Forex News

• EUR/USD nears three-week lows as the US Dollar strengthens.
• The pair trades below the 21-day, 50-day and 100-day SMAs, keeping sellers in control.
• Immediate resistance is seen at 1.1415, while 1.1350 remains key support.

EUR/USD trades on the back foot on Thursday as the expanding war in the Middle East pushes Oil prices higher and fuels hawkish Federal Reserve (Fed) expectations, boosting demand for the US Dollar (USD). Meanwhile, the European Central Bank’s (ECB) decision to leave interest rates unchanged draws little market reaction.

At the time of writing, the pair trades around 1.1379, near three-week lows. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.40, recovering from an intraday low of 100.94.

From a technical perspective, EUR/USD has formed a base above 1.1350, although downside risks are building. On the daily chart, the pair retains a bearish near-term bias while trading below the 21-day Simple Moving Average (SMA) at 1.1415 and the 50-day SMA at 1.1504, with the 100-day SMA at 1.1576 reinforcing the broader bearish structure.

The Relative Strength Index (RSI) at 39 remains below the neutral 50 mark, highlighting persistent bearish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is marginally positive, suggesting that buying momentum remains tentative despite signs of stabilization.

On the upside, initial resistance is seen at the 21-day SMA near 1.1415, followed by the 50-day SMA at 1.1504 and the 100-day SMA at 1.1576, ahead of the key horizontal resistance at 1.1700.

On the downside, immediate support lies at 1.1350. A sustained break below this level could expose the pair to deeper losses, while holding above it would reinforce the newly established base and keep the door open for a corrective rebound toward the nearby moving averages.

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

• Gold snaps a four-day winning streak as the US Dollar rebounds and US Treasury yields move higher.
• Hawkish Fed expectations weigh on Gold as rising energy prices fuel inflation concerns.
• XAU/USD faces resistance at $4,200 while hovering near the 21-day SMA at $4,070.

Gold (XAU/USD) loses ground on Thursday, snapping a four-day winning streak as the US Dollar (USD) rebounds, while the widening war in the Middle East drives Oil prices higher. At the time of writing, XAU/USD trades around $4,050 after hitting a two-week high of $4,165 on Wednesday.

The United States (US) carried out strikes against Iran for the 12th consecutive night, while Tehran retaliated by targeting US military bases in Jordan and Bahrain.

Oil supply disruptions around the Strait of Hormuz have now spread to the Bab el-Mandeb Strait after Yemen’s Ansar Allah attacked two Saudi Oil tankers in the Red Sea.

Reacting to the attacks in a post on Truth Social, US President Donald Trump warned that “if they do this again, the US will hold Iran responsible,” describing Ansar Allah as a proxy of Tehran. He added that “major military punishment” would be inflicted on both Iran and the Yemeni rebel group.

The latest flare-up pushed West Texas Intermediate (WTI) crude to its highest level since June 11, trading near $91 per barrel at the time of writing, up around 30% so far this month.

The rise in energy costs is adding to inflation concerns and strengthening expectations that the Federal Reserve (Fed) may need to raise interest rates later this year.

Markets are now pricing in a higher probability of a Fed rate hike at the September meeting, with the odds standing at 78%, up from 52% a week ago, according to the CME FedWatch Tool.

As a result, traders appear reluctant to build aggressive bullish positions in Gold, which continues to face headwinds from hawkish Fed expectations, a broadly stronger US Dollar and elevated US Treasury yields.

The benchmark 10-year US Treasury yield trades around 4.71%, its highest level since January 2025. Higher yields tend to weigh on Gold by increasing the appeal of interest-bearing assets.

TD Securities warns that "the higher rate environment suggests that the yellow metal may again be destined to drop back to support at around $3,900/oz, before any new highs occur some twelve months from now."

Technical analysis: $4,200 remains the key hurdle

On the daily chart, XAU/USD maintains a bearish near-term bias as it struggles to stay above the 21-day Simple Moving Average (SMA) at $4,068 and trades well below the 50-day SMA at $4,241.

