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EUR/USD Rebound as Dovish Mixed US CPI Keeps September Fed Rate Cut Speculation Alive

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  • August 12, 2025
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The Euro reclaimed its losses against the US Dollar on Tuesday, rising to about 1.1630 and ending a two-day losing streak following mixed US inflation reports. July’s headline CPI increased in accordance with forecasts at 0.2% MoM and 2.7% YoY, while core inflation unexpectedly beat forecasts at 0.3% MoM and 3.1% YoY. Even sturdier core readings, markets still expect a Federal Reserve rate reduction in September, aided by softening overall inflation pressures and a weaker jobs market. In the Euro area, sentiment fell sharply, with Germany’s ZEW Economic Sentiment Index down more than anticipated, although words of ECB policymakers implying that rates are still at a proper level provided some support for the common unit. KEY LOOKOUTS • Headline inflation eased as predicted, but core inflation surprised to the upside, providing a cautionary note for Fed policy. • Markets continue to price in a September rate cut even after the hotter reading of core. • German and Eurozone ZEW Economic Sentiment indicators plummeted, reflecting sustained growth difficulties. • ECB policymakers assert interest rates are at a “very good level,” suggesting policy room during economic uncertainties. Euro made gains against the US Dollar on Tuesday to reach about 1.1630 after conflicting US inflation data cooled recent bearish pressure. Although July’s headline CPI was as forecast and improved marginally on the year figure, core inflation unexpectedly hardened on the upside to show continued pressures. Despite this, investors are still hopeful the Federal Reserve will proceed with a September rate cut, as weaker overall inflation and a slowing labor market leave scope for policy relaxation. In the Eurozone, mood worsened significantly, with Germany’s ZEW survey indicating increased growth concerns, though assurances from ECB officials that the central bank is to stay flexible provided some support to the currency. The Euro surged to near 1.1630 following mixed US CPI data, with markets remaining bullish on a September Fed rate cut even as core inflation was hotter. Sluggish Eurozone sentiment dragged the outlook down, but supportive comments from ECB officials contained the downside pressure. • The Euro surged to near 1.1630, ending a two-day losing trend following mixed US inflation data. •  US July headline CPI was in line with expectations at 0.2% MoM and 2.7% YoY. •  Core CPI was above forecast at 0.3% MoM and 3.1% YoY, reflecting continued price pressures. •  Markets continue to widely anticipate the Federal Reserve to reduce rates in September even as core readings strengthened. •  German ZEW Economic Sentiment Index declined sharply to 34.7 in August from 52.7 in July. •  Sentiment across the Eurozone also declined, reflecting ongoing economic headwinds. •  ECB officials indicated rates are at a “very good level” and stressed flexibility in adapting to evolving conditions. The Euro firmed on Tuesday as uneven US inflation data provided some respite for the currency, aiding it to rebound from recent losses. July’s headline CPI was in line with expectations at 0.2% month-on-month and 2.7% year-on-year, indicating that price growth is slowing in line with expectation. Yet, core inflation, which strips out food and energy, was a touch higher than expected, indicating that underlying price pressures persist. In spite of this, market participants still expect a September Federal Reserve rate cut as decelerating headline inflation and evidence of a softening labor market provide room for policymakers to maneuver. EUR/USD DAILY PRICE CHART SOURCE: TradingView In Europe, the economic sentiment continued to be soft, with the recent ZEW survey indicating a sharp decline in confidence in Germany and the wider Eurozone. The fall underscores continued worries of weak growth and repeated headwinds in the bloc’s biggest economy. However, words from ECB Governing Council member Joachim Nagel, suggesting interest rates are at a “very good level” and the bank has the flexibility to adjust if necessary, gave some comfort. Although there are still uncertainties—most notably over trade tensions—the comments gave some stability to the euro’s outlook. TECHNICAL ANALYSIS EUR/USD bounced back to the 1.1630 area after hitting support close to recent lows, indicating short-term demand. The recovery in the pair keeps it above crucial support levels of 1.1600, while near resistance is located close to 1.1650, followed by the 1.1700 handle. A breakout above these hurdles on a sustained basis may allow further up move, while a fall below 1.1600 may lead to the next support at 1.1570. Momentum indicators are stabilizing, suggesting possible consolidation prior to the next directional shift. FORECAST Short term, EUR/USD may experience modest gains if sentiment continues to support a September rate cut by the Fed. A continued break above the 1.1650 resistance range should set the stage for 1.1700, with more pronounced bullish momentum likely taking it to 1.1750. Encouraging Eurozone news or dovish Fed commentary could propel the rally further. The downside is, however, that if US economic statistics improve or Fed policymakers turn dovish on easing, the pair can expect to see fresh selling pressure. A fall below 1.1600 would bring into focus the 1.1570 and 1.1540 support levels. Poor Eurozone data or increased geopolitical tensions can fuel bearish activity in the sessions to come.

