The Euro faces pressure from differing central bank policies, with the European Central Bank potentially cutting rates sooner than the US Federal Reserve, amidst rising energy costs and trade concerns. The British Pound anticipates key economic data, including consumer price figures, which will influence the Bank of England’s future policy decisions, with no immediate rate changes expected. The Japanese Yen remains sensitive to central bank rhetoric, with the Bank of Japan maintaining its current stance while monitoring global trade impacts. Gold prices have seen recent dips as geopolitical tensions show signs of easing, reducing safe-haven demand, though the overall trend remains positive.
🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar
Current Market Overview: The EUR/USD pair has seen a slight increase in value recently, driven by a perceived divergence in monetary policy between the European Central Bank (ECB) and the US Federal Reserve (Fed). Rising oil prices, fueled by tensions between Israel and Iran, and ongoing trade tariff disputes are also influencing market sentiment.
Key Factors Affecting EUR/USD:
- Monetary Policy Divergence:
- ECB: Markets are now anticipating a higher ECB deposit rate by year-end (1.79%), with the probability of a September rate cut decreasing to 50% from 60%. This suggests a less dovish stance than previously expected, potentially supporting the Euro. The ECB recently lowered its key interest rates by 25 basis points with effect from June 11, 2025, but future decisions will be data-dependent.
- US Federal Reserve: The Fed is widely expected to maintain current interest rates at its upcoming meeting. Investor focus will be on the updated economic projections and the “dot plot” for clues on future rate movements, with a possible September rate cut still anticipated by markets. Former Fed officials anticipate higher unemployment and higher inflation, complicating future rate decisions.
- Geopolitical Tensions: Escalating tensions between Israel and Iran are contributing to higher oil prices due to supply disruption fears. While the immediate impact on the US Dollar hasn’t been consistently strong, sustained high oil prices could fuel inflation, influencing central bank decisions and indirectly affecting currency valuations.
- Trade Tariffs: Ongoing disputes over trade tariffs, particularly concerning US-China relations and their impact on global trade, create uncertainty and can influence currency flows. The recent agreement on a US-China trade framework, while potentially positive, still involves significant tariffs which have already impacted trade volumes.
- Economic Data: Upcoming economic data releases from both the Eurozone and the US will be crucial. Stronger-than-expected data from the Eurozone could further bolster the Euro, while any signs of weakness in the US economy could weigh on the Dollar.
General Forecast and Price Levels:
The hourly trend for EUR/USD is currently bullish. However, recent price action indicates strong seller reaction at higher levels.
- Resistance Levels: The immediate resistance to watch is 1.1572. A clear move above this level could open the path towards 1.1616. Further resistance levels are identified at 1.1600, 1.1640, and 1.1685.
- Support Levels: The primary support level is 1.1505. A break below this could trigger a move lower. Key support levels include 1.1530, 1.1490, 1.1445, 1.1440, 1.1373, 1.1356, 1.1312, 1.1296, and 1.1269.
- Alternative Scenario: If the price decisively breaks and consolidates below 1.1373, the broader downward trend could resume, potentially testing levels around 1.1350-1.1390.
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Current Market Overview: The GBP/USD pair has experienced a bullish trend, but recent selling pressure near resistance levels suggests a potential shift or consolidation. The upcoming week is critical for the Pound, with key economic data and a Bank of England (BoE) meeting on the horizon.
Key Factors Affecting GBP/USD:
- UK Consumer Price Index (CPI): The release of May CPI data on Wednesday is a significant event. A monthly increase exceeding 0.3% would push the annual inflation rate above April’s 3.5%, potentially influencing BoE policy expectations.
- Bank of England (BoE) Monetary Policy: The BoE is widely expected to keep its base rate unchanged at 4.25% at its upcoming meeting. However, the market is pricing in a 63% probability of a rate cut by the next meeting in August, with a full rate cut anticipated by November. Any hints from the BoE regarding the timing or pace of future rate adjustments will be closely watched. The BoE stated in May 2025 that inflation has been close to the 2% target, but expects a temporary increase to 3.7% this year due to higher energy prices.
- Retail Sales Data: May retail sales data, due at the end of the week, is expected to show a slowdown compared to the strong growth seen in April. A weaker-than-anticipated retail sales figure could dampen optimism about the UK economy and weigh on the Pound. UK retail sales in May only edged up 1% year-on-year, primarily driven by food and drink, with non-food sales declining, indicating low consumer confidence.
- Global Risk Sentiment: Geopolitical tensions, particularly those impacting oil prices, can indirectly influence the Pound through their effect on overall market risk appetite and the strength of the US Dollar.
General Forecast and Price Levels:
The trend for GBP/USD is broadly bullish, but the pair has recently faced strong selling pressure.
- Resistance Levels: Key resistance levels include 1.3603, 1.3632, and 1.3600. A sustained move above these levels would indicate renewed bullish momentum.
- Support Levels: The critical support level for buyers is 1.3535. A breakdown below this could lead to a sharper decline towards the priority change level. Other significant support levels are 1.3530, 1.3500, 1.3465, 1.3435, 1.3430, 1.3390, 1.3333, 1.3291, and 1.3121.
- Alternative Scenario: If the price breaks and consolidates below 1.3554, the downward trend is likely to resume.
