Weekly FX Chartbook: Mega Week Ahead – Fed, BOJ, BoE, Australia and Eurozone CPI, big tech earnings

Saxo Research Team Saxo Bank

Key points

USD: The Fed may find it hard to meet market’s dovish expectations.
JPY: Volatility risks remain high with Fed-BOJ policy divergence in focus.
GBP: Overbought positioning could be a risk going into close-call BOE meeting.
AUD: Any hints of hot inflation can spur further RBA rate hike bets.
CNH: Economic and tariff risks continue to escalate.

Carry trading saw unwinding risks develop last week which sent Japanese yen higher, taking other funding currencies such as Swiss franc and Chinese yuan with it while high yielders Aussie and kiwi underperformed.

Our FX Scorecard saw Japanese yen and Swiss franc momentum surge higher than sterling, but turning negative again in the last two days. Momentum is NOK seems to be the gaining, followed by SEK.

The CFTC positioning data for the week of 23 July saw speculators cut the long positioning in US dollar further. Short positioning in JPY was covered significantly, as was in CHF. Longs were added to EUR and GBP, while net positioning in AUD turned to a short.

Read the original analysis: Weekly FX chartbook: Mega week ahead - Fed, BOJ, Bank of England, Australia and Eurozone CPI

Author

Saxo Research Team

Saxo Bank

Saxo is an award-winning investment firm trusted by 1,200,000+ clients worldwide. Saxo provides the leading online trading platform connecting investors and traders to global financial markets.

EUR/USD seems fragile below 1.1700 as Middle East war boosts energy prices

The EUR/USD pair trades flat at around 1.1680 during the Asian trading session on Tuesday, but broadly seems vulnerable, being close to its five-week low. The major currency pair is under pressure as surging oil prices due to the United States-Israel war with Iran have increased the risks of higher inflation for the Old Continent.

GBP/USD hovers around 1.3400 with bearish pressure intact

GBP/USD edges higher after three days of losses, trading around 1.3400 during the Asian hours on Tuesday. The technical analysis of the daily chart indicates an ongoing bearish bias, as the pair trades within a descending channel pattern.

Gold stays bullish as Iran war continues to spur safe-haven flows

Gold is finding renewed bids in Asian trades on Tuesday, making another attempt to regain the $5,400 level amid persistent demand for safe-haven assets as the Iran war extends. A softer risk tone remains in play as US President Donald Trump continues to threaten deeper escalation to the ongoing war with Iran, warning that a “big wave” is yet to come.

Top Crypto Gainers: Near Protocol, Virtuals Protocol, and Morpho lead market recovery

Near Protocol, Virtuals Protocol, and Morpho are leading the market recovery with double-digit gains over the last 24 hours. Technically, NEAR extends the breakout of the falling channel pattern, VIRTUAL holds above the 50-day EMA, while MORPHO tests a crucial resistance.

The market is not panicking it is repricing the probability distribution of Oil and time

At the end of the day, markets do not trade morality or geopolitics. They trade transmission channels. And the only channel that truly matters in this maelstrom runs through the price of energy and the time value of money.

Grass 20% bullish breakout defies broader market weakness

Grass (GRASS) is edging up above $0.30 at the time of writing on Monday. The token’s notable 20% intraday surge stands out amid heightened volatility in the broader crypto market.