EUR/USD remains pressured by the ECB’s dovish stance and global trade uncertainty, limiting its recovery prospects. GBP/USD is weighed by rising UK public debt and softening labor market data, but cautious optimism persists due to potential rate cuts by the BoE. USD/JPY faces volatility as the BoJ moves toward normalization with anticipated rate hikes, countering Fed and ECB easing. Gold continues its bullish trend, supported by safe-haven demand amid tariff concerns and inflation risks, with traders eyeing key support levels for buying opportunities as Fed rate cut expectations bolster its appeal.
EUR/USD
Current Trend: Bullish but fragile due to weak fundamentals and a dovish ECB policy.
Support Levels: 1.0354, 1.0299, 1.0265, 1.0238, 1.0223
Resistance Levels: 1.0434, 1.0458, 1.0482, 1.0554
Key Drivers:
- Euro Fundamentals: Eurozone inflation remains elevated, yet the ECB’s dovish stance undermines recovery prospects. Markets anticipate a further 25-basis-point rate cut in the upcoming ECB meeting.
- U.S. Data: Anticipation around U.S. Leading Indicators Index data could trigger volatility. Weak U.S. data could support further euro gains.
- Technical Insight: A liquidity test above 1.0434 suggests bullish pressure. If buyers reclaim 1.0482, a retest of 1.0554 could occur. However, failure to hold 1.0354 may prompt a sell-off toward 1.0265.
Forecast:
- The pair’s near-term outlook depends on weak U.S. data or dovish Federal Reserve commentary. Expect consolidation between 1.0354 and 1.0482 with a potential breakout toward 1.0554 on bullish momentum. A breakdown below 1.0354, however, may extend losses toward 1.0265.
GBP/USD
Current Trend: Bearish, but signs of reversal are emerging.
Support Levels: 1.2322, 1.2255, 1.2158
Resistance Levels: 1.2344, 1.2376, 1.2473
Key Drivers:
- UK Fundamentals: Mixed signals with rising public borrowing and wage growth but an unexpected uptick in unemployment. The Bank of England is expected to lower rates by 25 basis points, which limits upside potential.
- Global Economic Concerns: Persistent inflation and high interest rates may weigh on risk sentiment, indirectly supporting the pound.
- Technical Insight: Weak selling pressure near 1.2344 suggests potential for upside correction. A break above 1.2376 could lead to 1.2473, while sustained losses below 1.2322 could drag the pair to 1.2255.
Forecast:
- GBP/USD is likely to trade between 1.2322 and 1.2376 in the short term. A break above 1.2376 may trigger a bullish reversal toward 1.2473. Conversely, a breakdown below 1.2322 would confirm bearish continuation toward 1.2255 or lower.
USD/JPY
Current Trend: Bearish, amid expectations of BoJ policy tightening.
Support Levels: 155.26, 154.93, 154.34
Resistance Levels: 156.24, 156.74, 157.18, 158.19
Key Drivers:
- BoJ Policy Expectations: Markets anticipate a 0.5% rate hike, marking the highest borrowing costs in Japan since 2008. This bolsters yen demand.
- U.S. Dollar Weakness: Trump’s trade rhetoric and dovish Federal Reserve expectations add pressure on the USD.
- Technical Insight: The pair faces strong resistance at 156.24. Failure to break higher could result in a decline toward 155.26. However, a breakout above 156.74 may attract buyers aiming for 157.18.
Forecast:
- USD/JPY is expected to trade within the 155.26–156.74 range. A decisive break below 155.26 would confirm bearish continuation toward 154.34. Alternatively, a rally above 156.74 could push the pair toward 157.18 or even 158.19.
XAU/USD (Gold)
Current Trend: Bullish, driven by safe-haven demand and expectations of Fed easing.
Support Levels: 2725, 2720, 2703, 2656
Resistance Levels: 2762, 2790, 2800
Key Drivers:
- Safe-Haven Demand: Rising geopolitical tensions and Trump’s trade policies support gold prices.
- Federal Reserve Policy: Expectations of two rate cuts this year limit the upside for U.S. Treasury yields, supporting gold.
- Technical Insight: Gold’s breakout above 2725 suggests strong bullish momentum. A sustained move above 2762 could trigger a rally toward 2790. However, a pullback below 2720 may prompt selling toward 2656.
Forecast:
- Gold prices are likely to consolidate between 2725 and 2762. A breakout above 2762 could test 2790 and potentially 2800. However, a decline below 2720 would signal bearish momentum, with downside targets at 2703 and 2656.
General Summary
- EUR/USD: Bullish within 1.0354–1.0482; potential for a rally toward 1.0554.
- GBP/USD: Consolidating; a break above 1.2376 could lead to 1.2473.
- USD/JPY: Bearish within 155.26–156.74; resistance at 156.74 critical for bulls.
- Gold (XAU/USD): Bullish; a breakout above 2762 may target 2790 or 2800.
