EUR/USD has slipped as renewed US-Iran tensions strengthened safe-haven demand for the US dollar and pushed Treasury yields higher. A break below 1.1370 could expose the pair to 1.1350 and 1.1300, while recovery attempts remain capped near the 1.1475 to 1.1500 area. US inflation data is the next major catalyst, with a hotter CPI reading likely to reinforce dollar strength and increase pressure on the euro. EUR/USD came under renewed selling pressure on Monday as fresh military exchanges between the United States and Iran revived demand for the US dollar and lifted global energy prices.
The pair struggled to build on last week’s recovery and moved back toward the lower end of its recent range as investors prepared for the latest US Consumer Price Index report. Higher crude oil prices have added to inflation concerns, pushing US Treasury yields higher and strengthening expectations that the Federal Reserve may keep interest rates restrictive for longer.
The Dollar Index has recovered toward the 101.00 area after ending the previous week lower. For EUR/USD, the stronger greenback has brought the 1.1370 support level back into focus, with traders assessing whether the pair can stabilize or extend its decline toward 1.1350 and 1.1300.
Why Is EUR/USD Falling Today? The latest weakness in EUR/USD reflects a combination of geopolitical risk, higher oil prices and rising US bond yields.
Fresh attacks between the US and Iran over the weekend raised concerns about the future of shipping through the Strait of Hormuz. Iran said the key waterway had been closed again, while Washington maintained that commercial traffic could continue.
The conflicting claims sent crude oil prices sharply higher and revived concerns that another energy shock could keep global inflation elevated.
Higher oil prices tend to support the US dollar during periods of market stress. They can also place additional pressure on the euro because the Eurozone relies heavily on imported energy, leaving the region more exposed to rising fuel costs.
US CPI Could Decide the Dollar’s Next Move The US inflation report is likely to become the most important driver for EUR/USD in the near term.
A stronger-than-expected CPI reading would reinforce expectations that the Federal Reserve may need to maintain higher interest rates or consider additional tightening later this year. That outcome would likely push Treasury yields and the dollar higher, increasing the risk of EUR/USD falling through its current support zone.
A softer inflation report would create a different setup. It could reduce pressure on the Fed to tighten policy further and allow EUR/USD to recover some of its recent losses.
However, the impact of softer inflation could be limited if oil prices continue rising or geopolitical tensions worsen.
Euro Recovery Struggles Near 1.1500 EUR/USD recently recovered from lows around 1.1325 and moved above 1.1420, but the advance stalled before the pair could establish a sustained move through the 1.1475 to 1.1500 region.
That failure suggests sellers remain active whenever the euro approaches higher levels.
The pair now faces an important test around 1.1370. A clear move below that level would increase the likelihood of a decline toward 1.1350, followed by the June low near 1.1325. If selling pressure persists, the psychological 1.1300 level could become the next target.
On the upside, EUR/USD would need to recover above 1.1450 before challenging 1.1475 and 1.1500 again. A sustained break through 1.1500 would weaken the immediate bearish outlook and could support a broader recovery toward 1.1580.
ECB and Fed Policy Expectations Remain Divided Interest-rate expectations on both sides of the Atlantic continue to shape the EUR/USD outlook.
The Federal Reserve remains focused on inflation after stronger energy prices complicated the outlook for consumer prices. Recent weakness in US employment reduced expectations of immediate tightening, but the latest geopolitical escalation has prevented markets from fully dismissing the possibility of another rate increase.
In Europe, softer core inflation has reduced expectations of further European Central Bank tightening. That leaves the euro with less policy support, particularly if US inflation remains elevated and Treasury yields continue climbing.
Comments from Federal Reserve and ECB officials will therefore remain important as traders look for any change in the policy outlook.
EUR/USD Outlook The near-term EUR/USD price forecast remains cautious as the pair struggles to hold its recent recovery.
The US dollar is benefiting from safe-haven demand, rising oil prices and higher Treasury yields, while the euro faces renewed pressure from Europe’s exposure to imported energy costs.
A break below 1.1370 would put 1.1350 and 1.1300 within reach. However, softer US inflation or an easing of Middle East tensions could weaken the dollar and help EUR/USD return toward 1.1450 and 1.1500.
For now, US CPI and developments surrounding the Strait of Hormuz are likely to determine whether the pair stabilizes or begins another leg lower.
Why is EUR/USD falling today?
EUR/USD is falling as renewed US-Iran tensions increase safe-haven demand for the US dollar. Rising oil prices and Treasury yields have also strengthened expectations that US interest rates may remain elevated.
What are the key EUR/USD levels to watch?
The main support levels are 1.1370, 1.1350 and 1.1300. Resistance is located near 1.1450, followed by 1.1475 and 1.1500.
How could US CPI affect EUR/USD?
A hotter US CPI reading could strengthen the dollar and push EUR/USD lower by increasing expectations of tighter Federal Reserve policy. Softer inflation could weaken the greenback and support a euro recovery.
Fragile rebounds across precious metals and major FX pairs face renewed risks from the latest developments around the Strait of Hormuz and this week's US CPI report. Key technical levels remain in focus to determine the next directional breakout.
Iran and the US exchanged strikes following the disruption of the ceasefire framework. The US launched strikes against Iran's key Hormuz gateway and military infrastructure. Iran launched strikes against commercial shipping in the Strait of Hormuz, including oil and LNG vessels. Fed Governor Kevin Warsh is expected to testify on Wednesday following Tuesday's US CPI report. US CPI is expected to decline from 4.2% to 3.8%, in line with the more than 40% decline in crude oil prices from their yearly highs. Crude oil prices continue to hold a fragile bullish rebound following the latest strikes, within a broader selloff driven by oversupply risks, rising OPEC+ production quotas, and recovering Gulf production and exports. Latest analysis: Crude Oil Weekly Outlook: Oversupply Risks Challenge WTI & Brent Despite Hormuz Tensions EUR/USD and gold are also holding fragile rebounds despite persistent US dollar strength, supported by lingering inflationary pressures stemming from the US-Iran conflict, reinforcing expectations for a higher-for-longer interest rate environment. As the US Dollar Index (DXY) holds above 101: EUR/USD continues to face bearish pressure below 1.1470. Gold continues to face bearish pressure below 4,200. EUR/USD Price Outlook: Monthly Time Frame – Log Scale
Source: TradingView
Key points from this chart:
EUR/USD's monthly price action continues to test the multi-year resistance-turned-support zone between 1.1280 and 1.1300. This area aligns with the 38.2% Fibonacci retracement of the January 2025-January 2026 advance. A breakdown below 1.1280 would expose the 1.1130-1.1000 region, where the 50% Fibonacci retracement converges with the upper boundary of the 2008-2025 descending channel, creating another potential major rebound zone. On the upside, a sustained move back above 1.1470, followed by 1.1600, would reinforce bullish continuation toward the key 1.1730-1.1800 resistance area. This zone could either trigger another major pullback or open the door for a rally toward levels last seen in 2021 and 2018 near 1.2300. These scenarios largely depend on whether the US dollar pulls back or breaks above its major resistance zone, as discussed in this video. USD/JPY Bulls Prepare for Major Move Higher?
Gold Price Outlook: Six-Month Time Frame – Log Scale
Source: TradingView
Key points from the six-month chart:
Gold is testing a breakdown below the 27.2% Fibonacci retracement of the 1920-2026 advance. A close below 3,930 would expose the 38.2% Fibonacci retracement near the 3,500-3,460 zone, which served as a five-month resistance area throughout 2025. Price action is also aligned with the trendline connecting consecutive highs between 2016 and 2025, a major resistance-turned-support level. This high-time-frame confluence zone could determine whether gold stages a major reversal or experiences a deeper decline. Gold Price Outlook: Daily Time Frame – Log Scale
Source: TradingView
Key points from this chart:
Despite the high-time-frame support confluence, gold's daily price action remains capped below a descending trendline connecting lower highs since March 2026, maintaining an overall bearish bias. Price action is currently holding a fragile rebound, testing the 27.2% Fibonacci retracement of the April-July decline. A move above 4,200 would shift focus toward: 4,300: 38.2% Fibonacci retracement. 4,420: 50% Fibonacci retracement, which would mark a sustained bullish shift from the current bearish bias. As long as DXY strength persists, as discussed in this video, downside risks remain elevated across both EUR/USD and gold unless a change in monetary policy direction is confirmed and/or key resistance levels are reclaimed.
Currencies Reflect Divergent Monetary Policies and Economic Fundamentals On July 13, the dollar, euro and pound will keep being defined by competing central bank stances and economic fundamentals. Latest FOMC meeting minutes saw a hint of a shift towards the hawkish side with some officials thinking rates might well be firmed up on the back of core inflation being too sticky, while risks from energy price volatility, and demand from artificial intelligence. The dollar is thus supported by the prospect of relatively restrictive monetary policy being sustained for a period of time. Strong underlying domestic demand and a status quo as a global reserve currency are key structural positives for the dollar.
Economy-wide growth across the euro zone is currently uneven, and is likely to remain so in the months following the ECB’s June rate increase to 2.25%. Different fiscal positions at the country level and heterogeneous inflation dynamics are key factors influencing monetary policy transmission in the euro zone. The euro currency remains susceptible to activity and wage data.
Sterling is facing a similar dilemma, as policymakers at the Bank of England juggle elevated service-sector inflation risks against signs of softer economic growth. Domestic fiscal and labour market policies are likely to continue playing a key role in the currency’s outlook as relative policy stances with the Fed and the ECB impact on exchange rates.
Key economic fundamentals remain divergent, with different paths in inflation dynamics, fiscal settings and underlying growth resilience, all of which will sustain two-way market risks for the three major currencies. External trade flows and capital movements will further differentiate the currency markets depending on which central bank can most easily maintain stability and growth.
DXY Holds $101.07 – Fib 0.618 Retest on 4h Dollar Index Price Chart – Source: Tradingview The USD index (DXY) was up slightly at $101.07 on the 4h timeframe chart. We can see from the 4h DXY chart that the mixed candles had just tested 0.618 Fib level near 100.31 after a strong breakout from the swing low at 97.67.
The bullish bodies with higher highs are confirming the buyer’s control, while still maintaining respect for the 4h chart 50-EMA near 101.02. We can also observe that the RSI sits near 55. Meanwhile, the volume profile identifies 100.59-101.06 as a significant breakout point.
Fib retracement implies the next resistance will come around 103.09 in the next few weeks. In short, the market remains decisively bullish in the 4h chart above 100.59 inside a well-defined ascending channel, confirming a higher high and a higher low formation to keep the buyers firmly in control.
Based on this technical outlook, I would consider a long position around $101.07, targeting $103.09, while placing a stop below $100.59.
GBP/USD Holds $1.3388 – EMA 50 Defense on 4h
GBP/USD Price Chart – Source: Tradingview The British pound was trading near $1.3388 on the 4h timeframe chart. The mixed candles defending the 4h chart 50-EMA near 1.3360 were kicked off near the red MA around 1.337, according to the 4h GBP/USD price chart.
