The USD/INR has inched higher at the start of the new week, nearing two-month lows as oil prices hit $88 per barrel on the Brent benchmark. Current Setup and Live Chart The balance of risks for the USD/INR as we head into the new week currently favors the greenback, as the rupee nears two-month lows. Treasury yields remain resiliently higher amid strong US economic sentiment. This is despite the cooling of inflation in June. Markets have paid little attention to last week’s Consumer and Producer Price Indices, as they reflected the inflationary scenario while the US-Iran truce lasted. The renewal of hostilities last week is expected to reinforce inflationary expectations for July, which is why the markets are pricing in this scenario against the CPI and PPI data releases for August.
Furthermore, geopolitical uncertainty continues, reinforcing safe-haven demand for the greenback, even as rising crude oil prices pile pressure on the Indian rupee. Oil prices inched higher at the start of the week, rising to $88 per barrel at the start of the New York session this Monday.
India’s exposure to higher energy prices, due to its status as the third-largest net crude importer, continues to put the rupee end of the USD/INR pairing on the defensive. The current market sentiment prices in a higher energy risk premium and rising demand for US dollars from Indian refiners. As before, the Reserve Bank of India (RBI) continues to use various measures to smooth excessive volatility and prevent outsized moves, even as USD/INR inches higher.
USD/INR Macro Drivers 1) Higher Oil Prices
Oil prices are gradually inching towards the $90 mark, which poses a remarkable challenge for the import-dependent Indian economy and the rupee by extension. Higher oil prices raise the crude oil import bill, create additional demand for the US Dollar (to pay for the product, which is priced in US Dollars on the international market), and also put additional current account pressure on the Indian economy. Higher energy prices also produce imported inflation, since virtually every industry runs on fossil fuels that are derived from crude oil. Higher oil prices automatically increase the price of energy derivatives on which these sectors run. Higher oil prices remain the strongest macro driver of the USD/INR.
2) Strong US Dollar Sentiment
Safe-haven demand for the US Dollar, as markets shift from capital appreciation to capital preservation, as well as the risk of imported inflationary pressures, keeps sentiment for the US Dollar strong. The situation drives US Treasury yields higher in anticipation of a more hawkish Fed policy to keep inflation under check. US economic data point to a resilient economy. As long as the sentiment on the US Dollar remains strong and higher energy prices weaken sentiment on the rupee, the USD/INR will stay supported.
3) RBI Intervention
The rupee’s value is also determined not just by forces of demand and supply, but by the policy measures of the Reserve Bank of India under the managed float system. The RBI continues to maintain and deploy a substantial foreign exchange reserve arsenal to defend the rupee to prevent any outsized moves. The RBI is reported to have used $100 billion in its interventionist moves over the course of the first phase of the US-Iran war. Policy actions include sales of US Dollars to handle rising demand, liquidity management, and forward market operations. These measures are meant to prevent disorderly market moves, but do not produce price reversals. Any retracements are usually dip-buying opportunities as long as the current situation persists.
Price Catalysts for the USD/INR 1) US Economic data and Treasury yields: The USD/INR’s direction is directly proportional to the direction of US Treasury yields and US economic data. Higher bond yields and stronger-than-expected US economic data will lead to a higher push on the USD/INR due to a reinforcement of US Dollar demand and capital flows into USD-denominated assets.
2) Brent crude prices: Oil price direction is also directly proportional to the USD/INR’s direction, as higher prices tend to cause a weakening of the rupee. Brent crude’s price remains the primary external price catalyst for the Indian rupee.
3) Foreign portfolio investment: The Indian stock and bond markets host a large percentage of their holdings from foreign portfolio investments. Whenever there are capital inflows, these must be converted from foreign currency such as USD into the local currency for deployment into the Indian markets. When there are net outflows, the investments must be liquidated and reconverted into foreign currency for exit into other destinations. A risk-off scenario driven by higher oil prices causes net capital outflows (rupee-negative). In comparison, net capital inflows that typically occur when the market is risk-on (lower oil prices) are rupee-supportive.
USD/INR Forecast Scenarios Base case: the bias favors a bullish pairing, as higher oil prices, safe-haven demand and stronger sentiment around the US economy and the US Dollar continue to provide structural support for the pair.
Bull case: if oil prices approach $100 a barrel (or higher), this will drive US bond yields higher and create a more risk-averse market situation. This will accelerate dollar demand and rupee weakness as India will have to battle with a much higher USD demand and a higher import bill. We will also see net capital outflows from foreign portfolio funds. In this scenario, USD/INR could mount a fresh challenge to hit new highs.
Bear case: if there is a geopolitical de-escalation, the oil risk premium dissipates. Lower oil prices mean that the risk of imported inflation is reduced. India will have a reprieve from its import bill status, and a risk-on market means foreign portfolio funds will re-enter Indian markets, all of which improve sentiment on the rupee and allow the USD/INR to retrace towards recent lows in a pullback move.
USD/INR Technical Outlook The price has bounced off the 95.24 support after the 10 July pinbar candle pullback was rejected by the bulls off that support line. This unlocked the current advance move that is well on its way to reclaim the 96.99 all-time high, which now serves as the next resistance.
A break of this resistance puts the pair on the path to the 27% Fibonacci extension of the 8 April – 20 May upswing at 98.32 as the next upside barrier. 99.87 is the 61.8% Fibonacci extension and comes into the picture if the bulls uncap 98.23.
Fig 1: USD/INR daily chart showing key price levels (snapshot taken on 20 July 2026) Conversely, a weakening of the current advance and subsequent breakdown of the 96.99 support allows for a retracement towards the 95.24 support level and site of the 10 July low. Below this, additional support is seen at 94.04, the site of the 7 May low and the 18 June/25 June double bottom pattern. This move is dependent on the bears taking out the dynamic support provided by the ascending trendline that has connected the price dips since 19 December 2025.
EURUSD currency pair recently reversed from the resistance level 1.1465 (top of earlier wave a) intersecting with the 50% Fibonacci correction of the downward impulse from June.
The downward reversal from the resistance level 1.1465 (also strengthened by the upper daily Bollinger band) started the active impulse wave iii.
Given the clear daily downtrend, EURUSD currency pair can be expected to fall further to the next support level 1.1370 (low of earlier wave b).
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GBP/CAD has spent the past few weeks tracing out a clean five-wave rally on the 1-hour chart, and now the pair looks to be working through the correction that typically follows a completed impulse. Here’s a breakdown of the structure and what it could mean for the path ahead.
The Rally: A Textbook Five-Wave Advance
Starting from the June 22 low near 1.863, GBP/CAD pushed higher in a sequence that fits the classic five-wave impulse pattern:
Wave (i) kicked off the advance, followed by a shallow wave (ii) pullback that held well above the starting point. Wave (iii) was the strongest leg of the move, itself breaking down into a smaller five waves (i–v) as the pair accelerated toward the 1.895–1.900 area. Wave (iv) brought a brief, contained dip before buyers stepped back in. Wave (v) carried price to the cycle high just above 1.905, completing the five-wave structure and marking the top of the rally. That high represents the point where the bullish impulse likely finished, opening the door for a corrective pullback.
The Correction: An A-B-C (ZigZag) Pattern Taking Shape
What is an A-B-C (ZigZag) Pattern?
The image below illustrates an A‑B‑C Zigzag structure, similar to the one highlighted on the GBPCAD chart above.
A Zigzag structure in Elliott Wave Theory is a sharp three‑wave corrective pattern labelled A‑B‑C, with a distinct 5‑3‑5 subdivision. It represents a counter‑trend move and is one of the most common corrective formations.
Wave A → 5 sub‑waves (impulsive decline or rise depending on trend). Wave B → 3 sub‑waves (a smaller counter‑move). Wave C → 5 sub‑waves (another impulsive move, usually equal to or longer than Wave A). Trading Insights
Zigzags often signal continuation after correction, making them useful for identifying re‑entry points in the direction of the larger trend. Traders watch for Blue Box zones (high‑probability reversal areas) to align entries with the end of Wave C. Recognizing zigzags helps avoid mistaking them for trend reversals—they are corrective pauses, not new dominant trends. Now that we understand what a Zigzag correction is, we can clearly connect that concept to the corrective structure shown in the GBPCAD chart above.
Since topping out, GBP/CAD has been unwinding in a standard three-wave (A-B-C) correction:
Wave (a) dropped sharply off the highs, retracing a large chunk of the prior advance. Wave (b) brought a corrective bounce back up toward the 1.903 area — a classic “relief rally” that retraces part of wave (a) without exceeding the prior high. Wave (c) is now underway, pressing the pair back down toward the 1.884–1.876 zone, with a key Fibonacci extension level sitting around 1.876. As of the most recent update, price is trading around 1.884, right in the area where wave (c) is expected to find support and complete the pullback.
What Comes Next
Based on this count, the correction is viewed as a buying opportunity rather than a setup to sell. The expectation is for GBP/CAD to carve out a smaller, choppy dip-and-recovery pattern near current levels before turning back higher, targeting a resumption of the broader uptrend. A key support/invalidation zone sits down near 1.863 — a break below that level would call the entire bullish wave count into question.
The Final Leg Down Completed as Expected
Zooming into the internal structure of wave ((c)), price carved out a clean five-wave decline (labeled (i) through (v)) that bottomed right at the extreme of the expected support zone, just above 1.880. That low landed almost exactly on the invalidation level near 1.88016, which is precisely the kind of reaction technicians look for — a move that reaches into a well-defined support area, taps it, and reverses rather than breaking cleanly through it.
That low marks the completion of the entire corrective sequence from the 1.905 high: wave ((a)) down, wave ((b)) bounce back toward 1.903, and wave ((c)) down into the 1.880 extreme.
A Sharp, Decisive Reaction
What stands out most on this update is the strength of the reaction off that low. Rather than a slow, grinding recovery, GBP/CAD snapped back aggressively, rallying from the 1.880 extreme up through 1.890 and on toward the 1.900–1.902 area in a single strong push — essentially retracing the entire wave ((c)) decline in short order. That kind of sharp, impulsive reaction off a support extreme is typically read as a sign that the corrective phase has genuinely finished and that sellers were overwhelmed at the low.
Why the Extreme Mattered
This is a good example of why the 1.876–1.884 zone was flagged as the key area to watch in the first place. It wasn’t just a round-number guess — it lined up with:
The Fibonacci extension target near 1.876 The internal five-wave count of wave ((c)) reaching a natural completion point A structural invalidation level just below 1.880 that, as long as it held, kept the broader bullish wave count intact Price respected that confluence, printed the low, and turned — which is exactly the kind of reaction that gives a wave count credibility.
Bottom Line
GBP/CAD did exactly what the prior wave count anticipated: it pushed into the extreme of the support zone, completed a five-wave decline into that area, and reacted sharply higher — a textbook reaction at the extreme that reinforces the case for a resumption of the uptrend.
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The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Tuesday at 6.7917 compared to the previous day's fix of 6.7948 and 6.7706 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
Headline inflation beats, underlying pressures easing Tradables prices undershoot RBNZ's forecast September RBNZ hike likely, longer-term pricing looks excessive NZD/USD bulls retain technical advantage above support AUD/NZD breakdown keeps sellers firmly in control A beat, but with important caveats New Zealand consumer prices rose 1.5% in the June quarter, lifting the annual inflation rate to 4.1%. While that was above the 4.0% increase expected by economists, it fell just short of the Reserve Bank of New Zealand's 4.2% forecast released in May.
That suggests inflation remains uncomfortably high and is likely to keep the RBNZ on course to tighten policy further. However, the underlying details were more encouraging, with the broadest measure of core inflation easing further and domestic price pressures evolving broadly as the central bank had anticipated.
The composition of the report was arguably more important than the headline. While annual inflation accelerated, much of the increase reflected higher tradeable prices, which are influenced by developments offshore rather than domestic demand.
Source: FOREX.com, RBNZ, StatsNZ
Tradeable inflation accelerated to 4.9% over the year, driven largely by a 27.5% jump in petrol prices and a 71.0% surge in other vehicle fuels and lubricants. However, that was well below the RBNZ's 5.6% forecast, explaining why headline inflation also undershot the central bank's expectations.
By contrast, non-tradeable inflation, which is viewed as a better gauge of domestically generated price pressures, eased to 3.4% and matched the RBNZ's forecast. Electricity and local authority rates provided the largest upward pressure, while lower real estate services prices helped offset some of the increase.
The broadest measure of underlying inflation, CPI excluding the food group, household energy subgroup and vehicle fuels, also continued to ease, slipping to 2.5% from 2.6%. While it remains in the upper half of the RBNZ's 1–3% target band, the continued moderation suggests underlying inflation pressures are still moving in the right direction rather than becoming more entrenched.
