Dear Trader,

The week of June 29–July 3 had a single hinge point, and it arrived exactly where the outlook said it would: Thursday’s Nonfarm Payrolls. Everything before it — Tuesday’s consumer confidence read, Wednesday’s ADP/ISM double bill, Warsh’s Sintra debut — was positioning. Everything after it was consequence. The June jobs report landed at just 57,000, barely half the ~110–115K consensus and the weakest print in four months, with April and May revised down a combined 74,000 on top of it. The unemployment rate ticked down to 4.2%, but only because the participation rate slumped to 61.5%, its lowest since March 2021 — not the kind of improvement the dollar bulls wanted. The market’s reaction was immediate and one-directional: September rate-hike odds on the CME FedWatch tool collapsed from roughly 66–67% to a coin-flip near 50%, the dollar posted its largest weekly decline since April, and every instrument on our board broke the same way — higher.

The macro build-up mattered too. Wednesday’s ADP report undershot at 98,000 versus ~110–118K expected, and the ISM Manufacturing PMI eased to 53.3 against a ~53.8–54 forecast — still comfortably in expansion, but soft enough to prime the market for a weak NFP before it arrived. Fed Chair Kevin Warsh made his international debut at the ECB’s Sintra forum the same day, sharing a stage with Lagarde, Bailey, and Macklem. He gave the market nothing to trade: no July signal, a reaffirmation that “prices are too high,” and a pointed rejection of forward guidance as a policy tool alongside his central-bank peers. This was not the dovish surprise Idea 2 in the EUR/USD and DE40 outlooks required — the pivot, when it came a day later, was delivered entirely by the labour data, not by the Fed chair’s words. Geopolitics added a false start early in the week: a weekend exchange of fire between US and Iranian forces near the Strait of Hormuz put risk assets on the back foot Monday, with gold initially dropping over 1.5% even on safe-haven logic, before a US official signalled both sides would stand down and shipping through the strait continued recovering faster than feared. By Friday, oil was back near pre-war levels and the geopolitical risk premium had faded from every chart. Here is the full accounting.

1. Germany 40 (DE40) — The Bearish Case Never Got Off the Ground

Verdict: Loss on Idea 1 (Bearish Continuation), Decisive Win on Idea 2 (Bullish Reversal) — the index didn’t just reverse, it broke to fresh record highs

The Outlook The bias was cautiously bearish to range-bound, with the 4-hour EMA ribbon in bearish configuration after a sequence of lower highs from 25,400 down to the 24,750 area. Idea 1 called for selling a recovery into 24,880–24,930 on a confirmed 1-hour rejection, targeting 24,640, then 24,400, with a stop above 25,050. Idea 2 required a 4-hour close above 24,950 to confirm a bullish reversal, targeting 25,100 and 25,250. Idea 3 was a pre-NFP range fade between 24,600 and 24,950 through Wednesday.

What Happened The index opened the week near 24,750 and did exactly what Idea 3 anticipated through Monday and into Tuesday — contained, two-way trade inside the prescribed band, with no clean directional conviction ahead of the data calendar. Wednesday changed the character of the week. The soft ADP print and marginally weaker ISM reading were read as early evidence that the labour market was cooling faster than the Fed’s hawkish hold implied, and the DE40 began grinding higher through the session, closing well above the 24,950 confirmation level Idea 2 required. Thursday’s NFP shock — 57K against ~110–115K expected — removed any remaining doubt. European equities, unburdened by the Fed’s rate path and cheered by a weaker dollar, accelerated hard: the index tore through 25,100 and 25,250 in the same session the outlook had flagged as its bull targets, and kept going. Friday extended the move into a genuine breakout: the DAX rose roughly 0.8–0.9% on the session alone to close near 25,779, a fresh all-time high, capping a weekly gain of approximately 4.7% — its best week in over a month, alongside the broader STOXX 600. The gains were led by Siemens (+2.6% on a Kepler Cheuvreux upgrade) and E.ON (+4.2%), with defence names also firm as the sector priced in higher European spending; Rheinmetall was the one visible casualty, falling roughly 2.3% after the German government cancelled the F126 frigate programme, a headline the outlook had no way of anticipating. The 1-hour chart at week’s close shows price well above both EMAs, with the 9 EMA (orange) and 18 EMA (black) both sloped steeply upward and no sign of the bearish separation the outlook’s primary scenario required.

Trade PerformanceIdea 1 (sell 24,880–24,930, targets 24,640/24,400/24,200, stop above 25,050) never had a chance to work as designed and was the week’s clear loser. Any short entered on the Monday–Tuesday consolidation would have been stopped out by Wednesday’s break above 25,050, well before either target came into view. The bearish EMA configuration that justified this idea a week earlier was invalidated the moment the ADP/ISM data landed soft rather than resilient.

Idea 2 (buy on 4-hour close above 24,950, targets 25,100/25,250) triggered cleanly on Wednesday’s close and delivered both targets in full by Thursday’s session — Target 2 at 25,250 was cleared with room to spare, and the index continued running well beyond the scenario’s original scope into Friday’s record close near 25,779. For traders who stayed with the trade past Target 2 using a trailing stop rather than a fixed exit, this was the standout result of the week across all three instruments.

