The British pound remains under pressure after weaker than expected UK inflation data. Slowing inflation has fueled expectations that the Bank of England may adopt a more flexible policy stance in the coming months, weighing on the pound. Meanwhile, the Euro continues to trade within a relatively narrow range as investors await new signals from the Eurozone economy.
Market participants also remain cautious due to the continuing escalation of tensions in the Middle East. The United States continues to carry out strikes on targets in Iran, supporting demand for traditional assets, including the US dollar, and limiting the possibility of a recovery in European currencies.
Attention in the coming days will focus on the initial Purchasing Managers’ Index (PMI) releases from Germany, France, the UK and the Eurozone, which will provide an early assessment of economic conditions at the start of the third quarter. This data is particularly important for the euro, as it could influence expectations about the European Central Bank’s next policy moves. Stronger than expected numbers may support the single currency, while weaker readings may boost expectations of further easing in ECB policy. In addition, the US weekly initial jobless claims report will provide another update on the health of the US labor market.
EUR/USD
The EUR/USD pair entered the consolidation phase after failing to test the key resistance level at 1.1500. Technical analysis indicates that the pair may decline towards the 1.1330-1.1370 area, where a bearish Harami pattern has formed on the daily time frame. A renewed upward correction may become more likely only after a decisive breakout and close above 1.1500.
Key events for EUR/USD:
- Today at 09:45 (GMT+3): France Flash PMI
- Today at 10:20 (GMT+3): Speech by Sabine Mauderer, Member of the Executive Board of the Bundesbank
- Tomorrow at 10:00 (GMT+3): German GfK Consumer Climate Index
GBP/USD
The GBP/USD pair is witnessing a bearish pullback after buyers failed to establish a foothold above 1.3500. A Bearish bastard The pattern has also formed on the daily chart, increasing the possibility of another test of the nearby support area at 1.3320-1.3340. The bearish scenario will only be invalidated by a decisive close above 1.3400.
Key events for GBP/USD:
- Today at 13:00 (GMT+3): Industrial trends requests from the UK Central Bank
- Today at 15:30 (GMT+3): Initial unemployment claims in the United States
- Tomorrow at 11:30 (GMT+3): UK Manufacturing Purchasing Managers’ Index (PMI).
summary
The British pound remains under pressure following weak UK inflation data, while the Euro continues to consolidate as traders await new economic signals from the Eurozone. Over the coming days, preliminary Purchasing Managers’ Index (PMI) releases are likely to be the main catalyst for European currencies, as they could reshape expectations for future policy decisions by both the European Central Bank and the Bank of England. US macroeconomic data and developments in the Middle East are also expected to remain important drivers of market sentiment.
Trade over 50 Forex markets 24 hours a day with FXOpen. Benefit from low commissions, high liquidity and spreads starting from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about forex trading with FXOpen.
This article represents the opinion of companies operating under the FXOpen brand only. It should not be construed as an offer, solicitation or recommendation regarding products and services offered by companies operating under the FXOpen brand, nor should it be considered financial advice.
