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Pound Sterling Live and Corpay have launched the midyear forecast collation for the Pound to Dollar exchange rate.

The document shows that the world’s best-regarded foreign exchange analysts and economists have downgraded their view on the Pound’s prospects against the Dollar.

The forecast document – available as a discretionary free download – collates the forecasts of all the major investment banks to give an actionable point target for those with payment requirements to consider.

The median forecast of the major investment banks is particularly useful as it shows where there is greater consensus. It allows those with payment requirements the ability to formulate as reliable an expectation as possible.

As we reach the mid-year stage, we can report that the median GBP/USD prediction is shifted lower by 200 pips from where it started the year.

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Above: King Dollar reigns supreme in 2024.

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To be sure, the median is still higher than current spot levels (1.2670). However, the downgrade recognises the Dollar’s outperformance in 2024.

“We have been bullish on the USD throughout the year on the premise that the Fed will cut slower than other central banks and that the dollar was under-pricing the US election. The dollar’s rally in recent days is arguably in part due to the market finally starting to price a higher risk premium on this event,” says George Saravelos, an analyst at Deutsche Bank.

At the start of the year, investors reckoned the Fed would gift up to seven interest rate cuts throughout the year, which would ultimately weigh on the Dollar. The first cut was expected in March.

Fast-forward to June, and we have had no cuts. There is now less than a 50% chance of a Fed cut by the September meeting. The market is now fully priced for just one cut this year.

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Some Fed officials have even warned this could also be too optimistic.

Meanwhile, the U.S. stock market outperforms, giving global investors the incentive to buy dollars to fund forays into market darlings like Nvidia.

The forecast document, meanwhile, shows that one investment bank thinks the Pound-Dollar exchange rate can fall as low as 1.11. At the other extreme is a forecast for 1.35.

We suspect the median could be correct in anticipating levels higher than current rates, but a cross of 1.30 will require a sudden downshift in the U.S. data pulse. This is, of course, still possible, but data-dependency is the watchword heading into the year’s second half.

• The Japanese yen suddenly fell to its weakest level since 1986, increasing speculation and authorities may soon have to support the currency again to stop the worst selling in the developed world.
• According to reliable trading platforms, the US dollar against the Japanese yen USD/JPY rose to the resistance level of 160.86, its lowest since 1986.
• With the move, the currency pair surpassed the point where officials intervened in the market in April, bringing losses this year to more than 12%.
• Against the euro, it fell to its lowest levels ever.

In general, a weaker currency increases the prices of imports, hurting Japanese consumers and causing increasing concern among businesses. Commenting on the performance, Masato Kanda, Vice Minister of Finance and Governor of the Japanese currency, said on Wednesday that officials are monitoring foreign exchange markets with a high degree of urgency and will take appropriate steps as needed. He described the latest move in the currency as “rapid” and “unilateral,” but declined to comment on whether it was excessive. The yen extended losses after his comments.

Meanwhile, the wide gap between interest rates in Japan — where borrowing costs remain close to zero — and the United States has continued to weigh on the yen despite attempts to contain the decline. The next big pain point could come from Friday’s reading of the Federal Reserve’s preferred measure of U.S. inflation, which is key to its monetary policy outlook.

What’s next for the yen?

“The comments from the finance ministry in recent days suggest growing concern,” said Erik Nelson, a strategist at Wells Fargo in London. He expects officials to hold out until the currency drops to 165 against the U.S. dollar before entering the market, a level that banks including Bank of America say is the new “line in the sand” for authorities.

There’s a lot at stake for Japan, which has spent a record 9.8 trillion yen ($61.1 billion) in its latest round of intervention. Citigroup estimates the country has between $200 billion and $300 billion in ammunition to fund any campaign, which could entail selling U.S. dollars and other currencies it holds in reserves or even government bonds around the world to buy yen.

For Dominik Kohnstamm, any intervention is more about “slowing the yen’s bottom” while the Bank of Japan normalizes monetary policy.

So far this week, officials in Tokyo have limited themselves to verbal warnings. Finance Minister Shunichi Suzuki said they were closely monitoring developments in the market and would take all possible measures as needed. Currency Governor Kanda warned on Monday that authorities were ready to intervene 24 hours a day, if necessary, while reiterating that they were not targeting a specific level.

