The United States dollar (USD) experienced a correction at the start of European trading on Tuesday (July 29, 2025), likely due to technical factors. Fundamentally, the US-European trade agreement continues to support the dollar’s strength.
As previously mentioned in the Macro Overview, due to this trade deal, the European Union (EU) is still subject to a 15% import tariff and is required to increase purchases from the United States, which could help balance the trade deficit.
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This implies that the EU’s trade surplus with the US could shrink. Consequently, this instills a positive sentiment in the USD and will likely influence today’s movement. The release of economic data from the United States will also have an impact. Here are some key data points from Trading Central:
- US Consumer Sentiment (July) at 21:00 WIB; forecast 95 compared to the previous 93
- Job Openings (JOLTs) in the US (June); forecast 7.5 million compared to the previous 7.8 million
GOLD
Gold prices (XAUUSD) rebounded at the start of European trading, reaching a daily high of $3,329.88 per troy ounce. Compared to Monday’s close, gold rose by $15.7 or 157 pips.
The correction in the USD allowed gold to recover. Nevertheless, this precious metal is still overshadowed by negative sentiment arising from the US-EU trade agreement. With such a deal, the risks of a trade war diminish, improving market participants’ outlook and reducing gold’s appeal as a safe haven.
Considering this, if the US economic data released tonight surpasses the forecast, there is a likelihood that the USD will strengthen again, putting further pressure on gold.
OIL
Oil prices (CLS10) traded sideways in the range of $66.51 – $67.25 as European trading commenced. Earlier last week, oil prices surged nearly $2 due to positive sentiment from the US-EU trade agreement.
With this agreement, the risk of a trade war decreases, and the global economic outlook improves, which is supportive for oil demand. This positive sentiment will likely continue to affect oil trading tonight.
EURUSD
EURUSD dipped 605 pips to 1.15257 at the beginning of European trading. This is the lowest level in a month before EURUSD managed to trim its losses.
As mentioned earlier, the US-EU trade agreement favors the dollar significantly. If the US economic data released tonight is better than the forecast, EURUSD may experience further downward pressure.
GBPUSD
Similar to EURUSD, this currency pair fell to 1.33153 at the start of European trading, hitting the lowest point in over two months before recovering some losses.
GBPUSD continues to battle negative sentiment from the Bank of England’s (BoE) expectations of lowering interest rates soon. The pressure on GBPUSD may increase significantly if US economic data tonight exceeds the forecast.
USDJPY
USDJPY has been volatile, trading within a range of 148.153 – 148.746 at the beginning of European trading after a three-day rally. USDJPY benefits from positive sentiment thanks to the US-EU trade agreement.
This sentiment could be further amplified if the US economic data released tonight is better than the forecast.
Nasdaq
Nasdaq rose at the beginning of European trading, reaching an all-time high of 23,607. The US-EU trade agreement has instilled positive sentiment in US stock indices, including Nasdaq.
If the US consumer sentiment tonight is higher than the forecast, along with job opening data, Nasdaq may continue to ascend and set new all-time records.
