AUD/USD – What a Week for Risk-On!
The Australian Dollar just posted four straight green days — with today’s candle still TBD. AUD, a classic risk-on currency, has been riding the wave of bullish sentiment in global markets. Price is now up against a key resistance level at 0.65500, with the next resistance at 0.67000 and nearby support down at 0.64000.
Fundamentally, easing geopolitical tensions, steady equity strength, and a cooling Dollar all contributed to the AUD’s upside. While price action was choppy earlier in the month, this week’s price action has cleaned up.
On the institutional side, last week’s COT report showed NZD with a strong +24.54% net change, while AUD came in weaker at -1.39%. I’ll be watching this Friday’s filing to see if AUD positioning catches up. Historically, AUD tends to performs in risk-on and underperform when risk-off flows dominate.
If 0.65500 gives way, we may be headed toward a test of 0.67000 — but a stall here could offer a pullback opportunity for bulls.
– Alan
The Australian Dollar just posted four straight green days — with today’s candle still TBD. AUD, a classic risk-on currency, has been riding the wave of bullish sentiment in global markets. Price is now up against a key resistance level at 0.65500, with the next resistance at 0.67000 and nearby support down at 0.64000.
Fundamentally, easing geopolitical tensions, steady equity strength, and a cooling Dollar all contributed to the AUD’s upside. While price action was choppy earlier in the month, this week’s price action has cleaned up.
On the institutional side, last week’s COT report showed NZD with a strong +24.54% net change, while AUD came in weaker at -1.39%. I’ll be watching this Friday’s filing to see if AUD positioning catches up. Historically, AUD tends to performs in risk-on and underperform when risk-off flows dominate.
If 0.65500 gives way, we may be headed toward a test of 0.67000 — but a stall here could offer a pullback opportunity for bulls.
– Alan
EdgeFinder’s Seasonality Scanner – How History Can Help Your Edge
Ever wonder how seasonality could affect your trades?
In stable or low-volatility market environments, seasonality can be a powerful confluence tool. By analyzing how assets tend to perform during certain months over a 10-year average, we can better time entries, exits, or bias shifts — especially when paired with technicals and fundamentals.
Let’s look at the NASDAQ as an example:
Historically, summer is a strong period for equities:
- May: +2.13%
- June: +2.59%
- July: +3.12%
- August: +2.26%
Why? Typically, inflation and rate decisions are more predictable mid-year, earnings season can provide bullish catalysts, and risk sentiment often leans positive unless disrupted by major macro events.
Of course, seasonality isn’t a guarantee — but in calm markets, it can offer an extra layer of conviction.
Use seasonality with EdgeFinder's trend bias, COT data, and retail sentiment for well-rounded trade setups.
Ever wonder how seasonality could affect your trades?
In stable or low-volatility market environments, seasonality can be a powerful confluence tool. By analyzing how assets tend to perform during certain months over a 10-year average, we can better time entries, exits, or bias shifts — especially when paired with technicals and fundamentals.
Let’s look at the NASDAQ as an example:
Historically, summer is a strong period for equities:
- May: +2.13%
- June: +2.59%
- July: +3.12%
- August: +2.26%
Why? Typically, inflation and rate decisions are more predictable mid-year, earnings season can provide bullish catalysts, and risk sentiment often leans positive unless disrupted by major macro events.
Of course, seasonality isn’t a guarantee — but in calm markets, it can offer an extra layer of conviction.
Use seasonality with EdgeFinder's trend bias, COT data, and retail sentiment for well-rounded trade setups.
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USD/CAD – Crossroads
Last Friday, the Canadian Dollar surged 80+ pips in under an hour after Trump abruptly ended trade talks with Canada over the Digital Services Tax — a flashback to earlier this year, when headlines repeatedly drove pops on USD/CAD. Now, USD/CAD is trading near a key level of support and a long-standing bullish trendline — a pivotal technical area as both currencies digest fresh developments.
Fundamentally, the issue with Canada has reportedly been resolved, and trade negotiations are said to be back on track. At the same time, the US 10-Year Yield continues to drift lower, reinforcing the Dollar’s bearish tone as traders add to rate cut bets.
