Global markets opened cautiously on July 1 amid lingering policy uncertainty and data-driven caution. Analysts note that “2025 has proven to be an unusually volatile year” for forex, driven by trade war tensions and geopolitical shocks. Ahead of today’s key U.S. data releases and Fed commentary, traders are positioning for volatility: U.S. officials emphasize waiting for more data before any policy moves. In Europe, the ECB recently signaled it will pause rate cuts with inflation near target, underpinning the euro, while the Bank of England kept rates on hold but warned of looming cuts. Overall, risk sentiment is mixed – equity markets remain near highs on hopes of U.S. fiscal stimulus and a pause in tariff increases, but investors are wary of sticky inflation and what the U.S. jobs report will reveal.
EUR/USD
EUR/USD extended a gradual uptrend on Tuesday. The euro firmed off overnight lows (around 1.1750) to trade near 1.1790 by London’s morning session, helped by broad U.S. dollar softness and positive euro-area news. Europe’s second-quarter growth outlook and a friendly trade backdrop for the euro kept bids firm.
Technical indicators
The short-term MACD has turned modestly bullish (histogram above zero), while the RSI is in mid-60s (rising but not overbought) and the Stochastic oscillator is climbing from mid-range – all suggesting upward momentum may continue. Key intraday support lies near 1.1760–1.1770 (recent lows), and resistance around 1.1800–1.1810 (minor 5‑minute highs).
Trading Strategy
A bullish continuation is favored given the constructive momentum. Traders could look to buy on a break above 1.1800, targeting the next resistance zone (~1.1830), with an initial stop-loss around 1.1770. Alternatively, failure to hold 1.1760 could signal deeper retracement toward 1.1720 (stop ~1.1805).
USD/JPY
USD/JPY showed choppy weakness overnight. After peaking near 144.50 on June 30, the pair slid through the Asian session to trade around 143.60 by early July 1. Safe-haven flows and fading U.S. yield pressure pushed the yen firmer.
Technical indicators
Short-term momentum flipped negative – the MACD histogram crossed below its signal line, and the RSI has fallen toward the 40 level. The Stochastic oscillator is in the lower range (oversold territory), hinting a possible near-term bounce. Immediate support is seen around 143.50 (May 27 low), with resistance near 144.00.
Trading Strategy
With USD/JPY looking oversold on the 5‑min chart, one approach is to trade a rebound. Consider buying above 143.85 (just above recent consolidation) with a target near 144.30–144.50, placing a stop-loss around 143.50. Alternatively, if the downtrend resumes (break below 143.50), a short could target 142.80, with stop at 144.00.
GBP/USD
GBP/USD recovered sharply from early Tuesday lows. The pound fell to ~1.3670 on Monday’s low but rallied strongly overnight, reaching ~1.3740 by this morning. The bounce reflects a combination of broad U.S. dollar softness and hopes that UK rate cuts may be delayed longer than feared.
Technical indicators
The MACD has turned positive with a recent bullish crossover, and the RSI is pushing toward the 70 level (approaching overbought). The Stochastic is also rising, suggesting the rally still has legs but may face resistance soon. Key short-term support is around 1.3710, and resistance near 1.3750–1.3760.
Trading Strategy
The short-term trend favors longs. A breakout above 1.3750 could fuel further upside; traders might go long above 1.3750 with a target around 1.3790–1.3800, and a stop-loss near 1.3710. Conversely, failure to sustain above 1.3740 could open a short toward 1.3700 (stop ~1.3760), especially if broader dollar strength returns.
Market Outlook
Key U.S. data will dominate the outlook over the next two days. Tuesday brings the June ISM manufacturing index and construction spending (10:00 ET), and Wednesday sees the ADP employment report. The highlight is Thursday’s U.S. payrolls release (Employment Report) and May trade balance at 8:30 ET. A stronger-than-expected jobs report or higher U.S. unemployment could swing dollar sentiment: strong U.S. data would reinforce the case for future Fed tightening, boosting the dollar, while weak numbers would heighten expectations of rate cuts, pressuring USD. Central bank moves are also on the horizon: the Fed meets July 29–30 (with a projected pause on rates), and the ECB meets July 24 where it is expected to hold rates steady. Investors will watch those meetings, as well as any Fed or ECB speaker comments, for cues on the policy path. Overall, upcoming data will likely fuel intraday swings (e.g. USD/JPY on risk versus safe-haven shifts, EUR/USD on relative yields) and set the tone for July’s trading.