Technical outlook on USD/JPY, GBP/USD, Gold [Video]

FOMC rate decision --> GOLD

Gold opened the week on a positive note after Pakistani mediators confirmed that the US and Iran agreed on a 60-day memorandum, including a ceasefire in Lebanon and across all fronts, the reopening of the Strait of Hormuz, and a new round of negotiations, particularly on nuclear production. Improved risk sentiment lifted the precious metal toward the 4,300 region after the recent sell-off halted near 4,000 and the 50-weekly simple moving average (SMA).

While investors are likely to remain sensitive to geopolitical headlines until the US-Iran agreement is officially signed in Switzerland on Friday, attention may increasingly shift toward the Federal Reserve policy meeting on Wednesday. This will mark the first meeting under Chairman Kevin Warsh, with markets closely monitoring the updated economic projections and dot plot for signals on the future rate path.

As technical indicators continue to reflect oversold conditions, any softer policy tone could revive expectations for rate cuts and provide fresh support for gold. From a technical perspective, a decisive break above 4,850 is required to restore the broader bullish outlook.

BoJ rate decision --> USD/JPY

The Bank of Japan is expected to raise interest rates to 1.0% on Tuesday, marking the highest level in over three decades. Deputy Governor Himino will chair the meeting in Governor Ueda’s absence. Markets will look for guidance on whether further tightening remains likely later this year despite the easing geopolitical tensions.

Technically, USD/JPY continues to hold above its 20-day SMA and the key 160 area, showing resilience against the easing Middle East risks. However, the momentum indicators suggest bullish momentum is fading after repeated failures near 160.60.

BoE rate decision --> GBPUSD

In the UK, the Bank of England is widely expected to keep interest rates unchanged at 3.75% on Thursday for a fourth consecutive meeting, with policymakers likely voting 7-2 in favor of holding rates steady versus 8-1 previously. UK CPI data could generate volatility in GBP/USD a day earlier, while employment figures due before the rate announcement may provide further clarity on whether tighter monetary policy is still needed at a time when Middle East tensions appear to be easing, at least temporarily, and GDP growth continues to lose momentum.

Thursday’s Makerfield by-election could also bring UK politics into focus, adding to volatility around the central bank announcement, as polls show Starmer critic Andy Burnham leading Reform in the by-election that would make him a Member of Parliament, thereby increasing the chances of another leadership challenge to the Prime Minister.

As for GBP/USD, the pair needs a decisive break above 1.3500 to confirm that the bullish double-bottom pattern near 1.3300 remains sustainable.