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Currencies GBP/USD

GBP/USD Stabilizes at 1.3350 as Fed Hold, UK Inflation Influence Sentiment

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  • July 30, 2025
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GBP/USD remains stable at 1.3350 as the US Dollar weakens in anticipation of the Federal Reserve’s interest rate decision as markets already largely expect a halt to rate hikes. The currency pair continues its gradual bounce back after recovering from a two-month low on the back of a muted USD and risk-averse investor sentiment. While the Fed is likely to leave rates unchanged, all eyes are on the FOMC press conference for hints at potential rate cuts in the second half of the year. On the UK front, the Pound continues to come under pressure as it struggles with soft labor market data and high inflation, making the Bank of England’s policy outlook tricky before its next meeting. KEY LOOKOUTS •  Investors will keenly watch any indications of prospective rate cuts, particularly the possibility of easing from September. •  The next Q2 PCE inflation report and July Nonfarm Payrolls will be important to the Fed’s next step. •  There is a growing chance of a 25 bps rate cut in August as UK inflation remains elevated and economic growth slows. • Soft PMI prints and moderating labor market conditions may continue to burden the Pound Sterling in the immediate future. GBP/USD trades with a modestly upbeat bias at 1.3350 as the US Dollar loses strength in anticipation of the Federal Reserve policy release. Even though the Fed is universally anticipated to keep rates unchanged, market players will carefully scrutinize Chair Powell’s statements for any rate-cut guidance, maybe starting as early as September. On the British side, the Pound Sterling continues to be weighed down by soft labor market reports and persistent inflation concerns, making it difficult for the Bank of England to chart policy.”. In spite of a boost in food sales, soft PMI readings have raised hopes of a 25 bps rate cut by the BoE in August, contributing to the risk-averse sentiment around GBP. GBP/USD is trading around 1.3350 as the US Dollar weakens in anticipation of the Fed rate decision. Even as the Fed is likely to maintain rates, the market is looking for cues on when it will cut further. In the meantime, UK economic woes and BoE policy doubts cap Pound appreciation. • GBP/USD trades around 1.3350, bouncing back slightly from a two-month low of 1.3307. • The US Dollar continues to stay subdued in anticipation of the Federal Reserve interest rate decision. • The Fed will likely keep rates unchanged at 4.25%–4.50%, with a 97% probability already priced in. • The FOMC press conference is being waited upon for cues on potential rate cuts from September onwards. • UK labor market conditions are easing, damping the Pound’s resilience. • Inflation pressures in the UK are ongoing, making the Bank of England’s policy trajectory more challenging. •  Deteriorating UK PMI numbers and weakening economic momentum increase the prospects of an August BoE rate cut. GBP/USD is exhibiting stability around the 1.3350 mark as market sentiment shifts towards the imminent Federal Reserve interest rate determination. The central bank is expected to leave the current rate band of 4.25% to 4.50% intact, with an almost-unanimous market expectation of no action. But true attention is on the post-meeting discussion, where hints are being sought on when rate cuts may be implemented, perhaps from September. At a time when U.S. inflation is easing and growth worries are slowly emerging, this policy shift has raised hopes tentatively. GBP/USD DAILY PRICE CHART SOURCE: TradingView The economic sentiment in the UK is still unclear. Even though retail food sales experienced a modest boost, wider economic indicators like PMI reading still indicate weakness in momentum. The labor market is also cooling off, while inflation pressures linger. This combination puts the Bank of England in a precarious position before its next policy meeting. Markets are increasingly factoring in the chance of a rate cut in August, with a second one perhaps by the end of the year, as the central bank attempts to walk the tightrope between inflation control and the need to prop up slowing growth. TECHNICAL ANALYSIS GBP/USD is consolidating at the 1.3350 level, which is now a major support area after recent recovery from a two-month low at 1.3307. Short-term moving averages are starting to converge, which suggests that momentum could be turning towards a steadier uptrend, and the Relative Strength Index (RSI) has eased back from oversold levels. Traders are looking for any break above this level as confirmation of further bullish action, with volume trends supporting the likelihood of more gains if buying pressure continues to be sustained. FORECAST If the Federal Reserve sends a dovish message in its press conference—suggesting that it will reduce rates in the second half of this year—GBP/USD may experience fresh bullish moves. A move over the 1.3360–1.3380 resistance level may set the course toward the 1.3420 and 1.3500 levels. Any evidence of strength in the UK economy or a less hawkish tone from the Bank of England towards impending rate reductions can also provide additional support to the Pound. To the downside, if the Fed sees no reason to ease further or if future US economic statistics surprise to the upside, the US Dollar could strengthen, sending GBP/USD back to key support at 1.3300. A break below this level that holds could unleash further losses on the pair with potential targets at 1.3250 and 1.3200. Further poor UK data or high hopes of BoE rate reductions would tend to add bearish pressure.

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Currencies

USD/CAD Increases to 1.3750 as Trade Tensions and BoC Outlook Survey Expectations Intensify

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  • July 21, 2025
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USD/CAD currency pair moves higher towards 1.3750 during early European morning hours on Monday, bolstered by persistent US-Canada trade tensions as well as market caution in anticipation of the Bank of Canada’s Business Outlook Survey. The Canadian Dollar has difficulty gaining traction as investors weigh the risks of a possible 35% US tariff on Canadian imports, although diplomatic negotiations spearheaded by Canadian Prime Minister Mark Carney provide some hope. In a supporting role, firm crude Oil prices, driven by new EU sanctions against Russian supply, offer a possible support base for the CAD, which helps to cap the upside on the USD/CAD pair. KEY LOOKOUTS • Markets look to the BoC report for new economic sentiment and policy direction. • Attention is on possible 35% tariffs and eleventh-hour negotiations among Canadian and US authorities. • CAD could be supported by WTI Oil remaining close to $66 in light of EU sanctions on Russian Oil. • Market restraint keeps the US Dollar bid, putting additional upside pressure on USD/CAD. The USD/CAD pair is getting into gear, moving towards the 1.3750 level as investors are grappling with increased trade tensions between Canada and the US. Market players are keeping an eye on events related to the imposition of 35% US tariffs on Canadian products, with last-minute diplomatic efforts in place to minimize further dislocation. In the meantime, the Canadian Dollar continues to be under selling pressure, but stable Oil prices are providing some respite. All attention is on the Bank of Canada Business Outlook Survey due out soon, which may give the pair further guidance in the North American session. USD/CAD rises close to 1.3750 as US-Canada trade tensions and investor apprehension increase. Traders wait for the Bank of Canada’s Business Outlook Survey for new economic signals, while bullish crude Oil prices provide little support to the Canadian Dollar. • USD/CAD hovers at 1.3750, having recovered from recent losses against a backdrop of caution in the markets. • US-Canada trade tensions grow more heated, with threats of a 35% tariff on Canadian imports. • Canadian PM Mark Carney sends a trade envoy to Washington for last-ditch talks. • BoC Business Outlook Survey due, which is likely to shed important light on economic sentiment. • Crude Oil prices stable, with WTI at $66, underpinning the commodity-linked CAD. • EU’s 18th round of Russia sanctions contributes to worldwide supply worries, helping Oil prices. • US Dollar is supported by safe-haven flows, placing the USD/CAD pair on a strong trend. The USD/CAD currency exchange rate is presently driven by increased political and economic events between Canada and the United States. With the US threatening a tariff of 35% on Canadian imports, relations between the two countries are strained. In a move to preempt this, Canadian Prime Minister Mark Carney has dispatched a trade envoy to Washington with the aim of securing a deal before the imminent August 1 deadline. The diplomatic initiative has kindled guarded hope in the markets, with investors monitoring closely for any sign of movement in the trade talks that may affect cross-border trade and investor mood. USD/CAD DAILY PRICE CHART SOURCE: TradingView Besides trade dynamics, commodity prices, especially crude Oil, are also providing support to the Canadian Dollar. West Texas Intermediate (WTI) Oil is steady near $66 per barrel, thanks mainly to new European Union sanctions on Russian exports. The sanctions cover diminished price caps and stricter constraints on Moscow’s energy earnings. The Canadian economy, highly integrated with the energy exports, would gain from sustained Oil price strength, even while general uncertainties influence market performance. TECHNICAL ANALYSIS USD/CAD is demonstrating bullish sentiment as it trades at the 1.3750 resistance level, trying to bounce from its recent decline. The pair remains above its short-term moving averages, indicating underlying strength. An extended break above 1.3750 might trigger the way toward the 1.3800 psychological mark, with near-term support resting around 1.3700. Momentum indicators like the RSI continue to register in neutral-to-positive ground, suggesting room for further upside if bearish pressure continues. FORECAST If the tensions in trade relax through effective Canada-US negotiations, and the Bank of Canada’s Business Outlook Survey indicates the resilience of the economy, USD/CAD can continue its upward trend. A continued break above the 1.3750 level could drive the pair to the 1.3800 level and further, particularly if the US Dollar continues to be supported by safe-haven flows and firm economic data. Additional advances will also materialize if Oil prices plateau or fall, lowering support for the Canadian Dollar. Conversely, lack of an agreement on a trade deal by the August 1 deadline or a dovish sentiment in the BoC survey might put pressure on the Canadian Dollar. Yet, any substantial increase in crude Oil prices due to global supply worries or geopolitical tensions would assist the CAD in bolstering strength. In such a situation, USD/CAD can fall back towards the 1.3700 mark of support, with even more bearish potential in case the momentum is reversed in favor of the Canadian Dollar.