Traders should now watch the release of the RBNZ's Sectoral Factor Model at 3pm Wellington time. The measure, which strips out temporary price movements to provide another gauge of underlying inflation, printed at 2.7% in the March quarter and could influence moves in New Zealand financial markets should it deliver a meaningful surprise.
What it means for the RBNZ
Source: Bloomberg
When all said and done, today's report is unlikely to materially alter the RBNZ's near-term thinking. Inflation remains above target and the central bank has already adopted an explicit tightening bias. Another 25 basis point increase in September still looks very likely and is close to fully priced, with the risk of a second move by October also deemed slightly more likely than not ahead of November's general election.
Further out, though, market pricing looks far too punchy. Overnight index swaps continue to imply close to five additional quarter-point increases by May next year, taking the OCR to around 3.75%.
That profile looks too aggressive given the broader economic backdrop. While inflation remains high, underlying price pressures continue to ease and there is still ample slack in the labour market, with little evidence that wage growth is accelerating in a way that would warrant taking policy deep into restrictive territory.
The next major test for that view will come on 13 August, when the RBNZ releases its latest Survey of Expectations. Of particular interest will be the two-year inflation expectations measure, which climbed to 2.53% in May from 2.37% previously.
Another meaningful acceleration would strengthen the case for additional tightening, potentially even a 50 basis point move, which can't be ruled out given some of the hawkish rhetoric from external members of the Monetary Policy Committee. But if inflation expectations fail to accelerate again, it would cast doubt on the degree of tightening currently priced into the OIS curve.
At face value, today's report may be interpreted as hawkish given headline inflation exceeded economists' forecasts. I'm not convinced that's the right read. The underlying detail tells a different story, particularly with the broadest measure of core inflation continuing to ease and tradables inflation coming in well below the RBNZ's own forecast.
That's just one of several factors to consider when assessing directional risk for the Kiwi dollar. While domestic rates remain an important driver, recent price action has also become increasingly sensitive to broader risk appetite and changes in US interest rate expectations. Starting with NZD/USD, here's how the technical picture stacks up.
The battleground for Kiwi bulls
Source: TradingView
The RBNZ's hawkish tilt has helped support NZD/USD over recent weeks, allowing the pair to reclaim a cluster of key medium and long-term moving averages.
For now, though, it's a game of ping-pong. Buyers continue to emerge on dips towards the 100-day moving average, while rallies are being capped ahead of resistance at 0.5860. That's the initial range to watch.
The oscillators continue to favour the bulls. RSI (14) remains comfortably above the neutral 50 level at 63, while MACD has crossed above its signal line and remains in positive territory.
Should the pair break decisively above 0.5860, the next upside level to watch is 0.5920, an area that repeatedly acted as both support and resistance during April, May and June. Above that, attention shifts to 0.5992, the double top established earlier this year.
On the downside, initial support is provided by the 100, 200 and 50-day moving averages, along with horizontal support at 0.5796, another level that has repeatedly acted as both support and resistance in recent weeks. A break beneath the latter could open the door for a retracement towards 0.5747, with 0.5724 and the uptrend from the June lows the next levels to watch.
Breakdown keeps bears in control
Source: TradingView
As flagged earlier this month, AUD/NZD has broken below the uptrend from the June 2025 lows, with the pair also slipping beneath the 50 and 100-day moving averages. Along the way, it took out support at 1.2053 and 1.2000 before finding buyers at 1.1950.
For now, the pair is stuck in a narrow range between 1.2000 and 1.1950. We did see a bullish engulfing candle print on Monday following renewed upside in energy prices as the conflict in the Middle East escalated. However, that has not generated follow-through buying, with rallies continuing to stall ahead of 1.2000.
The message from the oscillators remains bearish. RSI (14) continues to set lower highs and sits well below the neutral 50 level at 33. That bearish message is being reinforced by MACD, which remains below its signal line and in negative territory.
Selling rallies and downside breaks remains the preferred strategy. Should the pair break decisively beneath 1.1950, there is little in the way of technical support until the 200-day moving average at 1.1835, followed by 1.1797, former resistance before February's upside breakout.
Should the pair reclaim 1.2000, the next upside levels to watch are 1.2053, followed by the confluence of the 100-day moving average and resistance at 1.2115. For now, though, selling rallies and downside breaks remains the preferred strategy.
From a fundamental perspective, with New Zealand's inflation report now out of the way, attention will quickly shift to Australia's labour force report on Thursday. Alongside broader risk sentiment, the release is likely to be influential on markets' assessment of the directional risks for the RBA cash rate moving forward.
Gold price (XAU/USD) declines to near $4,000 during the early Asian session on Tuesday. The precious metal extends its downside as escalating tensions between the United States (US) and Iran pushed oil prices up, intensifying inflation concerns.
Bloomberg reported on Monday that US forces struck Iranian targets after US President Donald Trump vowed Tehran “will pay” for killing three US soldiers. US Central Command (CENTCOM) said that the US military began a new wave of strikes on Monday, the 10th straight day of attacks. “Every time Iran kills an American soldier, they will pay for that killing many times over!” said Trump.
Concerns about an escalation in Middle East hostilities could push crude oil prices up and could prompt central banks to hold rates at elevated levels for longer, weighing on gold's appeal as a non-yielding asset.
“Gold remains negatively correlated to oil prices, with market participants closely tracking developments in the Middle East,” UBS analyst Giovanni Staunovo said.
Traders continue to assess the likelihood of the US Federal Reserve (Fed) hiking interest rates to contain inflation. Swap traders see low odds of the Fed raising rates at its next meeting in July after softer US inflation data, although traders have fully priced in at least one hike by the end of the year.
Cleveland Fed President Beth Hammack on Friday joined a growing chorus of officials voicing concern over inflation, saying that interest rates may need to rise to beat back persistent inflation.
Hammack flags broad-based inflation pressures, reinforcing hawkish Fed toneFed’s Hammack delivers a more hawkish message relative to the historical average, with the FXS Speechtracker score rising to 7.2/10 versus a 6.6/10 baseline. The emphasis on businesses calling for action to curb inflation and consumers facing a “growing sense of despair,” alongside broad-based price pressures from energy, supply chains, insurance, and AI data centers, underscores a clear focus on persistent inflation risks even as growth and consumer spending remain solid. The repeated characterization of “persistently high inflation” as the bigger concern signals a bias toward tighter policy or at least a higher-for-longer stance for the Dollar.
The FXS Fed Sentiment Index climbed by 2.06 points to 128.64, reinforcing a firmly hawkish setting well above the neutral 100 mark. This move, aligned with the stronger FXS Speechtracker reading, suggests markets should lean toward expecting sustained restrictive policy, a supportive backdrop for the Dollar against the Euro and Yen.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Pound Sterling registers losses against the Japanese Yen for the third consecutive trading day, doon 0.15% as traders digest the first speech of new Prime Minister Andy Burnham, who is naming the first members of his cabinet. The GBP/JPY trades at 218.13 after reaching a daily high of 218.84.
GBP/JPY Price Forecast: Technical outlookLast week, the GBP/JPY bounced off a daily low on July 15 and hit a new yearly high of 219.61, opening the door to a consolidation as bullish momentum faded.
The Relative Strength Index (RSI) shows that buyers remain in charge, as the index, after briefly dipping, is poised to resume its upward trajectory, an indication that further upside is in the cards.
For a bullish continuation, the GBP/JPY must reclaim 219.00. A breach of the latter exposes the 219.50 area, ahead of 220.00. On further strength, the next resistance would be the psychological 221.00.
Downwards, the first support is the July 9 high at 218.01. If sellers clear the latter, the 217.00 is up next, followed by a move towards April’s 30 daily high-turned-support at 216.60. Once surpassed, the next area of interest for GBP/JPY would be the July 2 high, now turned support, at 216.06.
GBP/JPY Price Chart — Daily
GBP/JPY daily chart Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
The Swiss Franc loses ground against the Greenback in a trading session marked by CHF weakness amid improving risk appetite. At the time of writing, the USD/CHF trades at 0.8101, up 0.32%.
USD/CHF Price Forecast: Technical outlookThe USD/CHF recovered the 0.8100 level after hitting a three-day low of 0.8034 last week, in which the Greenback weakened. Worth noting that in the last four trading days, the pair reached a successive series of higher lows, hinting that buyers are moving in to buy the dip.
Momentum, as measured by the Relative Strength Index (RSI) shows that buyers hold the upper hand. Hence, the path of least resistance is upwards.
The first resistance for USD/CHF would be the August 1, 2025, peak at 0.8172. Above sits the 0.8200 mark, followed by the June 19, 2025, high at 0.8215, ahead of 0.8250. Once hurdled, the next stop would be the 0.8300 mark.
Downwards, the first support is the low of the day (LOD) at 0.8061. Below, the next support is the July 15 swing low of 0.8033 ahead of the psychological 0.8000 mark. A breach of it, and a move towards the 50-day Simple Moving Average (SMA) at 0.7979 is on the cards.
USD/CHF Price Chart — Daily
USD/CHF daily chart Swiss Franc Price Today The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the Canadian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.24%0.19%0.06%0.45%-0.20%0.13%0.39%EUR-0.24%-0.03%-0.15%0.21%-0.44%-0.16%0.14%GBP-0.19%0.03%-0.13%0.25%-0.39%-0.12%0.12%JPY-0.06%0.15%0.13%0.39%-0.26%0.06%0.29%CAD-0.45%-0.21%-0.25%-0.39%-0.64%-0.33%-0.11%AUD0.20%0.44%0.39%0.26%0.64%0.31%0.55%NZD-0.13%0.16%0.12%-0.06%0.33%-0.31%0.22%CHF-0.39%-0.14%-0.12%-0.29%0.11%-0.55%-0.22% 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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
The Canadian dollar was the weakest-performing major currency on Monday after softer-than-expected inflation data reduced expectations of further Bank of Canada policy tightening. Cooling headline and core inflation diminished Canada's relative yield advantage, weighing on the Loonie despite the central bank leaving its policy rate unchanged at 2.25%. Separately, reports that the US and Iran had signed a memorandum aimed at ending the conflict weighed on oil prices, adding further pressure to the oil-sensitive Canadian dollar. The loonie then came under renewed selling late in the US session after Reuters reported that Washington would impose new 50% tariffs on Canadian products.
Source: LSEG
Trump's Tariffs Add to Pressure on the Canadian Dollar The proposed 50% tariffs on Canadian products add a fresh headwind for the loonie by threatening Canada's export outlook and economic growth. Slower growth could reinforce expectations that the Bank of Canada will keep interest rates on hold or even consider easing if the economic impact proves material, reducing the Canadian dollar's yield appeal relative to the US dollar. While the full scope and timing of the tariffs remain uncertain, the announcement was enough to fuel another leg higher in USD/CAD.
USD/CAD Technical Analysis: US Dollar vs Canadian Dollar USD/CAD posted its largest daily gain in 23 sessions, rising 0.5% after finding support at the 50-day EMA and the 1.40 handle, strongly suggesting a swing low may be in place, at least in the near term. It has been just under a month since USD/CAD peaked, and recent developments suggest the pair could extend its rebound towards the 2025 high at 1.4140.
The 1-hour chart shows support has emerged around the weekly pivot point for now, although the sharp momentum shift below ¥116 suggests bears may look to sell into minor pullbacks. A break below 115.31 would bring the 115.00 handle into focus, followed by a key support zone around 114.60 where the monthly and weekly pivot points converge.
Source: ICE, TradingView
CAD/JPY Technical Analysis: Canadian Dollar vs Japanese Yen While crude oil prices didn’t exactly roll over on Monday, they did form doji’s on the daily chart to show indecision. Given but WTI and brent crude have stalled around their respective resistance levels, it removes another pillar of support for CAD/JPY – which is leaving bearish reversal signals of its own.
CAD/JPY formed a notable bearish engulfing candle on Monday to mark its second worst day of the month. Given it formed around 1.16 after a solid bounce, the case for a pullback was arguably growing anyway.
The 1-hour chart shows support has been found around the weekly pivot point for now, though the sharp momentum shift below 116 suggests bears may be seeking to fade into minor pullbacks, A break below 115.31 brings the 115 handle, and tight support zone around 114.6 into focus comprising of the monthly and weekly pivot points.
Spot silver weekly chart so larger trend structure. Source: TradingView Nevertheless, any upswing in silver would initially represent a notable counter-trend rally toward prior dynamic support indicators, including an uptrend line and the 200-day moving average. Together, these present the upper boundary of an initial target range if bullish signals are triggered. The 200-day moving average is now near $70.47. However, the first potential upside dynamic resistance zone is marked by the falling 50-day moving average, currently at $67.44.