Idea 3 (range fade 24,600–24,950, Monday–Wednesday) performed exactly as intended for the first two sessions, offering clean intraday oscillations before the Wednesday breakout closed the range for good — a textbook example of a contingency scenario earning its keep before yielding to the directional trade.

The DE40 this week is a reminder that a “cautiously bearish” bias is a probability statement, not a certainty, and that Idea 2 exists precisely for the weeks when the lower-probability scenario is the one that fires. When it fires this decisively, being positioned for it — rather than fighting it from the wrong side — is the entire game.

2. EUR/USD — The Primary Short Never Triggered, and That Was the Right Outcome

Verdict: No-Trade on Idea 1 (Bearish Continuation) — the entry zone was breached with bullish force rather than rejected; Idea 2’s fundamental thesis was vindicated even though its strict technical trigger was not met

The Outlook The bias was firmly bearish, framed as a 4-hour bear flag following the break to multi-week lows near 1.1300 after the June FOMC. Idea 1 called for selling the recovery bounce into 1.1430–1.1455 on a confirmed 1-hour bearish rejection, targeting 1.1360, then 1.1300, with a stop above 1.1520. Idea 2 required a June NFP print below 130K combined with dovish Warsh language at Sintra to justify a 4-hour close above 1.1520, targeting 1.1600 and 1.1650.

What Happened The pair opened near 1.1415 and spent Monday and Tuesday consolidating in a tight band, occasionally probing toward the 1.1380s without a decisive break of either side — a quieter open than the DE40’s. Wednesday’s soft ADP and ISM readings began chipping away at dollar support, and the pair pushed into the 1.1430–1.1455 zone that Idea 1 had identified as the sell trigger. Critically, price did not reject from that zone — there was no confirmed 1-hour bearish candle, no rollover, just a continuation through it on thinning dollar strength. That absence of a rejection signal was the framework working as designed: the entry criteria simply were not met, and no short was taken. Thursday’s NFP miss removed any remaining ambiguity. EUR/USD surged to the 1.1470 area — a multi-day peak — as the dollar posted its steepest one-day slide of the week. Warsh’s Wednesday comments had been hawkish, not dovish, so Idea 2’s precise dual-condition trigger (weak NFP and dovish Warsh) was only half-satisfied, and the pair never produced the clean 4-hour close above 1.1520 the scenario required for a formal long entry. Friday’s holiday-thinned session saw the pair consolidate around 1.1440–1.1460 as US markets closed for Independence Day, with the earlier Trump tariff headlines (a proposed 15–20% minimum levy on EU goods) doing nothing to arrest the move. The pair has pulled back modestly into the weekend, last near 1.1438, but the week’s structural takeaway stands: the multi-week downtrend that defined May and June did not extend, and the 1-hour EMA ribbon has now flipped constructively for the first time in over a month.

Trade PerformanceIdea 1 correctly did not trigger. This is the result to highlight this week — the discipline of waiting for a confirmed rejection candle rather than shorting into round numbers on schedule prevented a loss that would otherwise have run from the 1.1440s toward the eventual 1.1470 high with no favourable exit in between. A trader who had shorted anticipation of the ribbon rather than on confirmation would have been underwater by Thursday afternoon.

Idea 2 did not achieve its literal trigger (Warsh stayed hawkish, and 1.1520 was never touched), but the directional thesis behind it — that a sufficiently weak NFP alone could overwhelm the bearish structure — was proven correct almost to the letter. The lesson for the coming week is that the 1.1520 threshold set in the outlook may have been calibrated to a scenario requiring two confirming inputs; a single, sufficiently extreme input (a 57K NFP is a five-sigma miss by recent standards) can do the job alone.

This week is the cleanest illustration in recent memory of why Idea 1 in a trade plan needs a confirmation trigger and not just a price zone. The zone was reached. The rejection never came. Not trading was the trade.

3. XAU/USD (Gold) — Idea 3 Was the Week’s Best-Executed Setup on the Board

Verdict: Win on Idea 3 (Buy the Structural Floor) and Idea 2 (Bullish Breakout) — gold snapped a four-week losing streak with its best week since the FOMC flush, while Idea 1’s bearish setup never found its entry

The Outlook The bias was range-bound with a bearish medium-term lean and an explicit geopolitical wildcard. Idea 1 called for selling a failed recovery at 4,080–4,095, targeting 4,020, then 3,970, with a stop above 4,160. Idea 2 required a 4-hour close above 4,100 combined with a weak NFP or Iran escalation, targeting 4,180 and 4,320. Idea 3 was the highest-conviction setup on the board: a limit buy at 3,980–4,005 on a confirmed reversal candle, targeting 4,100, then 4,180, then 4,320.
​