The bullish wicks represent buyers’ absorption around support levels, confirming higher lows are still in tact. The RSI sits near 51. The volume profile identifies 1.331-1.338 as a reliable pivot. We note that the resistance is located around 1.345-1.350.
The GBP/USD is maintaining a neutral-to-bearish structure at the 4h 1.345 EMA-50 as the price oscillates inside a sideways trading range. The higher lows indicate that the buyers remain on the sidelines, looking to buy at any pullback.
Based on the current technical outlook, I would consider a long position around 1.3388, targeting 1.345, with a stop below 1.325.
EUR/USD Holds $1.1440 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview The euro (EURUSD) was trading near $1.1440 on the 4h timeframe chart. The 4h EUR/USD chart shows that the mixed candles are defending the 4h chart 50-EMA near $1.1423 after the bears were kicked off near the $1.162 red MA. We see that the bullish wicks represent buyers’ absorption near support levels while the higher lows are being held on the 4h EUR/USD.
The RSI sits near 43. The volume profile confirms a reliable pivot around 1.140-1.150. The next resistance is located around 1.155-1.162. The EUR/USD price action remains neutral-bearish near the 1.150 EMA-50 on the 4h timeframe chart as the price trades inside the long-term downtrend. Higher lows keep the buyers engaged, as they enter at any dips in this zone.
Based on the current technical outlook, I would consider a long position around 1.1440, targeting 1.155, with a stop below 1.140.
UOB’s Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has slipped after testing 1.1460, with increasing downward momentum but major support at 1.1360 seen as difficult to reach near term. For the coming 1–3 weeks, they expect EUR/USD to remain in a 1.1360–1.1450 range. On a multi‑week view, a break of the 1.1390/1.1410 support zone would target 1.1210.
Euro seen confined in set band"24-HOUR VIEW: EUR rose to a high of 1.1449 last Thursday. When it was at 1.1430 on Friday, we highlighted the following: “The slight increase in upward momentum suggests EUR may retest 1.1450. A continued rise above this level is unlikely. Support is at 1.1420; a breach of 1.1405 would mean that the prevailing mild upward pressure has eased.” We were not wrong, as EUR rose to 1.1460 and then dropped back down to 1.1410. EUR closed at 1.1413, but it opened with a slight gap down this morning. While the increasing downward momentum suggests EUR could decline further, the major support at 1.1360 could be out of reach. Note that there is another support level at 1.1375. To sustain the downward momentum, EUR must hold below 1.1420, with minor resistance at 1.1405."
"Our most recent narrative was from last Thursday (09 Jul, spot at 1.1420), when we highlighted that EUR “has likely moved back into a range-trading phase, expected to be between 1.1360 and 1.1450.” After EUR rose to 1.1449, we highlighted on Friday that “although EUR subsequently rose to 1.1449, there has been no clear increase in upward momentum.” We also highlighted that “looking ahead, with momentum remaining flat, a break above 1.1450 is likely to result in a broader trading range rather than a sustained move higher.” Although EUR subsequently rose above 1.1450 with a high of 1.1460, it retreated from the high. The price action still appears to be part of a range-trading phase, and for the time being, we continue to expect EUR to trade between 1.1360 and 1.1450"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Euro (EUR) holds opening losses at around 1.1390 against the US Dollar (USD) during the mid-Asian trading session on Monday. The major currency pair faces selling pressure as the US Dollar starts the week on a strong note due to an increase in the appeal of safe-haven assets.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% higher to near 101.15.
Escalating military actions between the United States (US) and Iran over Tehran showing dominance over the Strait of Hormuz, a critical chokepoint to almost 20% of global energy supply, have forced investors to shift to the safe-haven fleet and have de-anchored inflation expectations.
To get cues regarding the current status of US inflation, investors will pay close attention to the Consumer Price Index (CPI) data for June, which will be released on Tuesday.
This week, investors will also focus on Federal Reserve (Fed) Chair Kevin Warsh’s two-day testimony before Congress starting on Tuesday.
Technical Analysis:
EUR/USD trades lower at around 1.1390, keeping a bearish near-term tone as spot holds beneath the 20-period Exponential Moving Average (EMA) at 1.1443 and a breakdown of the Bearish Flag formation.
The Relative Strength Index (14) hovers near 38, hinting at persistent but not extreme downside momentum.
On the topside, initial resistance is aligned with the lower boundary of the parallel channel near 1.1424, followed by the 20-period EMA at 1.1443, with the channel top around 1.1530 acting as a stronger cap if a rebound extends. On the downside, major support levels are the June 24 low at 1.1324, followed by 1.1300.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Risk sentiment FAQs In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
EUR/USD started a recovery wave and climbed to test 1.1450. A rising channel or a possible bearish pennant is forming with resistance at 1.1500 on the 4-hour chart. GBP/USD recovered and tested the 1.3450 resistance. WTI Crude Oil prices struggled to stay above $75.00 and trimmed gains. EUR/USD Technical Analysis The Euro recovered some losses and climbed above 1.1420 against the US Dollar. However, EUR/USD seems to be facing hurdles near 1.1475 and 1.1500.
Looking at the 4-hour chart, the pair failed to clear the 50% Fibonacci retracement level of the downward move from the 1.1622 swing high to the 1.1324 low. It also struggled to settle above the 100 simple moving average (red, 4-hour) and remained well below the 200 simple moving average (green, 4-hour).
If there is a fresh decline, the pair might find support near 1.1380. The first major support could be near 1.1350. A downside break and close below 1.1350 might send the pair toward 1.1325. Any more losses could open the doors for a test of 1.1280.
On the upside, the bears might remain active near 1.1475. The next major resistance might be 1.1500. There is also a rising channel or a possible bearish pennant forming with resistance at 1.1500.
A close above the channel resistance could decrease selling pressure. In the stated case, the bulls could aim for a move to 1.1580.
Looking at GBP/USD, the pair recovered some losses, tested the 1.3450 resistance, and now shows some signs of consolidation.
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The EUR/USD pair edges lower to around 1.1400 during the early Asian session on Monday, pressured by heightened geopolitical tensions in the Middle East. Federal Reserve (Fed) Bank Governor Christopher Waller and European Central Bank (ECB) policymaker Isabel Schnabel are set to speak later in the day.
The US military said that it launched another round of strikes at Iran over the weekend, per CNN. The Islamic Revolutionary Guard Corps (IRGC) then launched retaliatory drone and missile assaults on US allies across the Middle East, including Kuwait, Jordan and Qatar.
Iran’s Foreign Ministry on Sunday condemned US military attacks on Iran, accusing Washington of violating international law and warning neighboring countries not to assist any military action against the country. Another escalation in the diplomatic breakdown between the US and Iran could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair.
Traders have ramped up their bets on ECB hikes again in recent days on signs that an agreement between Washington and Tehran to end the war is in jeopardy. The ECB raised the interest rates at the June policy meeting and markets expect it to do so twice more over the next year to contain the fallout from the Iran war on energy prices.
The US Consumer Price Index (CPI) inflation data will be published later on Tuesday. The headline CPI is expected to decline by 0.1% MoM in June, while the core CPI is projected to show a rise of 0.3% during the same period. Any signs of softening inflation in the US could reduce pressure on the Fed to hike interest rates, weighing on the USD.
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The EUR/USD ended the week on the back foot, surrendering its earlier poise during Friday’s session. From mid-week until that point, the pair had displayed a rather unexpected degree of composure, even as tensions in the Middle East flared up again. A sharp rebound in crude oil swiftly changed the market narrative by mid-week, herding investors back into cautious, defensive trades. By the final stages, however, the mood had darkened.
All eyes on US-Iran tensions again At the weekend, there was further escalation of tensions. The US initiated a new series of airstrikes in Iran after the IRGC forces targeted a vessel navigating the Strait of Hormuz. This strategic waterway, crucial for global oil shipments, has now been declared closed by IRGC until further notice, and launched attacks on American military bases and their regional allies.
Retaliation from Tehran was inevitable, and one can easily imagine the situation spiralling quite rapidly. Of course, rhetoric can soften. We’ve seen that movie before.
But for now, traders are forced to assume the worst. That means the dollar continues to benefit from its dual role as both a high-yielder and a safe harbour, while the euro—particularly vulnerable given Europe’s energy import dependency—remains on the back foot. Stagflation fears, never far from the surface, are once again creeping back into the conversation.
CPI and Warsh Take Centre Stage Geopolitics aside, this week’s calendar is anything but quiet. All eyes turn to Wednesday’s US CPI release and Fed Chair Kevin Warsh’s congressional testimony. With energy prices now firmly elevated, the inflation data takes on added significance. The risk skew is clearly tilted toward a hotter print, which would reinforce the narrative that the Fed may need to keep rates restrictive for longer—or even hike again later this year.
If that scenario plays out, expect US Treasury yields to push higher, further widening the interest rate differential that has been one of the dollar’s strongest pillars.
Technical EUR/USD outlook and levels to watch On the charts, the picture remains cautious. EUR/USD is carving out what looks increasingly like a bear flag on the daily timeframe—a continuation pattern that suggests the recent consolidation is just a pause before another leg lower.
Key levels to watch: Support: The 1.1400 zone remains the immediate line in the sand. A clean break below could open the door to 1.1300 fairly quickly. Resistance: On the upside, 1.1450 continues to cap rallies. A move above that would shift focus to 1.1500, with 1.1575 as the next meaningful hurdle. For now, the path of least resistance still points south.
The Bottom Line Unless we see a meaningful shift in the fundamental landscape—be it a sharp drop in oil prices, or a string of weak US data—the dollar’s yield advantage and safe-haven status are likely to keep any EUR/USD rallies well-contained. The near-term bias remains cautiously bearish, with geopolitics and inflation data set to dictate the next move.
The Euro to Dollar (EUR/USD) exchange rate is holding close to 1.1415, despite renewed geopolitical tensions in the Middle East that would normally be expected to support the US Dollar.
UniCredit believes the Dollar's muted response reflects a combination of higher global bond yields, resilient equity markets and fading expectations of an imminent Federal Reserve rate increase.
The bank identifies rising long-term yields outside the United States as the most important factor supporting the Euro.
According to UniCredit, higher German Bund and Japanese government bond yields are providing a "parachute" for other major currencies, reducing the Dollar's traditional safe-haven advantage during periods of geopolitical stress.
The bank also notes that minutes from the Federal Reserve's latest meeting remained cautious on inflation but stopped short of signalling an imminent interest-rate hike, while global equity markets have remained remarkably resilient.
UniCredit adds that investors have become increasingly accustomed to shifts in President Trump's rhetoric, making markets less likely to react aggressively to geopolitical headlines alone.
Even so, the bank does not expect a sustained Dollar sell-off until diplomatic progress resumes.
