Dear Trader,

Market Overview & Key Events

This is the single heaviest calendar week of the summer, and it lands right as the geopolitical backdrop finally shows its first real signs of cooling. The US military has paused its airstrikes on Iran after nearly two weeks of near-nightly bombing, with diplomatic efforts pushing forward on a compromise that would let Iran manage — but not choke — vessel transit through the Strait of Hormuz. Oman and Iran held several rounds of technical talks over the weekend, and CENTCOM did not announce new strikes for the first time in thirteen nights. That de-escalation has already pulled oil lower into the weekend, with Brent down roughly 4% to the $97 area and WTI near $89, which matters directly for gold’s safe-haven premium this week. Nothing here is durable yet — Trump has both threatened more strikes and said talks are progressing, Netanyahu visits Washington this week, and the Houthis’ Red Sea blockade threat is a live secondary risk — but the tone has shifted from escalation to a genuine off-ramp attempt for the first time since the conflict resumed in early July.

Layered directly on top of that is a US data-and-decision week that rivals anything seen this year. Wednesday’s FOMC decision is the anchor event: the Fed under Chair Kevin Warsh is priced at roughly 85% to hold the funds rate at 3.50–3.75% for a fourth straight meeting, with no Summary of Economic Projections or dot plot at this gathering — meaning the statement language and Warsh’s press conference tone are the entire catalyst. The setup is genuinely two-sided: last week’s jobless claims printed a surprisingly strong 187K versus 212K expected, reinforcing the case that the labour market doesn’t need help, while the disinflation trend earlier in July hasn’t been enough to buy back a single cut in market pricing. A hawkish hold reasserts the “higher for longer” trade; anything read as a dovish crack would move all three of our instruments quickly.

Thursday is the other pivotal session, with a genuine data avalanche: Eurozone Q2 GDP, preliminary German CPI, the Bank of England’s rate decision, and — in the same 8:30 AM ET window — US Q2 GDP, weekly jobless claims, and the Fed’s preferred inflation gauge, June PCE. The Bank of Japan also decides policy Thursday evening. Friday closes the week with preliminary French and Eurozone CPI, German unemployment, and the Chicago PMI. Note that Nonfarm Payrolls does not fall in this window — August 1 is a Saturday, pushing the jobs report to the following Friday, August 7 — so the labour-market narrative this week runs through jobless claims and Tuesday’s Consumer Confidence rather than NFP.

Earnings season adds another layer: 177 S&P 500 companies report this week, including Microsoft, Meta, Qualcomm, and ARM on Wednesday and Apple and Amazon on Thursday — directly relevant to GER40 given the index’s tech and semiconductor-adjacent exposure through names like Infineon and ASML-linked suppliers. Tuesday also brings an OPEC meeting worth watching given the oil-price volatility already in play from the Iran de-escalation headlines.

1. GER40 (Germany 40) — Holding the Range, Leaning Into the Top

Technical Landscape

The 4-hour chart shows the bigger story clearly: GER40 topped near 25,900 on July 6–8, crashed roughly 900 points into a low near 24,780, and has spent the three weeks since chopping inside a broad 24,700–25,200 band. That range is still intact. The index has just pushed back up toward the top of it, trading at 25,055 with the EMA ribbon (9 EMA ~24,963 / 18 EMA ~24,958) curling back upward beneath price after last week’s dip — a constructive short-term signal, but not yet a breakout.

The 1-hour chart shows the mechanics of the past week: a rally into 25,150–25,200 on July 22–23, a sharp flush back down to 24,760–24,800 into July 23–24 (the earnings-season/risk-off wobble), and a clean recovery back through the EMA ribbon into the current 25,035–25,080 zone. Price is sitting right on top of the 9 EMA, with structure still inside the established range rather than confirming a fresh leg either way.

GER40 has failed to break decisively out of the 24,700–25,200 range for three weeks, but the sequence of higher lows since July 17 and this week’s reclaim of the EMA ribbon both favour the bulls over the near term — especially with Iran de-escalation headlines pulling a geopolitical discount out of European risk assets. The counterweight is Wednesday’s FOMC and Thursday’s GDP/PCE cluster, either of which could inject fresh volatility in either direction. Treat this as a range trade that leans long into strength, not a trending market to chase in one direction.

