Market Conditions and Trading Mindset:

The markets have started to stabilize compared to the previous weeks of extreme volatility. However, this stabilization should not be mistaken for low-risk trading conditions — liquidity sweeps, fakeouts, and sentiment-driven moves are still very present.

As volatility compresses, trading will demand even more patience and discipline.
This is the time where being selective is crucial. Only the best setups should be taken — the ones that meet your trading plan criteria perfectly. Risk management must remain your top priority, because although moves are smaller, they can still be sharp and unforgiving.

Remember: Not trading is a position. Sitting out of low-quality setups is just as important as taking the good ones. Mastery in trading is not about doing more — it’s about doing better.

And for those staying consistent: the results show.

Fundamental Analysis:

Global Economy and Trade War Developments

This past week brought a combination of ongoing trade tensions and shifts in central bank sentiment, which are significantly impacting markets.

1. Trade Wars and Global Tensions

The global economy remains under strain due to the ongoing trade conflicts, especially between the United States and China. Both countries continue to escalate tariffs on critical sectors such as semiconductors, technology hardware, and agricultural goods.
This escalation has had a ripple effect, influenced multinational supply chains and pushing companies to reevaluate manufacturing and sourcing strategies.

• China’s Economy: China recently posted weaker-than-expected GDP growth figures, highlighting the real economic toll of these tensions. Slower Chinese demand affects commodity markets globally, particularly industrial metals and oil.
• United States: Despite internal economic resilience, sectors exposed to exports (like agriculture and manufacturing) are starting to feel pressure from reduced foreign demand and higher input costs.

This tit-for-tat escalation creates an environment where risk assets (such as stocks and risk currencies) remain vulnerable to sudden sentiment shifts based on political headlines.

2. Central Banks and Interest Rate Outlook

We’re also seeing important developments in global monetary policy:

• Federal Reserve (U.S.):
  The Fed has signalled that while inflation remains sticky, they are unlikely to raise rates aggressively further. However, no rate cuts are expected in the immediate future either, which leaves the USD relatively supported.
• European Central Bank (ECB):
  ECB policymakers are balancing slowing growth against stubborn inflation. A dovish tone from the ECB could pressure the Euro further, particularly against USD and commodity currencies like AUD and CAD.
• Bank of Japan (BoJ):
  After years of ultra-loose policy, Japan is cautiously exploring ways to normalize policy. Any surprises from BoJ will create volatility in JPY pairs, particularly USD/JPY and EUR/JPY.

3. Impact on Markets

• Indices:
  Despite short-term recoveries, the broader tone across equity indices like NASDAQ, S&P 500, and Dow Jones remains cautious. Corporate earnings have been mixed, and fears of economic slowdown keep a lid on strong bullish moves.
• Forex:
  The U.S. dollar (USD) remains firm as a safe-haven asset, but traders should watch out for reversals on any signs of Fed dovishness or risk-on sentiment returning. Commodity currencies (AUD, NZD, CAD) remain sensitive to both global growth signals and commodity price swings.
• Gold and Commodities:
  Gold continues to attract safe-haven demand, especially with lingering geopolitical tensions. Meanwhile, oil prices have been volatile due to conflicting signals — on one hand, weaker global demand; on the other, potential supply constraints.

Technical analysis:

This week we are looking at EURUSD again, and we will have the same bias as last week, we are still expecting some buys to come through and the market to start pushing to the upside, this bias is based on the fundamental analysis as we can see the markets are starting to normalise again after the added volatility coming from the tariff wars. With that in mind, looking at the chart on the 4-hour time frame we can expect price to drop below the lows and grab liquidity before potentially making its way to the upside. I Think we can sit on our hands a bit this week as we wait for the market to give more confirmation, the market out level is where I’m looking to potentially enter some long positions after price has grabbed liquidity. Safe stop loss placements can be around the red line at 1.11498 as if price breaks below this level, then we know that the buys are no longer valid.

Key Takeaways for Traders This Week:

• Stay news-aware: Political and economic headlines can cause rapid shifts.
• Be technically disciplined: Only enter where the probabilities and technical align.
• Focus on high liquidity trading sessions: New York and London overlaps are likely to offer the best moves.
• Manage risk conservatively: Small consistent gains will outperform aggressive over-trading in these conditions.

Final Note:

The trading environment continues to demand excellence.
It’s not the time to rush trades or chase after every move. It’s the time to execute your plan with precision and let your trading edge work for you.

Consistency, patience, and adaptability will be what defines your performance over the next few weeks.

Keep showing up. Keep doing the work. The results will follow.