According to UniCredit, "a rapid move back above 1.15 in EUR-USD... appears unlikely" while negotiations between the US and Iran remain stalled. At the same time, the risk of EUR/USD slipping back towards the year's low near 1.1325 "has therefore not disappeared" if tensions escalate further.
The Euro to Dollar (EUR/USD) exchange rate is trading around 1.1415 after losing more than 2% during June and struggling to build a sustained recovery in July.
Goldman Sachs has lowered its six- and 12-month EUR/USD forecasts to 1.12, compared with previous targets of 1.18 and 1.20 respectively.
The bank expects a divided US Dollar environment, with the Greenback likely to strengthen further against lower-yielding currencies such as the Euro while losing ground against selected higher-carry currencies.
According to Goldman Sachs, the forecast revisions reflect an “ongoing divided Dollar environment” rather than an expectation of uniform Dollar gains across the foreign exchange market.
The bank expects US interest rates to remain at 3.50-3.75% for the rest of 2026, while resilient economic growth and persistent inflation should keep US yields relatively attractive.
Goldman Sachs forecasts US growth of 2.0% in 2026 and expects core PCE inflation to end the year at 3.0%, reducing the case for rapid Federal Reserve easing.
These conditions should continue to favour the Dollar against the Euro, with Goldman Sachs now expecting EUR/USD to fall towards 1.12 over both the six- and 12-month horizons.
The Euro to Dollar (EUR/USD) exchange rate has slipped back towards 1.1415 as investors continue to favour the US Dollar following resilient US economic data and expectations that the Federal Reserve will keep interest rates higher for longer.
HSBC believes EUR/USD is likely to face renewed downside pressure as markets shift their focus back to interest-rate differentials.
The bank notes that geopolitical concerns in the Middle East have eased, reducing one source of support for the Dollar. However, it argues that renewed disruption to shipping routes could quickly restore safe-haven demand for the US currency.
According to HSBC, firm US labour market conditions and sticky inflation continue to justify a cautious approach from the Federal Reserve, keeping longer-term yield support firmly behind the Dollar.
The bank also highlights that Eurozone inflation has cooled, but underlying price pressures remain elevated, leaving the European Central Bank in a difficult position.
HSBC argues that "the EUR loses out on fundamentals", with interest-rate differentials now re-emerging as the dominant driver of EUR/USD.
The bank adds that the outlook could deteriorate further if energy prices rise again, warning that renewed disruption in the Middle East would increase stagflation risks for the Eurozone and add fresh pressure on the single currency.
Euro Technical Outlook: EUR/USD Short-term Trade Levels EUR/USD is holding above a key support zone as with the July opening range carved just above. The broader April downtrend remains vulnerable while above support – risk for price inflection ahead. A break below support would reinforce the bearish outlook while a topside breakout would strengthen the case that a more significant low is in place. U.S. CPI and PPI data next week could provide the catalyst for the next directional move. Resistance 1.1483/92 (key), 1.1576/78, 1.1646/49- Support 1.1355/60 (key), 1.1276, 1.1214 EUR/USD continues to trade within an increasingly compressed range, with both the weekly and monthly opening ranges developing just above a major support zone. The repeated failure to break lower has left the April downtrend vulnerable near-term, while buyers still need a decisive breakout to suggest a more durable low is in place. With key U.S. inflation data due next week, the stage is set for a move that could determine the pair's next directional trend. Battle lines drawn on the Euro short-term technical charts.
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Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In my last Euro Short-term Technical Outlook we noted that EUR/USD had rebounded nearly 1% off the June low and that, “From a trading standpoint, rallies would need to be limited to 1.1675 IF EUR/USD is heading lower on this stretch with a close below the weekly open needed to threaten another test of the monthly lows.” Euro broke sharply lower later that day with the decline extending more than 2.9% off the June high before rebounding off confluent support into the close of the month. The July opening range has been carved just above, and the focus is on a breakout in the days ahead with the April downtrend vulnerable while above this pivotal support zone.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: A closer look at Euro price action shows EUR/USD holding a tight range this week, just below the median line. Key support rests with the yearly low-day close (LDC) and the 38.2% retracement of the 2025 advance at 1.1355/60. A break / daily close below this threshold would mark a break of the monthly opening range and threaten resumption of the May downtrend toward subsequent support objectives at the 2023 high at 1.1275 and the 2024 high at 1.1214- both levels of interest for possible downside exhaustion / price inflection IF reached.
Resistance is eyed at 1.1483/92- a region defined by the 1.618% extension of the April decline and the November low-day close (LDC). Noe that channel resistance extending off the May high (red) converges on this level early next week and a breach / daily close above would be needed to validate a breakout of the July opening range and a suggest a more significant low is in place / a larger reversal is underway. Subsequent resistance objectives eyed at the May / January lows at 1.1576/78 and the 200-day moving average and the 61.8% retracement of the April decline at 1.1646/49.
Bottom line: The weekly opening range is preserved within the broader monthly opening range, just above support. Look for the breakout to offer guidance here in the days ahead. From a trading standpoint, rallies would need to be limited to 1.1492 IF price is heading lower on this stretch with a close below 1.1355 needed to fuel the next leg of the decline.
The focus next week shifts to the release of June U.S. inflation data, with the Consumer Price Index (CPI) due Tuesday and the Producer Price Index (PPI) on Wednesday. Following Chair Warsh's renewed commitment to restoring inflation to the Fed's 2% target, the reports will be closely watched for clues on the future path of U.S. monetary policy. A stronger-than-expected inflation reading would reinforce expectations for additional Fed tightening, supporting Treasury yields and the U.S. dollar while increasing downside risks for EUR/USD. Conversely, softer inflation data could temper expectations for further policy tightening, weighing on the greenback and providing scope for a broader recovery in the euro. Stay nimble into the releases and watch the weekly closes for guidance. Review my latest Euro Technical Forecast for a closer look at the longer-term EUR/USD trade levels.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Canadian Dollar Short-term Outlook: USD/CAD Coils Below Resistance—Breakout Looms Australian Dollar Outlook: AUD/USD Holds Major Support—Reversal Risk Builds Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance Japanese Yen Short-term Outlook: USD/JPY Breakout Stalls at 2024 High as Intervention Risk Builds US Dollar Short-term Outlook: USD Breakout Targets Next Major Resistance British Pound Short-term Outlook: GBP/USD Rebound Challenges Bear Trend --- Written by Michael Boutros, Senior Technical Strategist
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Societe Generale’s Kenneth Broux notes EUR/USD has rebounded after forming an interim low near 1.1325 and moved back into its prior range, signalling limited follow-through on the earlier breakdown. The bank stresses that resistance at 1.1475/1.1500 must be cleared to extend the bounce, while a drop below 1.1390 would risk resuming the broader downtrend.
Bounce capped by 1.1500 barrier"EUR/USD has staged a modest rebound after carving out an interim low around 1.1325. The pair has re-integrated within previous range, indicating a lack of follow-through after the recent breakdown."
"However, clear signals of a large up move are not yet visible. The recent pivot high at 1.1475/1.1500 is the first layer of resistance. Overcoming this will be crucial for signalling an extension of the bounce."
"Conversely, there could be a risk of a continuation of the downtrend if the pair breaches the recent pivot low at 1.1390."
"Euro bid for second day as dust settles around oil prices. Support 1.1390, resistance 1.1500. Massive option expiries at 1.1370-85 (€1.3bn), 1.1400-50 (€6.5bn). US CPI, PPI, Warsh semi-annual testimony next week."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Euro to Dollar (EUR/USD) exchange rate has edged higher to around 1.1450, extending its recovery from this week's lows as the US Dollar softened modestly.
UOB believes the Euro retains a mild upside bias in the near term, although it expects gains to be capped around the 1.1450 level.
The bank notes that upward momentum has improved slightly after EUR/USD rebounded from 1.1390 earlier this week.
According to UOB, "EUR may retest 1.1450", but it cautions that "a continued rise above this level is unlikely."
Looking beyond the next 24 hours, UOB believes the pair has returned to a range-trading phase after failing to generate stronger bullish momentum.
The bank expects EUR/USD to trade between 1.1360 and 1.1450 over the coming one to three weeks, adding that even a break above resistance would probably lead to a broader trading range rather than a sustained rally.
UOB continues to monitor the 1.1390-1.1410 support zone closely. The bank maintains that if this area eventually gives way, the next medium-term downside target remains 1.1210.
MUFG’s Derek Halpenny highlights that European Central Bank (ECB) minutes added little new information but confirmed openness to another rate hike, consistent with MUFG’s call for a 25bp move in September. Despite the Euro being July’s weakest G10 currency, a turning 2-year yield spread and potential US yield declines could support renewed EUR/USD upside in coming weeks.
ECB stance and yields guide Euro outlook"The ECB will be certainly less concerned over longer-term inflation expectations becoming un-anchored with the 5y5y inflation swap rate having declined since the initial ceasefire was agreed."
"If crude oil and/or natural gas prices were to rebound sharply then risks will rise of course but at this point longer-term inflation expectations remain well anchored."
"In that context we see continued risks of the ECB acting again consistent with our current forecast of another 25bp hike in September."
"The euro is currently the worst performing G10 currency in July but the 2-year yield spread has started to turn in favour of some moderate EUR/USD recovery."
"We continue to see risks of US yields turning lower that should reinforce renewed upward momentum for EUR/USD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The euro has also been struggling to navigate mixed economic activity throughout the Eurozone, and in addition, the ECB is trying to achieve price stability. As countries continue to have varying fiscal positions and inflation rates, they are impacting the way that monetary policy affects each country differently. For the euro, that translates into being vulnerable to data releases on economic activity and wage increases.
Sterling faces the same challenge of balancing between the Bank of England’s concerns over services inflation and the economy’s slowing pace. In the UK, there continues to be domestic fiscal policy and labor markets that will remain important factors in the pound’s performance. On top of that, policy decisions of the other two central banks will impact the currency pair prices.
These currencies’ fundamentals reflect that their divergence is going to remain intact for some time to come. Inflation levels, fiscal policy choices, and economic growth vary from country to country in terms of pace and resilience. As a result, two-way risks remain prevalent in these currencies and will persist. These countries’ differences will play out in the currencies’ trade balances and capital movements, in addition to the central banks’ capabilities to stabilize growth.
ING’s Francesco Pesole writes that Middle East tensions have modestly re-tightened EUR/USD short-term swap rate differentials by around 10bp, though the spread remains wider than pre-war levels. While this supports expectations for a potential September European Central Bank (ECB) hike, Pesole argues the path for a stronger EUR/USD is limited and warns of downside risks, including a possible retest of 1.140.
Rate spreads support but risks linger"We expect stabilisation today – with markets potentially wanting to wait for weekend clarity – but risks are of a retest of 1.140."
"While all this is injecting new confidence into previously dwindling expectations for a September ECB hike, the path for EUR/USD to come out stronger from this re-escalation is quite narrow."
