The euro remains under pressure as inflation data aligns with forecasts, keeping traders cautious ahead of U.S. economic releases. The British pound saw mixed movements following stronger-than-expected GDP figures, but speculation over future rate cuts by the Bank of England limits its upside potential. The Japanese yen weakened as U.S. inflation data dampened expectations of Fed rate cuts, reinforcing dollar strength. Gold remains in an uptrend despite brief pullbacks, supported by global economic uncertainties and safe-haven demand, but its upside is limited by Fed policy expectations.
EUR/USD
Market Overview
The EUR/USD pair has exhibited a bearish trend recently, with the euro struggling against the U.S. dollar amid stronger-than-expected U.S. inflation data. The Consumer Price Index (CPI) data reaffirmed expectations that the Federal Reserve may maintain its hawkish stance, thereby strengthening the dollar. Meanwhile, the European Central Bank (ECB) has taken a more accommodative approach, which further pressures the euro.
Key Influencing Factors
- U.S. Inflation: Higher-than-expected inflation could result in prolonged higher interest rates, supporting the dollar and limiting euro gains.
- ECB Policy: A more dovish ECB may weaken the euro, especially if economic data from the Eurozone remains mixed.
- Geopolitical Tensions: Trade disputes between the U.S. and the EU could further impact the pair’s movement.
Support and Resistance Levels
- Support: 1.0390, 1.0317, 1.0272
- Resistance: 1.0451, 1.0520, 1.0600
Forecast
The short-term trend remains bearish, with further downside possible if the price breaks below 1.0317. However, a break above 1.0451 could lead to a test of 1.0520 and potentially 1.0600.
GBP/USD
Market Overview
The British pound has shown mixed movement, supported initially by strong UK GDP data but pressured by expectations of continued monetary easing by the Bank of England (BoE). The U.S. Producer Price Index (PPI) report remains a key factor for short-term volatility.
Key Influencing Factors
- BoE Rate Outlook: Speculation about future rate cuts in the UK could limit the pound’s potential for appreciation.
- U.S. Data: Stronger inflation data supports the dollar, keeping GBP/USD under pressure.
- UK Housing Market: Signs of slowing growth in house prices may impact overall market sentiment toward the pound.
Support and Resistance Levels
- Support: 1.2442, 1.2396, 1.2335
- Resistance: 1.2544, 1.2600
Forecast
The short-term trend is bullish, but a break below 1.2335 could shift momentum downward. If resistance at 1.2544 is breached, further gains toward 1.2600 are possible.
USD/JPY
Market Overview
The Japanese yen has weakened against the U.S. dollar, with USD/JPY climbing above 154. The key driver has been robust U.S. economic data, reinforcing expectations that the Federal Reserve will maintain higher interest rates for longer. Meanwhile, the Bank of Japan (BoJ) remains ambiguous about its policy direction, adding to the yen’s weakness.
Key Influencing Factors
- Fed’s Policy Stance: Higher U.S. interest rates support the dollar against the yen.
- BoJ’s Caution: The lack of clarity from the BoJ regarding potential tightening keeps the yen under pressure.
- Bond Yields: Higher U.S. Treasury yields continue to favor USD over JPY.
Support and Resistance Levels
- Support: 153.35, 152.77, 151.62
- Resistance: 154.33, 155.04, 155.52
Forecast
The medium-term trend remains bullish, but a move above 155.52 would indicate a continuation of the uptrend. A break below 153.35 could signal a reversal lower.
Gold (XAU/USD)
Market Overview
Gold has maintained a bullish trend, benefiting from inflation concerns and global uncertainties. However, strong U.S. inflation data has limited upside potential, as expectations of a hawkish Federal Reserve reduce gold’s appeal as a hedge against inflation.
Key Influencing Factors
- U.S. Inflation Trends: Higher-than-expected inflation strengthens the dollar, weighing on gold prices.
- Geopolitical Risks: Any escalation in trade tensions or geopolitical instability boosts demand for safe-haven assets like gold.
- Interest Rate Expectations: Higher interest rates reduce gold’s attractiveness as a non-yielding asset.
Support and Resistance Levels
- Support: 2871, 2834, 2807
- Resistance: 2950, 3000, 3050
Forecast
The trend remains bullish, with gold expected to test 2950 if upward momentum continues. A break below 2834 could indicate a deeper correction towards 2800. If gold surpasses 3000, a further move toward 3050 is possible.
Conclusion
- EUR/USD: Bearish bias; downside potential if support at 1.0317 breaks.
- GBP/USD: Bullish short-term trend; resistance at 1.2544 is key.
- USD/JPY: Mixed outlook; resistance at 154.33 could determine the next move.
- Gold: Bullish trend; key resistance at 2950, with downside risk if support at 2834 breaks.