In my opinion, this pair is at a true crossroads. With a stacked calendar ahead, we may not get clarity until later in the week:
- Tuesday: JOLTs, ISM Manufacturing (US)
- Thursday: CAD Balance of Trade, US ISM Services, US Unemployment, NFP
- Alan
Last Friday, the Canadian Dollar surged 80+ pips in under an hour after Trump abruptly ended trade talks with Canada over the Digital Services Tax — a flashback to earlier this year, when headlines repeatedly drove pops on USD/CAD. Now, USD/CAD is trading near a key level of support and a long-standing bullish trendline — a pivotal technical area as both currencies digest fresh developments.
Fundamentally, the issue with Canada has reportedly been resolved, and trade negotiations are said to be back on track. At the same time, the US 10-Year Yield continues to drift lower, reinforcing the Dollar’s bearish tone as traders add to rate cut bets.
In my opinion, this pair is at a true crossroads. With a stacked calendar ahead, we may not get clarity until later in the week:
- Tuesday: JOLTs, ISM Manufacturing (US)
- Thursday: CAD Balance of Trade, US ISM Services, US Unemployment, NFP
- Alan
US10Y – Decline Continues
The US 10-Year Yield continues to drift lower, now trading around 4.25%, roughly 3% off last week’s levels. This steady decline has been a key driver for risk-on sentiment and Dollar weakness, as traders increase bets on rate cuts
However, the bulk of cuts may already be priced in — with markets expecting roughly 62 basis points of easing by year-end. As we approach peak dovish expectations, yields may begin to stabilize or even reverse if data surprises to the upside.
In my opinion, yields are falling for the right reasons — softening macro, easing inflation, and uncertainty easing. But any upside surprise in jobs or inflation could spark a quick repricing
– Alan
The US 10-Year Yield continues to drift lower, now trading around 4.25%, roughly 3% off last week’s levels. This steady decline has been a key driver for risk-on sentiment and Dollar weakness, as traders increase bets on rate cuts
However, the bulk of cuts may already be priced in — with markets expecting roughly 62 basis points of easing by year-end. As we approach peak dovish expectations, yields may begin to stabilize or even reverse if data surprises to the upside.
In my opinion, yields are falling for the right reasons — softening macro, easing inflation, and uncertainty easing. But any upside surprise in jobs or inflation could spark a quick repricing
– Alan
EdgeFinder's Retail Sentiment – Quick Glance
Retail traders are once again heavily skewed — and that’s where contrarian opportunity starts to take shape.
The EdgeFinder’s Retail Sentiment Scanner shows extreme crowding on several pairs and indices.
Remember: sentiment isn’t a timing tool, but in a strong trend, it can be an added layer of conviction.
📈Overcrowded Longs:
USD/CHF – 92% long
USD/CAD – 60% long
USOIL – 78.67% long
DOW – 73.71% long
SPX500 – 70% long
📉Overcrowded Shorts:
EUR/USD – 79% short
RUSSELL – 83.69% short
NASDAQ – 88.46% short
NIKKEI – 100% short
Retail traders are once again heavily skewed — and that’s where contrarian opportunity starts to take shape.
The EdgeFinder’s Retail Sentiment Scanner shows extreme crowding on several pairs and indices.
Remember: sentiment isn’t a timing tool, but in a strong trend, it can be an added layer of conviction.
📈Overcrowded Longs:
USD/CHF – 92% long
USD/CAD – 60% long
USOIL – 78.67% long
DOW – 73.71% long
SPX500 – 70% long
📉Overcrowded Shorts:
EUR/USD – 79% short
RUSSELL – 83.69% short
NASDAQ – 88.46% short
NIKKEI – 100% short
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DXY – 14 Year Trendline
The US Dollar is now testing a 14-year bullish trendline — a long-term support level that many bears have had their eye on during the recent Dollar selloff.
Fundamentally, the Dollar’s decline accelerated after the April 2nd tariff announcement, which triggered capital outflows and sent money into other currencies and safe-haven assets. Add in a Fed with data supporting a cut and a string of underwhelming US data, and you get the sharp drop.
In my opinion, big levels like this can be noisy. Price often wicks around key trendlines before making its true move. Waiting for clean follow-through — especially on a weekly close — is the smarter play here.
