The euro held steady amid improved eurozone data but faced headwinds from new tariffs and cautious traders awaiting key inflation figures. The pound struggled after dovish comments from the Bank of England and expectations of softer UK data. The yen weakened near multi-month lows as trade tensions and dollar strength persisted. The Canadian dollar drifted with focus on both domestic and U.S. CPI results, which could reshape rate cut expectations. Gold remained resilient despite tariff pressures, holding near key resistance as investors weighed inflation risks and geopolitical uncertainty.
🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar
Fundamental Drivers:
- Euro found modest support from upbeat ZEW sentiment and industrial production data.
- Weak rally suggests markets are awaiting stronger catalysts, especially US CPI figures.
- Geopolitical tension over new US tariffs on EU and Mexican imports adds pressure to the euro.
- Fed policy in focus: Higher US inflation may postpone rate cuts, boosting the USD.
Forecast Outlook:
- A weaker-than-expected CPI could revive euro gains.
- Strong US inflation likely to reinforce USD strength, pushing EUR/USD lower.
Support Levels: 1.1686, 1.1651, 1.1642, 1.1581, 1.1518
Resistance Levels: 1.1714, 1.1762, 1.1810, 1.1913
Bias: Neutral to Bearish (short-term), with downside risks if US inflation accelerates.
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Fundamental Drivers:
- GBP under pressure after BoE Governor Bailey hinted at faster rate cuts if the labor market deteriorates.
- Current weakness stems from subpar UK economic growth and elevated inflation expectations.
- U.S. inflation data and FOMC member speeches (Bowman, Barr) are key for near-term movement.
- Market awaits UK labor and inflation data this week for clarity on the BoE’s path.
Forecast Outlook:
- Higher US CPI = stronger USD, weaker GBP.
- Lower CPI or dovish Fed remarks = potential rebound in GBP/USD.
Support Levels: 1.3410, 1.3388
Resistance Levels: 1.3471, 1.3532, 1.3619, 1.3680, 1.3712, 1.3752, 1.3770, 1.4000
Bias: Bearish, but near a support zone; volatility expected around CPI release.
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
- Fundamental Drivers:
- USD/JPY near two-month highs amid ongoing trade tensions and tariff threats.
- Japan has not yet retaliated to U.S. tariffs, but officials warn of possible economic consequences.
- Empire State Manufacturing Index and CPI data from the U.S. will direct short-term flows.
- Fed’s tone and inflation expectations remain the core driver.
- Forecast Outlook:
- High CPI prints = extended USD/JPY rally.
- Trade concerns and Fed caution could limit gains or spark pullbacks.
- Support Levels: 146.80, 146.13, 145.88, 145.28, 144.18
- Resistance Levels: 148.28
- Bias: Bullish (medium-term), with caution around tariff headlines and U.S. economic surprises.
🇨🇦 USD/CAD Outlook – U.S. Dollar vs Canadian Dollar
Fundamental Drivers:
- CAD treading water ahead of dual CPI reports from Canada and the U.S.
- Canada’s inflation is forecast to remain steady, especially core CPI at 3.0%.
- If U.S. CPI shows a sharp increase, expectations for Fed rate cuts may recede.
- Rising inflation in the U.S. driven by tariffs could support the dollar further.
- The BoC is likely comfortable with CPI near 2%, but persistent high core CPI may delay cuts.
Forecast Outlook:
- If US CPI beats expectations, USD/CAD may break above 1.3719, potentially targeting 1.3800.
- A miss in inflation data could allow CAD to strengthen modestly.
Support Levels: 1.3695, 1.3680, 1.3656
Resistance Levels: 1.3719, 1.3734
Bias: Bullish, with upside risk if inflation confirms stronger USD narrative.
🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar
Fundamental Drivers:
- Gold remains stable near $3360 despite stronger dollar, indicating persistent safe-haven demand.
- Trade war risks (new U.S. tariffs on 20+ countries) have spurred demand for hard assets.
- Elevated inflation expectations and tariff-driven cost increases may support gold’s value.
- However, a strong CPI print could pressure gold by lifting real yields and the USD.
- If inflation disappoints, gold could rally toward recent highs.
Forecast Outlook:
- Breakout above 3365 needed to continue upward trend toward 3405 and 3444.
- Caution warranted near key resistance, especially if dollar strength returns.
Support Levels: 3345, 3322, 3309
Resistance Levels: 3365, 3393, 3405, 3444, 3500
Bias: Bullish (medium-term), but short-term direction hinges on CPI outcome and USD strength.
📊 Summary Table: As of July 16, 2025
| Pair | Bias | Key Drivers | Support Levels | Resistance Levels |
|---|---|---|---|---|
| 🇪🇺 EUR/USD | Neutral–Bearish | U.S. CPI, EU data, trade tariffs | 1.1686, 1.1651, 1.1581 | 1.1714, 1.1762, 1.1810 |
| 🇬🇧 GBP/USD | Bearish | BoE dovish tone, U.S. inflation, UK labor data | 1.3410, 1.3388 | 1.3471, 1.3532, 1.3619, 1.3680 |
| 🇺🇸 USD/JPY | Bullish | Fed inflation outlook, trade tensions | 146.80, 146.13, 145.28 | 148.28 |
| 🇨🇦 USD/CAD | Bullish | U.S. and Canadian CPI, Fed rate expectations | 1.3695, 1.3680, 1.3656 | 1.3719, 1.3734, 1.3800 (potential) |
| 🪙 XAU/USD | Bullish | Inflation hedge, trade war fear vs. stronger USD | 3345, 3322, 3309 | 3365, 3393, 3405, 3444, 3500 |
