Europe Session — Market Briefing – July 24, 2026

Europe Session — 06:00 UTC

Session Introduction

Asian markets closed on a cautiously constructive note, with risk sentiment broadly stable but lacking conviction. Equity indices across the region finished mixed — Tokyo marginally softer as JPY weakness persisted near mid-150s, while Sydney and Shanghai posted modest gains on residual optimism around Chinese stimulus expectations. No major central bank decisions crossed the wire overnight, though BoJ officials reiterated discomfort with disorderly FX moves, keeping intervention risk live. Chinese activity data remained a focal point, with mixed reads on industrial momentum keeping commodity-linked currencies — AUD and NZD — rangebound through the Asia close.

European desks open this morning with a clear macro agenda. The broader USD remains firm, DXY holding in the upper-104 to 105 area, and dollar strength continues to set the tone across major pairs. ECB-related newsflow — including Governing Council speeches and recently published meeting accounts — will be closely parsed for any evolution in the easing debate. Euro-area PMI prints are on the radar as a high-frequency read on growth momentum, while BoE speakers at scheduled parliamentary and conference appearances will be monitored for any shift toward endorsing a first rate cut. Gold and silver continue to trade in well-established bull trends, and crypto markets open the European session in cautious risk-on mode with BTC holding above the $64k handle.

Foreign Exchange

US Dollar / DXY Overview

DXY is firm in the upper-104 to 105 area, near multi-week highs, underpinned by US labor market resilience, sticky core inflation, and a Fed maintaining a data-dependent, higher-for-longer stance with the funds target at 3.50–3.75%. US real yields remain elevated relative to peers, providing a persistent structural bid for the dollar. The index faces initial resistance at 105.50–106.00; a clean break there would reopen the 107+ zone last seen during prior risk-off episodes. Support sits in the 103.50–104.00 band, which would need to break to signal any meaningful reversal of the current dollar bull phase.

EUR/USD

Macro Drivers: EUR/USD is trading near its weakest levels in roughly two months as US data outperformance widens the growth differential versus the Eurozone. The ECB has held its deposit rate steady with guidance remaining data-dependent; persistent core inflation pressures complicate any accelerated easing path. Fed funds at 3.50–3.75% with no imminent cut on the table keeps the rate differential firmly in favor of the dollar. Euro-area PMIs and industrial production readings have been soft, reinforcing the narrative of a fragile Eurozone recovery.

Technical Detail: Spot is holding in the 1.154–1.155 area, pressing against the 1.1500–1.1525 support zone — a combination of the psychological handle and recent cycle lows. Immediate resistance sits at 1.1600–1.1630, with a more significant barrier at 1.1700 where key moving averages cluster on the daily. A sustained break below 1.1500 opens the 1.1460–1.1475 swing-low area where prior bear positions were partially covered. Price remains under key short-term moving averages, maintaining a bearish structure on daily timeframes.

Trend: The directional bias is sell-on-rally while EUR/USD holds below approximately 1.17, with the path of least resistance lower. Dips toward 1.15–1.145 are likely to attract real-money support, capping the downside move in the near term. Direction for any sustained move will be dictated by whether incoming Eurozone data — particularly PMIs this week — stabilize or deteriorate further, and whether US disinflation resumes enough to soften the dollar. Until that shift materializes, a mildly bearish-to-sideways range remains the base case.

GBP/USD

Macro Drivers: Cable has underperformed EUR modestly over the past week as UK data softened and markets trimmed BoE tightening expectations. The BoE is holding Bank Rate at a restrictive level, but recent MPC minutes reflect a split committee gradually shifting toward eventual easing, with wages and services inflation still keeping cuts cautious. The UK-US rate spread has narrowed, limiting GBP upside against a broadly firm dollar. The UK growth backdrop remains fragile, with fiscal space constrained and consumer momentum subdued.

Technical Detail: GBP/USD trades in the 1.26–1.27 area, with immediate support at 1.2600–1.2620 — the recent cycle low and key psychological level. Deeper support is located at 1.2520–1.2550 should the lower end of that range fail. Resistance comes in at 1.2750–1.2800, with a more significant barrier at 1.2850–1.2900 that would require a sustained risk-on impulse and dollar softness to test. Price action has been grinding, with rallies capped by the prevailing dollar bid.

Trend: The base case is range trade between 1.25 and 1.29, with the directional impulse following global risk sentiment and US data outcomes. Downside risks are skewed toward UK growth disappointments and any dovish surprise from BoE speakers this week. GBP can outperform on crosses — particularly EUR/GBP — as the BoE's relatively slow cutting pace compares favorably versus the ECB. Any BoE communication this week signaling a nearer-term cut would pressure GBP/USD toward the lower end of the range.

USD/JPY

Macro Drivers: USD/JPY remains elevated in the mid-150s, sustained by a wide and persistent policy divergence — the Fed holding at 3.50–3.75% versus a BoJ that has exited negative rates but maintains a materially looser stance with a still-large balance sheet. Japanese authorities have explicitly flagged discomfort with rapid FX moves and have intervened previously when moves were deemed disorderly, creating repeated intraday spikes and reversals. BoJ communication around JGB purchase operations and any comments on yen weakness are a live source of overnight headline risk. The structural upward pressure from rate differentials is the dominant driver, but intervention acts as a persistent ceiling.

Technical Detail: Support for the pair lies in the low-150s intervention zone; a decisive break below that level would expose 148–149. Resistance is at the upper-150s recent highs, beyond which the risk of heavier and more sustained official intervention increases sharply. Intraday price action continues to be characterized by sharp reversals from elevated levels as authorities lean against disorderly moves. The mid-150s represents a contested range where structural pressure and policy risk collide.