Bearish Risks Remain Below Support On the downside, a decisive decline below $54.78 would signal a continuation of the bearish trend. Even so, the confluence of resistance levels outlined above could limit the strength of any rebound before the broader downtrend reasserts itself. If the support range is broken, the 78.6% Fibonacci retracement at $48.29 would become the next downside target. Whether Monday’s bullish reversal develops into a more meaningful recovery or simply another counter-trend bounce will likely depend on how price reacts around the wedge breakout levels noted above.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
Gold price edges down some 0.19% on Monday as hostilities between the US and Iran extended, following a short-lived truce that began after both countries agreed to a ceasefire, which was broken nine days ago. At the time of writing, XAU/USD trades at $4,011.
XAU/USD slips as rising Oil, yields and Dollar pressure BullionThe escalation of the Middle East conflict is weighing on Gold prices amid high energy prices, sparked by fears of a disruption in Oil supplies. The US attacked military targets for the ninth straight day near the Strait of Hormuz, while Iran hit US military assets in Gulf states. At the same time, Ansar Allah, an Iran-linked political/military organisation, declared a naval blockade on Saudi Arabia.
On the news, Crude prices, namely US benchmark West Texas Intermediate (WTI) trimmed some of its earlier losses, shifted positive and is up 0.33%, at $82.05 per barrel. Consequently, the US 10-year Treasury yield — which inversely correlates with Gold — is up nearly five basis points to 4.598%, a headwind for the yellow metal.
The US Dollar Index (DXY), which tracks the American Dollar’s value against six currencies, is up 0.19% at 100.94.
Last week, the Federal Reserve’s (Fed) Vice Chair, Philip Jefferson, said he is open to raising rates if there is no progress toward disinflation. On Friday, Cleveland Fed President Beth Hammack expressed concern about persistent high inflation, emphasising that “inflation is too high." She noted the labour market is solid, with good growth and stable consumer spending.
Money markets are pricing 82% odds of an interest rate hike by year-end, yet for the July meeting there is a nearly 79% chance of holding rates unchanged.
Next week, the US economic docket will feature jobs data and S&P Global Flash PMIs as Fedofficials entered their blackout period ahead of the July 29 policy meeting.
XAU/USD technical outlook: Gold price remains bearish, eyes on $3,900Gold remains downwardly biased with price action respecting the ongoing successive series of lower highs and lower lows. Also, momentum remains tilted downward as depicted by the Relative Strength Index (RSI), which is bearish.
For a bearish continuation, XAU/USD must drop below the July 17 low of the day (LOD) at $3,959. A breach of the latter will expose the $3,900 psychological level, ahead of the October 28, 2025 mark at $3,886.
To reverse upward, Bullion must break a descending trendline between $4,125 and $4,175. Success could target the 50-day Simple Moving Average (SMA) at $4,291, with the 200-day SMA at $4,495 as the next hurdle. Surpassing this could lead to $4,500.
Gold daily chart Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Gold Talking Points: While rate cuts amidst high inflation drove a massive breakout in gold back in 2024 the possibility of inflation-fueled rate hikes has driven a 28% pullback in the metal. The $4k level was initially taken-out last October as rate cuts fueled the rally but that price has become a massive spot of contention with buyers stepping in on tests below over the past month.
It’s been a brutal four-month stretch for Gold and that statement really can be spanned back to six months, as it was January 29th when the metal had set its current all-time-high just below $5600/oz. The initial pullback from that move was violent, with prices testing just above the $4400 handle a few days later, but that move was bid as late-stage buyers posed a bounce, and that move inevitably topped out at a lower-high of $5400/oz in early-March.
Since then, sellers have very much been in-charge with lower-lows and lower-highs, but over the past month they’ve largely been stalled as we’ve seen continued buying interest upon tests below the $4k level.
Gold Weekly Chart Chart prepared by James Stanley; data derived from Tradingview Gold: All About $4k On the initial approach towards the $4k level back in March, buyers stepped in about $100 before the big figure could come into play. That bounce, like the bounce from the $5600 reversal, was faded by sellers, leaving another lower-high on the chart. In the four months since, buyers have continued to show demand around the $4k level although that’s been slipping of late.
As to where sellers have been showing more aggression, we have lower-highs at both $4200 and $4100 and that sets up for some important context as the $4k support test from the weekly chart has continued, as each of those prices represent waypoints that buyers will need to take out to exhibit greater control of the trend in Gold.
Gold Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview Gold Strategy Moving Forward Last week saw two tests and failures at $4100 following below expected inflation data out of the US, and this further indicates that sellers are using bounces to build positions in the metal. When that sees initial signs of change, then we can begin to plot for bigger picture bullish themes, with that price and $4200 both representing important spots on the chart with which sellers have so far exhibited control.
Outside of that, sellers have an open door to make a move as the daily chart can be argued as a descending triangle formation, which is a bearish continuation pattern marked by horizontal support to go along with lower-highs. The logic being that successive bounces from that horizontal support are bringing less and less buying activity, and a persistent effort from sellers can, eventually, play through to a downside break of that important line-in-the-sand.
In that bearish scenario, spots of prior resistance-turned-support stand out, just below both $3900 and $3800, with the levels specifically plotted at $3895 and $3791.
Gold Daily Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
FedWatch Tool indicates that there is a 55% probability that Fed will raise rates by 25 bps in September. The probability of two rate hikes by September is estimated at 9.5%. Hawkish Fed policy outlook is bearish for gold that pays no interest.
U.S. dollar gained ground against a broad basket of currencies as forex traders focused on rising Treasury yields. Stronger dollar is bearish for gold and other dollar-denominated commodities.
Oil prices moved higher as Yemen’s Houthis threatened to impose a naval blockade on Saudi Arabia. Rising oil prices fuel worries about another inflation wave at a time when global oil reserves are at low levels.
The technical picture remains unchanged as gold needs to settle above the resistance level at $4020 – $4040 to have a chance to gain upside momentum in the near term. If gold climbs above the $4040 level, it will head towards the next resistance at $4180 – $4200. A move above the $4200 level will push gold towards the 50 MA at $4277.
On the support side, a move below the $4000 level will open the way to the test of the support level at $3930 – $3950.
Silver (XAG/USD) trades on the front foot on Monday as buyers defend the $55.00 mark after the metal briefly slipped below it on Friday, touching its lowest level since December 2025. At the time of writing, XAG/USD trades around $56.85, up nearly 1.50% on the day.
The metal, however, lacks strong upside momentum as Middle East tensions support the US Dollar, while energy-driven inflation risks keep hawkish Federal Reserve (Fed) expectations alive. Meanwhile, the technical outlook remains bearish, even as momentum indicators point to a slowdown in selling pressure.
Silver positioning pares back as demand signals softenAccording to TD Securities, speculative appetite for the metal continues to fade, with the bank noting that “money managers have also reduced their long silver exposure, which will apply downward pressure on prices due to weakening industrial and investment demand.” This retrenchment in positioning underscores a more cautious stance toward silver as both industrial usage and investor interest show signs of cooling.
Technical analysis: Daily chart
XAG/USD remains well beneath the 200-day and 100-day Simple Moving Averages (SMAs). The Relative Strength Index (RSI) around 38 stays below the neutral 50 line, suggesting only modest downside momentum, with the slightly positive Moving Average Convergence Divergence (MACD) hinting at tentative attempts to stabilize after the latest slide.
On the topside, initial resistance emerges at the horizontal barrier near $60, followed by a stronger cap around $65. A sustained break above these levels would ease selling pressure and expose the 200-day SMA at $70.58 and the 100-day SMA at $72.24 as the next hurdles.
On the downside, immediate support is seen at $55, with a loss of this floor opening the way toward the $50 zone, where buyers would likely attempt to stem deeper losses.
Technical Analysis: 4-hour chart
XAG/USD holds a bearish near-term bias as it remains below the 100-period Simple Moving Average (SMA) at $58.94 and the 200-period SMA at $62.43.
The metal has bounced off recent lows but is still capped by a nearby horizontal barrier at $58, while the Relative Strength Index at 47 stays near neutral and the Moving Average Convergence Divergence (MACD) turns mildly positive, hinting that the latest recovery is corrective rather than a clear trend reversal.
On the topside, immediate resistance stands at $58.00, followed by the 100-period SMA near $58.94 and then $60.00, with the 200-period SMA at $62.43 and the prior horizontal cap at $65.00 reinforcing a broader supply zone overhead.
On the downside, initial support is seen at the horizontal level of $55, and a break beneath this floor would likely expose the metal to deeper losses within the prevailing bearish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The Pound Sterling reverses course and turns negative on the day as Andy Burnham is named the new Prime Minister and reassures that he will stick to the fiscal rules set by the former Chancellor, Rachel Reeves, who just resigned. The GBP/USD trades at 1.3425, after hitting a daily high of 1.3481. Read More...
British Pound gains as Andy Burnham to become new Prime MinisterGBP/USD gains ground after two days of losses, trading around 1.3470 during the European hours on Monday. The pair strengthens as the UK 10-year gilt yield held near 5%, driven by surging oil prices that stoked inflation fears and signaled that the Bank of England (BoE) may keep interest rates elevated for longer. Read More...
British Pound steadily climbs to 1.3465 on softer USD as UK awaits new PMThe GBP/USD pair rebounds around 30 pips from the Asian session low on Monday, snapping a two-day losing streak amid a modest US Dollar (USD) downtick. Spot prices, however, remain well below a two-month high, touched last Wednesday, as escalating US-Iran tensions and reviving hawkish US Federal Reserve (Fed) expectations help limit USD losses. Read More...
Key Points:EUR/USD pulled back as traders focused on rising Treasury yields. GBP/USD moved lower as traders waited for first moves of new UK Prime Minister. USD/CAD gained ground as Canada's Inflation Rate missed analyst estimates.
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U.S. Dollar Moves Higher At The Start Of The Week
DXY 200726 4h Chart U.S. Dollar Index gains ground as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.22% level, while the yield of 10-year Treasuries settled near 4.60%. Treasury yields are moving higher as bond traders worry that rising oil prices will create inflationary pressure.
U.S. Dollar Index managed to settle above the 50 MA at 100.86 and is trying to settle above the 100.00 level. In case this attempt is successful, U.S. Dollar Index will move towards the resistance at 101.15 – 100.30. A successful test of this level will open the way to the test of the next resistance at 101.80 – 101.95. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
EUR/USD Pulls Back As Germany’s PPI Meets Estimates
EUR/USD 200726 4h Chart EUR/USD pulled back as traders focused on Producer Prices report from Germany. The report showed that PPI increased by +1.8% year-over-year in June, in line with analyst consensus.
Currently, EUR/USD is trying to settle below the support at 1.1420 – 1.1435. In case this attempt is successful, EUR/USD wil move towards the next support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Retreats As Traders Wait For First Moves From New PM GBP/USD 200726 4h Chart GBP/USD is losing ground as traders react to political developments in the UK. New Prime Minister Andy Burnham promised to bring a new economic model for the UK, but markets remain skeptical. His predecessors also pledged to boost UK finances, but their attempts yielded no results.
In case GBP/USD manages to settle below the 50 MA at 1.3424, it will head towards the nearest support at 1.3335 – 1.3350. On the upside, GBP/USD needs to settle back above the resistance at 1.3450 – 1.3465 to have a chance to gain upside momentum in the near term.
USD/CAD Rebounds As Canada’s Inflation Rate Drops To 2.8% USD/CAD 200726 4h Chart USD/CAD moved away from recent lows as traders focused on inflation data from Canada. Inflation Rate declined from 3.2% in May to 2.8% in June, compared to analyst forecast of 2.9%. Core Inflation Rate decreased from 2.2% to 2.1%, while analysts expected that it would remain unchanged at 2.2%. The lower-than-expected inflation report put pressure on the Canadian dollar. Other commodity-related currencies are gaining ground in today’s trading session.
If USD/CAD settles above the 1.4050 level, it will head towards the 50 MA at 1.4095. A move above the 50 MA will open the way to the test of the resistance level at 1.4125 – 1.4140.
USD/JPY Moves Higher As Treasury Yields Rise
USD/JPY 200726 4h Chart USD/JPY gains ground, supported by rising Treasury yields. However, traders remain cautious as the yen is trading near multi-decade lows. Traders worry that BoJ may intervene to provide support to the national currency.
USD/JPY needs to settle above the 162.80 level to gain additional upside momentum in the near term. In this case, USD/JPY will head 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.
Foreign exchange strategists at MUFG expect the Indian Rupee to recover gradually against the US Dollar over the next year, forecasting USD/INR will ease to 95.00 by the middle of 2027 as foreign capital inflows strengthen and the Reserve Bank of India continues to support the currency.
The USD/INR exchange rate traded around 96.3 on Monday after climbing steadily from below 90.0 earlier this year, with the Rupee coming under pressure from higher oil prices and renewed geopolitical tensions in the Middle East.