⚠️ Risks to consider for bulls:
- A confirmed breakdown below the trendline could shift long-term structure
- Softer US data or dovish Fed rhetoric accelerates selling
⚠️ Risks to consider for bears:
- Strong rebound from support zone sparks squeeze
- US data surprises to the upside, delaying cuts and lifting yields
– Alan
The US Dollar is now testing a 14-year bullish trendline — a long-term support level that many bears have had their eye on during the recent Dollar selloff.
Fundamentally, the Dollar’s decline accelerated after the April 2nd tariff announcement, which triggered capital outflows and sent money into other currencies and safe-haven assets. Add in a Fed with data supporting a cut and a string of underwhelming US data, and you get the sharp drop.
In my opinion, big levels like this can be noisy. Price often wicks around key trendlines before making its true move. Waiting for clean follow-through — especially on a weekly close — is the smarter play here.
⚠️ Risks to consider for bulls:
- A confirmed breakdown below the trendline could shift long-term structure
- Softer US data or dovish Fed rhetoric accelerates selling
⚠️ Risks to consider for bears:
- Strong rebound from support zone sparks squeeze
- US data surprises to the upside, delaying cuts and lifting yields
– Alan
USOIL – Tight Range, No Clear Direction
Oil is currently trading around $65 — right back at pre-breakout levels from three weeks ago. The sharp spike driven by Israel-Iran tensions has since fully retraced, and price is now consolidating near a major support zone, showing no clear trend in either direction.
Technically, the upside remains capped at $78, while the current range-bound structure reflects a lack of strong conviction from either buyers or sellers.
Fundamentally, tensions in the Middle East have cooled, and Trump’s “drill baby drill” energy stance has re-entered headlines, potentially pressuring supply expectations. On top of that, summer seasonality, which typically favors demand, has so far failed to lift prices.
The EdgeFinder score currently sits at -2, signaling slight bearish bias — but paired with in-directional price action, it’s not enough to act on.
In my opinion, this is a time to be patient. I’d rather wait for a clean break or shift in narrative before committing either way.
– Alan
Oil is currently trading around $65 — right back at pre-breakout levels from three weeks ago. The sharp spike driven by Israel-Iran tensions has since fully retraced, and price is now consolidating near a major support zone, showing no clear trend in either direction.
Technically, the upside remains capped at $78, while the current range-bound structure reflects a lack of strong conviction from either buyers or sellers.
Fundamentally, tensions in the Middle East have cooled, and Trump’s “drill baby drill” energy stance has re-entered headlines, potentially pressuring supply expectations. On top of that, summer seasonality, which typically favors demand, has so far failed to lift prices.
The EdgeFinder score currently sits at -2, signaling slight bearish bias — but paired with in-directional price action, it’s not enough to act on.
In my opinion, this is a time to be patient. I’d rather wait for a clean break or shift in narrative before committing either way.
– Alan
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EdgeFinder’s Eco Surprise Meter – Gauges Are Moving
Lots on the economic calendar this week — and the needles have shifted since our last check-in.
The Economic Surprise Meter helps track how each currency is performing relative to expectations, not just raw data. That context matters — because a beat or miss doesn’t move markets the same way every time.
Economic surprise trends can lead price action, especially ahead of major central bank moves. Currencies with consistently strong beats tend to gain momentum — and those with weak prints often face pressure.
Having the EdgeFinder’s Surprise Meter on hand lets us catch shifts in economic strength early — before they show up in price or policy decisions.
Lots on the economic calendar this week — and the needles have shifted since our last check-in.
The Economic Surprise Meter helps track how each currency is performing relative to expectations, not just raw data. That context matters — because a beat or miss doesn’t move markets the same way every time.
Economic surprise trends can lead price action, especially ahead of major central bank moves. Currencies with consistently strong beats tend to gain momentum — and those with weak prints often face pressure.
Having the EdgeFinder’s Surprise Meter on hand lets us catch shifts in economic strength early — before they show up in price or policy decisions.
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USD/JPY – Range Trading
USD/JPY is currently recovering yesterday’s losses and remains trapped in a tight range dating back to April 30th. While other Dollar pairs — like USD/CAD and USD/CHF — have steadily pushed to new lows, USD/JPY has held its ground, showing relative strength.
