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Dear Trader,

The week of July 6–10 opened with the outlook’s central question already framed: would Wednesday’s FOMC Minutes settle the tension between a hawkish June dot plot and a soft NFP print, or would something else entirely decide the tape? The answer turned out to be the latter. The Minutes themselves were a mixed, backward-looking document — a few participants saw a case for a hike in June, the majority remained worried about inflation, and Fed staff had marked up their 2026–27 inflation forecasts on the back of the Middle East conflict and AI-driven demand — but they landed almost as an afterthought. The real catalyst arrived a day early: Iran struck three tankers in the Strait of Hormuz, the US answered with fresh air strikes on Iranian targets, Tehran retaliated against US positions in Bahrain and Kuwait, and President Trump declared on Wednesday that “the Cease Fire is OVER,” even while leaving the door open to continued talks. Brent and WTI both surged more than 5–6% on the week, European equities took the sharpest hit of the three instruments on our board, gold whipsawed in both directions before ending lower, and EUR/USD — the one pair that “should” have moved on the Fed Minutes — spent the week going essentially nowhere. Here is the full accounting.

1. Germany 40 (DE40) — The Bullish Breakout That Became the Week’s Bearish Casualty

Verdict: Win on Idea 3 (Pre-Minutes Range), Loss on Idea 1 (Bullish Continuation), Win on Idea 2 (Bearish Pullback) — the index broke to fresh record highs before Wednesday’s geopolitical shock erased the entire move and then some

The Outlook The bias was bullish, with the 4-hour EMA ribbon in a clean uptrend after the rally from the mid-June low near 23,900 to the current 25,814 print. Idea 1 called for buying dips to 25,600–25,650 or a breakout close above 25,900, targeting 26,000 then 26,200, with a stop below 25,400. Idea 2 required a 4-hour close below 25,400 to confirm a bearish pullback, targeting 25,100 then 24,700. Idea 3 was a pre-FOMC Minutes range fade between 25,600 and 25,900.

What Happened The index opened Monday near 25,600–25,700 and did exactly what Idea 3 anticipated for the first day and a half — contained, two-way trade inside the prescribed band. Momentum then pushed the breakout scenario into play: DE40 tagged a fresh record high just above 25,900 through Monday and Tuesday, confirming Idea 1’s breakout trigger and putting the 26,000 target within reach. It never got there. Tuesday night into Wednesday brought the Iran escalation — the tanker attacks, the US strikes, Trump’s “ceasefire is over” declaration — and European equities sold off hard on the geopolitical shock rather than any dot-plot surprise. The index fell 1.1% at Wednesday’s open alone to 25,184, then kept sliding as the session progressed, with reports putting the week’s low in the 24,950–25,035 area — well through both the 25,400 stop-loss on Idea 1 and the 25,100 first target on Idea 2. Thursday saw a partial stabilization as markets digested the news, and Friday closed a volatile week roughly 0.2% lower at 25,067, capping a weekly decline of approximately 2.8% — the index’s worst week since the June selloff, and a near-total reversal of the prior week’s record-high breakout. The session’s damage was concentrated in AI- and industrials-exposed names (Siemens Energy, Infineon, Rheinmetall all fell sharply), while defensive and rate-sensitive names like Deutsche Telekom and the banks outperformed.

Trade PerformanceIdea 1 (buy 25,600–25,650 or breakout above 25,900, targets 26,000/26,200, stop below 25,400) triggered cleanly on the breakout above 25,900 early in the week — and was the week’s clear loser. Neither target was ever in range before Wednesday’s reversal took the index straight through the 25,400 stop with no bounce to exit on. A trade that looked like the highest-conviction setup on the board through Tuesday afternoon was underwater by Wednesday’s open.

Idea 2 (sell on 4-hour close below 25,400, targets 25,100/24,700) triggered on Wednesday’s break and delivered Target 1 at 25,100 in full as the index continued to the 24,950–25,035 area. Target 2 at 24,700 was not reached — the index found a floor roughly 250–350 points above that level and stabilized into Thursday — but this was still a clean, fast win for the contingency scenario that existed precisely for a hawkish-surprise or risk-off reversal.

Idea 3 (range fade 25,600–25,900, pre-Minutes) performed as designed through Monday and into Tuesday, offering clean two-way trade before the breakout — and then the geopolitical shock — closed the range for good.

The lesson from DE40 this week is close to a mirror image of the DE40 story from two weeks ago: then, the lower-probability Idea 2 fired decisively while the bearish primary scenario never got off the ground. This week, the higher-probability Idea 1 triggered exactly as scripted and still lost, because the catalyst that broke the chart wasn’t the one the outlook was built around. A weekend geopolitical escalation can invalidate a clean technical breakout within a single session — which is exactly why Idea 2 exists as a hard directional line, not a footnote.