MUFG notes that the Indian Rupee has been one of the weaker Asian currencies in recent weeks as Brent crude climbed above US$85 per barrel, increasing concerns over India's import bill and widening trade deficit.
"The Indian rupee remained under depreciation pressure over the past week, with USD/INR trading above the 96.00 levels."
The bank believes renewed tensions in the Middle East have reinforced demand for the US Dollar while persistent importer demand has outweighed improving foreign portfolio inflows.
"Elevated oil prices, a wider trade deficit and firm importer dollar demand remain fundamentally negative for INR."
Even so, MUFG argues that the Reserve Bank of India has continued to limit excessive volatility by intervening in both the spot and non-deliverable forward markets.
"The RBI continued to provide measured support through the spot and non-deliverable forward markets."
A key part of MUFG's constructive medium-term outlook centres on the RBI's special Foreign Currency Non-Resident Bank (FCNR(B)) deposit programme.
Although inflows have so far fallen short of initial expectations, the bank believes they should strengthen over time as banks offer more competitive deposit rates.
"We think it might be a matter of time and this will help improve the outlook for the Indian Rupee."
MUFG argues that larger FCNR(B) inflows should gradually improve market sentiment, alter importer and exporter hedging behaviour and encourage international investors to rebuild positions in Indian assets.
Near-Term USD/INR Forecast: MUFG Sees Rupee Recovering as Capital Inflows Build While MUFG expects near-term trading to remain sensitive to oil prices, geopolitical developments and broad US Dollar strength, it remains optimistic that the Rupee will strengthen once temporary external pressures begin to ease.
"We expect this will help improve the outlook for the Indian Rupee."
Reflecting that view, MUFG forecasts USD/INR at 95.50 by the end of 2026, before the pair falls further to 95.00 by the middle of 2027 as foreign capital inflows improve and pressure on India's external accounts gradually recedes.
So, all in all, the loudest weekend of the war produced American deaths, a collapsed ceasefire, and oil at a one-month high, and gold could not hold thirty dollars of a bounce.
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This was the weekend the war was supposed to matter. Three American service members were killed. The United States ran its ninth night of strikes on Iran and began reaching beyond military targets. Iran launched a fresh wave of missiles, hit a major oil facility in Kuwait, and declared the ceasefire had formally collapsed. Oil gapped up almost 4% on Sunday, with Brent pushing above $91, its highest since June. Bonds fell. Every ingredient of the classic flight to safety was on the table at once.
Gold Defies War Headlines Gold went from about $3,986 on Friday to roughly $4,020 in early trade today, then gave most of it back toward $4,000 as I write. Thirty-odd dollars, then handed back, on a widening war and a one-month high in oil. Bloomberg said it as plainly as I could: gold fell after the escalation because it stoked bets the Federal Reserve may need to raise rates, not because anyone reached for it as a haven.
Gold is retreating from its early-2026 peak, with a downside target zone marked near $3,500 at the 38.2% retracement. Source: GoldenMeadow.eu.
Gold’s minor rebound stalls near falling resistance, keeping its short-term downtrend intact. Source: GoldenMeadow.eu. I have lost count of how many times I have written this exact paragraph now. The war started, and gold gave its spike back in a day. A peace deal was signed, and gold did the same. The war came back, escalated, widened, and now killed American troops, and gold has treated each headline like it was not there.
A market does not ignore its single best reason to rally by accident. It ignores it because that reason was never what moved it. What moves gold is the dollar and the rate behind it, and a wider war on the world’s most important oil route does not soften the Federal Reserve. It hardens it.
That is the whole mechanism, and this weekend ran it in front of you. More conflict means more oil. More oil means more inflation. More inflation means a Fed that leans toward hiking, which lifts real yields and the dollar and presses gold down. Two soft inflation prints last week had knocked the odds of a July hike to about 10%, yet the odds of a hike by December sat near 73% even then, and this weekend’s oil spike is pushing the whole path back up. The escalation is not a bid for gold. It is fuel for the thing that has been sinking gold all year.
Technically, gold’s medium- and short-term downtrends remain intact – in perfect tune with what I’ve been writing about for weeks. Even today’s tiny upswing managed to take gold only to the declining resistance line – not above it.
The Dollar Index is holding above 100, having recovered from a brief dip below support. Source: GoldenMeadow.eu. The dollar tells the calmer version of the same story. Through a killed-ceasefire weekend and a spike in oil, the Dollar Index sat firm near 101, holding above the 100 breakout that has anchored this entire decline. It did not need to do anything dramatic. It simply refused to give ground while the metals failed to rally, and every failed rally in gold is one more vote for the breakout that keeps pressing the sector lower.
Technically, the situation is bullish as the USDX is above its previous highs, and the small breakdown below the rising support line was already invalidated. This is a buy signal.
One thing I am watching honestly, because it is the real risk to all of this. Transit through the Strait has all but stopped. One tracking firm reported no tankers passing since the fifteenth. As long as the market treats this as a disruption and oil pares its spikes the way it did this morning, the chain runs my way, from oil to inflation to a firmer dollar to weaker metal.
If those transits stay near zero and oil breaks higher instead of fading, the shock stops being merely inflationary and turns into something harsher, and that is the one path that could change how gold behaves. It has not yet (and it might not happen at all), and today’s oil giving back gains says the market still sees this as contained. But that transit number is the thing to watch this week above any headline.
Crude oil has bounced off its June lows back above $80, holding above its April low. Source: GoldenMeadow.eu. Technically, oil came back above its mid-April low, and it looks ready to soar.
S&P 500 futures are struggling to hold above 7,500 following the rally off the April low. Source: GoldenMeadow.eu. The SpaceX IPO Signaling a 2026 Top The S&P 500 Index closed last week slightly below 7,500. It’s now trying to move above this level one more time, but it might have a really hard time doing so with rising oil prices and the fundamental situation in the Middle East looking terrible.
Also, do you remember how hyped investors were about the SpaceX IPO?
SpaceX shares have slid from around $210 to $124 within weeks, as buying volume faded. Source: StockCharts.com. Three days.
That’s how long it took for the buying power to dry out.
This is very disappointing, and I’m viewing this as a topping sign for the whole market. That mid-June top in SpaceX corresponded to the top in the S&P 500 – it seems to me that both might have formed their own 2026 tops then – in tune with my expectations.
So, all in all, the loudest weekend of the war produced American deaths, a collapsed ceasefire, and oil at a one-month high, and gold could not hold thirty dollars of a bounce. A wider war does not make gold a safer haven. It makes the Federal Reserve a harder one. That is the whole story, and it has not changed once. The outlook for the precious metals market (as well as for non-energy commodities) remains bearish.
Thank you for reading today’s analysis – I appreciate that you took the time to dig deeper and that you read the entire piece. If you’d like to get more (and extra details not available to 99% investors), I invite you to stay updated with our free analyses – sign up for our free gold newsletter now.
Sincerely,
Przemyslaw K. Radomski, CFA
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EUR/USD edges lower on Monday after reversing earlier gains as markets swing between risk-on and risk-off sentiment. At the time of writing, the pair trades around 1.1408, easing from an intraday high of 1.1449.
Middle East headlines shape price action at the start of the week in the absence of major economic data releases. The Euro (EUR) climbed earlier in the day as the US Dollar (USD) weakened after Reuters reported that mediators had proposed a 10-day pause in strikes to help revive the interim US-Iran deal. Officials from both countries also signalled that they remained open to diplomacy.
However, sentiment turned cautious again after a separate Reuters report said Yemen’s Iran-aligned Houthis had declared an immediate naval blockade against Saudi Arabia. Markets quickly rotated back toward the US Dollar, wiping out EUR/USD’s earlier gains.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.00, recovering from an intraday low of 100.65.
Oil prices have rebounded to their highest level in more than a month since fighting between the US and Iran resumed earlier in July, keeping energy-driven inflation risks in focus and raising the possibility that price pressures could pick up again after cooling in both the Eurozone and the US in June.
Against this backdrop, markets expect both the European Central Bank (ECB) and the Federal Reserve (Fed) to maintain a tight policy stance. The ECB is widely expected to leave its Deposit Facility Rate unchanged at 2.25% on Thursday, although markets are fully pricing in a rate hike by September. Meanwhile, the CME FedWatch Tool shows that the probability of a Fed rate hike in September stands at around 63%.
“Tighter monetary policy when the Eurozone economy is still operating below potential is more likely to limit EUR downside than push the currency higher because it raises the likelihood of a downward adjustment to ECB rate expectations,” Brown Brothers Harriman (BBH) analysts said.
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Gold (XAU/USD) trades in a volatile range on Monday as markets react to conflicting headlines from the Middle East. At the time of writing, XAU/USD trades around $4,010, little changed on the day after climbing to an intra-day high of $4,040.
The metal climbed earlier in the day after both Iran and the United States (US) signaled that diplomacy was still possible despite the continued military strikes. Iranian Foreign Ministry spokesperson Esmaeil Baghaei said intermediaries had exchanged messages with Tehran in recent days and that negotiations with the US could be pursued in line with Iran’s national interests.
“I think we’re always open to diplomacy. It has to be real. It has to be a deal that they’re willing to live by,” US Secretary of State Marco Rubio said.
The comments pushed the US Dollar (USD) and Oil prices lower, helping Gold gain ground. However, markets quickly priced a fresh geopolitical risk premium after Reuters reported that Yemen’s Iran-aligned Houthis had declared an immediate naval blockade against Saudi Arabia.
In reaction, the US Dollar recovered all its earlier losses, while Oil prices rebounded from intraday lows and traded near a one-month high, limiting Gold’s upside.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades near 100.90 after recovering from an intraday low of 100.65.
Meanwhile, hawkish Federal Reserve (Fed) expectations remain a major headwind for the non-yielding metal as higher Oil prices keep inflation risks elevated. In recent days, several Fed officials have stressed their commitment to bringing inflation back to the 2% target. Markets, therefore, expect at least one interest rate hike this year.
The US economic calendar is relatively quiet this week with Initial Jobless Claims due on Thursday and the preliminary July Purchasing Managers Index (PMI) data scheduled for Friday. Fed officials have entered their blackout period ahead of next week’s monetary policy meeting, leaving geopolitical headlines as the main driver for Gold in the near term.
On the daily chart, XAU/USD remains in a bearish stance, trading well below the 200-day Simple Moving Average (SMA) at $4,495.69 and the 100-day SMA at $4,523.
The pair has slipped back under the previously highlighted $4,200 resistance area, while the Relative Strength Index (RSI) around 40 suggests weak but not extreme downside momentum, reinforcing the notion of a market that stays capped by overhead supply rather than oversold.
On the topside, initial resistance is now seen at $4,200, with the 200-day SMA at $4,495 followed by the 100-day SMA at $4,523 forming a broader medium-term ceiling.
On the downside, immediate support is located near $4,000, ahead of a lower structural floor at $3,800. A decisive break beneath these levels would open the door to a deeper corrective leg in the metal.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
TD Securities’ commodity strategists, led by Bart Melek, note that Gold investors have sharply reduced long exposure as higher Oil prices from the US‑Iran conflict threaten recent disinflation progress. With markets increasingly pricing a late‑2026 Fed hike, higher carry and opportunity costs alongside a firmer US Dollar are expected to keep Gold near support around $3,900/oz, with speculative length likely to erode further.
Higher yields weigh on bullion positioning"Gold investors aggressively cut their long exposure as it became apparent that the escalating US-Iran conflict will continue to keep oil prices at very elevated levels, which is set to reverse recent progress made on inflation."
"With the energy complex likely driving aggregate prices higher in the coming months, the market is increasingly pricing a Fed hike towards the end of the year."
"The resulting increase in carry costs, yield-driven opportunity costs and a firming US dollar will likely keep gold prices near support at $3,900/oz."
"Money managers have also reduced their long silver exposure, which will apply downward pressure on prices due to weakening industrial and investment demand."
"As such, both silver and gold length are likely to erode for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
USD/CAD Key Points Canadian inflation cooled more sharply than expected in June, easing concerns that the recent energy-driven increase was spreading across the broader economy. Headline CPI slowed to 2.8% y/y from 3.2% in May; Excluding gasoline, inflation held steady at 2.2% y/y. USD/CAD remains near a 1-month low, but a possible bullish engulfing candlestick pattern that would strengthen the argument for a near-term bottom.
A week after a similarly below-expectation report from the US, Canadian inflation cooled more sharply than expected in June, easing concerns that the recent energy-driven increase was spreading across the broader economy. Headline CPI slowed to 2.8% y/y from 3.2% in May, while prices fell -0.4% m/m. On a seasonally adjusted basis, CPI declined -0.1%.
