Week ahead: Markets eye 9 July tariff deadline

Entering mid-July, markets face a transitional phase as trade policy uncertainties, central bank commentary, and macroeconomic data shape sentiment. With the US tariff pause set to expire on 9 July, investors remain cautious. This week’s influences include the Fed’s July meeting minutes, the UK’s CPI release, and shifting flows across global assets.

KEY INDICATORS

Foreign exchange market

Dollar expected to remain soft in July.

Over 80% of analysts forecast further dollar weakness, driven by ongoing uncertainty.

Foreign investors are increasing USD hedging on US stocks, signalling caution.

Commodities & equities

Oil rally stabilises, with prices expected to average $67–68 in 2025.

US equity funds saw a $31.6 billion inflow last week, reflecting strong investor confidence.

Investors are awaiting the expiry of the US tariff pause on 9 July, which could impact market sentiment.

US equities face pressure from tariff uncertainties and concerns over Fed independence.

Asian markets & key events

Hong Kong stocks surged 21% year-to-date, bolstered by mainland Chinese inflows.

Foreign investors are increasingly favouring Asian markets, supporting Chinese and regional equities.

MARKET MOVERS

XAU/USD

• Technical breakout: Gold remains range-bound with key resistance at $3,355–$3,375 and support near $3,335–$3,300. A valid breakout above $3,375 would signal bullish momentum, while a drop below $3,300 would suggest a bearish shift.
• Target projection (bullish): A breakout above $3,375 targets $3,400–$3,415, with potential to extend to $3,450–$3,500.
• Target projection (bearish): A break below $3,300 opens the path to $3,275–$3,260, with further downside towards $3,240–$3,220.
• Opening expectation: Gold is expected to open near $3,335–$3,345, supported by safe-haven flows and a slightly softer USD following economic data releases and tariff headlines.
• Primary support zone: $3,335–$3,330 (recent daily consolidation area).
• Secondary support zone: $3,300–$3,295 (lower triangle/channel support).
• Tertiary support zone: $3,275–$3,260 (prior range lows and Fibonacci area).
• Strategy (bullish approach): Buy on a breakout above $3,375 with targets at $3,400 and $3,415–$3,450.
• Strategy (bearish approach): Short on a breakdown below $3,300 with targets at $3,275–$3,260, extending to $3,240–$3,220.
• Stop-loss level: Below $3,330 for bullish positions; above $3,385 for bearish positions.
• Key catalysts this week: US inflation data (PPI/PCE), Fed minutes, tariff headlines tied to the 9 July deadline, and safe-haven flows from global risk events.

EUR/USD

• Technical breakout: EUR/USD is currently consolidating beneath its recent peak at 1.1836–1.1850. A valid breakout above 1.1836–1.1850 would confirm a bullish trend continuation, while a breakdown below 1.1680–1.1700 would shift the bias to bearish, with a move toward deeper support.
• Target projection (bullish): A breakout above 1.1836–1.1850 targets 1.1875–1.1900, with potential to extend to 1.2000–1.2200 by year-end.
• Target projection (bearish): A break below 1.1680 opens the path to 1.1635–1.1670, with further downside towards 1.1439–1.1465.
• Opening expectation: EUR/USD is expected to open near 1.1770–1.1785, supported by continued dollar weakness and reduced summer volatility.
• Primary support zone: 1.1680–1.1700 (crucial short-term support and recent convergence point).
• Secondary support zone: 1.1635–1.1670 (earlier consolidation and pullback area).
• Tertiary support zone: 1.1439–1.1465 (deeper Fibonacci/wedge base if prices erode significantly).
• Strategy (bullish approach): Buy on a breakout above 1.1836 with targets at 1.1875–1.1900, extending to 1.2000–1.2200.
• Strategy (bearish approach): Short on a breakdown below 1.1680 with targets at 1.1635–1.1670, extending to 1.1439–1.1465.
• Stop-loss level: Below 1.1680 for bullish positions; above 1.1850 for bearish positions.
• Key catalysts this week: US FOMC minutes, tariff headline risks—especially with the 9 July deadline approaching, European retail sales, and German industrial production, which could impact ECB policy outlook.

Crude Oil WTI

• Technical breakout: WTI is consolidating just below its recent high around $68–$68.50, forming a bullish pennant. A breakout above $68.50–$69.00 would confirm renewed bullish momentum.
• Target projection (bullish): A breakout above $68.50–$69.00 targets $70.00–$71.00, with potential to extend to $75.00+ if supported by political risk or supply news.
• Target projection (bearish): A breakdown below $65.60–$65.80 opens the path to $63.70–$64.00, with further downside towards $61.80–$62.00.
• Opening expectation: Oil is expected to open in the $66.50–$67.00 range, supported by geopolitical uncertainty and steady demand data.
• Primary support zone: $65.60–$65.80 (base of the current range and weekly pivot).
• Secondary support zone: $63.70–$64.00 (lower bound of consolidation).
• Tertiary support zone: $61.80–$62.00 (long-term support zone if weakness extends).
• Strategy (bullish approach): Buy on a breakout above $68.50 with targets at $70.00 and $71.00–$75.00+.
• Strategy (bearish approach): Short on a breakdown below $65.60 with targets at $63.70–$64.00, extending to $61.80–$62.00.
• Stop-loss level: Below $65.80 for bullish positions; above $68.50 for bearish positions.
• Key catalysts this week: US inflation data (PPI/PCE), FOMC minutes, tariff headlines tied to the 9 July deadline, and geopolitical risks impacting oil prices.

NEWS HEADLINES

Trade tensions rise ahead of key deadline

Trump dismissed Elon Musk’s new “America Party” as “ridiculous,” escalating political polarisation ahead of trade talks.

The White House confirmed tariff notification letters will be sent by 9 July to countries including India, Korea, and Indonesia.

US trade deal talks continued under pressure, with last-minute efforts focused on Asia amid widening global uncertainty.

Dollar weakens as trade fog builds

The US dollar hovered near multi-year lows as traders awaited clarity on upcoming tariff actions.

India’s rupee dropped to ₹85.70 per USD, reflecting broader weakness across Asian currencies.

Markets react to shifting trade signals

Oil prices declined after OPEC+ raised output and geopolitical risk premiums faded.

London Metal Exchange (LME) trading volumes surged to a decade high on tariff-driven volatility.

European equities traded flat, reflecting caution over US trade uncertainty.

Asian markets dipped as tariff delays and oil weakness weighed on sentiment.

Gulf equities edged higher on optimism around extended US tariff reprieves.

Thailand reported its third straight month of deflation, reinforcing regional dovish outlooks.

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