Forex News

• NZD/USD holds nearly flat around 0.5785 after giving back part of its earlier rebound.
• Softer US consumer confidence and slowing private-sector hiring limit demand for the Greenback.
• The Fed’s policy guidance will likely determine whether the pair extends its recovery or resumes its decline.

NZD/USD trades nearly unchanged around the 0.5785 area on Tuesday, struggling to extend its earlier recovery despite a modest decline in the US Dollar (USD). The pair rebounded from recent lows but lost momentum as investors avoided large positions ahead of Wednesday’s Federal Reserve (Fed) monetary-policy announcement.

The Greenback came under pressure after the Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. US private employers also added an average of only 15K jobs per week during the four weeks ending July 11, according to the NER Pulse report, indicating that hiring slowed for a fifth consecutive week.

The New Zealand Dollar (NZD) receives some support from the sharp decline in oil prices, as lower energy costs improve the outlook for New Zealand, which relies heavily on imported fuel. However, cautious market sentiment and uncertainty surrounding the Fed’s guidance continue to limit the Kiwi’s recovery.

The Fed is expected to leave interest rates unchanged on Wednesday. Investors will focus on the policy statement and Chair Kevin Warsh’s press conference for signals regarding future adjustments. A hawkish message could strengthen the US Dollar and push NZD/USD back toward its recent lows, while cautious guidance could support another recovery attempt.

Technical Analysis:

On the 4-hour chart, NZD/USD trades at 0.5788. The pair is hovering just above both the 20-period simple moving average (SMA) at 0.5783 and the 100-period SMA at 0.5787, hinting at a fragile attempt to build a base after recent weakness, though the cluster of nearby horizontal levels keeps the near-term bias broadly neutral. The Relative Strength Index (14) at 47.8 sits slightly below the 50 line, suggesting a lack of strong directional momentum as price consolidates around its short- and medium-term averages.

On the topside, initial resistance emerges at 0.5791, followed by another nearby barrier at 0.5799, where recent supply has tended to cap rebounds; a break above these caps would open the way toward 0.5907, then 0.5930 and 0.5965. On the downside, immediate support is reinforced by the 100-period SMA at 0.5787 and the horizontal level at 0.5785, with the 20-period SMA at 0.5783 and the subsequent floor at 0.5779 guarding against a deeper pullback; a sustained move below this latter zone would undermine the nascent base-building tone.

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

Rabobank’s strategists Mauricio Une and Renan Alves note that tensions between the United States (US) and Iran have eased slightly with a pause in hostilities, but the outlook for global energy and markets remains highly uncertain. Brent Oil again approached US$100, while the US Dollar (USD) ended last week at Brazilian Real (BRL) 5.0831. Rabobank projects USD/BRL at 5.35 by year-end, citing narrowing rate differentials and Brazil’s fragile fiscal backdrop.

De-escalation pause but risks linger

"Following several days of escalation, the weekend was marked by the continued pause in hostilities between the United States and Iran, representing the first tangible sign of de-escalation in nearly two weeks."

"Even so, the environment remains characterized by significant uncertainty."

"The U.S. dollar closed the previous week at BRL 5.0831, implying a 0.56% appreciation of the Brazilian real against the dollar during the week, the seventh-best performance among 24 emerging-market currencies."

"Given expectations of a narrower interest-rate differential between Brazil and advanced economies throughout 2026, together with a potential recovery of the U.S. dollar globally amid Brazil’s fragile fiscal backdrop and an election year, we expect the exchange rate to reach BRL 5.35 per U.S. dollar by year-end."

"Tensions between the United States and Iran remained elevated, sustaining concerns over global energy supply and pushing Brent crude oil prices closer to US$100 per barrel, although prices partially eased toward the end of the week."

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

BNY strategists John Velis and David Tam see elevated US supercore inflation as a key argument for further tightening but still favor a July hold. They note that core services ex shelter has run above its pre-COVID pace and discuss Chair Kevin Warsh’s Inflation Frameworks Task Force, which will reassess measures like trimmed mean inflation and their policy implications.

Supercore pressures and task force review

"The most compelling argument for a rate hike remains the inflation rate. We don’t view Chair Kevin Warsh’s frequent (of late) references to price stability to axiomatically indicate a new hawkish direction from the Fed, but we do acknowledge that other speakers have gone on record that they view inflation as not only too high but also reflecting upward pressures beyond mere tariff effects and the supply shock from the Middle East. We share that concern, and note that since mid-2023, so-called “supercore” (i.e., core services inflation ex shelter) has been running at nearly a percentage point above its pre-COVID pace."

