The euro remains under pressure as trade deals and diverging central bank policies boost dollar demand, while the pound struggles with weak UK data and rate cut expectations. The yen faces losses as safe-haven demand wanes and Japan sticks with loose policy. The Australian dollar retreats on profit-taking and inflation uncertainty ahead of key central bank meetings. Meanwhile, gold attempts a rebound despite headwinds from a stronger dollar and reduced geopolitical tension, as markets await signals from the upcoming Fed decision and US economic data releases.
🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar
Market Overview:
- The euro initially rose on optimism over a US-EU trade agreement, which set a 15% tariff on EU exports, reducing earlier tensions.
- However, the market sees the agreement as more favorable to the US, weakening the euro’s broader outlook.
- Continued divergence in central bank policy remains central. The Fed maintains a hawkish stance while the ECB is more accommodative, favoring the dollar.
- Lack of high-impact US data early this week leaves room for dollar strength to persist unless disrupted by Fed commentary.
Key Drivers:
- Diverging Fed–ECB monetary policy outlook (hawkish Fed vs dovish ECB).
- Market sentiment that the US will economically benefit more from recent trade deals.
- Positioning ahead of the FOMC and potential September rate cut hints.
Support Levels:
- 1.1734 – Minor near-term pivot
- 1.1714 – Below this could encourage renewed bearish interest
- 1.1657 – Last swing low
- 1.1615 – Critical breakdown level
Resistance Levels:
- 1.1786 – Initial ceiling
- 1.1810 – Range high
- 1.1913 – Medium-term upside cap if bullish momentum builds
Forecast:
- If the pair holds above 1.1734 and avoids 1.1657 breakdown, we may see consolidation or modest recovery.
- Sustained movement below 1.1615 would shift outlook strongly bearish.
- ECB commentary may interrupt prevailing dollar strength midweek.
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Market Overview:
- Pound unable to benefit from retail sales beat due to underlying concerns over UK’s economic trajectory.
- Market focus is shifting from inflation control to growth preservation, supporting expectations of an August rate cut by the BoE.
- The pound’s decline is compounded by a stronger US dollar and broader risk-off tones.
Key Drivers:
- Weak UK data, particularly soft PMIs and sluggish retail rebound.
- BoE likely to begin easing cycle soon, diverging from Fed policy.
- Dollar demand remains elevated amid stronger macro US positioning.
Support Levels:
- 1.3421 – Short-term bounce level
- 1.3402 – Trend-defining pivot
- 1.3363 – Bearish target on breakdown
Resistance Levels:
- 1.3462 – First hurdle for bulls
- 1.3496 – Significant intraday barrier
- 1.3534 / 1.3586 / 1.3645 – Multi-session tops that cap upside
Forecast:
- If 1.3402 breaks, bearish continuation toward 1.3363 is favored.
- A rebound toward 1.3496 possible if dollar sentiment wanes midweek.
- Caution advised due to shifting expectations ahead of BoE’s August decision.
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
Market Overview:
- USD/JPY advances as global trade agreements reduce need for safe-haven assets.
- The Fed’s hawkish stance contrasts sharply with BoJ’s commitment to low rates.
- BoJ decision this week is unlikely to surprise but will be watched for inflation revision hints.
- U.S. economic stability continues to attract capital inflows, keeping demand for dollar high.
Key Drivers:
- Global reduction in trade tensions (US–EU, US–Japan deals).
- Persistent yield differential due to Fed’s restrictive policy and BoJ’s dovish stance.
- Weak demand for yen amid shifting sentiment away from risk aversion.
Support Levels:
- 147.50 – Key short-term defense for buyers
- 147.15 / 146.35 / 145.85 – Gradual steps toward deeper correction
- 145.28 – Breakdown point for longer-term trend shift
Resistance Levels:
- 147.93 – Current barrier to fresh upside
- 148.81 – Break here confirms bullish continuation
- 149.20+ – Medium-term bullish extension target
Forecast:
- A breakout above 147.93 signals fresh bullish momentum with scope for 148.81–149.20.