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Currencies EUR/USD

EUR/USD Fails to Gain Momentum Amid Trade Uncertainty and Bearish Technical Indications

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  • July 8, 2025
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EUR/USD currency pair continues to experience pressure even after modest recovery from two-week lows, as global trade uncertainty and incongruent Eurozone data continue to unfavorably impact market sentiment. Though expectations of positive developments in Eurozone-US trade talks have provided diminishing support for the Euro, broader risk aversion and safe-haven demand for the US Dollar are limiting any follow-through upside. Technically, the pair is ranging in a bearish expanding wedge, resistance being approximately 1.1780 and significant support at 1.1685. The pair’s general bearish outlook is supported by weak consumer demand, weak trade data, and persistent worries regarding US tariffs. KEY LOOKOUTS • Wednesday’s release may change sentiment based on the extent of the division among Fed members regarding future rate action. • Any news of updates or deals made may affect the direction of the Euro. • A breakout above 1.1780 or a breakdown below 1.1685 should confirm direction. • Ongoing worries regarding US tariffs and international trade may make the US Dollar remain sought-after as a safe haven. EUR/USD pair continues to be pressured as uncertainty in trades and aversion in global risk prevail in market sentiment. Even as the Euro received some lift from optimism on improvement in Eurozone-US trade negotiations and a short reprieve from US tariff threats, the overall bearish trend is still in force. Indifferent economic reports in Germany and France, coupled with declining retail sales in the Eurozone, further undermined faith in the European economy. In the meantime, the US Dollar remains resilient on safe-haven demand, with market participants keeping a keen eye on the future FOMC minutes for any indication of future monetary policy direction. EUR/USD is unable to hold onto gains as trade tensions and soft Eurozone data continue to firm up the bearish trend. Safe-haven demand for the US Dollar and technical resistance around 1.1780 continue to cap upside. • EUR/USD is in a longer-term bearish trend, even though short-term it has bounced from two-week lows. • Trade uncertainty continues, with global risk sentiment subdued by renewed threats of US tariffs. • Eurozone economics is mixed, with weak consumption and easing trade activity. • US Dollar is still strong as investors turn to safe-haven assets in market volatility. • Technical pattern is that of an expanding wedge, generally a bearish pattern signaling potential for further fall. •  Resistance at 1.1780 is key, with a break upwards required to change the bearish view. •  Support at 1.1685 and 1.1630, coinciding with key Fibonacci levels and structure of trendlines. The EUR/USD is finding its way through a risk-averse market climate as investor attitudes are still influenced by ongoing trade tensions around the world. The latest news, with US President Trump reissuing tariff threats, has reawakened fears for global economic stability. Although optimism regarding Eurozone-US trade talks at one point boosted the Euro, wider uncertainty and a risk-averse tone have capped its advance. Economic performance across the Eurozone remains weak, with consumer confidence and trade statistics both showing increased weakening against ongoing global headwinds. EUR/USD DAILY PRICE CHART SOURCE: TradingView On the macroeconomic side, recent German and French data present conflicting signals. Germany posted an increase in trade surplus mainly on account of falling imports, which is indicative of softer domestic demand, whereas that of France edged higher. Moreover, retail sales within the Eurozone declined sharply in May, representing the steepest fall in almost two years, highlighting once again the effect of economic uncertainty on consumption. Against a light US economic schedule, markets are now looking ahead to the coming FOMC minutes, which could provide some insight into the Federal Reserve’s monetary policy stance and what it means for currency markets.        TECHNICAL ANALYSIS EUR/USD is trading in a widening wedge pattern, a normally bearish formation that is often seen at market tops. The duo immediately meets resistance at 1.1780, which corresponds with the downward trendline from July 1 highs. A clean break above it and subsequent highs at 1.1790 would be necessary to negate the bearish scenario. To the downside, solid support is observed at 1.1685, identified by the 38.2% Fibonacci retracement of the June 24-July 1 rally. A break below this level would set the stage for further declines towards the 1.1630–1.1645 zone, where the 50% Fibonacci retracement and the highs align. Momentum indicators such as the RSI are also neutral, trading around the 50 mark, indicating indecision among the traders. FORECAST If euphoria about Eurozone-US trade talks holds and there are no new tariff threats on the horizon, EUR/USD may try to stage a slight rebound. A clear break above the near-term resistance at 1.1780 might open the door for further advances towards the 1.1790 region and potentially 1.1830, as long as market sentiment shifts risk-on. Moreover, any dovish sentiment in the next FOMC minutes or softer-than-anticipated US data could keep the US Dollar in check and support the Euro’s short-term upside potential. Conversely, ongoing fears of trade tensions at the global level and lower Eurozone fundamentals might push the EUR/USD pair down. A strong break below the 1.1685 support may result in a slide towards the next support zone of 1.1630–1.1645. If bearish pressure picks up and the US Dollar holds strong on account of safe-haven demand, the pair might even hit the 1.1600 psychological support level in the near future.

