Weekly Forex Market Outlook: EUR/USD, GBP/USD, and Key Pairs in Focus

The Forex market is bracing for a pivotal week as central bank decisions, economic data, and geopolitical shifts collide. Whether you’re trading EUR/USD’s tug-of-war or GBP/USD’s volatility, this weekly outlook arms you with actionable insights to navigate the chaos. Let’s break down the technical setups, fundamental catalysts, and key levels to watch.

EUR/USD: Euro Battles Dollar Dominance

Current Price: 1.0750

Weekly Trend: Bearish (Down 1.2% Last Week)

Technical Analysis:

• Resistance: 1.0800 (200-day SMA), 1.0850 (July 9 high).
• Support: 1.0700 (Psychological Level), 1.0650 (2024 Low).
• Chart Pattern: Descending channel on the 4H chart.
• RSI: 38 (Oversold territory, but no divergence yet).

Key Drivers:

• Fed Rate Cut Bets: Weak U.S. CPI last week fueled September cut hopes, but Friday’s strong retail sales revived the dollar.
• ECB Policy: ECB’s Lagarde (Thursday) may hint at further easing if Eurozone inflation stays muted.
• Data Watch:

1. Tuesday: Eurozone ZEW Economic Sentiment.
2. Thursday: U.S. Jobless Claims, Philly Fed Index.

Trade Plan:

• Bullish Scenario: A break above 1.0800 could target 1.0850 if U.S. data disappoints.
• Bearish Scenario: Close below 1.0700 opens the door to 1.0650.

GBP/USD: Pound Holds Breath Ahead of UK Inflation

Current Price: 1.2650

Weekly Trend: Neutral (Stuck in 1.2600-1.2800 Range)

Technical Analysis:

• Resistance: 1.2750 (50-day SMA), 1.2800 (June 12 High).
• Support: 1.2600 (May 24 Low), 1.2550 (2024 Bottom).
• MACD: Neutral signal near the zero line.

Key Drivers:

• UK Inflation (Wednesday): Forecast: 2.0% YoY (Core: 3.5%). A hot print could delay BoE cuts, boosting GBP.
• Fed vs. BoE Policy: Markets price 60% odds of a September BoE cut vs. 75% for the Fed.
• Risk Sentiment: GBP often rallies with stock markets (high beta status).

Trade Plan:

• Long Setup: Buy above 1.2700 if UK CPI exceeds forecasts.
• Short Setup: Sell below 1.2600 if U.S. retail sales rebound further.

USD/JPY: Yen at Mercy of BoJ and U.S. Yields

Current Price: 158.50

Weekly Trend: Bullish (Up 2.3% in July)

Technical Analysis:

• Resistance: 159.50 (June 14 High), 160.00 (Psychological Level).
• Support: 157.00 (July 8 Low), 155.50 (100-day SMA).
• Ichimoku Cloud: Price above cloud, bullish momentum.

Key Drivers:

• BoJ Rate Decision (Tuesday): Expected to hold rates at 0.1%, but watch for hawkish hints on bond tapering.
• U.S. 10-Year Yield: Near 4.20%. A surge above 4.30% could propel USD/JPY to 160.00.
• Intervention Risks: Japan’s MoF may step in if JPY weakens past 160.00.

Trade Plan:

• Range Trade: Fade moves near 159.50 with tight stops (intervention fears).
• Breakout: A close above 160.00 could target 161.00 (stop-loss hunting likely).

AUD/USD: Aussie Eyes China Data and Iron Ore

Current Price: 0.6750

Weekly Trend: Bearish (Down 1.8% in July)

Technical Analysis:

• Resistance: 0.6800 (50% Fib Retracement), 0.6850 (June High).
• Support: 0.6700 (2024 Low), 0.6650 (2020 Pandemic Level).
• RSI: 42 (Neutral with bearish bias).

Key Drivers:

• China GDP (Monday): Expected 5.1% YoY. A miss could hit AUD (China is Australia’s top export market).
• Iron Ore Prices: Down 12% in July—watch for stabilization near $100/ton.
• RBA Minutes (Tuesday): Look for clues on rate cut timing (markets price November).

Trade Plan:

• Bullish Catalyst: China GDP beat + iron ore rally → Buy AUD/USD above 0.6780.
• Bearish Catalyst: Break below 0.6700 → Target 0.6650.

Key Events This Week

Day	Event	Currency Impact
Monday	China GDP, Retail Sales	AUD, NZD, CNH
Tuesday	RBA Minutes, BoJ Decision	AUD, JPY
Wednesday	UK CPI, Fed’s Powell Speech	GBP, USD
Thursday	ECB’s Lagarde Speech, U.S. Jobless Claims	EUR, USD
Friday	Japan Inflation, UK Retail Sales	JPY, GBP

Market Sentiment & Risk Appetite

• Risk-On: A cooling U.S. CPI (Wednesday) could boost EUR, GBP, and AUD.
• Risk-Off: Escalating Middle East tensions or U.S.-China trade spats may lift USD and JPY.

Trading Strategies for the Week

1. Fade the Dollar Dips: Buy USD on pullbacks if Fed cut bets recede further.
2. Play GBP Volatility: Straddle GBP pairs around Wednesday’s CPI release.
3. Track Commodity Currencies: AUD and CAD hinge on China data and oil prices.

Final Thoughts

This week’s Forex market hinges on central bank rhetoric and inflation surprises. EUR/USD and GBP/USD face make-or-break tests at key technical levels, while USD/JPY traders dance around intervention risks. Stick to tight risk management—1-2% per trade—and let the data guide your moves.

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