"The Middle East military re-escalation has prompted a moderate re-tightening in EUR/USD short-term swap rate differentials. In the two-year tenor (often the best correlated with FX moves), that has been worth roughly 10bp."
"That spread is still 50bp wider than its April peak, when markets bet heavily on ECB tightening but not on the Fed’s, but only 15bp wider than before the war."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
UOB’s Quek Ser Leang highlights a modest uptick in EUR/USD momentum, with scope to retest 1.1450 but limited prospects for a sustained break higher. Intraday support is seen at 1.1420 and 1.1405. For the coming one to three weeks, the pair is viewed in a 1.1360–1.1450 range, while a break of 1.1390/1.1410 could expose 1.1210 longer term.
Euro capped near recent highs"24-HOUR VIEW: EUR declined to 1.1390 two days ago before recovering to close largely unchanged at 1.1414 (+0.03%). Yesterday, we noted that “momentum indicators are turning flat,” and we held the view that EUR “is likely to range-trade between 1.1395 and 1.1440.” EUR subsequently traded within a higher range of 1.1412/1.1449, closing at 1.1428 (+0.12%). The slight increase in upward momentum suggests EUR may retest 1.1450. A continued rise above this level is unlikely. Support is at 1.1420; a breach of 1.1405 would mean that the prevailing mild upward pressure has eased."
"1-3 WEEKS VIEW: Yesterday (09 Jul, spot at 1.1420), we highlighted that EUR “has likely moved back into a range-trading phase,” and we expected it “to trade between 1.1360 and 1.1450.” Although EUR subsequently rose to 1.1449, there has been no clear increase in upward momentum. Looking ahead, with momentum remaining flat, a break above 1.1450 is likely to result in a broader trading range rather than a sustained move higher."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The EUR/USD pair attracts some buyers for the third consecutive day and touches a fresh weekly high, around the 1.1460 area, during the Asian session on Friday. The US Dollar (USD) is seen prolonging the less hawkish FOMC Minutes-inspired slide and turning out to be a key factor acting as a tailwind for the currency pair. However, persistent geopolitical uncertainties help limit further USD losses and cap spot prices.
From a technical perspective, the EUR/USD pair, so far, has been struggling to find acceptance or build on its strength beyond the 23.6% Fibonacci retracement level of the April-June downfall. Moreover, the recovery from the year-to-date low has been along an upward-sloping channel, which now seems to constitute the formation of a bearish flag pattern, leaving the recent gains capped within the broader corrective structure.
Momentum indicators, however, remain constructive. In fact, the Relative Strength Index is hovering just below 60, while the Moving Average Convergence Divergence (MACD) line is above zero and showing a modestly positive histogram. This suggests downside pressure is limited while the EUR/USD pair stays supported by the trend-channel support, currently pegged near the 1.1400 mark, which should act as a pivotal point.
A convincing breakdown below the said handle would expose the deeper structural supports clustered near 1.1327–1.1323. On the topside, immediate resistance is seen at the 200-period EMA at 1.1491, followed closely by the channel top at 1.1494. A sustained strength and acceptance above this zone would open the way toward the 38.2% retracement at 1.1524 and the 50.0% level around 1.1586, if the bullish momentum extends further.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
RaboResearch Global Economics & Markets discusses how Euro sentiment has cooled after optimism around Germany’s debt brake, with political risks and structural headwinds weighing on the currency. The bank notes EUR/USD is already priced for another ECB hike and expects sideways trading near current levels in the coming months, with only a modest upward bias further out.
Euro sentiment cools after 2025 surge"While higher short-term interest rates are currency supportive, the market is already fully priced for another ECB rate hike this year, suggesting that one more policy move is unlikely to offer much support for the EUR. On balance, we expect EUR/USD to trade sideways close to current levels on a 1-to-3-month view."
"Irrespective of this, it is worth noting that the EUR was the second best performing G10 currency in Q2 2025 after the safe haven CHF. This highlights the part the EUR played in emphasising the sharp rise in the EUR/USD in that period."
"The EUR now appears to have lost that momentum and that has clear implications for the outlook for EUR/USD."
"In our view, the market is likely to be reluctant to rebuild large, long positions in the EUR in the months ahead. That said, while the USD has benefited from a resilient US economy, it is RaboResearch’s view that hawkish bets on the Fed are overdone."
"We expect sideways trading in EUR/USD on a 3-month view and a modest upward bias to emerge in the currency pair on a 3-to-6-month view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Euro to Dollar (EUR/USD) exchange rate has steadied near 1.1425 after recovering from June's lows, although Rabobank believes the single currency has lost much of the momentum that drove its rally earlier this year.
The bank expects EUR/USD to trade broadly sideways over the next one to three months before regaining a modest upward bias later in the year.
Rabobank argues that optimism surrounding Germany's decision to loosen its debt brake has faded as investors refocus on weaker Eurozone growth, higher energy costs and lingering competitiveness challenges.
According to the bank, last year's fiscal shift in Germany "was no panacea", with structural reforms still needed to tackle sluggish productivity and weak long-term growth.
Rabobank also notes that markets are already fully priced for another European Central Bank rate increase this year, limiting the Euro's ability to gain further support from monetary policy.
While the US Dollar continues to benefit from a resilient economy, the bank believes expectations for additional Federal Reserve tightening have become excessive and should gradually unwind.
Even so, Rabobank expects investors to remain reluctant to rebuild large long Euro positions in the coming months after the currency's strong performance over the past year.
The bank believes investors will remain cautious in the near term. According to Rabobank, "the market is likely to be reluctant to rebuild large, long positions in the EUR in the months ahead."
However, it also argues that expectations for further Federal Reserve tightening have become excessive. As the bank puts it, "we expect sideways trading in EUR/USD on a 3-month view and a modest upward bias to emerge in the currency pair on a 3-to-6-month view."
Chris Turner at ING highlights that EUR/USD has held up despite higher Oil, as Euro swap rates outperformed US rates on expectations of an ECB hike in September. However, he argues the Fed narrative will dominate, with EUR/USD likely to surrender gains and fall below 1.14. ECB minutes and energy prices should keep September hike expectations alive.
Resilience questioned as Fed dominates"On the eurozone calendar today is the release of the ECB minutes for the 11 June meeting. We assume this will be pitched as hawkish and, combined with higher energy prices, keep expectations alive for a follow-up hike at the September meeting. That is currently priced at +22bp by money markets."
"EUR/USD has held up remarkably well given the jump in oil prices yesterday. Yield spreads did narrow in favour of the euro, where euro swap rates rose around 7-8bp more than short-dated US rates on the view that the ECB is more likely to pull the trigger on another hike in September."
"However, we think the Fed story will be a more dominant theme and can easily see EUR/USD handing back early gains today and sending the euro back below the 1.14 level."
"Could some of the EUR/USD resilience be down to President Trump mentioning Greenland again at the NATO conference? Remember that his threats back in January sparked a backlash against US asset markets from European investors. This link looks tenuous at best."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
HomeTechnical AnalysisIntraday Analysis 09.07.2026 Nasdaq continues selling off
Intraday analysis covering EURUSD(The euro) , AUDUSD , and NAS 100, highlighting recent price movements, key technical levels, and short-term momentum shifts across major markets.
EURUSD remains undecided
EURUSD(The euro) took a break from moving towards more multi-week highs but remains bullish.
The pair has been inching higher and lower since last Friday’s NFP data, which saw a decline in job numbers. 1.1430 is the first hurdle for bulls on the path higher. As the RSI ventures away from the overbought area, the recent bottom could serve as firm support at 1.1340. 1.1550 is the next key level should a bullish extension ensue. AUDUSD stays congested
The US dollar continues to gain traction across the board as risk appetite remains heightened.
The current rebound from the 0.6960 top has kept momentum to the downside. Now that buyers are seemingly out of the picture, the path is mostly clear for a move lower towards 0.6865. However, a push above the latest resistance could lead to another rally, with 0.7000 becoming a psychological resistance. NAS 100 hits another low
The Nasdaq remained pressured after global indices fell lower with fresh attacks in the Middle East.
On the chart, the price is moving towards 28400 as bearish momentum attracts sellers. However, a bullish RSI divergence could indicate a deceleration in the downward spiral and might lead to a pullback if traders begin to close positions. 30000 is the closest resistance at the recent gap, and its breach would send the index towards 30800 to claim another record.
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The British currency has also been grappling with services inflation pressures and slower growth rates that the Bank of England has had to consider. Domestic budget spending and employment developments are crucial to the performance of the pound along with relative policy settings that can affect cross-rates with the U.S. and Europe.
Other factors, such as differential inflation paths, fiscal policies, economic growth levels, trade balances, and capital flows, can continue to drive currency valuations. As central banks respond to inflation pressures, their approaches will shape future developments in the FX markets. For now, the FOMC minutes released today, along with the upcoming data, provide additional market intelligence and could be a determining factor in shaping the trend that currencies are expected to move over the short term.
Thu Lan Nguyen at Commerzbank notes that EUR/USD has traded in a narrow range and appears largely unaffected by Iran-related headlines, as the correlation with Oil has weakened. She highlights that markets now price Fed rate hikes despite softer labour data, reflecting a hawkish FOMC bias and reduced perceived risk of politically driven monetary easing in the United States.
Fed reaction function supports Dollar"EUR/USD appears largely unaffected by the latest developments in the Iran conflict and continues to trade in a relatively narrow range. We had already pointed out that the correlation between the exchange rate and the oil price has diminished significantly."
"In other words, the market is now pricing in Fed rate hikes even in spite of a marked decline in oil prices."
"The fact that rate-hike expectations in the market are nevertheless holding up is mainly linked to a general reassessment of the Fed’s reaction function. And this can be traced back to the latest FOMC meeting, the first under the leadership of new Fed Chair Kevin Warsh which highlighted two points:"
"A significant number of FOMC members have a bias towards rate hikes. This was confirmed once again by the minutes of the meeting published yesterday evening, which state "Participants generally assessed that information received over the intermeeting period suggested that upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit." as well as "In such scenarios [of elevated inflation], almost all of these participants indicated that some policy firming would likely be warranted to return inflation to 2 percent."."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang highlights that EUR/USD momentum has flattened, with the Euro expected to trade between 1.1395 and 1.1440 intraday. Over 1–3 weeks, the pair is seen in a broader 1.1360–1.1450 range-trading phase. On a 1–3 month view, a break of the 1.1390/1.1410 support zone would target 1.1210.
Euro-Dollar locked in range phase"24-HOUR VIEW: EUR fell to a low of 1.1407 on Tuesday. Yesterday, we highlighted the following: “Despite the relatively sharp decline, downward momentum has not increased much. However, there is scope for EUR to dip below 1.1390. The major support at 1.1360 is unlikely to come into view. Resistance is at 1.1420; a breach of 1.1430 would indicate that the immediate downward pressure has eased.” EUR subsequently declined and printed a low of 1.1390 before recovering to close largely unchanged at 1.1414 (+0.03%). Momentum indicators are turning flat, and today, we expect range-trading, most likely between 1.1395 and 1.1440."