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AUD/USD Currencies

AUD/USD Falls Towards Critical Support as US Tariff Fears Reignite Global Trade Maladies

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  • July 4, 2025
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Australian Dollar falls against the US Dollar again, with AUD/USD moving towards the 0.6550 mark as revived fears over US tariffs spark global risk aversion. Market mood suffered following confirmation by President Trump to inform trading partners of forthcoming unilateral tariffs, which heightened the specter of a disturbance of global trade—specifically for export-focused economies such as Australia. The currency pair is also dragged down by firmer-than-anticipated US jobs data, which dampened hopes of imminent Fed rate cuts. Technically, AUD/USD is approaching an important support area at 0.6535–0.6545, the neckline of a possible Double Top pattern, which could indicate the potential for a more substantial correction if the level breaks. KEY LOOKOUTS • Markets are closely monitoring President Trump’s official letters to trading partners, which have the potential to further augment global trade tensions. • The 0.6535–0.6545 region is an important neckline support; a breakdown here might see further losses. • Further robust US labor market data could lower the prospects of Fed rate reductions, helping to support the USD. • Shifts in global risk appetite, fueled by trade or geopolitical events, would have a major influence on AUD/USD movement. AUD/USD remains under pressure as international markets prepare for possible disruptions in trade due to renewed threats from US tariffs. President Trump’s assurance that trading partners will receive letters on unilateral tariffs has been a cause of concern among investors, particularly for those economies with a strong export orientation such as Australia. Combined with more robust than anticipated US employment statistics that deflate expectations of near-term Fed rate cuts, sentiment has become cautious. With increasing risk aversion, the Australian Dollar is still exposed, with market players closely monitoring any development prior to the July 9 tariff deadline. AUD/USD sinks towards 0.6550 as revived US tariff concerns subdue risk appetite. Encouraging US jobs data and impending trade tensions bear down on the Aussie Dollar. The pair looks to pivotal support at 0.6535–0.6545, with a potential breakdown indicating further losses. • AUD/USD continues to fall for a second day in succession, trading around 0.6550. • US tariff fears return with President Trump threatening letters to trade partners. • Risk aversion worldwide rises, causing stress for risk-sensitive currencies such as the Aussie Dollar. • More-than-anticipated US NFP numbers lowers expectations for early Fed rate reductions. • Double Top pattern emerges at 0.6590, indicating a reversal to the downside. • The main support at 0.6535–0.6545, the Double Top’s neckline. • Break below 0.6535 can lead to a further decline towards 0.6510, the 38.2% Fibonacci retracement level. The Australian Dollar is in decline as international markets become more risk-averse in anticipation of a further tightening in US trade policy. President Trump’s move to send formal letters to trading nations on unilateral tariffs has increased the prospect of a new wave of trade tensions. This has weighed heavily on sentiment for risk-sensitive assets, with Australia exposed in particular given its dependence on international trade and commodity exports. AUD/USD DAILY PRICE CHART SOURCE: TradingView To the already defensive sentiment is added the robust US Nonfarm Payrolls report, which identified ongoing firmness in the US labor market. The news has reduced hopes for near-term monetary policy easing by the Federal Reserve, diverting investor attention from rate cut expectations and into global economic risks. As the July 9 deadline nears, market participants are preparing for possible disruptions that would influence not only trade flows, but also general economic stability. TECHNICAL ANALYSIS AUD/USD is exhibiting bearish momentum after registering a Double Top pattern around the 0.6590 level. The pair now tests the neckline support at 0.6535–0.6545, a key zone that, if broken, could validate the pattern and indicate a deeper correction. The Thursday’s lower high and the 4-hour RSI below the 50 level also confirm the bearish inclination. A confirmed breakdown below the neckline would set the pair on the path towards 0.6510, corresponding with significant Fibonacci retracement levels, and a bounce above 0.6590 would be required to reinstate the bullish thesis. FORECAST If bearish pressure persists and AUD/USD erodes below the 0.6535–0.6545 support range, it may validate the Double Top formation and initiate a deeper correction. The next lower target would be at 0.6510, which also coincides with the 38.2% Fibonacci retracement of the recent upmove and the June 27 swing low. A break below this level could lead to more losses down to the psychological 0.6500 level and even 0.6475 in the near future. On the positive side, a bounce above the 0.6590 resistance—the Double Top peak—would invalidate the bearish configuration and indicate fresh bullish strength. This would set up a rise towards the 127.2% and 161.8% Fibonacci extensions at 0.6610 and 0.6640, respectively. A clean breakout above 0.6640 would entice additional buyers and drive the pair towards new highs, particularly if sentiment picks up and trade tensions are eased.

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Currencies USD/JPY

USD/JPY Grinds Higher with US Dollar Rebound and Escalating Tariff Tensions with Japan

