This week is packed with major economic events that could spark big moves in global markets. Key inflation, growth, and employment data from the US, UK, Canada, Australia, China, and Japan will be released alongside crucial central bank interest rate decisions.
Traders are watching closely as the US dollar enjoys its strongest month of 2025 so far, fueled by a new trade deal with the EU. Meanwhile, the UK faces mounting debt pressures, raising concerns about higher taxes, slower growth, and capital outflows. With the Federal Reserve, Bank of Japan, and other key central banks in focus, plus important GDP, jobs, and inflation figures due, market volatility is likely to rise.
Overview
This week is packed with major economic events that could spark big moves in global markets. Key inflation, growth, and employment data from the US, UK, Canada, Australia, China, and Japan will be released alongside crucial central bank interest rate decisions.
Traders are watching closely as the US dollar enjoys its strongest month of 2025 so far, fueled by a new trade deal with the EU. Meanwhile, the UK faces mounting debt pressures, raising concerns about higher taxes, slower growth, and capital outflows. With the Federal Reserve, Bank of Japan, and other key central banks in focus, plus important GDP, jobs, and inflation figures due, market volatility is likely to rise.
Key Economic Events
Wednesday 04:30 am (GMT+3) – Australia: CPI y/y (AUD)
Wednesday 15:30 (GMT+3) – USA: Advance GDP q/q (USD)
Wednesday 16:45 (GMT+3) – Canada: Overnight Rate (CAD)
Wednesday 21:00 (GMT+3) – USA: Federal Funds Rate (USD)
Thursday 04:30 am (GMT+3) –China: Manufacturing PMI (CNY)
Thursday Tentative – Japan: BOJ Policy Rate (JPY)
Thursday 15:30 (GMT+3) – Canada: GDP m/m (CAD)
Thursday 15:30 (GMT+3) – USA: Core PCE Price Index m/m (USD)
Thursday 15:30 (GMT+3) – USA: Unemployment Claims (USD)
Friday 15:30 (GMT+3) – USA: Nonfarm Employment Change (USD)
Friday 17:00 (GMT+3) – USA: ISM Manufacturing PMI (USD)
Chart Analysis
Since establishing a low of 1.20989 on January 13, GBPUSD maintained a clear upward trajectory, characterized by a series of higher highs and higher lows. The initial bullish reversal was signaled by a Hammer candlestick pattern, which marked the end of the prior downtrend.
However, the recent formation of a failure swing has shifted sentiment. The rally stalled at 1.35880, below the previous high, before breaking the key support level at 1.33646, decisively turning the bias bearish. This shift was reinforced by a "Death Cross", where the 20-period EMA crossed below the 50-period EMA, confirming the buildup of downside momentum.
Technical indicators remain aligned with the bearish view. The Momentum Oscillator is holding below the 100 level, signaling sustained pressure, while the RSI remains sub-50, reflecting persistent selling interest.
Key Resistance Levels
Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:
1.34730: The initial resistance level is established at 1.34730, which mirrors the weekly Pivot Point, PP, calculated using the standard methodology.
1.35880: The second price target is set at 1.35880, representing the swing high marked on July 24.
1.37882: The third price objective is observed at 1.37882, corresponding to the daily high registered on July 1.
1.42490: An additional upside target is projected at 1.42490.
Key Support Levels
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.32265: The initial support level is seen at 1.32265, corresponding to the 161.8% Fibonacci Extension drawn from the low point, 1.33646, to the high point, 1.35880.
1.31716: The second support level is estimated at 1.31716, representing the weekly support, S3, estimated using the standard Pivot Points methodology.
1.30031: The third support level is identified at 1.30031, reflecting the 261.8% Fibonacci Extension drawn from the low point, 1.33646, to the high point, 1.35880.
1.27797: An additional downside target is 1.27797.
Fundamentals
The US dollar is having its best month of 2025 so far, boosted by a new trade deal with the European Union. The US Dollar Index rose 1.01% on Monday and is up 2.33% in July, marking its first monthly gain this year.
The deal, announced over the weekend, will see the EU face higher tariffs on exports to the US than it imposes on US imports. This tilted arrangement drove investors toward the dollar as a safe haven, causing the euro to fall. Analysts warn that such tariffs could slow global growth, especially in Europe.
Markets are now watching for key events this week, including the Federal Reserve's interest rate decision, US Treasury debt sales, and an important jobs report, with an August 1 trade deadline set by President Trump also looming.
On the other hand, the UK is facing what experts call a "debt doom loop" — a cycle where rising government debt leads to higher taxes, which in turn drives wealthy individuals to leave the country, weakening the tax base and slowing growth.
This risk is significant, as the richest 10% of earners account for more than half of all income tax. Analysts already predict the UK could see the largest loss of millionaires globally this year.
The warning comes ahead of the autumn budget, with a possible £20bn shortfall looming. International bodies have urged bold measures, which could include tax increases or cuts to expensive commitments, such as the state pension triple lock.
High debt is also pushing up interest rates, adding strain to public finances, while unemployment is expected to rise and inflation is expected to remain above 3% until late 2026.
Conclusion
In short, this week's mix of major economic data, central bank decisions, and political developments could set the tone for global markets in the weeks ahead. With the US dollar gaining strength, the UK facing rising debt pressures, and trade tensions adding uncertainty, investors should brace for potential volatility across currencies, commodities, and equities. Staying alert to both technical signals and fundamental shifts will be key for navigating the days ahead.