STIR FUTURES: BLOCK: Dec'25 SOFR Sale

• After a shakier start to the European session, the USD soon recovered through NY hours, with strong GDP and ADP Employment Change numbers shortly followed by a resolutely patient outlook from the Fed Chair Powell following the Fed rate decision. Resultantly, the USD Index made light work of resistance into the mid-June highs, testing the 100-dma to the upside for the first time since October 2024.
• Powell's patient approach on policy came despite renewed pressure from the White House to cut interest rates, as he stressed that the FOMC see modestly restrictive policy as "appropriate", despite two dissents at the meeting (Bowman and Waller). The chair also talked down any decisions about the September meeting - stressing that the FOMC is still a ways from seeing where things settle down. As a result, rates pricing through year-end and into the second half of 2026 tightened, helping underpin the dollar rally.
• Markets remained content to sell the EUR through phases of USD strength, resulting in EUR/USD showing well through the late-June lows. This week’s bearish price action has resulted in a move through key support at the 50-day EMA, at 1.1560 - which highlights a stronger reversal and opens 1.1431, a Fibonacci retracement.
• Soft Australian CPI data remained a weight for AUD throughout the day - AUD/JPY is again testing Y96.00, while AUD/USD has shown through the bottom-end of the up-trend channel drawn through the April-July range.
• With the Fed decision now cleared for markets, focus shifts to China's manufacturing and non-manufacturing PMI prints for July, regional German inflation metrics and the Bank of Japan rate decision.
• The BoJ is widely expected to keep its policy rate unchanged at 0.5% for a fourth consecutive meeting, amid signs of easing trade-related uncertainty since its June meeting. Markets will pay close attention to Governor Ueda’s tone during the post-meeting press conference. Ueda has maintained a cautious stance since May, but if the forecasts and risk assessments are revised higher, there’s a high likelihood his tone may shift.

• Asked about any updates on whether he would stay on as governor after his Fed chair term expires in May 2026, Powell tersely ends the press conference with: "Sorry, I do not have any update for you."
• Q&A ends

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance
• RES 2: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
• RES 1: 0.8705/69 50% of Jul 28-29 sell-off / High Jul 27 & bull trigger 
• PRICE: 0.8630 @ 19:54 BST Jul 30
• SUP 1: 0.8615 Intraday low 
• SUP 2: 0.8584 50-day EMA 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8508 Low Jun 27

The trend set-up in EURGBP remains bullish, however, Monday’s price pattern - a bearish engulfing candle - signalled a potential short-term reversal. The subsequent extension down reinforces this bearish signal. Support at the 20-day EMA has been cleared highlighting scope for deeper retracement. The 50-day EMA lies at 0.8584. For bulls, a move through 0.8769, the Jul 27 high, is required to confirm a resumption of the uptrend.