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  • July 2, 2025
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USD/JPY currency pair traded slightly higher on Wednesday, aided by a modest US Dollar rebound even as a softer-than-expected ADP jobs report presented surprise June job losses. The Greenback stabilized as markets became wary of the imminent Nonfarm Payrolls release and absorbed Fed Chair Powell’s cautious words. Simultaneously, rising trade tensions between Japan and the US put additional pressure on the Japanese Yen, with threatened tariffs from former President Trump and staunch opposition from Tokyo increasing uncertainty. Bank of Japan Governor Ueda played it safe, emphasizing the requirement of inflation alignment prior to any policy changes. KEY LOOKOUTS • The markets are waiting for clearer indications regarding US labor market strength and possible Fed rate cuts. • Increasing tensions and hawkish postures before the July 9 deadline could influence JPY volatility. • Governor Ueda’s cautious tone supports expectations of slow and modest tightening. • In spite of soft ADP numbers, the rebound in the USD Index indicates that investors have not yet priced in aggressive dovish pivots. The USD/JPY pair made small gains as the US Dollar recovered from its sharp losses at the start of the week after a disappointing ADP employment report indicated surprise job losses in June. Though the data fueled speculation of Federal Reserve rate cuts, investor sentiment was subdued, and focus is now shifting to the coming Nonfarm Payrolls for firmer direction. Simultaneously, rising trade tensions between Japan and the US put more pressure on the Yen as both countries take harder stances before a high-stakes tariff negotiation deadline. Meanwhile, the Bank of Japan stood pat on its wait-and-see stance, solidifying expectations of incremental policy normalization. USD/JPY is trading slightly higher after the US Dollar steadies against weak ADP data. Surching US-Japan trade tensions and dovish BoJ policy tone are keeping the Japanese Yen under pressure. Markets now look towards the critical US Nonfarm Payrolls report for further cues. • USD/JPY is trading around 143.75, having recovered slightly after touching a three-week low. • US Dollar bounces back marginally despite ADP reporting a surprise loss of 33,000 private-sector jobs in June. • Wage growth holds steady, maintaining the Fed’s policy framework in mind prior to the NFP release. • US Dollar Index (DXY) increases 0.25%, rebounding from its lowest level since February 2022. • Trade tensions intensify as the US and Japan dig in ahead of the July 9 tariff negotiation deadline. • Former President Trump threatens up to 35% tariffs on Japanese imports, boosting market uncertainty. • BoJ Governor Ueda remains guarded, indicating no near-term rate moves while watching inflation developments. The USD/JPY exchange rate also captured wider market sentiment as investors absorbed important economic news and geopolitical events. The surprising drop in US private-sector hiring, as marked by the ADP report, added new worries about the extent of labor market deceleration. While wage increases continued to hold steady, the job losses have stoked expectations for possible monetary policy reduction by the Federal Reserve. Nonetheless, traders are still wary of the more conclusive Nonfarm Payrolls data, which will best illuminate the economic picture and the Fed’s next step. USD/JPY DAILY PRICE CHART SOURCE: TradingView Internationally, heightened tensions between the United States and Japan in recent times due to trade negotiations have created an extra layer of uncertainty. As the July 9 deadline draws near, neither side seems keen on making concessions, particularly in areas such as tariffs on Japanese exports and safeguarding domestic industries. Former President Trump’s assertive language has put pressure on Japan, while Prime Minister Ishiba has stuck to his guns in protecting national interests. These events have attracted the attention of international investors, who are monitoring closely for signs of further escalation that would influence economic relations and currency movements. TECHNICAL ANALYSIS USD/JPY is trying to make a minor rebound after finding support at around the 143.00 area, a level which concides with recent lows. The pair touched an intraday high around 144.25 briefly but was unable to sustain the momentum, indicating possible resistance at that area. A prolonged break above 144.25 would then pave the way towards the 145.00 psychological level, while a loss of holding above 143.00 would result in fresh bearish pressure. Momentum oscillators such as RSI and MACD are still in a neutral to slightly positive stance, mirroring the pair’s measured recovery amidst a larger-scale consolidation phase. FORECAST If future US economic releases, specifically the Nonfarm Payrolls report, indicate job growth resilience and stable wages, the US Dollar may strengthen further. Such a move should propel USD/JPY upwards, especially if sentiment turns away from near-term Fed rate cuts. Breaking the 144.25 resistance level may push the pair to test the 145.00 level, with further upside possibly seen in the 146.50 zone if buying pressure gathers momentum. On the negative side, though, if the NFP report does validate labor market softness or sets off heightened expectations of near-term Fed easing, the US Dollar could again face selling pressure. In such a case, USD/JPY would likely decline back towards the 143.00 support level, and a penetration through this could expose the pair to further losses down to 141.80 or even the psychologically significant 140.00 level. Furthermore, rising US-Japan trade tensions could also serve to drive up demand for safe-haven Yen, putting downward pressure on the pair.

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Currencies EUR/USD

EUR/USD Climbs to YTD Highs after Trump-Facilitated Iran-Israel Ceasefire Rouses Risk Rally

