Forex News

• Red Sea tanker attacks lift Oil and Fed tightening bets.
• Markets price higher July hike risk before Fed decision.
• ECB hold and Lagarde remarks guide Euro’s next move.

The EUR/USD consolidates near 1.1400 late on Wednesday, up a modest 0.08%, as it consolidates, with the shared currency failing to capitalise on overall US Dollar weakness across the board.

EUR/USD steadies as Middle East escalation limits Dollar downside

The escalation of the US-Iran war might boost the Greenback in the near-term. US President Donald Trump warned Iran that any ship attacked would trigger retaliation, which includes bombing a bridge or power plants near Iran’s capital.

The US continued its attacks for the twelfth consecutive day. Meanwhile, the UK Maritime Trade Operations (UKMTO) reported an attack to a tanker within the Red Sea. Recently, Yemen’s Houthis announced that they attacked two Saudi oil tankers.

This pushed Oil prices higher, as West Texas Intermediate (WTI) rose nearly 8% to $88 per barrel, increasing the chances that the Federal Reserve could tighten monetary policy sooner rather than later.

Money markets had priced in a 63% that the US central bank will keep rates unchanged at the July 29 meeting. This leaves a 37% chance of a rate hike, up from 23% a day ago, according to Prime Terminal data.

On Thursday, the European Central Bank (ECB) will release its latest monetary policy decision, in which the central bank is expected to hold the ECB FRate On Deposit Facility unchanged at 2.25%. After the decision, eyes would be on the press conference led by ECB President Christine Lagarde.

Across the pond, the US economic schedule will be light, with the release of Initial Jobless Claims for the week ending July 18, which are expected to rise from 208K to 212K.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1408, keeping a bearish near-term bias as spot holds beneath the latest triple simple moving average at 1.1510 and within a downward parallel channel. The pair is trading just over the channel floor at 1.1396, while the prior downtrend resistance line’s break level at 1.1574 and the channel top at 1.1570 remain well overhead, suggesting rallies are likely to be capped. The Relative Strength Index (14) at 43.38 stays below the neutral 50 mark, hinting at weak but not oversold downside momentum in line with the prevailing structure.

On the topside, initial resistance is seen at the clustered area formed by the triple simple moving average around 1.1510, followed by the channel’s upper boundary near 1.1570 and the former trend-line break point at 1.1574, ahead of a stronger horizontal barrier at 1.1849. On the downside, immediate support sits at the bottom of the descending channel near 1.1396; a sustained break below this level would open the way for an extension of the current bearish phase toward lower psychological levels.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/CNH consolidating in the near term after recent downside moves. Their 24-hour view expects the Dollar to trade between 6.7635 and 6.7755 as downward pressure has eased. Over the 1–3 week horizon, they still anticipate a downside bias toward 6.7600 while 6.7820 caps the upside.

USD/CNH downside bias holds below resistance

"24-HOUR VIEW: Following Monday’s price action, we highlighted the following yesterday: “Downward momentum is building, and USD is likely to trade with a downside bias today. That said, USD does not appear to have enough momentum to break below 6.7600. To sustain the momentum build-up, USD must hold below 6.7755.” We were not wrong, as USD dipped to a low of 6.7635 before closing largely unchanged at 6.7688 (-0.02%). Downward pressure appears to have eased, and today, we expect USD to consolidate, most likely between 6.7635 and 6.7755."

"1-3 WEEKS VIEW: Our most recent narrative was from last Wednesday (15 Jul, spot at 6.7720), when we highlighted that “downward momentum is increasing, and USD is likely to trade with a downside bias toward 6.7600.” While the downside bias remains intact as USD eked out a fresh low of 6.7635 yesterday, downward momentum has slowed somewhat. That said, there is still a chance for USD to decline to 6.7600 as long as 6.7820 (no change in ‘strong resistance’ level) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• NZD/USD trades lower near 0.5820 despite stronger-than-expected New Zealand inflation data.
• New Zealand CPI rose 1.5% QoQ and 4.1% YoY, reinforcing expectations that the RBNZ may maintain a restrictive policy stance.
• US Initial Jobless Claims are expected to rise to 212K, with a stronger labor-market reading potentially adding pressure on the pair.