"1-3 WEEKS VIEW: Last Friday (03 Jul, spot at 1.1430), we highlighted that “the bias for EUR is tilted to the upside.” After EUR fell sharply two days ago, we highlighted yesterday (08 Jul, spot at 1.1405) that “upward momentum has largely faded, and EUR has likely moved back into a rangetrading phase, and we expect it to trade between 1.1360 and 1.1450 for now.” There is no change in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Fresh US strikes reignite Hormuz disruption fears Europe's energy vulnerability back in focus Euro and European cyclicals resume underperforming Bearish wedge points to renewed downside risk Back to pricing energy risk The US has resumed strikes on Iran after attacks on commercial shipping transiting the Strait of Hormuz, raising the prospect that markets may once again have to price the risk of prolonged disruption to one of the world's most important energy chokepoints.
As Donald Trump declares the memorandum of understanding signed only weeks ago between the US and Iran "over", so too may be the brief respite for the euro, reviving simmering fears over energy security.
While it's too early to know whether the Strait will face prolonged disruption, the prospect alone is enough to remind investors that the region remains far more exposed to Middle Eastern energy shocks than the United States.
Even if higher energy prices increase the odds of another ECB rate hike later this month, the potential hit to growth may prove the more important driver, tilting the balance of risks for the euro and European assets to the downside, as shown in the chart below.
Europe left behind
Source: TradingView
The left-hand panel tracks EUR/USD since the Friday before the initial US strikes on Iran in late February. Alongside it is the performance of Euro Stoxx 600 futures relative to Russell 2000 futures over the same period. The latter were chosen because both are broader, more cyclical equity benchmarks, avoiding the outsized influence that mega-cap tch companies exert on US indices such as the S&P 500 and Nasdaq.
Since the conflict began, the euro has weakened while European equities have generally underperformed comparable US peers. To be sure, geopolitics is far from the only driver behind that divergence, but Europe's greater reliance on imported energy makes it far more vulnerable, impacting economic sentiment and capital flows.
However, while Trump's declaration that the MOU is "over" has revived geopolitical risk, traders are unlikely to price in the worst case scenario immediately. Throughout the conflict, markets have repeatedly lurched between reports of imminent de-escalation and renewed hostilities, whether from Trump himself or sources familiar with the negotiations.
The prolonged whipsawing may temper any immediate knee-jerk reaction, with trader instead likely to demand clearer evidence that the latest escalation will have a lasting impact on energy supplies and European economy. Rather than a single sharp move, EUR/USD may instead be vulnerable to a gradual grind lower, punctuated by bouts of volatility as markets once again find themselves playing headline hockey.
Technicals and fundamentals align
Source: TradingView
When you zoom out, the price action continues to favour the bears with EUR/USD carving out a series of lower highs and lower lows. It also remains beneath its key medium and longer-term moving averages, all of which are now starting to roll over and carry a negative slope.
And when you zoom in, the price appears to be sitting in what resembles a rising wedge, a pattern typically associated with bearish continuation. Admittedly, the structure isn't the cleanest, but a sustained break beneath wedge support would increase the risk of a retest of the lows set in June, and potentially an extension of the broader bearish trend.
If that scenario were to unfold, the first level to watch is the 38.2% Fibonacci retracement of the April 2025 advance at 1.1355, followed by the June 24 swing low at 1.1325. Should that latter level give way, there's not a lot of meaningful technical support to speak of until 1.1200, an area that repeatedly influenced price action following the Liberation Day tariff announcement in April 2025.
On the topside, the pair has repeatedly struggled above 1.1450, with another minor resistance zone sitting around 1.1480. Above there, 1.1500 and 1.1566 are the levels to watch.
The story from the oscillators is one of diminishing downside strength, not building upside momentum. RSI has lifted from oversold territory but, at around 42, remains below the midpoint and looks close to breaking the very shallow uptrend it's been sitting in over recent weeks. MACD has crossed above its signal line, but that merely suggests downside momentum has eased rather than been eradicated altogether. For now, that continues to favour selling into strength.
EUR/USD holds firm on Wednesday after reversing earlier losses triggered by renewed tensions between the United States (US) and Iran, while traders digest the June Federal Open Market Committee (FOMC) meeting minutes. At the time of writing, the pair is trading around 1.1427 after hitting an intraday low of 1.1391.
The US Dollar (USD) saw little immediate reaction to the minutes, suggesting much of the Federal Reserve's (Fed) message was already reflected in market pricing. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading around 100.97, easing from an intraday high of 101.27.
Officials remained cautious about inflation, which remains well above the central bank's 2% target, while describing labor market conditions as balanced.
Policymakers also signaled that the future path of interest rates will depend on incoming economic data, with some indicating that additional policy tightening could be warranted if inflation proves more persistent than expected.
Nevertheless, renewed geopolitical tensions and expectations that the Fed could deliver at least one interest rate hike this year should continue to underpin the Greenback, keeping downside pressure on EUR/USD.
Technical analysis:
On the daily chart, EUR/USD is trading within a downward parallel channel and beneath its key moving averages, which keeps the near-term bias bearish.
However, momentum is showing signs of improvement, with the Relative Strength Index (RSI) recovering to 41 from near-oversold territory, while the Moving Average Convergence Divergence (MACD) has turned marginally positive, reinforcing the idea of a consolidative phase within a broader downside structure rather than a clear bullish reversal.
On the topside, initial resistance is seen at the horizontal level around 1.1500, closely aligned with the upper boundary of the descending channel, forming a tight cap on any corrective bounce.
Above these, the 100-day Simple Moving Average (SMA) at 1.1611, followed by the 200-day SMA at 1.1649, represent more substantial barriers that would need to be reclaimed to ease the prevailing bearish tone.
On the downside, immediate support emerges at the horizontal level near 1.1350, ahead of the channel floor around 1.1305, where a break would likely open the way for a continuation of the broader downtrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
ABN AMRO’s Georgette Boele notes that the Euro’s relationship with energy prices has evolved, with recent Oil and Gas gains again weighing on EUR/USD. Earlier in the US-Iran conflict, higher energy prices hurt the Euro (EUR), but later the pair became more driven by Federal Reserve (Fed) and European Central Bank (ECB) expectations. She now sees EUR/USD guided by central bank expectations, yield spreads and Eurozone energy risks.
Euro sensitivity returns to energy moves"At the start of the US-Iran conflict, higher energy prices weighed on the euro against the US dollar. During the conflict, however, EUR/USD became less sensitive to energy prices and more sensitive to expectations for the Fed and the ECB."
"When a Memorandum of Understanding was announced, energy prices fell sharply, but the euro gained little against the US dollar because markets were focused on expectations of Fed rate hikes."
"As a result, oil and gas prices rose strongly, supporting the currencies of energy exporters such as the Norwegian krone, Canadian dollar and US dollar. At the same time, currencies of energy importers weakened."
"The euro again declined against the US dollar as energy prices rose."
"Going forward, the direction in EUR/USD will depend on expectations for the Fed and the ECB, inflation expectations, changes in nominal and real yield spreads between the US and Europe, and perceptions of possible energy shortages in the eurozone."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY gained ground, supported by rising Treasury yields.
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U.S. Dollar Moves Higher As Oil Prices Gain 5%
DXY 080726 4h Chart U.S. Dollar Index gains ground as traders prepare for the release of FOMC Minites and react to rising tensions in the Middle East.
President Trump said that U.S. could launch strikes against Iran and resume the blockade of country’s ports. Oil prices are up by more than 5% as traders react to the surprising escalation between U.S. and Iran. Rising oil prices could force Fed to be more hawkish, which is bullish for the American currency.
Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
EUR/USD Retreats Amid Worries About Hawkish Fed EUR/USD 080726 4h Chart EUR/USD is losing ground as traders focus on the strong rally in the oil markets. Demand for risk assets declined amid inflation fears, which was bearish for the European currency.
EUR/USD settled below the 50 MA at 1.1414 and is trying to settle below the 1.1400 level. If EUR/USD settles below 1.1400, it will head towards the support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Rebounds From Session Lows GBP/USD 080726 4h Chart GBP/USD is swinging between gains and losses as traders focus on geopolitical tensions and evaluate their next moves.
In case GBP/USD manages to settle above the support level at 1.3335 – 1.3350, it will head towards the next resistance, which is located in the 1.3450 – 1.3465 range.
USD/CAD 080726 4h Chart USD/CAD is losing some ground despite the strong pullback in precious metals markets. Gold is down by -1.5%, while silver pulled back by -4%. Other commodity-related currencies are mixed in today’s trading session.
In case USD/CAD stays below the 50 MA at 1.4203, it will head towards the nearest support level, which is located in the 1.4125 – 1.4140.
On the upside, a move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240. In case USD/CAD climbs above the 1.4240 level, it will head towards the next resistance, which is located in the 1.4335 – 1.4350 range.
USD/JPY Gains Ground As Treasury Yields Rise USD/JPY 080726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.23% level, while the yield of 10-year Treasuries settled above 4.58%. Treasury yields are rising as traders react to recent developments in the Middle East and bet on hawkish Fed. In case oil prices continue to move higher, the Japanese yen will find itself under additional pressure.
From the technical point of view, USD/JPY settled above the resistance at 161.50 – 162.00 and is moving towards multi-decade highs near 162.80. In case USD/JPY settles above the 162.80 level, it will head towards the 165.00 level. It remains to be seen whether the Bank of Japan is ready to intervene as yen’s fundamentals are extremely bearish. Previous attempts to support the yen yielded no results.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
EUR/USD forecast remains uncertain as renewed US-Iran tensions sends oil higher FOMC minutes coming up but market’s attention is on developments in the Middle East again EUR/USD selling contained relative as it holds inside bear flag Oil returns to the forefront of currency markets The EUR/USD edged only slightly lower, showing surprising resilience for now while European equity markets took the brunt of the sell-off, as tensions in the Middle East made an unwelcome return with renewed intensity. A sharp rebound in crude oil prices has quickly become the dominant market theme again, overshadowing economic data and forcing investors back into defensive positions.
Will tensions de-escalate quicker this time? Well, it is tough to say. Already, Trump has announced they will probably strike Iran again tonight. There will be retaliation from Tehran and things could get quite messy very quickly. Trump’s latest comments certainly don’t point to any de-escalation after he effectively dashed hopes that recent diplomatic progress could continue, reviving concerns over potential disruptions to global energy supplies.
Whether events develop into a prolonged confrontation remains uncertain. There is still scope for political rhetoric to soften over the coming days, but for now traders are once again having to price in geopolitical risk. That naturally favours the US dollar while simultaneously weighing on risk-sensitive assets, including European equities and the euro. Europe also relies heavily on energy imports, which makes the euro even more vulnerable.