Key Levels to Watch

Resistance - 25,150–25,200 — this week’s swing high and the top of the established range; a confirmed 4h close above here targets the next tier. - 25,450 — minor supply zone from the post-July 6 unwind. - 25,850–25,900 — the July 6 all-time high; only relevant on a genuine risk-on breakout.

Support - 24,960–25,000 — psychological level and the current EMA ribbon zone; the first line of defence for bulls. - 24,760–24,800 — this week’s pullback low. - 24,600–24,700 — the deeper range floor; losing this on a 4h close would be the first real sign the range is breaking down rather than holding.

Trade Ideas

Idea 1 — Range-Top Breakout Long (Primary Scenario) Buy strength rather than fade it, given the higher-lows structure and cooling geopolitical premium. - Entry: Buy on a confirmed 1h close above 25,150, or a pullback to 25,000–25,050 that holds the EMA ribbon - Target 1: 25,450 · Target 2: 25,850 - Stop-Loss: Below 24,800 - Rationale: The EMA ribbon has curled back up, the index has built a sequence of higher lows since July 17, and a de-escalating Iran conflict removes one of the main headwinds that capped the last two rallies. Strong mega-cap tech earnings midweek would add a supportive read-through.

Idea 2 — Range Fade at the Top (Alternative Scenario) If FOMC comes across as more hawkish than the 85% consensus prices in, or Thursday’s GDP/PCE surprises strong (reviving the “higher for longer” trade), fade the top of the range instead. - Entry: Sell on a rejection from 25,150–25,200 with a bearish 1h close - Target 1: 24,960 · Target 2: 24,760 - Stop-Loss: Above 25,300 - Rationale: The range has held for three weeks for a reason — until it’s actually broken, fading extremes with tight risk remains a valid lower-conviction play, particularly with two major US data catalysts still ahead.

Idea 3 — Reduced Size Through FOMC and Thursday’s Data Cluster Step aside or cut size for the 30–60 minutes around Wednesday’s 2:00 PM ET Fed decision and again for Thursday’s 8:30 AM ET US GDP/PCE release — both carry outsized potential to whip GER40 independent of the immediate technical picture.

2. EUR/USD — Range Floor Broken, Bears in Control Into FOMC

Technical Landscape

The 4-hour chart shows EUR/USD’s rejection from the July 16 high near 1.1480 has now turned into a genuine breakdown. After weeks compressing in the 1.1400–1.1460 band, price broke below 1.1400 in the past few sessions and is now trading at 1.1370, with the EMA ribbon (9 EMA 1.1382 / 18 EMA 1.1392) sloping down and sitting above price — a bearish configuration on the higher timeframe for the first time in over a week.

The 1-hour chart confirms the same picture with more granularity: a failed push toward 1.1480 gave way to a steady grind lower through the week, accelerating into a sharper break below 1.1400 into the current 1.1370–1.1400 zone. Price is trading below both the 9 EMA (1.1374) and the 18 EMA (1.1377), with lower highs and lower lows since July 17.

Most Likely Bias: Bearish Into FOMC

The break of 1.1400 — the pivot that had held for weeks — combined with a Fed that remains unwilling to price in cuts despite recent disinflation, tilts this week bearish for EUR/USD. The catalyst that could flip this quickly is Wednesday’s FOMC: any statement language read as opening a door to a September cut would hit the dollar hard and could reclaim 1.1400 fast. Absent that, the path of least resistance into Thursday’s GDP/PCE cluster is lower.

Key Levels to Watch

Resistance - 1.1400 — the broken range floor, now the first overhead level bulls need to reclaim. - 1.1440–1.1460 — the base of the prior multi-week consolidation. - 1.1480 — the July 16 swing high; only relevant on a clearly dovish Fed surprise.

Support - 1.1350 — the late-June swing low and first real support below current price. - 1.1320 — the deeper structural low for the month. - 1.1280–1.1300 — psychological round-number support if the broader downtrend resumes in earnest.