NZD/USD trades lower near the 0.5820 area on Wednesday, extending its recent pullback as the New Zealand Dollar (NZD) struggles to benefit from stronger-than-expected domestic inflation data.

New Zealand’s Consumer Price Index rose 1.5% QoQ in the second quarter, above the 1.4% market forecast and accelerating sharply from the previous 0.9% increase. On an annual basis, inflation climbed to 4.1% from 3.1%, also exceeding expectations of 4.0%.

The hotter inflation figures could reinforce expectations that the Reserve Bank of New Zealand will maintain a restrictive monetary-policy stance or consider further interest-rate increases. However, the Kiwi has failed to sustain a recovery as geopolitical uncertainty and cautious market sentiment continue to support demand for the US Dollar.

Investors will also monitor US Initial Jobless Claims, which are expected to rise modestly to 212K from 208K. A lower-than-expected reading would indicate that the US labor market remains resilient and could place additional pressure on NZD/USD.

Despite New Zealand’s elevated inflation, the pair remains under pressure near 0.5820, suggesting that broader US Dollar demand is currently outweighing domestic support for the Kiwi.

Short-term technical Analysis:

In the four-hour chart, NZD/USD trades at 0.5816, maintaining a mildly bearish, capped tone as it holds under the 20-period simple moving average (SMA) at 0.5839 and a tight band of nearby horizontal resistance starting at 0.5817. The pair remains supported by the 100-period SMA at 0.5763 and minor horizontal demand at 0.5810, though the Relative Strength Index (RSI) near 41 suggests subdued upside momentum after the recent pullback from the mid-0.58s.

On the topside, immediate resistance is clustered at 0.5817, 0.5823 and 0.5834, with the 20-period SMA at 0.5839 reinforcing this short-term supply area before stronger barriers at 0.5907, 0.5930 and 0.5965. On the downside, initial support is seen at 0.5810, ahead of the 100-period SMA at 0.5763, where a break would likely open the way to a deeper decline in the near term.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

DBS Group Research economist Ma Tieying analyses South Korea’s new South Korean Won (KRW) internationalisation roadmap, unveiled by the Ministry of Finance and Economy, Bank of Korea and Financial Services Commission. The plan includes an offshore won market, 24-hour trading infrastructure and regulatory easing. Tieying expects these structural reforms, together with narrowing USD/KRW rate differentials, KOSPI-linked dynamics and a widening trade surplus, to support moderate KRW recovery in 2H26 and beyond.

Structural reforms and cyclical tailwinds for KRW

"The Ministry of Finance and Economy, together with the Bank of Korea and the Financial Services Commission, announced the KRW internationalization roadmap on July 19."

"Key measures include establishing an offshore won market, developing 24-hour won trading and settlement infrastructure, easing foreign exchange transaction regulations, and expanding the range of available won-denominated assets."

"The roadmap could provide structural support for the won over the medium to long term."

"If successfully implemented, broader use of the won in trade settlement, investment, and financial transactions could generate stronger global demand for KRW."

"From a short-term cyclical perspective, the KRW is benefiting from several emerging tailwinds."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• The Australian Unemployment Rate is forecast to hold steady at 4.4% in June.
• Australia is expected to have added 15K jobs in the month, fewer than the 40.3K gained in May.
• AUD/USD battles to extend gains beyond the 0.7000 mark. 

Australia will publish the June monthly employment report on Thursday at 01:30 GMT, and market participants expect a modest increase in job creation in the land Down Under. The Australian Bureau of Statistics (ABS) is expected to announce that the country added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%, unchanged from May. The Participation Rate, in the meantime, stood at 66.7% in the previous month.

The ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs entail working 38 hours or more per week, usually include additional benefits, and typically provide a consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs. In May, Australia added 32.5K part-time positions and a modest 5.2K full-time ones.