"So why, then, not raise rates this week? First, we don’t find the arguments for a hike completely persuasive, although we acknowledge (again) that the meeting is a close call and supercore inflation has caught our eye for a while. While we don’t dismiss sticky supercore inflation, it’s steady and hasn’t been rising."

"Furthermore, much of the increase in this important inflation subcategory is from transportation services – notably airfares, which are obviously affected by the energy shock. Other components keeping the pressure on services are health care costs – representing rising insurance premiums, themselves impacted by reduced Obamacare subsidies – and financial services. Transportation and health care together contribute 0.7% to the 3.0% increase in supercore. None of these are particularly sensitive to tighter monetary policy."

"Warsh has said that the Inflation Frameworks Task Force will examine “the drivers of inflation, first principles, and weigh the full range of ideas for delivering price stability in a changing economy.” The use of “first principles” is noteworthy because, though the Fed formally targets headline PCE, Warsh has at times signaled that he favors other measures, such as a form of trimmed mean inflation."

"Crucially, while trimmed mean inflation understated rising inflation in the aftermath of COVID relative to core y/y PCE, it need not always be dovish. In a period of disinflation driven by specific volatile components, trimmed mean would also understate disinflation. In the wake of the global financial crisis, with headline inflation falling quickly in late 2008, while the Dallas trimmed mean took until mid-2009 to show a similar decline."

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

Here is what you need to know for Wednesday, July 29:

The US Dollar (USD) trades slightly lower on Tuesday as investors reduce some exposure ahead of Wednesday’s Federal Reserve (Fed) monetary policy announcement. The Greenback remains close to its recent monthly high, however, as markets continue to consider the possibility of a surprise interest rate increase. Softer US Consumer Confidence data also limits demand for the currency.

The US Dollar Index (DXY) falls around 0.1% and trades near 101.40. The Fed is generally expected to maintain the fed funds target range at 3.50%–3.75%, although markets assign close to a 40% probability of a 25-basis-point increase. Investors will focus on the policy statement and Chair Kevin Warsh’s press conference for signals regarding a possible September move.

EUR/USD rises around 0.2% and trades near 1.1390, benefiting from the modest retreat in the US Dollar. The pair remains below 1.1400 as investors avoid taking large positions ahead of the Fed decision.

GBP/USD holds marginally higher near 1.3290. Sterling’s movement remains limited as traders await the Fed before turning their attention to the Bank of England’s monetary policy announcement later in the week. The BoE is broadly expected to leave interest rates unchanged.

USD/JPY edges higher toward 163.84, keeping the Japanese Yen close to multi-decade lows. Elevated US Treasury yields and expectations that the Fed will retain a hawkish stance continue to support the pair. Japanese authorities remain alert to excessive currency movements as the Yen approaches levels that could increase the risk of intervention.

AUD/USD falls around 0.2% and trades close to 0.6975 as investors prepare for Australian inflation figures. Headline Consumer Price Index inflation is expected to rebound by 0.2% MoM in June after falling 0.7% previously, while the annual rate is forecast to remain at 4.0%. Trimmed Mean CPI is expected to rise 0.4% MoM, matching the previous increase. A hotter report could strengthen expectations of another Reserve Bank of Australia rate hike.

West Texas Intermediate (WTI) Oil tumbles more than 3.5% and trades near $79 per barrel, reaching its lowest area in over a week. Crude prices remain under pressure as the pause in US-Iran military strikes raises cautious hopes that diplomatic efforts could reduce supply risks in the Middle East.

Gold declines around 1.2% and trades near $4,027 per troy ounce. The non-yielding metal remains pressured by elevated Treasury yields and expectations that the Fed could maintain restrictive monetary policy for longer, despite the modest daily decline in the US Dollar.

Wednesday’s economic calendar

Australia will publish June headline and Trimmed Mean CPI figures, which could influence expectations surrounding the RBA’s next policy move. Switzerland will release the ZEW Expectations Survey, while the Bank of Canada will publish its Summary of Deliberations.

The main event will be the Federal Reserve’s interest rate decision and Kevin Warsh’s press conference. A surprise hike or clearly hawkish guidance could strengthen the US Dollar, while an unchanged decision accompanied by cautious commentary could trigger a deeper correction in the Greenback.