It’s not uncommon for major pairs to stall into key data releases, and this week is no different. Tomorrow’s lineup:
- Unemployment Rate
- Nonfarm Payrolls (NFP)
- ISM Services PMI
Fundamentally, markets have cooled off across the board. While tariffs remain a headline risk, talks are reportedly progressing and a resolution could be near. For now, traders are focused on upcoming data to gauge how many cuts the Fed may deliver this year.
In my opinion, the pair is likely to continue ranging into tomorrow’s releases. Once the data hits, we’ll get a better read on both rate expectations and market direction.
– Alan
USD/JPY is currently recovering yesterday’s losses and remains trapped in a tight range dating back to April 30th. While other Dollar pairs — like USD/CAD and USD/CHF — have steadily pushed to new lows, USD/JPY has held its ground, showing relative strength.
It’s not uncommon for major pairs to stall into key data releases, and this week is no different. Tomorrow’s lineup:
- Unemployment Rate
- Nonfarm Payrolls (NFP)
- ISM Services PMI
Fundamentally, markets have cooled off across the board. While tariffs remain a headline risk, talks are reportedly progressing and a resolution could be near. For now, traders are focused on upcoming data to gauge how many cuts the Fed may deliver this year.
In my opinion, the pair is likely to continue ranging into tomorrow’s releases. Once the data hits, we’ll get a better read on both rate expectations and market direction.
– Alan
GBP/USD – Political Tensions Hit Sterling
The Pound is falling fast as internal political turmoil rattles investor confidence in the UK. The latest drop follows reports that Prime Minister Keir Starmer failed to fully support Treasury Chief Rachel Reeves in Parliament — raising questions about fiscal leadership just as markets were looking for stability.
The Labour government has been forced to soften its stance on welfare reforms after internal pushback from its own party members. Markets are now bracing for either tax hikes or spending cuts — both of which carry potential economic and political fallout.
In my opinion, uncertainty around the UK’s fiscal path could keep pressure on GBP especially if the headlines continue to point to policy instability.
*Last summer, political instability fueled a selloff in the Euro as France had a flash election.
⚠️ Risks to consider:
- Continued political infighting may erode GBP confidence
- Clarity from Starmer or Reeves could stabilize sentiment temporarily
– Alan
The Pound is falling fast as internal political turmoil rattles investor confidence in the UK. The latest drop follows reports that Prime Minister Keir Starmer failed to fully support Treasury Chief Rachel Reeves in Parliament — raising questions about fiscal leadership just as markets were looking for stability.
The Labour government has been forced to soften its stance on welfare reforms after internal pushback from its own party members. Markets are now bracing for either tax hikes or spending cuts — both of which carry potential economic and political fallout.
In my opinion, uncertainty around the UK’s fiscal path could keep pressure on GBP especially if the headlines continue to point to policy instability.
*Last summer, political instability fueled a selloff in the Euro as France had a flash election.
⚠️ Risks to consider:
- Continued political infighting may erode GBP confidence
- Clarity from Starmer or Reeves could stabilize sentiment temporarily
– Alan
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Don't Short The Dollar?📉
Chart of the day: Dollar Pairs🔥
Chart of the day: Dollar Pairs🔥
EdgeFinder's EU Economic Heatmap – Big Data Ahead!
Tomorrow is stacked with high-impact events, and the euro area is in the spotlight.
Tomorrow's News for Europe:
- Italian, French, and German Services PMIs
- ECB Meeting Minutes
Just a few hours later, we’ll shift focus to the US with:
- Unemployment Rate
- Nonfarm Payrolls
This combination of monetary policy insight and labor market data could trigger sharp moves across EUR/USD, equities, and rates markets.
Safe trading everyone!
Tomorrow is stacked with high-impact events, and the euro area is in the spotlight.
Tomorrow's News for Europe:
- Italian, French, and German Services PMIs
- ECB Meeting Minutes
Just a few hours later, we’ll shift focus to the US with:
- Unemployment Rate
- Nonfarm Payrolls
This combination of monetary policy insight and labor market data could trigger sharp moves across EUR/USD, equities, and rates markets.
Safe trading everyone!