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  • June 24, 2025
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EUR/USD pair climbed to its year-to-date highs after U.S. President Donald Trump declared Israel and Iran’s total ceasefire, inciting a worldwide risk-on rally. The Euro gained traction as investors distanced themselves from the safe-haven U.S. Dollar, boosted further by the sudden decline in crude oil prices, which suits the Eurozone as a net importer. Breaking a bullish flag pattern, EUR/USD is now eyeing major resistance levels of 1.1630 and 1.1700. The market is also keeping a close eye on Fed Chairman Jerome Powell’s congressional testimony for more indications on future U.S. monetary policy as expectations for interest rate cuts continue to grow. KEY LOOKOUTS • Trump-declared Iran-Israel ceasefire has unleashed a global risk-on mood, devaluing the U.S. Dollar and strengthening the Euro. • Oil prices have declined sharply, alleviating the inflation fear in the Eurozone and adding to the support for the EUR/USD rally. • EUR/USD broke above a bullish flag chart pattern and trendline resistance levels, with target points at 1.1630 and 1.1700. • Markets look forward to Powell’s assessment of inflation and growth prospects, which may influence expectations for future U.S. interest rate decisions. EUR/USD pair has jumped to multi-month highs as a high-risk rally was driven by U.S. President Trump’s declaration of a ceasefire between Israel and Iran. This geopolitical development helped alleviate market anxiety, with investors unloading the safe-haven U.S. Dollar and opting for riskier assets such as the Euro. Contributing to the strength of the Euro is a steep drop in oil prices, which provides relief to the energy-hungry Eurozone economy. From a technical standpoint, EUR/USD has broken above a bullish flag pattern, with the next levels at 1.1630 and 1.1700 as traders also pay close attention to Fed Chair Jerome Powell’s congressional testimony for additional guidance on U.S. monetary policy. EUR/USD jumped hard following Trump’s declaration of an all-out ceasefire between Iran and Israel, as risk appetite turned bullish. The steep decline in oil prices and softening demand for the U.S. Dollar provided the fuel for the Euro’s escalation. Traders now look to 1.1630 and 1.1700 as primary upside targets. • Trump declared an all-out ceasefire between Iran and Israel, which set off a global risk-on surge. •  EUR/USD surged more than 1.30%, touching levels in excess of 1.1600 and close to the year-to-date high of 1.1630. •  The U.S. Dollar fell dramatically as safe-haven investors fled. •  Oil prices declined almost 3% on Tuesday, following a fall of 13% on Monday, softening inflationary pressure in the Eurozone. •  EUR/USD broke above a bullish flag formation, affirming bullish momentum with targets at 1.1630 and 1.1700. • Fed Chair Powell’s testimony is under the spotlight, with markets looking for interest rate cut signals as U.S. growth slows. • Eurozone PMIs were mixed, but rising sentiment and declining energy prices are providing short-term support for the Euro. The EUR/USD currency pair received a solid lift after a significant geopolitical news event, as U.S. President Donald Trump declared a “complete and total” ceasefire between Israel and Iran. This revelation provided major relief to world markets that were in the doldrums because of mounting Middle East tensions. With concern regarding a wider conflict abating, investors moved swiftly to risk assets, shedding exposure to safe-haven currencies such as the U.S. Dollar. The Euro, therefore, took advantage of risk appetite returning and picked up significant momentum against the Dollar. EUR/USD DAILY PRICE CHART SOURCE: TradingView Aside from geopolitical respite, declining oil prices have also propped up the Euro. Since Europe is a net crude importer, the recent steep drop in oil prices is viewed as a silver lining for the continent’s economy, which has been grappling with inflation and moribund growth. Economic news is also being watched closely by the market, such as German economic climate indicators and forthcoming speeches by ECB officials. In the meantime, in the U.S., focus shifts to Fed Chair Jerome Powell’s congressional testimony, where his inflation and economic stability views could shape future policy expectations. TECHNICAL ANALYSIS EUR/USD broke above a bullish flag chart pattern, indicating a continuation of the uptrend. The duo climbed through the critical trendline resistance level of 1.1540, confirming bullish pressure and targeting the subsequent levels of resistance at 1.1630—the year-to-date high—and 1.1700, corresponding to the 127.2% Fibonacci extension of the recent June rally. Supportively, on the bearish side, immediate support is found at the reverse trendline of 1.1535, and a break below that could negate the bullish setup, revealing the 1.1445 zone back into focus. FORECAST If optimism in the market persists and geopolitical tensions remain low, EUR/USD will most likely continue its bullish sentiment. A break above 1.1630 and maintaining it is likely to pave the way for a move up to the next important resistance at 1.1700. Further U.S. Dollar weakness, prompted by dovish expectations from the Fed or weaker economic news, would add fuel to the Euro’s up move. Positive sentiment around lower oil prices and stabilizing Eurozone fundamentals could also provide tailwinds for the pair in the short term. On the flip side, any revival of geopolitical tensions or better-than-anticipated U.S. economic data can revive safe-haven Dollar demand, exerting downward pressure on EUR/USD. A breakdown below the support level at 1.1535 could initiate a bearish correction, possibly pulling the pair towards the 1.1445 level. Furthermore, a firmer tone from Fed Chair Powell or weaker-than-expected Eurozone data can undermine the bullish mood and stop the rally in its tracks.

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Currencies GBP/USD

GBP/USD Inches Close to 1.3500 as Weak US Dollar and BoE Halt Bets Fuel Sterling

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  • June 2, 2025
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GBP/USD exchange rate starts the week strong, moving nearer to the important 1.3500 level as renewed US Dollar weakness keeps pressures on the pair. The weakening of the USD is fueled by increasing expectations of Federal Reserve rate reductions after soft PCE inflation readings and rising apprehensions regarding the US fiscal situation, especially in light of President Trump’s recent spending bill. In the meantime, the British Pound gets support from speculation that the Bank of England will maintain interest rates unchanged at its next June meeting. Yet, generalized caution in markets on account of rising geopolitical tensions and new US-China trade uncertainties might restrict the pair’s gains. The market now looks to future US economic news and Fed Chairman Powell’s statements for additional guidance. KEY LOOKOUTS • Market focus will be on near-term US economic releases, such as the ISM Manufacturing PMI, and remarks from Fed Chair Jerome Powell for additional indications about the direction of Fed interest rates. • Expectations of the BoE halting rate cuts at its June 18 gathering remain underpinning the GBP, with central bank guidance being a key variable in shaping GBP/USD sentiment. • Concerns about the US fiscal deficit, fueled by President Trump’s latest spending budget, and heightened US-China trade tensions can pressure the USD in the short term. • Rising geopolitical tensions—led by Russia, Ukraine, and the Middle East—can drive safe-haven demand for the USD and cap gains in GBP/USD even with underlying positive drivers. GBP/USD pair remains volatile to a variety of key factors that can influence its near-term direction. Market players will be keenly watching Fed Chair Jerome Powell’s forthcoming comments and the newest US macroeconomic reports, such as the ISM Manufacturing PMI, for cues on the Federal Reserve rate outlook. On the British side, hopes that the Bank of England will leave interest rates unchanged at its June 18 meeting remain behind the support for the Pound. But chronic worries over the US fiscal deficit, fueled by President Trump’s recent spending bill, and escalating tensions in US-China trade relations could further pressure the US Dollar to the downside. Meanwhile, wider risk-off sentiment sourced from the geopolitical tensions in Eastern Europe and the Middle East might provide some support to the Greenback, potentially putting a lid on the upside for GBP/USD. The GBP/USD currency pair is supported by hopes of a BoE rate standstill and continued USD weakness fueled by weak US data and fiscal issues. Nevertheless, geopolitical tensions and a conservative global risk tone could cap any further appreciation. Traders are now looking to essential US data and Fed commentary for new direction. •  GBP/USD trades around 1.3500, gaining positive momentum in the face of new USD weakness. •  Expectations for Fed rate cut increase after weak PCE inflation data in the US. •  US fiscal worries deepen following President Trump’s spending bill, putting pressure on the Dollar. •   BoE to keep rates steady in its June 18 meeting, favoring GBP strength. •  Geopolitical tensions in Eastern Europe and the Middle East weigh on global risk appetite. •   US-China trade uncertainty returns after Trump’s remarks, contributing to USD pressure. •   Upcoming US data and Powell’s address are in the spotlight for short-term direction for markets. GBP/USD pair has begun the week on a firm footing, helped by more general weakness in the US Dollar and enhanced confidence in the British Pound. A milder US inflation reading, as expressed through the most recent PCE Price Index, has further fueled bets that the Federal Reserve will choose additional policy loosening in the months ahead. This mood, together with increasing unease regarding the US fiscal situation in the wake of passage of a new government appropriation bill, has further contributed to the downward pressure on the Dollar. In the meantime, the British Pound holds steady, supported by hopes the Bank of England will be less willing to make further cuts in future interest rates, with no near-term moves anticipated at its next policy session. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView All the while, global market sentiment is being influenced by heightened geopolitical tensions and uncertainty regarding US-China trade relations. Recent comments from President Trump, in which he hinted that China might not completely live up to the terms of their trade deal, have also added to investor wariness. Also, all the recent conflicts in places like Eastern Europe and the Middle East still bear down on overall market sentiment. Therefore, investors are remaining close to upcoming US economic data and Federal Reserve speeches by officials, especially Chair Jerome Powell, for any signals that might impact policy expectations and currency market trends. TECHNICAL ANALYSIS GBP/USD is demonstrating signs of bullish momentum as it slowly inches towards the important psychological resistance around the 1.3500 level. Sustained break above this point may pave the way for further appreciation, with the next resistance at 1.3570–1.3600. On the downside, near-term support is at 1.3420, followed by firmer support at 1.3370, where the buyers may get back in. The overall framework is positive, but a decisive breakout above 1.3500 is required to ensure further uptrend. FORECAST GBP/USD pair holds scope for additional upside if prevailing momentum is sustained and the pair is able to achieve a clear breakout above the 1.3500 psychological mark. A change in market sentiment, aided by dovish communications from the Federal Reserve or improved UK economic indicators, could propel the pair to the next level of resistance around 1.3570–1.3600. Moreover, if the Bank of England is reticent about rate cuts while the Fed tends to ease, the policy differences might further favor bullish action in the pair. Conversely, any indication of strength in US economic statistics or even a more aggressive stance at the Fed can revive demand for the US Dollar at the expense of GBP/USD. A failure to hold above the 1.3500 level could trigger a short-term pullback, with initial support at 1.3420, and a further correction feasible towards 1.3370 if bearish momentum takes over. In addition, rising geopolitical tension or