Japan’s previous move to support its currency market has raised eyebrows abroad, with the U.S. Treasury Department last week adding the country to a “watch list” for foreign exchange market practices. While the U.S. stopped short of labeling Japan — or any other trading partner — a currency manipulator, officials in Washington wrote that “in large, freely traded exchange markets, intervention should be limited to very exceptional circumstances with appropriate prior consultation.”

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The U.S. is adding Japan to its foreign exchange watch list amid global pressure on the strong dollar. However, U.S. data on Friday could ease some pressure on the yen. Moreover, economists expect core personal consumption expenditures inflation — a measure that excludes volatile food and energy categories — to slow, which could bolster the Federal Reserve’s case for lowering borrowing costs this year.

Also, volatility has remained relatively low in the market, making it difficult for authorities to enter the market so far, many analysts say. Furthermore, the implied volatility of the USD/JPY exchange rate over one month hovered below 9% for most of this month, down sharply from 12.4% in late April.

USD/JPY Technical Analysis and Expectations Today

With the recent move in the USD/JPY exchange rate, all technical indicators have moved towards strong overbought levels. Accordingly, the markets are awaiting the moment of Japanese intervention in the currency markets to stop the bleeding of the exchange rate losses, and that an event will bring strong selling operations for profit-taking in the currency pair. Currently, the closest resistance levels for the currency pair are 160.80, 161.20, and 162.00, respectively.

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EUR/USD Current price: 1.0719

• Upbeat United States data fueled market’s optimism and pushed the USD lower.
• European Economic Sentiment contracted in June to 95.9, also missing expectations.
• EUR/USD en route to extend its recovery, critical resistance at 1.0750.

The EUR/USD pair recovered the 1.0700 mark and trimmed its Wednesday losses when it bottomed at 1.0665. Demand for the US Dollar lost steam throughout the first half of the day despite the market mood remaining sour. Asian and European indexes edged lower following Wall Street’s poor performance, unable to take advantage of the tech sector recovery and limiting USD intraday weakness. The Greenback, however, accelerated its slump after the release of generally encouraging United States (US) figures.

Earlier in the day, the Eurozone published the June Economic Sentiment Indicator, which contracted to 95.9 from 96 in May, missing expectations of 96.2, which failed to trigger an EUR/USD reaction.

US data, on the contrary, spurred optimism. On the one hand, Durable Goods Orders were up 0.1% MoM, better than the -0.1% expected. On the other hand, the US confirmed the Gross Domestic Product (GDP) to be at 1.4% as expected, slightly above the previous estimate of 1.3%. At the same time, the country reported that Initial Jobless Claims for the week ended June 21 at 233K, better than the 236K expected. The US will later release May Pending Home Sales and the June Kansas Fed Manufacturing Activity Index.

EUR/USD short-term technical outlook

The EUR/USD pair hovers around 1.0720, and although the bearish momentum has receded, it is still at risk of falling. In the daily chart, the pair keeps trading below all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly south below directionless 100 and 200 SMAs. Technical indicators, however, aim higher but remain within negative levels, somehow limiting the bullish scope.

The 4-hour chart offers a similar picture. Technical indicators head firmly higher, although the Momentum indicator remains below its 100 line. The Relative Strength Index (RSI) indicator, on the contrary, stands at 55, suggesting the pair may extend its near-term gains. At the same time, the current candle reflects strong buying interest, pushing EUR/USD above a flat 20 SMA, also supporting additional gains. Finally, a bearish 100 SMA provides dynamic resistance in the 1.0750 price zone. A clear break above the latter should support steady gains in the upcoming sessions.

 Support levels: 1.0665 1.0620 1.0580

Resistance levels: 1.0750 1.0800 1.0845

EUR/USD Current price: 1.0719

• Upbeat United States data fueled market’s optimism and pushed the USD lower.
• European Economic Sentiment contracted in June to 95.9, also missing expectations.
• EUR/USD en route to extend its recovery, critical resistance at 1.0750.

The EUR/USD pair recovered the 1.0700 mark and trimmed its Wednesday losses when it bottomed at 1.0665. Demand for the US Dollar lost steam throughout the first half of the day despite the market mood remaining sour. Asian and European indexes edged lower following Wall Street’s poor performance, unable to take advantage of the tech sector recovery and limiting USD intraday weakness. The Greenback, however, accelerated its slump after the release of generally encouraging United States (US) figures.

Earlier in the day, the Eurozone published the June Economic Sentiment Indicator, which contracted to 95.9 from 96 in May, missing expectations of 96.2, which failed to trigger an EUR/USD reaction.