• USD/MXN falls below 17.50 for a third consecutive session as the Mexican Peso maintains its recent strength.
• Softer US consumer confidence and slowing private-sector hiring limit demand for the US Dollar ahead of the Fed decision.
• Mexico’s economy is expected to expand by 1.3% in the second quarter with annual growth forecast to accelerate to 1.5%.

USD/MXN trades around 17.40 on Tuesday, posting modest losses for a third consecutive session. The US Dollar (USD) retains a broadly firm tone despite softer-than-expected United States (US) data, as investors await the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

The Greenback came under some pressure after the Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. Meanwhile, US private employers added an average of 15K jobs per week during the four weeks ending July 11, according to the NER Pulse report, indicating that hiring momentum slowed for a fifth consecutive week.

The Mexican Peso (MXN), by contrast, benefits from the latest US tariff announcement. Washington imposed a 10% tariff on Mexican imports not covered by the United States-Mexico-Canada Agreement (USMCA), below the 12.5% rate applied to economies without a trade agreement. The comparatively lower levy helps preserve Mexico’s competitive advantage in the US market.

The Fed is widely expected to leave interest rates unchanged on Wednesday, placing the focus on its policy statement and guidance regarding future adjustments. Investors will assess whether officials remain concerned about persistent inflation or place greater emphasis on signs of weakening employment and consumer confidence.

Attention now turns to Mexico’s preliminary second-quarter Gross Domestic Product figures on Thursday. The economy is expected to have expanded by 1.3% during the quarter, recovering from the 0.6% contraction recorded in the first quarter. Annual growth is forecast at 1.5%, accelerating from the previous 0.2%.

Short-term technical analysis:

On the 4-hour chart, USD/MXN trades at 17.4349, retaining a modest bearish bias as the pair holds beneath a dense band of nearby resistance. Price remains capped below the 100-period Simple Moving Average (SMA) at 17.4657 and the 20-period SMA at 17.4722, suggesting rallies are being sold, while the Relative Strength Index (RSI) at 45.1 leans slightly bearish but stops short of oversold conditions, hinting at subdued downside momentum rather than an aggressive sell-off.

On the topside, initial resistance is aligned with the horizontal level at 17.4399, followed by 17.4584. Above these, the 100-period SMA at 17.4657 and the 20-period SMA at 17.4722 form a critical supply cluster, with further barriers at 17.4837 and 17.4928 that would need to give way to ease the current bearish tone. The 17.38 area, which marked the July 22 low, could act as an initial support level if USD/MXN extends its decline.expose USD/MXN to additional downside discovery until a new floor develops on the chart.

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

Commerzbank’s Norman Liebke reports that Silver has fallen from USD 70 to USD 57.50 per troy ounce and that the bank has lowered its forecasts, now seeing USD 67 by year-end and USD 80 by end‑2027. Despite substitution in solar and Indian import curbs, persistent market deficits and an expected Gold recovery are seen underpinning higher Silver prices ahead.

Deficits and Gold seen lifting Silver

"Nevertheless, the silver price is likely to continue rising in the coming months: According to forecasts by the Silver Institute and the research firm Metals Focus, the silver market was in a supply deficit for the fifth consecutive year last year."

"Another deficit is expected this year, as supply is projected to decline more sharply than demand."

"In addition to the fundamentals and the tight market, the rise in the gold price we anticipate is the main driver of the expected rise in the silver price."

"By year-end, we expect the silver price to reach USD 67 per troy ounce (previously: USD 80) and USD 80 by the end of 2027 (previously: USD 90)."

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

• USD/JPY remains near 163.80 despite softer US consumer confidence figures.
• Trump says he wants to avoid targeting Iranian power plants and bridges but maintains pressure on Tehran to reach a deal.
• Tokyo core CPI is expected to rise to 1.7% YoY, while unemployment is forecast to remain at 2.5%.

USD/JPY trades slightly higher near the 163.80 area on Tuesday, remaining close to multi-decade highs as the Japanese Yen (JPY) struggles to attract demand. Softer United States (US) consumer confidence data limited the US Dollar’s advance, although the pair maintained its upward bias.

The Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. The Present Situation Index fell for a third consecutive month to 114.9, while the Expectations Index remained unchanged at 74.7, suggesting that US households remain cautious about business and labor market conditions.

