July 9 Tariff Deadline: Markets Brace for Impact | Market Analysis July 7–11

Market Sentiment Overview

Markets enter a critical week as Trump’s July 9 tariff deadline looms, with only trade deals with Vietnam and the UK secured. The US Dollar continues its “Big Beautiful” decline, hitting February 2022 lows near 96.40 on the USDX, down nearly 12% year-to-date. Despite falling USD, Gold remains oddly stagnant around $3,300 while the S&P 500 surges to new all-time highs, suggesting a structural capital reallocation. Trade negotiations with the EU, Japan, and South Korea remain incomplete as markets brace for potential tariff implementations.

Currencies

USD Index: Breakdown Below Key Support (96.55)

Current Trend: Strongly Bearish Market Sentiment: Very Negative

The US Dollar Index has crashed through critical support, currently trading at 96.55 and showing a clear breakdown below the 20-day moving average (red line). The USDX displays a persistent downtrend with the Stochastic oscillator at 35.0 in deeply oversold territory, yet showing no signs of stabilization. The sustained decline below 97.50 support confirms the structural weakness. Despite stronger-than-expected NFP data, fiscal concerns over Trump’s “Big Beautiful Bill” continue to weigh heavily. Next critical support lies at 95.50, with any bounce facing resistance at 98.50 and 99.80.

Resistance: 97.40, 98.29

Support: 95.71, 94.76

EUR/USD: Breakout to Fresh Multi-Year Highs (1.1779)

Current Trend: Explosively Bullish Market Sentiment: Very Positive

EUR/USD has broken decisively above the ascending trendline resistance, currently trading at 1.1779 near fresh multi-year highs. The pair shows explosive bullish momentum above all moving averages, with the 20-day SMA providing dynamic support well below current levels. The Stochastic oscillator at 84.56 indicates overbought conditions but maintains bullish momentum. Strong resistance now lies at 1.1906 and 1.2075, while support has been established at 1.1644 and deeper at 1.1488. The technical structure suggests further upside potential toward the psychological 1.2000 level.

Resistance: 1.1906, 1.2075

Support: 1.1644; 1.1488

GBP/USD: Testing Key Resistance Zone (1.3652)

Current Trend: Bullish Market Sentiment: Cautious Optimism

GBP/USD is currently testing the critical resistance zone around 1.3652, having pulled back from recent highs near 1.3789. The pair remains well-supported by the rising 20-day moving average (red line), which continues to provide dynamic support. The Stochastic oscillator shows neutral readings, suggesting room for further upside if resistance is cleared. Key resistance levels are positioned at 1.3844 and 1.4011, while support rests at 1.3524 and 1.3364. The overall uptrend structure remains intact, with the ascending trendline providing a strong technical foundation.

Resistance: 1.3844, 1.4011

Support: 1.3524, 1.3364

Stocks

S&P 500: Approaching Key Resistance at Record Highs (6254.85)

Current Trend: Strongly Bullish Market Sentiment: Euphoric

The S&P 500 continues its relentless march to new all-time highs, currently at 6254.85 and approaching critical resistance at 6319.74. The index shows a clear ascending channel pattern with the 20-day moving average providing strong upward momentum. The Stochastic oscillator at 85.39 indicates overbought conditions but hasn’t shown bearish divergence yet. Markets display “euphoric” sentiment with daily new highs, driven by AI innovation themes and capital rotation from traditional assets. Next resistance targets are 6319.74 and 6419.14, while support sits at 6140.16 and 6038.72. Despite stretched valuations, technical momentum remains strongly bullish.

Resistance: 6319.74; 6419.14

Support: 6140.16; 6038.72

Delta Air Lines (DAL): Range-Bound Ahead of Earnings (50.81)

Current Trend: Neutral/Consolidative Market Sentiment: Cautiously Optimistic

Delta trades at 50.81, consolidating in a range between key support at 47.94 and resistance at 53.06 ahead of Thursday’s earnings report. The stock has been trading sideways above the 20-day moving average, suggesting underlying strength. With an Earnings ESP of +2.09% and a history of beating estimates (10.06% average surprise), the technical setup appears favorable for an upside breakout. The Stochastic oscillator at 70.31 shows moderate momentum with room for further gains. Key resistance levels at 53.06 and 56.09 could be tested on positive earnings, while support at 47.94 and 45.28 should contain any disappointment.