US data, on the contrary, spurred optimism. On the one hand, Durable Goods Orders were up 0.1% MoM, better than the -0.1% expected. On the other hand, the US confirmed the Gross Domestic Product (GDP) to be at 1.4% as expected, slightly above the previous estimate of 1.3%. At the same time, the country reported that Initial Jobless Claims for the week ended June 21 at 233K, better than the 236K expected. The US will later release May Pending Home Sales and the June Kansas Fed Manufacturing Activity Index.

EUR/USD short-term technical outlook

The EUR/USD pair hovers around 1.0720, and although the bearish momentum has receded, it is still at risk of falling. In the daily chart, the pair keeps trading below all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly south below directionless 100 and 200 SMAs. Technical indicators, however, aim higher but remain within negative levels, somehow limiting the bullish scope.

The 4-hour chart offers a similar picture. Technical indicators head firmly higher, although the Momentum indicator remains below its 100 line. The Relative Strength Index (RSI) indicator, on the contrary, stands at 55, suggesting the pair may extend its near-term gains. At the same time, the current candle reflects strong buying interest, pushing EUR/USD above a flat 20 SMA, also supporting additional gains. Finally, a bearish 100 SMA provides dynamic resistance in the 1.0750 price zone. A clear break above the latter should support steady gains in the upcoming sessions.

 Support levels: 1.0665 1.0620 1.0580

Resistance levels: 1.0750 1.0800 1.0845

• GBP/USD edges higher early Thursday after posting large losses on Wednesday.
• The pair could have a hard time discouraging sales until it flips 1.2640 into support.
• The cautious market mood could help the USD hold its ground.

GBP/USD lost 0.5% and touched its lowest level in over a month below 1.2620 on Wednesday. The pair stages a technical correction toward 1.2650 in the European morning on Thursday but the technical outlook doesn’t offer any convincing signs pointing to an extended rebound.

The US economic docket will feature the Bureau of Economic Analysis’ (BEA) final revision to the annualized Gross Domestic Product (GDP) growth for the first quarter. The US Department of Labor will also release the weekly Initial Jobless Claims data, which is forecast to come in at 236,000 in the week ending June 22. A reading of 240,000, or higher, in the number of fist-time applications for unemployment benefits could remind investors of loosening labor market conditions and cause the US Dollar (USD) to weaken against its rivals.

In the meantime, US stock index futures trade modestly lower on the day. Market participants could stick to a cautious stance ahead of the first Presidential Debate between Donald Trump and Joe Biden later in the American session.

Although it’s difficult to say how the debate could influence the action in markets, the USD is likely to benefit from risk aversion.

On Friday, the BEA will publish the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, for May.

GBP/USD Technical Analysis

The 100-day and the 50-day Simple Moving Averages (SMA) form a key pivot level at 1.2640. If GBP/USD fails to reclaim this level and starts using it as resistance, technical sellers could remain interested. In this scenario, 1.2600 (psychological level, static level), 1.2580 (Fibonacci 50% retracement) and 1.2550 (200-day SMA) could be seen as next bearish targets.

If GBP/USD manages to flip 1.2640 into support, 1.2675 (50-period SMA on the 4-hour chart) and 1.2710-1.2720 (200-period SMA, Fibonacci 23.6% retracement of the latest downtrend) could be seen as next resistance levels.

 

• GBP/USD edges higher early Thursday after posting large losses on Wednesday.
• The pair could have a hard time discouraging sales until it flips 1.2640 into support.
• The cautious market mood could help the USD hold its ground.

GBP/USD lost 0.5% and touched its lowest level in over a month below 1.2620 on Wednesday. The pair stages a technical correction toward 1.2650 in the European morning on Thursday but the technical outlook doesn’t offer any convincing signs pointing to an extended rebound.

The US economic docket will feature the Bureau of Economic Analysis’ (BEA) final revision to the annualized Gross Domestic Product (GDP) growth for the first quarter. The US Department of Labor will also release the weekly Initial Jobless Claims data, which is forecast to come in at 236,000 in the week ending June 22. A reading of 240,000, or higher, in the number of fist-time applications for unemployment benefits could remind investors of loosening labor market conditions and cause the US Dollar (USD) to weaken against its rivals.