Trade Ideas

Idea 1 — Bearish Continuation (Primary Scenario) Sell rallies into broken support rather than chase the move at current levels. - Entry: Sell on a rejection from 1.1400–1.1420 (retest of broken range floor/EMA resistance), or on a confirmed 1h close below 1.1350 - Target 1: 1.1320 · Target 2: 1.1280 - Stop-Loss: Above 1.1460 - Rationale: The ribbon is bearishly configured on both timeframes, structure shows a clean sequence of lower highs, and a hawkish-leaning FOMC hold or a strong US GDP/PCE print Thursday would extend USD strength directly.

Idea 2 — Bullish Reversal on a Dovish Fed (Alternative Scenario) Requires a genuine catalyst — Fed language read as opening the door to a cut, a soft US GDP/PCE surprise, or a material Iran de-escalation headline that reduces flight-to-dollar flows. - Entry: Buy on a confirmed 1h close above 1.1420, or a pullback to 1.1390–1.1400 that holds as support after the reclaim - Target 1: 1.1460 · Target 2: 1.1480 - Stop-Loss: Below 1.1350 - Rationale: This is a reclaim-the-range trade — it needs the FOMC or Thursday’s data to genuinely surprise dovish, so treat it as reactive rather than something to pre-position for heavily.

Idea 3 — Reduced Size Through FOMC (Wednesday) and the GDP/PCE Cluster (Thursday) Both sessions carry the potential for outsized, headline-driven moves independent of the current technical setup. Reduce size or step aside for the release windows themselves.

3. XAU/USD (Gold) — Caught Between a Cooling War and a Hawkish Fed

Technical Landscape

The 4-hour chart shows gold’s choppy month continuing: a peak near 4,375 in mid-July gave way to a hard drop toward 4,000 by July 18–19, a rally back to roughly 4,175–4,200 into July 22–23, and another pullback into the current 4,053 level. Price is trading just below the EMA ribbon (9 EMA 4,061 / 18 EMA 4,066), which has flattened out after last week’s chop — an inflection zone rather than a clear directional signal.

The 1-hour chart shows the past two sessions more precisely: a rally into 4,130–4,160 on July 22–23, a sharp selloff back to the 4,020–4,040 zone into July 23–24, and a shallow recovery attempt that has stalled just below the EMA ribbon (9 EMA 4,058 / 18 EMA 4,058) at the current 4,053 print. This is the most balanced short-term structure gold has shown in over a week — no clean trend either way.

Most Likely Bias: Range-to-Bearish, Safe-Haven Premium Fading

Gold’s setup this week is genuinely two-sided, but the immediate pressure leans down. The pause in US airstrikes on Iran and the progress in Oman-mediated Strait of Hormuz talks pulled roughly 4% out of oil into the weekend, and that same de-escalation removes some of the safe-haven bid that had been propping gold up through most of July. Layer on a Fed that’s still priced to hold rates rather than cut, and the real-yield backdrop stays a headwind too. The offsetting risk is that this de-escalation is fragile — a single confirmed strike, a stalled talks headline, or a Netanyahu-Trump meeting that goes badly this week could reverse the safe-haven unwind quickly. Trade this one reactively and with smaller size.

Key Levels to Watch

Resistance - 4,090–4,100 — this week’s EMA-ribbon ceiling and the first upside level to reclaim. - 4,130–4,160 — the July 22–23 swing-high cluster. - 4,180–4,200 — the deeper overhead level from mid-July’s peak.

Support - 4,020–4,040 — this week’s pullback low and a minor shelf. - 4,000 — the key psychological level for the month. - 3,960–3,980 — the deeper July low; a break here would be a genuinely bearish signal.

Trade Ideas

Idea 1 — Bearish Fade at Resistance (Primary Scenario) With the safe-haven bid cooling and the Fed still on a hawkish hold path, fade strength into resistance rather than buy dips this week. - Entry: Sell on a failed retest of 4,090–4,100 with a 1h bearish rejection candle, or on a confirmed 1h close below 4,020 - Target 1: 4,000 · Target 2: 3,960 - Stop-Loss: Above 4,140 - Rationale: Price is trading below the EMA ribbon on both timeframes, the Iran de-escalation removes a key prop under the metal, and a hawkish FOMC or strong US GDP/PCE print Thursday would add real-yield pressure on top of that.

