Market Overview — 07.07EUR/USDOANDA:EURUSDTylerWhite_Good morning team Let’s go over the latest news, because there are several important developments that could affect today’s trading. First of all, all eyes are once again on the escalation around the **Strait of Hormuz**. Yesterday, a Qatari LNG carrier was attacked while passing through the strait, and the market reacted very nervously. As you can see, oil is opening the day with a solid move higher, and volatility has picked up across several other assets as well. The market seems to be worried that this could put the ongoing negotiations between the U.S. and Iran at risk. Those talks are still continuing through working groups. Personally, I’m not convinced this changes much. We've already seen multiple cases where both sides exchanged strikes and still returned to the negotiating table afterward. But markets are clearly nervous. So today, be especially careful with anything related to oil and the U.S. dollar. Volatility could easily be higher than usual, and we're already seeing that this morning. Moving on. Yesterday we also got industrial production data from Germany. And for recent years, the numbers were surprisingly strong—industrial output increased by almost 1% month-over-month. This is actually exactly what I talked about in my video about the German economy. If you haven't watched it yet, I highly recommend it. In that video, I explained that Germany's industrial slowdown has been driven by two major factors. First, the economy has become increasingly service-oriented, with roughly 75% of GDP now coming from services rather than manufacturing. Second, several strategic mistakes made by German automakers caused them to lose market share in both the U.S. and China. So what we're seeing now is very much in line with that outlook. The slowdown appears to have been temporary, and Germany's automotive industry has recovered from much more difficult periods before. If this trend continues, Germany could once again become a source of strength for the euro. The data was genuinely strong, and that increases the chances of seeing better GDP numbers and stronger PMI readings in the coming months. So from a medium-term perspective, I think the euro has room to strengthen—even if the European Central Bank isn't planning any rate hikes right now. Now let's move to the U.S. Yesterday we also received several PMI reports from different sources, including the ISM Services Index. Overall, every business activity indicator came in below expectations. The U.S. economy is still expanding—most PMI readings remain above 50—but the pace of growth is weaker than markets expected. In several sectors, especially services, activity also slowed compared to last month. That’s something worth paying attention to. These weaker business activity numbers could limit how aggressive **Kevin Warsh** can be with his rate-hike rhetoric. It's entirely possible that his repeated comments about higher interest rates have already started affecting business sentiment. Remember, PMI surveys are based on responses from purchasing managers and supply managers—the people who make day-to-day decisions inside companies. If they're becoming more cautious about the economy, that eventually shows up in these reports. So I wouldn't be surprised if we start hearing a slightly softer tone from Warsh in the near future, which could also lead to some weakness in the U.S. dollar. As for today's calendar, we have several things worth watching. We'll get the **Bank of England meeting minutes**, which should give us a better understanding of how policymakers currently view interest rates. Because of that, the British pound could become quite volatile around the release. If the minutes suggest there's little support for future rate hikes, the pound could come under pressure. We'll also receive trade balance data from both the U.S. and Canada. Export and import figures are always useful because they give us another look at the underlying strength of each country's currency. And finally, we'll continue watching updates from the **International Energy Agency** on the oil market. Brent has been trading around the $70 level, and the IEA's comments could provide more clarity about where the oil market is heading next. Right now, oil remains one of the key drivers for the global economy and the major currencies, so it's definitely something we need to keep an eye on. Overall, though, the situation remains manageable. I'll post today's trading ideas in the private community as usual, taking all of these developments into account. Have a great trading day, and good luck everyone!