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1. EURUSD moves toward a familiar topside target area

   The EURUSD has extended its rally, climbing to a new session high of 1.1456 as the U.S. dollar remains under pressure following another round of softer-than-expected U.S. inflation data. This week's CPI and today's PPI reports have reinforced the view that inflation pressures continue to ease, fueling expectations that the Federal Reserve may have greater flexibility to keep rate unchanged, and a door open for lower rates at sometime in the future if the trend continues. That shift in sentiment has pushed Treasury yields lower, with the 2-year yield down 5.6 basis points to 4.136% and the 10-year yield lower by 3.6 basis points to 4.549%, helping to weigh on the greenback and support the euro. The two year is still comfortably above 4.0% and the 10 year yield needs to get and stay below 4.5% to give the buyers in treasuries more confidence.

   From a technical perspective, the pair is once again approaching a very familiar resistance zone between 1.14618 and 1.14715. The 1.14618 level has repeatedly capped rallies, with highs on July 3, July 10, and July 14 all stalling near that price. It also marks the 38.2% retracement of the decline from the May 27 high, adding to its technical importance.

   Just above, 1.14715 represents another critical hurdle. That level marked the post-U.S. jobs report high on July 2 and is the final barrier before buyers can begin targeting higher retracement levels. A decisive break above the 1.14618–1.14715 resistance zone would strengthen the bullish case and signal that buyers are regaining control. Until then, the area remains a key test where sellers have repeatedly shown a willingness to defend.

   This article was written by Greg Michalowski at investinglive.com.

2. GBPUSD moves to a new session high. Tests retracement and swing area target.

   The GBPUSD is extending its rally after weaker-than-expected U.S. Producer Price Index (PPI) data reinforced the view that inflation pressures continue to ease. Following yesterday's softer CPI report, today's PPI release added to the disinflation narrative, prompting another wave of U.S. dollar selling. Treasury yields also moved lower, with the two-year yield falling around 4 basis points as traders further reduced expectations for Fed tightening at least in the near term. The combination of a weaker dollar and lower yields has provided another tailwind for sterling, allowing the pair to build on yesterday's gains.

   From a technical perspective, the bullish momentum has pushed the GBPUSD to a new session high, where it is now testing a significant resistance cluster. The rally has reached the 61.8% retracement of the decline from the May 1 high, while also challenging the series of highs that have capped advances since June 10. Together, those technical levels define an important resistance zone between 1.3446 and 1.3465, with the key retracement level coming in at 1.34598.

   This is an area where sellers have previously stepped in, making it an important test for buyers. A decisive move above the resistance cluster would represent another technical victory for the bulls and should increase confidence that the recent recovery has further room to run. If buyers can sustain momentum above 1.3465, the focus shifts toward the May 29 high at 1.34854, followed by the May 25-26 swing high at 1.35089.

   Conversely, if sellers are able to defend the resistance zone once again, traders could see another period of consolidation as the market digests the recent gains. For now, however, the combination of softer U.S. inflation data, a weaker dollar, and lower Treasury yields continues to favor buyers, with the resistance zone between 1.3446 and 1.3465 serving as the key technical hurdle that will determine whether the rally can extend further.

   This article was written by Greg Michalowski at investinglive.com.

3. The USDCAD is back to unchanged on the day after correcting higher from yesterday's decline

   The USDCAD came under heavy selling pressure yesterday after U.S. CPI data came in much weaker than expected, triggering a decisive technical breakdown. The pair fell below the key support zone between 1.4125 and 1.4143, moved well beneath the 100-hour moving average, and broke an upward-sloping trendline that had guided the rally since May 1.

   One of the more encouraging developments for sellers was what happened after the initial break. The subsequent corrective bounce stalled right at the underside of the broken trendline, where fresh sellers stepped back in. That successful retest confirmed former support had turned into resistance and gave bears the confidence to extend the move lower.

   The decline continued through the Asian session, with the pair reaching a low of 1.4040. However, the move stopped just ahead of the next major downside target near the mid-June highs around 1.4020, prompting a modest rebound.

