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Forex markets are trading with a relatively subdued tone as the US session gets underway, with limited broad-based momentum among major currencies. The most notable move is a selloff in the Swiss Franc, which appears largely technical, led by a bullish bounce in EUR/CHF.

Meanwhile, Yen is seeing a modest recovery, likely driven by profit-taking after its extended weakness since the start of July. Traders appear reluctant to press shorts further ahead of this weekend’s upper house elections in Japan, which could trigger new fiscal policy shifts and JGB volatility in the days ahead.

Dollar is slightly firmer despite today’s softer-than-expected PPI release. Markets are not placing too much emphasis on the inflation miss, as the dominant driver remains the looming August 1 tariff deadline. Until there is clarity on whether new trade deals are reached or further levies imposed, Dollar positioning is likely to stay cautious.

Sterling is holding its ground near the top of the G10 board after today's upside surprise in UK inflation. Though the reaction has been modest. Attention now turns to the UK labor market report tomorrow, which could help determine whether August’s rate cut odds remain intact.

For the week so far, Dollar leads the major currencies, followed by Loonie and Sterling. At the bottom are Kiwi and Aussie, with Swiss Franc also under pressure. Euro and Yen are treading in the middle.

Technically, EUR/CHF's break of 55 4H EMA offers tentative sign of bottoming at 0.9292, after breaching 0.9296 support briefly. Focus is back on 0.9365 resistance. Break there will argue that corrective pattern from 0.9445 has completed, and the rebound from 0.9218 low is ready to resume.

In Europe, at the time of writing, FTSE is up 0.29%. DAX is up 0.52%. CAC is up 0.02%. UK 10-year yield is down -0.002 at 4.628. Germany 10-year yield is down -0.012 at 2.698. Earlier in Asia, Nikkei fell -0.04%. Hong Kong HSI fell -0.29%. China Shanghai SSE fell -0.03%. Singapore Strait Times rose 0.30%.

US PPI flat in June, misses forecasts

US producer prices were flat in June, falling short of expectations for a 0.3% mom rise. While a 0.3% mom increase in goods prices provided some support, a -0.1% mom dip in services prices offset the gain. PPI excluding food, energy, and trade services was unchanged on the month too.

On an annual basis, headline PPI slowed to 2.3% yoy from 2.6% yoy, also below forecasts 2.5% yoy. The more stable core measure still rose 2.5% year-on-year.

Eurozone exports rise 0.9% yoy in May while imports fall -0.6% yoy

Eurozone goods exports rose 0.9% yoy in May to EUR 242.6B, outpacing a -0.6% yoy drop in imports to EUR 226.5B, leading to a trade surplus of EUR 16.2B. Intra-Eurozone trade also grew 1.4% yoy to EUR 219.1B, indicating resilient domestic supply chains within the bloc.

For the broader European Union, exports rose just 0.1% yoy while imports fell -2.0% yoy, producing a EUR 13.1B surplus. Bilateral data shows continued divergence: EU exports to the US rose 4.4% yoy while imports from the U.S. fell -7.4%. Exports to China dropped -11.2% yoy, while imports from China rose 3.4%. EU-UK trade data showed a 2.5% yoy increase in exports and a -7.1% drop in imports.

UK CPI rises to 3.6%, goods prices jump, services sticky

UK inflation came in hotter than expected in June. Headline CPI accelerated from 3.4% yoy to 3.6% yoy, above consensus of 3.4%. Core CPI (excluding energy, food, alcohol, and tobacco)also surprised to the upside, rising from 3.5% to 3.7%, versus expectation of 3.5% yoy.

Goods inflation picked up from 2.0% yoy to 2.4%, its highest since October 2023. Services inflation remained stubbornly high, unchanged at 4.7% yoy.

On a monthly basis, CPI rose 0.3%, adding to signs that disinflationary progress may be stalling.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 147.93; (P) 148.47; (R1) 149.40; More...

USD/JPY retreats mildly but stays above 147.55 minor support. Intraday bias remains mildly on the upside. Rise from 139.87 is resuming and should target 100% projection of 139.87 to 148.64 from 142.66 at 151.43. That is close to 61.8% retracement of 158.86 to 139.87 at 151.22. On the downside, below 147.55 minor support turn intraday bias neutral again first.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). There is no clear sign that the pattern has completed yet. But still, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

US producer prices were flat in June, falling short of expectations for a 0.3% mom rise. While a 0.3% mom increase in goods prices provided some support, a -0.1% mom dip in services prices offset the gain. PPI excluding food, energy, and trade services was unchanged on the month too.

On an annual basis, headline PPI slowed to 2.3% yoy from 2.6% yoy, also below forecasts 2.5% yoy. The more stable core measure still rose 2.5% year-on-year.

Full US PPI release here.

• USD/JPY crosses above 200-day EMA, prints three-month high.
• Technical signals suggest stability below 149.40.