2. EUR/USD — A Quiet Week That Validated the Range Scenario Almost Perfectly

Verdict: No clean trigger on Idea 1 or Idea 2 — Idea 3 (Pre-Minutes Range) was the week’s standout call on a pair that ultimately finished a handful of pips from where it started

The Outlook The bias was cautiously bullish/range, with the pair recovering from the June lows near 1.1330 but still inside a larger downtrend from May. Idea 1 called for buying a 1-hour close above 1.1470, or a pullback entry near 1.1405–1.1415, targeting 1.1500 then 1.1600, with a stop below 1.1370. Idea 2 required a confirmed 4-hour close below 1.1400, targeting 1.1370 then 1.1330, with a stop above 1.1470. Idea 3 was a pre-Minutes range fade between 1.1400 and 1.1470.

What Happened The pair opened near 1.1440 and spent the entire week doing almost exactly what Idea 3 described — a tight, low-volatility grind that one weekly wrap-up fairly called “uneventful,” finishing just a handful of pips above 1.1400. The week’s only real test came on Wednesday, when the combination of the FOMC Minutes and the Iran escalation briefly pushed the pair down to a week’s low of 1.1395 — a marginal wick through the 1.1400 line that never produced the confirmed 4-hour close below it that Idea 2 required, and the pair was back above 1.1400 within the same session. On the topside, the pair’s best moment came Friday, when it touched a week’s high of 1.14585 — just short of the 1.1470 confirmation level Idea 1’s breakout entry needed. A pullback entry near 1.1405–1.1415, however, would have been filled during Wednesday’s dip and remained open into the weekend, unrealized in either direction, with price closing the week near 1.1415. Underlying the calm was a genuine divergence of forces: dovish-leaning signals from soft Eurozone inflation and a cautious ECB read pulled one way, while rising oil prices and firmer rate-hike pricing pulled the other, and neither side won decisively enough to break the range.

Trade PerformanceIdea 1 did not achieve a clean win. The breakout trigger at 1.1470 was never reached (the week’s high stopped 1–2 pips short at 1.14585), while the pullback entry near 1.1405–1.1415 likely filled during Wednesday’s dip but produced no decisive move toward either the 1.1500 target or the 1.1370 stop by week’s end — an open, undecided position rather than a resolved trade.

Idea 2 correctly did not trigger. The 1.1400 line was tested with a brief wick to 1.1395 but never gave way on a confirmed close, meaning no short was taken — and a trader who had jumped the gun on that Wednesday dip would have been fighting a pair that recovered within hours.

Idea 3 was the week’s cleanest read. The 1.1400–1.1470 band held almost to the pip for five straight sessions, with the only real drama being a same-session wick below the floor that reversed before it meant anything.

This week is a useful companion to the DE40 story: two instruments, two very different lessons about the same Wednesday catalyst. DE40 broke its range and its stop in the same session. EUR/USD tested both edges of its range and respected both — proof that even a week built around a major scheduled release and a geopolitical shock can still end up being about discipline and patience rather than a big directional call.

3. XAU/USD (Gold) — The Bearish Pullback Delivered, and the Deep Dip Buy Was a Near-Miss by Design

Verdict: Win on Idea 2 (Bearish Pullback) — gold rejected resistance and broke down almost exactly as scripted; Idea 3’s structural floor was tagged within $21 of its limit but technically never filled, while Idea 1’s bullish continuation was the week’s clear loser

The Outlook The bias was short-term bullish/bounce within a larger correction, with gold recovering sharply from the July 1 low near 3,980–4,000 to a current level near 4,175. Idea 1 called for buying pullbacks toward 4,140–4,150 or a breakout above 4,200, targeting 4,260 then 4,360, with a stop below 4,100. Idea 2 required a rejection from 4,180–4,200 or a confirmed 4-hour close below 4,100, targeting 4,000 then 3,980, with a stop above 4,240. Idea 3 was a limit buy at 3,980–4,000 on a confirmed reversal, targeting 4,100, then 4,180, then 4,260.

What Happened Gold opened the week near 4,175–4,180 and pushed toward the 4,196–4,200 zone through Monday and Tuesday — testing, but never decisively clearing, the resistance Idea 2 had flagged as its rejection trigger. That rejection is exactly what followed. Wednesday’s Iran escalation initially looked like textbook safe-haven fuel, but rising Treasury yields and firming rate-hike pricing (markets moved toward pricing in a real chance of a September hike as oil-driven inflation fears resurfaced) overwhelmed the geopolitical bid, and gold broke hard through the 4,100 level Idea 2 required for its breakdown confirmation. The decline extended all the way to a week’s low of $4,021 on Thursday — just $21 short of the 3,980–4,000 zone Idea 3 had marked as the highest-conviction long entry on the board, and just above Idea 2’s second target at 3,980. From there gold reversed, climbing back above 4,100 by Thursday’s close and testing as high as roughly 4,135–4,196 intraday on Friday before settling back near 4,103–4,120, essentially flat on the day and down approximately 1.5% for the week — its first weekly decline after the prior week’s sharp bounce.

