U.S. Dollar Index gains ground as traders react to the Retail Sales report. The report indicated that Retail Sales increased by +0.2% month-over-month in June, in line with analyst estimates. Retail Sales Ex Autos declined by -0.2%, compared to analyst forecast of -0.1%.

Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report indicated that 208,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 217.000. The report showed that labor market remained in decent shape, which was bullish for the U.S. dollar.

The Euro to Dollar exchange rate is trading close to 1.1460 after gaining around 0.5% in July, although Rabobank expects choppy conditions to dominate over the coming months.

The bank notes that the US Dollar has been the strongest G10 currency since the start of the Iran war, initially benefiting from safe-haven demand and short-covering before receiving a second boost from more hawkish Federal Reserve expectations.

Rabobank believes investors may still have room to increase long-Dollar positions, but recent price action suggests that the rally is losing momentum.

The bank highlights that the Dollar has failed to respond meaningfully to renewed speculation over a possible Federal Reserve rate increase, despite concerns about sticky core inflation, tariff pressures and AI-related demand.

According to Rabobank, this “supports the view that the market is already long USDs and currently has little appetite to build these up further.”

The bank does not share the market’s hawkish outlook for the Fed, but it also sees limited scope for investors to rebuild large bullish positions in the Euro.

Optimism surrounding Germany’s fiscal expansion has faded, while higher energy costs and weaker Eurozone growth have undermined sentiment. Expectations for another European Central Bank rate increase are also largely reflected in current pricing.

Rabobank expects “choppy range trading around the EUR/USD1.14 level on a 1-to-3-month view”, with similarly uneven trading likely to persist into the autumn.

Copper price continued forming bullish trading, as the negative pressure repeated at $6.3000, attempting to find a chance for recording extra gains in the near period, and the price needs to provide a new close above the current barrier, to reinforce the chances of forming a new bullish rally, to expect reaching $6.4800 followed by $6.5400.

Note that the main indicators will support the bullish scenario in the current trading, to keep waiting for recording the previously suggested expected gains, while the risk of the price return to the bearish corrective trend requires a sharp decline, to settle below $5.9500 level.

The expected trading range for today is between $6.2500 and $4.4800

Trend forecast: Bullish

The GBPJPY pair formed a new bullish rally yesterday, benefiting from the continuation of providing positive momentum by the main indicators, to surpass %38.2 Fibonacci correction level at 218.55, which formed the main target in the previous report, to open the way for recording extra gains by reaching 219.30 level.

We will depend on forming extra support at 218.55 level, to reinforce the chances of forming new bullish waves, targeting the bullish channel’s resistance at 220.00, and surpassing it will form the next main target at 220.45 level in the current trading.

The expected trading range for today is between 218.80 and 220.00

Trend forecast: Bullish

jumps to a two-month high on Chancellor reports and softer Fed outlook. Oil steadies near $80 as U.S.-Iran hostilities remain in focus.

GBP/USD Jumps to Two-Month High on Chancellor Reports and Softer Fed Outlook

GBP/USD has climbed to a two-month high above 1.35 as investors continue to scale back Federal Reserve expectations and welcome reports over the UK’s next Chancellor.

Reports that Home Secretary Shabana Mahmood will be appointed Chancellor by incoming Prime Minister Andy Burnham have helped to reassure the market and ease concerns. The market had been fretting that Burnham could appoint a more fiscally expansionary candidate, such as Ed Miliband. are edging lower on the news.

Meanwhile, UK data showed the economy returned to growth in May after contracting in April. rose 0.1% month-on-month, beating expectations for no growth following April’s 0.1% decline.

Looking beneath the headline, the services sector, which accounts for around 80% of the UK economy, expanded 0.3%. However, construction output fell 0.8%, while industrial production declined 0.5%, suggesting the recovery remains uneven.

Looking ahead, renewed tensions in the Middle East could cloud the outlook for the economy. Oil prices have risen to a monthly high, weighing on the economic outlook while increasing the risk of higher inflation

Higher oil prices are reinforcing expectations that the Bank of England will tighten monetary policy later this year. Markets are now fully pricing in a 25 basis point rate hike in November, with another increase expected in March 2027.

Meanwhile, the U.S. dollar has fallen to a monthly low after softer-than-expected and data this week, which followed last week’s weaker labour market report. Together, the data have prompted investors to rule out a July rate hike from the Federal Reserve.

Markets now price around a 70% probability of a 25 basis point rate hike in September.

However, downside in the dollar could prove limited. Renewed U.S.-Iran hostilities could support safe-haven demand for the greenback, while rising oil prices risk reigniting inflation concerns and lifting .

Attention now turns to today’s U.S. report, which is expected to show sales rose 0.2% month-on-month in June after 0.9% growth previously. A stronger-than-expected reading could lend support to the dollar.