   On the 5-minute chart, that recovery retraced to the 50% midpoint of the most recent decline at 1.40768, where sellers once again took control. The softer-than-expected U.S. PPI report added to the bearish tone, helping push the pair back lower. Over the last several minutes, price has oscillated around the 100- and 200-bar moving averages on the 5-minute chart. A sustained move back below those averages would increase the likelihood of another test of today's low at 1.40387, with a break opening the door toward the 1.4020 target.

   For sellers, the key near-term objective is to keep price below the 38.2% to 50% retracement zone between 1.40678 and 1.40768. A move above that resistance area would weaken the immediate bearish momentum and suggest the correction is gaining traction.

   The broader trend has still been higher since May 1, so additional downside follow-through is needed to shift the longer-term technical outlook. Even so, the recent break of key support and the failure of corrective rallies are beginning to expose cracks in that bullish structure. For now, 1.4068 and 1.4077 remain the key resistance levels that sellers need to defend to maintain near-term control.

   Fundamentally, the Bank of Canada rate decision is forthcoming fall by the comments and expectations that go along with it.

   This article was written by Greg Michalowski at investinglive.com.

4. Kickstart the North American session: The USD is little changed versus the major currencies.

   The above video kickstarts the North American session with a technical look at the 3 major currency pairs - the EURUSD, USDJPY and GBPUSD.  All three are within 0.13% of unchanged in confined trading as the market awaits the next shove.  Perhaps it is as the market traders await the England vs Argentina footie match later today. Congrats to Spain on their win yesterday vs France securing their place in the finals on Sunday.  

   Back to the market, a number of major U.S. financial companies reported stronger-than-expected second-quarter results overnight, continuing the positive tone from the start of earnings season. Results were broadly driven by resilient capital markets activity, solid fee income, and better-than-expected profitability, with every major company below exceeding both earnings and revenue expectations.

   • Morgan Stanley (MS): EPS $3.46 vs. $2.93 est. (BEAT), Revenue $21.31B vs. $19.65B est. (BEAT)
   • Bank of New York Mellon (BK): Adj. EPS $2.46 vs. $2.23 est. (BEAT), Revenue $5.70B vs. $5.40B est. (BEAT)
   • Johnson & Johnson (JNJ): Adj. EPS $2.90 vs. $2.86 est. (BEAT), Revenue $25.30B vs. $25.02B est. (BEAT); raised FY2026 outlook
   • BlackRock (BLK): Adj. EPS $13.91 vs. $12.61 est. (BEAT), Revenue $7.08B vs. $6.73B est. (BEAT)
   • ASML: EPS €7.59 vs. €6.97 est. (BEAT), Revenue €9.33B vs. €8.80B est. (BEAT), Net Income €2.92B vs. €2.62B est. (BEAT), Gross Margin 54% vs. 52% est. (BEAT); guided Q3 revenue of €8.4B–€9.0B
   • Richemont: Revenue €6.33B vs. €5.81B est. (BEAT), Constant-currency sales +20% vs. +11.2% est. (BEAT)

   ECB policymakers maintained a generally hawkish tone overnight, emphasizing that inflation risks remain elevated despite recent progress. Executive Board member Fabio Panetta said eurozone inflation is currently running near 3% and is expected to remain above that level into early 2027. He warned that higher energy prices, tighter financial conditions, and ongoing geopolitical tensions—particularly in the Middle East—could keep inflation pressures alive and tighten credit conditions. His comments suggest the ECB remains focused on ensuring inflation expectations stay anchored and preventing second-round effects.

   ECB Governing Council member Joachim Nagel also struck a hawkish note, saying policymakers should continue to react cautiously but be prepared to act decisively if necessary. He reiterated that monetary policy should remain vigilant given the uncertain geopolitical backdrop and inflation outlook.

   ECB Governing Council member Klaas Knot (reported as Kochev/Kochev in the news feed) echoed a slightly hawkish to neutral stance, saying the ECB stands ready to adjust policy at any time if needed and remains committed to returning inflation to its 2% target. However, he noted that no significant second-round inflation effects are currently evident, suggesting there is no immediate urgency to tighten policy further.

   Overall, the ECB messaging overnight leaned hawkish, with policymakers continuing to stress upside inflation risks and the need to keep policy restrictive until they are confident inflation is durably returning to target.

   The US stock futures are implying a marginally higher opening for the major indices with the Dow up 45 points, the S&P up 2.66 points and the Nasdaq up 120 points.

