Asia midday: Nasdaq 100 outperformed, Nikkei 225 pull-back hit key support (Chart of the day)

[Redator]

Monday, 29 July’s standout move came from the FX market, where the US dollar surged to near a two-month high. The greenback’s strength followed initial optimism over the newly announced US-EU trade deal, which triggered a brief intraday spike of 0.3% in the euro during the early hours of Monday’s Asian session.

However, that euro rally quickly faded. By the close of the US session, the euro had tumbled 1.3%, its steepest daily drop since 12 May 2025, making it the worst-performing major currency. The US Dollar Index climbed 1% on the day, bringing its July-to-date gain to 2%, its strongest monthly performance of 2025.

Trade terms favour the US, stir EU criticism

The reversal in euro sentiment was driven by criticism over the deal's perceived imbalance. Under the agreement, the EU will apply a 15% tariff on most exports to the US, while its own tariffs on US goods will fall below 1%. Additionally, the EU has pledged to buy US$750 billion worth of American energy and invest another US$600 billion in the US economy.

German officials and industry leaders voiced concern that the deal disproportionately benefits the US, potentially harming the competitiveness of European manufacturers. Reflecting this unease, Germany’s DAX fell 1%, the worst performer among major European indices.

Read more EU-US Trade deal and USD bullying – Market wrap for the North American session - July 28

US tech rally continues, led by Nvidia

In contrast, US equities extended their bullish momentum. Nvidia surged 1.9% intraday on Monday to close at another record high, fueling further gains in the Nasdaq 100, which rose 0.4% to a fresh all-time closing high of 23,356. The S&P 500 and Nasdaq 100 E-mini futures continued the rally in today’s Asia session, gaining 0.1% and 0.2%, respectively.

Asian equities pull back amid stronger dollar

Despite the bullish tone in US markets, most Asia-Pacific indices slipped in today’s session, weighed down by the firmer dollar. Hong Kong’s Hang Seng Index dropped 1% to a five-day low, even as markets anticipate a 90-day extension of the US-China tariff truce beyond the 12 August deadline.

Japan’s Nikkei 225 also fell 1% to 40,590, marking its third straight daily loss. The index is now nearing its 20-day moving average at around 40,130, which may act as intermediate support.

USD/JPY nears key resistance as yen rebounds

In the currency markets, the dollar’s rally paused. The Japanese yen emerged as the best-performing major currency today, up 0.2% against the greenback. The USD/JPY pair hit an intraday high of 148.71 and is now testing a critical resistance zone between 149.00 and 149.60, which has capped gains since mid-May.

Gold finds support as dollar eases

Gold (XAU/USD) managed to halt its four-day losing streak, gaining 0.1% intraday. The yellow metal found support around the US$3,300 level, a key medium-term technical floor, benefiting from the dollar’s subdued intraday performance.

Economic data releases

Fig 1: Key data for today’s Asia mid-session (Source: MarketPulse)

Chart of the day – Nikkei 225’s corrective pull-back may have ended

Fig 2: Japan 225 CFD Index minor trend as of 29 July 2025 (Source: TradingView)

After hitting its current 52-week high of 42,084 on last Thursday, 24 July (just a whisker below its current all-time high of 42,513 printed in July 2024), the price actions of the Japan 225 CFD Index (a proxy of the Nikkei 225 futures) have staged a minor corrective pull-back of -3.6%.

The three-day minor corrective decline sequence has reached a potential key inflection zone of 40,470/40,130 defined by a confluence of elements (the rising 20-day moving average, the 61.8%/76.4% Fibonacci retracement of the prior sharp rally from 22 July low to 24 July high) (see Fig 2).

In addition, the hourly RSI momentum indicator has just flashed out a bullish divergence condition at its oversold region, which suggests that the downside momentum of the three-day corrective decline has eased.

The odds now are in favour of the bulls for a continuation of another potential round of impulsive up-move sequence within its medium-term uptrend phase.

Watch the 40,130 key short-term pivotal support, and a clearance above 41,110 sees the next intermediate resistances coming in at 41,650, 41,940/975, and 42,513 in the first step.

On the other hand, failure to hold at 40,130 invalidates the recovery scenario for a round of corrective decline extension to expose the next intermediate supports at 39,455, and 38,940 (also the 50-day moving average).

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