Rate Cut Hopes Fuel Risk Appetite, Bulls Eye New Buying Opportunities

Eva Chen

Economic

Stocks

Summary:

Markets appear convinced of imminent rate cuts, continuing to drive equities higher.

BUY US30

Close Time

CLOSED

43728.97

Entry Price

44149.00

42500.00

48571.90 -263.55 -0.54%

4200.3

Pips

Profit

42500.00

44149.44

Exit Price

43728.97

Entry Price

44149.00

Fundamentals

After closing largely flat in the previous session, U.S. stocks rallied strongly throughout Thursday’s trading. The Nasdaq and S&P 500 both finished just shy of record closing highs.

Major indices posted robust gains. The Nasdaq climbed 194 points (1.0%) to 20,167. The Dow Jones surged 404 points (0.9%) to 43,386. The S&P 500 advanced 48 points (0.8%) to 6,141.

The market continues to ride the recent bullish wave, with major indices remaining well above their April lows despite lingering uncertainties over tariffs.

The rally has brought both the S&P 500 and Nasdaq back near all-time peaks. The S&P closed just 3 points below its February record, while the Nasdaq once again breached historic levels. Meanwhile, the Dow Jones Industrial Average extended its bullish run, shrugging off negative headlines.

The latest GDP revision served as a key catalyst for the rally. The U.S. Q1 GDP was revised downward to -0.5% from -0.2%, amplifying pressure on the Fed to either cut rates or adopt a more accommodative stance.

Rate Cut Hopes Fuel Risk Appetite, Bulls Eye New Buying Opportunities_1

Technical Analysis

The Dow maintains its strong rebound structure from June, having breached prior resistance highs. Sentiment remains optimistic, though short-term consolidation is likely before further upside.

On the Daily Chart, the breakout above the 43,000–43,200 resistance zone has accelerated the uptrend, with the index now trading near record highs.

Momentum: MACD shows a sustained golden cross with expanding bars, confirming unabated bullish momentum.

RSI approaches overbought territory, hinting at near-term correction risks—yet no clear reversal signals emerge.A break above 43,650 (local high) could open a path to 44,000–44,200 resistance.

An ideal bullish pullback toward 43,000 support would offer favorable long-entry opportunities. However, entering near current levels equates to buying into resistance, presenting suboptimal risk/reward. As a result, wait for dips remains the preferred strategy.

Trading Recommendations

Trading Direction: Buy

Entry Price: 43000

Target Price: 44149

Stop Loss: 42500

Valid Until: July 12, 2025, 23:55:00

Support: 43000/43200/43000

Resistance: 43650/44000/44200

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Economic

Summary:

Gold extended its decline on Friday, sliding below the $3,300 mark, as reports of a trade breakthrough between the U.S. and China lifted risk sentiment and drained demand for safe-haven assets.

SELL XAUUSD

Close Time

CLOSED

3275.00

Entry Price

3175.00

3350.00

4299.39 +20.10 +0.47%

138.6

Pips

Profit

3175.00

3261.14

Exit Price

3275.00

Entry Price

3350.00

Gold prices came under fresh pressure on Friday, tumbling below the key psychological threshold of $3,300 per ounce, as global markets responded to a surprise development: a preliminary trade agreement between the United States and China. The news has sharply undercut safe-haven demand, sending bullion on a steep retreat for the second time this week, in line with a broader rotation into riskier assets.

At the time of writing, spot gold (XAU/USD) is trading around $3,282 per ounce, down more than 1.3% on the day, marking one of its most aggressive weekly declines in June. The move comes as investors pivot away from safety trades amid renewed optimism over geopolitical stability, easing trade tensions, and the prospect of looser monetary policy.

The immediate catalyst for gold’s latest slide was the announcement that Washington and Beijing have tentatively agreed to a new framework that would pause further tariff escalation until at least August 12. The development — reportedly spearheaded by high-level diplomatic backchannel efforts — eases concerns that the world’s two largest economies were heading toward another disruptive round of protectionism. Markets responded with enthusiasm: global equity indices rose, U.S. Treasury yields climbed modestly, and risk-sensitive currencies strengthened.

For gold, however, the shift in sentiment has been less forgiving. The yellow metal’s traditional role as a hedge against uncertainty and geopolitical unrest has been diminished in this environment of renewed optimism. Investors are increasingly reallocating capital into equities and credit markets, anticipating a rebound in global growth if trade frictions continue to subside.