Trade PerformanceIdea 1 (buy 4,140–4,150 or breakout above 4,200, targets 4,260/4,360, stop below 4,100) triggered on the pullback entry during Tuesday’s consolidation and was stopped out cleanly on Wednesday’s breakdown — the week’s clearest loser on the gold board, and a reminder that a bounce inside a larger correction remains vulnerable exactly where the outlook said it was.

Idea 2 (sell on rejection from 4,180–4,200 or a close below 4,100, targets 4,000/3,980) was the standout setup of the week. The rejection came first, right at the flagged resistance, and the breakdown followed on schedule; the $4,021 low effectively delivered Target 1 in substance if not to the exact dollar, and came within $41 of Target 2 as well. The stop above 4,240 was never remotely threatened.

Idea 3 (limit buy 3,980–4,005 on confirmed reversal, targets 4,100/4,180/4,260) is this week’s cleanest illustration of the discipline that Idea 1 in EUR/USD’s outlook demonstrated two weeks ago: the zone was almost reached, but “almost” is not a fill. The $4,021 low stopped $21 short of the limit-buy zone, meaning a trader following the plan as written was never filled — and therefore never exposed to the sharp reversal that immediately followed, which happened to be in the trade’s favor. The underlying structural thesis was vindicated (the reversal off the low was real, and gold did reclaim 4,100 within a day), but the framework’s job is to specify the price, not the narrative, and the price criterion was not met.

Gold this week is the rare case where being right about the story and being triggered on the trade are two different outcomes — Idea 3’s zone was close enough to validate the thesis behind it, while remaining just far enough away to keep the framework’s discipline intact.

Weekly Summary & Lessons Learned

The week of July 6–10 was framed around a single scheduled catalyst — Wednesday’s FOMC Minutes — and ended up being decided by a different one entirely. The Minutes themselves were backward-looking and modestly hawkish at the margins, but markets had largely moved past the June meeting by the time they landed. The Iran escalation that broke out the same day was the real driver across all three instruments, and it produced three distinctly different outcomes depending on how each outlook’s contingency scenarios were built.

DE40 delivered the week’s most violent reversal: Idea 1’s bullish breakout triggered exactly as designed on a fresh record high, then was stopped out within 48 hours as the geopolitical shock erased the entire move. Idea 2 — built for precisely this kind of reversal — captured the bulk of the subsequent decline. The lesson isn’t that the bullish breakout call was wrong at the time; the EMA ribbon and the pattern of higher highs were real. The lesson is that a scheduled-event outlook needs a contingency for the catalyst that isn’t on the calendar, and this week, that was Idea 2’s entire reason for existing.

EUR/USD was the week’s case study in a range holding under real pressure. Both edges of the 1.1400–1.1470 band were tested — the top by Friday’s rally, the bottom by Wednesday’s wick — and neither gave way on a confirmed basis. The pair that “should” have been most exposed to the FOMC Minutes ended up the calmest instrument on the board, a reminder that scheduled catalysts don’t always produce the reaction the calendar implies, especially when offsetting forces (soft Eurozone inflation versus rising oil-driven rate expectations) are pulling in opposite directions at the same time.

XAU/USD produced the week’s cleanest directional win and its subtlest discipline lesson in the same instrument. Idea 2’s rejection-and-breakdown sequence played out almost to the letter, while Idea 3’s structural-floor entry came within $21 of filling and didn’t — a near-miss that, in hindsight, protected a trader who followed the plan from a level of drawdown risk that the printed limit price was specifically designed to avoid, even though the broader bounce thesis behind Idea 3 was ultimately proven correct.

The overarching lesson of July 6–10 is that pre-built contingency scenarios matter most when the catalyst that actually moves the market isn’t the one at the top of the calendar. A hawkish-or-dovish Fed Minutes framework did little to explain a week that was decided by tanker attacks in the Strait of Hormuz — but because each outlook had a bearish contingency with a specific trigger price rather than a vague “risk-off” warning, the framework still had an answer ready when the actual catalyst arrived from a different direction entirely.

Our full outlook for the week ahead will be published before Monday’s open, with markets now digesting whether DE40 can rebuild its record-high structure from a lower base, whether EUR/USD’s five-session range can hold through a new data calendar, and whether gold’s rejection from resistance marks a return to the broader corrective trend or another buyable dip inside it.

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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