The prospect of renewed disruption around the Strait of Hormuz also keeps stagflation risks firmly on investors’ radar. Higher energy prices would complicate the outlook for central banks at a time when many had been preparing for a more benign inflation environment.
EUR/USD forecast: US rates expectations remain supportive for dollar Against this backdrop, the publication of the latest Federal Reserve meeting minutes may struggle to attract its usual level of attention. Markets already have a fairly clear understanding of the Fed’s position, with policymakers remaining cautious about inflation risks.
If oil prices remain elevated, inflation expectations could become more persistent, giving the Fed more reason to keep policy restrictive for longer, and deliver some rate hikes later this year. That view continues to support US Treasury yields, maintaining one of the dollar’s strongest advantages over its major counterparts. This explains why, despite relatively resilient European economic data, investors have continued to favour the greenback lately.
EUR/USD technical analysis: bear flagging From a technical perspective, the EUR/USD forecast continues to point lower, even if we haven’t seen an immediate drop amid the geopolitical uncertainty yet. But with the pair showing a potential bear flag in the making, the pressure remains.
Source: TradingView.com The 1.1400 area remains an important near-term support level to watch on the daily EUR/USD chart. A decisive break beneath that zone would expose the 1.1300 handle.
On the upside, resistance around 1.1450 continues to cap advances. A sustained move above that level would shift attention towards the psychological 1.1500 mark, with 1.1575 representing the next significant upside objective.
In summary For the time being, however, the fundamental backdrop offers little justification for a sustained recovery. Unless incoming US economic data begins to weaken convincingly or expectations surrounding Fed policy changes materially, say as a result of significantly weaker oil prices (again, unlikely), the dollar’s combination of higher yields and safe-haven demand is likely to keep rallies in EUR/USD relatively limited. That leaves the broader EUR/USD forecast cautiously bearish over the near term.
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The Euro (EUR) shows marginal losses against the US Dollar (USD) on Wednesday and has returned to levels just above 1.1400 during the European trading session after rejection at 1.1430. A new round of hostilities in Iran and investors’ cautiousness ahead of the release of the minutes of the latest Federal Reserve (Fed) meeting are keeping Euro bulls in check.
US President Donald Trump affirmed earlier on Wednesday that the ceasefire is over and that, in his view, the memorandum of understanding is no longer in effect. These comments follow a fresh bout of reciprocal attacks between the US and Iran, and the revocation of the US authorisation to sell Iranian Oil.
The market reaction has been tame so far, as investors continue to view these events as manoeuvres to gain leverage in the negotiation process. Beyond that, investors remain wary of placing large directional bets on the USD ahead of the release of the minutes of June’s Fed meeting, eager for further insight into the central bank’s monetary policy plans.
Technical Analysis: A potential bearish flag is in progress
EUR/USD trades at 1.1405, at the bottom of the immediate ascending channel, that might turn out to be a bearish flag formation. Momentum indicators in four-hour charts are turning bearish, with the Relative Strength Index (14) easing toward 44, and the Moving Average Convergence Divergence (MACD) slipping back into slightly negative territory, suggesting that bullish attempts are losing traction.
A break of the channel bottom and Tuesday's low at 1.1400 would boost expectations of a bearish flag formation that would be confirmed below the late June lows in the 1.1325-1.1330 area. The pattern's measured target is just below the late May 2025 low, at 1.1210.
On the topside, Tuesday's highs around 1.1459 and last week's trading peak in the area of 1.1475 are likely to challenge bulls in case of a positive reaction. An unlikely breach of those levels would clear the path towards the mid-June highs, near 1.1620.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD0.24%0.05%0.70%-0.24%0.23%0.24%0.54%EUR-0.24%-0.22%0.43%-0.52%0.00%-0.03%0.24%GBP-0.05%0.22%0.54%-0.30%0.23%0.19%0.45%JPY-0.70%-0.43%-0.54%-0.96%-0.35%-0.41%-0.19%CAD0.24%0.52%0.30%0.96%0.59%0.55%0.76%AUD-0.23%-0.01%-0.23%0.35%-0.59%-0.05%0.22%NZD-0.24%0.03%-0.19%0.41%-0.55%0.05%0.27%CHF-0.54%-0.24%-0.45%0.19%-0.76%-0.22%-0.27% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Key Points:Markets are awaiting today’s FOMC meeting minutes for fresh clues on the Fed’s policy stance amid sticky inflation.DXY held at $101.04 with green continuation candles retesting Fibonacci 0.618 level.EUR/USD defended $1.1418 blue trendline support with green rejection candles absorbing selling pressure.GBP/USD held $1.3360 resistance zone, testing key levels with mixed candles and neutral momentum.
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Dollar, Euro and Pound Navigate Divergent Central Bank Paths On July 8, the dollar, euro, and sterling were underpinned by different monetary policy settings and economic conditions. Core inflation has remained elevated in the U.S., meaning the Fed is disinclined to ease rates in any near term, keeping a more hawkish setting and dollar attractive as a reserve currency, alongside a strong economy and fiscal balance sheet.
The euro was hampered by heterogeneous growth across the euro zone as the ECB looks to keep inflation expectations anchored. Divergent fiscal settings and inflation rates in the bloc add to a transmission effect, making the currency more data and wage-dependent.
Sterling is caught between sticky services inflation and weaker growth, with the BoE weighing the labour market data and fiscal policy. The relative policy stance of the Fed, ECB and BoE is likely to continue to underpin cross-rates.
All in all, different inflation trajectories, fiscal positions and economic resiliencies will likely lead to two-way risk in the currencies, with other variables like trade balances and capital flows likely to contribute to currency dispersion.
DXY Holds $101.04 – Fibonacci 0.618 Retest on 4h Dollar Index Price Chart – Source: Tradingview DXY is trading at $101.04 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, retested the .618 Fib level at $100.31 following a massive breakout off the $97.67 swing low. The candles with bullish color and higher highs indicate buyers continue to respect the 50ema at $101.02. The RSI is near 52 with neutral momentum.
In terms of volume profile, the breakout pivot is around $100.59 to $101.06. The .618 Fib suggests that $103.09 will be the next upside target in the next few weeks. Above $100.59, the price action is in a clean, strongly bullish channel. The higher highs and higher lows pattern indicates that buyers are firmly in control.
Trade Idea: Buy $101.04, targeting $103.09, with a stop at $100.59.
GBP/USD Holds $1.3360 – White Descending Trendline Test on 4h GBP/USD Price Chart – Source: Tradingview The GBP/USD is trading at $1.3360 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, tested the white trendline at $1.3380 after rejection of the red ma at $1.337. The 4-hour candle with a bullish wick indicates the absorption of buy orders at the resistance, and the 4-hour candles maintain higher highs.
The RSI is near 57 with neutral momentum. In terms of volume profile, the pivot cluster is at $1.331 to $1.338. The next support level is expected to be in the $1.325 to $1.331 area. Within the overall trading range, the price is in a neutral to bullish structure above the trendline, with higher highs indicating that buyers are active on dips.
Trade Idea: Buy $1.3360, targeting $1.345, with a stop at $1.325.
EUR/USD Holds $1.1418 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview The EUR/USD is trading at $1.1418 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, defended the 50ema at $1.1423 after rejection of the red ma at $1.162. The 4-hour candle with a bullish wick indicates the absorption of buy orders, and the 4-hour candles maintain higher lows. The RSI is near 50 with neutral momentum.
In terms of volume profile, the pivot cluster is at $1.140 to $1.150. The next resistance level is expected to be in the $1.155 to $1.162 area. Despite a downtrend, the price is in a neutral to bullish structure above the 50ema, with higher lows indicating that buyers are active on dips.
Trade Idea: Buy $1.1418, targeting $1.155, with a stop at $1.140.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang highlights EUR/USD’s failure to extend its recent advance, with momentum fading after a retreat from recent highs. The pair is now seen oscillating between 1.1360 and 1.1450 in coming weeks, while intraday price action may test 1.1390 without threatening the more important 1.1360 support unless the 1.1430 resistance breaks.
Momentum fades into sideways pattern"24-HOUR VIEW: Two days ago, EUR traded within a range of 1.1408/1.1444 and closed largely unchanged at 1.1440 (+0.04%). Yesterday, we stated that we “continue to expect range-trading, but the firmer underlying tone suggests EUR is likely to trade in a higher range of 1.1425/1.1470.” Our assessments turned out to be incorrect, as EUR fell to a low of 1.1407. Despite the relatively sharp decline, downward momentum has not increased much. However, there is scope for EUR to dip below 1.1390. The major support at 1.1360 is unlikely to come into view. Resistance is at 1.1420; a breach of 1.1430 would indicate that the immediate downward pressure has eased."
"1-3 WEEKS VIEW: Our most recent narrative was from last Friday (03 Jul, spot at 1.1430), when we highlighted that “the bias for EUR is tilted to the upside.” We also highlighted that “expect firm resistance at 1.1470 and 1.1500.” EUR has not been able to make much headway on the upside, and yesterday, it retreated to a low of 1.1407. Although our ‘strong support’ level at 1.1390 has not been breached yet, upward momentum has largely faded. EUR has likely moved back into a range-trading phase, and we expect it to trade between 1.1360 and 1.1450 for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
EUR/USD maintains its position after registering modest losses in the previous day, trading around 1.1410 during the Asian hours on Wednesday. Traders’ attention is focused on Wednesday's release of the US Federal Reserve (Fed) Meeting Minutes, the first under newly appointed Chairman Kevin Warsh, for crucial clues regarding the future path of US interest rates.
The EUR/USD holds minor gains as the US Dollar (USD) inches lower after experiencing volatility. The Greenback may regain its ground amid rising safe-haven demand and renewing geopolitical tensions. US airstrikes against Iran came in response to Iranian attacks on commercial vessels in the crucial Strait of Hormuz, including a Qatari LNG carrier and a Saudi oil tanker.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that the era of bullying and extortion has ended and insisted that Iran will not fold under pressure. Meanwhile, the country's top joint military command denounced the attacks on southern Iran as blatant aggression, promising a crushing military response. Defiant over the strategic waterway, Tehran reaffirmed that it will block any US interference regarding the control and management of the Strait of Hormuz.
European Central Bank (ECB) rate hike bets rose after board member Isabel Schnabel warned that the Iran conflict keeps core inflation elevated. ECB policymaker and Governor of the Bank of Italy Fabio Panetta warned Eurozone inflation risks remain high due to energy supply uncertainties in the Strait of Hormuz.
ECB’s Panetta scores 6.2/10 on FXS Speechtracker, notably above the historic 4.2/10 baseline, signaling a more impactful intervention than usual. The focus on Strait of Hormuz uncertainty and increasingly frequent supply shocks underscores persistent upside inflation risks, tilting the tone modestly hawkish despite clear concern about downside growth.
