VT 
Markets are weighing rising risks as a US court challenges Trump’s tariffs and the Fed signals a potential rate cut in September, while the ECB emphasises flexibility. Geopolitical tensions intensify with the Russia-Ukraine war, escalating Middle East conflicts, and Turkey cutting ties with Israel. Political shifts in Thailand and reaffirmed mandates in France add to market uncertainty, while Swiss gold remains resilient amid US pressure.
KEY INDICATORS
US inflation and market reaction
US inflation data came in line with forecasts, boosting bets on a September Fed rate cut.
Dollar slipped slightly; Dollar Index down 0.001% at 97.86.
10-year Treasury yield at 4.233%, 2-year yield at 3.625%.
Commodities
Gold rose 0.9% to USD 3,448/oz, marking the best monthly gain since April; silver increased 1.53% to USD 39.7/oz.
WTI fell 0.47% to USD 63.79, Brent down 0.35% to USD 67.38, marking the first monthly decline since April.
Equities
US equities ended lower: Dow -0.2%, S&P 500 -0.64%, Nasdaq -1.15%.
Semiconductors fell 3.2% (Nvidia -3.3%), while Google rose 0.5%.
China tech outperformed: Alibaba +13%, Baidu +4.7%.
European equities also closed lower: DAX -0.57%, FTSE 100 -0.32%, Euro Stoxx 50 -0.83%.
MARKET MOVERS
EUR/USD
- Primary trend: Bullish, with pullbacks likely to find support before buyers return.
- Support level: 1.1665 (secondary: 1.1700)
- Resistance zone: 1.1745 (secondary breakout target: 1.1770)
- Long strategy: Enter longs near 1.1665 support, target 1.1745 initially, extend towards 1.1770, stop-loss below 1.1665.
- Short strategy: Consider tactical shorts on rallies into 1.1745–1.1770 resistance, target 1.1700 initially, extend back to 1.1665 if momentum builds.
- Range trade: Buy dips near support and sell rallies near resistance if price consolidates between 1.1665–1.1770.
- Risk management: Keep stops tight given the prevailing bullish trend.
GBP/JPY
- Primary trend: Bullish, with selling pressure fading and dips towards support likely to offer fresh buying opportunities.
- Support level: 198.20 (secondary: 198.60)
- Resistance zone: 199.40 (secondary breakout target: 199.70)
- Long strategy: Buy on dips near 198.20 support, target 199.40 initially, extend towards 199.70, stop-loss below 198.20.
- Short strategy: Consider tactical shorts on failed rallies near 199.40–199.70 resistance, target 198.60 initially, extend back to 198.20 if momentum builds.
- Range trade: Buy near support and sell near resistance if price consolidates between 198.20–199.70.
- Risk management: Keep stops tight given the overall bullish structure.
DAX 40 (Germany)
- Primary trend: Bearish, with rallies into resistance likely to attract sellers and brief moves higher expected to be short-lived.
- Support level: 23,750 (secondary: 23,840)
- Resistance zone: 24,200 (secondary breakout target: 24,300)
- Long strategy: Consider tactical longs only on dips holding above key support, with targets likely limited given the broader bearish backdrop, stop-loss below support.
- Short strategy: Sell on rallies towards 24,200 resistance, target 23,840 initially, extend towards 23,750 if momentum builds.
- Range trade: Sell near the top of the range and buy near the base if price consolidates between 23,750–24,200.
- Risk management: Keep stops tight given the bearish medium-term trend.
NEWS HEADLINES
US economic and policy updates
A US court rules Trump’s tariffs illegal, but he insists the measures will remain in effect, highlighting ongoing trade uncertainty.
Fed officials signal a September rate cut as July Core PCE reaches 2.9%, amid tensions over their economic mandate and market expectations.
The Fed finalises new big-bank capital rules, with Morgan Stanley seeking a review, while a judge delays ruling on Cook’s removal, keeping her in place.
Trump cancels USD 5bn in foreign aid and advances plans to rename the “War Department”, while the Texas governor signs a new congressional map into law.
Geopolitical tensions
Zelensky pushes for deeper strikes in Ukraine as the EU pledges stronger support; heavy clashes continue in Donetsk, and Zelensky is scheduled to meet Trump with EU leaders.
The EU plans troop deployments, with France and Germany advocating secondary sanctions, as geopolitical pressure rises in the region.
Israel intensifies strikes in Gaza, killing senior figures including Hamas spokesman Abu Ubayda, while operations expand and the country considers West Bank annexation.
Turkey severs trade and closes its airspace to Israel, and Houthis target UN agencies, signalling escalation across the Middle East.
Europe and central banks
Macron commits to a full term and backs PM Bayrou in a confidence vote, reinforcing political stability in France.
The ECB keeps September policy decisions open, with Kocher stressing flexibility and Rehn warning that inflation risks remain on the downside, reflecting ongoing uncertainty in the Eurozone.
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