Following the latest Bank of Canada meeting, the central bank maintained a cautious tone but refrained from committing to further easing highlighting persistent inflationary pressures, especially in services and housing. The statement acknowledged that underlying inflation remains sticky and that any rate cuts will be gradual and data-dependent.

In contrast, the Swiss National Bank has already initiated rate cuts and remains one of the more dovish central banks among the majors. The SNB is not only comfortable with easing, but also has historically intervened to weaken the Swiss franc in the face of excessive strength especially when inflation is contained, as it currently is in Switzerland.

Canada is still battling inflation and taking a cautious approach to easing.

Switzerland is easing more proactively and has room to stay dovish.

Add to that Canada’s commodity-linked economy, which could benefit if oil and broader risk sentiment remain supportive. Meanwhile, Switzerland’s low-yield environment makes the franc less attractive during risk-on phases, especially when yields elsewhere remain elevated.

As a result, CADCHF looks well-positioned to trend higher, particularly if global risk appetite holds and BoC stays patient while the SNB continues to cut or signals further easing.

CADCHF

BUY LIMIT CADCHF

Gold Drops Nearly $100 in 15 Hours, What’s Driving It?

As I reviewed the market reaction following the FOMC’s July rate decision, one of the most striking moves came from gold. Prices fell sharply from around $3,320 to $3,272 in under 15 hours a nearly $50 decline that can’t be overlooked.

This move wasn’t about a surprise hike or a shock comment from Powell. It was about the market digesting the implications of a “higher-for-longer” stance. The Fed held rates at 4.50%, as expected, but the tone made it clear: they’re not in a rush to cut. And in an environment where real yields remain elevated and the dollar is gaining momentum, gold an asset with no yield faces natural headwinds.

What I find important here is the underlying driver: risk appetite. Equity markets remain firm, U.S. data continues to surprise to the upside, and investors are still chasing yield. As long as that narrative holds, there’s little reason for gold to rebound meaningfully in the short term.

Technically and structurally, the path of least resistance appears to be lower, with $3,200 as a probable near-term magnet. Of course, this doesn't mean we pick sides it means we stay data-driven, and stay adaptive to the next catalyst, whether that’s CPI, NFP, or Jackson Hole.

I'm a neutral to bearish into gold and looking for pullbacks around the $3.320 to be able to short with a better risk reward.

XAUUSD

GOLD is Looking Interesting After FOMC

USD Strength Theme: The market is shifting focus toward US exceptionalism, with strong corporate earnings and labor data offering a more compelling USD narrative.

Positioning Unwind: The first half of the year saw substantial USD short positioning. Now, with risk sentiment improving, traders are unwinding these shorts adding to dollar upside pressure.

Key Levels: A clean break below 1.1500 would be technically significant and suggest further dollar momentum could unfold.

EURUSD

SHORT EURUSD

Policy Divergence: The Fed is expected to stay cautious on rate cuts amid solid US labor data and resilient earnings. In contrast, the BoJ is likely to emphasize downside risks to growth and inflation, especially given Japan’s domestic political instability and backlash over the US trade deal.

Political Risk in Japan: PM Ishiba is under growing pressure to resign. This creates policy uncertainty and undermines confidence in Japan’s leadership typically bearish for the yen.

Technical Trigger: A divergence in tone between BoJ Governor Ueda and Deputy Governor Uchida could catalyze another leg higher in USD/JPY.

USDJPY

LONG USDJPY

The Swiss National Bank (SNB) surprised markets recently by holding rates, but they remain highly vigilant on inflation and have explicitly stated their willingness to intervene in FX markets to support the franc. With global risk sentiment under pressure  and carry trades starting to unwind slightly  CHF stands to benefit as a defensive currency.

At the same time, the U.S. dollar is facing downward pressure from softer inflation momentum, weaker consumer sentiment data, and expectations of a more dovish Fed stance into Q4.

If equity volatility picks up or U.S. macro disappoints this week, USD/CHF could unwind lower, especially with the SNB unlikely to resist CHF strength near key inflation inputs.