The broader trend remains capped by the 100-day SMA near $4,490, while the Relative Strength Index (RSI) around 45 suggests only modest, range-bound momentum.

The Moving Average Convergence Divergence (MACD) indicator has turned positive but still merely hints at stabilizing downside pressure rather than a decisive bullish reversal while price stays below these key averages.

On the topside, initial resistance is located at the horizontal level of $4,200, followed by the 50-day SMA at $4,241. A daily close above these would open the way toward the next hurdle at $4,400 and the longer-term cap at the 100-day SMA near $4,490.

On the downside, immediate support is seen at the psychological $4,000.00 level, where a break would likely reopen the path toward a deeper corrective phase in the Gold price.

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

US President Donald Trump said he is close to deciding whether to launch a new military operation against Iran, according to Israel’s N12. Trump said he is “considering a massive attack greater than anything before,” adding that Israel would join the operation “within two minutes” if requested. However, he stressed that the United States (US) would not need assistance to carry out the attack.

Meanwhile, two regional sources familiar with mediation efforts said Iran’s leadership had not accepted the latest proposal presented by intermediaries.

Key quotes:

I’m considering a massive attack greater than anything before. I’m close to making a decision.

Israel would join in two minutes if I ask them to.

We don’t need anybody.

They want to negotiate, but they are not ready to make a deal.

They haven’t received enough pain yet.

We are trying, but the Iranians are not being helpful."

• Trump attack threat boosts safe-haven demand for the Dollar.
• Strong jobless claims reinforce resilient US labor-market narrative.
• UK Retail Sales, GfK Confidence and PMIs drive next move.

The Pound Sterling drops by over 0.40% against the Greenback as risk aversion weighs on most G8 currencies amid the escalation of the Middle East conflict and growing speculation of an extended US campaign against Iran. The GBP/USD trades at 1.3313 after reaching a daily high at 1.3393.

GBP/USD falls as Middle East escalation revives Fed hike bets

The Gulf war continues to drive price action, bolstering the American currency. The US Dollar Index (DXY), which tracks the buck against its peers, edges up 0.32% to 101.46.

Tensions in the Middle East are rising sharply as N12 reports that US President Donald Trump said that he is “considering a massive attack greater than anything before, I'm close to making a decision.” This exerts additional pressure on the GBP/USD, which approaches the 1.3300 figure. In the meantime, Ansar Allah sources said that Saudi Aramco Oil facilities would be a target if the Saudi blockade of Yemen is not lifted, reported Al Jazeera.

Aside from this, US economic data revealed that the labour market remains solid as the US Department of Labour revealed that Initial Jobless Claims for the week ending July 18 came at 187K, stronger than the expected 212K by analysts.

Money markets increased the chances of a Federal Reserve (Fed) rate hike at the July 29 meeting. A day ago, the chances were near 33%; as of writing, they are closing in on 40%. Meanwhile, the odds for a hold are 60%, according to Prime Terminal data.

In the UK, the economic docket this week features the release of inflation figures, which eased somewhat. Nevertheless, the recent rise of energy prices spurred by an escalation of the US-Iran conflict could trigger another jump in inflation next month.

The UK economic docket will feature Retail Sales data on Friday, and the GfK Consumer Confidence for July. In the US, traders are waiting for S&P Global Flash PMIs, ahead of the next week’s monetary policy decision by the Fed.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3308, retaining a bearish near-term bias as spot holds beneath the latest reading of the 50/100/200-day Simple Moving Averages (SMA) cluster at 1.3369. The pair also trades below the downward resistance trendline break level at 1.3474 and the former upward support trendline break around 1.3517, suggesting rallies remain capped, while the Relative Strength Index (RSI 14) at 44 leans toward weak downside momentum rather than an oversold condition.

On the topside, initial resistance aligns with the daily SMA cluster at 1.3369, ahead of the descending trendline break around 1.3474, with a stronger barrier seen near 1.3517 where the prior rising support line was broken. As long as GBP/USD holds below these overhead levels, the technical structure favors further consolidation or fresh downside attempts rather than a sustained recovery.

