Forex News

• EUR/USD posts modest losses near 1.1465 in Thursday’s early Asian session. 
• While the Fed held rates steady at the July meeting, Warsh pledged that the central bank would take action on inflation if needed.
• The preliminary readings of the Eurozone and German GDP for Q2 are due later on Thursday. 

The EUR/USD pair trades with mild losses around 1.1465 during the early Asian session on Thursday. The US Dollar (USD) edges higher against the Euro (EUR) on a hawkish Federal Reserve (Fed) rate hold. Traders brace for the preliminary readings of the Gross Domestic Product (GDP) for the second quarter (Q2) from Germany and the Eurozone. 

The Fed opted to leave interest rates unchanged in the 3.5%-3.75% range at its July policy meeting on Thursday. Though markets widely expected the US central bank to stay on hold,   Dallas Fed President Lorie Logan, Cleveland’s Beth Hammack, and Minneapolis Fed chief Neel Kashkari dissented in favor of raising rates by 25 basis points (bps). 

During the press conference, Fed Chairman Kevin Warsh said that while the Fed won’t provide hints on where rate policy is heading, it will take necessary steps to meet its 2% inflation target. 

The Eurozone and Germany’s GDP data will be in the spotlight later on Thursday. Economists estimate the Eurozone GDP to show a modest 0.2% QoQ expansion in Q2 following a contraction of 0.2% in the previous reading. Germany's GDP is projected to grow 0.1% QoQ in Q2, versus 0.3% prior. If the reports show stronger-than-expected outcomes, this could lift the shared currency in the near term. 

The European Central Bank (ECB) policymaker Peter Kazimir said on Monday that the central bank will need to raise interest rates at least once more to contain inflation, and a deterioration in the outlook could warrant more tightening than now expected. Financial markets see at least two more rate hikes from the ECB, with the first move fully priced in by October and the second by March, according to Reuters. 

Fed seen delivering hawkish hold as markets price in year-end hike

Commerzbank’s Antje Praefcke expects that “in all likelihood, this overall situation should lead to a ‘hawkish hold’ this evening,” with the FOMC under Chair Kevin Warsh keeping rates unchanged but maintaining a tightening bias. She notes that “the market expects at least one interest rate hike from the Fed by the end of the year and sees a chance that more could follow next year as well.” While investors “do not want to completely rule out an interest rate hike even today,” Commerzbank stresses that the market “sees only a low probability for this to happen,” leaving the US Dollar and EUR/USD particularly sensitive to any shift in the perceived path of Fed policy.

Yemen’s Iran-backed Houthi rebels are considering imposing fees on commercial ships sailing through the southern Red Sea, Reuters reported on Wednesday. This development came a week after the Houthi declared a naval blockade on Saudi Arabia.

The source said Houthi officials were looking into imposing fees on most traffic through the narrow Bab el-Mandeb gateway, which links the southern Red Sea with the Gulf of Aden. No timeframe was given at this stage for implementation, they added.

The objectives of such a move would be to normalize the practice of imposing fees on international waterways and raise pressure on the US.

Market reaction

Crude oil prices attract some buyers following these headlines. At the time of writing, the West Texas Intermediate (WTI) is up 6.33% on the day at $83.32.

US President Donald Trump said that he will order heavy strikes on Iran in retaliation for its “surprise attack” on US forces overnight, Bloomberg reported on Wednesday.

“We’ll be hitting them hard,” said Trump. "They're going to get a beating,” he added.

Iranian media stated that Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted a base in Jordan in response to “aggressive US actions.” The US and Saudi Arabia also struck Iran-backed militants in Iraq after Riyadh said it intercepted drones launched by Iraqi groups that were targeting its oil facilities.

Market reaction

Crude oil prices attract some buyers following these headlines. At the time of writing, the West Texas Intermediate (WTI) is up 6.17% on the day at $83.20.

• Gold price gains traction to near $4,095 in Thursday’s early Asian session. 
• Fed held the benchmark federal funds rate in a range of 3.5% to 3.75% at its July policy meeting. 
• Trump said the US would strike back at Iran after a recent attack that targeted a military base in Jordan.

Gold price (XAU/USD) rebounds to around $4,095 during the early Asian session on Thursday. The precious metal edges higher after the US Federal Reserve (Fed) decided to leave interest rates unchanged, a hold delivered over three dissenting votes and against a fresh eruption of fighting between the US and Iran.

As expected, the Fed left the Federal Funds Rate in its current target range between 3.50% and 3.75% at its July policy meeting on Wednesday. However, the statement showed that three committee members voted for a 25-basis-point rate hike at this meeting.

Fed Chairman Kevin Warsh said during the press conference that tightening in the market has done quite a bit of work for policymakers. He added that the committee will be quick to act if inflation pressures accelerate.