Geopolitical uncertainty also remains in focus. US President Donald Trump said Washington has a “very strong position” with Iran and described Pickaxe Mountain as “not a big problem.” Trump added that he would prefer to avoid attacking power plants and bridges and said he was “not looking to do that,” although he maintained that the US could strike additional targets if Tehran fails to reach an agreement.

Investors now await Tokyo inflation and employment figures. Tokyo CPI excluding fresh food is expected to accelerate to 1.7% YoY in July from 1.6%, while headline inflation previously stood at 1.7%. CPI excluding food and energy was previously 1.9%, and Japan’s Unemployment Rate is forecast to remain unchanged at 2.5%.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 163.85. The pair retains a bullish near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at 163.76 and the 100-period SMA at 162.65, keeping the broader uptrend structure intact despite recent consolidation. The Relative Strength Index (RSI) at 60.60 has eased from overbought territory but still points to constructive momentum, suggesting dips are likely to attract buyers while the price remains supported by these averages.

On the topside, immediate resistance is located at the recent horizontal cap near 163.96, where a clear break would open the way for a fresh leg higher. On the downside, initial support aligns around 163.76, where a horizontal level converges with the 20-period SMA, followed by additional cushions at 163.64 and 163.59; a deeper pullback toward the 100-period SMA at 162.65 would be needed to materially challenge the prevailing bullish structure.

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

• USD/CHF retreats from multi-month highs as traders await the Federal Reserve interest rate decision.
• The Fed is expected to keep rates unchanged while maintaining a hawkish policy stance.
• The SNB’s zero-interest-rate policy keeps the Franc attractive for carry trades, limiting the scope for a sustained recovery.

The Swiss Franc (CHF) steadies against the US Dollar (USD) on Tuesday as the Greenback gives up its early gains, with traders turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. At the time of writing, USD/CHF trades flat around 0.8184, retreating from an intraday high of 0.8205, its highest level since June 2025.

The Greenback weakens as Oil prices extend their pullback following a pause in attacks between the United States and Iran. Lower energy prices ease inflation concerns and drag US Treasury yields lower.

US President Donald Trump said on Tuesday that it was a “good time for Iran to make a deal,” but warned that the US would “go back and finish the job” if no agreement was reached.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades around 101.35, easing from 101.64, its highest level in a month.

US economic data offered little support. The Conference Board’s Consumer Confidence Index fell to 90.8 in July from an upwardly revised 92.2 in June.

The US central bank is widely expected to leave the federal funds rate unchanged at 3.50%-3.75%, although the CME FedWatch Tool shows that markets price in around a 30% chance of a 25-basis-point rate hike.

US inflation is running well above the Fed’s 2% target. While the pullback in Oil prices eases some immediate inflation concerns, upside risks persist. Even if the Fed leaves rates unchanged, policymakers are expected to retain a hawkish stance, which could keep the US Dollar supported.

Meanwhile, the Swiss Franc has been among the worst-performing major currencies since the US-Iran war began. The Swiss National Bank's (SNB) zero-interest-rate policy makes the Franc attractive for carry trades, while broad-based US Dollar strength and the central bank’s readiness to counter excessive Franc appreciation add to the pressure.

• DJIA adds close to 700 points to trade just short of 52,900, roughly 450 points beneath the record set in the first week of July.
• Healthcare and financials reach record highs, while the technology sector sits at its lowest level since early May.
• Both conditions the rotation depends on, cheaper energy and a rate curve that stays put, get tested inside 48 hours.

The Dow Jones Industrial Average (DJIA) trades just short of 52,900 on Tuesday, higher by close to 700 points and 1.3%, roughly 450 points beneath the record it set in the first week of July. Taken alone, that reads as a broad risk rally. One index over, the semiconductor complex is in a drawdown that has taken more than 20% out of the sector this month, and Korea's benchmark tripped its ninth circuit breaker of the year overnight on a fall of nearly 11%.

The selling has a destination

Nine of the 11 S&P 500 sectors trade higher on the session. Healthcare and financials both reach record highs, led by insurers, while consumer staples add close to 4% on the strength of a single earnings report. The technology sector, on the same tape, sits at its lowest level since the first week of May.

That is not a market selling off but a market changing seats. Cash exiting the names that carried the tape to records has to arrive somewhere, and it is arriving in exactly the old-economy exposure the DJIA is built out of. The leap is real. A good part of it is also borrowed.