   Looking at the US debt market, yields are higher with teh 2 year at 4.214% up 2.1 basis point. The 10 year is up 2.6 basis points at 4.611%.  

   On the economic calendar, the North American session features the sister US inflation reading with the PPI data in the US. In addition, there will be, some Canada sales data and at later the Bank of Canada rate decision. The main focus will be the U.S. Producer Price Index (PPI) at 8:30 AM ET, which provides an important read on pipeline inflation following yesterday's softer-than-expected CPI report. The Bank of Canada announces its latest interest rate decision at 9:45 AM with no change expected.   At 10 AM, the Fed Chair will take his testimony to the Senate in front of the Banking Committee.

   • 8:30 AM ET – U.S. NY Fed Manufacturing Index (July): Forecast 8.80 vs. prior 5.70
   • 8:30 AM ET – U.S. PPI Final Demand YoY (June): Forecast 6.2% vs. prior 6.5%
   • 8:30 AM ET – U.S. PPI Final Demand MoM (June): Forecast 0.0% vs. prior 1.1%
   • 8:30 AM ET – U.S. Core PPI ex-Food & Energy YoY (June): Forecast 5.2% vs. prior 4.9%
   • 8:30 AM ET – U.S. Core PPI ex-Food & Energy MoM (June): Forecast 0.4% vs. prior 0.4%
   • 8:30 AM ET – U.S. PPI ex-Food, Energy & Trade YoY (June): Prior 5.1% (no consensus estimate)
   • 8:30 AM ET – U.S. PPI ex-Food, Energy & Trade MoM (June): Prior 0.8% (no consensus estimate)
   • 8:30 AM ET – Canada Manufacturing Sales (May): Forecast 1.1% vs. prior 4.2%
   • 8:30 AM ET – Canada Wholesale Trade (May): Forecast -0.7% vs. prior 0.6%
   • 9:45 AM ET – Bank of Canada Rate Decision: Expected to hold the overnight rate at 2.25%.

   This article was written by Greg Michalowski at investinglive.com.

5. EURUSD retests 200 hour MA and bounces. Buyers and sellers battle between technical levels

   The EURUSD initially rallied after the softer-than-expected U.S. CPI report, as traders pared back expectations for near-term Federal Reserve tightening. Headline inflation came in weaker than forecast, while core inflation also undershot expectations, reinforcing the view that inflation pressures continue to ease. Although Fed officials - including Fed Chair Warsh - have cautioned that one favorable inflation report is not enough to change policy, the data was enough to send the U.S. dollar broadly lower in the immediate aftermath of the release, helping lift the EURUSD.

   That rally carried the pair to 1.1462, where it tested a key technical hurdle—the 38.2% retracement of the decline from the May 29 high at 1.14618. The level proved to be almost perfect resistance. Sellers stepped in immediately, stalling the upside momentum and triggering a reversal lower. The inability to break above that Fibonacci level kept the broader corrective rally from gaining traction and signaled that sellers were still willing to defend an important resistance area.

   The subsequent decline brought the pair back toward its key hourly moving averages. The 200-hour moving average, currently at 1.1423, was tested first, with the price then probing toward the 100-hour moving average at 1.1417. Buyers responded near those support levels, helping the pair rebound modestly to around 1.1431. That reaction keeps the shorter-term technical picture balanced for now, but only barely.

   Going forward, those two moving averages will define the near-term bias. A sustained move below the 200-hour and 100-hour moving averages would tilt the advantage back toward the sellers, increasing the bearish bias and opening the door for a deeper retracement of today's post-CPI rally. Such a break would signal that the market has rejected the softer inflation-inspired move higher and is ready to refocus on the broader downtrend from the recent highs.

   On the topside, buyers still have work to do. They need to regain momentum and force a break above the 1.1462 Fibonacci resistance. Clearing that level would represent an important technical victory and shift the focus toward higher resistance targets. Until one side breaks either the resistance at 1.1462 or the support defined by the 100- and 200-hour moving averages between 1.1417 and 1.1423, the pair remains trapped in a well-defined technical battleground where both buyers and sellers still have a case.

   This article was written by Greg Michalowski at investinglive.com.