Iran’s Islamic Revolutionary Guard Corps (IRGC) fired ballistic missiles overnight at a US airbase and command center in Jordan, all of them intercepted, per Bloomberg. The US and Saudi Arabia also struck Tehran-backed militias in Iraq, ending a days-long pause in hostilities.

US President Donald Trump said on Wednesday that Washington would strike back at Iran after a recent attack that targeted a military base in Jordan. “We’ll be hitting them hard,” said Trump. “They’re going to get a beating,” he added. Ongoing tensions in the Middle East could push crude oil prices up and prompt central banks to hold rates at elevated levels for longer, weighing on gold's appeal as a non-yielding asset.

Gold outlook supported as Commerzbank questions Fed hike pricing

Analysts at Commerzbank acknowledge the recent weakness in Gold but argue that the downside may be overdone, seeing scope for prices to rebound from here. They stress that “there is potential for the gold price to recover from its current level,” as they “consider current market expectations of Fed rate hikes to be excessive” and instead “anticipate that Fed interest rates will remain unchanged until the end of the year.” In their view, a less aggressive Fed path than currently priced would provide a more supportive backdrop for Gold over the coming quarters.

• GBP/JPY rebounds from ten-day low as buyers reclaim 218.00.
• RSI momentum favors upside, though intervention risk remains elevated.
• Break above 219.00 exposes 219.57/61 and 220.00 next.

The GBP/JPY advances by over 0.30%, rising above 218.00, as risk appetite improves amid overall US Dollar weakness following the Federal Reserve's monetary policy decision. The pair trades near 218.50 after hitting a low of the day (LOD) of 217.16.

GBP/JPY Price Forecast: Technical outlook

The cross-pair was headed to extend its losses after reaching a ten-day low. However, the GBP/JPY followed the direction of the GBP/USD pair after the Fed’s decision.

Momentum favours further upside as depicted in the Relative Strength Index (RSI). Hence, the path of least resistance is tilted to the upside, but a potential intervention in the FX markets by Japanese authorities could open the door for further downside.

For a bullish continuation, the first resistance for GBP/JPY would be the 219.00 psychological level. Above this area sits the confluence of the July 15 and 15 daily peaks at 219.57/61, followed by the 220.00 milestone.

On the downside, the first support is 218.00. A breach of the latter will expose the low of the day (LOD) at 217.16, followed by the April 30 daily high-turned-support at 216.60. Once hurdled, the next stop is the 50-day Simple Moving Average (SMA) at 215.62.

GBP/JPY Price Chart – Daily

• USD/JPY trades near 163.50 after surrendering roughly 60 pips between the 18:00 GMT decision and a session low printed during the press conference.
• A nine-to-three vote with three dissents for a hike pulled the July tail out of the front end without taking the hike off the calendar, and the long end moved the other way entirely.
• Japan's currency authorities have said nothing since a record spring intervention and the Bank of Japan reports Friday, so one session of Dollar softness is the whole reprieve.

The Federal Reserve (Fed) held its target range at 3.50% to 3.75% for a fifth consecutive meeting at 18:00 GMT, and the pair did what a market short the Yen against a 1.00% policy rate does when a hike it partly paid for fails to arrive. Price slipped from a session high just short of 164.00 to the 163.50 area, then to just above 163.00 while the chair took questions. It trades near 163.50 late, down 0.24% on the day.

The hold dated the hike rather than cancelling it

The decision came on a nine-to-three vote, three voting members dissenting in favour of a quarter point, the closest call in years. Futures carried a hike tail near 36% into the meeting, up from roughly 11% in mid-July, and that premium came out of the front end on the announcement. The two-year Treasury yield fell about four basis points while the thirty-year rose more than nine.

That divergence between the curve's two ends is the whole story for a carry pair, because a hold with three hawkish dissents dates a hike rather than cancelling it. September already carried odds near 80% before the vote, so the Yen's reward is one session of relief while the Dollar collects a steeper curve.

A reaction function nobody will describe

The press conference was the more consequential half of the afternoon and produced nothing a trader could price. Fed Chair Warsh refused the word pause for what the committee had just done, declined to say what would trigger a September move, and told the room that participants are learning to react to data rather than the central bank. One reporter was reduced to asking what the news actually was.

The reticence is deliberate policy rather than an accident of temperament, given a June statement cut to roughly 130 words, guidance struck, the chair's own dot withheld, and a July statement barely departed from it. A Fed that will not describe its reaction function is worse for a currency defence than a hawkish one, because it hands every release before 16 September the weight guidance used to absorb.