In the meantime, US stock index futures trade modestly lower on the day. Market participants could stick to a cautious stance ahead of the first Presidential Debate between Donald Trump and Joe Biden later in the American session.

Although it’s difficult to say how the debate could influence the action in markets, the USD is likely to benefit from risk aversion.

On Friday, the BEA will publish the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, for May.

GBP/USD Technical Analysis

The 100-day and the 50-day Simple Moving Averages (SMA) form a key pivot level at 1.2640. If GBP/USD fails to reclaim this level and starts using it as resistance, technical sellers could remain interested. In this scenario, 1.2600 (psychological level, static level), 1.2580 (Fibonacci 50% retracement) and 1.2550 (200-day SMA) could be seen as next bearish targets.

If GBP/USD manages to flip 1.2640 into support, 1.2675 (50-period SMA on the 4-hour chart) and 1.2710-1.2720 (200-period SMA, Fibonacci 23.6% retracement of the latest downtrend) could be seen as next resistance levels.

 

• The US dollar rallied rather significantly during the trading session on Wednesday.
• As we have now broken to a fresh new high, we are above the 160 yen level, an area that the Bank of Japan had intervened in previously.
• I think it does make a certain amount of sense that people are taking a look around and piling in.

Yen is Getting Crushed Everywhere

It’s not a huge surprise considering many of the other yen-denominated pairs have already broken above the Bank of Japan intervention level, so it was probably only a matter of time before the dollar did it as well. The obvious analysis of this USD/JPY pair is that when you pull back, you find value and you buy.

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You get paid at the end of every day to hang on to this position, so that makes a lot of sense that we would have traders coming in and trying to take advantage of any cheap US dollar that they can. The 158 yen level underneath should continue to be support right as the 50 day EMA is starting to race towards it. We also have the 155 yen level underneath there offering support as well. Based on the measured move of the breakout that we just did; we could be looking at a move to as high as 168 yen.

That doesn’t mean we get there anytime soon, and it doesn’t even necessarily mean that we even get there this year. I think this is going to continue to be more of a grind higher, although breaking through all the stops at the 160 yen level, of course, is something that a lot of people will pay attention to. But at the end of the day, it really doesn’t change anything because we’ve seen the same behavior for months now.

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• The euro initially fell again during the early hours on Wednesday but has since recovered against the British pound to continue the overall noisy consolidation that we have been in for some time.
• With that being the case, I think you have to look at this through the prism of a market that is trying to sort itself out and figure where we are going next.
• But there is a gap above that still needs to be filled, although we came very close to doing so.
• We could find this pair going back to the 0.85 level for no other reason than that gap.

However, it’s also worth noting that this is a market that has seen a lot of downer pressure over the last several months. I think the snap elections in France have really put a chill down the spine of most traders that would be willing to hold on to this market. So, I think we have a situation where traders continue to look at this through the prism of potential value play based on longer term charts. But we need to be honest here.

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The EUR/GBP market is clearly one that is going to remain volatile and choppy and perhaps even very difficult overall to deal with. Because of this, I think you’ve got a situation where traders continue to favor buying the dips as they occur and trying to defend 0.84 level. The 0.84 level, of course, is an area that has caused a bit of support in the longer term charts. So, I think right now we may be setting up sideways action between 0.84 and 0.85 above.

Current Environment is All Noise

In this current environment, I expect to see a lot of noisy trading in multiple markets, not just this one. However, as this market does tend to be choppy under normal conditions, I expect it to be even more aggressive here. If we can break above the 0.8550 level, that might bring in a certain amount of FOMO trading.

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• The British pound has gotten hammer during the early hours on Wednesday as we continue to see a lot of chaos in the currency markets.
• We continue to see a lot of volatility, and unfortunately think that might be more or less a feature of the market, and not a bug.
• After all, the Federal Reserve remains steadfast in its strategy of strangling the economy, as although there is a massive amount of inflation, we are starting to see real pain.

As long as they keep monetary policy tight, it’s likely that the US dollar will be somewhat attractive, at least from an interest rate perspective. That being said, I also think that you have a scenario where traders will continue to look for any help whatsoever in determining whether or not the Federal Reserve may possibly someday think about cutting rates, because they are more than willing to jump all over that if they get an opportunity. This makes a certain amount of sense, considering that almost all traders now have never lived through an inflationary environment.

