Trump-Powell Tensions Escalate: Markets Navigate Political Turmoil | Market Analysis July 21–25

Market Sentiment Overview

Political tensions reached a fever pitch as President Trump intensified attacks on Fed Chair Jerome Powell, reportedly asking Republican lawmakers whether he should fire the Fed chief before quickly walking back the comments. Markets showed resilience despite the chaos, with the Dollar breaking above 98.00 despite fundamental headwinds, and major currencies finding technical support levels. Bitcoin continues its historic run toward $123,218 highs while regulatory clarity improves with the passage of key crypto legislation. The week ahead brings critical PMI data, the ECB decision, and major earnings from tech giants Alphabet and Tesla.

Currencies

USD Index: Breaking Above Key Resistance (98.01)

Current Trend: Bullish Market Sentiment: Risk-Off

The US Dollar Index has broken decisively above the key 98.00 level, reaching 98.01, and confirming the reversal from multi-year lows as political tensions and safe-haven demand drive flows. The DXY has cleared the critical resistance zone and now faces the next hurdle at 99.03, with stronger resistance at 100.32. The Stochastic oscillator at 66.47 shows building momentum without reaching overbought extremes. Support has shifted to 97.17 and deeper at 95.89. Trump’s escalating pressure on Powell paradoxically strengthens the Dollar’s safe-haven appeal despite fundamental weaknesses. The break above 98.00 suggests further upside toward 99.00 or higher if political tensions persist.

Potential Resistance: 99.03, 100.32

Potential Support: 97.17, 95.89

EUR/USD: Deeper Correction Underway (1.1620)

Current Trend: Bearish (Correcting)Market Sentiment: Cautious

EUR/USD has extended its pullback to 1.1620, falling further from multi-year highs as Dollar strength and trade uncertainty weigh on the pair. The correction has broken below the 1.1650 support level, opening the door toward 1.1442 and potentially 1.1252. The Stochastic reading of 34.06 indicates oversold conditions but hasn’t yet triggered a meaningful bounce. Resistance has firmed at 1.1801 and 1.1994, with the ECB’s Thursday decision looming as a key catalyst. The 20-day moving average continues to decline, reflecting the shift in momentum. Recovery requires reclaiming 1.1700 to stabilize the near-term outlook.

Potential Resistance: 1.1801, 1.1994

Potential Support: 1.1442, 1.1252

GBP/USD: Extended Decline Continues (1.3406)

Current Trend: Bearish Market Sentiment: Negative

GBP/USD has fallen further to 1.3406, extending the decline from recent highs as disappointing UK economic data and Dollar strength create a bearish cocktail. The pair has broken below multiple support levels and now approaches the critical 1.3276 zone. Resistance has formed at 1.3516 and 1.3655, while deeper support lies at 1.3139. The 20-day moving average has turned decisively lower, confirming the trend shift. UK inflation acceleration failed to support the Sterling as markets focus on growth concerns and BoE dovishness. Thursday’s PMI data will be crucial for determining if the downtrend can stabilize or accelerate toward 1.3200.

Potential Resistance: 1.3516, 1.3655

Potential Support: 1.3276, 1.3139

Stocks

S&P 500: New Highs at Key Resistance (6,294)

Current Trend: Bullish Market Sentiment: Optimistic

The S&P 500 has surged to 6,294, breaking above previous consolidation and approaching the major resistance zone at 6,414. The index shows renewed momentum above all moving averages, with the Stochastic at 78.09 indicating strong bullish pressure without extreme readings. The recent breakout above 6,250 resistance confirms the continuation of the record-setting rally. Next resistance targets are 6,414 and 6,547, while support has shifted to 6,171 and 6,039. Despite political tensions, markets continue to focus on strong fundamentals and earnings optimism. The technical structure suggests further upside potential if earnings season delivers positive results.

Potential Resistance: 6,414, 6,547

Potential Support: 6,171, 6,039

Netflix: Earnings-Driven Decline (1,209)

Current Trend: Bearish Market Sentiment: Disappointed

Netflix has fallen sharply to $1,209 following mixed Q2 earnings results, breaking below key support levels. The stock faces immediate resistance at 1,275 and 1,339, while support has emerged at 1,156 and 1,089. The Stochastic reading of 39.71 suggests oversold conditions but reflects the post-earnings disappointment. Despite meeting revenue expectations, concerns about subscriber growth and content costs weighed on investor sentiment. The break below 1,250 support confirms near-term bearish momentum. Recovery requires reclaiming 1,250 to stabilize the technical outlook, while 1,200 becomes critical support.

Potential Resistance: 1,275, 1,339

Potential Support: 1,156, 1,089

Intel: Trading Above Key Moving Average (23.10)

Current Trend: Cautiously Bullish Market Sentiment: Cautious Optimism

Intel has recovered to $23.10, trading above the 20-day moving average (red line) and showing signs of stabilization ahead of the crucial Q2 earnings report on July 24. The stock has bounced from the 22.27 support level and now approaches the 23.88 resistance zone. The Stochastic oscillator at 57.35 indicates neutral momentum with room for further upside if earnings catalysts emerge. Despite ongoing foundry struggles and market share pressures from AMD, the technical setup suggests potential for a breakout above 23.88 toward the key 24.99 resistance level. However, analysts remain cautious given execution risks and competitive headwinds. Thursday’s earnings guidance will be critical for determining if the recent recovery can be sustained.