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

• WTI trades just above the $91.00 handle, up almost 6% on the day, with Brent testing the $95.00 area.
• Fresh Iranian threats and a head-for-an-eye doctrine from Washington's top diplomat keep the escalation channel producing on schedule.
• The advance is one-directional rather than headline-reactive, and the futures market is paying up harder than the spot tape.

Crude Oil is staging the kind of one-day advance that usually arrives strapped to a flash headline, and the wires have duly supplied several, but the tape refuses to behave like a reaction. WTI trades just above the $91.00 handle into the North American afternoon, up almost 6% on the day, while Brent presses the $95.00 area, up almost 5%, and both benchmarks sit back at levels last seen in early June.

The character of the move matters more than its size, because the advance has run in one direction since the day began and every dip has been absorbed within minutes. Futures are trading through the spot tape rather than lagging it, and that combination reads as repricing rather than reflex, which is not how this market has treated war headlines for most of July.

Disproportion finds its spokesman

The day's headline flow gives the rally a respectable alibi, because the escalation channel produced fresh material right on schedule. Iranian Foreign Minister Abbas Araghchi spent the week describing Tehran's doctrine as an eye for an eye and promising a powerful response to any strike on Iranian infrastructure, while the foreign ministry branded Washington's bridge-and-power-plant price list unlawful. Ansar Allah, having declared a maritime embargo on Saudi Arabia earlier in the week, struck two Saudi tankers in the Red Sea on Wednesday, converting a threat against Saudi flows into a second live pressure point alongside the Strait of Hormuz.

Secretary of State Marco Rubio then supplied the centrepiece from Manila, answering the Iranian formula directly by describing Trump's strategy as a "head for an eye". He added that the price rises every night until Tehran comes to its senses, that Iran keeps begging for a deal and then breaking it, and that the goal is keeping a nuclear weapon out of Tehran's hands rather than regime change. The line is the third rendering of the same arithmetic in four days, following the many-times-over pledge on American casualties and the posted rate of one bridge or power plant per tanker.

A market that wanted to fade this material would have had its chances, and for two weeks it took every one of them, renting the war premium through the morning and handing it back by the afternoon. The absence of that reflex today is the tell that the doctrine landed differently, not as noise to trade around but as confirmation that the retaliation ladder has no advertised top and that the disruption now runs wider than the Strait itself.

One-way traffic is not a twitch

Monday's session remains the useful contrast, because three days ago this market still traded like a nerve ending: an early WTI high just above the $84.00 handle, a midday flush through $79.50 on a single social-media post, and an immediate V-shaped recovery to test $83.00. That is what headline-reactive trading looks like, violent in both directions and pointless on net.

Thursday has produced none of that violence, which is precisely the point. WTI has printed higher lows through every hour of the session, climbing from the $86.50 area to just above $91.00, while Brent has run the same staircase from the $90.50 area to a test of $95.00. Pullbacks have reached about a Dollar at their deepest and have been reabsorbed within the hour, and the intraday Stochastic oscillator has cycled through overbought repeatedly without producing a reversal of any consequence, the signature of a trend day rather than a skirmish.

The daily chart supplies the wider frame, with WTI now trading more than a third above its early-July basing low near $67.00 and the entire recovery compressed into barely three weeks. A market covering that much ground with nothing resembling a durable rejection along the way is not hedging headline risk. It is rebuilding the war premium as a standing feature of the price.

The futures market strengthens the case rather than complicating it with the WTI front-month near $92.00, through the spot tape. The Brent front-month contract is back above the $100.00 handle for the first time since May, a level that belonged to the opening phase of the war. None of this requires much imagination about the physical balance, which currently features Gulf exports at roughly half their pre-war rate, Strait tanker traffic at a fraction of normal, reimposed sanctions on Iranian barrels, and a US Strategic Petroleum Reserve at its lowest level since 1983.

Crude Oil technical levels

Resistance: The session high just above $91.00 is the immediate WTI cap, ahead of the early-June shelf near $95.00 that Brent is already testing. Beyond there the daily chart thins quickly toward $104.00, with the April conflict peak just above $107.00 as the outer marker and the $100.00 handle standing as Brent's own milestone.