An index that cannot feel the rout

Price weighting converts a pair of earnings beats into an outsized number of index points. Sherwin-Williams (SHW) adds 8% on a second-quarter beat and a raised full-year outlook, and as one of the highest-priced names in the thirty it pulls more index points behind it than any equal-weighted structure would grant. Coca-Cola (KO) adds 5% on a beat at both lines with guidance lifted alongside it.

Micron (MU) falls about 9% and Advanced Micro Devices (AMD) about 6% in the same session, and neither costs the index a single point, because neither is a member. Nvidia (NVDA) is the only chipmaker in the thirty, and the largest names in that complex have been handled far more gently this month than memory and equipment makers down 20% to 50%. What the benchmark does not carry matters more than what it does.

Software supplies the rest of the lift, with Microsoft (MSFT) adding 2% and Salesforce (CRM) 5%, both of them members, while Apple (AAPL) leads through a $5 trillion market value ahead of its own results later this week. The composition that made this index look sluggish through two years of an artificial intelligence melt-up is the composition paying now.

Two conditions, both tested inside 48 hours

The rotation into cyclical and rate-sensitive exposure runs on two things, cheaper energy and a rate curve that does not shift higher. Crude Oil is delivering on the first, with West Texas Intermediate roughly 5% lower near $78.00 and Brent just below $84.00, a decline driven by diplomacy rather than by barrels.

Iran's foreign ministry held separate calls with its Saudi and Omani counterparts on the Strait of Hormuz, and Muscat has reportedly put a Gulf-backed plan in front of Tehran built on voluntary transit contributions rather than tolls imposed by Iran. Trump publicly credits the exchanges as productive, while Tehran denies that any direct negotiation with Washington is under way. Verified transits through the Strait ran to fewer than 30 across the entire weekend, against roughly 100 vessels a day before the war.

The second condition gets its answer at 18:00 GMT on Wednesday. A hold at 3.75% is the base case, with futures pricing the July increase near one in three and cumulative odds of at least one hike by the September meeting close to 80%. Four de-escalations since April have bought equity index points and no relief whatsoever at the front end of the curve.

The week's real tests

Wednesday's statement lands at 18:00 GMT with the press conference at 18:30 GMT. Forward guidance has been struck from the statement, so the vote tally carries the message, and a hold arriving with dissents reads nothing like the unanimous hold delivered in June.

Thursday at 12:30 GMT brings the June Personal Consumption Expenditures (PCE) price data. The PCE headline gauge is seen at -0.1% MoM and 3.7% YoY from 4.1%, with the core measure at 0.2% MoM and 3.3% YoY. Second-quarter Gross Domestic Product arrives in the same window at 2.1% annualized, alongside Initial Jobless Claims seen at 200K against 187K.

Friday fills in the wage and survey side, with the second-quarter Employment Cost Index at 0.8%, the Chicago Purchasing Managers Index at 56 and Michigan Sentiment at 54. The one-year inflation expectation is seen unchanged at 4.2%, and that is the figure deciding whether this month's energy relief has reached the household yet.

Levels and bias

Resistance: The session high just short of 52,900 is the immediate line, and clearing it opens the 53,000 handle with the record just above 53,300 as the objective beyond.

Support: The 52,600 area is the first shelf beneath spot, then the 52,200 area carrying both the session low and Monday's close. The 52,000 handle sits under that, with the 50-day Exponential Moving Average near 51,600 the trend defence of last resort.

Bias: Bullish above the 52,600 area, objective the record just above 53,300, invalidation on a daily close back beneath 52,200. The daily Stochastic Relative Strength Index near 20 is describing the range the index just left rather than the breakout it is making, while the five-minute reading above 90 puts the stretch squarely intraday, so the near-term risk is a pause and not a reversal.

Dow Jones daily chart

• EUR/GBP trades above 0.8550, on track for its eighth gain in nine sessions and more than a hundred pips above the mid-July low just over 0.8450.
• The posted policy-rate gap has not moved a basis point since June, so this recovery is a repricing of the British side rather than a European revival.
• Thursday delivers euro-area second-quarter growth at 09:00 GMT and a Bank of England decision at 11:00 GMT, with a fresh forecast round and a press briefing attached.

The Euro is on track for its eighth gain in nine sessions against the Pound, and the explanation that would normally cover a run of that length is not available. Bank Rate sits 150 basis points above the European Central Bank deposit rate, precisely where it has sat since the middle of June, and that spread is what dragged this cross to a one-year low in the first place. The gap has not moved. The cross has.

