Dear Trader,

Market Overview & Key Events

The week opens with the dollar on the back foot after last week’s June Non-Farm Payrolls print landed at just +57K, badly missing consensus and reviving Fed rate-cut speculation only weeks after Chair Warsh’s hawkish debut and upwardly revised dot plot at the June 16–17 FOMC meeting. That contradiction — a hawkish Fed narrative colliding with a suddenly soft labor market — is exactly why this week’s calendar matters so much.

The single biggest catalyst is the FOMC Minutes from the June 16–17 meeting, released Wednesday, July 8 at 2:00 PM ET. Traders will dissect the committee’s internal debate for any cracks in the hawkish consensus, especially in light of the payrolls miss that arrived two weeks later. A minutes release that reveals more dovish dissent or data-dependency language would extend the current USD-weakness/risk-on move; a reaffirmed hawkish tone would risk a sharp dollar snap-back.

Supporting data points bracket that release: US ISM Services PMI (Monday), ADP employment change (Tuesday), and weekly initial jobless claims (Thursday) will all be read through the lens of “is the labor market actually cracking, or was NFP a one-off.” On the European side, Eurozone retail sales (Monday) and German CPI (Friday) are secondary but relevant for EUR crosses, while Canadian labour data (Friday) rounds out the week. None of this displaces the ongoing background risk of US–EU tariff headlines, with the White House continuing to push for 15–20% minimum tariffs on EU goods — a theme that can move EUR/USD and DE40 independently of the data calendar.

1. Germany 40 (DE40) — Bullish Trend, Fresh Highs

Technical Landscape

The 4-hour chart shows a decisive uptrend. After a sharp corrective low near 23,900 in mid-June, DE40 recovered to the 25,100 area, pulled back to retest 24,600–24,700 in late June, and has since staged an aggressive rally to fresh highs above 25,800. Both EMAs have turned firmly higher, with the 9 EMA (orange, ~25,622) leading the 18 EMA (grey/black, ~25,421) — a clean bullish ribbon configuration with no signs of exhaustion yet.

The 1-hour chart confirms the same picture in miniature: a steady stair-step climb from the June 29 low near 24,650 to the current 25,814 print, price consistently holding above both EMAs on pullbacks. There’s no bearish divergence or rejection candle at the highs yet, though the pace of the rally (a near-vertical push from 25,000 to 25,650 in a single session) leaves it stretched short-term.

Most Likely Bias: Bullish

The trend is unambiguous on both timeframes. A weak dollar backdrop and risk-on sentiment following the soft NFP print are supportive of further upside, but the index is extended and vulnerable to a sharp pullback into the FOMC Minutes on Wednesday if the tone surprises hawkish.

Key Levels to Watch

Resistance: - 25,850–25,900 — immediate overhead, marginal new-high territory - 26,000 — psychological round number, likely magnet if momentum continues - 26,200–26,300 — next structural target if a breakout extends cleanly

Support: - 25,600–25,650 — the 9 EMA on the 4h chart; first line of defence for bulls - 25,400–25,450 — the 18 EMA and prior breakout shelf; a close below here would suggest the rally is pausing - 25,050–25,100 — the mid-June swing high, now the key structural support; a break back below this would seriously damage the bullish case

Trade Ideas

Idea 1 — Bullish Continuation (Primary Scenario) Buy pullbacks toward the 9 EMA as long as the ribbon stays bullish, ideally confirmed by a 1h bullish rejection candle. - Entry: Buy on a dip to 25,600–25,650, or on a fresh breakout close above 25,900 - Target 1: 26,000 · Target 2: 26,200 - Stop-Loss: Below 25,400 - Rationale: Trend, momentum, and a weak-dollar macro backdrop all align. Risk is a hawkish FOMC Minutes surprise reigniting dollar strength and denting risk appetite.

Idea 2 — Bearish Pullback (Alternative Scenario) If Wednesday’s Minutes read hawkish and equities sell off broadly, look for a break of the EMA ribbon. - Entry: Sell on a confirmed 4h close below 25,400 - Target 1: 25,100 · Target 2: 24,700 - Stop-Loss: Above 25,700 - Rationale: A trend this extended can correct quickly once the macro narrative flips; the prior consolidation zone near 25,100 becomes the first magnet on any reversal.

