Errante’s The Week Ahead: 30^th June 30 – 4^th July 2025  

Highlights of the Week 

• US Nonfarm Payrolls (NFP) & Unemployment Rate: The June NFP and unemployment data will be central for assessing US labor market resilience and recalibrating Fed policy expectations. 

• Fed Chair Powell Testimony: Markets will scrutinize Powell’s tone for clues on the Fed’s policy direction amid mixed economic signals and persistent inflation concerns. 

• Eurozone & UK Macro Releases: German CPI, Eurozone CPI, and UK GDP figures will shape EUR and GBP volatility, especially in light of diverging growth prospects and ECB/BoE policy paths. 

What Now? 

The Macro and Policy Narrative 

The coming week places US labor market data and Fed guidance in the spotlight, with profound implications for global risk sentiment. 

US NFP Trend & Policy Outlook: 

Nonfarm payrolls have shown a gradual cooling in recent months, with last month’s reading of 139K (down from 175K in April and 303K in March) and an unchanged unemployment rate at 4.2%. While the labor market is not signaling recession, the trend points to a moderation in job growth—a dynamic broadly consistent with a late-cycle economic environment. This slowdown, combined with stickier wage growth and persistent inflation, positions the Fed in a difficult balancing act for the second half of 2025. 

Policy Implications: 

Despite earlier market hopes for a rate cut as early as Q3, most leading research (including Fed surveys and private sector outlooks) now suggests the Fed is likely to delay any meaningful easing until clear evidence emerges of both sustained disinflation and labor market weakness. Wage inflation (see Thursday’s Average Hourly Earnings) remains a pivotal variable: a surprise acceleration could push rate cut bets further into 2026. 

Market Impact: 

The combination of softer jobs data and cautious Fed communication has helped anchor US yields and capped the dollar’s upside, but expectations remain fluid. Equity markets are thus trapped in a tug-of-war between resilient consumption and the risks of a ‘higher for longer’ rate regime. 

Europe & UK Focus: 

German and Eurozone CPI releases will be key for EUR pairs, especially as the ECB signals its intent to cut rates later this year. UK GDP for Q1 will be watched for any further signs of economic stagnation as the BoE faces mounting pressure to balance persistent inflation against weak growth. 

Market Events and Announcements  

(GMT +3) 

Monday, 30^th June 

• 04:30 CNY – China Manufacturing PMI 

• 09:00 GBP – UK GDP (Q1, QoQ/YoY) 

• 15:00 EUR – German CPI (MoM, Jun) 

• 16:45 USD – Chicago PMI (Jun) 

Tuesday, 1^st July 

• 12:00 EUR – Eurozone CPI (YoY, Jun) 

• 16:30 USD – Fed Chair Powell Speaks 

• 16:45 USD – S&P Global Manufacturing PMI (Jun) 

• 17:00 USD – ISM Manufacturing PMI, ISM Manufacturing Prices, JOLTS Job Openings 

Wednesday, 2^nd July 

• 15:15 USD – ADP Nonfarm Employment Change (Jun) 

• 17:30 USD – Crude Oil Inventories 

Thursday, 3^rd July 

• US Independence Day (early close) 

• 15:30 USD – Average Hourly Earnings, Initial Jobless Claims, Nonfarm Payrolls, Unemployment Rate 

• 16:45 USD – S&P Global Services PMI 

• 17:00 USD – ISM Non-Manufacturing PMI, ISM Non-Manufacturing Prices 

Friday, 4^th July 

US Independence Day (Full Holiday, markets closed) 

Market Insights: Key Charts to Watch 

USDCAD – Daily Chart 

USDCAD has been confined within a clear downtrend since mid-April, with price action making lower highs and lower lows under the influence of both a weaker USD and a relatively resilient CAD. The pair is currently trading near 1.3650, just above the 61.8% Fibonacci retracement of the May-June rally. 

With momentum indicators still negative and price capped by a firm downtrend line, the path of least resistance is to the downside toward 1.3540 and potentially 1.3430 on a break. However, short-term stabilization is possible if risk-off flows or soft Canadian data drive USD demand. 

RSI is soft near 41, reflecting bearish momentum, but not yet oversold. The MACD is negative and declining, reinforcing a downside bias, though the Stochastic Oscillator (now near 52) hints at potential short-term stabilization. 

Key Levels:  

• The immediate support lies at the 1.3638 area (61.8% Fibo), with further targets at 1.3539 (swing low) and 1.3432/1.3380 (141%/161% Fibo projections).  

• Resistance is overhead at 1.3770 (upper Bollinger band and June highs) and 1.3870 (200-day WMA). 

Alternative Scenario:  

A sustained recovery above 1.3770 would be needed to suggest a short-term trend reversal and open the way toward the 1.3798 zone. 

EURUSD – Daily Chart 

EURUSD is in the midst of a robust uptrend, having broken decisively above previous resistance at 1.1630 and advancing to the 1.1718 region at the time of writing. The pair is trading at overbought levels but remains supported by strong bullish momentum. 

While the trend remains upward, the overbought readings call for caution—look for possible consolidation or a modest pullback toward 1.1630 before the next leg higher. A clear break above 1.1745 could accelerate gains toward the 1.1815 zone. 

RSI is elevated at 71, suggesting overbought conditions, while the MACD remains firmly positive and the Stochastic Oscillator is stretched above 90—both indicative of strong bullish momentum but also warning of a potential short-term pullback or consolidation. 

Key Levels:  

• The first resistance zone is the 1.1745 (161.8% Fibo extension), followed by 1.1816 (200% Fibo).  

• Support is at 1.1630 (breakout area and 100% Fibo), then 1.1560 (61.8% Fibo). 

Alternative Scenario: 

Failure to hold above 1.1630 would signal the start of a deeper corrective phase, with next supports at 1.1560 and then the 50-day WMA. 

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