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
Current Market Overview: The USD/JPY pair has been trading near the 145 level, following two consecutive sessions of decline. The Japanese Yen has been under pressure despite the Bank of Japan’s (BoJ) recent policy decision.
Key Factors Affecting USD/JPY:
- Bank of Japan (BoJ) Monetary Policy: The BoJ left its policy rate unchanged at 0.5% and maintained its bond purchase plan, though it signaled readiness to adjust if needed. The BoJ’s cautious stance, assessing inflationary impacts of oil prices and US trade policy, implies a continued accommodative monetary environment, which generally weighs on the Yen. The BoJ’s latest statement on monetary policy reiterated its commitment to encouraging the uncollateralized overnight call rate at around 0.5 percent and outlined a plan to reduce Japanese government bond issuance.
- US Federal Reserve Policy: As with EUR/USD, the Fed’s stance on interest rates, particularly any signals regarding future rate cuts, will significantly impact the interest rate differential between the US and Japan, a key driver for USD/JPY.
- Trade Policy and Geopolitics: Reports of a lack of agreement on tariffs between Japan and the US during the G7 summit have added pressure to the Yen. Broader US trade policies and global geopolitical developments continue to play a role in risk sentiment, which can affect the Yen’s safe-haven appeal.
- Oil Prices: The inflationary impact of rising oil prices is a concern for the BoJ and could influence their future policy decisions, indirectly affecting the Yen.
General Forecast and Price Levels:
The medium-term trend for USD/JPY is bullish, with the Yen consolidating above a key resistance level.
- Resistance Levels: The immediate resistance to watch is 145.45. A clear breakout and consolidation above this level could pave the way towards 146.27, 146.85, and potentially 148.28.
- Support Levels: The key support level is 144.57, which was previously a resistance level. Other support levels include 144.45, 143.88, 143.65, 143.47, 142.76, and 142.19.
- Alternative Scenario: A sharp break and consolidation below 142.77 would likely signal a resumption of a downward trend.
🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar
Current Market Overview: Gold (XAU/USD) recently pulled back from record highs, falling below $3,400 per ounce. This decline is largely attributed to an easing of concerns regarding military action between Israel and Iran, which reduced demand for safe-haven assets.
Key Factors Affecting Gold (XAU/USD):
- Geopolitical Tensions and Safe-Haven Demand: Gold’s price is highly sensitive to geopolitical instability. Reports of potential nuclear talks between Tehran and the US, signaling a de-escalation of conflict, boosted risk sentiment and reduced the appeal of gold as a safe haven. Any renewed escalation of tensions would likely drive gold prices higher again.
- US Dollar Strength/Weakness: A weaker US Dollar generally makes gold, which is priced in Dollars, more attractive to holders of other currencies. Conversely, a stronger Dollar can weigh on gold prices.
- Central Bank Policies and Interest Rates: The outlook for interest rates, particularly from the US Federal Reserve, is a critical factor. Higher interest rates typically increase the opportunity cost of holding non-yielding assets like gold, while lower rates can make gold more appealing. Investors will be closely watching the Fed’s guidance for clues on future rate actions.
- Inflation Expectations: Gold is often seen as a hedge against inflation. While current inflation concerns might be tempered by easing geopolitical tensions, any signs of persistent or rising inflation could reignite demand for gold.
- Global Economic Uncertainty: Broader global economic concerns, including trade disputes and potential slowdowns, can increase demand for gold as a store of value.
General Forecast and Price Levels:
The overall trend for XAU/USD remains bullish, despite a recent correction.
- Resistance Levels: Key resistance levels are 3405, 3444, and the all-time high of 3500. A sustained break above 3405 would restore bullish momentum and target higher levels.
- Support Levels: The immediate support level is 3377. A consolidation below this level would open the path towards 3338. Other important support levels include 3310, 3303, 3287, 3272, and 3248.
- Alternative Scenario: If the price breaks and consolidates below 3338, the downtrend is likely to resume, potentially putting the long-term bullish trend at risk if 3140 is breached.
📊 Summary Table: As of June 18, 2025
| Asset | Bias | Key Factors | Support Levels | Resistance Levels | Key Trigger to Watch |
|---|---|---|---|---|---|
| 🇪🇺 EUR/USD | Bullish | ECB/Fed policy divergence, oil prices, trade tariffs, economic data | 1.1505, 1.1445, 1.1373, 1.1356, 1.1312, 1.1296, 1.1269 | 1.1572, 1.1616, 1.1600, 1.1640, 1.1685 | Break and consolidate below 1.1373 |
| 🇬🇧 GBP/USD | Cautiously Bearish | UK CPI, BoE monetary policy, retail sales, global risk sentiment | 1.3535, 1.3465, 1.3435, 1.3390, 1.3333, 1.3291, 1.3121 | 1.3603, 1.3632, 1.3600 | Break and consolidate below 1.3554 |
| 🇯🇵 USD/JPY | Bullish | BoJ/Fed policy, trade policy, geopolitics, oil prices | 144.57, 143.88, 143.47, 142.76, 142.19, 144.45, 143.65 | 1.3603, 1.3632, 1.3600 | Break and consolidate below 142.77 |
| 🪙 XAU/USD | Bullish | Geopolitical tensions (safe-haven), USD strength, central bank policy, inflation expectations | 3377, 3338, 3303, 3272, 3248, 3310, 3287 | 3405, 3444, 3500 | Break and consolidate below 3338 |
