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Forex Signals Brief July 24: Focus on ECB Decision and Earnings Highlights
Markets look ahead to a packed Thursday featuring the European Central Bank’s policy decision, a wave of PMI releases, and earnings reports.
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Last updated: Thursday, July 24, 2025
Quick overview
- Markets are anticipating a busy Thursday with the European Central Bank's policy decision and various PMI releases.
- The U.S. and Japan have announced a trade pact that includes significant investments and tariff reductions, boosting market optimism.
- Peter Navarro has expressed skepticism about a potential EU tariff agreement, emphasizing the need for meaningful concessions from Europe.
- U.S. equities reached record highs, while mixed signals in housing and economic indicators suggest ongoing market complexities.
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Markets look ahead to a packed Thursday featuring the European Central Bank’s policy decision, a wave of PMI releases, and earnings reports that could set the tone for the rest of the trading week.
U.S.–Japan Trade Pact Kicks Off Busy Session
The U.S. session began with strong momentum following the announcement of a bilateral trade agreement between the United States and Japan. The deal included Japan committing to large-scale investments in the U.S., such as the purchase of 100 Boeing aircraft and substantial quantities of American agricultural goods, including rice. In return, the U.S. agreed to slash tariffs on Japanese imports by 15%, a move that sparked optimism despite concerns over potential near-term price increases.
EU Negotiations Take Center Stage
Attention quickly turned toward Europe amid reports by the Financial Times suggesting the U.S. and European Union were close to finalizing a separate agreement. This deal would reportedly impose a 15% tariff on EU exports such as aircraft, pharmaceuticals, and spirits in exchange for certain concessions from Brussels. However, the optimism was quickly tempered.
Navarro Pushes Back on EU Tariff Reports
Peter Navarro, the White House’s economic advisor, cast doubt on the FT report. He stated that any talk of a 15% tariff on European goods should be taken with “a grain of salt,” emphasizing that nothing was guaranteed unless the EU offered President Trump meaningful concessions. Navarro warned against trusting overly “ambitious” EU media leaks, reinforcing the administration’s stance that they weren’t pleased with the suggestion that Europe was preparing countermeasures.
As Navarro noted, “The Art of the Deal” remains the guiding philosophy—emphasizing strategic leverage over mutual compromise.
Recent trends continue to show that the Trump administration has been more inclined to extract concessions than to offer them, particularly outside of the UK, where select compromises were made—for example, benefiting companies like Rolls-Royce. Overall, the U.S. has been taking a hardline stance in most international negotiations.
Despite concerns over Japanese tariff implications, the equity markets welcomed the broader trade momentum.
Housing and Economic Indicators Show Mixed Signals
On the domestic front, U.S. existing home sales fell short of expectations. However, the median home price rose again, reinforcing ongoing upward price pressure in the housing market. The average time homes remain on the market stood at 4.7 months—still below the six-month norm, but notably tighter than earlier in the year.
Record Closes for U.S. Indices
U.S. equities ended the session on a high note, extending their rally. The S&P 500 and NASDAQ both closed at all-time highs. The Dow Jones Industrial Average came within just four points of its all-time record set last December, finishing with an impressive gain.
- Dow Jones Industrial Average: 45,010.29 (+507.85 pts / +1.14%)
- S&P 500 Index: 6,358.91 (+49.29 pts / +0.78%)
- NASDAQ Composite: 21,020.02 (+127.33 pts / +0.61%)
After-Hours Movers: Alphabet & Tesla
After the closing bell, Alphabet reported earnings that beat expectations, sparking a sharp rebound. The stock rose approximately $7.00, or 3.6%, in after-hours trading. Tesla also released its quarterly update. Although initially slipping, the stock recovered slightly and was up 0.19% post-market.
Today’s Market Events
ECB Poised to Hold Rates as Policy Nears Inflection Point
The European Central Bank is widely expected to leave its policy settings unchanged at its Thursday meeting, with market odds pricing in a 94% chance of no further easing. This follows June’s 25-basis-point cut to the Deposit Rate, which may have marked the last in the current easing cycle. ECB President Christine Lagarde recently stated that policy is “well-positioned” to address lingering economic uncertainty, reinforcing the notion that the central bank is now in a holding pattern.
Policymakers are navigating a tricky landscape shaped by stagnant inflation, soft growth, and fresh geopolitical concerns. Chief among those concerns is the brewing trade dispute between the European Union and the United States, with negotiators racing to reach a deal before the August 1 deadline. Any escalation could cloud the ECB’s cautiously optimistic stance.
Eurozone and UK PMIs: Mild Optimism but Still Fragile
Flash PMI data for July is due Thursday, and modest improvements are expected across both the Eurozone and UK.
In the Euro area:
- Manufacturing PMI is forecast to edge up from 49.5 to 49.7.
- Services PMI is projected to rise slightly from 50.5 to 50.8.
- Composite PMI is expected to move up from 50.6 to 50.9.
These incremental gains follow similar movements last month and suggest continued—but slow—progress in the bloc’s economic recovery.
- Meanwhile, the UK is also showing signs of slight resilience:
- July services PMI is expected to tick up from 52.8 to 52.9.
- Manufacturing PMI may rise from 47.7 to 48.0.
- Composite PMI is expected to retreat slightly from 52.0 to 51.8.
The muted gains reflect lingering uncertainty around domestic policy, wage pressures, and the broader global trade environment.
Last week, markets were slower than what we’ve seen in recent months, with gold retreating and then bouncing to finish the week unchanged. EUR/USD slipped toward 1.16, while S&P and Nasdaq continued higher. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.
Gold Returns Below $3,400
Gold surged by nearly $50 to close near $3,438/oz, rebounding from its 20-week moving average around $3,150. However, momentum has stalled just under the key $3,500 resistance level and yesterday we saw a reversal below $3,400 after the US-Japan trade deal. With no immediate catalyst, traders are awaiting stronger direction—possibly from Thursday’s Fed commentary or signs of resurgent inflation. Until then, gold appears to be in a consolidation phase.
USD/JPY Returns Below the 100 Weekly SMA After Japanese Elections
The USD/JPY pair made headlines as it broke above the 148 handle, a move that defied recent yen strength and pierced the 100-week moving average—often seen as a key long-term resistance marker. This unexpected strength in the dollar is being partly driven by Japanese capital flowing into foreign assets, which is complicating forecasts for future Bank of Japan policy moves. A firm close above this level could shift sentiment and revive debates around policy divergence between the Fed and BOJ.
USD/JPY – Weekly Chart
Cryptocurrency Update
Cryptocurrencies Hold Gains as Bitcoin Briefly Tops $120K
In digital assets, Bitcoin briefly dipped below $113,000 earlier in the week but bounced sharply and reclaimed support above $120,000. The recovery came after testing the 50-day moving average, with strong buyer demand kicking in around the 20-week SMA. Investors appear to be using dips as opportunities to hedge against volatility in traditional markets.
BTC/USD – Weekly chart
Ethereum Breaks Above Resistance, Heads for $4,000
Ethereum has outpaced Bitcoin recently, gaining 20% since April and breaking above its 100-week moving average. Optimism around the upcoming “Pectra” upgrade—which promises scalability improvements—has boosted institutional inflows. With ETH now eyeing the $4,000 level, bullish sentiment in the space is gaining traction.
ETH/USD – Daily Chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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