Tokyo buys a day at a record price

The gap the Yen has to survive runs roughly 275 basis points, a 1.00% Bank of Japan policy rate against a Fed at 3.50% to 3.75%, and with underlying inflation near 2.8% the Japanese real policy rate is negative on every measure. Japan's Ministry of Finance spent about 11.7 trillion Yen buying its own currency between late April and late May, and the pair sits a full figure above where that campaign left it.

Positioning explains why the defence keeps failing, with speculative Yen shorts above 150K contracts at the end of June, the most bearish stance in years. The 162.00 level desks treated as the defence line was breached without response, and currency research now describes that line as having disappeared. Silence is the doctrine, the top currency official quiet since the spring operation while the finance minister's promises of decisive action produce no durable bid.

The Yen stopped trading the differential

The pair recovered half its post-decision drop inside two hours because the transmission channel has moved. The International Monetary Fund flagged in April that the exchange rate had decoupled from the narrowing US-Japan spread, and what fills the gap is Japan's own fiscal premium, with thirty-year and forty-year Japanese government bond yields above 4% against public debt beyond 230% of Gross Domestic Product. A rising US long end is therefore actively Yen-negative, which is what the afternoon delivered.

Japanese Prime Minister Takaichi's fiscal stimulus advocacy and her criticism of higher rates have widened the premium markets charge to hold Japanese paper, and her approval rating has slumped to its lowest since she took office. Officials concede that bond-market anxiety has blunted efforts to talk down Yen bears. A currency cannot be defended against its own sovereign spread.

Crude Oil compounds it, with the barrel up more than 20% this month on renewed Hormuz disruption and Japan importing all of it, so the war premium arrives once in Dollars and again in the exchange rate. Yen-denominated import prices ran 25.5% higher YoY in May, and a funding currency that cannot rally while the Dow trades 1,100 points lower is saying more than any intervention warning.

What Thursday and Friday settle

Thursday at 12:30 GMT brings the June Personal Consumption Expenditures price index, the release September hangs on, with core consensus at 0.2% MoM and 3.3% YoY from 3.4%, headline 3.7% YoY from 4.1%, preliminary Q2 GDP at 2.1% annualized, and jobless claims at 200K against 187K.

Tokyo Consumer Price Index figures land at 23:30 GMT the same evening, expected at 1.7% YoY excluding fresh food against 1.6% prior, which is the entire licence available before Friday's Bank of Japan decision. Consensus has that as a hold at 1.00%, with the quarterly Outlook Report at 03:00 GMT and the governor's press conference at 06:30 GMT, leaving his language on an October or December move as Tokyo's only instrument.

Levels and bias

Resistance: The session high stopped just short of 164.00, where the July peak also sits, a shade under the handle and the strongest the pair has traded since December 1986. Above it, 165.00 is where intervention chatter concentrates, which makes it a target and a hazard at the same time.

Support: 163.00 is the pivot, broken on 21 July for the first time in nearly four decades, and it contained the post-decision flush with the session low printing just above it. Beneath that, 162.00 is the June breach level, with the 50-day Exponential Moving Average near 161.50 the first structural line and the 200-day near 158.00 far below.

Bias: Bullish while 163.00 holds. The hold delayed a hike rather than removing it, the long-end differential is widening, Tokyo has no tool that survives contact with a September Fed, and the daily Stochastic Relative Strength Index near 56 leaves room in both directions, so the path of least resistance runs at 164.00 and then toward 165.00. A daily close beneath 163.00 invalidates and turns the focus to 162.00.

USD/JPY daily chart

Here is what you need to know for Thursday, July 30:

The US Dollar (USD) falls sharply during the American session on Wednesday after the Federal Reserve (Fed) left interest rates unchanged. The Federal Open Market Committee (FOMC) maintained the federal funds target range at 3.50%–3.75% in a divided 9–3 vote. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan preferred a 25-basis-point increase. The Fed said that economic activity continues to expand at a solid pace, while inflation remains elevated partly because of energy-related supply shocks.

The US Dollar Index (DXY) fell around 0.5% and trades near 100.90. Despite the hawkish dissenting votes, the decision to remain on hold raised doubts about whether enough policymakers will support a rate increase at the September meeting. The immediate reaction also pushed US Treasury yields lower and encouraged broad selling of the Greenback.

EUR/USD advances around 0.7% and trades near 1.1470, reaching its highest area in more than a week as the US Dollar weakens. On Thursday, investors will monitor preliminary second-quarter Gross Domestic Product figures from Spain, Germany, Italy, and the broader Eurozone. Germany will also publish preliminary July inflation data, while Eurozone economic sentiment and unemployment figures will provide additional indications about the regional outlook.

