Forex Today: Draghi set to rock EUR/USD, PM Boris Johnson culls cabinet, top-tier US data eyed

Yohay Elam FXStreet

Here is what you need to know on Thursday, July 25th, the European session:
- The European Central Bank is left, right, and center. President Mario Draghi has pledged to provide fresh monetary stimulus but analysts are split on the timing: now or in September. Moreover, it is unclear if the ECB will settle for only cutting interest rates or also opening the door to resuming the QE program. Markit's latest PMIs have been downbeat and increase expectations for imminent action. German IFO Business Climate will provide the last data point before the event. EUR/USD has been on the back foot.

- UK PM Boris Johnson has announced his new cabinet which includes Thatcherite Sajid Javid as Chancellor of the Exchequer and hardline Brexiteer Dominic Raab as Foreign Secretary, lowering the chances of a deal with the EU. Political experts suspect the UK is heading to elections. GBP/USD has been steady amid the change of the guard.

- US data was mostly disappointing with New Home Sales coming out at 646K annualized – another worrying sign for the sector. Today's Durable Goods Orders provides critical insight for Friday's GDP. The USD is stable and next week's Fed decision is awaited.

- Cryptocurrencies are recovering with Bitcoin topping $10,000. Oil and gold are stable.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold retakes $4,400 as receding Fed hike bets undermine USD

Gold is looking to build on Friday's bounce from the $4,300 neighborhood as reduced bets on an immediate Fed rate hike keep US Dollar bulls on the defensive and support the non-yielding bullion. However, the US-Iran standoff could limit deeper USD losses, warranting caution before positioning for the resumption of the XAU/USD pair's recent uptrend to its highest level since June 5.

BTC/USD price outlook: Bitcoin navigating between arc levels. Potential continuation toward $58,000

Overview: Based on Arc Cycle Analysis applied to the 1D chart, Bitcoin is trading between the 0.5 Arc and 0.618 Arc within the current Arc Cycle. Price has cleared the 0.5 Arc and is progressing toward the 0.618 Arc, suggesting continued movement toward the next Arc boundary. Metric

US Dollar Weekly Forecast: Economic cracks challenge Fed rate bets

It was a strange week for the US Dollar: while the geopolitical situation has remained largely unchanged, with the usual back-and-forth between the US, Iran, and occasional third parties, disappointing domestic data have re-emerged, reducing expectations of potential tightening by the Federal Reserve in the next few months.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.