Potential Resistance: 23.88, 24.99

Potential Support 22.27, 21.25

Crypto

Bitcoin: Consolidation After Record High (118,617)

Current Trend: Consolidative (After Bullish Run) Market Sentiment: Cautious Optimism

Bitcoin consolidates at 118,617 after hitting the record high of 123,218 earlier in the week, showing healthy digestion of gains. The cryptocurrency remains well-supported by the long-term ascending trend line, with the Stochastic at 82.49 indicating some cooling from extreme levels. Strong resistance zones at 123,390 and 128,942 await any renewed upside move, while support is established at 112,077 and 105,791. The $2.02 billion weekly ETF inflows and crypto regulatory progress provide fundamental support. Consolidation near these levels appears healthy for the next leg higher toward $125,000.

Potential Resistance: 123,390, 128,942

Potential Support: 112,077, 105,791

Commodities

Gold: Consolidation Channel Forms (3,350)

Current Trend: Neutral/Consolidative Market Sentiment: Cautious

Gold trades at 3,350, consolidating within a defined range as markets assess competing forces between safe-haven demand and rising yields. The precious metal faces resistance at 3,397 and 3,449, while support sits at 3,295 and 3,244. The Stochastic reading of 52.96 reflects the neutral momentum as Gold hovers around key moving averages. Despite Dollar strength and political tensions, Gold struggles to break higher as investors focus on potential Fed policy shifts. The RSI around 50 highlights the indecisiveness. Tuesday’s Powell speech could provide the catalyst for the next directional move, with trade tensions supporting the upside bias.

Potential Resistance: 3,397, 3,449

Potential Support: 3,295, 3,244

WTI Crude Oil: Retreat from Recent Highs (67.42)

Current Trend: Neutral/Corrective Market Sentiment: Mixed

WTI Crude has pulled back to 67.42 from recent highs near 69.00, reflecting profit-taking after the strong rally. The commodity faces immediate resistance at 69.27 and 72.02, while support has emerged at 65.51 and 62.86. The Stochastic at 35.28 indicates oversold conditions that could support a bounce if demand fundamentals remain supportive. The retreat appears corrective within the broader uptrend, driven by improving US economic data. Energy sector strength in equity markets continues to support the bullish narrative, though the geopolitical premium has diminished. The 67.00 level provides key short-term support for the next move higher.

Potential Resistance: 69.27, 72.02

Potential Support: 65.51, 62.86

Key Events This Week (July 21–25, 2025)

Major Data Releases

• Monday, July 21: RBA Meeting Minutes (23:00 UTC)
• Tuesday, July 22: Fed Chair Powell speech at conference, ECB Bank Lending Survey
• Wednesday, July 23: US Existing Home Sales, Alphabet and Tesla earnings after the bell
• Thursday, July 24: Global PMI releases (Eurozone, UK, US preliminary), ECB Rate Decision (11:45 UTC), US New Home Sales, Intel Q2 earnings
• Friday, July 25: Japan Tokyo CPI, UK Retail Sales, US Durable Goods Orders

Central Bank Focus

• ECB Rate Decision: Expected to hold rates at 2.15% (main refinancing) and 2.00% (deposit), focus on forward guidance amid trade uncertainty
• Fed Chair Powell Speech: Critical test whether Trump’s pressure campaign affects Fed independence stance
• RBA Minutes: Insights into surprise hold decision despite 84.6% market expectations for cut

Earnings Spotlight

• Wednesday: Alphabet (GOOGL) – Q2 growth expected to slow, AI chatbot competition pressuring search revenue
• Wednesday: Tesla (TSLA) – Focus on 2025 guidance, robotaxi updates, Musk comments on Trump relationship
• Thursday: Intel (INTC) – “Hold your horses” warning from analysts, foundry struggles continue

Week Ahead Outlook

The week ahead centers on political tensions between Trump and Powell, with the Fed Chair’s Tuesday speech serving as a critical test of central bank independence. Trump’s public pressure campaign, including reported discussions about firing Powell, has created unprecedented political risk for monetary policy. Markets will scrutinize Powell’s response for any signs that the pressure is affecting the Fed’s stance.

Thursday’s global PMI releases will provide crucial insight into economic momentum amid trade uncertainty. The ECB’s rate decision and President Lagarde’s press conference will be closely watched for reaction to Trump’s 30% EU tariff threats. With trade negotiations ongoing but little progress evident, markets remain vulnerable to political headlines.

Bitcoin’s regulatory environment continues improving with the passage of key legislation, while the corporate earnings season tests whether fundamental strength can support stretched valuations. The Trump-Powell saga adds a new dimension of political risk that could overshadow traditional economic fundamentals.

Key risk factors include escalation of Trump-Fed tensions, disappointing PMI data signaling economic weakness, and earnings misses from tech giants. Conversely, successful trade negotiations or dovish Fed signals could spark risk-on rallies.