On Friday 18 July 2025 the market mood was skewed toward a stronger US dollar, driven by solid US economic data and cautious central-bank signals. U.S. indicators (retail sales, unemployment claims) suggested the Fed can hold rates steady, and the dollar rose to a four‑week high. Meanwhile, European markets were jittery: Italy’s deputy PM called for more ECB easing, and June inflation data remained tame in the Eurozone. These factors kept volatility elevated in EUR/USD and GBP/USD. In Asia/CAD, a surprise uptick in Canada’s June CPI (1.9% YoY vs 1.7%) bolstered the loonie, tempering USD/CAD moves. Overall, traders saw whipsaw action on the 5‑min charts: sharp spikes at data times and range-bound trading otherwise.
News Impact
- United States: The key releases on 18 July were June building permits and housing starts (both due at 12:30 GMT). These housing figures were broadly in line with forecasts, so by themselves they only nudged intraday moves. More influential were overnight U.S. data: June retail sales unexpectedly jumped +0.6% and weekly jobless claims fell to a 3‑month low. Together they reinforced expectations that the Fed would not cut rates soon. This drove broad USD strength into the session (the dollar index climbed ~0.4% on Thursday). As a result, EUR/USD and GBP/USD fell sharply on Thursday’s US session and opened Friday on the defensive. On Friday itself, the unremarkable housing starts data gave only a modest boost to the dollar – prices largely continued in the direction set by the stronger USD tone.
- Eurozone: Euro‐area headline inflation for June came in at 2.0% YoY (up slightly from 1.9%), roughly matching expectations. This steady inflation backdrop implies continued ECB easing. Indeed, comments from Italy’s Deputy Prime Minister Tajani added bearish fuel: he urged the ECB toward further rate cuts and a new QE program. That rhetoric weighed on EUR sentiment. In practice, EUR/USD repeatedly failed to break much above ~1.1640–1.1700 in the week, and the pair was especially pressured into Thursday’s close. On Friday, in the absence of fresh Eurozone data, EUR/USD mostly followed the dollar’s lead: modest intraday bounces were sold into, keeping EUR near multi-week lows.
- United Kingdom: The UK CPI report on 16 July caught traders by surprise: June inflation surged to 3.6% YoY (up from 3.4%), above BoE forecasts. This initially supported GBP, but by 18 July those gains had faded under the broader USD rally. Cable (GBP/USD) traded in a downtrend: early-week spikes near 1.3500 gave way to declines toward ~1.3370 as risk sentiment wavered. In short, the pound’s bounce from inflation news was overwhelmed by stronger US data.
- Canada: Earlier in the week Canada’s June CPI climbed to 1.9% YoY, raising doubts about an imminent BoC rate cut. This had bolstered CAD support around 1.3650–1.3700 vs USD. On Friday, though, USD/CAD was mainly driven by USD moves: the “strong dollar” mood slightly outweighed the loonie’s earlier strength. Thus USD/CAD saw fairly modest swings in the 1.3700–1.3770 range. Overall, the key news reinforced the intraday FX moves: a stronger USD lifted USD/CAD and weighed on EUR/USD and GBP/USD, while local inflation news set the stage for each pair’s trading band.
EUR/USD
Price traded in a clear range roughly between 1.1560 (support) and 1.1700 (resistance). Thursday’s high (~1.1642) was tested again early Thursday before a swift reversal, forming a double-top near 1.1690. The long upper wicks (seen on 17 July 12:30–14:30 GMT) signaled strong selling pressure at resistance. Conversely, on 17 July around 03:00 GMT and 22:30 GMT the pair found bids near 1.1560–1.1580 – several long lower wicks at those lows indicate buyers stepping in to defend support.
Friday’s price action was mostly consolidative: EUR/USD oscillated within a ~1.1600–1.1640 band. No clear breakout occurred on 18 July; each attempt to move past the range edges was rejected by opposite pressure. Overall, the bias appears slightly bearish in the short term, as the pair failed to break above resistance and stayed near the bottom of the range. Key levels to watch are the tops at ~1.1690 (supply zone) and the lows at ~1.1560–1.1600 (demand zone) that have held during this period.
GBP/USD
The chart shows a broad down-channel early on, with a bounce into a range mid-session. Initially (16 July) the pair spiked up toward 1.3490 but immediately reversed (long upper wicks), dropping into the 1.3350s by Thursday evening. This defined a resistance zone around 1.3480–1.3500 (tested twice on 17 July) and a support zone near 1.3360–1.3380 (tested on 17 July 05:00–06:30 GMT). On Friday, GBP/USD traded sideways in a narrower band (~1.3380–1.3430).