Idea 3 — Range Strategy (Pre-FOMC Minutes) Ahead of Wednesday’s release, expect chop between 25,600 and 25,900. Fade extremes with tight stops and reduced size, and avoid holding a full position into the 2:00 PM ET release.

2. EUR/USD — Recovery Attempt Within a Broader Downtrend

Technical Landscape

The 4-hour chart tells a two-act story. EUR/USD topped near 1.1680 in late May, then sold off hard through June — driven largely by the hawkish FOMC hold and Warsh’s upwardly revised dot plot — bottoming near 1.1330 by June 18–19. Since then price has chopped in a recovery range, pushing as high as 1.1460 in the past few sessions before settling back to 1.1438. The 9 EMA has crossed back above the 18 EMA, a short-term bullish signal, but the 18 EMA itself is only just flattening after months of decline — this is a recovery, not yet a confirmed trend reversal.

The 1-hour chart shows the same pattern: a sharp rally from the 1.1380 area into 1.1460, followed by a pullback to the current 1.1438, with price now consolidating right on top of both EMAs. Momentum has clearly cooled from the sharp bullish impulse candle a few sessions back.
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Most Likely Bias: Cautiously Bullish / Range

The weak NFP print favours continued dollar softness short-term, and the bullish EMA cross supports further upside. However, EUR/USD remains inside a larger downtrend from May, and the FOMC Minutes on Wednesday is a binary risk that could either confirm the recovery or send price back toward the June lows.

Key Levels to Watch

Resistance: - 1.1460–1.1470 — immediate swing high, capping the last several sessions - 1.1500 — psychological level and next meaningful resistance - 1.1600 — structural resistance from the June breakdown zone; a bigger medium-term target

Support: - 1.1400 — round-number pivot and near-term structural support - 1.1370–1.1380 — the recent 1h consolidation low - 1.1330–1.1340 — the June structural low; a break here would resume the broader downtrend

Trade Ideas

Idea 1 — Bullish Continuation (Primary Scenario) Buy on a hold of 1.1400 or a confirmed breakout above 1.1470, ideally on a dovish-leaning FOMC Minutes read. - Entry: Buy on a 1h close above 1.1470, or a pullback entry near 1.1405–1.1415 - Target 1: 1.1500 · Target 2: 1.1600 - Stop-Loss: Below 1.1370 - Rationale: Bullish EMA cross plus a soft-dollar macro backdrop favour continuation, but this remains a counter-trend trade relative to the May–June downtrend, so sizing should stay moderate.

Idea 2 — Bearish Reversal (Alternative Scenario) If the FOMC Minutes reaffirm hawkish resolve, or ADP/ISM data surprise strong enough to push back on rate-cut pricing, look for a break back below 1.1400. - Entry: Sell on a confirmed 4h close below 1.1400 - Target 1: 1.1370 · Target 2: 1.1330 - Stop-Loss: Above 1.1470 - Rationale: The broader trend since May has been down; a hawkish surprise this week would likely resume it, with the June low as the first real target.

Idea 3 — Range Strategy (Pre-FOMC Minutes) Expect consolidation between 1.1400 and 1.1470 into Wednesday afternoon. Fade extremes with tight stops, and stand aside or reduce size in the two hours surrounding the 2:00 PM ET release.

3. XAU/USD (Gold) — Sharp Bounce, Testing First Resistance

Technical Landscape

The 4-hour chart shows gold’s brutal correction from a mid-June peak near 4,600 down to the 3,980–4,000 area by July 1 — a drop of roughly $600 tied to the post-FOMC dollar rally. Since then, price has staged a sharp V-shaped recovery to the current 4,175 level. The 9 EMA has turned up and is trying to cross the 18 EMA, but the 18 EMA (still near 4,107) remains well below price — a sign this bounce is still young relative to the size of the preceding decline.

The 1-hour chart shows the bounce in more detail: a clean impulsive move from 3,980 to a high of 4,180, now consolidating just below that high with both EMAs (9 at ~4,171, 18 at ~4,163) sloping upward and supporting price on dips.

