The euro has surged to a recent high amid calm data flows, supported by a recovering US manufacturing index. The British pound remains steady, with focus on inflation data and Bank of England decisions. Meanwhile, the yen shows strength as the Bank of Japan maintains a cautious policy stance. The New Zealand dollar has seen a rise, fueled by an improved services PMI and expectations of further rate cuts. Gold continues its upward trend, driven by declining US Treasury yields and geopolitical tensions, though it may face resistance due to overbought market conditions.
EUR/USD
- Support Levels: 1.1060, 1.1018
- Resistance Levels: 1.1180, 1.1160
Analysis: The euro has shown strength, reaching a 10-day high against the dollar. The movement comes amid weaker-than-expected U.S. data, providing room for euro bulls. However, upcoming economic sentiment data from Germany and U.S. retail sales could lead to short-term volatility. The U.S. Federal Reserve meeting on Wednesday adds uncertainty, and any dovish stance could push EUR/USD higher.
- Forecast: EUR/USD is likely to maintain its bullish momentum as it tests resistance at 1.1180. A break above could lead to the next resistance at 1.1230. On the downside, support at 1.1060 should hold unless there is unexpectedly strong U.S. data or hawkish Fed signals.
GBP/USD
- Support Levels: 1.3115, 1.3086, 1.3033
- Resistance Levels: 1.3150, 1.3202, 1.3306
Analysis: The British pound is holding its ground amid mixed economic data from the U.K. and the U.S. Focus this week is on U.K. inflation data, which could determine the Bank of England’s future policy path. With an 80% probability of holding rates steady, volatility is expected, especially if inflation surprises on either side. The pound is also sensitive to the outcome of the Fed meeting, especially if the U.S. central bank signals a dovish stance.
- Forecast: GBP/USD may continue its bullish run towards 1.3200, especially if U.K. inflation data come in higher than expected, increasing the likelihood of rate hikes. If inflation is softer, support at 1.3115 and 1.3033 will come into focus as the pair could correct lower.
USD/JPY
- Support Levels: 140.22, 137.26
- Resistance Levels: 141.32, 143.04
Analysis: USD/JPY is in a downtrend but nearing critical support levels. The hawkish stance of the Bank of Japan, combined with a potential Fed rate cut, is putting pressure on the pair. The pair has also been influenced by geopolitical tensions and movements in U.S. Treasury yields, which have supported the yen. However, the U.S. Fed’s decision could provide a turning point if dovish signals weaken the dollar further.
- Forecast: USD/JPY is expected to test support around 140.22. A break below could lead to 137.26. On the upside, resistance at 141.32 remains a key level for a potential reversal, which will be influenced heavily by the Fed’s rate decision.
NZD/USD
- Support Levels: 0.6153, 0.6112
- Resistance Levels: 0.6199, 0.6240
Analysis: The New Zealand dollar is showing strength following positive PMI data, even though the services and manufacturing sectors remain in contraction. Market expectations of a Federal Reserve rate cut, combined with New Zealand’s own rate cut, are pushing NZD/USD higher. This week’s key data includes New Zealand GDP, expected to show a contraction, which may put pressure on the currency if the data misses expectations.
- Forecast: NZD/USD could test the resistance at 0.6199 and, if broken, aim for 0.6240. However, weaker-than-expected GDP data on Thursday could cause the pair to pull back to 0.6153 or lower.
Gold (XAU/USD)
- Support Levels: $2,560, $2,525, $2,500
- Resistance Levels: $2,600
Analysis: Gold has surged to all-time highs, nearing the psychological $2,600 level. The main drivers include a decline in U.S. Treasury yields, a weaker U.S. dollar, and expectations of aggressive monetary easing by the Federal Reserve. However, gold’s upward momentum may face resistance near $2,600, especially with upcoming central bank meetings, including the Fed, Bank of England, and Bank of Japan.
- Forecast: If XAU/USD breaks above $2,600, it could head toward new highs, but caution is advised due to overbought conditions on the RSI. A pullback to $2,560 or even $2,525 is possible before renewed buying interest. If gold decisively breaks below $2,500, the next support level at $2,470 will be in focus.
Summary Forecasts
- EUR/USD: Bullish toward 1.1180 with possible consolidation around 1.1060.
- GBP/USD: Bullish toward 1.3200, with risk of correction to 1.3033 if inflation disappoints.
- USD/JPY: Bearish toward 140.22; rebound likely only if Fed is hawkish.
- NZD/USD: Bullish towards 0.6240 but vulnerable to GDP data miss.
- Gold (XAU/USD): Bullish toward $2,600; potential correction to $2,560 or $2,525.