The slowdown was largely driven by gasoline, which fell -10.2% from May as global oil prices retreated. Gasoline remained 20.5% more expensive than a year earlier, but that was well below May’s 33.2% increase. Excluding gasoline, inflation held steady at 2.2% y/y.
The underlying details were also encouraging. The Bank of Canada’s preferred CPI-trim and CPI-median measures eased to 1.8% and 1.9%, respectively, leaving their average below the 2% target. Grocery inflation remained relatively firm at 3.9%, while World Cup-related demand pushed accommodation and air travel prices sharply higher. However, those increases were concentrated rather than widespread and are likely to dissipate soon with the tournament wrapping up this weekend.
For the Bank of Canada, the report supports the view that higher energy costs have not generated significant second-round inflation yet. With economic growth beginning to recover, the most likely outcome remains an extended hold at 2.25%, assuming oil prices stabilize and core inflation stays contained, though energy volatility from the ongoing conflict in Iran could still have a spillover impact on Canada’s oil-dependent economy in the coming months.
Canadian Dollar Technical Analysis: USD/CAD Daily Chart
Source: Tradingview, StoneX
From a technical perspective, USD/CAD is bouncing from support at its 50-day EMA near 1.4025, helped along by this morning’s softer-than-anticipated Canadian data. The North American pair remains near a 1-month low, but the combination of a BOC in stasis and the potential for safe-haven demand for the US dollar amid the re-escalating Iranian conflict could boost the pair as we move through the week. Current price action is showing a possible bullish engulfing candlestick pattern that would strengthen the argument for a near-term bottom.
Looking ahead, previous-support-turned-resistance at 1.4130 is the next level of resistance to watch before the 1+ year highs in the low-1.4200s, whereas a break below the 50-day EMA near 1.4020 could target the 38.2% Fibonacci retracement of the May-July rally below 1.4000.
-- Written by Matt Weller, Global Head of Research
Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX
Foreign exchange analysts at Bank of America forecast the Euro to weaken against the US Dollar over the coming months, projecting EUR/USD will fall to 1.12 in the third quarter before recovering to 1.15 by the end of 2026.
The Euro to Dollar exchange rate (EUR/USD) traded around 1.15 on Monday after recovering from recent lows near 1.12, but remains below this year's highs close to 1.20 as investors continue to favour the higher-yielding US Dollar.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.141798 (-0.17%)
Pound to Dollar (GBP/USD): 1.345558 (+0.01%)
Dollar to Yen (USD/JPY): 162.41676 (+0.01%)
The recent recovery in EUR/USD has come as the Dollar paused after a strong first half of the year. However, Bank of America believes the broader trend still favours the US currency, arguing that resilient US growth, relatively high Treasury yields and continued demand for Dollar-denominated assets should underpin the greenback.
The bank expects the Federal Reserve to remain more restrictive than many of its peers, preserving the Dollar's yield advantage even if interest rates gradually move lower.
"We expect EUR/USD to finish 2026 at 1.15."
BofA believes the path to that year-end forecast will not be smooth, with further Dollar strength likely over the coming months.
"Our forecasts are for EUR/USD at 1.12 by the end of the third quarter before recovering to 1.15 by year-end."
The bank also points to the Eurozone's weaker growth outlook and greater exposure to higher energy costs as factors that could continue to weigh on the single currency. Although investor positioning has become less negative on the Euro, BofA argues much of the earlier short-covering has already taken place, reducing scope for another sharp rally.
Looking further ahead, the outlook becomes more constructive for the Euro as the Dollar's exceptional performance gradually fades.
"We forecast EUR/USD at 1.20 by end-2027 and 1.22 by end-2028."
BofA believes that longer-term recovery will be driven by a gradual narrowing in growth and interest-rate differentials rather than by a sharp deterioration in the US economy.
Near-Term EUR/USD Forecast: BofA Sees Dollar Yield Advantage Limiting Euro Gains Despite expecting EUR/USD to recover from its projected third-quarter lows, Bank of America believes the Dollar should remain well supported over the remainder of 2026.
"The Dollar's yield advantage should continue to underpin the currency."
For now, the bank expects rallies in EUR/USD to remain limited while US yields stay elevated and capital continues to flow into US assets. It argues that only a more pronounced slowdown in the US economy or a materially faster Federal Reserve easing cycle would be likely to push the pair sustainably above the mid-1.15 area.
Morgan Stanley expects the Pound to weaken against the Australian Dollar over the coming months, forecasting GBP/AUD will fall to 1.82, as improving sentiment towards Australia contrasts with growing political and fiscal risks in the UK.
The Pound to Australian Dollar exchange rate (GBP/AUD) traded around 1.93 on Monday after rebounding from June lows below 1.90, leaving the pair close to its highest levels of the year despite the bank believing the rally has gone too far.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.917965 (-0.49%)
Pound to Dollar (GBP/USD): 1.345149 (-0.02%)
Australian Dollar to Dollar (AUD/USD): 0.701342 (+0.47%)
Morgan Stanley remains one of the more bearish investment banks on Sterling, arguing that much of the recent optimism surrounding the UK's political outlook has already been priced into the currency.
"We are bearish GBP."
The bank says Sterling rallied after reports that the incoming government could appoint a more fiscally conservative Chancellor than initially feared, but believes investors have already discounted much of that positive news.
"We think the market has priced in the 'good news' from the potential for a more fiscally conservative Chancellor than initial market expectations."
Morgan Stanley adds that there is still little clarity on the new government's economic agenda, while attention is likely to shift towards difficult fiscal decisions ahead of the autumn Budget.
"With so much good news already in the price, we think the hurdle for further upside surprises has moved higher."
In contrast, the bank retains a constructive view on the Australian Dollar. It points to resilient business confidence, attractive carry returns and expectations that Australian front-end yields will remain relatively elevated.
"We remain bullish on AUD."
Morgan Stanley believes steady labour market conditions and relatively hawkish Reserve Bank of Australia expectations should continue to attract investors seeking higher-yielding currencies.
Near-Term GBP/AUD Forecast: Morgan Stanley Expects Sterling to Give Back Recent Gains Reflecting these contrasting outlooks, Morgan Stanley continues to recommend a short GBP/AUD trade.
The bank has a target of 1.82, representing a decline of around 6% from current levels.
"GBP/AUD faces downward pressure from elevated risk appetite and a potential increase in GBP negative risk premium."
Morgan Stanley believes the combination of stronger Australian fundamentals and rising UK fiscal uncertainty should allow the Australian Dollar to outperform Sterling over the coming months, particularly if global risk sentiment remains supportive.
Currency analysts at MUFG predict the Euro to recover ground against the Pound Sterling over the coming months, forecasting the Euro-Pound rate will strengthen to 0.8700 as Sterling's recent rally fades and UK political optimism proves difficult to sustain.
The Euro to Pound exchange rate (EUR/GBP) traded close to 0.85 on Monday after falling to its lowest levels of 2026, leaving the Pound at its strongest against the Euro this year, but MUFG believes the move has gone too far.
Latest — Exchange Rates:
Euro to Pound (EUR/GBP): 0.848625 (-0.18%)
Pound to Dollar (GBP/USD): 1.345012 (-0.03%)
Euro to Dollar (EUR/USD): 1.14141 (-0.21%)
The Pound has outperformed most major currencies this month after political developments in the UK boosted investor confidence. Reports that incoming Prime Minister Andy Burnham is likely to appoint a fiscally conservative Chancellor have also helped reduce concerns over the government's economic direction.
MUFG believes those political tailwinds have been an important driver of Sterling's gains, but questions whether they can continue.
"The pound has continued to trade at stronger levels after strengthening sharply in response to media reports surrounding the new government."
The bank argues that markets have already priced in much of the near-term political optimism.
"We are cautious about chasing Sterling strength from current levels."
MUFG also notes that the Euro has been weighed down by higher energy prices and concerns over the regional growth outlook following tensions in the Middle East. However, it expects those headwinds to fade gradually as markets refocus on relative valuations.
"The recent move in EUR/GBP looks overextended."
While MUFG acknowledges that the Bank of England is likely to keep policy relatively restrictive in the near term, it believes expectations for UK growth and fiscal policy have become increasingly optimistic.
"Current market pricing leaves room for EUR/GBP to recover."
Near-Term EUR/GBP Forecast: MUFG Sees Recovery Towards 0.8700 MUFG continues to forecast EUR/GBP rising to 0.8700, implying the Pound will surrender part of its recent gains against the Euro.
"We forecast EUR/GBP at 0.8700."
The bank believes the combination of fading political optimism in the UK, stretched Sterling positioning and a stabilisation in the Eurozone outlook should allow the Euro to recover over the coming months. While the Pound could remain supported in the very near term, MUFG expects gains beyond current levels to prove increasingly difficult to sustain.
Daily Spot Gold (XAU/USD) Spot gold is putting in a steady-to-mixed performance early Monday with the price action indicating the on-going battle for short-term control between the bulls and the bears.
By all of my major metrics, the main trend is down on the daily chart. The series of lower-tops and lower-bottoms on the swing chart clarify this assessment. The nearest swing top is $4202.71. The formation of the swing bottoms at $3942.10 and $3959.80 is most interesting to me right now.
I’m trying to determine if the buying that came in to stop the slide at those levels is profit-taking or bottom-picking due to some metrics like RSI indicating oversold conditions. The key filter to keep an eye on may be the open interest. Volume is one thing once a rally starts moving, but rising open interest on the long side may actually tell us if new buyers are actually coming in and establishing positions. Rising prices and falling open interest will tell me that the shorts are just lightening up.
The daily chart indicates there is long-term support at $3886.46. With the selling pausing slightly above this area, one can build a case for traders defending against a sharp sell-off under this support.
The aforementioned analysis has one thing in common and that is, it suggests passive bidding on weakness. And that centers the issue I have with gold right now. On the way up last December and January, gold investors were willing to take out offers, which is an aggressive way to trade, but also one of the best to get a market moving higher at a faster pace. What we’re looking at now maybe buying, more controlled entries that seemingly say buyers are letting the market come to them. That’s ok over the long-run for investors who believe in the upside potential of this market, but very frustrating for short-term players who want to make a quick buck.
The price action and the fundamentals are in sync, in my opinion. At the start of the year, investors were aggressively buying because the market had priced in as many as three Fed rate cuts. Now, the market is toying with the idea of a Fed rate hike, but no one is certain if it’s going to be in September, December or early next year. I’m convinced that we’re going to see more of the same type of trading until the investors get some clarity from the Fed.
Technically, one sign of aggressive positioning could be the overtaking of short-term retracement zones at $4041.65 to $4072.40 and $4162.36 to $4214.34. The swing top at $4202.71 would also have to go to break the bearish pattern of lower tops and lower bottoms. But this would only bring us to the 50-day moving average at $4277.32.
Although we could see periodic rallies, gold faces enough headwinds to make any rallies labored events. I think that more than ever, a good player is going to have to determine if he’s trading gold or investing in gold.
What to Watch Crude oil and the next Iran headline are still running this market. The war keeps defensive demand underneath gold but the same conflict is pushing crude higher, strengthening the inflation case and keeping the Fed from turning dovish. Strong retail sales, lower claims and a sharp Philly Fed rebound took the last soft-landing argument away from the rate-cut crowd. Gold is stuck until one side of that trade breaks. Either the war premium overwhelms the rate story or oil pulls back enough to let easing expectations rebuild.
The technical picture confirms the stalemate. Buyers are bidding passively on weakness, not taking out offers the way they did in December and January when three rate cuts were priced in. That controlled buying keeps a floor under gold but it does not produce rallies with any follow-through. The pattern of lower tops and lower bottoms is still intact and until the swing top breaks, rallies remain labored events.
If you’d like to know more about how to trade gold, please visit our educational area.
United Overseas Bank’s (UOB) Quek Ser Leang reports GBP/USD slipping but lacking strong downside momentum, with intraday trade expected between 1.3420 and 1.3475. The prior bullish view has faded after a break of 1.3450 support, and the pair is now seen in a 1.3385–1.3495 range. Over 1–3 months, broader supports lie at 1.3210 and 1.3160.
Pound loses momentum and consolidates"24-HOUR VIEW: We expected GBP to “trade in a range between 1.3450 and 1.3520” last Friday. We did not expect GBP to drop to 1.3427. Despite the decline, there has been no clear increase in downward momentum and the current price movements are likely part of a range-trading phase, expected to be between 1.3420 and 1.3475."
