Group 1 - Fund managers are adopting a cautious stance, reducing exposure to risk assets and favoring low-volatility defensive investments as the fourth quarter begins [2] - Concerns about private credit markets have intensified following the bankruptcies of Tricolor and First Brands, leading to fears of credit issues spreading to other markets [2][3] - The potential for stagflation is being closely monitored, with tariffs and political interventions raising concerns about unexpected inflation increases in the U.S. [3][4] Group 2 - The credibility of the Federal Reserve is under scrutiny due to political pressures, which could impact its ability to manage inflation effectively [4][5] - Divergence in global central bank policies is seen as both a challenge and an opportunity, with significant internal volatility across various asset classes [5][6] - The European Central Bank is expected to maintain interest rates in October, with a more optimistic growth forecast for 2025 driven by stable growth in member countries [5][6]

Core Insights - The Euro/USD has risen to a two-week high, approaching 1.1770 amid volatile trading conditions [2] - Improved trade sentiment has led to a slight retreat of the US dollar [3] - The European Central Bank (ECB) is expected to maintain interest rates during its upcoming meeting [4][10] Trade and Economic Sentiment - The slight increase in the Euro reflects a mild pullback in the Dollar Index (DXY), driven by improved trade prospects [5] - Recent US-Japan trade agreements have provided some relief to global markets, while potential US-EU agreements are boosting risk sentiment [7] - The ECB's cautious stance is influenced by external demand signals, with a recent cut in deposit rates to 2.00% [9] Market Positioning - As of July 15, speculators have increased their long positions in the Euro to approximately 128.2K contracts, the largest bet since December 2023 [11] - Conversely, commercial participants have expanded their short positions to nearly 184.2K contracts, marking the largest hedge in months [11] Technical Analysis - A breakthrough above the 2025 high of 1.1830 could pave the way for testing the June 2018 high of 1.1852 [12] - Conversely, a drop below the July low of 1.1556 may lead the currency pair towards the transitional 55-day SMA of 1.1501 [13] Momentum Indicators - Momentum has improved but remains unstable, with the Relative Strength Index (RSI) exceeding 62 and the Average Directional Index (ADX) around 22 [14] Influencing Factors - The Euro's rebound occurs against a backdrop of tariff tensions and widening policy gaps between the Federal Reserve and the ECB [17]

Core Viewpoint - The Euro/USD pair continues to rise, breaking the 1.1700 level, driven by recent positive sentiment towards the Euro amidst trade tensions affecting the US dollar [1][2]. Group 1: Trade Tensions - Ongoing trade instability has put selling pressure on the US dollar, with the market closely watching upcoming speeches from Jerome Powell and the European Central Bank (ECB) [2]. - The worsening trade situation has led to concerns over global trade conflicts, with potential tariffs on European exports and imports from Japan and South Korea, prompting investors to seek safety in the dollar [3]. - The EU is considering broad "counter-coercion" measures in response to US tariffs, which could target US services or limit access to public tenders if no agreement is reached by the August 1 deadline [3]. Group 2: Central Bank Divergence - The minutes from the June Federal Reserve meeting revealed a split among committee members regarding immediate rate cuts, with some advocating for caution until the inflation impact of new tariffs is clearer [4]. - The rise in US consumer prices in June has reinforced Powell's cautious stance, while the ECB has lowered its deposit rate and indicated that new stimulus measures will depend on clearer signs of weak external demand [5]. Group 3: Market Positioning - As of July 15, speculators have increased bullish bets on the Euro, raising net long positions to approximately 128.2K contracts, the highest level since December 2023 [6]. - Commercial traders have increased their net short positions to about 184.2K contracts, marking the highest level in several months, with open interest rising for the fourth consecutive week to over 820K contracts, the highest since March 2023 [6]. Group 4: Technical Analysis - For the Euro/USD to continue its upward trajectory, it needs to break above the July 1 high of 1.1830, targeting the peak of 1.1852 from June 2018 [8]. - Conversely, a drop below the July low of 1.1556 could lead to a decline towards the transitional 55-day moving average of 1.1485, followed by the weekly low of 1.1210 from May 29, and ultimately the psychologically significant level of 1.1000 [8]. Group 5: Momentum Indicators - Current momentum indicators show a moderate trend, with the Relative Strength Index (RSI) rising close to 57, while the Average Directional Index (ADX) remains around 22, indicating a lack of strong confidence in the current trend [9]. Group 6: Considerations - The uncertainty surrounding US tariff policies, combined with the growing divergence between the Federal Reserve and ECB policies, suggests that the Euro may face challenges in regaining its previous strength [12].