Trading Week Ahead: Powell’s Testimony and US GDP Data Could Shake Markets

The final week of June brings a high-stakes macro storm that could jolt volatility across USD pairs, equities, and commodities. With Fed Chair Jerome Powell’s back-to-back testimonies, fresh PMI readings, and a final Q1 GDP revision, traders are on alert for any shift in inflation sentiment and Fed trajectory.

Will Powell hint at easing or double down on inflation? Will growth data rattle markets or reinforce resilience? Here’s what you need to know:

• PMI Data (Manufacturing & Services)
Fresh US PMI readings will provide key insight into the momentum of both industrial and service sectors. Manufacturing PMI is forecast to slow to 51.1 from a previous 52.0, while Services PMI is expected to ease to 52.9 from 53.7; both remain in expansion territory but signal a cooling pace. Any unexpected softness may fuel rate cut speculation and pressure the dollar, whereas resilience in these indicators could reinforce the Fed’s cautious stance and support Treasury yields.

• Fed Chair Powell Testifies
All eyes turn to Capitol Hill as Fed Chair Jerome Powell delivers testimony on Tuesday and Wednesday. With monetary policy at a turning point, traders will parse his words for dovish or hawkish undertones. Hints at policy easing may weaken the dollar and lift equities, while firm inflation concerns could support yields and the greenback.

• Final GDP
Thursday’s GDP revision is expected to confirm a -0.2% contraction in Q1, matching the previous estimate. While largely priced in, any unexpected revision could stir sentiment. A deeper contraction might fuel recession concerns, while a surprise upward adjustment could temper rate cut expectations.

Technical Analysis with FVG Strategy

This trading strategy uses the EMA 20 and 50 to assess market trends and the Fair Value Gap (FVG) to identify areas of price imbalance. These imbalances, caused by rapid price movements, often indicate high-probability entry and exit points. This approach can be applied to currency pairs such as EURUSD and GBPJPY, as well as US30 and XAUUSD, and provides a review of recent price action and potential trading opportunities.

Last Week’s Opportunities

EURUSD

Market Context: EURUSD remains in a bullish structure, holding above the 20 EMA, reflecting continued buying pressure. Price action aligns with last week's Fair Value Gap (FVG), which continues to support the current upward trend.

Bullish Scenario (Preferred): As long as the pair trades above the EMA20 and key support, the bullish outlook remains intact, targeting a 2:1 RRR or recent swing highs.

Bearish Scenario (Alternative): A decisive move below the EMA20 and support zone could shift sentiment, opening the path to a liquidity sweep below recent lows.

Setup: No new FVG was formed this week; the previous bullish setup from last week remains active and in progress.

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XAUUSD

Market Context: Gold remains in a broad uptrend, trading above EMA20 despite subdued volatility. The trend structure stays intact, with bulls defending key levels.

Bullish Scenario (Preferred): A continuation higher targeting the swing high and all-time high remains likely while the price holds above EMA20.

Bearish Scenario (Alternative): A close below EMA20 and underlying support may indicate short-term weakness and trigger a deeper pullback.

Setup: Last week's bullish FVG remains valid and active; no new setups formed this week.

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US30

Market Context: The Dow is consolidating between the 20 and 50 EMA. Price is supported by the 50 EMA but capped by the 20 EMA, reflecting market indecision following a sharp decline.

Bearish Scenario (Preferred): A continuation lower toward swing lows is expected unless price reclaims the 20 EMA.

Bullish Scenario (Alternative): A daily close above both EMAs would invalidate the bearish view and suggest renewed bullish momentum.

Setup: No FVG setups have been observed this or last week, leaving the market technically neutral for now.

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Opportunities to Watch This Week

GBPJPY

Market Context: GBPJPY surged higher last week, clearing liquidity zones and forming a new bullish FVG, signalling strong buyer dominance.

Bullish Scenario (Preferred): Further upside into marked liquidity levels is expected if the pair holds above support.

Bearish Scenario (Alternative): A drop toward support may occur, where a bounce could continue the bullish trend. A break below would increase the likelihood of a move toward lower lows.

Setup: A new FVG formed this week to the upside, reinforcing bullish continuation potential.

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