"1-3 WEEKS VIEW: We turned positive on GBP last Thursday (16 Jul, spot at 1.3540), indicating that “the renewed upward momentum suggests that GBP has resumed its advance.” We also indicated that “the level to monitor is 1.3590.” On Friday, GBP fell and broke below our ‘strong support’ level at 1.3450. The build-up in momentum has faded, and GBP has likely entered a range-trading phase between 1.3385 and 1.3495."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad expects the ECB to leave rates at 2.25% this week after June’s 25 bps hike, maintaining a data-dependent stance without new projections. Markets fully price a September hike and over 50 bps of tightening in twelve months, but the Haddad argues tighter policy with the Eurozone below potential is more likely to cap Euro downside than drive significant appreciation.
ECB on hold with hawkish pricing"The ECB policy decision is Thursday. The ECB is widely expected to leave the policy rate unchanged at 2.25% after delivering a well-telegraphed 25bps hike in June. Eurozone CPI indicators are tracking slightly below the ECB’s baseline forecast while the rebound in energy prices are still traling the ECB’s base case assumption."
"The ECB is also poised to stick to its data-dependent, meeting-by-meeting approach without pre-committing to any particular rate path. There are no updated macroeconomic projections associated with this meeting."
"The swaps curve fully price in a 25bps hike in September and more than 50bps of tightening over the next twelve months to 2.75%. That would leave the policy rate near the top of the ECB’s estimated neutral range (1.75%-3.00%)."
"However, tighter monetary policy when the Eurozone economy is still operating below potential is more likely to limit EUR downside than push the currency higher because it raises the likelihood of a downward adjustment to ECB rate expectations."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The gold market has bounced a bit during the early part of the trading session on Monday, as we continue to see the death cross loom large. At this point in time, the market still watches several things at once.
Gold Technical Analysis
Gold is consolidating just above $4,000, below both EMAs, after retreating from its highs. Source: TradingView. The gold market has bounced a bit during the early part of the trading session on Monday, as the $4,000 level is psychologically and structurally important at the moment. Buyers come back in despite the fact that interest rates have crept up a little bit higher during the trading session in the United States, but nothing major. The $4,000 level, I think, is a scene that a lot of people are watching very closely. It makes a lot of sense, and it is good for headlines.
We have had the Death Cross recently, where the 50-day EMA breaks down below the 200-day EMA, but that makes for good headlines. This is a situation that sometimes ends up being a bit late, so I always keep that in mind as well.
Geopolitical Drivers and Downside Risks The market right now is more or less paying close attention to what’s going on in the Middle East and trying to discern whether or not traders are going to continue to see this as an area that matters. This is a market that has a lot of noise, and I don’t see that changing in the current environment.
If the market were to break down below the $3,900 level, it would be a breach of a fresh new low, and history suggests that the next potential market memory spot is somewhere near the $3,500 level. If the US dollar continues to strengthen, that very well could be the case, but do keep in mind that both can rise. It doesn’t have to be a situation where a higher dollar means lower gold.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
The 50-day EMA has recently broken below the 200-day EMA indicator, opening up the possibility of a more bearish attitude, as it is the so-called Death Cross. It tends to attract a lot of headlines, but the reality is that it’s the stronger US dollar and stronger interest rates that have been the biggest thorn in the side of silver bulls. This remains the biggest obstacle that is obvious to me.
Geopolitical Headwinds and Technical Support Floors The situation in the Middle East continues to be a major problem for silver as it’s just taken some of the luster out of this market. That being said, silver is still undersupplied, objectively speaking, around the world, and therefore, longer-term, it’s probably got quite a bit of demand to push it higher in the electrification trade, for example.
That being said, it does look like a market that continues to punish rallies, and it’s worth noting that the $50 level below is an area that’s been important multiple times in the past, going all the way back to the late 1970s, and therefore, I suspect traders are looking to test that again.
As things stand right now, every time this market’s rallied, the sellers have returned, so something to keep in mind. Silver continues to be a messy market at this point in time, but the longer-term picture is, of course, a lot different than the action that we have seen in the recent past.
DBS Group Research’s Philip Wee argues that the Euro (EUR) may find support in coming weeks as markets reassess geopolitical risks and central bank divergence. He highlights investor unease over Federal Reserve (Fed) Chair Kevin Warsh’s push to end forward guidance, contrasting it with the European Central Bank’s (ECB) clearer framework. The analysis focuses on EUR/USD’s potential to break its recent trading range.
ECB clarity contrasts Fed uncertainty push"Against this volatile geopolitical backdrop, the coming fortnight may underpin the EUR, driven by a market preference for the European Central Bank’s new and transparent Framework Guidance over Fed Chairman Kevin Warsh’s campaign to end forward guidance."
"The ECB has flagged a tactical pause at its governing council meeting on July 23. However, the market is currently pricing in an 87.8% chance of a 25-bps hike to 2.50% at the subsequent September 10 meeting. If the ECB affirms this trajectory, the EUR/USD pair could break above this month’s tight range of 1.1360 to 1.1480."
"Conversely, Warsh’s testimony to US lawmakers last week confirmed his intention to restore an "uncertainty premium" to the market’s pricing for a September hike. Warsh plans to use the July 28-29 FOMC meeting to foster an "honest internal discussion" with his colleagues at the Fed."
"Markets will become anxious that slashing the FOMC statement and Warsh’s refusal to provide his own forecasts at his first FOMC meeting in June could be a prelude to stripping the dots and the Summary of Economic Projections of their market-moving authority at the September meeting."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver (XAG/USD) advances toward $56.90 per troy ounce on Monday at the time of writing, gaining 1.6% on the day. The precious metal continues to benefit from safe-haven demand as geopolitical tensions in the Middle East keep risk sentiment under pressure.
The United States (US) has carried out a ninth consecutive night of strikes against Iranian targets. In response, Tehran considers the ceasefire between the two countries effectively over, raising concerns about further disruptions to key regional energy supply routes. Meanwhile, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said that intermediaries have delivered messages to Tehran in recent days aimed at reducing tensions, while stressing that diplomacy remains a tool to pursue the country's national interests.
Concerns intensified further after Yemen's Houthis announced a naval blockade against Saudi Arabia, raising fears of additional disruptions to energy trade. Against this backdrop, West Texas Intermediate (WTI) Oil rebounded from daily lows to near $82.00 per barrel at the time of press, increasing the risk of renewed inflationary pressures.
Higher energy prices are reinforcing expectations of further monetary tightening. Speaking on Friday, Federal Reserve (Fed) of Cleveland President Beth Hammack said inflation remains persistent, strengthening expectations that interest rates could remain higher for longer. According to the CME FedWatch tool, markets now assign a 55.3% chance to a Fed rate hike in September.
The prospect of higher interest rates is typically a headwind for Silver as the precious metal does not generate yield. However, strong safe-haven demand driven by geopolitical tensions is currently allowing the white metal to maintain a bullish bias despite this unfavorable backdrop.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
US Dollar Technical Analysis: Last week could’ve been much worse for the USD given the below-expected CPI and PPI prints, but so far it’s held support at prior resistance. USD/JPY retains bullish breakout potential and that’s probably one of the more attractive bullish majors for the USD this week, while GBP/USD retains bullish potential itself setting up as one of the more attractive for USD-weakness. The big part of the DXY basket is in view this week with the ECB rate decision and EUR/USD has seen the sell-off stall over the past few weeks, with 1.1500 as a major barrier level on pullback scenarios.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
USD Last week was one of those episodes where it could’ve went very differently for the US Dollar, as below-expected CPI and PPI highlighted less urgency for the rate hikes that have been priced in for later this year.
That has not come to pass, however, as the Tuesday and Wednesday pullback led to a rally in the Greenback, and so far this week, that move has continued. From the weekly chart below we can see the DXY basket holding support at prior resistance and this again points to bullish technical structure.
For this week, the big item is the European Central Bank rate decision and the EUR/USD pair remains in an unsettled place, as the bearish trend and fresh lows have been on pause for the past few weeks, but buyers have seemingly been unable to prod for re-test of the 1.1500 handle. That will likely be the big driver for the USD for this week.
US Dollar Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD In last week’s USD webinar, I looked at three different resistance areas in EUR/USD, and so far the most nearby has held the highs at 1.1469. But the bigger question is whether there’s now enough motivation from bears to finally break through to a fresh low, as that’s been the lacking component going back to late-June and while the daily chart looks messy, the weekly chart highlights this well. This is why we have the old saying in charting of ‘when in doubt, zoom out.’
EUR/USD Weekly Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD Daily From the daily chart we can see that counter-trend motive well and while messy, this can be argued as a bear flag type of formation given the bullish counter-trend grind over the past few weeks.
Given the ECB meeting on the calendar, this would seem opportune time for the larger trend to present itself, which would point to further DXY strength as the Euro is a whopping 57.6% of the DXY basket. The next resistance level up, the price that bulls have not wanted to encroach upon yet since breaking below a moth ago, is at the 1.1500 level.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY The Japanese Yen is the second largest component of the DXY basket and the Japanese Yen weakness theme remains as a big part of the relative strength in the USD. At this point, the USD/JPY pair holds an ascending triangle formation, which is a bullish breakout formation that points to the possibility of topside breakouts and trend continuation.
As looked at last week, the 165 level is the next major level up and that’s a price that hasn’t traded in USD/JPY since 1986. But – central to that bullish reaction in DXY after PPI and CPI was a similar outing in USD/JPY, and I had looked at this possibility on Monday, highlighting that trend traders could view that weakness as opportunity, which so far they have.
USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD While the EUR/USD sell-off has stalled over the past few weeks but the pair showing an inability to climb above 1.1500, GBP/USD has sprung into what could be argued as a bullish trend given a recent higher-high.
I looked into the pair last week and highlighted three support areas. The first of those areas has so far helped to hold the lows around 1.3450. The second, just below, spans from a Fibonacci level at 1.3390 up to 1.3400, and the third is a prior swing around 1.3325.
For those looking to take bearish stances on the USD this stands out as one of the more attractive major pairs currently available.
GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
The Euro (EUR) trades marginally lower to near 1.1432 against the US Dollar (USD) during the European trading session on Monday. The major currency pair edges down as the US Dollar recovers its early losses.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 100.77.
The Greenback bounces back even as oil prices have retreated amid hopes of de-escalation in ongoing military aggression between the United States (US) and Iran. Higher oil prices de-anchor inflation projections that prompt Federal Reserve (Fed) interest rate expectations, a scenario that is favorable for the US Dollar.
This week, investors will pay close attention to the European Central Bank (ECB) monetary policy announcement on Thursday, in which policymakers are expected to leave policy rates steady. In the June policy meeting, officials raised key rates by 25 basis points (bps), but guided a meeting-by-meeting approach.
Latest remarks from ECB officials signaled that more interest rate hikes could be needed as price pressures will likely stay above the central bank’s 2% target for longer.
EUR/USD technical analysis
EUR/USD trades slightly lower at around 1.1437, holding a mildly bearish near-term tone as it remains just under the 20-period Exponential Moving Average (EMA) at 1.1441, which now caps the upside. The price action suggests a Bearish Flag formation, which is a trend-continuation pattern. As price action suggests that the prior move was on the downside before a consolidation, the odds of further decline are significantly higher.
The Relative Strength Index (RSI) at about 47 leans slightly soft and hints that upside momentum is waning while the pair trades beneath its immediate dynamic resistance.
On the topside, initial resistance is located at the 20-day EMA around 1.1441, and a sustained break above this cap would expose the channel top near 1.1516 as the next hurdle. On the downside, the lower boundary of the rising channel at 1.1393 is the first notable support, and a decisive drop through this floor would weaken the constructive channel structure and open the door for further decline towards 1.1300.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
The GBP/USD pair bounced from recent lows near 1.3450, maintaining an underlying three-week winning streak despite recent consecutive daily losses Measured investor optimism surrounding newly appointed Prime Minister Andy Burnham and structural fiscal prudence are acting as strong tailwinds for sterling A resilient UK economy and a softening US dollar, weighed down by expected Federal Reserve policy pauses, offer immediate dip-buying opportunities for bulls The British pound has shown resilience in foreign exchange markets, maintaining a three-week winning streak despite recent losses. The GBP/USD pair has moved back upward today, recovering from lows near 1.3450 to around 1.3468.
The British pound has demonstrated notable resilience in foreign exchange markets. Despite recording losses in the last two trading sessions, it maintains a three-week winning streak.
So what is actually holding this momentum together, and does it point to something durable, or just a currency pair catching its breath?
Politics Has Done a Lot of the Heavy Lifting Sterling’s strength mostly comes from domestic politics, not anything happening in Washington. Three weeks ago, then-Prime Minister Keir Starmer resigned. Traders had been pricing in a hefty political risk premium since talk of instability began, but as that uncertainty eased, the pound quietly clawed back its losses.
Andy Burnham took over as the UK’s seventh Prime Minister in a decade this Monday. Markets expect him to appoint a fiscally conservative chancellor, a move that’s helped keep sterling well supported. Less political noise, simply put, means more room for the currency to run.