While geopolitical headlines dominated the early part of the session, attention is now turning to Friday’s key U.S. macroeconomic data release — the Core Personal Consumption Expenditures (PCE) Price Index. As the Federal Reserve’s preferred inflation barometer, the PCE data will be critical in shaping expectations around future rate decisions.

The May core PCE is expected to rise modestly on a year-over-year basis, suggesting continued but contained inflation pressures. However, any meaningful deviation from consensus — particularly an upside surprise — could disrupt the Fed’s projected easing path. Conversely, a weaker-than-expected print would reinforce the argument for additional policy accommodation, supporting long-duration assets, including gold.

Adding complexity to the outlook, U.S. President Donald Trump has intensified public pressure on the Fed to cut rates more aggressively, arguing that monetary easing is necessary to maintain economic competitiveness amid lingering global uncertainties. According to the CME FedWatch Tool, markets are pricing in a 72% probability of a 25-basis point rate cut at the Fed’s September meeting, with odds rising for cumulative cuts of 50 basis points or more by the end of the year.

Technical Analysis

From a technical standpoint, the picture for gold remains fragile in the short term. The metal broke below the key support level of $3,300 during Friday’s intraday session, signaling a potential acceleration of the ongoing bearish correction. A 4-hour chart confirms this bearish trend, showing a pronounced downward channel and price action hovering near $3,282 — well below both the 50-period EMA and previous support zones.

Notably, the RSI indicator continues to flash oversold conditions, suggesting that while momentum remains firmly to the downside, a temporary deceleration in selling pressure could occur in the near term. Still, the dominant pattern is one of weakness, with the next significant support zone seen near $3,244. A sustained break below this level would likely open the door to further downside toward $3,200 and possibly $3,175.

Resistance is now firmly entrenched between $3,300 and $3,320. Unless bulls can reclaim this zone with conviction — potentially driven by a dovish Fed narrative or a geopolitical flare-up — the path of least resistance remains lower.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3275

STOP LOSS: 3350

TAKE PROFIT: 3175

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

The UK economy's marginal improvement, coupled with weakening growth momentum in Canada, may lead to further strengthening of the GBPCAD.

BUY GBPCAD

Close Time

CLOSED

1.87448

Entry Price

1.96900

1.84300

1.84103 -0.00196 -0.11%

314.8

Pips

Loss

1.84300

Exit Price

1.87448

Entry Price

1.96900

Fundamentals

UK:

The preliminary UK Composite PMI for June rose to 50.7, with the Services PMI increasing to 51.3. Although the Manufacturing PMI declined to 47.7, it still exceeded expectations, indicating a stabilization in overall economic activity and providing fundamental support for the British pound. Despite recent dovish signals from Bank of England Governor Bailey, the market has partially priced in an August rate cut. Furthermore, the UK's May core inflation rate remained at 3.5%, and wage growth slowed only marginally, potentially limiting the scope for policy easing.

Additionally, the UK's Q1 GDP grew by 0.7% quarter-on-quarter. The combination of service sector expansion and a slowdown in manufacturing contraction suggests signs of a soft landing, alleviating market concerns about a recession.

Canada:

In April, Canadian manufacturing sales experienced a 2.8% decline, marking the largest monthly decrease since October 2023, and representing the second consecutive month of contraction. This downturn was significantly impacted by U.S.-Canada tariffs, particularly affecting petroleum and automotive exports.

Furthermore, Canada's May core CPI rose 2.5% year-on-year, exceeding the headline inflation rate of 1.7%. However, with weak economic growth momentum, market expectations for further interest rate cuts by the Bank of Canada (BOC) have increased. The BOC maintained its interest rate at 2.75%, but the economy may have entered a technical recession (with Q2 GDP expected to decline by 1%), and the pressure for policy easing continues to suppress the Canadian dollar.

In summary, the marginal improvement in the UK economy, coupled with weak growth momentum in Canada, suggests that the GBPCAD may continue to strengthen.

Technical Analysis

Policy Divergence and Technical Breakthroughs Converge, Targeting the 1.93 Level_1

In the 1D timeframe, the GBPCAD exhibits a clear upward trend, with the SMA system displaying a bullish alignment, thereby reinforcing the continuation of the overall uptrend.

Currently, the GBPCAD has breached the critical resistance level of 1.8710, as well as the March high of 1.8777, which suggests further upside potential. The next target could be a test of the May 2016 high of 1.9301. A break above this level could see the GBPCAD potentially rise towards the 1.9800 range.

It is recommended to go long at the lows.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.8730

Target Price: 1.9690

Stop Loss: 1.8430

Valid Until: July 14, 2025 23:00:00

Support: 1.8669, 1.8551

Resistance: 1.8831, 1.9301

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The 200-period moving average is located near a key local resistance zone, which could trigger an acceleration in bullish momentum towards this area as part of a correction.