Noticeable candle patterns include a bearish engulfing around 17 July 13:30 GMT at the high (signaling a selloff) and pin bars (long wicks) both at the highs and lows, showing indecision. Volume indicators (bottom of chart) spiked when the big moves occurred – e.g., on the sharp decline late 16 July – confirming participation in those moves. In sum, GBP/USD set up a bearish bias with resistance near 1.3480 and support near 1.3360. A clean break below 1.3360 could open 1.3300, while a break above 1.3500 would negate the downtrend.
USD/CAD
The pair had been in a mild uptrend from mid-July. The chart shows USD/CAD finding support around 1.3650–1.3680 (tested on 17 July ~04:00 GMT and 16 July ~16:00 GMT) and resistance near 1.3760–1.3780 (peaks on 17 July). On 17 July the pair formed a double top around 1.3770: after reaching that level twice in late afternoon, it reversed sharply to ~1.3700. Notice the long upper wick at 1.3770 marking exhaustion. Several bullish candles off the 1.3680 support (e.g. 17 July 07:00–09:00 GMT) show buyers stepping in, confirming that floor.
On 18 July, USD/CAD mostly oscillated between 1.3700 and 1.3760. Volume surges accompanied the sharp 17 July moves: a large green candle on 17 July 07:30 GMT on higher volume pushed price up, and a big red candle on 17 July 14:50 GMT on volume drove it back down. These highlight where momentum was high. In summary, USD/CAD’s short-term range is ~1.3680–1.3770. A break above 1.3780 would signal continuation of the uptrend, while a break below 1.3680 could test 1.3600.
Market Outlook
EUR/USD – Short at Resistance: After two failed rallies near 1.1690, look for a short entry around 1.1680. Place a stop‑loss just above the prior swing-high (e.g. ~1.1710). The target is the support zone around 1.1580–1.1600 (near Thursday’s lows). Rationale: double-top pattern and long upper wicks at 1.1690 suggest sellers prevailed. Risk is controlled by limiting losses above 1.1700.
GBP/USD – Short on Bounce: A similar setup exists at cable’s top. Enter short near 1.3470 (top of the two-peak resistance), with a stop above 1.3500. Target around 1.3380, the recent support area. This trades the expectation that the pair will stay range-bound or resume its down-channel after a pullback. If the pair instead pushes above 1.3500, that would invalidate this setup.
USD/CAD – Long on Dip: For USD/CAD, consider buying on a pullback toward support. Enter around 1.3710–1.3720 (near the 17 July lows), with a stop below 1.3680. The target would be the prior high 1.3770–1.3780. Rationale: the overall move since 16 Jul has been higher, and this setup buys near the rising trendline/support. The stop is just below the support floor to limit risk. If price breaks 1.3680 decisively, this invalidates the trade.
Each setup assumes using appropriate position size. These levels are based on the 5-min chart structure and recent swing points. News flow could trigger quick moves through these zones, so traders should watch for confirmations (like reversal candle patterns) before entering and adjust stops if volatility spikes.
Summary
The U.S. dollar’s strength was the dominant theme on 18 July: robust US data sent the DXY index to four‑week highs, pressuring EUR/USD and GBP/USD. Traders should note that EUR/USD repeatedly topped out near 1.1690–1.1700 and has found support around 1.1560–1.1600. A break of those levels could set the tone for the next moves.
GBP/USD remained weak, failing to sustain rallies above ~1.3450–1.3500. Key levels are near 1.3500 (resistance) and 1.3370 (support). Cable trades lower as long as it stays below resistance. USD/CAD traded sideways but with an upward bias. The pair’s range was 1.3680–1.3780. A break above 1.3780 (prior peaks) would signal further USD bullishness; a break below 1.3680 would risk a deeper pullback.
USD sentiment remains firm heading into the next session, so keep an eye on Fed-related commentary or any surprises in U.S. data. Traders should also watch for weekend geopolitical or policy events that might reignite risk appetite. Remember the critical chart pivots mentioned above – trading should favor entries in the direction of the prevailing USD bias, with stops beyond the recent swing extremes. In short, dollar-weakness is unlikely until a clear catalyst emerges, so bias toward the dollar’s advantage at these technical levels.