The EUR/USD pair trimmed part of its recent losses and settled around 1.1450 as demand for the US Dollar (USD) cooled down. On the one hand, easing concerns about the Middle East war and its consequences pushed investors away from the USD’s safety. On the other hand, tepid American data weighed on the local currency. At the end, the odds of interest rate hikes in the United States (US) dropped, making it easier for speculative interest to push the Greenback lower.

Middle East and Oil Price

Markets kicked off the week in a cautious mood amid headlines indicating some tit-for-tat attacks between the US and Iran over the weekend. The fragility of the ceasefire, however, is no news to the world and investors, while ships keep transiting the Strait of Hormuz.

Physical and verbal skirmishes continue, but as long as Oil prices come down, it seems market players are far from concerned about the war. And it has its logic: lower Oil prices mean easing inflationary pressures and, hence, decreased odds for economic turmoil. In the US, it also means that the Federal Reserve (Fed) may not need to hike interest rates.

By the end of the week, the barrels of Brent and West Texas Intermediate (WTI) crude trade at pre-war levels, reflecting the ‘normalization’ of vessels’ traffic through the critical sea passage. It seems that as long as the Strait is open, market participants will bet against mounting risk and hence move into higher-yielding assets.

As a note of color, there has been no clear progress in negotiations between the US and Iran, and Pakistani mediators were just able to inform that the next meeting between the two countries will be scheduled “at the earliest possible time.” Tehran is now focused on a massive funeral for the former Supreme Leader, Ayatollah Ali Khamenei, who was killed at the beginning of the war on February 28. His funeral will last until July 9, and talks are unlikely to resume before that date.

Cautious yet confident European authorities

European Central Bank (ECB) President Christine Lagarde started the week praising Europe’s resilience, noting it means rate hike effects on the economy are more contained, and that the ECB “can raise rates to address inflation without fear it becomes a source of financial stress.” Lagarde later noted that risks are more broadly balanced “than a few weeks ago” and that the European Union (EU) is not in stagflation, while speaking at a policy panel at the ECB Forum on Central Banking 2026 that took place in Sintra, Portugal.

Data somehow backed her words, as annual inflation in Germany, as measured by the change in the Consumer Price Index (CPI), softened to 2.3% in June, according to preliminary estimates, from 2.6% in May. The Harmonized Index of Consumer Prices (HICP) in the same period printed at 2.4%, down from the 2.7% posted in the previous month.

The preliminary estimate of the Euro area annual HICP came in at 2.8% in June, below the previous reading of 3.2% and lower than the anticipated 3%. Finally, the core annual HICP printed at 2.4%, lower than the prior 2.6%.

As Middle East tensions eased and inflation cooled, the odds for additional interest rate hikes in the Eurozone decreased, with market players now looking for a prolonged hold.

United States Federal Reserve

The US macroeconomic calendar revolved around employment, and news were not good. The ADP Employment Change report showed that the private sector added 98K new jobs in June, below the previous 122K. Also, US-based employers announced 45,849 job cuts in June, down 53% from the 97,006 cuts announced in May, according to the Challenger Job Cuts report. The big miss came from the Nonfarm Payrolls (NFP) report released on Thursday, as the country added a measly 57K new jobs in June vs the anticipated 110K and the previous May reading of 129K (downwardly revised from 172K). The report also showed that the Unemployment Rate declined to 4.2% from 4.3%.

Other than employment data, the country released the June ISM Manufacturing Purchasing Managers’ Index (PMI), which printed at 53.3, below the 54 expected but still indicating business expansion for the sixth consecutive month. The Price sub-index edged sharply lower, from the 82.1 posted in May to 73, a sign of easing inflationary pressures.

Meanwhile, Fed Chair Kevin Warsh participated in the ECB Central Banking forum and delivered some interesting comments. He reiterated that forward guidance is not in his book and that the focus is on price stability. US policymakers will decide on rates in four weeks’ time, according to Warsh. “When we get into that room and shut the door, we’re going to have a good debate,” Warsh added.

A softer labor market, easing inflationary pressures, and the absence of any other clues on future monetary policy played against the Greenback, with odds of a rate hike edging sharply lower after the release of the NFP report.

What’s next in the docket

The new week starts with the EU releasing May Retail Sales and the US delivering the June ISM Services PMI. The Federal Open Market Committee (FOMC) will unveil the Minutes of the latest meeting on Wednesday, while Germany will publish the final estimate of the June HICP on Friday. The calendar also includes some other figures that could provide clues on the actual health of major economies.

Also, as central banks’ decisions are now one month away, policymakers from both shores of the Atlantic will hit the wires, and their words will be scrutinized in search of monetary policy clues.

EUR/USD Technical Outlook:

The weekly recovery is far from changing the EUR/USD pair’s technical picture, which still shows that bears are in control. Furthermore, the advance met sellers around a long-term static resistance area near 1.1470, which is also an inflection point. As long as it is clearly below it, the odds are on sellers’ side.

In the daily chart, EUR/USD maintains a bearish near-term bias as spot holds below the 20-day, 100-day and 200-day Simple Moving Averages (SMAs) at 1.1470, 1.1623 and 1.1654, respectively. The Momentum indicator lacks directional strength but holds below its midline, while the Relative Strength Index (RSI) indicator hovers around 43, suggesting downside pressure persists but has lost strength. Still, the moving averages setup is likely to contain attempts to advance further while suggesting lower lows are still possible.

Bigger time frames also reflect sellers’ dominance, as in the weekly chart, EUR/USD maintains a bearish bias. The pair develops far above the 100- and 200-week SMAs at roughly 1.1296 and 1.1001, but remains capped by the 20-week SMA at 1.1611. The pair’s slide from recent highs, together with a 14-week RSI hovering near 42 and a negative 14-week Momentum reading, tilts risks toward further consolidation while leaving the door open for additional slides.