Most Likely Bias: Short-Term Bullish / Bounce Within a Larger Correction

The weak NFP print and softer dollar are the direct drivers of this recovery, and near-term momentum favours a test of the 4,180–4,200 zone. However, given the depth of the preceding sell-off, this should be treated as a recovery bounce until proven otherwise — a hawkish FOMC Minutes surprise could quickly cap it.

Key Levels to Watch

Resistance: - 4,180–4,200 — immediate high and round-number resistance; the key line in the sand for this week - 4,240–4,260 — next shelf, a prior consolidation zone from mid-June - 4,320–4,360 — bigger resistance, the pre-breakdown congestion zone from June 17–18

Support: - 4,140–4,150 — the 9 EMA on the 1h chart, first line of defence - 4,100 — round number and 18 EMA convergence area on the 4h - 3,980–4,000 — the structural low from July 1; a break back below here would resume the broader downtrend

Trade Ideas

Idea 1 — Bullish Continuation (Primary Scenario) Buy pullbacks toward the EMA cluster as long as 4,100 holds, targeting a breakout above 4,200. - Entry: Buy on a dip to 4,140–4,150, or on a confirmed 1h close above 4,200 - Target 1: 4,260 · Target 2: 4,360 - Stop-Loss: Below 4,100 - Rationale: Momentum and a softer-dollar backdrop favour continuation of the bounce, but this is a counter-trend trade against the dominant June downtrend — a hawkish Fed surprise is the main risk.

Idea 2 — Bearish Pullback (Alternative Scenario) If the FOMC Minutes reaffirm a hawkish stance and the dollar rebounds, look for gold to roll back over from resistance. - Entry: Sell on a rejection from 4,180–4,200, or a confirmed 4h close below 4,100 - Target 1: 4,000 · Target 2: 3,980 - Stop-Loss: Above 4,240 - Rationale: The dominant trend since mid-June has been down; a hawkish catalyst would likely resume it quickly given how sharp the bounce has been.

Idea 3 — Buy the Dip at Structural Support If gold sells off hard back toward 3,980–4,000 this week — on a hawkish surprise or broad dollar strength — this is the highest-probability medium-term long zone. - Entry: Limit buy near 4,000, or market entry on a confirmed 1h bullish reversal candle - Target 1: 4,150 · Target 2: 4,260 - Stop-Loss: Below 3,940 - Rationale: This level already acted as a structural low once this cycle; a retest with a clean reversal signal offers favourable risk/reward.

Risk Considerations

FOMC Minutes — Wednesday, July 8, 2:00 PM ET: The single most important scheduled event of the week. The market wants clarity on how much internal disagreement existed at the June meeting given the hawkish dot plot, especially now that payrolls have badly missed. A dovish-leaning read extends USD weakness across all three instruments; a hawkish reaffirmation risks a sharp reversal in EUR/USD and gold, and a pullback in DE40.

Labor Market Data (ISM Services Monday, ADP Tuesday, Jobless Claims Thursday): Each of these will be read as confirmation or denial of the NFP miss. A run of weak prints would reinforce the current dollar-weak, risk-on tone; stronger-than-expected data would undercut it and could trigger a USD bounce ahead of the Minutes even.

US–EU Tariff Headlines: Ongoing background risk. Any escalation toward the reported 15–20% minimum tariff push would be a headwind for EUR/USD and could weigh on DE40 given Germany’s export exposure, while providing a modest safe-haven bid for gold.

Extended Positioning: All three instruments have moved sharply in the same direction (USD weaker) over the past week. Crowded positioning increases the risk of a sharp, fast reversal on any hawkish surprise — size accordingly into Wednesday.

Summary Outlook

The dollar-weakness theme from last week’s payrolls miss is the dominant force heading into this week, but Wednesday’s FOMC Minutes is the event that will determine whether it continues or reverses. DE40 is the cleanest bullish trend of the three and the highest-conviction long while the EMA ribbon stays intact above 25,400. EUR/USD is a cautious long above 1.1400 but remains inside a larger downtrend — treat any move toward 1.1500+ as a level to take profit rather than chase. Gold is the highest-risk, highest-reward setup: a strong bounce off a deep correction, with 4,180–4,200 the key test this week and 3,980–4,000 the level to watch for a high-probability dip-buy if the Minutes disappoint.

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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