USDCHF

SHORT USDCHF


After the BoJ's subtle tightening bias last week and the shift in tone from Governor Ueda, there’s rising speculation that Japan is gradually moving away from ultra-loose monetary policy. Meanwhile, U.S. Treasury yields have shown signs of peaking amid softer U.S. economic surprises and growing anticipation of a Fed pivot in Q4.


The yen, deeply oversold and still under-owned by real money investors, could benefit from any deterioration in U.S. macro data or further dovish Fed commentary in the week ahead.

Additionally, geopolitical tensions in East Asia and month-end repatriation flows could further support JPY strength.

SHORT USDJPY

The Bank of England is facing a more persistent inflation problem than the eurozone, but recession risks in the UK are rising particularly in services and retail. Meanwhile, the ECB has room to pause without panic, supported by stabilizing inflation and positive PMIs.


As the EUR strengthens on structural confidence and less trade uncertainty, and the UK economy shows early signs of contraction, relative economic momentum favours the euro.

EURGBP

LONG EURGBP


Go long EUR/USD on pullbacks towards 1.1650, targeting 1.1880, with a stop below 1.1585.

Fundamental Rationale:
The ECB’s pause reinforced a "wait-and-see" stance but offered no resistance to recent euro strength. With inflation stabilizing and trade tensions showing signs of easing, investor positioning continues to favour EUR upside.

In contrast, the Fed is nearing a policy plateau, and softer U.S. inflation prints have capped USD demand.
If an EU-US trade deal materializes by the August 1 deadline, it could reduce macro uncertainty and push EUR/USD toward fresh YTD highs, especially as the eurozone rate path becomes more anchored.

LONG EURUSD

This trade captures dual macro pressures: deteriorating risk sentiment in Asia and mounting Japanese political instability.

On the Australian side, the AUD remains vulnerable due to its tight correlation with China’s growth trajectory. Recent weakness in Chinese credit data and stimulus hesitancy suggest downside pressure remains, particularly for commodity-linked currencies.

On the yen side, although political noise has weakened JPY temporarily, it also introduces volatility and uncertainty that favors defensive flows over time. If Ishiba resigns or if leadership speculation intensifies, we could see a flight to safety within the Asia-Pacific region, with JPY benefiting relative to AUD.

Technically, AUD/JPY is at a short-term resistance zone, and macro risk-off flows could trigger a clean reversal.

EURJPY

SHORT AUDJPY


While the yen is soft against the dollar, its weakness may not be symmetrical across the board. The ECB is expected to hold rates steady today with increasingly dovish forward guidance amid a weak inflation outlook. 

If Lagarde delivers a cautious tone especially post recent PMIs EUR could come under pressure.

Meanwhile, if Japanese political risk does not materially escalate, the yen could stabilize or even strengthen relative to the euro, which lacks near-term bullish drivers. This makes EUR/JPY a more balanced vehicle for JPY reversion trades while avoiding direct USD risk.

SHORT EURJPY


Markets are positioned cautiously ahead of next week’s quarterly inflation print in Australia. However, recent commodity price stability and stickiness in service-sector inflation suggest a potential upside surprise, which would push back RBA rate cut expectations. With risk sentiment rebounding and USD facing downward pressure, the AUD stands to benefit from both domestic and global tailwinds.

The RBA minutes hinted at a more data-dependent, gradualist path shifting focus to the inflation release.

The EM Risk Appetite Index has stabilized, favoring high-beta currencies.

Global equity strength and a softer USD create supportive crosswinds.

AUDUSD

LONG AUDUSD


While the initial yen strength appears to have been driven by short-covering, the political situation in Japan remains precarious. Markets have yet to fully price the probability of Prime Minister Ishiba stepping down, which would reintroduce fiscal uncertainty, risk of stimulus, and broader market instability historically supportive of yen strength.

LDP internal pressure is mounting, and key leadership terms expire in September.

Trade negotiations with the U.S. are fragile; a failed deal could trigger new elections or fiscal pledges.

The JGB market is already pricing in a steeper curve, suggesting rising concerns about fiscal credibility.

Luca Santos

Luca Santos

Jul 31 2025

BUY LIMIT CADCHF

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