The euro and pound gained momentum as the dollar weakened on soft U.S. data and rising expectations of Fed rate cuts, while the euro showed renewed strength ahead of the ECB decision and the pound found support from UK-U.S. trade optimism. Meanwhile, the yen rebounded sharply as strong domestic inflation and tariff tensions boosted demand for safe havens, reversing its earlier losses. Gold also benefited from the uncertain outlook, edging higher as investors shifted toward safety amid slowing U.S. growth and ongoing geopolitical risks.
🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar
Market Analysis
- Economic Context: The US economy showed a mild contraction in Q1 (-0.2% YoY), the first in three years. While slightly better than expectations (-0.3%), it reinforces market belief in multiple rate cuts by the Fed in 2025.
- ECB Outlook: With a decision expected next week, the ECB faces a split between doves and hawks. Although a cut is broadly anticipated, some policymakers have expressed a more hawkish tone, possibly hinting at a pause.
- Price Action: The euro rallied sharply despite recent US tariff decisions and closed higher at 1.1367 (+0.65%). The pair decisively broke resistance at 1.1266, indicating upward momentum.
Forecast
- Outlook: Bullish if price consolidates above 1.1374–1.1420.
- Upside Targets: 1.1535, 1.1692 (medium-term).
- Key Risks: Hawkish ECB surprise or sudden USD strength from geopolitical or inflation shocks.
Key Levels
- Support: 1.1339, 1.1296, 1.1269, 1.1220
- Resistance: 1.1374, 1.1413, 1.1535
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Market Analysis
- UK Political Context: Talks of accelerating a trade deal with the US add a tailwind for the pound, although implementation is uncertain. Weak US GDP and labor data are keeping the dollar under pressure.
- Price Action: The pound reversed from support at 1.3433 and gained slightly (+0.18%). Current price action suggests buyers are defending the 1.3454 level effectively.
- Trend Context: The pair remains in a broad ascending price channel, supported by bullish sentiment and relative resilience to tariff volatility.
Forecast
- Outlook: Bullish toward 1.3635 and possibly 1.3762 if 1.3522 is breached.
- Key Risks: US trade policy shocks, or a surprise strengthening in US labor market data.
Key Levels
Resistance: 1.3522, 1.3585, 1.3635, 1.3762
Support: 1.3454, 1.3435, 1.3390
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
Market Analysis
- Monetary Policy Divergence: Strong Japanese core inflation increased speculation of a rate hike by the BoJ in July (+25bps possible). This diverges from the Fed, where cuts are anticipated.
- Safe-Haven Demand: Risk sentiment is tilting in favor of the yen after a US court reinstated Trump-era tariffs, prompting renewed safe-haven flows.
- Price Action: USD/JPY fell below 144 and tested support at 143.45. The move reflects a break below key support, with increasing downward momentum.
Forecast
- Outlook: Bearish if price holds below 143.45.
- Downside Targets: 141.70, 139.59 (September 2024 low).
- Key Risks: BoJ backing off from hikes, or sudden Fed hawkish pivot.
Key Levels
Resistance: 144.75, 145.45, 146.27
Support: 143.84, 143.03, 141.70, 139.59
🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar
Market Analysis
- Macro Themes: Gold continues to benefit from:
- Weaker USD expectations amid poor GDP and rising jobless claims.
- Safe-haven appeal after the US court reinstated tariffs.
- Persistent geopolitical tensions and uncertainty about monetary policy trajectory.
- Fundamentals: The soft macroeconomic backdrop in the US, combined with dovish Fed expectations and resurgent demand for inflation hedges, underpins gold’s medium-term strength.
Forecast
- Outlook: Bullish, provided the dollar remains soft and yields subdued.
- Upside Targets: $2,400 and $2,435 remain medium-term resistance levels.
- Key Risks: Sharp rebound in USD or real yields, or stronger-than-expected inflation data.
Key Levels
Resistance: $2,400, $2,435
Support: $2,358, $2,334, $2,312
📊 Summary Table: As of May 30, 2025
| Asset | Bias | Short-Term Target | Support Levels | Resistance Levels | Key Drivers |
|---|---|---|---|---|---|
| 🇪🇺 EUR/USD | Bullish | 1.1535, 1.1692 | 1.1339, 1.1296, 1.1269 | 1.1374, 1.1413, 1.1535 | Weak USD, ECB caution, Fed cut expectations |
| 🇬🇧 GBP/USD | Bullish | 1.3635, 1.3762 | 1.3454, 1.3435, 1.3390 | 1.3522, 1.3585, 1.3635 | Trade deal hopes, soft USD, risk resilience |
| 🇯🇵 USD/JPY | Bearish | 141.70, 139.59 | 143.84, 143.03 | 144.75, 145.45, 146.27 | BoJ rate hike outlook, safe-haven flows |
| 🪙 XAU/USD | Bullish | $2,400, $2,435 | $2,358, $2,334, $2,312 | $2,400, $2,435 | Soft USD, inflation hedging, tariff/geopolitics |
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