Australian unemployment rate seen steady in June

The Australian data release, barring any huge surprise, could be overshadowed by the market’s sentiment. Mounting tensions in the Middle East are driving firmer Oil prices once again, which lately tend to result in a stronger US Dollar (USD) amid concerns inflation will soar and trigger a response from the Federal Reserve (Fed). However, the Greenback is having a hard time gaining momentum these days. The Australian Dollar (AUD) had been outpacing its American rival for most of July, slowly but steadily grinding north after bottoming at 0.6865 late in June.

The USD's latest slow reaction to risk-related headlines has something to do with recent United States (US) inflation data: the June Consumer Price Index (CPI) grew at a much slower pace than anticipated, increasing by 3.5% YoY in the month against the 4.2% posted in May. The figures cooled rate hike expectations in the US, hence limiting demand for the American currency. The fact that Oil prices are on the rise and could translate into higher inflation in the upcoming months is not yet dipping into investors’ hearts.

Meanwhile, the Reserve Bank of Australia (RBA) decided to leave the Official Cash Rate (OCR) unchanged at 4.35% when it met in June, despite acknowledging that “headline and underlying inflation are still too high,” according to the monetary policy Board statement. The RBA, however, hiked rates three times so far in 2026. 

Officials also stated that “the Board is focused on its mandate to deliver price stability and full employment. It will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required.”

The decision to hold its fire in June, despite understanding the high risks, had to do with slowing Middle East tensions: The US and Iran had just signed a Memorandum of Understanding (MoU), declaring a 60-day ceasefire in which all parts involved were meant to negotiate a more sustainable peace.

But the MoU is now gone, as Washington and Tehran have been exchanging fire for almost two weeks, the Strait of Hormuz is once again closed, and talks are down the drain.

Back to the Australian employment-data release, the anticipated figures are unlikely to trigger a market reaction per se. The numbers are not enough to prompt an RBA repricing, as the focus remains on inflation rather than employment. The 4.4% Unemployment Rate is within what policymakers consider reasonable levels, and adding 15K new jobs, despite being a soft figure, would be far from concerning. 

A stronger-than-anticipated job creation number, coupled with a decreasing Unemployment Rate, hints at a tight labor market and hence could push the Aussie up amid fresh speculation for additional rate hikes. A dismal employment report, on the other hand, could help diminish concerns about the labor market’s strength, but it likely won’t be sufficient to consider a shift in the current hawkish monetary policy. In the near term, it could weigh on the AUD, but the Middle East conflict is likely to overshadow everything else.

When will the Australian employment report be released and how could it affect AUD/USD?

The ABS June employment report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%. Market participants will also be attentive to the breakdown of full-time and part-time positions. 

Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair hovers around the 0.7000 threshold ahead of the Australian employment data release, with gains beyond the level quickly resulting in retracements. So far this week, the pair peaked at 0.7026, but was unable to hold on to gains beyond the critical mark. Still, the pair is up for a fourth consecutive week.”

Bednarik adds: “The technical picture is neutral-to-bullish, according to the daily chart. The pair develops above a mildly bullish 20 Simple Moving Average (SMA), which provides dynamic support at around 0.6445. The 100 SMA stands directionless at around 0.7050, providing strong resistance should the pair gain upward momentum. Finally, technical indicators remain directionless, although well above their midlines, which skews the risk to the upside.”

RBA pause risks build as Australia jobs data seen undershooting

Analysts at Brown Brothers Harriman expect Australia’s June labor force survey, due Thursday, to show a cooling in momentum, with the economy “projected to add +15k jobs vs. +40.3k in May” and “the unemployment rate … unchanged at 4.4% for a second straight month.” They note that such an outcome “would be marginally higher than the RBA’s June unemployment rate projection of 4.2% and support the case for an extended pause to the bank’s tightening cycle.”

BBH underscores that the policy backdrop is already restrictive, pointing out that “the RBA projects real GDP growth to be below potential over the next two years” and that “the RBA cash rate at 4.35% currently sits near the top of the range of model-based central estimates of the nominal neutral rate.” While “RBA cash rate futures imply 60% odds of one final 25bps hike by year end to 4.60%,” the bank argues that “the risk is skewed towards a more extended pause in the RBA tightening cycle,” a stance it sees as “a headwind for AUD.”