By stressing that upside inflation and downside growth risks remain and that the outlook is fragile, the speech reinforces a narrative of constrained policy flexibility. For FX, this mix of inflation vigilance and growth anxiety suggests limited support for the Euro, with markets likely to price in lingering risk premia rather than a confident policy tightening path.
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The American currency gained ground as traders focused on recent events in the Strait of Hormuz.
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U.S. Dollar Moves Higher As Oil Prices Rally
DXY 070726 4h Chart U.S. Dollar Index gains ground as traders focus on the rally in the oil markets. An LNG carrier from Qatar was hit in the Strait of Hormuz. A Saudi oil tanker also suffered damage. Iran insists that ships should go through approved routes.
The nearest resistance level for U.S. Dollar Index is located in the 101.15 – 101.30 range. In case U.S. Dollar Index manages to settle above the 101.30 level, it will head towards the next resistance, which is located in the 101.80 – 101.95 range.
EUR/USD Tests Support At 1.1420 – 1.1435
EUR/USD 070726 4h Chart EUR/USD pulled back as demand for risk assets declined after attacks on vessels in the Strait of Hormuz.
Traders also focused on the Industrial Production report from Germany. The report indicated that Industrial Production increased by +0.9% month-over-month in May, compared to analyst consensus of +0.2%.
Currently, EUR/USD is trying to settle below the support level at 1.1420 – 1.1435. This support level has already been tested several times and proved its strength. In case EUR/USD manages to settle below the 1.1420 level, it will get to the test of the 50 MA at 1.1410. A move below the 50 MA will open the way to the test of the support level at 1.1350 – 1.1365.
GBP/USD Retreats Amid Falling Demand For Risk Assets GBP/USD 070726 4h Chart GBP/USD is losing ground as traders focus on general strength of the American currency.
From the technical point of view, GBP/USD failed to settle above the 1.3400 level and pulled back towards 1.3370. The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range.
If GBP/USD declines below the 1.3335 level, it will head towards the 50 MA at 1.3285. In case GBP/USD manages to settle below the 50 MA, it will move towards the next support level at 1.3250 – 1.3265.
USD/CAD Tests The 1.4200 Level
USD/CAD 070726 4h Chart USD/CAD remains stuck below the resistance at 1.4225 – 1.4240 as traders focus on the strong rally in the oil markets. Gold and silver are losing ground, which is bearish for the Canadian currency. Other commodity-related currencies are moving lower in today’s trading session.
If USD/CAD settles below the 50 MA at 1.4204, it will head towards the support level at 1.4125 – 1.4140. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
On the upside, USD/CAD needs to settle above the resistance level at 1.4225 – 1.4240 to gain upside momentum in the near term. A move above 1.4240 will push USD/CAD towards the next resistance at 1.4335 – 1.4350.
USD/JPY Remains Stuck Near Key Resistance Level USD/JPY 070726 4h Chart USD/JPY is losing some ground as traders react to the Household Spending report from Japan. The report indicated that Household Spending increased by +3.7% month-over-month in May, compared to analyst forecast of +1.4%. On a year-over-year basis, USD/JPY declined by -0.4%, compared to analyst consensus of -2.5%.
The technical picture remains unchanged as USD/JPY is trying to settle above the resistance level at 161.50 – 162.00. If USD/JPY settles above the 162.00 level, it will move towards recent highs near 162.80. A move above the 162.80 level will push USD/JPY towards the 165.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is slightly softer versus the US Dollar (USD) but supported by a sharp recovery in yield spreads and stronger German industrial production. Renewed hawkishness from European Central Bank (ECB) policymakers is lifting Euro area rate expectations. They see near-term upside for EUR/USD, with technicals pointing to a drift toward 1.15 within a 1.1400–1.1500 range and limited resistance before 1.1580.
Hawkish ECB supports Euro"Bearish/neutral – the recovery in the RSI is important, reflecting a clear fade in bearish momentum and a drift back toward the neutral threshold around 50. The near-term balance of risk appears to favor gains and a drift toward 1.15 and we note the absence of any material resistance ahead of 1.1580. The medium-term trend is flat, and we look to a near-term range bound between 1.1400 and 1.1500."
"The EUR is soft, down a fractional 0.1% vs. the USD as it consolidates within its range from last Thursday with congestion in the mid-1.14s. Tuesday’s releases have been limited to stronger than expected German industrial production data for May (0.9% m/m vs. 0.1% exp.)."
"The outlook for relative central bank policy is providing renewed support for the EUR and yield spreads are showing a sharp recovery from last Wednesday."
"Euro area rate expectations are climbing sharpy, reflecting renewed hawkishness from a range of ECB policymakers, including executive board member Schnabel who specifically pushed back on the idea of softening the central bank’s guidance in response to the latest decline in oil prices."
"We see near-term upside for the EUR as markets reprice their outlooks for both the ECB (higher) and the Fed (lower)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang reports EUR/USD holding near 1.1440 with a firmer underlying tone. The pair is expected to trade slightly higher in a 1.1425–1.1470 range intraday. Over the next 1–3 weeks, the bias remains tilted to the upside as long as Euro stays above strong support at 1.1390, with resistance at 1.1470 and 1.1500.
Firmer tone within defined ranges"24-HOUR VIEW: Following last Friday’s price action, we highlighted yesterday that “momentum indicators are mostly flat,” and expected EUR to “rangetrade between 1.1415 and 1.1455.” EUR subsequently dipped to 1.1408, rose to 1.1444 before closing largely unchanged at 1.1440 (+0.04%). We continue to expect range-trading, but the firmer underlying tone suggests EUR is likely to trade in a higher range of 1.1425/1.1470."
"1-3 WEEKS VIEW: We revised our EUR view to mildly positive last Friday (03 Jul, spot at 1.1430). We highlighted that “the bias for EUR is tilted to the upside,” but we stated that “expect firm resistance at 1.1470 and 1.1500.” We will maintain this view as long as EUR holds above 1.1390 (‘strong support’ level previously at 1.1370)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Two central banks, two hawkish tones — but only one dollar just took a hit. The ECB delivered a 25bp hike in June, its first since 2023, lifting the deposit rate to 2.25% as Middle East-driven energy costs pushed headline inflation to 3.2% in May before easing to 2.8% in June, with growth downgraded to 0.8% amid weaker confidence.
The Fed, under new Chair Kevin Warsh, held rates at 3.50%-3.75% for a fourth straight meeting, with a hawkish dot-plot shift initially fueling hike expectations. However, the June employment report—released on July 3rd—showed nonfarm payrolls rising by just 57K against 110K expected, the weakest reading in four months, while the unemployment rate dipped to 4.2% only due to a labor force participation rate falling to 61.5%, its lowest level in five years.
The result: both central banks’ communications currently lean hawkish, but with the Fed’s data now sending mixed signals. Which side ultimately prevails could well set the tone for EUR/USD’s trend into year-end.
EUR/USD Technical Analysis
EUR/USD has spent roughly the past year confined within a broad consolidation range, as the chart illustrates, with price repeatedly oscillating between well-defined boundaries and no decisive breakout sustained in either direction.
Bullish Scenario
After briefly breaking below the range’s base support, price snapped back quickly, reclaiming the range almost as fast as it left it. For renewed bullish momentum to take hold, EUR/USD first needs to hold above the 1.1420-1.1460 support zone. The next, more decisive test lies with the descending trendline originating from January’s highs, which has been respected consistently throughout the year. This same area also converges with the 200-period EMA and the long-term ascending trendline broken to the downside in June. This confluence makes 1.1500-1.1550 the pivotal zone: a clean break above it would open the door for the euro to regain sustained strength against the dollar.
Bearish Scenario
The alternative reading is that price is currently only retesting the previously broken key support at 1.1420-1.1460. A decisive break below the low formed near 1.1320-1.1350 would confirm renewed downside momentum, clearing the path to resume the broader medium-term downtrend, where the next significant support comes into play around 1.1100-1.1150.
Either scenario will likely require confluence between technical structure and fundamentals, with central bank rhetoric and action remaining the key driver. ECB or Fed — which one becomes the catalyst for EUR/USD’s next major trend?
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EUR/USD remains slightly under pressure as the US dollar finds mild support ahead of the FOMC minutes Firmer oil prices and volatility in technology stocks reinforce demand for safe-haven dollar German industrial production jumps but fails to offer euro much support The EUR/USD forecast remains tilted slightly to the downside as the dollar continues to attract buyers in what has been a relatively quiet start to the week. With little in the way of fresh economic catalysts, investors are focusing on central bank expectations, oil prices, some volatility in the technology sector and broader risk sentiment. While the euro has managed to hold above the 1.1400 mark, it is struggling to generate meaningful upside momentum as markets increasingly favour the US dollar for now.
Markets settle into wait-and-see mode Currency markets have entered a period of consolidation following last week’s US employment report. Although payroll data was softer than expected, it failed to significantly alter expectations for Federal Reserve policy. Investors appear comfortable maintaining long-dollar positions while waiting for clearer signals from policymakers.
Monday’s US ISM Services PMI came in largely as expected at 54.0, reinforcing the narrative that the US economy continues to expand at a healthy pace without generating fresh inflation surprises. Meanwhile, Fed Governor Christopher Waller largely reiterated familiar views, suggesting inflation risks remain skewed to the upside while questioning whether excessive forward guidance benefits markets.
With today’s US calendar offering few major data releases, attention is already shifting towards Wednesday’s publication of the FOMC meeting minutes. Any indication in the minutes that policymakers were open to the idea of policy tightening in the coming months could keep the dollar supported.
Away from economic data, it is worth keeping an eye on crude oil prices which have extended their recovery for the fourth day, as tensions around the Strait of Hormuz continue to simmer following reports of missile attacks involving commercial vessels. Although energy prices have dropped massively from their conflict-driven highs, lingering supply concerns continue to support crude prices around $70 and, by extension, the defensive appeal of the US dollar.
Euro struggles to find fresh drivers The euro’s outlook is becoming increasingly mixed. Today’s publication of German industrial production figures offered an encouraging surprise, with output rising 0.9% in May, helped by stronger automotive manufacturing and construction activity. The resilience suggests Europe’s industrial sector has so far weathered recent geopolitical disruptions better than many had feared.
However, stronger industrial data alone will not be enough to shift monetary policy expectations decisively. Markets continue to debate whether the European Central Bank will need to tighten policy further later this year, with a September rate increase no longer viewed as the most likely outcome.
That said, ECB officials are unlikely to declare victory over inflation just yet. Core price pressures remain elevated enough to warrant a cautious tone, and speeches from senior policymakers this week could reinforce the message that the inflation battle is not yet complete. While that may offer occasional support to the single currency, it is unlikely to outweigh the broader strength currently underpinning the dollar.
EUR/USD forecast: Technical outlook points to further consolidation From a technical analysis perspective, the EUR/USD forecast is pointing towards continued consolidation. The pair was holding above the 1.1410 support area at the time of writing, but should this region give way then that would expose the 1.1300 area for a potential test.