Resistance: 53.06; 56.09

Support: 47.94; 45.28

Commodities

Gold: Range-Bound Despite Dollar Weakness (3329.23)

Current Trend: Neutral/Consolidative Market Sentiment: Puzzled

Gold continues its unusual consolidation around 3329.23, failing to capitalize on the Dollar’s dramatic decline. The precious metal trades within a defined range bounded by resistance at 3396.77 and 3448.86, with support at 3268.04 and 3210.06. The 20-day moving average is providing dynamic support, but momentum indicators remain neutral with the Stochastic at 64.95. This disconnect from traditional correlations mirrors the 2013-2014 period when capital flowed from Gold into risk assets. Technical indicators suggest a potential breakout is approaching, with Friday’s FOMC Minutes potentially serving as the catalyst.

Resistance: 3396.77; 3448.86

Support: 3268.04; 3210.06

WTI Crude Oil: Recovery Above Moving Average (66.71)

Current Trend: Bullish (Short-term) Market Sentiment: Cautiously Optimistic

WTI Crude has recovered to 66.71, trading above the 20-day moving average after testing lower support levels. The recent price action shows a bounce from key support around 64.65, with the Stochastic oscillator at 73.92 indicating renewed bullish momentum. However, fundamental concerns about OPEC+ supply increases and weak global demand remain. Resistance is established at 68.51 and 71.06, while support sits at 64.65 and 62.00. Saturday’s OPEC+ meeting will be critical for determining whether this technical recovery can be sustained or if the market faces another leg lower toward $60.

Resistance: 68.51; 71.06

Support: 64.65; 62.00

Central Bank Calendar & Key Events (July 7-11, 2025)

Major Central Bank Meetings

• Tuesday, July 8: RBA Rate Decision (25bps cut to 3.60% expected), RBNZ Rate Decision (hold at 3.25% expected)
• Wednesday, July 9: TRUMP TARIFF DEADLINE – Critical for market direction

Key Economic Releases

• Monday, July 7: Eurozone Retail Sales (1.5% expected vs 2.3% prior), Germany Industrial Production
• Tuesday, July 8: Australia RBA Meeting, Canada Ivey PMI
• Wednesday, July 9: FOMC Minutes (June meeting), China CPI (-0.3% expected), Japan PPI (3.2% expected)
• Thursday, July 10: US Initial Jobless Claims (260K expected), Delta Air Lines Earnings
• Friday, July 11: UK GDP (0.2% MoM expected), Canada Employment, Germany Current Account

Fed Speakers & Central Bank Officials

• Monday: ECB’s Nagel
• Tuesday: RBA Press Conference, ECB’s Nagel
• Wednesday: RBA’s Hauser and Hunter, ECB’s Lane, Nagel, and De Guindos
• Thursday: Fed’s Musalem, Waller, and Daly, ECB’s Cipollone, BoE’s Breeden

Special Focus: July 9 Tariff Deadline

The critical July 9 deadline approaches with only 2 of 18 targeted trade deals completed (UK and Vietnam). Trump announced he will begin sending tariff letters starting Friday, explaining the rates that trading partners will face. Key outstanding negotiations:

• European Union: Dropped hopes for a comprehensive deal, seeking a lighter agreement
• Japan & South Korea: Progress reported but no breakthrough
• Canada: Deal possible in the coming days
• India: Talks progressing, but timeline uncertain

Market consensus suggests Trump may threaten higher tariffs to extract concessions before granting extensions, rather than implementing April 2’s “Liberation Day” rates immediately.

Week Ahead Outlook

This week centers on the July 9 tariff deadline as the primary market catalyst. With negotiations ongoing until the weekend, expect heightened volatility around trade headlines. The FOMC Minutes on Wednesday will provide insights into Fed thinking after the strong NFP report, while RBA and RBNZ decisions offer insight into Asia-Pacific monetary policy divergence.

The Dollar’s decline appears structural rather than cyclical, driven by fiscal concerns and the administration’s preference for currency weakness to address trade imbalances. Traditional correlations are breaking down, with Gold failing to benefit from Dollar weakness as capital flows into US equities seeking innovation and yield.

Risk management remains crucial given the binary nature of tariff outcomes and potential for sharp moves based on trade deal announcements or implementation threats.