The dollar remains mostly unchanged, as major currencies lack momentum. EUR/USD is around 1.1680, staying below key moving averages with a bear’s bias yet limited seller momentum. Should it break through 1.1650, retracement levels could come into focus.
USD/JPY is steady at 147.33, aiming to build on recent gains with nearby resistance at 148.00. The downside finds support near the 100-day moving average at 145.79. Meanwhile, GBP/USD has dipped by 0.2% to 1.3473, while USD/CAD is stable at 1.3683. AUD/USD and NZD/USD have fallen by 0.2% and 0.4% to 0.6565 and 0.5985, respectively, amid a slightly cautious market sentiment.
Market Watch And US CPI
US futures are recovering slightly, with S&P 500 futures down by just 0.3%, having been 0.6% lower earlier. European indices have also pared some losses. The DAX, now down 0.6%, was over 1% lower at its session lows.
Markets are closely watching US data, as the US CPI report is set to influence expectations for the Federal Reserve’s July and September meetings. June’s core annual inflation is predicted at 3.0%, up from May’s 2.8%. Traders are currently seeing ~93% odds of no rate change in July and ~67% odds of a 25 bps rate cut in September.
Markets appear hesitant, and price action reflects this measured atmosphere. The euro remains under modest pressure against the dollar, but movement south of 1.1650 would move attention towards earlier fib levels, though that space between current pricing and such a shift remains narrow. The broader hesitation is partly due to a lack of strong economic triggers, particularly leading into high-impact data releases. Sellers are cautious, and without fresh catalysts, one cannot rely on momentum continuing in the same direction.
Against the yen, the greenback’s consolidation reflects attempts to hold onto recent highs rather than push significantly higher. Resistance just under 148 has previously drawn attention, and should that area be revisited again in coming sessions, price behaviour around that figure could provide helpful signals. There is support well anchored lower on the chart, nearer 145.80, giving the current range a clearer frame. Price is near the top of it, but not yet threatening to break free.
As for sterling, the soft move lower fits with a slight uptick in cautious positioning. No particular force is pulling it down sharply, but there’s also no apparent will to lift it back into the higher zone it touched earlier this month. While the Canadian dollar remains flat, the Aussie and Kiwi are edging lower in tandem, responding more to global mood rather than local variables. Risk aversion, even when only marginal, tends to have more immediate consequences for commodity-linked currencies.
Equity And Inflation Focus
In equities, what was a more considerable drop earlier in the session has turned into a shallow pullback by the time US markets wake up. The DAX recovering over half of its morning losses is one example. A notable shift seemed unlikely after the open, especially with broader yields unchanged. The S&P future contracts, still slightly down, show a more balanced reaction, underlining the idea that sentiment is currently swaying rather than plunging.
From the macro front, inflation remains the primary inflection point. There is little else trading desks are watching more closely at the moment. The expectation for the next US inflation print is pretty clear: an uptick in core readings is widely anticipated. That, in itself, sets up potential disappointment or relief, depending on how the reality lines up. Speculative positioning already suggests that a hold in July is seen as nearly certain. However, September remains less defined, and should inflation come in higher, the 25-basis-point cut priced in for late Q3 could very well face doubts.
From our view, any reaction to the data should clarify how tethered market participants remain to the idea of easier policy. If inflation surprises on the upside—even slightly—the rates market might quickly get pulled back toward neutral expectations. We’ve seen that sensitivity before. The current pricing leaves a narrow corridor for easing later in the year, but it isn’t especially deep. Any misalignment here matters more because the market has condensed its expectations around a handful of dates.
In the current rhythm, it’s the spacing between data points that’s setting the tone rather than any single headline. Volatility remains low, and daily ranges narrow on most major pairs. But traders relying too heavily on that calm could be caught off-guard—especially once the next batch of CPI figures starts moving the needle again. There’s limited scope for dovish interpretation if core pressures prove sticky or accelerate again.
For now, we’re watching to see whether markets respect recent ranges. Price threats have not materialised yet, but a move beyond immediate technical bands would very likely feed into positioning shifts quickly, particularly in corp-hedging flows and medium-tenor volatility pricing. This matters most in tighter liquidity conditions, where reactions can unwind exaggeratedly.