The financial world expects the new administration to stick to a fiscally prudent path. This has really boosted confidence in the currency. The minor profit-taking late last week was just a healthy pause as traders braced for the official transition.
Macroeconomic Resilience and a Faltering Dollar Sterling’s gains didn’t happen in a vacuum. A softer US dollar played a part too. Doubts about how fast the Federal Reserve will tighten, along with a disappointing June Nonfarm Payrolls report, have periodically weighed on the greenback and given cable room to climb.
But the dollar hasn’t been a one-way loser. Escalating US-Iran tensions, including a ninth straight night of US strikes and retaliatory attacks from Iran over the weekend, have kept some safe-haven demand for the dollar alive. Rising oil prices, linked to those tensions, have also fed inflation worries and revived bets on at least one more Fed rate hike this year.
What Does This Say About the Near-Term Outlook? The current trend favors the pound, but the situation is not entirely one-sided. The GBP/USD remains below its early July high, indicating that the dollar could strengthen, particularly if geopolitical risks increase.
This week’s calendar could be the real decider. UK employment data comes out Tuesday, with inflation figures following on Wednesday. Either report could sway the Bank of England’s next move and the pound’s trajectory.
Is There an Opportunity Here? For short-term forex traders, the current market presents a clear strategy. Sterling is expected to perform well as long as domestic politics remain stable. However, this strategy requires careful risk management due to the dollar’s sensitivity to Middle East developments and Federal Reserve policy expectations.
Those following monitoring markets may find opportunities in short-term trading, especially around significant economic data releases. Longer-term investors might consider the pound’s resilience as a sign of underlying value, particularly if the UK economy shows broader stabilization.
What is the near-term outlook for sterling?
The near-term outlook for sterling appears constructive, with trading likely to remain within a range. Upside potential may emerge if UK economic data proves resilient leading up to Bank of England decisions.
Are there opportunities in current GBP strength?
Yes, for momentum traders around data events. Longer-term investors could see potential if the UK recovery continues, especially if the US dollar faces downward pressure.
What could determine the pound’s direction this week?
This week, the direction of the pound could be influenced by UK employment data on Tuesday and inflation figures on Wednesday.
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Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Gold (XAU/USD) shows marginal gains on Monday, as the US Dollar recovery stalled and Oil prices pulled back from highs. The precious metal remains capped below a descending trendline resistance, but downside attempts remain supported above the $3,965 area, thus forming a descending triangle pattern
Simmering tensions in the Middle East keep Gold rallies subdued, but recent comments from Iran’s Foreign Ministry Esmaeil Baghaei, suggesting that efforts to de-escalate the conflict are going on, have provided a glimpse of hope on Monday. Risk appetite added some pressure on the US Dollar and pulled Oil prices down from one-month highs, which is good news for Gold.
The US Dollar also remains weighed by the softer-than-expected US inflation figures released last week, which have prompted investors to dial down expectations of any Federal Reserve monetary tightening in the coming months.
Technical Analysis: Triangle formation and bullish divergence
XAU/USD trades at $4,021, with the bearish structure in play, yet with a triangle formation and some bullish divergence in the Relative Strength Index (RSI), suggesting that bears might have run out of steam. The 4-hour RSI has recovered toward a neutral level while the Moving Average Convergence Divergence (MACD) has turned positive, hinting at building but still constrained buying interest.
Bulls, however, would have to break the top of the triangle, now around $4,050, to confirm a trend shift, aiming for the $4100 area (July 14 high) and the $4,210 area (July 6 high). A break below year-to date lows at $3,941 would expose the October 2025 low, at $3,886. Further down, the 127.2% Fibonacci extension of the late-June downleg, at the $3,830 area, emerges as the next target.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
USD/JPY opens the week at 162.36 on Monday. The Japanese yen remains near its lowest level since 1996. Pressure on the currency is being exerted by a strengthening US dollar and a sharp rise in oil prices amid escalating conflict in the Middle East.
The US military launched new airstrikes on Iran following the deaths of three American troops. Tehran has stated that the ceasefire has effectively ceased to operate. Over the weekend, Iranian forces intercepted four vessels passing through the Strait of Hormuz.
Japan is heavily dependent on oil supplies from the Middle East, making it particularly vulnerable to regional disruptions and rising energy costs. Expensive oil worsens the country’s trade balance and intensifies pressure on the yen.
Investors have yet to see decisive action from Tokyo to support the currency. Data on foreign exchange interventions will be released at the end of the month, which may reveal whether Japanese authorities were behind the yen’s abrupt-though brief-strengthening in recent weeks.
Technical Analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 162.58 level, currently extending up to 162.58 and down to 162.28. A rise to the 163.00 level is expected today, with the prospect of the trend continuing to 163.50. Technically, this scenario is confirmed by the MACD indicator, whose signal line is above the zero level and pointing strictly upwards.
On the H1 chart, USD/JPY has completed a downward wave structure to the 162.28 level. A wave extension to 162.00 cannot be ruled out. Thereafter, the start of a growth wave to at least 163.00 is expected. A breakout above this level would open potential for a continuation of the growth wave to 163.50. Technically, this scenario is confirmed by the Stochastic oscillator, whose signal line is below the 50 level and pointing strictly upwards to 80, indicating short-term upward momentum.
Conclusion USD/JPY remains elevated as the yen stays near multi-decade lows, weighed down by a strong dollar, surging oil prices, and escalating Middle East tensions. US airstrikes on Iran and Tehran’s interception of vessels in the Strait of Hormuz have heightened geopolitical risks, leaving Japan-a major oil importer-particularly exposed to energy price shocks. Expensive oil worsens Japan’s trade balance and adds to the yen’s downward pressure. Markets are also awaiting end-of-month intervention data to see if Japanese authorities have been active in supporting the currency. Technically, the pair appears poised for further gains towards 163.00 and potentially 163.50, though intervention risks remain a wildcard for yen bulls.
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GBP/JPY wavers around 218.50, with bears contained above previous highs at 218.00.
The Pound picks uop across the board with markets awaiting Andrew Burnham's nomination as next PM.
The British Pound (GBP) is trading practically flat against the Japanese Yen (JPY) on Monday, with the GBP/JPY pair wavering around 218.50, holding comfortably above previous highs at the 218.00 area, and with last week’s long.term high at 219.63 within a short distance.
The Pound Sterling remains moderately bid with investors bracing for the nomination of former Mayor of Manchester, Andy Burnham, as the next Prime Minister. Burnham pledged in an interview with The Times newspaper a 10-year plan to “rewire” the UK after having assured markets that he will pursue responsible fiscal policy.
In Japan, markets are closed for the Marine Day holiday, which is keeping market volatility low and the Japanese Yen moving within tight ranges so far.
Technical Analysis: Bulls remain focused on the 219.63 high
GBP/JPY trades at 218.69, retaining a bullish near-term bias with price action supported by an ascending trendline from late June lows. The 4-hour Relative Strength Index (14) around 58 suggests underlying buying interest, while the slightly negative Moving Average Convergence Divergence (MACD) reading hints at a shallow corrective pressure rather than a decisive reversal.
Bulls remain capped below session highs at 218.85, although the main focus remains on last week's high, at 219.63. Above here, the next target might be at the 127.2% Fibonacci extension of the July 10-15 rally, at 220.45.
On the downside, initial support is seen at the confluence between trendline support, now around 218.15, and Friday's trading floor, in the area of 218. A bearish reversal below here would expose the July 7 and 10 lows, near 216.40.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Euro.
USDEURGBPJPYCADAUDNZDCHFUSD0.07%-0.09%0.02%0.06%-0.24%-0.09%0.09%EUR-0.07%-0.13%-0.06%-0.03%-0.31%-0.19%0.00%GBP0.09%0.13%0.09%0.12%-0.18%-0.04%0.13%JPY-0.02%0.06%-0.09%0.05%-0.25%-0.08%0.06%CAD-0.06%0.03%-0.12%-0.05%-0.30%-0.13%0.00%AUD0.24%0.31%0.18%0.25%0.30%0.16%0.34%NZD0.09%0.19%0.04%0.08%0.13%-0.16%0.15%CHF-0.09%-0.01%-0.13%-0.06%-0.00%-0.34%-0.15% 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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The Pound to Australian Dollar (GBP/AUD) exchange rate traded in a wide range last week, briefly falling to a two-week low before recovering to test fresh multi-month highs amid UK Chancellor speculation.
At the time of writing, GBP/AUD was trading at AU$1.9262, virtually unchanged on the week after retreating from a high of AU$1.9350.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.927315 (+0.11%)
Pound to Dollar (GBP/USD): 1.345377 (-0.17%)
Australian Dollar to Dollar (AUD/USD): 0.698058 (-0.28%)
DAILY RECAP:
The Pound (GBP) got off to a subdued start last week, as a quiet UK economic calendar left investors with few fresh domestic catalysts.
Sterling sentiment was also suppressed by cautious remarks from Bank of England Governor Andrew Bailey, who reiterated the bank's policy remains data dependent.
The Pound’s fortunes then improved markedly in mid-week trade amid reports that incoming Prime Minister Andy Burnham might be looking to appoint Shabana Mahmood as his Chancellor over Ed Miliband, with the former being viewed by markets as more fiscally conservative.
However, the jump in Sterling proved short-lived, with the currency succumbing to subsequent profit-taking, which overshadowed a rebound in UK GDP in May.
Meanwhile, trade in the Australian Dollar (AUD) was mixed last week, with the resumption of hostilities in the Gulf driving volatility in the currency throughout the session.
Demand for the risk-sensitive ‘Aussie’ was also knocked later in the session as a global tech stock selloff spooked markets.
On a more positive front was the release of Australia's latest consumer and business confidence surveys, which both reported an improvement in morale.
Near-Term GBP/AUD Forecast: Burnham's First Moves as PM in the Spotlight Looking to the week ahead, Andy Burnham's first days in office are likely to act as a key catalyst for the Pound to Australian Dollar exchange rate.
The spotlight will undoubtedly be on who Burnham ultimately appoints as his Chancellor of the Exchequer, with markets likely to favour a more fiscally conservative pick.
At the same time, there is also a glut of high-impact UK economic releases set to influence Sterling this week, with GBP investors particularly focused on how the latest employment and inflation figures could influence Bank of England rate expectations.
Meanwhile, the focus for AUD investors will be on Australia's latest employment data, with the ‘Aussie’ poised to weaken if another weak jobs report tempers Reserve Bank of Australia rate hike bets.
The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell to a three-week low last week as strong domestic data and rising Reserve Bank of New Zealand rate hike expectations helped the ‘Kiwi’ outperform Sterling.
At the time of writing, GBP/NZD was trading at NZ$2.3052, down around 0.8% on the week.
Latest — Exchange Rates:
Pound to New Zealand Dollar (GBP/NZD): 2.302862 (-0.19%)
Euro to New Zealand Dollar (EUR/NZD): 1.957782 (-0.08%)
New Zealand Dollar to Dollar (NZD/USD): 0.58422 (+0.02%)
DAILY RECAP:
The Pound (GBP) was subdued at the start of the week amid a lack of UK economic data.
Comments from Bank of England Governor Andrew Bailey also pressured the Pound, as the BoE chief raised concerns about the UK’s long-running problem with sluggish growth.
Sterling rallied midweek amid speculation around who would become Chancellor under incoming Prime Minister Andy Burnham.
Shabana Mahmood overtook Ed Miliband as the frontrunner, with markets welcoming the news as Mahmood is seen as more fiscally responsible.
However, GBP couldn’t sustain its upside, even with UK GDP showing a 0.1% rebound in May.
Investors moved to book their profits in the Pound after it struck multi-month highs against some of its peers, sending Sterling lower.
Meanwhile, the New Zealand Dollar (NZD) started strong last week, building on the previous week’s gains, as domestic data continued to underpin the ‘Kiwi’.
New Zealand’s June services PMI exceeded forecasts, reporting an unexpected expansion in the sector.
In addition, business confidence in the country rebounded 8% in the second quarter, rather than deteriorating.
The risk-sensitive currency relinquished some gains in the middle of the week as escalating tensions in the Middle East soured the market mood.
However, the ‘Kiwi’ was able to find its footing again to end the week with most of its gains intact, as markets continued to price in more interest rate hikes from the Reserve Bank of New Zealand (RBNZ) following the recent strong domestic data.
Near-Term GBP/NZD Forecast: High-Impact Data to Drive Volatility? Looking ahead, the first major data release this week will be New Zealand’s second-quarter inflation figures. If inflation accelerated as expected, the ‘Kiwi’ could be buoyed by RBNZ rate hike bets.
The focus then shifts to GBP data, with the UK’s latest jobs report to be published on Tuesday. Signs that the labour market has stopped softening – such as steady unemployment and wage growth – could boost the Pound.