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Currencies

USD/CAD Reaches Weekly Highs on USD Strength, But Increases Might Be Limited in the Face of Important Economic Releases and FOMC Minutes

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  • May 28, 2025
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The USD/CAD currency pair has continued to recover for a third straight day, rising to a new weekly high at the 1.3840 level due to slight US Dollar appreciation after robust US economic reports. Yet, still lingering over the US fiscal horizon and increasing hopes of Fed rate reductions in 2025 might cap further gains. On top of this, traders are being cautious before the FOMC meeting minutes and major economic announcements, such as US GDP, PCE statistics, and Canada’s monthly GDP. Though higher crude oil prices and firmer Canadian inflation statistics might underpin the Loonie, a conclusive trend might only be seen with continued follow-through buying. KEY LOOKOUTS •  Traders will be keeping a close eye on the minutes for insight into the Fed’s interest rate outlook, which may determine USD sentiment and near-term price action. •  The coming Prelim Q1 GDP and PCE Price Index releases will be pivotal in influencing expectations for future Fed policy action and shaping USD demand. •  Canada’s monthly GDP and variations in crude oil—Canada’s major export—will be crucial in deciding CAD strength. •  Continuous worries over the US fiscal health can keep the USD under pressure, keeping gains in the USD/CAD pair in check even with positive information. USD/CAD pair trades at weekly highs, market players are closely eyeing a number of crucial factors that can decide its next direction. The release of the FOMC meeting minutes is eagerly awaited, as investors want to know the Fed’s rate-cut path. Along with that, the next US economic data releases—specifically the preliminary Q1 GDP and the PCE Price Index—will be crucial in deciding the momentum of the USD. On the Canadian front, more-than-anticipated core inflation and the next monthly print of GDP, along with crude oil price fluctuations, may provide the Loonie with support. Also, ongoing worries regarding the US fiscal horizon could still limit the greenback’s appreciation, contributing to the pair’s short-term ambiguity. Traders are looking to the FOMC meeting minutes and leading US data such as Q1 GDP and PCE for hints at the Fed’s rate trajectory. On the Canadian front, firmer inflation and coming GDP prints, as well as oil price action, may underpin the Loonie. US fiscal issues may also cap additional USD gain. • USD/CAD is trading around 1.3840, a third consecutive day of rising gains and a new weekly high. • Positive US economic data has propped up the USD, alleviating recession concerns and boosting the DXY. • FOMC meeting minutes are expected for some clarity on the Fed’s rate-cutting outlook in 2025. • US fiscal issues and dovish Fed expectations could cap further gains for the USD. • Prelim US Q1 GDP and PCE Index figures may have a strong bearing on the direction of the USD this week. • Warmer Canadian core inflation has taken away some possibility of a June BoC rate cut, supporting CAD strength. • Crude oil price action and Canadian monthly GDP will be major drivers for the Loonie. The USD/CAD pair is still in the spotlight this week as a number of significant economic events on both sides of the border continue to happen. The US Dollar is finding support from some recent encouraging economic data, which has helped to alleviate some recession fears and lift sentiment in the markets. While investor attention is firmly focused on the upcoming release of FOMC meeting minutes, which should give more definitive direction on future interest rate policy by the Federal Reserve. Simultaneously, persistent worries about the US fiscal picture are causing volatility and may affect the overall demand for the USD in the near future. USD/CAD DAILY PRICE CHART CHART SOURCE: TradingView In Canada, better-than-anticipated core inflation readings have caused the market expectations for potential interest rate reductions by the Bank of Canada to change. This, along with higher crude oil prices, has supported the Canadian Dollar beneath. In the coming week, the release of Canada’s monthly GDP report will be under keen observation for additional evidence of economic strength. Along with the important US releases of Q1 GDP and the PCE Price Index, these are the elements most likely to determine the market mood towards the USD/CAD currency pair for the rest of the week. TECHNICAL ANALYSIS USD/CAD has continued its recovery from the recent low around the 1.3685 area, with the pair now sitting near the 1.3840 resistance area. This area represents a significant barrier, and a breakout above it can be a signal of bullish continuation in the short term. Still, momentum indicators such as the Relative Strength Index (RSI) are nearing overbought levels on the daily chart, which means buyers might get tired if the pair is unable to break higher convincingly. On the bearish side, near-term support is around the 1.3780 level, followed by the 1.3725-1.3700 area, which would serve as a cushion if the pair is subject to selling pressure. FORECAST If the bullish trend remains and USD/CAD decisively breaks above the 1.3840 resistance zone, then the pair may target the next levels on the upside at 1.3880 and possibly 1.3915. More robust US economic data and a hawkish interpretation of FOMC meeting minutes will fuel additional support for the USD to drive the pair further up. Moreover, any backtracking in crude oil prices or softer-than-anticipated Canadian GDP figures might soften the Canadian Dollar, providing more space for further upsides. Alternatively, a failure to sustain above the 1.3840 threshold might spark a short-term correction, with near-term support around the 1.3780 region. A more severe pullback can also challenge the 1.3725–1.3700 support level, particularly if US data is disappointing or if the FOMC minutes suggest a more dovish policy. Some strong Canadian economic data or a continuation of the oil price increase can also reinforce the Loonie and push the pair down towards a revisit of the recent low around 1.3685.