- Below 147.50, buyers may temporarily retreat, with pullback risk increasing.
- BoJ inflation guidance and Fed tone will guide the second half of the week.
🇦🇺/🇺🇸 AUD/USD Outlook – Australian Dollar vs U.S. Dollar
Market Overview:
- AUD/USD trades lower after failing to sustain an earlier breakout, with markets pricing in weaker inflation and looming RBA cuts.
- The USD’s rebound on trade optimism and Fed hawkishness is pulling AUD lower.
- Traders await Australia’s inflation print and FOMC decision for directional clarity.
Key Drivers:
- FOMC rate guidance and Fed Chair Powell’s post-meeting tone.
- Australia’s quarterly inflation release – stronger data could delay RBA cuts.
- Longer-term trend shows AUD strength from April lows, but now facing retracement risks.
Support Levels:
- 0.65150–0.65350 – Immediate pivot zone (decisive level for trend direction)
- 0.6485 – Local support
- 0.6450 – Technical breakdown level
- 0.63–0.64 – Long-term support zone
Resistance Levels:
- 0.6570–0.6590 – Swing resistance
- 0.6625 – Weekly high
- 0.6670–0.6740 – Broader range top, above which buyers regain control
Forecast:
- AUD may test 0.6450 if USD remains dominant, especially if Aussie CPI disappoints.
- A strong inflation reading could rally AUD back to test 0.6590 and 0.6625.
- Near-term trend bearish unless 0.6535 holds and reversal signals appear.
🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar
Market Overview:
- Gold slides as trade agreements lessen safe-haven demand.
- The market remains cautious ahead of the FOMC, with expectations for stable rates but dovish signals potentially supporting gold.
- Political pressure on the Fed from the White House introduces a wild card to gold dynamics.
Key Drivers:
- Reduced demand for gold amid improved global trade sentiment.
- Market positioning ahead of the Fed meeting and inflation forecasts.
- Potential US rate cut in September may restore demand if hinted during Powell’s speech.
Support Levels:
- 3326 – Immediate support, below which trend may turn bearish
- 3309 – Breakdown confirmation
- 3300 – Psychological and structural support
- 3250–3280 – Deeper support range
Resistance Levels:
- 3351 – Key resistance cap
- 3377 – Major target for bulls on breakout
- 3401 / 3439 / 3500 – Progressive bullish targets
Forecast:
- If gold holds above 3326 and breaks 3351, short-covering could lift it toward 3377–3400.
- A move below 3309 signals bearish momentum resumption.
- The Fed’s tone remains pivotal to gold’s path for the rest of the week.
📊 Summary Table: As of July 29, 2025
| Asset | Bias | Key Support Levels | Key Resistance Levels | Forecast Direction |
|---|---|---|---|---|
| 🇪🇺 EUR/USD | Slightly Bearish | 1.1734, 1.1714, 1.1657, 1.1615 | 1.1786, 1.1810, 1.1913 | Downward unless Fed surprises |
| 🇬🇧 GBP/USD | Bearish Bias | 1.3421, 1.3402, 1.3363 | 1.3462, 1.3496, 1.3534, 1.3586 | Likely lower short-term |
| 🇯🇵 USD/JPY | Bullish | 147.50, 147.15, 146.35 | 147.93, 148.81, 149.20 | Continuation if 147.93 breaks |
| 🇦🇺 AUD/USD | Bearish Near-Term | 0.6515, 0.6485, 0.6450 | 0.6590, 0.6625, 0.6670 | Weakness unless inflation boosts |
| 🪙 XAU/USD | Neutral-to-Bearish | 3326, 3309, 3300 | 3351, 3377, 3401 | Bearish unless Fed hints dovish pivot |
Categories: Market News
