Weekly Technical Outlook – US500, EURUSD, USDCAD

NFP Report – US500

The June US Non-Farm Payrolls (NFP) report drops early this Thursday, July 2 due to the Independence Day holiday, with the US500 attempting to stabilize after pulling back from record highs. Despite tailwinds from tech sector strength, investors face clear crosscurrents, ranging from the sustainability of the AI trade to renewed rate-hike bets. Under new Fed Chair Kevin Warsh’s data-dependent leadership, labour metrics remain the primary equity driver, with markets now pricing in at least one rate hike this year.

The labour market remains resilient, averaging 188,000 jobs per month over the last quarter – nearly triple the comparable figure for the same period in 2025 – with unemployment holding at 4.3%. For June, consensus forecasts project a moderation to 110,000 payrolls (down from May's 172,000). Monthly average hourly earnings are expected to rise 0.3%, while annual earnings are forecast to tick up to 3.5%, up from a 3.4% rise in May.

A hotter-than-expected print will fuel hawkish concerns, especially if Warsh reinforces an aggressive tone at the ongoing Sintra central banking forum on Wednesday. Conversely, a softer headline number would lower the probability of a September hike, boosting tech-led equity inflows.

Technically, the US500 is consolidating near 7,350, testing its 50-day SMA resistance. A bullish breakout past the 20-day SMA at 7,450 reopens the path toward record highs near 7,620. However, with momentum indicators signalling fading upside strength, a rejection here risks a pullback toward monthly support at 7,250, exposing the 7,000 psychological floor.

Eurozone Flash Estimate Inflation data – EURUSD

Currently trading near over-one-year lows around the 1.1400 handle, EURUSD faces a pivotal week. Its next directional move depends heavily on Wednesday’s preliminary Eurozone inflation report, paired with ECB President Christine Lagarde’s commentary at the annual Sintra forum and late-week US employment data.

Inflation in the euro area has edged higher since Mideast geopolitical conflicts flared, with core metrics ticking up in May. June consensus forecasts reflect expectations for a complex reading, with headline CPI projected to hit 3.0% (down from 3.2%) and core CPI expected at 2.6% (up from 2.5%). An upside surprise would give ECB hawks more leverage to push for a July rate hike, narrowing the monetary policy divergence with the Fed and boosting the euro. Conversely, a sharp 20% decline in June oil prices leaves room for a significant headline downside surprise. A cool print would validate a dovish ECB approach, dampening July hike expectations and fuelling euro weakness against majors like the dollar and pound.

Technically, a hot inflation print could propel EURUSD past immediate resistance at 1.1410, targeting the 1.1500 psychological boundary. On the flip side, a downside miss threatens immediate support at yearly lows near 1.1300, handing control to the bears for a deeper slide toward 1.1250.

Canada’s GDP release for April serves as the primary fundamental catalyst for the loonie, putting USDCAD under pressure as it stabilizes following a pullback from multi-year highs. Tuesday's data is expected to show a 0.4% expansion, marking a healthy rebound from the previous month’s 0.1% contraction. This growth metric is critical as the BoC remains in a strict holding pattern, having left its benchmark interest rate unchanged at 2.25% for the fifth consecutive meeting.

Beyond domestic indicators, the pair remains highly vulnerable to geopolitical shifts and broader dollar dynamics. The US dollar recently softened on news that Washington and Tehran paused attacks ahead of Doha peace talks, shifting global risk appetite. However, the commodity-linked Canadian dollar’s upside may be further capped by a 20% drop in crude prices over June, dragging on the energy-dependent currency.

A strong GDP print would confirm robust domestic demand despite restrictive financial conditions, adding to the loonie’s recovery against the greenback. Technically, this could drive USDCAD downward to test major support around 1.4000, with a break exposing 1.3900. Conversely, an economic miss would expose the loonie to selling pressure, triggering a bullish breakout past immediate resistance at 1.4200 toward the 1.4245 target.