The US Dollar trades slightly lower on Wednesday as markets remain cautious amid escalating tensions surrounding Iran and the Strait of Hormuz. The US Dollar Index (DXY) slips toward 101.10, helping the Euro recover modestly, while most other major currency pairs remain relatively stable.

Risk sentiment remains fragile after US President Donald Trump warned that Washington could strike Iranian infrastructure if Iran attacks another ship in the Strait of Hormuz. Concerns about a wider conflict and possible disruptions to global energy supplies are supporting oil and precious metals.

DXY falls slightly toward 101.13 as investors prepare for Thursday’s US Initial Jobless Claims. Claims are expected to rise to 212K from 208K, although the figures would still suggest that layoffs remain limited.

EUR/USD advances toward the 1.1410 area as the Greenback loses modest ground. Investors remain cautious ahead of the European Central Bank’s monetary policy decision. The ECB is expected to leave the Main Refinancing Operations Rate at 2.40% and the Deposit Facility Rate at 2.25%. President Christine Lagarde’s press conference will be closely watched for signals about future policy changes.

GBP/USD trades marginally lower near 1.3380 despite the softer US Dollar. The pair lacks a strong domestic catalyst ahead of the UK GfK Consumer Confidence report, which is expected to improve to -21 in July from -23.

USD/JPY remains virtually unchanged near 163.15, holding close to multi-decade highs. Rising oil prices continue to represent a challenge for Japan, a major energy importer, while geopolitical uncertainty supports demand for the US Dollar. Japan’s upcoming inflation report could influence expectations surrounding further Bank of Japan policy tightening.

AUD/USD edges lower toward 0.6995 as traders avoid taking large positions ahead of Australia’s June labor-market report. Employment is expected to increase by 15K after rising by 40.3K in May. The Unemployment Rate and Participation Rate are forecast to remain unchanged at 4.4% and 66.7%, respectively.

USD/CAD declines toward 1.4090 as the Canadian Dollar benefits from higher oil prices. Canadian Retail Sales are expected to rise 1.0% MoM in May, accelerating from 0.5%, while sales excluding automobiles are forecast to increase 1.4% after a 0.1% gain.

West Texas Intermediate (WTI) Oil rallies above $86.40 per barrel, gaining more than 2% as concerns about the security of energy shipments through the Strait of Hormuz intensify.

Gold climbs toward $4,135, advancing more than 1% as geopolitical uncertainty increases demand for traditional safe-haven assets.

Thursday’s preview

Australia’s employment report will begin a busy session, followed by the ECB interest-rate decision and Lagarde’s press conference. Markets will also monitor Canadian Retail Sales, US Initial Jobless Claims and Eurozone Consumer Confidence.

Later in the session, Australia’s preliminary July PMIs, UK Consumer Confidence and Japan’s June CPI report will be released. Japanese core inflation excluding fresh food is expected to accelerate to 1.6% YoY from 1.4%.

BNY’s Geoff Yu highlights that the Philippine central bank has intervened as higher Oil prices pressure Asian importers. Reported US Dollar (USD) sales followed the Peso’s drop to a record low near 61.75, with reserves already down more than 5% this year. iFlow data show Philippine Peso (PHP) holdings close to year-to-date lows, underscoring rising vulnerability and the need for vigilant policy.

Oil shock drives FX defense

"The Philippine and Indian central banks have both intervened to support their currencies as surging oil prices put renewed pressure on Asian oil importers. In the Philippines, the central bank reportedly sold dollars after the peso fell to a record low of 61.75 to the dollar, with higher oil prices threatening to widen the current account deficit and add to inflation pressure."

"Our flow data confirm that pressure is building. Sales have already pushed PHP holdings close to their lowest level YTD. The currency does not have the carry anchor seen elsewhere, which may require much greater BSP vigilance on interest rates, despite the obvious dampening impact on growth."