USD/JPY advanced above its 200-day exponential moving average (EMA) for the first time since February on Tuesday, while slightly extending its ascent to a new three-month high of 149.17 earlier today before losing momentum.

The bullish price action coincides with growing political uncertainty in Japan, as the ruling Liberal Democratic Party and its coalition partner face the risk of losing their majority in the upper house in Sunday’s election. However, a sustained move higher remains uncertain, given that the price has closed above the upper Bollinger Band and both the RSI and stochastic oscillator are signaling overbought conditions.

A decisive breakout above the 50% Fibonacci retracement of the January–April downleg could pave the way for an extension toward the 151.00 barrier and the 61.8% Fibonacci level at 151.60. A move beyond that point may open the door for a rally toward 154.70.

On the downside, if bullish pressure fades, the price could find immediate support between the 200-day EMA at 147.85 and the 38.2% Fibonacci level at 147.13. Further declines may stabilize near 145.85. However, only a drop below 143.35 would signal a bearish trend reversal.

Overall, USD/JPY appears cautious, as overbought conditions hint at a possible pullback or consolidation in the short term. The next bullish phase is likely to resume above 149.40.

EUR/USD declined from the 1.1750 resistance and traded below 1.1650. USD/JPY is rising and might gain pace above the 149.20 resistance.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a fresh decline after a strong surge above the 1.1720 zone.
• There is a connecting bearish trend line forming with resistance at 1.1660 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 147.50 and 148.40 levels.
• There is a key bullish trend line forming with support at 148.40 on the hourly chart at FXOpen.

On the hourly chart of EUR/USD at FXOpen, the pair rallied above the 1.1720 resistance zone before the bears appeared, as discussed in the previous analysis. The Euro started a fresh decline and traded below the 1.1660 support zone against the US Dollar.

The pair declined below 1.1620 and tested 1.1590. A low was formed near 1.1592 and the pair started a consolidation phase. There was a minor recovery wave above the 1.1610 level.

EUR/USD is now trading below the 50-hour simple moving average. On the upside, it is now facing resistance near the 1.1630 level. It is close to the 23.6% Fib retracement level of the downward move from the 1.1749 swing high to the 1.1592 low.

The next key resistance is at 1.1660 and the 50% Fib retracement level. There is also a connecting bearish trend line forming with resistance at 1.1660.

The main resistance is near the 1.1690 level. A clear move above it could send the pair toward the 1.1720 resistance. An upside break above 1.1720 could set the pace for another increase. In the stated case, the pair might rise toward 1.1750.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.1590. The next key support is at 1.1550. If there is a downside break below 1.1550, the pair could drop toward 1.1520. The next support is near 1.1485, below which the pair could start a major decline.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a fresh upward move from the 145.75 zone. The US Dollar gained bullish momentum above 146.55 against the Japanese Yen.

It even cleared the 50-hour simple moving average and 148.00. The pair climbed above 149.00 and traded as high as 149.18. The pair is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 145.74 swing low to the 149.18 high.

The current price action above the 148.50 level is positive. There is also a key bullish trend line forming with support at 148.40. Immediate resistance on the USD/JPY chart is near 149.20.

The first major resistance is near 149.50. If there is a close above the 149.50 level and the RSI moves above 70, the pair could rise toward 150.50. The next major resistance is near 152.00, above which the pair could test 155.00 in the coming days.

On the downside, the first major support is 148.40 and the trend line. The next major support is visible near the 147.90 level. If there is a close below 147.90, the pair could decline steadily.

In the stated case, the pair might drop toward the 147.50 support zone and the 50% Fib retracement level of the upward move from the 145.74 swing low to the 149.18 high. The next stop for the bears may perhaps be near the 146.55 region.

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The British pound has stabilized on Wednesday and is trading at 1.3389 in the European session, up 0.07% on the day. This follows a four-day losing streak in which GBP/USD dropped 1.5%. On Tuesday, the pound fell as low as 1.3378, its lowest level since June 23.

UK inflation hotter than expected

Today's UK inflation report brought news that the Bank of England would have preferred not to hear. UK inflation in June jumped to 3.6% y/y, up from 3.4% in May and above the market estimate of 3.4%. This was the highest level since January 2024 and is a stark reminder that inflation is far from being beaten. The main drivers of inflation were higher food and transport prices. Services inflation, which has been persistently high, remained steady at 4.7%. Monthly, CPI ticked up to 0.3% from 0.2%, above the market estimate of 0.2%.

It was a similar story for core CPI, which rose to 3.7% y/y from 3.5% in May, above the market estimate of 3.5%. Monthly, core CPI climbed 0.4%, above 0.2% which was also the market estimate.

The hot inflation report will make it more difficult for the BoE to lower interest rates and the money markets have responded by paring expectations of further rate cuts. Still, expectations are that the BoE will cut rates at the August 7 meeting, with a probability of around 80%, despite today’s higher-than-expected inflation numbers.