BUY USDCAD

Close Time

CLOSED

1.36455

Entry Price

1.36910

1.36100

1.37700 0.00000 0.00%

45.5

Pips

Profit

1.36100

1.36911

Exit Price

1.36455

Entry Price

1.36910

U.S. President Donald Trump recently stated that the United States will hold talks with Iran next week, although he expressed doubts about the need for a diplomatic solution regarding Iran’s nuclear program. According to Bloomberg, Trump cited the damage caused by U.S. bombings of key sites in Iran as a reason for questioning the necessity of a negotiated settlement.

While Trump suggested that the conflict was essentially “over” following the U.S. bombing mission, he also warned that tensions could escalate once again. Traders will be closely monitoring developments surrounding the U.S.-Iran discussions and broader geopolitical tensions in the Middle East. Any sign of further escalation could lead to capital flows into safe-haven assets, particularly benefiting the U.S. Dollar (USD).

Federal Reserve Chairman Jerome Powell commented on Wednesday that President Trump’s tariff policies could lead to a temporary increase in prices. However, he emphasized that the risk of causing more persistent inflation is significant enough to warrant caution when considering further interest rate cuts. While the Fed still expects to lower rates later this year, the timing remains uncertain, with policymakers awaiting clarity on the next trade deadlines and the full impact of the tariffs.

On Thursday, mixed economic data from the U.S. added a cautious tone to the market, limiting any potential rally in the U.S. Dollar. Although durable goods orders surged in May, signaling resilience in the manufacturing sector, the U.S. economy contracted by 0.5% in Q1 2025, deeper than the previously estimated 0.2% decline, highlighting underlying economic weakness. In another sign of a cooling economy, initial jobless claims in the U.S. fell by 9,000 to 236,000 for the week ending June 21, falling below expectations.

The CME’s FedWatch Tool currently prices in a 24% chance of a rate cut in July, with a 90% likelihood for September, up from 14% and 65% the week before.

Meanwhile, economic data from Canada released on Tuesday showed that the country’s Consumer Price Index (CPI) rose by 1.7% year-on-year in May, matching the previous month’s 1.7% rise and in line with market expectations. On a monthly basis, the CPI increased by 0.6% in May, exceeding the market’s expectation of 0.5%, following a -0.1% decline in April.

The ongoing slump in crude oil prices could weigh on the Canadian Dollar, which is closely tied to commodities. It’s important to note that Canada is the largest oil exporter to the U.S., and lower crude oil prices tend to negatively impact the CAD’s value. An Upside Correction May Develop From Local Support_1

An Upside Correction May Develop From Local Support_1

Technical Analysis

USDCAD has recently experienced a sharp drop, reaching a local low of 1.3618 during the previous session. This level coincided with an RSI reading of 16.92 on the 1-hour chart, signaling an oversold condition. These extreme oversold levels often attract buyers, making it unlikely that the price will continue its decline before a corrective move occurs from this region. Additionally, the price shows significant support at the 1.3634 level, which was swiftly reclaimed after a brief dip below this level. If this support holds, an upward momentum could be on the horizon.

On the flip side, the 100-period and 200-period moving averages are situated at 1.3718 and 1.3692, respectively. The 200-period moving average is located near a key local resistance zone, which could trigger an acceleration in bullish momentum towards this area as part of a correction. Furthermore, this zone coincides with a Fibonacci retracement level of the latest bearish impulse, adding further pressure for a correction towards this key resistance area.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3644

Target price: 1.3691

Stop loss: 1.3610

Validity: Jul 04, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

EUR/JPY holds steady near 169.00 as bullish sentiment in the Eurozone offsets the safe-haven appeal of the Japanese Yen.

BUY EURJPY

Close Time

CLOSED

168.999

Entry Price

171.000

168.000

182.929 +0.318 +0.17%

73.9

Pips

Profit

168.000

169.738

Exit Price

168.999

Entry Price

171.000

The Euro (EUR) remains well-supported against the Japanese Yen (JPY) on Thursday, hovering just below the psychologically significant 170.00 mark, as bullish momentum extends into the second half of June. Despite a modest pullback from recent highs, the Euro has posted a remarkable monthly gain of more than 3% against the Yen, propelled by a resurgence in global risk appetite and diverging monetary policy expectations between the European Central Bank (ECB) and the Bank of Japan (BoJ).