Source: TradingView.com On the upside, 1.1450-1.1470 remains an important resistance area on EUR/USD. Above that 1.1500 handle is the next level to watch ahead of 1.1575 thereafter.
For now, any meaningful upside in the EUR/USD exchange rate would likely require a clear shift in Fed expectations or a significant deterioration in US economic data, neither of which appears imminent. Thus, markets seem comfortable rewarding the higher US yield advantage while volatility remains subdued.
Overall, the EUR/USD forecast continues to favour modest dollar strength over the near term. Unless the upcoming FOMC minutes deliver an unexpectedly dovish message or ECB officials surprise with a more aggressive stance, the pair may remain confined to the lower end of its recent trading range, with sellers likely to emerge on any short term rallies or recovery attempts.
GBP/USD started a recovery wave and surpassed the 1.3320 resistance. A key contracting triangle is forming with support at 1.3290 on the 4-hour chart. EUR/USD struggled to extend its recovery wave above the 1.1475 resistance. WTI Crude Oil prices are under pressure below the $72.50 pivot level. GBP/USD Technical Analysis The British Pound started a recovery wave above 1.3200 against the US Dollar. GBP/USD gained pace after it settled above 1.3250.
Looking at the 4-hour chart, the pair surged above the 100 simple moving average (red, 4-hour) and 1.3320. However, the bears defended the 1.3385 resistance and the 200 simple moving average (green, 4-hour).
A high was formed at 1.3384, and the pair started consolidating gains. There was a minor decline below 1.3350. If there is another decline, the pair might find support near 1.3290. Besides, there is a key contracting triangle forming with support at 1.3290.
The first major support could be near 1.3250. A downside break and close below 1.3250 might send the pair toward 1.3220. Any more losses could open the doors for a test of 1.3150.
On the upside, the bears might remain active near 1.3385. The next major resistance might be 1.3400. A close above 1.3400 could spark a sharp increase. In the stated case, the bulls could aim for a move to 1.3500.
Looking at EUR/USD, the bulls attempted a recovery wave, but they need a daily close above 1.1475 for upside continuation.
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Key Points:Sticky core inflation and fiscal deficits have reinforced the US Dollar’s strength amid monetary policy divergence.DXY held at $100.93 with green continuation candles retesting Fibonacci 0.618 level.EUR/USD defended $1.1430 blue trendline support with green rejection candles absorbing selling pressure.GBP/USD held $1.3380 resistance zone, testing key levels with mixed candles and neutral momentum.
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Currencies Reflect Divergent Monetary Policies and Economic Fundamentals Dollar, euro and pound rates are still subject to conflicting central bank policies and economic forces as of July 7. On the one hand, the U.S. Federal Reserve’s wait-and-see policy in the face of ongoing core inflation is sustaining dollar rates on the basis of expectations for a relatively tight rate setting in the foreseeable future; on the other hand, there is domestic demand and the status quo for dollars as reserve currency.
A mix of divergent fiscal settings and disparate inflation pressures in various parts of the euro zone and the European Central Bank’s push toward price stability characterize the euro. Policy pass-through in the area remains contingent on a range of national policies, keeping rates sensitive to growth and wage data.
As with other currencies, the Bank of England is considering both services inflation and softness in economic growth, and its policy path is a function of these variables, alongside UK fiscal policy and labor market trends, and relative policy settings for other central banks, which is what largely drives the cross rates with the dollar and euro.
Divergent inflation paths, fiscal settings and growth resilience in the three economies create two-sided risks, with trade and capital flows further driving currency differentiation, as markets seek to discern which central bank will best provide stability and growth.
DXY Holds $100.93 – Fibonacci 0.618 Retest on 1D Dollar Index Price Chart – Source: Tradingview DXY is sitting at $100.93 on the daily time frame. Following a breakout from the $97.67 low, buyers retested the 0.618 Fibonacci retracement zone around $100.31, creating green and red mixed candles. The asset continues to make higher highs, suggesting the upside remains intact above the $100.31 price level and its ascending white trendline.
With RSI hovering around 58, the DXY maintains a neutral-to-bullish bias. The $100.31 zone now serves as a breakout pivot point, per the volume profile, while the next 103 Fibonacci extension sits near $103.09 within the next couple of weeks. The market continues trading in an ascending channel and the higher highs/lows structure keeps the trend bullish.
Trade Idea: Buy at $100.93 with a target of $103.09 and a stop loss under $100.31.
GBP/USD Holds $1.3380 – White Descending Trendline Test on 4h GBP/USD Price Chart – Source: Tradingview GBP/USD is trading at $1.3380 within the 4h timeframe. After getting rejected off the red moving average around $1.337, buyers tested the descending white trendline around $1.3380 and formed green and red mixed candles. The price creates bullish rejection wicks and continues to keep higher highs within the chart. Currently, RSI sits around 67 and is still neutral on the 4h timeframe.
The $1.331 to $1.338 zones are a pivot area, per the volume profile, with the next zone of support around $1.325 to $1.331. GBP/USD still trades in a bullish trend and is still neutral and above its trendline. Higher highs and lows are still in place, and the trendline continues to hold the price higher within the trading range.
Trade Idea: Buy at $1.3380 with a target of $1.345 and a stop loss under $1.325.
EUR/USD Holds $1.1430 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview EUR/USD is trading at $1.1430 within the 4h timeframe. After getting rejected off the red moving average around $1.162, buyers retested the 50 EMA around $1.1419 and formed green and red mixed candles. The price creates bullish wicks and continues to keep higher lows within the chart.
Currently, RSI sits around 52 and is still neutral on the 4h timeframe. The $1.140 to $1.150 zones are a pivot area, per the volume profile, with the next zone of resistance around $1.155 to $1.162. EUR/USD still trades in a bullish trend and remains neutral and above its 50 EMA. Higher highs and lows are still in place, and the 50 EMA continues to hold the price higher in the near-term.
Trade Idea: Buy at $1.1430 with a target of $1.155 and a stop loss under $1.140.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
The EUR/USD pair trades marginally lower at around 1.1433 during the European trading session on Tuesday. The major currency pair faces slight selling pressure as the US Dollar (USD) edges up, while investors await the release of the Federal Open Market Committee (FOMC) minutes of the June policy meeting on Wednesday.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 100.92.
Investors keep an eye on the FOMC Minutes to identify reasons probably responsible for restricting policymakers from delivering forward guidance on monetary policy decisions.
In the June monetary policy press conference, Fed Chairman Kevin Warsh said that policymakers agreed that the “so-called forward guidance is not well suited to the current policy conjuncture.
Like the Fed, officials from the European Central Bank (ECB) also appear not in favor of delivering remarks regarding the monetary policy outlook.
Over the weekend, ECB Governing Council member Emmanuel Moulin also denied providing cues regarding the central bank’s decision in July, while speaking at the Rencontres Economiques conference in Aix-en-Provence. “We are not doing forward guidance so I won’t say what we will do in July,” Moulin said.
EUR/USD technical analysis
EUR/USD trades lower at around 1.1430, keeping a bearish near-term tone as the pair holds beneath the 20-day exponential moving average (EMA) at 1.1460. The fact that price remains under this short-term trend gauge suggests rallies are still being capped, while the Relative Strength Index (14) at 41.9 stays below the neutral 50 line, hinting at lingering downside pressure rather than a decisive recovery.
On the topside, immediate resistance is located at the 20-day EMA around 1.1460, and a sustained break above this level would be needed to ease the current bearish bias and open the way for a stronger rebound. Looking up, the pair could advance to the psychological level of 1.1500 if it breaks above the moving average.
On the downside, the yearly low around 1.1330 will be the key support zone; a break below it would expose the pair to the 29 May 2025 low at 1.1210.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Commerzbank’s Volkmar Baur notes EUR/USD has been stuck between 1.1350 and 1.1450 since mid-June, with few catalysts expected over the summer. He highlights that the European Central Bank (ECB) is likely to delay its next rate hike to September and that the Federal Reserve (Fed) is also unlikely to deliver clear signals, which should limit US Dollar (USD) strength and gradually support the Euro (EUR) into next year.
Rangebound pair awaits autumn drivers"Since mid-June, EUR/USD has been fluctuating between 1.1350 and 1.1450, and one is slowly getting the feeling that this could continue for a while longer."
"It therefore seems probable that the ECB will leave the key interest rate unchanged, while at the same time making it clear that another rate hike is possible but not yet certain."
"As for the Fed, the market is currently still pricing in slightly more than one rate hike by year-end. In September, Kevin Warsh will have to say a bit more than just “task force” when asked about the economic situation. We continue to expect that he will not raise interest rates - a development that is likely to weigh on the dollar."
"And the closer we get to next year, the stronger the support for the euro is likely to become. Yesterday’s German industrial orders data showed that a cyclical recovery is slowly taking shape. Structural reforms and expansionary fiscal policy should also help Germany and Europe grow faster next year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound to Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as easing UK political uncertainty offset renewed demand for the US Dollar following last week's sharp selloff.
At the time of writing, GBP/USD was trading at $1.3352, little changed on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335559 (+0.03%)
Euro to Dollar (EUR/USD): 1.141696 (-0.17%)
Dollar to Yen (USD/JPY): 162.33951 (+0.61%)
DAILY RECAP:
The US Dollar attracted support on Monday as US markets reopened following the long Independence Day weekend.
The ‘Greenback’ seemed to have entered oversold conditions following its sharp losses in the wake of last week’s non-farm payrolls report, which reported an unexpectedly large slowdown in job creation.
Therefore, some price-conscious investors were willing to buy the dip, lifting the US Dollar.
Meanwhile, the latest ISM services PMI printed in line with expectations, easing from 54.5 in May to 54 in June. Although this was a slight softening of activity, it still represented a healthy expansion in the US services sector.
Meanwhile, the Pound (GBP) held strong on Monday as investors continued to scale back the political risk premium that has weighed on Sterling in recent weeks.
With MP Andy Burnham widely expected to become the next Prime Minister, markets appear increasingly confident that the UK will avoid a lengthy and disruptive Labour leadership contest.
Burnham has moved to reassure investors since launching his leadership bid, pledging to maintain the government’s existing fiscal rules while also outlining ambitious plans to support the economy.
This has been well received by GBP investors, with Sterling finding support as concerns over UK political instability continue to recede.
Near-Term GBP/USD Forecast: US Employment Data to Support the Dollar? Looking forward, high-impact data is thin on the ground on Tuesday, with the US weekly ADP employment change figure being the only release of note. This mid-tier data could support the US Dollar, if it reports healthy growth in US private employment.
Elsewhere, market risk appetite could influence the pairing. The safe-haven US Dollar would likely benefit if the market mood sours, while the increasingly risk-sensitive Pound could attract support if sentiment brightens. Any shifts in risk appetite could see GBP/USD waver.
