Trading Week Ahead: Markets Brace for the ECB
Geopolitical tensions in the Middle East remain elevated as renewed clashes between the US and Iran push Brent crude back near $90 per barrel. Alongside this energy inflation threat, traders face a pivotal week defined by megacap technology earnings and critical central bank action.
With the European Central Bank policy decision and flash purchasing manager data on the calendar, markets are bracing for sharp shifts in risk sentiment.
👉 EUR ECB Interest Rate Decision – 14:15, Thursday (CEST)
The macroeconomic event of the week. Markets expect the central bank to hold the deposit rate at 2.25% amid sticky 3% headline inflation. A hawkish tone addressing recent oil shocks will instantly reprice EUR pairs and weigh on European risk assets.
👉 EUR Flash PMI – 10:00, Friday (CEST)
An early and critical read on Eurozone business activity. Any sign of severe economic contraction will directly pressure the Euro and bolster the case for future rate cuts.
👉 US Flash PMI – 15:45, Friday (CEST)
A crucial forward-looking growth indicator following the previous 52.2 composite print. A strong expansion will highlight underlying economic resilience, driving immediate USD volatility and challenging dovish Federal Reserve bets.
| Date | Time | Instrument | Event |
|---|---|---|---|
| 20/07/26 |
14:30
|
CAD
|
CPI |
| 21/07/26 |
00:45
|
NZD
|
CPI |
| 22/07/26 |
08:00
|
GBP
|
CPI |
| 23/07/26 |
03:30
|
AUD
|
Employment Change |
|
14:15
|
EUR
|
ECB Interest Rate Decision | |
|
14:45
|
EUR
|
ECB Press Conference | |
| 24/07/26 |
08:00
|
GBP
|
Retail Sales |
|
10:00
|
EUR
|
Eurozone Flash Manufacturing PMI | |
|
EUR
|
Eurozone Flash Services PMI | ||
|
15:45
|
USD
|
Flash Manufacturing PMI | |
|
USD
|
Flash Services PMI |
*All times in the table are in CEST
Technical Analysis with FVG Strategy
This technical analysis uses the EMA 20 and EMA 50 to determine market trends, alongside volume analysis (VPOC) and the Fair Value Gap (FVG), which refers to price imbalances caused by aggressive movements, signalling key entry and exit points. This strategy applies to EURUSD, GBPJPY, US100, and XAUUSD, providing insights into both last week’s market opportunities and the current ones.
Opportunities to Watch This Week
EURUSD
Market Context: The Euro remains in an accumulation phase following a recent drop, preparing for its next decisive move. Structurally, the price stays below both EMAs, indicating a prevailing downtrend, and continues to respect overhead resistance, as no daily candle has definitively closed above it. However, applying a volume profile to the entire accumulation range reveals that the price managed to climb above the VPOC on Thursday and Friday. This offers a potential hint of upward momentum, making today’s close relative to the VPOC a critical deciding factor.
Bullish Scenario (Preferred): If the price successfully closes above the VPOC, the preferred scenario is a long position targeting the overhead swing high, potentially extending to the upper resistance zone.
Bearish Scenario (Alternative): A daily close below the VPOC, triggering a drop to sweep the liquidity resting at the bottom of the accumulation range.
FVG Setup: No FVG setup formed this week or last week due to the ongoing accumulation phase. Traders should closely monitor Thursday’s ECB announcement, which is expected to inject significant volatility into the market.
GBPJPY
Market Context: The market continues its strong bullish trajectory. However, caution is warranted following last Wednesday’s elongated bullish candle, as such extended expansions can often signal the liquidation of long positions and a potential trend exhaustion. A structural support level lies below this expansion candle and will serve as a critical pivot for any further upward continuation.
Bullish Scenario (Preferred): The bias remains strongly bullish as long as the price does not break and close below the underlying support level.
Bearish Scenario (Alternative): A daily close below the immediate support. This would signal a trend reversal and open the door for a deeper pullback into lower support tiers.
FVG Setup: Last week’s FVG setup successfully hit its 2:1 RRR target. While a new FVG formed on Thursday, entry is not recommended due to the overextended nature of the initiating candle.
XAUUSD
Market Context: Gold continues its prevailing downtrend, trading steadily below the 20 EMA. Furthermore, the asset closed below the VPOC of the previous range, signalling a high probability of continued downward momentum.
Bearish Scenario (Preferred): The preferred scenario is a downward continuation to sweep the underlying swing low liquidity.
Bullish Scenario (Alternative): A daily close back above the VPOC. This would invalidate the immediate bearish bias and potentially trigger a move to fill the weekend gap (marked by the yellow rectangle).
FVG Setup: No FVG setup formed this week due to a lack of aggressive, displaced price action.
US100
Market Context: Since last week, the US100 has gained significant downward momentum, ultimately closing below structural support and shifting the broader market structure to bearish. The index is currently trading below both the 20 and 50 EMAs.
Bearish Scenario (Preferred): The preferred scenario is a continuation of the downward trend originating from the active short FVG, targeting a sweep of the nearest swing low and potentially extending into the next underlying support zone.
Bullish Scenario (Alternative): A daily close back above overhead resistance. This structural reclamation would suggest a potential return to a bullish market regime.
FVG Setup: Last week’s long FVG setup resulted in a stop-loss following an aggressive market flush. However, a new bearish FVG has now formed and is valid for execution, with potential targets set at the underlying swing low or the next major support zone.
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