On the topside, initial resistance is at the 1.1470 area, reinforced by the 20-day SMA near it. The next significant resistance comes in a handful of pips above 1.1600, with the 100-day SMA around 1.1623 and the 200-day SMA at 1.1650. The EUR/USD would need to clearly break above this area to ease the broader bearish tone. The recent multi-week low at 1.1324 is the immediate support, closely followed by the 100-week SMA at 1.1296. An extension below the latter exposes the psychological 1.1000 threshold.

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

Intraday bias in EUR/GBP stays on the downside at this point. Fall from 0.8863 should target 61.8% retracement of 0.8221 to 0.8863 at 0.8466 at next. On the upside, above 0.8601 minor resistance will turn bias neutral first. But risk will stay on the downside as long as 0.8686 resistance holds, in case of recovery.

In the bigger picture, current development suggests that rise from 0.8221 (2024 low) has completed at 0.8863, just ahead of 38.2% retracement of 0.8221 (2024 low) to 0.8863 (2025 high) at 0.8618. Deeper fall would be seen back to 0.8201 (2022 low). For now, outlook will be neutral at beast as long as 0.8863 hold.

2026.07.03 2026.07.03
GBP/USD: Elliott Wave Analysis and Forecast for 03.07.26–10.07.26

Alex Geutahttps://www.litefinance.org/blog/authors/alex-geuta/

Major Takeaways

• Main scenario: Once the correction is completed, consider short positions below the level of 1.3467 with a target of 1.3050–1.2936. A sell signal: the correction ends and the price holds below 1.3467. Stop Loss: above 1.3510, Take Profit: 1.3050–1.2936.
• Alternative scenario: Breakout and consolidation above the level of 1.3467 will allow the pair to continue rising to the levels of 1.3660–1.3870. A buy signal: the level of 1.3467 is broken to the upside. Stop Loss: below 1.3425, Take Profit: 1.3660–1.3870.

Main Scenario

Consider short positions below 1.3467 with a target of 1.3050–1.2936 once the correction is completed.

Alternative Scenario

Breakout and consolidation above 1.3467 will allow the pair to continue rising to the levels of 1.3660–1.3870.

Analysis

On the weekly time frame, an ascending wave of larger degree (A) of B is developing. Within it, wave 1 of (A) has formed, and a downward correction has been completed as wave 2 of (A). The third wave 3 of (A) appears to be unfolding on the daily chart. Within it, wave i of 3 has formed, and bearish correction ii of 3 is developing. On the H4 time frame, wave (c) of ii is developing. Within it, wave iii of (c) has formed, and a local correction is unfolding as wave iv of (c). If the presumption is correct, GBP/USD will continue to decline to 1.3050–1.2936 after the correction is over. The level of 1.3467 is critical in this scenario as a breakout above it will enable the pair to continue rising to the levels of 1.3660–1.3870.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of GBPUSD in real time mode

2026.07.03 2026.07.03
USD/JPY: Elliott Wave Analysis and Forecast for 03.07.26–10.07.26

Alex Geutahttps://www.litefinance.org/blog/authors/alex-geuta/

Major Takeaways

• Main scenario: Consider long positions from corrections above 159.83 with a target of 165.00–170.00. A buy signal: the price holds above 159.83. Stop Loss: below 159.30, Take Profit: 165.00–170.00.
• Alternative scenario: Breakout and consolidation below 159.83 will allow the asset to continue declining to the levels of 158.90–158.00. A sell signal: the level of 159.83 is broken to the downside. Stop Loss: above 160.35, Take Profit: 158.90–158.00.

Main Scenario

Consider long positions from corrections above 159.83 with a target of 165.00–170.00.

Alternative Scenario

Breakout and consolidation below 159.83 will allow the pair to continue declining to the levels of 158.90–158.00.

Analysis

On the weekly time frame, an ascending third wave of larger degree 3 has formed, a downward correction has been completed as the fourth wave 4, and the fifth wave 5 is developing. On the daily chart, the third wave of smaller degree (3) of 5 appears to be developing, with wave 3 of (3) forming as its part. Wave i of 3 has formed on the H4 chart, and wave ii of 3 has presumably been completed as a local correction. If the presumption is correct, USD/JPY will continue to rise to 165.00–170.00 within wave iii of 3. The level of 159.83 is critical in this scenario as a breakout below it will enable the asset to continue declining to the levels of 158.90–158.00.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of USDJPY in real time mode

The Euro to Dollar (EUR/USD) exchange rate has recovered to around 1.1430 after rebounding from recent multi-month lows, although Citi believes the broader risks remain tilted to the downside.

Citi maintains its three-month EUR/USD forecast at 1.13 and expects the pair to trade around 1.14 over the following six to 12 months, with scope for only a gradual recovery.

The bank warns that EUR/USD “risks a move towards the 1.10 area” if US inflation remains sticky enough to keep markets pricing further Federal Reserve tightening, even if additional rate hikes are ultimately not delivered.

Citi also believes the European Central Bank could become less hawkish as commodity prices decline and the Middle East conflict continues to ease, opening the door to further scaling back of ECB tightening expectations.

Over the medium term, however, the bank expects some mean reversion once the US Dollar rally peaks. Citi argues that markets may eventually unwind overly aggressive Fed expectations, helping to limit further Dollar gains.

The bank also expects higher European defence spending to provide a gradual lift to economic growth, although it cautions that broader structural reforms are progressing only slowly.

While Citi remains cautious on EUR/USD in the near term, it believes a moderation in Dollar strength should allow the pair to stabilise around 1.14 over the longer horizon.