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200-Day EMA

The 200-Day EMA is an indicator that sits just below current trading, and I think a lot of people will be paying close attention to it. If we were to break down below there, then it’s likely that the GBP/USD market could go down to the 1.25 level, which is an area that is not only a large, round, psychologically significant figure, but it is also an area where we have seen a lot of support and resistance previously, kicking off the idea of “market memory” in that region. If we have that actually happen and offer support, it might end up being a nice buying opportunity, but we will have to wait and see what happens if we do get there.

If we were to break down below the 1.25 level, it could open up a massive unwinding of the British pound, perhaps sending it down to 1.22, maybe even down to the 1.20 level, but I think we are a long way from seeing that happen. I would suspect that sooner or later we will see buyers coming in and picking up “cheap British pound.”

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Monetary policy tightening through rate hikes and a sharp cut in JGB purchases could have more lasting success in bolstering the Yen. In April, the Japanese government intervened to strengthen the Yen. The USD/JPY slid below the 152 handle on May 3, only to retake the 160 handle on June 26.

On Wednesday, June 26, Bruegel Senior Fellow Alicia Garcia Herrero shared her views on effective measures to bolster the Yen, saying,

“Bank of Japan to start quantitative tightening, which could support the Yen more than intervention.”

The Bank of Japan is banking on a more dovish Fed rate path, the net effect being a narrowing of the interest rate differential in favor of the Japanese Yen. If US economic indicators signal a more hawkish Fed rate path, the BoJ may need to take more aggressive measures to counter US Treasury yield trends.

Can US jobless claims raise expectations of a September Fed rate cut?

US Jobless Claims: A Prelude to the Crucial Friday Data Release

Later in the session on Thursday, US jobless claims, durable goods orders, and finalized Q1 GDP numbers will garner investor attention.

Unless there is a downward revision to Q1 GDP numbers and a slump in durable goods orders, weekly jobless claims could influence the Fed rate path more.

Economists expect initial jobless claims to fall from 238k to 236k in the week ending June 22. A larger-than-expected fall in jobless claims could reduce investor bets on a September Fed rate cut.

Tight labor market conditions support wage growth and consumer confidence. Upward wage trends and consumer confidence could fuel consumer spending and demand-driven inflation. The Fed could leave rates higher for longer to raise borrowing costs, impact hiring trends, and reduce consumer spending.

Labor Market and Consumer Confidence Trends Highlight the Fed Dilemma

Conference Board Chief Economist Dana Peterson commented on the June US consumer confidence survey, attributing the narrow movements in the CB Consumer Confidence Index to a robust US labor market.

Consumer confidence and unemployment trends suggest the Fed may require higher unemployment levels if inflationary pressures persist. The CB Consumer Confidence Index last dropped below 90 in January 2021. The US unemployment rate stood at 6.3% in January 2021 compared with 4.0% in May 2024. However, a sharp rise in unemployment could signal a hard landing and its election year.

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• EUR/USD added to Tuesday’s losses below 1.0700.
• The US Dollar rose to multi-week highs, helped by yields.
• Germany’s Consumer Confidence receded in July.

The intense buying interest in the US Dollar (USD) led the USD Index (DXY) to build on Tuesday’s gains and advance to multi-week highs past the 106.00 barrier on Wednesday, exerting notable pressure on risk-sensitive assets and sending EUR/USD to fresh monthly lows near 1.0660.

The negative sentiment around the euro (EUR) persisted despite decreasing political concerns in France ahead of the June 30 snap elections, while hawkish Fedspeak and the widening gap in monetary policy between the Fed and its major peers collaborated with the move lower.

Furthermore, the macroeconomic scenario remained unchanged on both sides of the Atlantic, with the European Central Bank (ECB) still considering further rate cuts beyond the summer, while market bets suggested two more rate cuts later in the year.

In contrast, market participants continued to debate between one or two rate cuts by the Federal Reserve (Fed) this year, even though the Fed had already forecasted just one cut, likely in December.

Once again, FOMC Governor Michelle Bowman repeated on Wednesday that her basic assessment is that inflation will fall further if the policy rate remains unchanged and that rate decreases will be necessary if inflation gets stably towards 2%.

From the ECB, Finnish policymaker Olli Rehn predicted bumpy inflation in the bloc, but this is expected, while data suggests price growth will meet the 2% target. Additionally, Board member Fabio Panetta suggested the ECB could gradually reduce interest rates as inflation falls, while ECB Chief Economist Philip Lane projected continued interest rate cuts if price pressures ease but may slow down in case of unexpected surprises.

