Technical outlook on EUR/USD, USD/JPY, BTC/USD [Video]

• EURUSD hopes for a rebound below 20-SMA as ECB rate decision and flash PMIs loom.

• USDJPY remains shaky after Ishiba’s political setback. 

• BTCUSD stabilizes near all-time high. Is another bullish episode on the horizon?

 

ECB rate decision, flash S&P Global PMIs – EUR/USD

The European Central Bank (ECB) has been cutting interest rates almost non-stop over the past year, halving its deposit facility rate to 2.0% after eight 25-basis-point reductions. However, with inflation showing signs of stickiness and EU-US trade negotiations stalling, policymakers are widely expected to stay on the sidelines when they conclude their two-day policy meeting on Thursday.

Money markets forecast one more rate cut by the end of the year, though whether it comes as soon as September or October remains uncertain. EU officials are also expected to meet as early as this week to prepare a package of countermeasures in case talks with the US administration collapse before Trump’s August 1 deadline. Notably, President Trump aims to impose tariffs on EU products above the 10% baseline, possibly reaching as high as 50-70%, while the bloc seeks to avoid any restrictions on pharmaceuticals and vehicles.

The Eurozone’s preliminary S&P Global PMI figures for July will also draw attention, as they are due before the ECB rate decision. Forecasts point to a slight improvement, but the ECB’s policy guidance and any updates on trade could overshadow the data. Still, a positive surprise could support the euro, and if Christine Lagarde adopts a hawkish tone, EURUSD may bounce back above its constraining 20-day simple moving average (SMA) at 1.1650 and head toward the 1.1780–1.1800 resistance zone. The double bottom in the RSI and oversold signals from the stochastic oscillator support this scenario—particularly as the upward trajectory remains solid above April’s peak and the 50-day SMA at 1.1517.

Powell's speech – USD/JPY

The US economic calendar will be relatively light this week, featuring housing data, S&P Global business PMIs, and durable goods orders. Meanwhile, Fed policymakers will be off the radar during the blackout period ahead of next week’s FOMC policy meeting. However, Jerome Powell’s remarks during a hybrid conference reviewing the capital framework for big banks may still draw attention on Tuesday, amid speculation about his potential replacement and growing concerns about the central bank’s independence.

In Japan, a second election setback for Prime Minister Ishiba during Sunday’s upper house vote could continue to weigh on the yen. While similar defeats in the past have led to resignations within two months, there is little appetite for a cabinet reshuffle at the moment - and no popular candidate to replace Ishiba.

Following the negative election outcome, USDJPY slipped to 147.80 during Monday’s Asian session, moving closer to its 200-day exponential moving average (EMA), with technical indicators pointing to potentially fragile sessions ahead.

Tech earnings releases – BTC/USD

In the crypto world, the weekend was relatively quiet, with BTCUSD hovering near its all-time high of $123,153. Last week, President Trump signed the Genius Act into law and promised to expand access for retirement funds to invest in cryptocurrencies, boosting investor sentiment. As a result, total market capitalization of the crypto market climbed to $4 trillion over the weekend.

While US economic data may have limited influence on Bitcoin, upcoming tech earnings from Tesla and Alphabet could spark renewed volatility, given Bitcoin’s strong positive correlation with major US stock indices. Interestingly, a bullish pennant formation appears to be setting the stage for a potential breakout to the upside.