Trend: The near-term setup is explicitly two-way — structural upward pressure from the rate differential versus recurring sharp downside risk from intervention. Medium term, if US yields drift lower on weaker data or the Fed signals a clearer easing path, USD/JPY could reprice toward the high 140s. Sustained BoJ normalization would amplify that move, but the pace of normalization remains gradual and cautious, keeping any structural JPY recovery a slow-burn thesis for now.

USD/CHF

Macro Drivers: USD/CHF is trading in the 0.89–0.91 region, having drifted higher alongside broad dollar strength. The CHF retains relative firmness versus EUR given its traditional safe-haven status, but has ceded ground to the dollar as US-Swiss rate differentials continue to favor the greenback. The SNB has historically used CHF strength as an inflation buffer, but has signaled greater balance recently, with scope for easing if Swiss inflation continues lower. CHF still benefits from safe-haven flows on risk-off episodes, acting as a natural cap on USD/CHF during periods of global stress.

Technical Detail: Support is at 0.8900–0.8920, with a deeper floor at 0.8800 representing a more significant structural level. Resistance sits at 0.9100–0.9150, which has capped recent USD/CHF rallies. Price action has been relatively contained within this range, consistent with broad dollar strength offset by CHF's safe-haven premium. No decisive break of either boundary is in place at present.

Trend: The baseline bias is sideways-to-slightly higher USD/CHF while US yields remain elevated and risk sentiment stays stable. Downside risks include renewed global risk aversion or any surprise SNB hawkish shift, both of which would attract safe-haven CHF buying and push the pair lower. A break of 0.9150 to the upside would require a meaningful deterioration in European or global risk sentiment alongside continued dollar strength.

AUD/USD

Macro Drivers: AUD/USD is trading around the 0.65 handle — mid-0.64s to low-0.65s — under pressure from mixed Chinese activity data and a broadly firm USD. The RBA has kept policy rate at a restrictive level, pushing back against expectations of imminent cuts due to sticky services inflation and a robust labor market, which provides some fundamental support for AUD. However, the pair remains highly sensitive to China-related newsflow, particularly industrial production, credit, and housing data, as well as iron ore prices. Global risk appetite is the dominant near-term swing factor.

Technical Detail: Support is at 0.6450–0.6470, with a deeper floor at 0.6400 on any sustained risk-off move. Resistance sits at 0.6550–0.6600, with a more significant barrier at 0.6700 that would require a positive China catalyst and broad dollar softness to reach. Recent price action has been choppy, with rallies consistently capped by the firm US yield backdrop. The pair has bounced from recent lows but lacks the momentum for a sustained move higher.

Trend: Near-term direction is primarily a function of global risk appetite and incoming China headlines, with AUD tending to underperform when US growth outshines and commodity sentiment softens. Medium term, a stabilization in China data combined with Fed easing signals and a cautious but on-hold RBA could allow AUD/USD to grind toward the upper end of a broad 0.64–0.68 range. For now, the bias is sideways with a mild downside skew while the dollar remains firm.

USD/CAD

Macro Drivers: USD/CAD trades around 1.36–1.37, having moved higher as oil's rally stalled and the BoC pivoted earlier than the Fed toward a more dovish stance. The BoC has been one of the earliest G10 central banks to open the door to rate cuts as Canadian growth slowed and core inflation eased, widening the US-Canada policy differential clearly in favor of USD. CAD remains exposed to oil price dynamics; any sustained softness in crude removes a key support pillar for the currency. Relative growth divergence and the policy gap are the dominant macro drivers.

Technical Detail: Support sits at 1.3500–1.3520; resistance at 1.3700–1.3750, with a break above that level opening 1.3800 and beyond. The pair has been grinding higher in line with the policy divergence narrative and oil's consolidation. Price action is directionally biased to the upside absent a meaningful shift in either crude prices or BoC guidance.

Trend: The baseline is mildly bullish USD/CAD, supported by the divergence in cutting cycles and any further weakness in crude oil. The primary downside risk is a sharp rally in oil prices or a more hawkish-than-expected BoC tone if Canadian inflation re-accelerates. Incoming Canadian CPI data this week is a key event risk capable of shifting short-term positioning. Absent a catalyst, the path of least resistance remains modestly higher.

NZD/USD

Macro Drivers: NZD/USD is trading around the 0.60 handle — upper-0.59s to low-0.60s — with the kiwi showing relatively high volatility driven by global risk sentiment swings and shifting RBNZ guidance. The RBNZ maintains a hawkish bias relative to several G10 peers, with policy still restrictive and concern about inflation persistence, which offers some fundamental support. NZD is highly sensitive to dairy prices and China sentiment, functioning as a higher-beta version of AUD in most macro regimes. Broader dollar strength continues to cap any sustained NZD rally.

Technical Detail: Support sits at 0.5950–0.5980, with deeper support around 0.5900 on a more extended risk-off move. Resistance is at 0.6050–0.6100, with a more significant barrier at 0.6200 requiring a sustained broader risk-on rally to approach. Recent price action has been choppy around the 0.60 psychological level, with the pair failing to establish a sustained foothold on either side.

Trend: The baseline is a range with modest upside skew if global risk stabilizes and the RBNZ maintains one of the more hawkish stances in G10. A dovish RBNZ pivot or a sharp risk-off episode would push NZD/USD back below 0.60 toward the 0.5950 support zone. The pair remains a high-beta macro read — quick to rally on positive global risk narratives and equally quick to give gains back when sentiment sours.