At the time of writing, EUR/JPY is trading around 168.85, with earlier lows near 168.56 offering immediate support. Investors appear to be positioning cautiously, with the next upside milestone—the 170.00 barrier—now firmly in focus. However, technical indicators are beginning to flash warning signals that the bullish momentum could be reaching a temporary plateau.

Euro Supported by Risk-On Flows and Interest Rate Differentials

The Euro continues to benefit from a broadly positive global risk environment, which has favored high-yielding and growth-linked currencies at the expense of traditional safe havens like the Japanese Yen. This week’s announcement of a ceasefire between Iran and Israel—confirmed by U.S. officials on Tuesday—has significantly reduced geopolitical tensions, easing market fears of a wider regional conflict. The result has been a retreat in demand for the Yen, which historically rallies during times of global stress.

Compounding the pressure on the JPY is Japan’s persistently low-interest rate regime, which remains one of the most dovish among G10 economies. Despite rising inflation and stronger-than-expected domestic PMIs, the Bank of Japan has shown reluctance to pivot decisively toward policy normalization. The central bank’s June meeting summary revealed that most members prefer a wait-and-see approach, citing uncertainty over U.S. trade policy and its potential impact on Japanese corporates.

By contrast, the ECB—while leaning dovish—has already delivered a rate cut in June and remains open to further easing depending on inflation and growth dynamics. However, key policymakers have emphasized flexibility rather than urgency, suggesting that the Euro still enjoys a yield advantage over the Yen in the near term.

As both Japan and the European Union race to finalize a trade agreement with the United States ahead of the July 9 deadline, the broader backdrop of improved diplomacy and economic cooperation adds to the constructive narrative for the Euro.

Technical Analysis

From a technical standpoint, EUR/JPY has entered a period of sideways consolidation, trapped between firm support near 167.60 and resistance around 169.30—the top of its most recent bullish wave. This rangebound action reflects a tug-of-war between fading momentum and persistent demand for Euro exposure.

The Relative Strength Index (RSI) on the daily chart remains above 68, signaling that the pair is trading near overbought territory. While this does not guarantee an immediate reversal, it suggests that upward progress may begin to slow unless fresh bullish catalysts emerge.

So far, the price action has respected a well-defined ascending channel, with the upper boundary near 170.00 representing a critical resistance level. A clear breakout above this threshold could trigger a new leg higher, potentially opening the door for a run toward the 170.50–171.00 zone. Conversely, failure to overcome this barrier could encourage some profit-taking and test support back toward 167.60 or even the 50-day EMA around 164.57.

Intraday, the pair is expected to trade between 168.30 and 170.00, with any dip into the lower end of this range likely to attract renewed buying interest. Should EUR/JPY successfully breach the 169.30 level and close above it, the bullish trend will regain strength, positioning the pair for a potential test of multi-year highs.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 169.00

STOP LOSS: 168.00

TAKE PROFIT: 171.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This pullback may be the early stage of a more pronounced correction, with the lower boundary of the channel near 1.7805 acting as the first major support.

SELL EURAUD

Close Time

CLOSED

1.78672

Entry Price

1.77100

1.80100

1.76437 +0.00319 +0.18%

142.8

Pips

Loss

1.77100

1.80210

Exit Price

1.78672

Entry Price

1.80100

Germany, the largest economy in Europe, remains under intense economic pressure as markets closely watch the outlook for a potential trade agreement with the United States. This ongoing uncertainty continues to weigh heavily on German economic performance.

On Thursday, Growth from Knowledge (GfK) released the latest Consumer Confidence Survey for July, an important leading indicator of economic sentiment in Germany. Expectations had pointed to a reading of -19.3, already indicative of a deteriorating outlook. However, the actual figure came in even lower, at -20.3, highlighting a further decline in consumer sentiment.

One of the most significant challenges for both Germany and the broader European Union has been the impact of tariffs imposed by the United States on global trading partners. U.S. trade policy has introduced sweeping tariffs, with a base rate of 10% on all imports and additional duties on specific EU goods such as steel, aluminum, and auto parts. These measures, enacted symbolically on “Liberation Day,” have placed substantial pressure on export-reliant economies.

In response, the European Union is actively seeking a mutually beneficial agreement with the United States. Any progress in easing tariffs, particularly on key industrial sectors, could provide some much-needed relief to the eurozone economy.

Meanwhile, economic data releases this week have been relatively limited. Aside from the GfK consumer confidence numbers, which were broadly in line with expectations, communication from the European Central Bank has remained largely neutral. Remarks from ECB Chief Economist Philip Lane suggested that the central bank has "largely completed" its mission to bring inflation back to target, which aligns with the recent upward momentum seen in euro exchange rates.