The CME Group’s FedWatch Tool now indicates nearly a 63% probability of lower interest rates in September and around 93% in December.

In the short term, the recent rate cut by the ECB, compared to the Fed’s decision to maintain rates, has widened the policy gap between the two central banks, potentially leading to further weakness in EUR/USD in the near term.

However, the Eurozone’s emerging economic recovery and perceived weakening of US fundamentals are expected to reduce this disparity, possibly providing occasional support for the pair in the near future.

EUR/USD daily chart

EUR/USD short-term technical outlook

If bears remain in control, EUR/USD may first revisit the June low of 1.0666 (June 26), then the May low of 1.0649 (May 1), and finally the 2024 bottom of 1.0601 (April 16).

Occasional bouts of strength, in the meantime, could put the pair on track to revisit the 200-day SMA at 1.0789, prior to the weekly high of 1.0852 (June 12) and the June top of 1.0916 (June 4). The breakout of this level reveals the March peak of 1.0981 (March 8), which precedes the weekly high of 1.0998 (January 11) and the psychological 1.1000 yardstick.

So far, the 4-hour chart has revealed some signs of continued deterioration. The initial resistance is at 1.0746 followed by 1.0761 and 1.0802. The initial support comes in at 1.0666, ahead of 1.0649 and 1.0601. The Relative Strength Index (RSI) bounced to 39.

• EUR/USD added to Tuesday’s losses below 1.0700.
• The US Dollar rose to multi-week highs, helped by yields.
• Germany’s Consumer Confidence receded in July.

The intense buying interest in the US Dollar (USD) led the USD Index (DXY) to build on Tuesday’s gains and advance to multi-week highs past the 106.00 barrier on Wednesday, exerting notable pressure on risk-sensitive assets and sending EUR/USD to fresh monthly lows near 1.0660.

The negative sentiment around the euro (EUR) persisted despite decreasing political concerns in France ahead of the June 30 snap elections, while hawkish Fedspeak and the widening gap in monetary policy between the Fed and its major peers collaborated with the move lower.

Furthermore, the macroeconomic scenario remained unchanged on both sides of the Atlantic, with the European Central Bank (ECB) still considering further rate cuts beyond the summer, while market bets suggested two more rate cuts later in the year.

In contrast, market participants continued to debate between one or two rate cuts by the Federal Reserve (Fed) this year, even though the Fed had already forecasted just one cut, likely in December.

Once again, FOMC Governor Michelle Bowman repeated on Wednesday that her basic assessment is that inflation will fall further if the policy rate remains unchanged and that rate decreases will be necessary if inflation gets stably towards 2%.

From the ECB, Finnish policymaker Olli Rehn predicted bumpy inflation in the bloc, but this is expected, while data suggests price growth will meet the 2% target. Additionally, Board member Fabio Panetta suggested the ECB could gradually reduce interest rates as inflation falls, while ECB Chief Economist Philip Lane projected continued interest rate cuts if price pressures ease but may slow down in case of unexpected surprises.

The CME Group’s FedWatch Tool now indicates nearly a 63% probability of lower interest rates in September and around 93% in December.

In the short term, the recent rate cut by the ECB, compared to the Fed’s decision to maintain rates, has widened the policy gap between the two central banks, potentially leading to further weakness in EUR/USD in the near term.

However, the Eurozone’s emerging economic recovery and perceived weakening of US fundamentals are expected to reduce this disparity, possibly providing occasional support for the pair in the near future.

EUR/USD daily chart

EUR/USD short-term technical outlook

If bears remain in control, EUR/USD may first revisit the June low of 1.0666 (June 26), then the May low of 1.0649 (May 1), and finally the 2024 bottom of 1.0601 (April 16).

Occasional bouts of strength, in the meantime, could put the pair on track to revisit the 200-day SMA at 1.0789, prior to the weekly high of 1.0852 (June 12) and the June top of 1.0916 (June 4). The breakout of this level reveals the March peak of 1.0981 (March 8), which precedes the weekly high of 1.0998 (January 11) and the psychological 1.1000 yardstick.

So far, the 4-hour chart has revealed some signs of continued deterioration. The initial resistance is at 1.0746 followed by 1.0761 and 1.0802. The initial support comes in at 1.0666, ahead of 1.0649 and 1.0601. The Relative Strength Index (RSI) bounced to 39.