Idea 2 — Bullish Reversal on Renewed Escalation or a Dovish Fed (Alternative Scenario) Triggered by a confirmed breakdown in the Strait of Hormuz talks, a fresh strike, or a Fed surprise read as dovish. - Entry: Buy on a confirmed 1h close above 4,100, or a pullback to 4,050–4,060 that holds as support after the reclaim - Target 1: 4,160 · Target 2: 4,200 - Stop-Loss: Below 4,000 - Rationale: The war is not over, only paused — any credible sign the off-ramp attempt is failing would bring the safe-haven bid back quickly, and this remains the most headline-sensitive instrument of the three heading into a week already loaded with data risk.

Idea 3 — Reactive Positioning on Iran Headlines Treat this as a standing alert rather than a pre-planned entry: a confirmed resumption of US strikes, a collapse in the Oman-mediated talks, or an unexpected outcome from the Netanyahu-Trump meeting this week can each trigger a sharp, independent move in either direction. - Entry: React directly to confirmed high-impact headlines — buy breakouts above the pre-headline range high on escalation, sell breakdowns below the pre-headline range low on a confirmed durable ceasefire - Target: Scale out into the next resistance/support tier listed above - Stop-Loss: Beyond the pre-headline swing high/low - Rationale: Headline risk is genuinely two-directional this week for the first time in over a month — this is about being ready to react to either outcome, not about pre-positioning size in one direction.

Risk Considerations

FOMC Decision (Wednesday): A hold at 3.50–3.75% is priced at roughly 85%, with no dot plot at this meeting — meaning Chair Warsh’s press conference tone is the actual catalyst for all three instruments. A hawkish hold extends USD strength and pressures gold; any dovish crack flips the dollar trade quickly.

Iran War / Strait of Hormuz De-Escalation: The first genuine pause in strikes in nearly two weeks, with technical talks between Iran and Oman progressing. This is fragile and unconfirmed — a single new strike or a stalled-talks headline could reverse the recent pullback in oil and the associated pressure on gold within minutes. Netanyahu’s visit to Washington this week is a secondary wildcard.

Thursday’s Data Avalanche: Eurozone Q2 GDP, preliminary German CPI, the Bank of England decision, US Q2 GDP, US PCE, and the Bank of Japan decision all land within hours of each other. This is the single highest-volatility session of the week across GER40 and EUR/USD in particular.

US Earnings Season: 177 S&P 500 companies report this week, including Microsoft, Meta, Apple, and Amazon. Strong guidance from mega-cap tech would support risk appetite and read through positively to GER40’s tech-adjacent constituents; a disappointment would do the opposite.

No NFP This Week: With August 1 falling on a Saturday, Nonfarm Payrolls shifts to August 7. Tuesday’s Consumer Confidence and Thursday’s jobless claims are the closest labour-market proxies available this week.

Summary Outlook

This is a decision-and-data week layered on top of a genuinely improving — if still fragile — geopolitical backdrop, and position sizing should reflect that around Wednesday’s FOMC and Thursday’s data cluster in particular. GER40 is leaning into the top of its three-week range, with a cooling Iran conflict working in the bulls’ favour, though a hawkish Fed surprise could just as easily send it back toward the range floor. EUR/USD has broken its multi-week 1.1400 pivot and is the cleanest directional trade of the three heading into FOMC — bearish while below 1.1400, with the Fed decision as the swing factor. Gold sits at the most interesting crossroads: the safe-haven bid that carried it through most of July is fading alongside the de-escalation headlines, but the war isn’t over, only paused — trade it reactively, with smaller size, and respect that the next Iran headline could move it as much as the Fed.

Risk Disclaimer

This Weekly Market Outlook is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or trading signal. All scenarios and probabilities are estimates based on technical analysis and are subject to change. Trading leveraged instruments carries substantial risk of loss. Always use appropriate position sizing, stop losses, and risk management. Consult a licensed financial advisor before making investment decisions. Past performance is not indicative of future results.

Stay disciplined. Trade the chart, not the headline.– The FX Hermes TeamIf you find the content useful:

Risk Disclaimer

This Weekly Market Outlook is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or trading signal. All scenarios and probabilities are estimates based on technical analysis and are subject to change. Trading leveraged instruments carries substantial risk of loss. Always use appropriate position sizing, stop losses, and risk management. Consult a licensed financial advisor before making investment decisions. Past performance is not indicative of future results.

Stay disciplined. Trade the chart, not the headline.– The FX Hermes Team