Insights 
VT 
The United States average hourly earnings reported a year-on-year increase of 3.9% in July, surpassing the forecast of 3.8%. This data suggests a rise in wage growth amid broader economic trends.
EUR/USD experienced a rally, trading above 1.1550, driven by weak US employment and ISM Manufacturing PMI data. Similarly, GBP/USD turned positive, moving above 1.3250 after a series of losses, aided by US data.
Gold Price Surge
Gold reached new weekly highs of around $3,350. This is attributed to a decline in US Treasury bond yields following disappointing NFP data.
In the cryptocurrency market, Bitcoin fell below $115,000 amid increased liquidations, with the focus on the $112,000 support level. The market is adjusting following a bullish July that reached new record highs.
The euro area economy shows resilience with a strong outlook due to the EU-US deal and German economic plans. However, there are potential risks for rate cuts by early 2026 if wage indicators soften further.
Foreign exchange trading involves substantial risk due to leverage and may not be suitable for all. It is crucial to understand the risks and possibly seek advice from an independent financial advisor.
Analyzing Market Conditions
Based on the latest data from July 2025, we are seeing conflicting signals from the US economy. The surprising 3.9% jump in average hourly earnings suggests inflation could remain persistent, even as other employment figures appear weak. This creates uncertainty around the Federal Reserve’s next move, likely increasing market volatility in the coming weeks.
We see the US dollar weakening significantly, which creates opportunities in currency pairs. With EUR/USD trading above 1.1550, we should consider strategies that benefit from continued dollar weakness, as the market is now pricing in a less aggressive Fed. Looking back, this dollar downturn is a sharp reversal from the hawkish stance the Fed held throughout 2024.
Gold’s rally to $3,350 is a direct response to falling US Treasury yields, which have dipped below 3.5% for the 10-year note for the first time this year. We can expect this trend to continue as long as weak US economic data keeps downward pressure on yields. This environment makes holding non-yielding gold more attractive, a pattern we also observed during the economic uncertainty of 2023.
In the crypto markets, we are viewing Bitcoin’s drop below $115,000 as a consolidation phase rather than a market top. This pullback follows a massive rally spurred by the 2024 halving event, which historically leads to significant price appreciation 12-18 months later. We should watch the $112,000 support level closely as a potential area to re-enter long positions.
The European economy’s resilience, supported by the recent EU-US trade deal, presents a clear contrast to the slowing momentum in the United States. While the outlook is strong for now, we must be mindful of the European Central Bank’s hints at potential rate cuts in early 2026. This could create future volatility and trading opportunities in euro-denominated assets.
Given these cross-currents, managing risk is more important than ever. The use of leverage in foreign exchange and other derivatives can lead to substantial losses in a volatile market. We must fully understand these risks before committing capital to new positions.
