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Published: 2025-07-03T10:11:51.000Z

Psychology for major markets Jul 03

byAdrian Schmidt

Senior FX Strategist
1

Consolidation as markets await employment data and tariff news. GBP weak as government struggles to cut spending

EUR/USD – EUR/USD edging off 4 year highs above 1.18 ahead of the US employment data. Underlying sentiment remains USD negative with the July 9 tariff deadline and the US budget bill also in focus.

USD/JPY – JPY still soft on the crosses and USD/JPY correcting higher as equities remain firm and Trump indicates no trade deal is likely with Japan.

EUR/GBP – Holding above 0.86 after spike higher on talk of Chancellor Reeves being sacked and failure of government to pass spending cuts. Reeves will likely stay after support from PM Starmer but underlying sentiment remains GBP negative.

AUD/USD – Found good support below 0.64 and retains scope for gains above 0.66 although rising expectations of RBA easing are limiting upside

Equities – S&P futures still making new all time highs and sentiment remains positive helped by easing Mid-East tensions and rising hopes of Fed easing, but valuation remains expensive and market looks vulnerable to bad news

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