The UK releases wage growth on Thursday, which is the final tier-1 event prior to the August meeting. Wage growth has been trending lower in recent months and if that continues in the May reading, that could cement an August rate cut.

GBP/USD Technical

• GBP/USD is testing resistance at 1.3381. Next, there is resistance at 1.3399 and 1.3409
• There is support at 1.3371 and 1.3353

GBPUSD 1-Day Chart, July 16, 2025

Eurozone goods exports rose 0.9% yoy in May to EUR 242.6B, outpacing a -0.6% yoy drop in imports to EUR 226.5B, leading to a trade surplus of EUR 16.2B. Intra-Eurozone trade also grew 1.4% yoy to EUR 219.1B, indicating resilient domestic supply chains within the bloc.

For the broader European Union, exports rose just 0.1% yoy while imports fell -2.0% yoy, producing a EUR 13.1B surplus. Bilateral data shows continued divergence: EU exports to the US rose 4.4% yoy while imports from the U.S. fell -7.4%. Exports to China dropped -11.2% yoy, while imports from China rose 3.4%. EU-UK trade data showed a 2.5% yoy increase in exports and a -7.1% drop in imports.

Full Eurozone trade balance release here.

The GBP/USD pair has slowed its decline, stabilising near 1.3391.

On the previous day, Bank of England Governor Andrew Bailey addressed key global economic challenges in a speech at Mansion House. He described the latest wave of trade tariffs as a systemic event capable of reshaping global trade dynamics. Bailey highlighted growing domestic imbalances in the US and weak domestic demand in China, urging both nations to clarify their strategies for addressing these issues.

However, Bailey clarified that not all trade imbalances are inherently problematic – many stem from productivity disparities between nations. Yet, he warned that widening macroeconomic and political divergences are increasing systemic fragility. Recent developments, he added, have exposed weaknesses in multilateral cooperation and a failure to tackle emerging challenges effectively.

The Governor also stressed the International Monetary Fund’s (IMF) role in mitigating global imbalances, calling for more proactive international institutions. He attributed distortions primarily to domestic economic policies, cautioning that without reform, global financial stability could be at risk.

While current imbalances remain manageable by historical standards, Bailey warned against complacency. A comprehensive reassessment of policy approaches is essential to ensure the stability and predictability of the financial system.

Technical Analysis: GBP/USD

H4 Chart:

On the H4 chart, the GBP/USD pair has declined to the 1.3450 level, where a consolidation range has now formed. The pair has broken out to the downside, reaching 1.3378. Today, a short-term rebound to 1.3415 (as a retest from below) is possible. However, if resistance holds, the pair may resume its decline towards 1.3296. Upon completion of this downward wave, a potential bounce towards 1.3450 could follow. Technically, this scenario is confirmed by the MACD indicator, whose signal line is below zero and pointing firmly downward.

H1 Chart:

On the H1 chart, the GBP/USD pair is extending the third wave of its decline, with a local target at 1.3296. Once this level is reached, a correction towards 1.3460 could unfold. Technically, this scenario is supported by the Stochastic oscillator, with its signal line below 80 and trending sharply downwards towards 20.

Conclusion

Bearish momentum persists, with key support levels in focus. A short-term pullback remains possible, but the broader downtrend is likely to continue unless a significant shift in fundamentals occurs.

Daily Pivots: (S1) 198.44; (P) 198.99; (R1) 199.76; More...

GBP/JPY is staying in range below 199.80 and intraday bias remains neutral. Some more consolidations could be seen first. While deeper retreat cannot be ruled out, further rise is expected as long as 195.33 support holds. On the upside, break of 199.80 will resume the rally from 184.35 and target 100% projection of 180.00 to 199.79 from 184.35 at 204.14.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 172.25; (P) 172.66; (R1) 173.12; More...

Intraday bias in EUR/JPY remains on the upside as rise from 154.77 is in progress. Next target is 138.2% projection of 154.77 to 164.16 from 161.06 at 174.03. On the downside, below 170.78 support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, price actions from 175.41 (2024 high) are seen as correction to up trend from 114.42 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. Meanwhile, decisive break of 175.41 will confirm long term up trend resumption.

Daily Pivots: (S1) 0.8654; (P) 0.8675; (R1) 0.8690; More...

Intraday bias in EUR/GBP is turned neutral first with current retreat. Further rise is expected as long as 0.8607 support holds. Above 0.8695 will target 0.8737 high. Decisive break there will resume the whole rise from 0.8221 low, and target 0.8867 fibonacci level. Nevertheless, considering bearish divergence condition in 4H MACD< firm break of 0.8607 will argue that rebound from 0.8354 has completed, and turn bias back to the downside for 55 D EMA (now at 0.8528).

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, firm break of 0.8737 will still pave the way to 61.8% retracement of 0.9267 to 0.8221 at 0.8867.