"Asia’s oil-importing currencies are already absorbing the shock. Japan remains at the verbal intervention stage, while the Philippines and India have moved into reported dollar selling to lean against FX weakness. This is not intervention from strength, but an attempt to slow the passthrough from higher oil into currencies, inflation and confidence."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/SGD is trading just above 1.29 after a quiet session, with momentum only tentatively firmer. They expect intraday consolidation between 1.2900 and 1.2930, while the broader 1–3 week view still flags a risk of a break below 1.2860, though odds are low as long as resistance at 1.2930 caps the pair.

USD/SGD stuck in tight band

"24-HOUR VIEW: Following Monday’s price action, we highlighted yesterday that “momentum indicators remain mostly flat,” and we expected USD to “trade in a range between 1.2895 and 1.2925.” Our view was not wrong, as USD traded within a range of 1.2893/1.2925. USD closed little changed at 1.2923 (+0.08%). There has been a tentative increase in upward momentum, but it is insufficient to indicate a continued rise. Today, USD is more likely to trade within a higher range of 1.2900/1.2930."

"1-3 WEEKS VIEW: Last Thursday (16 Jul, spot at 1.2885), we indicated that “downward momentum is starting to build, and should USD close below 1.2860, it could trigger a deeper decline.” Yesterday (21 Jul, spot at 1.2910), we highlighted the following: “USD traded in a quiet manner over the past few days, and downward momentum is starting to ease. However, as long as 1.2930 (‘strong resistance’ level) is not breached, the risk of USD breaking and closing below 1.2860 remains, though the odds are not high.” We continue to hold the same view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• GBP/JPY breaks support trendline, signaling downside risk below 218.00.
• RSI slopes toward 50, showing bullish momentum is fading.
• Break below 217.53 exposes 216.60 and 215.09 SMA.

GBP/JPY holds firm on Wednesday, with the cross-pair trading above the 218.00 figure, as sellers seem to have the upper hand, after a break of a key support trendline, which could open the door for further losses. At the time of writing, the cross trades at 218.16, down 0.05%.

GBP/JPY Price Forecast: Technical outlook

After reaching a yearly high of 219.61, GBP/JPY retreated 150 pips to the current exchange rate, opening the door for further downside.

The Relative Strength Index (RSI) remains bullish, but it is aiming lower, approaching the 50-neutral level, which could open the door to further downside. However, the market structure suggests that the downtrend stays intact.

For a bearish reversal, if GBP/JPY drops below the July 21 daily low of 217.53. A breach of the latter will expose the April 30 high of 216.60, followed by the 216.00 mark. Below, the next support would be the 50-day Simple Moving Average (SMA) at 215.09, followed by the 100-day SMA at 214.12.

Conversely, if GBP/JPY reaches 219.00, this opens the door to challenge the year-to-date (YTD) high at 219.61, followed by the 220.00 psychological level.

GBP/JPY Price Chart – Daily

Commerzbank’s FX research notes USD/CNY trading around 6.77, slightly lower on the day. The combination of weaker Chinese growth and expectations of further policy easing is seen generating a modest depreciation bias for the Yuan, though authorities are expected to cap volatility via the daily fixing mechanism.

Policy easing weighs but fixing caps swings

"China's State Council committed to meeting the full-year growth target after Q2 GDP came in at 4.3% yoy, missing the official 4.5%-5.0% target range. Premier Li Qiang chaired the State Council executive meeting, with the readout calling for fiscal funds to be deployed with maximum efficiency and for policy implementation to be accelerated through the remainder of the year."

"The State Council meeting is widely read as a preparatory signal ahead of the July Politburo meeting, expected to be held in the final week of July. It is set to define the macroeconomic policy stance for H2."

"The Politburo is expected to signal an easing rhetoric and accelerate implementation of already-planned demand-side measures, while maintaining the strategic focus on high-tech sectors and key supply chains. With local governments nearing completion of their debt-swapping programme at around 94% of the CNY6trn allowance, local governments are expected to deploy more growth-supporting investment in H2."

"In FX, USD/CNY was slightly lower by 10 pips to 6.77 and offshore USD/CNH was little changed at 6.77 yesterday. The combination of a growth shortfall and prospects of further policy easing is leading to a slight depreciation bias for CNY. However, PBoC is expected to limit excessive CNY volatility through its daily fixing mechanism."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)