On the other side of the globe, the Australian dollar has found some support as geopolitical tensions ease. Following the confirmation of a ceasefire between Israel and Iran earlier in the week, risk appetite has returned to the markets, lifting the Aussie.

Additionally, Australia’s monthly Consumer Price Index (CPI) data released on Wednesday showed a continued decline in price pressures. Analysts had forecast a 2.3% annual inflation rate for May, but the actual reading came in slightly lower at 2.1%. This softer inflation print has heightened expectations that the Reserve Bank of Australia (RBA) may move forward with another rate cut as early as July. EURAUD Faces Key Test as Bearish Pressure Builds_1

EURAUD Faces Key Test as Bearish Pressure Builds_1

Technical Analysis

EURAUD is currently trading within a well-defined ascending channel. After recently approaching the upper boundary of the channel, the pair has begun to show signs of a bearish reaction. This pullback may be the early stage of a more pronounced correction, with the lower boundary of the channel near 1.7805 acting as the first major support.

This zone is particularly significant, as it converges with the 100-period moving average on the 4-hour chart, which currently sits at 1.7712. Just below, the 200-period moving average lies at 1.7618, reinforcing the potential for further downside if momentum builds and the lower channel boundary is decisively breached.

The Relative Strength Index (RSI) is currently hovering around 51, indicating a neutral stance. This suggests that bearish momentum has not fully taken control, but a firm break below the 1.7854 support level could serve as a catalyst for further downside movement. Should this occur, the next key support lies around 1.7706. This area could pose a greater challenge to sellers, and a period of consolidation near this region—along with the moving averages—could ultimately lay the groundwork for a renewed bullish move.

Trading Recommendations

Trading direction: Sell

Entry price: 1.7870

Target price: 1.7710

Stop loss: 1.8010

Validity: Jul 04, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Tokyo apartment rents are rising at the fastest pace in three decades, providing the Bank of Japan (BoJ) with the latest signal that the inflation trend in Japan is deepening across the economic domain.

SELL USDJPY

Close Time

CLOSED

145.180

Entry Price

142.400

146.800

155.814 +0.255 +0.16%

29.9

Pips

Profit

142.400

144.881

Exit Price

145.180

Entry Price

146.800

Fundamentals

During the Asian session on Thursday, USDJPY plunged significantly, breaking below the 144.00 level, due to the widespread selling of the US dollar and the upward pressure on the asset from rising inflation in Japan.

Data from Japan's Ministry of Internal Affairs and Communications shows that rents in Japan's capital region rose by 1.3% year-on-year from April to May this year, the largest increase since 1994. Although this increase may seem modest compared to Tokyo's core inflation rate of 3.6% and the global surge in housing rents, it signifies that the inflationary cycle has finally penetrated Japan's rental market. The widespread increase in rents and prices provides the BoJ with grounds for further interest rate hikes.

Market observers note that the rise in rents confirms the so-called normalization shift by the central bank, which is indeed one of the signs of a rise in underlying prices and may drive the normalization process of monetary policy. Previously, in its semiannual financial system report, the BoJ had listed the real estate market as a key issue requiring close monitoring.

According to the summary of opinions from the BoJ's June meeting, the committee members discussed the issue of inflation rising faster than expected, while they continued to believe it was necessary to remain vigilant about the high uncertainty related to US tariffs.

One of the nine committee members stated, "Although prices are slightly higher than expected, given the downside risks to economic activity brought by US tariff policies and the situation in the Middle East, it is appropriate for the central bank to maintain its current stance on monetary policy implementation." Others also mentioned that the inflation rate was higher than expected.

Although the summary indicates that the urgency for interest rate hikes is not significant at present, the members' general view that inflation is higher than expected increases the likelihood of the BoJ raising the benchmark interest rate when the uncertainty of tariff impacts begins to dissipate.

Data released last Friday showed that Japan's main price index hit a two-year high, and the BoJ's inflation outlook suggests that the bank may raise its inflation forecast in the quarterly economic report at its July meeting.

Inflation Permeates Rental Sector, BoJ Normalization Path Begins to Emerge_1

Technical Analysis

USDJPY continued to be sold off on Thursday, but the intraday trend remained upward due to the oversold indicators. As long as the support level at 142.10 holds, USDJPY is expected to rise further, albeit modestly. On the upside, a break above 148.64 would restart the rally from 139.87.

However, given the relatively favorable fundamentals for the yen and the head-and-shoulders top pattern still in place on the daily chart, we anticipate that after a brief rebound, the bears will continue to dominate.