The spread that never narrowed

Currencies do not trade the rate differential printed on the screen. They trade the one the forward curve expects to exist in six months, which is how a cross can sit still for weeks under an enormous posted gap and then travel a full percent while that gap is unchanged. Since the middle of July the expected differential has narrowed steadily, and almost all of that narrowing has come from the British side.

The mid-July low just over 0.8450 marked the point of maximum agreement that the Bank of England would stay restrictive for longer than the European Central Bank. That view has been taken apart in stages since, mostly by British data and partly by a European central bank that has quietly told the market it has more to do.

One committee is loading while the other unloads

The European Central Bank held at 2.25% on 23 July, unanimously, then used the press briefing to make a September move sound close to inevitable. The President disclosed that some Governing Council members had asked whether rates should rise immediately, and warned that the longer energy costs stay elevated, the more likely they are to leak into broader prices through second-round effects. Roughly 70% odds of a quarter-point September move are now priced, with fresh staff projections landing at that meeting.

The Bank of England arrives on Thursday with the opposite problem. June Consumer Price Index (CPI) inflation cooled to 2.6% with services down to 3.6%, pay growth is decelerating, and forecasters expect the new Monetary Policy Report to show inflation peaking near 3% later this year. That projected peak is the whole argument, because a peak nearer 4% has previously been treated as the point at which second-round effects become statistically likely. A forecast topping out a full percentage point below that line disarms the Committee's own hawks.

Both tightening cases rest on the same barrel of Crude Oil, which is the part nobody is pricing consistently. The Gulf stand-down has pulled energy well off its July highs and weakened the inflation impulse on both sides of the Channel, and yet only one front end has repriced for it.

What the Pound was actually paid for in July

July was the best month the Pound has had in years, and it stood on three legs. Political risk unwound as an uncontested succession replaced the contest markets had feared, speculative shorts covered into the move, and traders held a firm expectation of another Bank of England hike before year-end.

Two of those legs have already been collected. The political premium was released the day Andy Burnham walked into Downing Street, and the hike expectation has been draining away since the June inflation print. What is left is carry, a thin defence for a currency heading into an October Budget with the highest long-end government yields in the Group of Seven behind it and borrowing above the official forecast.

Positioning tells the same story from the other end. One widely watched measure had the Pound more technically stretched against the Euro than at any point since before the Brexit referendum, and a July survey of investment banks found a clear majority expecting this cross back into the 0.8700 to 0.8900 area through 2027. Crowded trades do not need bad news to unwind, only the absence of fresh good news.

Thursday does the deciding

Thursday opens at 09:00 GMT with preliminary euro-area second-quarter growth, consensus 0.2% QoQ against a 0.2% contraction previously and 0.5% YoY from 0.3%. Unemployment is seen holding at 6.2% and the Economic Sentiment Indicator improving to 96 from 95. Friday adds the euro-area flash inflation estimate, headline seen at 2.9% YoY from 2.8% with core steady at 2.4%.

The Bank of England follows at 11:00 GMT, consensus a hold at 3.75% on a 7-2 vote, none for a cut and two again preferring 4.00%, with the Monetary Policy Report and minutes attached and a press briefing half an hour later. The hold carries no risk because it is fully priced, which leaves the vote split as the only live variable, and the asymmetry there runs one way. A third hawkish dissent would be a real shock against a forecast round showing a lower peak, while an 8-1 split or a unanimous hold confirms what that forecast already implies.

Technical levels

Resistance: The 50-day Exponential Moving Average just under 0.8600 is the first obstacle, and price has traded beneath it since late June. Above it sits the 0.8600 handle, then the declining 200-day Exponential Moving Average just under 0.8650, the level separating a retracement from a trend change.

Support: The 0.8550 shelf is immediate, defended at the session low just underneath. Beneath that, 0.8500 is the first real test of the recovery, with the mid-July base just over 0.8450 the line that ends it.

Bias: Bullish while above 0.8550, with the daily Stochastic Relative Strength Index turning up out of its July trough and Thursday's event risk skewed toward a softer British outcome. Objectives are the 50-day average just under 0.8600 and then the 0.8600 handle, with 0.8650 the decision point. Invalidation on a daily close back beneath 0.8500.

EUR/GBP daily chart