[Market in Wait-and-See Mode] Lack of Clear Catalysts Keeps Direction Uncertain – What Will Trigger the Next Move?

[Market in Wait-and-See Mode] Lack of Clear Catalysts Keeps Direction Uncertain – What Will Trigger the Next Move?

✅ Current Market Conditions

💴 USD/JPY

• The post-election yen strength has largely faded, avoiding a break below 146.

• Currently trading in the upper 147s, supported by buying interest.

• The pair remains stuck between last week’s 148.80 high and 147.20 low, suggesting a range-bound market for now.

💶 EUR/USD

• The July dollar-buying trend pushed the euro lower, but recent price action suggests stabilization.

• Currently consolidating in the 1.1550–1.1720 range.

Cross Yen Pairs

• EUR/JPY has maintained its uptrend since June but faced resistance near 173.00, retreating slightly into the 171.80–172.00 zone.

• Still holding at elevated levels overall.

✅ Potential Market Movers Ahead

U.S. Monetary Policy Outlook

• Few major data releases this week; rate expectations remain steady.

• However, political noise continues as President Trump pressures Powell to resign.

• The FOMC blackout period limits policy comments, but any credible report of leadership changes could trigger dollar selling.

Japan Political Risk

• PM Ishiba has reaffirmed his position, easing near-term concerns.

• However, the opposition’s Upper House win strengthens pressure for tax cuts, which could shift fiscal expectations and market sentiment.

• A full collapse of the LDP–Komeito coalition could reignite yen volatility.

Geopolitical Risks

• Uncertainty over the Iran nuclear agreement persists.

• U.S.–Japan trade negotiations could turn volatile depending on political developments.

Bank of England Policy Outlook

• Key Event Today: Bailey’s testimony before Parliament (most critical for GBP).

• UK labor data has been weak; if Bailey signals openness to larger rate cuts, GBP could face sharp downside pressure.

✅ Today’s Key Events

Economic Indicators

• Taiwan Unemployment Rate (June)

• Hungary Central Bank Policy Rate

• U.S. Richmond Fed Manufacturing Index (July)
  (Limited market impact expected from these data points)

Speeches

• Bailey (BOE): Main GBP driver today.

• Powell & Bowman (Fed) at a capital requirements event → unlikely to comment on policy.

✅ Strategic Takeaways

This week lacks a strong narrative, leaving markets without a clear direction.
However, headline risk remains high.

Watch these catalysts:

• FOMC leadership uncertainty (Trump vs. Powell)

• Bailey’s remarks → BOE rate path implications

• U.S. corporate earnings → equity performance spillover into FX