EUR faces downward pressure with an anticipated ECB rate cut and mixed Eurozone data. GBP shows slight weakness amid easing UK wage growth and upcoming GDP data, with BoE rate decisions on the horizon. JPY gains as the BoJ stays cautious, likely holding off on rate hikes despite market volatility and a slightly weakened Q2 GDP outlook. Gold remains steady, benefiting from expectations of a dovish Fed stance, as the market anticipates rate cuts that may support non-yielding assets. Each currency reflects its central bank’s unique policy path amidst global economic shifts.
EUR/USD
Current Market Sentiment: Bearish
The EUR/USD is in a downtrend, facing pressure due to a stronger U.S. dollar and weakening Eurozone sentiment. The focus this week is on the ECB meeting, where a 25bps rate cut is highly expected.
Key Support and Resistance Levels:
- Support: 1.1028, 1.1013, 1.0950, 1.0905, 1.0884
- Resistance: 1.1140, 1.1191, 1.1275
The pair broke below the 1.1059 support level, signaling further declines. A retest of the 1.1013 support is expected. A failure to hold this level could lead to deeper declines towards 1.0950. On the upside, a break above 1.1191 would signal a potential trend reversal.
Forecast:
- Bearish outlook: If the price consolidates below 1.1013, expect a move toward 1.0950. Strong U.S. data could reinforce this downward pressure.
- Bullish reversal: A break above 1.1140 would negate the bearish trend, opening the path to 1.1191.
GBP/USD
Current Market Sentiment: Bearish
The GBP/USD is under pressure as UK wage growth declines, signaling easing inflationary pressures. Investors are eyeing the BoE’s next move and Wednesday’s GDP data, which could add volatility to the pair.
Key Support and Resistance Levels:
- Support: 1.3055, 1.3031, 1.2973, 1.2932, 1.2848, 1.2800
- Resistance: 1.3120, 1.3150, 1.3202, 1.3306
The pair broke below the key 1.3120 level, suggesting further downside. A retest of the 1.3055 support is expected. A break below this level would open the way to 1.3031, with 1.2973 as the next target.
Forecast:
- Bearish outlook: Expect continued weakness if the price remains below 1.3120, targeting 1.2973.
- Bullish reversal: A break above 1.3202 would signal a reversal, with further gains likely toward 1.3306.
USD/JPY
Current Market Sentiment: Neutral to Bearish
USD/JPY has been under pressure after Japan’s Q2 GDP revision and general market uncertainty about the Bank of Japan’s monetary policy path. The pair is now trading at a crucial technical juncture, with price action narrowing within a triangle.
Key Support and Resistance Levels:
- Support: 142.97, 142.15, 141.93, 141.08, 140.22
- Resistance: 144.00, 144.82, 146.30
The pair is trading near the lower end of its range. A break below 142.97 could lead to further declines toward 141.93. On the upside, if the pair breaks above 144.00, it could signal a bullish reversal.
Forecast:
- Neutral outlook: Wait for a breakout from the narrowing triangle. A move below 142.15 will be bearish, while a break above 144.00 may lead to further gains.
- Bearish outlook: A break below 142.15 could lead to further declines to 141.08.
XAU/USD (Gold)
Current Market Sentiment: Bullish
Gold has maintained a bullish trend as Fed expectations of rate cuts support non-yielding assets like gold. However, strong resistance at 2526 has capped recent gains. The upcoming U.S. inflation data will likely be a major driver of the next big move.
Key Support and Resistance Levels:
- Support: 2488, 2471, 2451, 2440, 2416, 2367, 2343
- Resistance: 2504, 2526, 2532
Gold has shown buying interest around 2488 but remains capped by resistance at 2526. A break above 2526 would confirm the continuation of the bullish trend, while a drop below 2488 could lead to a retest of the 2451 support level.
Forecast:
- Bullish outlook: A break above 2526 opens the path to 2532 and higher.
- Bearish outlook: If the price breaks below 2488, expect a decline toward 2451.
Summary:
- EUR/USD: Bearish with support at 1.1013 and potential for further declines toward 1.0950.
- GBP/USD: Bearish with a break below 1.3055 possibly leading to 1.2973.
- USD/JPY: Neutral, awaiting a breakout from the 142.97–144.00 range.
- XAU/USD (Gold): Bullish with resistance at 2526. A break above 2526 could signal further gains.