The UK consumer price index on Wednesday could then dent GBP, if it shows that headline inflation eased in June.
Finally, Friday brings the UK’s June retail sales figures and preliminary PMIs for July. A slowdown in sales last month and another contraction in service sector activity this month could see Sterling end the week on a sour note.
Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $56.83 per troy ounce, up 1.49% from the $56.00 it cost on Friday.
Silver prices have decreased by 20.05% since the beginning of the year.
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 70.74 on Monday, down from 71.77 on Friday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Silver briefly slipped below the key $55 level on Friday but quickly regained its footing as the new week began, despite Brent crude gapping above $90 following another escalation in the US-Iran conflict. The lack of additional selling is notable. Throughout last week, higher oil prices fueled expectations of renewed inflation pressure, lifting Treasury yields and the Dollar while weighing on precious metals. Yet even after another round of geopolitical deterioration over the weekend, silver failed to attract fresh downside momentum, suggesting much of the bearish repricing had already taken place.
Why didn’t silver extend its decline? The answer lies in how markets interpreted the latest developments. Brent had already surged more than 17% last week, its biggest weekly gain since April, meaning investors had substantially priced in the risk of a prolonged disruption to Middle East oil supplies. The weekend headlines largely reinforced that narrative rather than introducing a fresh shock. At the same time, Brent itself struggled to build on its initial break above $90 during Asian trading, helping stabilize broader inflation expectations. As oil retreated back below $90, silver recovered further, indicating that bearish conviction is beginning to fade even though macro conditions remain challenging.
Can diplomacy prevent another wave of selling? There are still reasons for markets to avoid pricing the most disruptive outcome. Iranian Foreign Ministry spokesman Esmail Baghaei said negotiations with the US could continue if they serve Iran’s national interests, adding that intermediaries have continued exchanging messages despite the latest US strikes and military casualties. Those comments keep diplomacy alive and support the view that the Strait of Hormuz blockade could ultimately prove temporary rather than permanent. However, the path remains highly uncertain. If negotiations fail to produce visible progress over the coming days and Brent resumes its advance toward $100, markets would likely rebuild inflation expectations once again, lifting yields and the Dollar while exposing silver to another round of selling pressure.
What does the technical outlook suggest? Technically, the broader near-term outlook remains bearish as long as resistance at 59.66 caps rebounds. Following the break of 55.59 support, the decline from 121.83 is still expected to extend toward the psychological 50 level, which sits close to 76.4% retracement of 28.28 to 121.83 at 50.35.
Nevertheless, downside momentum is beginning to show signs of exhaustion. Bullish convergence on the 4H MACD suggests sellers are losing control despite the latest geopolitical headlines. A firm break above 59.66 would confirm short-term bottoming and open the way for a stronger recovery toward 63.25, with scope to extend further to the 55 D EMA, now at 65.76. Such a move would likely coincide with a clearer path toward de-escalation in the Middle East and renewed easing in oil prices.
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GBP/USD Rises as Markets Await Burnham's First Cabinet GBP/USD is edging higher on Monday, adding to last week’s gains as Andy Burnham prepares to replace Keir Starmer as UK Prime Minister.
Investors will be watching today's Cabinet announcement and Burnham's first major speech for clues on the new government's fiscal priorities.
Particular attention will be on whether Shabana Mahmood is confirmed as Chancellor. She is viewed by markets as a centrist, and her appointment would reassure investors that Burnham is not looking to ramp up spending or pursue the more expansionary fiscal policies some had feared.
Even so, uncertainty remains over Burnham's broader economic agenda. Fiscal credibility is likely to remain central to market sentiment, helping to keep gilt yields contained and providing support for sterling.
Alongside domestic politics, this is a busy week for UK economic data, with labour market figures due on Tuesday, inflation on Wednesday and retail sales on Friday.
The unemployment rate is expected to remain unchanged at 4.9%, while CPI inflation is forecast to ease to 2.4% from 2.8%, which could lower BoE rate hike expectations.
However, any improvement in inflation may prove temporary. Oil prices have continued to rise following renewed U.S.-Iran hostilities, increasing the risk that higher energy costs feed through into inflation over the coming months.
A softer-than-expected inflation reading could weigh on sterling in the near term, although stronger retail sales—supported by warmer weather and the FIFA World Cup—could provide some offset.
Meanwhile, the U.S. dollar remains under pressure following softer-than-expected CPI and PPI data earlier this month. However, rising oil prices could revive inflation concerns, supporting Treasury yields, Federal Reserve rate expectations and safe-haven demand for the dollar.
GBP/USD Forecast – Technical Analysis
GBP/USD has recovered from the 1.3200 support zone, rising above the 200-day EMA to a high of 1.3550 before pulling back below the former trendline support, which has now become resistance.
Buyers will need to reclaim 1.3485, where horizontal resistance coincides with the falling trendline. A move above this level would bring 1.3550 back into focus before exposing the 1.3600 psychological level.
Failure to reclaim 1.3485 could see the pair retest the 200-day SMA around 1.3390.
Below there, 1.3340 becomes the next key support level, with a break exposing the 1.3200 support zone.
Gold Holds Near Two-Week Low as Higher Oil Prices Revive Inflation Concerns Gold is little changed on Monday as investors assess the impact of escalating Middle East tensions, which continue to push oil prices higher and strengthen the case for the Federal Reserve to maintain a hawkish policy stance.
The precious metal fell 2.5% last week and is broadly unchanged so far in July after declining for four consecutive months, losing almost 25% over that period.
The outlook remains challenging following last week's 15% surge in oil prices, with crude extending gains at the start of this week as U.S. forces carry out strikes against Iran for a ninth consecutive day and concerns persist over shipping through the Strait of Hormuz.
As long as the conflict continues to support higher energy prices, investors are likely to remain concerned that inflation could prove more persistent, delaying any shift towards easier Federal Reserve policy.
That backdrop is weighing on non-yielding assets such as gold.
Cleveland Federal Reserve President Beth Hammack was the latest policymaker to suggest that further interest rate increases may still be required if inflation fails to ease sufficiently.
Markets are now pricing an 82% probability of a Federal Reserve rate hike by December, up from 73% a week ago, according to the CME FedWatch Tool.
One supportive factor for gold has been continued central bank buying.
Purchases by the People's Bank of China accelerated in June, marking the largest monthly increase in three years and extending its buying streak to 20 consecutive months.
For now, the $4,000 level continues to provide support.
With little major U.S. economic data due this week ahead of next week's Federal Reserve meeting, traders are likely to remain focused on developments in the Middle East, oil prices and their implications for inflation.
Gold Forecast – Technical Analysis
Gold has broken below its symmetrical triangle pattern and the 200-day EMA, falling to a low of 3,940.
The price remains below the falling trendline as well as both the 50-day and 200-day EMAs, reinforcing the bearish technical picture. The 50-day EMA has also crossed below the 200-day EMA, generating a bearish crossover signal.
A break below 3,940 would expose 3,800, followed by 3,700.
To improve the outlook, buyers would first need to reclaim 4,100 before targeting 4,200, where the falling trendline and the July high converge.
A move above this resistance would expose the 200-day EMA around 4,310, followed by the June swing high near 4,370.
Only a sustained break above those levels would bring 4,500 back into focus.
The Japanese Yen (JPY) trades marginally higher against the US Dollar (USD) during the European trading session on Monday. The USD/JPY pair edges down to near 162.36 as the US Dollar faces pressure, with investors remaining confident that the Federal Reserve (Fed) will leave interest rates unchanged in the monetary policy announcement next week.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades slightly lower to near 100.70.
The CME FedWatch tool, the odds of the Fed leaving interest rates unchanged in the July meeting are 85.6%, up from 65.8% recorded last week. Traders have trimmed hawkish Fed expectations after the United States (US) Consumer Price Index (CPI) data release for June, which showed that both headline and core inflation cooled down.
Meanwhile, the Japanese Yen faces pressure against its other currency peers amid escalating geopolitical tensions. Late Sunday, US Central Command (CENTCOM) confirmed that it had concluded a ninth straight night of strikes against Iran, clarifying that the latest aggression was in retaliation for the killing of at least three American service members
USD/JPY technical analysis
USD/JPY trades at 162.36, holding a modest bullish bias as it consolidates near the multi-decade high of 162.84. The pair trades close to the 20-period Exponential Moving Average (EMA) at 162.31, reflecting a sideways trend.
Price, which sits just under the multi-decade high at 162.84, while a mid-50s Relative Strength Index (RSI) at 53.83 suggests steady but not overextended buying pressure.
On the topside, the multi-decade high at 162.84 is the immediate resistance; a break above that would allow the pair to extend its upside towards 164.00. On the downside, the rising trend-line support near 162.26 is the immediate support level; a sustained break below that zone would expose deeper pullbacks toward the 160.49 origin of the current uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
HomeTechnical AnalysisIntraday Analysis 20.07.2026 Silver hopes to find support
XAGUSD (The Silver) finds a bounce
XAGUSD (The Silver) halts the ongoing bearish rally as the recent pullback is hampering efforts of a further drop.
The precious metal slightly licks it wounds by testing the support of 55.00. The said area is key as bears could be eager to ignore a rebound after sentiment remains downbeat. On the flip side, 57.50 looks to be a crucial level for bulls to turn their attention if buyers can re-enter the market.
EURUSD spiraling lower
The euro is hoping to turn momentum around as prices hit another low.
Since firm resistance was found around the 1.1480 zone, more buyers have closed their positions. 1.1460 is a major hurdle for the Euro to recapture this month’s losses. Then a close above 1.1520 at the previous swing high is vital to ease the selling pressure. Otherwise, a further correction might send the euro towards 1.1340. GER 40 finding bullish trend
The Dax weakened as the ongoing Middle East conflict has shaken up indices across the board.
A break below 24900 dented the market mood in the near-term. However, with prices now moving into a bullish channel, buyers are hoping for continuation. A lift above 24900 will help bulls regain confidence as prices look to regain the 25400 level. On the flip side, 24400 is an important support to avoid a further sell-off.
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Market Strategist at Orbex David Kindley is a renowned fundamental analyst with over 10 years of trading experience in the financial markets. With a keen eye for macroeconomics and a special focus on trading psychology, David is passionate about helping everyday investors make informed trading decisions through his thorough research and analysis.
The Pound to Canadian Dollar (GBP/CAD) exchange rate traded lower last week as UK political developments drove volatility while rising oil prices supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8861, down around 0.5% on the week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.88631 (-0.31%)
Euro to Canadian Dollar (EUR/CAD): 1.60365 (-0.20%)
Dollar to Canadian Dollar (USD/CAD): 1.40207 (-0.14%)
DAILY RECAP:
The Pound (GBP) had a quiet start to the week as a sparse UK economic calendar left Sterling lacking fresh direction, opening it up to losses against stronger rivals.
Comments from Bank of England Governor Andrew Bailey added to the subdued mood after he warned about the UK's long-standing growth challenges. As a result, GBP/CAD slid to a near two-week low.
Sterling surged in the middle of the week as markets reassessed expectations for the next Chancellor under incoming Prime Minister Andy Burnham.
Confidence improved after Shabana Mahmood emerged ahead of Ed Miliband as the favourite for the role, with investors viewing Mahmood as the more fiscally credible candidate.
However, Sterling couldn’t hold on to its gains, despite data confirming the UK economy expanded by 0.1% in May.
Meanwhile, the crude-linked Canadian Dollar (CAD) strengthened early last week as renewed conflict in the Middle East saw oil prices climb higher.
This propelled the ‘Loonie’ to a near two-week high against the Pound.
Midweek, CAD faced some pressure following the Bank of Canada’s monetary policy decision. The bank left rates unchanged and struck a broadly cautious tone, thereby dampening interest rate hike bets.
However, the Canadian Dollar was able to quickly regain lost ground on Thursday, and extended its upside on Friday, as crude prices continued to rise.
Near-Term GBP/CAD Forecast: Inflation Figures in Focus Looking ahead, the spotlight for GBP investors will first fall on the UK's latest labour market report, due on Tuesday.
If the data points to a resilient jobs market, with unemployment unchanged and wage growth remaining robust, Sterling may find fresh support.
Attention will then turn to Wednesday's UK consumer price index. Should June's figures show headline inflation eased further, the Pound may come under renewed pressure.
The week's final UK releases arrive on Friday, with June's retail sales data and the preliminary PMIs for July. A slowdown in consumer spending, coupled with another contraction in the services sector, could see Sterling end the week on the back foot.
As for the Canadian Dollar, the week kicks off with Canada’s latest CPI. A forecast cooling of inflation in June could dent CAD.
However, the crude-linked currency may attract support throughout the week if the US-Iran conflict continues to intensify, driving up the price of oil.