Support: The $86.50 launch area from the start of the session is the first floor, ahead of the $85.00 handle. Below there sits the rising 50-day Exponential Moving Average near $81.00, the line the July advance has leaned on throughout and never surrendered, with Brent's equivalent near $85.50.

Bias: Bullish. The daily Stochastic Oscillator is pinned in the mid-90s on both benchmarks, a reading that argues for a fade in a headline-twitch regime, but trend days do not honour oscillators, and this one has spent the whole session proving it. Bullish while WTI holds above the $86.50 area, and a daily close back below the $85.00 handle is the signal that the speculative twitch has retaken the wheel.

WTI Crude Oil daily chart

• USD/JPY near 164.00 as the US Dollar strengthens following better-than-expected US labor-market data.
• Initial Jobless Claims fell to 187K, well below the 212K forecast and the previous 209K, supporting expectations of restrictive Fed policy.
• Japan’s June CPI is next, with core inflation expected to rise to 1.6% YoY.

USD/JPY trades above163.90 on Thursday as the US Dollar (USD) strengthens following significantly better-than-expected United States (US) labor market data.

US Initial Jobless Claims fell to 187K in the week ending July 18, well below market expectations of 212K and the previous revised reading of 209K. The result marked the lowest level since 1969, suggesting that layoffs remain extremely limited despite signs of slower hiring.

The resilient figures could reinforce expectations that the Federal Reserve (Fed) will maintain a restrictive monetary policy stance for longer. US Treasury yields and the broader Dollar Index moved higher, the latter up 0.4%, following the release, providing additional support to USD/JPY.

Investors will now focus on Japan’s National Consumer Price Index data for June, due later on Thursday. Core inflation, which excludes fresh food, is expected to accelerate to 1.6% YoY from 1.4%, partly due to higher energy prices. Headline inflation previously stood at 1.5%, while the index excluding food and energy was 1.8%.

A stronger-than-expected inflation report could strengthen expectations of further Bank of Japan (BoJ) interest rate increases and support the Japanese Yen. Conversely, softer figures could allow USD/JPY to remain elevated near the 164.00 level.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 163.95, retaining a bullish near-term tone as it holds well above both the 20-period Simple Moving Average (SMA) at 162.97 and the 100-period SMA at 162.28. The pair is pressing against an immediate horizontal cap at 163.97, while the Relative Strength Index (RSI) around 80 signals strongly overbought conditions that could slow the advance even if underlying trend support remains intact.

On the downside, initial support emerges at 163.65, with further cushions at 163.49 and 163.29 before the bullish structure would be tested closer to the 20-period SMA at 162.97 and the 100-period SMA at 162.28. On the topside, a clear break above the 163.97 resistance level would reopen the path for additional gains, though stretched momentum suggests any upside extension could be vulnerable to a corrective pullback toward the mentioned support band.

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

TD Securities economists Eli Nir and Oscar Munoz analyze upcoming BEA methodology changes to United States (US) Personal Consumption Expenditures (PCE) Price Index inflation for portfolio management, legal services, and computer software & accessories. They estimate May 2026 core PCE year-on-year inflation would be about 15bp lower, with the average monthly core PCE impact around -1bp over the past year, and see virtually no implications for Federal Reserve policy.

Core PCE seen slightly lower

"PCE inflation will be revised on September 30, alongside the August data release. At that time, the BEA will also publish methodology details that are not yet available. For now, only the broad outlines of the changes have been released, meaning any estimates of their impact rely on assumptions until the BEA provides further guidance."

"The impact should be minimal. Core PCE inflation in May 2026 would have likely been 15bp lower than the currently reported 3.4% y/y rate (see LHS chart below). Over the past 12 months, the average effect on m/m core inflation would have been just -1bp (see RHS chart below)."

"The implications for Fed policy are limited, as the affected categories account for just 3.67% of the PCE basket. Revisions should better align measured inflation with underlying spending patterns, and except for portfolio management services, the revised measures will continue to rely on CPI and PPI data."