GBP/USD Forecast – Technical Analysis

GBP/USD has recovered from the 1.3200 support zone, breaking above both the 200-day SMA and the multi-month falling trendline to reach a high of 1.3550.

The breakout, together with the RSI holding above 50, keeps the near-term technical outlook constructive.

Buyers will look to extend gains towards 1.3600, followed by 1.3650, the May high. A move above there would bring 1.3800 into focus.

Initial support is seen around 1.3500, where the former trendline resistance has become support. A break below this level would expose the 200-day SMA near 1.3400, followed by horizontal support at 1.3340. Below there, sellers could target the 1.3200 support zone.

Oil Steadies Near $80 as U.S.-Iran Hostilities Remain in Focus

Oil prices are holding near a monthly high, with WTI trading around $80 per barrel, as renewed tensions between the U.S. and Iran continue to underpin the market.

The U.S. reimposed a naval blockade on Iranian ports earlier this week, while Tehran has threatened to disrupt more regional energy exports as tensions between the two sides continue to escalate.

Although geopolitical risks remain supportive of , the market has paused after the sharp rally earlier this week.

Shipping through the Strait of Hormuz remains well below normal levels, with just seven vessels transiting the waterway on Wednesday, down from 13 a day earlier.

At the same time, mediation efforts by neighbouring countries continue. The fact that oil prices have stabilised around current levels suggests investors are not yet pricing in a full-scale regional conflict.

However, a geopolitical risk premium remains firmly embedded in the market. Any signs that Iran could use its Houthi allies in Yemen to disrupt shipping through the Bab el-Mandeb Strait would likely add further upward pressure to oil prices.

Looking further ahead, oil prices could remain elevated into the fourth quarter if export flows continue to recover only slowly, particularly with global inventories already depleted following substantial drawdowns during the second quarter.

Conversely, a sustained easing in tensions alongside a faster recovery in production could see crude prices move back towards the $60 area by year-end.

Oil Forecast – Technical Analysis

After breaking below its symmetrical triangle pattern and the 200-day SMA, oil found support around $67 before staging a strong recovery.

The price has now reclaimed the 200-day SMA and is testing key resistance around $80, where the psychological level coincides with the April low and the 61.8% Fibonacci retracement of the move from $55 to $120.

With the RSI above 50, buyers will look for a break above $80, which would expose $88, where the 50-day SMA, the falling trendline resistance and the 50% Fibonacci retracement converge. Above there, $95 comes into focus.

Failure to overcome the 50-day SMA could see support tested around the 200-day SMA at $74.40. A break below there would shift attention back towards the $67-$70 support zone.

Original Post

Copper price continued forming bullish trading, as the negative pressure repeated at $6.3000, attempting to find a chance for recording extra gains in the near period, and the price needs to provide a new close above the current barrier, to reinforce the chances of forming a new bullish rally, to expect reaching $6.4800 followed by $6.5400.

Note that the main indicators will support the bullish scenario in the current trading, to keep waiting for recording the previously suggested expected gains, while the risk of the price return to the bearish corrective trend requires a sharp decline, to settle below $5.9500 level.

The expected trading range for today is between $6.2500 and $4.4800

Trend forecast: Bullish

– Written by


David Woodsmith

STORY LINK Pound Sterling Forecast: UK GDP, US Retail Sales in Focus for GBP/USD

The Pound to US Dollar (GBP/USD) exchange rate continued to edge higher on Wednesday, building on the previous session’s rally as investors further pared back expectations for additional Federal Reserve policy tightening.

At the time of writing, GBP/USD was trading at around $1.3401, unchanged from Wednesday’s opening levels.

The US Dollar (USD) remained muted through Wednesday’s European session as markets continued to digest the implications of the latest US inflation figures.

The weaker-than-expected consumer price index released on Tuesday sparked a broad selloff in the ‘Greenback’, with investors increasingly questioning whether the Federal Reserve will have scope to raise interest rates again in the coming months.

Following the inflation release, the implied probability of a 25-basis-point rate increase later this month dropped sharply, falling from above 40% to just 14%.

The US Dollar also faced additional headwinds ahead of the latest producer price index release, with economists expecting factory gate inflation to cool further and reinforce the case for a more cautious approach from the Fed.

Although consolidating its recent gains against the US Dollar, the Pound (GBP) traded with little conviction against most of its other major counterparts on Wednesday.

With no significant UK economic releases to provide direction, investors instead focused on the steady rise in UK government bond yields, with the benchmark 10-year gilt climbing towards its highest level in almost two months.

Higher borrowing costs continue to cloud the UK’s fiscal outlook, with markets wary of the challenges they could create for the incoming government led by Andy Burnham.

