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The European session features low-tier economic data, including the final French CPI and Italian industrial production figures. These releases are unlikely to influence the European Central Bank’s (ECB) policy decisions, leading to a muted market reaction. Meanwhile, the US-Iran geopolitical tensions have subsided, shifting focus to the upcoming US CPI report on Tuesday, which could impact EUR/USD and broader risk sentiment. In the American session, the Canadian employment report is expected to show a modest 10K jobs added in June, compared to 87.8K in May, with the unemployment rate remaining at 6.6%. The Bank of Canada (BoC) maintains a neutral stance, balancing economic weakness against inflation risks. Traders should note that deviations from consensus estimates could trigger minor volatility in USD/CAD.
For forex traders, the lack of high-impact data in Europe means limited opportunities for directional bets. However, the US CPI report will be critical for assessing Federal Reserve policy expectations and USD strength. The Canadian jobs data, while not pivotal, could test the BoC’s dovish stance if the numbers surprise significantly. The broader market remains in a wait-and-see mode ahead of key data releases and central bank meetings.
Investors should monitor the US CPI for inflationary signals that might influence Fed rate decisions. For the BoC, any unexpected strength in the Canadian labor market could delay rate cuts, affecting USD/CAD dynamics. Traders are advised to watch for technical levels in EUR/USD and USD/CAD, as well as potential shifts in market sentiment following the US CPI release.
