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• The euro is awaiting signals from the ECB regarding a rate rise.
• The pound will be looking for clues in the macroeconomic data.

The US dollar is finding support amid geopolitical developments and the high likelihood of Fed tightening. Although the futures market has priced out the prospect of a federal funds rate hike in June, it still anticipates monetary policy tightening in 2026. The probability of such an outcome is estimated at 81%. Moreover, the higher the oil prices rise, the sooner the Fed is likely to take decisive action. This bodes well for the greenback.

Brent has climbed above $90 per barrel for the first time since early June. Stabilising factors, such as a decline in global demand led by China, sales from strategic reserves, and alternative supply routes, suggest that the potential for an oil rally is limited. However, refined petroleum products lack such stabilising factors. Even if North Sea crude hits a ceiling and begins to fall, petrol and diesel prices are unlikely to drop significantly. This points to a prolonged period of high inflation in the US and requires the Fed to tighten monetary policy.

The US dollar has a long-term advantage, but in the short term, its rivals may benefit from expectations of monetary tightening. In particular, even a currency as vulnerable to rising energy prices as the euro can mount a counterattack against the backdrop of the ECB’s ‘hawkish’ rhetoric. The ECB is not expected to raise its deposit rate in July, but Christine Lagarde’s hints about September could push the EURUSD exchange rate higher.

While the euro will look for cues from the European Central Bank, the pound will seek them amid a busy economic calendar. The labour market is expected to stabilise, whilst inflation and UK retail sales are forecast to slow. This backdrop reduces the likelihood of the Bank of England tightening monetary policy and may prompt investors to take profits on long positions in GBPUSD. Conversely, positive surprises from the indicators would allow traders to return to buying sterling.

The yen remains under pressure, despite comments from Prime Minister Sanae Takaichi on the importance of encouraging pension funds, including the GPIF, to invest in Japanese assets. It is used as a funding currency in carry trades, which are flourishing amid low volatility and rising risk appetite.

The FxPro Analyst Team

Intraday bias in EUR/USD remains neutral as consolidation from 1.1323 continues. With 1.1499 support turned resistance intact, further decline is expected. On the downside, break of 1.1323 will resume the fall from 1.2081 to 100% projection of 1.2081 to 1.1408 from 1.1848 at 1.1175. However, decisive break of 1.1499 will turn bias back to the upside for 1.1621 resistance.

In the bigger picture, focus is back on 38.2% retracement of 1.0176 to 1.2081 at 1.1353. Decisive break there will revive the case of medium term bearish trend reversal after rejection by 1.2 key cluster resistance level. Further fall should be seen to 61.8% retracement at 1.0904. Nevertheless, strong rebound from 1.1353, followed by break of 1.1621 resistance, will retain medium term bullishness.

USD/JPY is staying in range trading below 162.83 and intraday bias remains neutral. Another fall cannot be ruled out as the consolidations extends, but downside should be contained by 38.2% retracement of 155.01 to 162.83 at 159.84. On the upside, firm break of 162.83 will extend the larger up trend to 164.34 projection level.

In the bigger picture, rise from 139.87 (2025 low) is seen as another rising leg of the long term up trend. Next target is 61.8% projection of 139.87 to 159.44 from 152.25 at 164.34. For now, outlook will remain bullish as long as 155.01 support holds, even in case of deep pullback.

Intraday bias in GBP/USD remains neutral for moment. Current development argues that corrective pattern from 1.3867 has completed with three waves down to 1.3139. Above 1.3557 will target 1.3657 first. Firm break there will bring retest of 1.3867 high. However, break of 1.3339 support will dampen this bullish view and bring deeper fall back to 1.3139 instead.

In the bigger picture, price actions from 1.3867 are a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is in favor for a later stage, towards 1.4248 key resistance (2021 high). However, firm break of 1.3008 will at least bring deeper fall to 38.2% retracement of 1.0351 to 1.3867 at 1.2524, with increased risk of bearish reversal.

USD/CHF is staying in consolidations below 0.8150 and intraday bias remains neutral. Further rally is in favor as long as 0.8029 support holds. Above 0.8150 will target 100% projection 0.7603 to 0.8041 from 0.7600 at 0.8198 next. However, firm break of 0.8029 will turn bias back to the downside for 0.7909 support and below.

In the bigger picture, while a medium term bottom was formed at 0.7603, it's still early to call for bullish trend reversal. As long as 38.2% retracement of 0.9200 (2025 high) to 0.7603 at 0.8213 holds, the larger down trend could still continue through 0.7603 at a later stage. However, firm break of 0.7603 will argue that the trend has reversed and turn focus to 0.8332 support turned resistance (2023 low) for confirmation.

Intraday bias in AUD/USD remains neutral for the moment. As long as 38.2% retracement of 0.7277 to 0.6864 at 0.7022 holds, fall from 0.7277 is mildly in favor to continue. On the downside, below 0.6912 minor support will bring retest of 0.6864 low. However, sustained break of 0.7022 will bring stronger rally to 61.8% retracement at 0.7119 next.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top could be formed at 0.7277 after failing to sustain above 61.8% retracement of 0.8006 (2021 high) to 0.5913 (2024 low) at 0.7206. Deeper fall could be seen to 38.2% retracement of 0.5913 to 0.7277 at 0.6756 as a correction. But strong support should be seen there to bring rebound. Consolidations would continue below 0.7277 for a while.

Outlook in USD/CAD is unchanged as pullback from 1.4247 is seen as correcting the rise from 1.3480 only. Downside should be contained by 1.3965 cluster support (38.2% retracement of 1.3480 to 1.4247 at 1.3954 to bring rebound. On the upside, above 1.4159 minor resistance will bring retest of 1.4247 high. Firm break there will target 61.8% retracement of 1.4791 to 1.3480 at 1.4290.

In the bigger picture, current development suggests that fall from 1.4791 has completed as a three wave correction to 1.3480. It's still early to judge if rise from there a corrective bounce, or resumption of the larger up trend from 1.2005 (2021 low). But in either case, retest of 1.4791 high should be seen next.

Intraday bias in GBP/JPY stays neutral and more consolidations could be seen below 219.56. Downside of consolidations should be contained by 216.39 support to bring rebound. On the upside, above 219.56 will extend larger up trend and target 220.90 fibonacci projection level next.

In the bigger picture, the long term up trend is in progress. Next target is 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. For now, outlook will remain bullish as long as 55 W EMA (now at 208.64) holds, in case of pullback.

No change in EUR/JPY's outlook as range trading continues and intraday bias stays neutral. stronger rebound cannot be ruled out. On the upside, firm break of 186.30 will resume the rebound from 182.10 towards 187.93 high. On the downside, break of 183.14 will bring deeper fall to retest 182.10.

In the bigger picture, uptrend from 114.42 (2020 low) is still expected to resume at a later stage to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88. However, sustained break of 55 W EMA (now at 180.15) will argue that it's already in a medium term down trend to 175.41 resistance turned support and below.

Intraday bias in EUR/GBP remains neutral and more consolidations could be seen above 0.8453. Upside of recovery should be limited below 0.8615 support. Break of 0.8453, and sustained trading below 61.8% retracement of 0.8221 to 0.8863 at 0.8466, will extend the decline from 0.8863 to retest 0.8221 low.

In the bigger picture, current development suggests that rise from 0.8221 (2024 low) has completed at 0.8863, just ahead of 38.2% retracement of 0.9267 (2025 high) to 0.8221 at 0.8867. Deeper fall would be seen back to 0.8221. For now, outlook will be neutral at best as long as 0.8863 hold.