EUR/USD: Breach of the end of May low at 1.0635 opens the door to a test of 1.0500 – MUFG

FXStreet Insights Team FXStreet

The Euro has continued to weaken after Thursday’s ECB policy meeting. Economists at MUFG Bank analyze the shared currency outlook.

Dovish ECB update weighs on EUR

The break below the low from the end of May at 1.0635 opens the door to a test of the bottom of the current year-to-date trading range between 1.0500 and 1.1000.

The dovish market reaction to the ECB’s policy update highlights that market participants have placed more importance on both: i) the stronger signal that rates may have peaked and are now more likely to remain on hold for a long period, and ii) the much weaker growth outlook for the euro-zone and lower inflation projections for 2025.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flat lines around mid-1.3300s amid Iran tensions

The GBP/USD pair struggles to capitalize on last week's strong move higher and oscillates in a narrow band, around the 1.3350 area during the Asian session on Monday. Moreover, spot prices remain below a technically significant 200-day Simple Moving Average, warranting caution before positioning for an extension of the recent recovery from the 1.3140 zone, or the year-to-date low touched in June.

EUR/USD drops toward 1.1400 as US Dollar rebounds

EUR/USD pair trades marginally lower, heading toward 1.1400 in the European session on Monday. The pair faces slight selling pressure as the US Dollar gains ground after a negative weekly close. Middle East concerns and the USD/JPY rally support the Greenback.

Gold struggles to find acceptance above $4,200; eases from two-week high

Gold struggles to capitalize on its modest Asian session uptick, and trades below a fresh two-week high, levels just above the $4,200 mark. The US Dollar attracts some safe-haven flows amid uncertainties stemming from tensions in the Strait of Hormuz, and acts as a headwind for the bullion. However, receding bets for rate hikes by the US Federal Reserve hold back USD bulls from placing aggressive bets.

Cardano Price Forecast: Bullish momentum persists as traders stay cautiously optimistic

Cardano (ADA) is trading slightly lower on Monday, finding support around the key technical level at $0.186. ADA pauses its gains at the start of this week after posting a massive 31% rally in the previous week. Despite the pullback, derivatives data suggests traders remain cautiously optimistic, while momentum indicators indicate that the uptrend remains intact if ADA holds the key support zone.

Week ahead – ISM services PMI and Fed Minutes to shake Fed hike bets

The US dollar is finishing the week on the back foot against most of its major counterparts this week, losing the most ground against the kiwi, the franc and the pound. Despite the pullback, investors remained adamant in their view that the Fed may have to press the rate hike button before the turn of the year.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.