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Currencies GBP/USD

GBP/USD Approaches 39-Month High as US-EU Trade Tensions Ease and BoE Rate Cut Odds Fade

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  • May 27, 2025
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GBP/USD pair maintains its bullish run, trading close to a 39-month high of 1.3593 as risk appetite improves in the markets. US Dollar drops as easing of US-EU trade tensions, after President Trump’s tariffs delay, combined with increasing worries about the US fiscal outlook linked to the proposed “One Big Beautiful Bill,” counters any strength from yesterday’s data. The Pound Sterling, however, gets stronger as hotter-than-forecast UK inflation and retail sales data lead to traders reducing bets for hostile rate cuts from the Bank of England. The pairing of a weaker USD and more resilient GBP has boosted the pair’s sustained rally. KEY LOOKOUTS • Market attention will stay focused on future UK economic data, particularly inflation and employment numbers, that may determine the Bank of England’s future actions on interest rates. •  Investors are monitoring the fate of Trump’s “One Big Beautiful Bill” in the Senate, whose potential to increase the fiscal deficit might still be a drag on the US Dollar. •  Any trade negotiation news or changes between the EU and the US could play a major role in affecting risk sentiment and USD strength. •  Traders will watch if GBP/USD can convincingly move above the 39-month peak of 1.3593, which would make the door open to more bullish strength. In the coming weeks, traders will stay focused on major economic data releases from the UK, such as future inflation and employment figures, for additional hints regarding the direction of policy at the Bank of England. A persistent change in rate cut expectations could further buoy the Pound. In the US, news regarding President Trump’s intended “One Big Beautiful Bill” and its effects on the fiscal deficit might continue to put pressure on the US Dollar, particularly in case concerns over increasing debt continue. Furthermore, any shift in the tone of US-EU trade relations can affect market risk appetite and create volatility in the GBP/USD pair. Technically, a clean break above the 39-month high of 1.3593 would indicate additional room for the currency pair to move higher. Pound traders are waiting to see UK data and BoE policy cues as diminished rate cut hopes keep the Pound supported. Against this backdrop, US fiscal issues and softening US-EU trade tensions keep the Dollar under pressure. A breakout above 1.3593 may prompt additional gains in GBP/USD. •  GBP/USD hovers at a 39-month high of 1.3593 on the back of unwavering bullish momentum. •  US Dollar drops on damping US-EU trade tensions and escalating fiscal deficit fears. •  President Trump postpones EU tariff deadline, enhancing market risk appetite. •  Trump’s suggested “One Big Beautiful Bill” sparks fears of a $3.8 billion addition to the US deficit. •  Higher US bond yields may persistently drive high borrowing costs, weighing on the USD. •  Faster-than-anticipated UK inflation and retail sales lower the expectations of dovish BoE rate cuts. •  Technical interest continues at the 1.3593 resistance level, with a breakout indicating potential for additional GBP/USD gains. GBP/USD pair is well-supported as sentiment continues to improve due to decreasing trade tensions between the United States and the European Union. The last-minute postponement of US tariff action against the EU, after a call between European Commission President Ursula von der Leyen and President Trump, has given investor sentiment a boost and supported risk-taking. This has put a bearish squeeze on the US Dollar, which is already weak due to increasing worries over the nation’s fiscal prospects. The suggested “One Big Beautiful Bill,” comprising tax cuts and higher spending, is set to widen the US deficit by $3.8 billion, triggering concerns about economic stability in the long term. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView Simultaneously, the British Pound is strengthening as investors rethink expectations over UK monetary policy. April’s recent retail sales and inflation data were hotter than anticipated, prompting markets to revise downwards expectations of large interest rate reductions by the Bank of England. Traders now price just one possible rate reduction in 2025 and a 50/50 chance of a second, futures data quoted by Reuters show. This more aggressive tone has contributed to the appeal of the Pound, particularly as economic data provides evidence of robustness in consumer spending and inflation pressures. TECHNICAL ANALYSIS GBP/USD is continuing its strong uptrend, consolidating short of the 39-month high of 1.3593. The pair has been underpinned by sustained buying interest, with momentum indicators like the RSI remaining in bullish conditions, suggesting underlying strength. The key support is seen at the 1.3550 region, which has served as a good base in recent sessions. A decisive break above the resistance of 1.3593 may set the stage for more upside, while inability to hold above support may result in short-term consolidation. FORECAST If the positive mood persists and UK economic indicators continue to be robust, GBP/USD may move further higher. The dissolving hopes of aggressive rate cuts by the Bank of England, coupled with a weak US Dollar on the back of fiscal worries and better global risk appetite, could promote further gains. If such factors hold, the pair will look to set new highs at higher levels than of late, especially if future data continues to assert the UK’s economic robustness. Yet, any surprise decline in UK economic signals or change in Bank of England tone towards dovishness can put pressure on the Pound. On the other hand, if US fiscal worries recede or safe-haven demand for the Dollar comes back—perhaps prompted by renewed geopolitical tensions or soft global growth numbers—GBP/USD is likely to be under pressure. Renewed trade tension between the US and EU or political turmoil can also adversely influence overall market sentiment, cap the pair’s rally potential.

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