"The information, opinions, commentaries, estimates and forecasts are as of the date of this report and subject to change without prior notification. We seek to update our materials as appropriate, but various regulations may prevent us from doing so. Macro commentaries are published at irregular intervals as appropriate in the author’s judgement."

"Historic information regarding performance is not indicative of future results and investors should understand that statements regarding future prospects may not be realized. All investments entail risk, including potential loss of principal invested. Performance analysis is based on certain assumptions, the results of which may vary significantly depending on the inputs assumed."

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

• WTI extends gains on Thursday as Iran war threatens Oil supplies.
• Threats to shipping through the Strait of Hormuz and Bab el-Mandeb add a fresh geopolitical premium to Oil prices.
• The technical outlook stays bullish, although an overbought RSI warns that the rally may be stretched.

West Texas Intermediate (WTI) crude Oil rallies more than 5% on Thursday as hostilities between the US and Iran deepen supply risks. At the time of writing, WTI trades around $90.50 per barrel, its highest level since June 11.

The commodity has gained around 30% so far this month after the war between the US and Iran flared up again. The latest rally gained momentum after Yemen’s Ansar Allah said they attacked two Saudi Oil tankers near the Bab el-Mandeb Strait on Wednesday, adding a fresh geopolitical risk premium to Oil prices.

Tehran maintains that the Strait of Hormuz falls under its sovereignty. Iran’s Revolutionary Guard Corps said the passage is “completely closed” while US military operations continue, warning that vessels would not be allowed to pass without coordinating with Iranian authorities.

Analysts at MUFG warned that "the key market risk is whether the conflict shifts from a phase of renewed escalation to one that triggers a broader global energy shock." The bank noted that President Donald Trump has threatened to target Iranian bridges and power infrastructure if Tehran attacks vessels transiting the Strait of Hormuz, while Iran has warned it would retaliate against energy infrastructure across the Gulf region.

Technical analysis:

On the daily chart, WTI US Oil maintains a bullish bias as it holds above the 21-day, 50-day and 100-day Simple Moving Averages (SMAs), clustered between roughly $75.50 and $88.20.

The Moving Average Convergence Divergence (MACD) indicator stands firmly above zero with the line advancing, while the Relative Strength Index (RSI) at 71 has entered overbought territory, which suggests strong upside momentum but also hints that the rally could be stretched in the short term.

On the topside, initial resistance is seen at the horizontal barrier near $95.00, ahead of a higher cap around $105. On the downside, immediate support emerges at the 100-day SMA close to $88.20, followed by the 50-day SMA near $82.40 and the horizontal level at $80.00; deeper setbacks would expose the 21-day SMA around $75.52 before the more distant structural floor at $67.

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

Nordea strategists Jan von Gerich, Tuuli Koivu and Anders Svendsen note that the European Central Bank (ECB) kept its deposit rate at 2.25% but signalled further tightening. They still forecast three additional 25bp hikes, now at a quarterly pace, taking the deposit rate to 3% by March 2027. They stress elevated uncertainty, energy-driven inflation risks and a resilient Euro-area growth backdrop supporting continued rate increases.

ECB seen extending tightening cycle

"The ECB left the deposit rate unchanged at 2.25% today, as expected, but the tone of the press release and the press conference both leave the door wide open for another 25bp rate hike at the next meeting in September, which is also our expectation."

"Even though the tentative peace agreement and the sizable falls seen in oil prices, together with softish inflation data for June reduced the immediate pressure for the ECB to raise rates at a faster pace, we still think that we are amidst a hiking cycle rather than one or two isolated rate moves, and continue to expect the ECB to raise rates three more times."

"Instead, we think that broadening price pressures and a resilient economy will keep the ECB on a tightening path for longer, even though a quarterly pace of hikes now looks more likely as opposed to the more rapid path we were forecasting earlier."

"As a result, our new ECB baseline assumes 25bp rate hikes in September, December and March 2027, bringing the deposit rate to 3%, in line with our previous forecast."

"A quick peace in the Middle East could still reduce the pressure on the ECB to hike rates, while a more notable escalation and longer-lasting war could lead to faster and even more hikes."

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