What Happened Gold opened near 4,060 and immediately ran into the weekend’s Hormuz headline risk — the metal fell more than 1.5% on Monday even on what should have been supportive safe-haven logic, as the initial panic gave way to reports that both sides would stand down and that shipping through the strait was recovering faster than analysts expected. That decline carried gold directly into the 3,970–4,000 zone Idea 3 had flagged as the highest-conviction long entry on the entire chart. Tuesday’s continued consolidation in that zone, followed by a basing pattern into Wednesday, offered the confirmed reversal structure the framework required — and gold began climbing from there, trading near 4,037 by Wednesday’s close as the soft ADP and ISM readings pressured the dollar. Thursday’s NFP miss was the accelerant: gold jumped above the 4,100 level intraday, satisfying Idea 2’s breakout confirmation on the same day the fundamental catalyst (weak NFP) arrived, and closed the session at an eight-month-low rebound high. Friday extended the move further still — spot gold traded as high as roughly 4,196 intraday before settling near 4,174, comfortably inside Idea 3’s Target 2 zone at 4,180, and posting a weekly gain of approximately 2% that snapped four consecutive weekly declines. Central bank buying (a reported 41 tonnes added to reserves in May) provided a structural tailwind underneath the macro move. The 1-hour chart at week’s close shows price well above both EMAs with the ribbon in confirmed bullish alignment — a complete reversal of the picture from the prior Friday.

Trade PerformanceIdea 1 (sell 4,080–4,095, targets 4,020/3,970/3,880) never triggered. Gold spent the first half of the week below the entry zone entirely, falling toward 3,970 rather than rallying into 4,080 first — the setup required a recovery into resistance that the price action never offered. No loss, no trade.

Idea 2 (buy on 4-hour close above 4,100, targets 4,180/4,320) triggered cleanly on Thursday as the NFP catalyst delivered exactly the confirmation this scenario specified. Target 1 at 4,180 was reached on Friday; Target 2 at 4,320 remains open into the following week.

Idea 3 (limit buy 3,980–4,005 on confirmed reversal, targets 4,100/4,180/4,320) was the week’s standout execution. The entry zone was tagged early in the week exactly where the outlook identified it, the reversal confirmed mid-week, Target 1 at 4,100 was cleared by Thursday, and Target 2 at 4,180 was reached by Friday’s close — three of three price objectives behaving precisely as the framework described, with the extended target at 4,320 still in play. The stop-loss below 3,920 was never remotely threatened; the week’s low printed comfortably above that level.

Gold this week validated the outlook’s own language almost word for word: the structural floor identified after the FOMC flush was, in fact, “one of the best-defined technical reference points on the chart,” and the reward-to-risk from that zone was exactly as compelling as advertised.

Weekly Summary & Lessons Learned

The week of June 29–July 3 was a single-catalyst week wearing a multi-catalyst costume. Tuesday’s consumer confidence data, Wednesday’s ADP/ISM releases, and Warsh’s Sintra appearance all mattered, but only as a build-up — each one chipped away at the hawkish-hold consensus without breaking it outright. Thursday’s NFP miss was the release that actually broke it, and every instrument on the board repriced in the same direction within hours of the 15:30 Athens release.

DE40 delivered the week’s most emphatic result: Idea 1’s bearish primary scenario was invalidated by Wednesday and stopped out cleanly, while Idea 2’s bullish reversal — the lower-probability contingency — not only triggered but ran roughly 800 points past its own Target 2 into a fresh record close. The lesson isn’t that the bearish bias was wrong to publish; the EMA ribbon and the pattern of lower highs were real at the time of writing. The lesson is that a well-built Idea 2 exists precisely to catch weeks like this one, and traders who treated the 24,950 level as a hard directional line — long above it, no shorts below it — captured the move regardless of which scenario they favoured going in.

EUR/USD is this week’s case study in the value of not trading. The bearish continuation setup was well-reasoned and the resistance zone was reached exactly on schedule — but the absence of a rejection candle at 1.1430–1.1455 was information, and respecting that absence prevented a loss on a pair that went on to rally 350+ pips from the outlook’s own stop-loss reference point. The six-week downtrend did not merely pause this week; it produced its first 1-hour bullish EMA cross since mid-May.

XAU/USD was the week’s cleanest directional win. Idea 3 — explicitly flagged as “the most compelling reward-to-risk available across all three instruments” — delivered on that promise almost mechanically: entry zone tagged, reversal confirmed, two of three targets reached, third still open. The Monday sell-off on Hormuz headlines that initially looked like a continuation of the four-week downtrend turned out to be the final flush into the exact zone the framework had marked for accumulation.

The overarching lesson of June 29–July 3 is that a single sufficiently extreme data point can override a multi-week technical structure and a hawkish policy narrative simultaneously — and that the value of a trading framework isn’t in predicting which data point that will be, but in having pre-built, price-triggered scenarios ready on both sides of the market so that whichever one arrives, there is already a plan waiting for it. This week, it was Thursday’s payrolls number. It won’t always be.

Our full outlook for the week ahead will be published before Monday’s open, with markets now digesting whether the DE40’s breakout has room to extend from record territory, whether EUR/USD can build a base above 1.1400, and whether gold’s reclaim of the $4,100–4,180 zone marks the start of a genuine trend change or another counter-trend rally inside a larger downtrend.

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

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