FX Market Report | July 2, 2025 Fundamentals Take the Spotlight Again Ahead of U.S. Jobs Report

FX Market Report | July 2, 2025
Fundamentals Take the Spotlight Again Ahead of U.S. Jobs Report
– Dollar Weakness Pauses, but Rate Cut Expectations Remain Intact –

✅ Market Focus Shifts from “Crisis” to “Economy”

With tensions between the U.S. and Iran easing, the “safe-haven dollar buying” sentiment has faded.
The market has shifted its attention back to U.S. economic data and monetary policy fundamentals.

Although President Trump’s comments still hold influence, market reactions are becoming more subdued.
Despite lingering uncertainty, sentiment is now focused on indicators and interest rate expectations.

📌 Today’s Key Focus: June ADP Employment Report

The ADP Employment Report is scheduled for release today and is closely watched as a leading indicator of tomorrow’s official Nonfarm Payrolls (NFP).

Indicator	Forecast	Previous (May)
ADP Private Employment	+98,000	+37,000

Compared to January’s +183,000, the momentum of job recovery remains weak.
Relative to the 2025 average of +103,000, today’s result will indicate whether employment is regaining strength.

📅 Tomorrow’s NFP Forecast (July 3)

Nonfarm Payrolls: +110,000 (Previous: +139,000)
Attention will also be on changes in average wages and the unemployment rate
→ Depending on ADP results, markets may start pricing in tomorrow’s expectations early.

💱 FX Market Snapshot and Key Catalysts

The recent dollar weakness has paused, with mild buying interest emerging.
This appears to be position adjustment ahead of tomorrow’s jobs data.

🔍 Today’s Scheduled Economic Events & Key Speeches

📊 Economic Indicators

France: Fiscal Balance (May)
Eurozone: Unemployment Rate (May)
U.S.: MBA Mortgage Applications
U.S.: Challenger Job Cuts (June)
U.S.: Weekly Oil Inventory Report

🗣 Key Speeches & Events

At the ECB Annual Forum “Adapting to Change” in Portugal, the following officials are scheduled to speak:

De Guindos (ECB Vice President)
Cipollone (ECB Executive Board)
Taylor (BOE MPC Member)
Lane (ECB Chief Economist)
Closing Speech by ECB President Christine Lagarde

→ Any remarks on stagflation or prolonged easing could influence the euro.

📝 Strategy Note: Event-Driven Short-Term Trading

With ADP today and NFP tomorrow, short-term trading should remain event-driven.

Weaker-than-expected data → Renewed rate cut bets → Dollar selling resumes
Strong data → Dollar rebound gains traction
Expect continued volatility based on a combination of economic data, central bank comments, and trade developments.

💱 Currency Pair Strategy & Technical Summary (July 2, 2025)

💵 USD/JPY

Current Price: ~143.60
Short-Term: Bias to sell on rallies
Daily Chart: Range-bound (143.00–145.00)

Strategy Note:
Rangebound likely to persist until NFP.
143.00 remains support, 145.00 resistance.
If U.S. data disappoints, a dip toward the lower 142s is possible.
Hawkish comments from BOJ board member Masu may also strengthen the yen temporarily.

💶 EUR/USD

Current Price: ~1.1760
Short-Term: Bullish
Daily Chart: Near top of rising channel (~1.1800)

Strategy Note:
Lifted by hawkish ECB remarks.
Holding 1.1750 opens path toward new YTD highs above 1.1850.
Below 1.1700 could trigger stops.
Also monitor shifts in European inflation expectations.

💷 GBP/JPY

Current Price: ~197.20
Short-Term: Sideways to heavy
Daily Chart: Potential head-and-shoulders pattern (neckline at 199.00)

Strategy Note:
BOE rate cut speculation is weighing on the pound.
Weak UK GDP revisions or Construction PMI could trigger a drop toward 195.00.
Dollar weakness could provide support, but 198.00 remains a profit-taking zone.

🇨🇦 CAD/JPY

Current Price: ~107.10
Short-Term: Lack of clear direction
Daily Chart: MACD warning of possible bearish crossover

Strategy Note:
Oil price swings and BOC policy expectations are creating volatility.
Watch for U.S. pressure on Canada over digital tax — could weigh on CAD.
Oil price decline could push pair into the 105s.
108.00 zone is a key resistance level.

🇦🇺 AUD/JPY

Current Price: ~95.60
Short-Term: Bullish
Daily Chart: Uptrend intact

Strategy Note:
Aussie supported by equities and ceasefire relief.
CPI slowdown may invite RBA rate cut talk, but external optimism supports AUD.
Break above 96.00 could trigger new highs.
94.80–95.00 remains dip-buying zone.

🇿🇦 ZAR/JPY

Current Price: ~7.74
Short-Term: Rebound in progress
Daily Chart: Forming recovery trend

Strategy Note:
ZAR supported by risk sentiment and oil price relief post-ceasefire.
With July 9 U.S. tariff deadline approaching, reform hopes also help sentiment.
Break above 7.80 could retest YTD highs.
7.60–7.65 remains key support area.