do anything to sacrifice agriculture sector in US trade talks

We’re about a week away now until the first deadline of 9 July. There will definitely be extensions but we’ll have to see what becomes of those countries that are testing Trump’s patience. And it looks like Japan is slowly starting to head into that category.

This article was written by Justin Low at www.forexlive.com.

The dollar was once again beaten down yesterday but it’s a tough one to feel out amid potential month-end and quarter-end flows. Now that we’ve gotten that out of the way, the real focus can begin. And the charts are definitely pointing towards a testing time for the greenback on multiple fronts.

EUR/USD is a standout after eight straight days of gains, with the pair testing its highest levels since 2021. Buyers are continuing to build momentum towards a potential push to 1.2000. But after this long winning streak, perhaps we’re overdue a slight breather? That will certainly be a consideration with eyes on US labour market data on Thursday.

But in any case, buyers are well in control with lots of breathing room for the time being as seen above.

Somewhat similarly, you have USD/CHF which is also breaking to fresh lows since 2011 with a firm break under 0.8000 now delivered. It adds to another blow to the dollar against European currencies especially.

Meanwhile, GBP/USD is also running up above 1.3700 with little in terms of any major resistance before meeting 1.4000 next. With the BOE needing to consider dual-sided risks and the Fed gradually erring more towards a rate cut, there is a minor divergence setting up in the short-term there. So, that could help with the push higher in cable; all else being equal.

As for USD/JPY, the pair is still sitting within the range seen in April at least. To the downside though, the 140.00 mark remains the most critical one as it has held back sellers since December 2023. So, that’s the one to watch out for if the dollar slumps further amid any continued bid in bonds.

Elsewhere, you have AUD/USD which is now looking to firmly shake off resistance closer to the 0.6500 mark. The 100-week moving average at 0.6503 had previously held the pair back somewhat but that looks to be giving way now as buyers are also pushing past daily resistance around 0.6537-50 at the moment.

In essence, the dollar is being pressured on multiple fronts amid the ongoing policy volatility and incoherence by the Trump administration. It’s all a mess for the greenback amid a loss of confidence with traders continuing to divest elsewhere. Mind you, and this is with the Fed having held interest rates up as they are until now while other major central banks have been cutting (besides the BOJ).

All that being said, dollar positioning is definitely crowded towards the short side now. So, that is also something to be mindful about. In case of any short squeezes, it can be a quick and sharp one so long as the conditions are favourable. Just keep that in mind.

For now, the charts are pointing to the dollar still being in a very vulnerable spot with month-end flows out of the way. The real test begins now and we won’t have to wait long with the US jobs report coming up on Thursday to provide some call to action.

This article was written by Justin Low at www.forexlive.com.

• Note – Hong Kong markets are closed today for a holiday
• Japan Hayashi: Japan won’t do anything to sacrifice agriculture sector in U.S. trade talks
• Bank of Japan press conference at 5pm Tokyo time
• China Caixin June 2025 Manufacturing PMI 50.4 (expected 49.0, prior 48.3)
• Federal Reserve Chair Powell is speaking on Tuesday, July 1, 2025
• PBOC sets USD/ CNY central rate at 7.1534 (vs. estimate at 7.1509)
• BOJ official: No clear voices from firms citing impact of U.S. trade policy on capex plans
• Japan final manufacturing PMI for June 2025 comes in at 50.1, from preliminary 50.4
• Tesla has raised the price on Model 3 long range edition to 285,000 yuan
• USD/JPY slips under 143.60 after the Bank of Japan Tankan report
• BOJ Tankan Q2 2025: Large Manufacturing Index 13 (vs. expected 10)
• BNZ forecasts no rate cut from the Reserve Bank of New Zealand at the July meeting
• The Bank of Japan Tankan report is due soon, here are the Reuters results as a preview
• Australian final June 2025 manufacturing PMI 50.6 (prior 51.0)
• UK BRC Shop Price Index for June 2025: +0.4% y/y (prior –0.1%)
• Japan to begin seabed rare earth extraction in 2025 to curb China dependence
• New Zealand building permits +10.4% m/m in May (prior -15.6%)
• US Dollar’s fate hinges on Fed motives, says Commerzbank
• QSBO NZ business confidence Q2 2025: 22% (prior 19%)
• Blackrock says global investors reassessing U. strength, diversifying away from US assets
• Morgan Stanley expects Brent crude oil to fall to $60 as supply builds
• “1H” decline of 10.8% for the USD is NOT one hour! Its the fall in one half, ie six months
• Forexlive Americas FX news wrap 30 Jun. Month ends with USD at low for year. Yields lower
• ICYMI – Trump hints at more tariffs on Japan via interview and on his social media outlet
• ICYMI – Goldman Sachs brings forward Fed rate cut forecast to September, from December
• Trade ideas thread – Tuesday, 1 July, insightful charts, technical analysis, ideas

The yen strengthened, with USD/JPY dipping to around 143.50, reflecting a market reaction to the relative upside surprise in Japanese data, the BoJ Tankan and the final manufacturing PMI for June.

A mixed set of results from Japan’s Q2 Bank of Japan Tankan survey offered a cautiously optimistic signal, with the overall tone more positive than expected—not by a wide margin, but enough to suggest resilience in Japanese business sentiment.

• The headline index for large manufacturers improved, reflecting a modest recovery in confidence.

• In contrast, sentiment among large non-manufacturers dipped slightly, as rising living costs continued to weigh on consumption.

• Both manufacturers and services firms expect conditions to deteriorate in the next three months, tempering the upbeat read.

Japan’s final manufacturing PMI for June rose to 50.1 (flash: 50.4; prior: 49.4), marking the first expansion in 13 months, driven by a rebound in output and production optimism.

Meanwhile in China, the Caixin Manufacturing PMI jumped to 50.4 in June (forecast: 49.0; prior: 48.3), signalling a return to growth after the sharp dip in May. Domestic production and new orders improved, but external demand remained soft, with export orders still contracting and employment shrinking. Falling input and output prices highlight the fragile pricing power across the sector, despite signs of ongoing policy support.

The USD lost ground early but has since shown a bounce back. EUR/USD rose to poke breifely above 1.1800.

Gold was basically one-way trafiic higher.

This article was written by Eamonn Sheridan at www.forexlive.com.

Its Hong Kong Special Administrative Region Establishment Day.

The holiday commemorates the transfer of Hong Kong’s sovereignty from Great Britain to the People’s Republic of China in 1997.

Market are closed in HK today.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan Chief Cabinet Secretary Hayashi:

• Japan won’t do anything to sacrifice agriculture sector in U.S. trade talks

Earlier, Japan farm minister Koizumi:

• will continue to work with various ministries towards maximising Japan’s national interests in the context of trade negotiations with U.S.

This article was written by Eamonn Sheridan at www.forexlive.com.