The euro holds steady as Germany’s inflation eases, reflecting broader eurozone trends, while the British pound gains support amid mixed UK data. The Japanese yen surged following unexpected political changes, signaling potential shifts in the Bank of Japan’s policy. Meanwhile, the New Zealand dollar climbs on strong business confidence, reinforcing expectations of further rate cuts by the RBNZ. Gold prices dip, influenced by a stronger dollar and quarter-end flows, though its safe-haven allure remains intact amidst ongoing global economic uncertainties and looming US jobs data.
EUR/USD:
- Support Levels: 1.1155, 1.1122, 1.1105
- Resistance Levels: 1.1169, 1.1198, 1.1275
Market Sentiment:
- The euro is stable as Germany’s inflation came in lower than expected at 1.6%. This suggests weaker price pressures, raising the possibility of further rate cuts by the ECB in upcoming meetings. A decline in Eurozone inflation is likely to continue putting pressure on the euro.
- In the short term, the EUR/USD pair remains bullish above the 1.1155 support level, with upside targets near 1.1198. A break above this could test 1.1275, driven by any dovish sentiment from the Fed.
Forecast:
- A dovish stance from the Fed (lower interest rate expectations) could strengthen the euro towards the 1.1209/1.1253 zone. Alternatively, if U.S. economic data supports the dollar, a move below 1.1122 could resume the downtrend.
GBP/USD:
- Support Levels: 1.3371, 1.3311, 1.3274, 1.3241
- Resistance Levels: 1.3427, 1.345
Market Sentiment:
- The British pound has shown strength, supported by resilient house prices and solid economic data, though government spending and exports have been revised lower. Expectations of rate cuts by the Bank of England may cap significant GBP strength in the medium term.
- The technical outlook remains bullish as long as GBP/USD holds above the 1.3371 support level. Intraday buying is favored above this level, with a target near 1.3427.
Forecast:
- The pair may continue to rise towards 1.3427, provided there’s no sudden shift in rate expectations or weak economic data. A break below 1.3311 could signal a return to bearish momentum.
USD/JPY:
- Support Levels: 142.26, 141.93
- Resistance Levels: 142.86, 143.19
Market Sentiment:
- Political developments in Japan, with the incoming PM Ishiba favoring monetary tightening, pushed the yen higher. As the market awaits further economic data and clarity from Ishiba’s policies, the yen could remain volatile.
- On the technical side, USD/JPY faces resistance at 142.86, with the potential for a move higher towards 143.19 if U.S. economic data supports the dollar.
Forecast:
- A break above 142.86 could signal a retest of 143.19, but continued political uncertainty and potential BoJ tightening make the yen attractive in the medium term. Failure to hold above 142.26 could push the pair lower towards 141.93.
NZD/USD:
- Support Levels: 0.6335, 0.6302
- Resistance Levels: 0.6373, 0.6426
Market Sentiment:
- NZD/USD has surged to a 14-month high, supported by strong business confidence data. The RBNZ is expected to continue its rate-cutting path, which may limit the upside for the kiwi in the longer term.
- In the short term, the pair is testing resistance at 0.6373. A break above this could lead to a test of 0.6426, while support at 0.6335 should limit downside risk.
Forecast:
- With strong business confidence, NZD/USD could maintain its bullish trajectory towards 0.6426. However, downside risks remain if the RBNZ adopts a more aggressive stance on rate cuts or if U.S. data boosts the dollar.
Gold (XAU/USD)
- Support Levels: $1,860, $1,845
- Resistance Levels: $1,885, $1,900
Market Sentiment:
- Gold prices have slid as the dollar strengthened, but safe-haven demand remains intact amid global uncertainties. The precious metal is still overbought and may face a deeper correction, especially if U.S. jobs data this week signals economic resilience.
- Technically, gold is testing support near $1,860. A break below could lead to further losses towards $1,845, while resistance near $1,885 could cap any near-term gains.
Forecast:
- Gold is likely to range ahead of U.S. jobs data, with potential for a deeper pullback if economic data supports a stronger dollar. However, continued Fed dovishness could sustain gold near the $1,885-$1,900 resistance.
Summary Forecast
- EUR/USD: Bullish above 1.1155, targeting 1.1198.
- GBP/USD: Bullish above 1.3371, targeting 1.3427.
- USD/JPY: Consolidation, potential upside to 143.19 if U.S. data supports the dollar.
- NZD/USD: Bullish momentum towards 0.6426, limited by potential RBNZ cuts.
- Gold: Overbought, ranging with support at $1,860 and resistance at $1,885.
Categories: Market News