GBP/USD rises around 0.5% and trades near 1.3360 ahead of the Bank of England’s monetary policy announcement on Thursday. The BoE is expected to leave its Bank Rate unchanged at 3.75%. Attention will focus on the voting split, the Monetary Policy Report and Governor Andrew Bailey’s comments for signals about whether policymakers remain open to another interest rate increase.

USD/JPY falls around 0.2% and trades near 163.50 as the broad decline in the Greenback allows the Japanese Yen to recover modestly. However, the pair remains close to multi-decade highs due to the wide interest rate differential between the United States and Japan. Thursday’s Japanese calendar will feature Tokyo inflation, unemployment, and Retail Sales data.

AUD/USD remains under pressure near 0.6945, falling around 0.4% despite the weaker US Dollar. The Australian Dollar continues to suffer after June inflation undershot market expectations, sharply reducing the likelihood of another Reserve Bank of Australia rate increase. Australia will publish June Building Permits on Thursday after the indicator declined 1.1% in May.

West Texas Intermediate (WTI) Oil surges more than 7% and trades near $85 per barrel as the conflict in the Middle East intensifies. The United States and Saudi Arabia launched strikes against Iran-backed groups in Iraq following attacks on Saudi energy facilities, while Iran targeted US forces in Jordan. The renewed escalation has raised concerns about regional supply disruptions and reduced expectations of a rapid diplomatic resolution.

Gold rises around 0.7% and trades near $4,056 per troy ounce. The precious metal benefits from the sharp decline in the US Dollar and renewed safe haven demand amid the Middle East conflict. Lower US Treasury yields following the Fed decision also support the non-yielding metal.

Thursday’s United States calendar will include preliminary second quarter GDP and the Fed’s preferred Personal Consumption Expenditures inflation measures. Annualized GDP growth is expected to remain at 2.1%, while Core PCE inflation is forecast to rise 0.2% MoM and 3.3% YoY in June. Initial Jobless Claims are expected to increase to 200K from 187K, while Personal Income and Personal Spending are both forecast to rise 0.3%.

• Silver steadies as Fed hold weakens Dollar despite yield spike.
• Three Fed dissenters favored hikes, keeping inflation worries elevated.
• Warsh reiterates inflation focus but offers limited policy guidance.

Silver price clings to gains on Wednesday late in the North American session, as the Federal Reserve held rates unchanged, which, instead of strengthening the Dollar, weakened it, while US Treasury yields spiked. The XAG/USD trades at $57.17, barely unchanged.

XAG/USD steadies near $57.00 as Fed dissent, surging long-end yields and Dollar weakness drive choppy trading

The Fed's monetary policy statement was barely changed. The central bank noted that the economy is growing steadily despite uncertainty stemming from the US-Iran war. The central bank revealed that productivity growth and capital investment are robust, further strengthening the jobs market.

Worth mentioning that the decision was split, with three dissenters led by the Cleveland Fed's Beth Hammack, Minneapolis Fed's Neel Kashkari, and Dallas Fed's Lorie Logan, who favoured a 25-basis-point rate hike. 

The press conference didn’t provide any remarks worth mentioning. Although the Fed Chair, Warsh, revealed that he’s committed to tackling inflation, he dodges the question of how the Fed will achieve its 2% goal. Meanwhile, the US 30-year Treasury yield spiked by more than 10 basis points to its highest level in almost 20 years, though it failed to boost the Greenback, which is tumbling over 0.40%, according to the US Dollar Index (DXY).

The DXY, which tracks the performance of the US Dollar against six currencies, is down at 100.93, after hitting a six-day low, despite the rise of US yields.

Ahead, the US economic docket will feature the final reading of Q2 2026 US GDP, the release of the Fed’s preferred inflation gauge, and the University of Michigan Consumer Sentiment.

XAG/USD Price Forecast: Technical Outlook

In the daily chart, XAG/USD trades at $57.15, keeping a bearish near-term tone as spot holds well below the latest simple moving average cluster around $64.33 and under a series of descending trend-line resistances, including the more recent lines derived from the $78.83 and $77.02 peaks. The Relative Strength Index (14) hovers near 41, hinting at subdued downside momentum, but with price compressed between immediate trend-line support near $55.98 and the overhead moving averages, the metal remains capped within a broader descending channel.

On the topside, initial resistance aligns with the former support trend line projected from $61.01, ahead of the confluence of the simple moving average triple and a descending trend-line break around $64–65, while a more significant supply zone emerges toward the $80.76 region associated with the longer-term downtrend from $96.62. On the downside, a clean drop through the nearby trend-line support at roughly $55.98 would expose lower levels and extend the prevailing bearish phase, whereas holding above this line could see XAG/USD attempt another corrective bounce back toward the clustered resistance band overhead.

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