The euro remains pressured by weak German data and uncertainty surrounding ECB policy, while the pound finds limited strength amid labor market resilience and potential BoE rate hikes. The yen faces downside risks as the BoJ holds steady on easing measures, despite inflation concerns. The Canadian dollar weakens further due to political instability and dovish BoC policy, while the U.S. dollar gains from robust retail sales and strong economic indicators. Gold holds steady, supported by China’s renewed purchases but weighed down by the Fed’s less aggressive rate cut outlook, reflecting mixed global economic dynamics.
EUR/USD (Euro/US Dollar)
Overview: The EUR/USD pair remains under bearish pressure as economic uncertainty persists within the Eurozone. Weak economic data, such as Germany’s declining IFO Business Climate Index and ongoing political tensions in France and Germany, have heightened concerns about economic stagnation. The European Central Bank (ECB) is likely to maintain a cautious stance on interest rates, while the Federal Reserve’s relatively hawkish position adds upward momentum for the dollar.
Technical Analysis:
- Support Levels: 1.0482, 1.0460, 1.0425
- Resistance Levels: 1.0537, 1.0565, 1.0615, 1.0654, 1.0714
The current trend is bearish, with sellers dominating the market below the 1.0537 resistance. Recent tests of the 1.0482 support indicate some buyer activity, but the lack of liquidity below 1.0425 suggests further downside potential. A break below 1.0460 could open the door to 1.0425.
- Bullish Scenario: If the price breaks above 1.0565 and consolidates, the pair could target the 1.0615 resistance level.
- Bearish Scenario: A failure to hold above 1.0482 could push the pair towards 1.0460 and ultimately 1.0425.
Forecast: In the short-term, EUR/USD will likely remain range-bound between 1.0480 and 1.0537, with downside risks prevailing. The medium-term outlook depends on the ECB’s next steps and US economic data. A weaker dollar, stemming from poor US macroeconomic releases, could lift the euro toward the 1.0615–1.0650 zone.
GBP/USD (British Pound/US Dollar)
Overview: The GBP/USD pair continues to show volatility amid economic challenges in the UK and strong US dollar fundamentals. The Bank of England (BoE) is expected to keep rates steady, though persistent wage growth may push inflation higher, limiting any near-term policy easing. Robust US retail sales and production data further bolster the dollar’s appeal.
Technical Analysis:
- Support Levels: 1.2679, 1.2669, 1.2617, 1.2589, 1.2467
- Resistance Levels: 1.2717, 1.2748, 1.2786, 1.2878, 1.2905, 1.2982
The GBP/USD pair remains in a bearish trend, despite minor corrective bounces. Buyers have shown limited strength at 1.2669–1.2679 support. A breakdown below this zone could trigger a move toward 1.2589.
- Bullish Scenario: A decisive break above 1.2717 and consolidation could pave the way for gains toward 1.2786.
- Bearish Scenario: Sustained pressure below 1.2669 would likely accelerate declines to 1.2589 and possibly 1.2467.
Forecast: In the short term, GBP/USD may continue to trade between 1.2660 and 1.2740, with the risk tilted to the downside. Medium-term recovery would require stronger UK economic data and a clear break above 1.2786.
USD/JPY (US Dollar/Japanese Yen)
Overview: USD/JPY remains bullish as the Bank of Japan (BoJ) adopts a cautious stance regarding monetary tightening. Despite inflationary concerns, the BoJ is awaiting stronger wage growth before committing to additional policy changes. The Federal Reserve’s hawkish outlook and strong US economic data continue to favor the dollar.
Technical Analysis:
- Support Levels: 153.98, 153.25, 152.45, 151.94, 151.41
- Resistance Levels: 154.71, 155.25
The pair remains in a bullish medium-term trend, with the price consolidating above key support at 153.98. Buyers are likely to maintain control as long as the price stays above this level.
- Bullish Scenario: A break above 154.71 resistance could push USD/JPY toward 155.25.
- Bearish Scenario: A breakdown below 153.98 could trigger a corrective move to 153.25 and lower.
Forecast: USD/JPY is expected to trade in a range between 153.98 and 154.71, with a bullish bias. A move above 155.25 could open the door for further gains.
USD/CAD (US Dollar/Canadian Dollar)
Overview: USD/CAD has reached multi-year highs as the Canadian dollar weakens amid dovish Bank of Canada (BoC) policies and political uncertainty. Strong US retail sales and rising Treasury yields have further driven demand for the greenback. Canada’s inflation, while slowing, complicates the BoC’s path for rate cuts.
Technical Analysis:
- Support Levels: 1.4191, 1.4137, 1.4100
- Resistance Levels: 1.4289, 1.4343, 1.4400
The pair remains bullish, with the RSI entering overbought territory. The 1.4289 level serves as immediate resistance, with 1.4400 being the next significant hurdle.
- Bullish Scenario: A break above 1.4300 could lead to further gains toward 1.4350 and 1.4400.
- Bearish Scenario: A corrective pullback may find support at 1.4200, followed by 1.4137.
Forecast: USD/CAD will likely remain bullish, but overbought conditions suggest the potential for short-term corrections. The pair is expected to trade between 1.4200 and 1.4400.
XAU/USD (Gold)
Overview: Gold prices face headwinds from strong US economic data, reducing expectations for aggressive Fed rate cuts in 2024. However, geopolitical tensions and China’s return to gold purchases provide support for bullion.
Technical Analysis:
- Support Levels: 2645, 2630, 2610, 2585
- Resistance Levels: 2658, 2675, 2700
The XAU/USD pair remains range-bound, with buyers active above 2645 support. A break below this level could signal further declines.
- Bullish Scenario: A move above 2658 resistance could push gold toward 2675 and potentially 2700.
- Bearish Scenario: A breakdown below 2645 support could open the path to 2630 and 2610.
Forecast: Gold is expected to trade in a range between 2630 and 2675, with downside risks prevailing in the short term. Long-term direction will depend on Fed policy and global economic conditions.
Summary Forecast Table
| Asset | Short-Term Outlook | Support Levels | Resistance Levels |
|---|---|---|---|
| EUR/USD | Bearish | 1.0482, 1.0460, 1.0425 | 1.0537, 1.0565, 1.0615 |
| GBP/USD | Bearish | 1.2669, 1.2617, 1.2589 | 1.2717, 1.2786, 1.2878 |
| USD/JPY | Bullish | 153.98, 153.25, 152.45 | 154.71, 155.25 |
| USD/CAD | Bullish | 1.4191, 1.4137, 1.4100 | 1.4289, 1.4343, 1.4400 |
| XAU/USD | Range-bound | 2645, 2630, 2610 | 2658, 2675, 2700 |
Overall Sentiment:
Gold remains range-bound amid mixed global fundamentals.
The US dollar remains strong, supported by robust economic data and hawkish Fed expectations.
European currencies (EUR, GBP) face downside risks from political and economic uncertainty.
JPY weakness persists due to BoJ’s cautious stance, while CAD struggles against a dovish BoC.