Near-Term GBP/USD Forecast: UK Growth Data and US Retail Sales Awaited

Looking ahead, Thursday’s UK GDP release is expected to provide the next significant catalyst for movement in the Pound to US Dollar (GBP/USD) exchange rate.

Economists anticipate that monthly economic growth returned to positive territory in May, with GDP forecast to rise from -0.1% to 0.1%.

A stronger reading could provide Sterling with additional support, although any gains may prove limited if the data continues to point to a sluggish and uneven recovery.

Across the Atlantic, investors will also be watching the latest US retail sales figures. Consumer spending is expected to have slowed noticeably during the previous month, while an increase in weekly jobless claims could add to concerns over the resilience of the US economy and place further pressure on the US Dollar.

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The British pound has gone back and forth during trading on Tuesday as we continue to see a lot of noise in the Japanese yen-denominated pairs.

GBP/JPY

The British pound has gone back and forth during trading on Tuesday as we continue to see a lot of noise in the Japanese yen-denominated pairs. Quite frankly, that’s not a huge surprise considering all of the problems that the Bank of Japan finds itself dealing with. The most obvious one is the fact that inflation is starting to drop a bit in Japan.

Furthermore, you also have the situation where the weakening Japanese yen has forced the Bank of Japan to intervene in the yen-related pairs, but the market will continue to see a lot of pressure to the upside because, quite frankly, there’s no point in trying to short a pair that is going to cost you at the end of every day.

Carry Trade Dynamics and Key Technical Levels

The 215 yen level is an area that I think is the floor with the 50-day EMA underneath, offering a bit of support as well. To the upside, we have the 218 yen level, an area that has shown itself to be resistance. And if we can break above there, then it’s likely that we go much higher, perhaps to the 220 yen level.

Keep in mind that you get paid at the end of every day to hold this pair. The carry trade is something that a lot of people will be watching closely, not just here, but in other places. The British pound continues to have a lot of strength to it in general, as the Bank of England is a bit more hawkish than many others, and most certainly than the Japanese central bank. I prefer to buy dips, and I do think eventually we probably go higher over the longer-term.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

– Written by


David Woodsmith

STORY LINK Pound-to-Dollar Forecast: Weaker US Inflation Cuts Fed Rate Hike Bets

The Pound to Dollar exchange rate (GBP/USD) climbed back above 1.3400 after softer-than-expected US inflation data prompted investors to scale back expectations of further Federal Reserve rate hikes.

Although geopolitical tensions in the Middle East continue to underpin the Dollar, the benign inflation report triggered a sharp fall in US Treasury yields and allowed Sterling to recover from earlier losses.

GBP/USD Forecasts: Back Above 1.34

The Pound to Dollar (GBP/USD) exchange rate again found support just below 1.3350 in Asian trading on Tuesday and rallied to 1.3430 after lower than expected US data with a dollar reversal as markets focussed primarily on global developments.

UoB commented on the GBP/USD outlook; “downward momentum has not increased significantly. Based on the prevailing momentum, a clear break below 1.3320 appears unlikely.”

According to Scotiabank; “We note the cluster of resistance levels between current spot and 1.3500 but anticipate an extension of the recovery to 1.36.”

Middle East events and the outlook for US interest rates are likely to dominate in the near term. The near-term impacts have pulled the dollar in opposite directions.

There have been further attacks on Iran by the US military while Iran has attacked ships in the Strait of Hormuz. In response, energy prices have moved higher again while risk conditions remain more fragile.

MUFG commented; “Tit-for-tat military strikes between the US and Iran have continued adding to concerns over the risk of more sustained disruption for energy supplies through the Strait of Hormuz.”

ING commented; “Short-term momentum is swinging back in favour of the dollar as the FX market is finally starting to take the Gulf re-escalation more seriously. Still, both oil (Brent is at $84/bl this morning) and the USD are showing reluctance to fully price back in another supply shock. That’s despite the US reimposing a blockade in the Strait of Hormuz and oil inventories at worryingly low levels.”

Overnight, the US 10-year yield jumped to above 4.60%, not far below 18-month highs recorded in May.

There was, however, a notable reversal after the US data with a retreat to near 4.55% for the 10-year bond and lower yields pushed the dollar lower.

US consumer prices declined 0.4% for June with the year-on-year inflation rate dipping to 3.5% from 4.2% and well below consensus forecasts of 3.8%.

Core prices were unchanged on the month with the annual rate retreating to 2.6% from 2.9% and below expectations of 2.8%.

The dollar dipped after the data with less confidence that the Federal Reserve would hike rates twice before year-end. Markets also cut the probability of a July rate hike to below 20% from 40% the previous day.

According to ING; “Our call for the remainder of the year remains USD negative, primarily resting on another de-escalation and dovish Fed view. But risks, especially in the near-term, are clearly shifting to the bullish side for the greenback.”

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TAGS: Pound Dollar Forecasts