GBP/USD Drops Near 1.3555 as US Dollar Strengthens Ahead of CPI Data

The GBP/USD pair dropped and traded around 1.3555 in early Asian trading on Monday as the US Dollar gained strength. Several analysts are of the opinion that the market mood showed signs of caution as the US President Donald Trump and Ukraine's President, Volodymyr Zelenskiy were due to meet. Traders are also keeping an eye on potential UK economic data, whereby the July’s Consumer Price Index (CPI) report on inflation indicators is to be published on Tuesday. Marketers suspect that such CPI data may present novel facts about the position of the UK economy and even on the expectations of future Bank of England (BoE) policies.

The US dollar is believed to be strengthening as traders remain wary ahead of Monday's summit between US President Donald Trump and Ukraine's President Zelenskiy in Washington. Markets are waiting to see if discussions lead to progress on a ceasefire, or if there are hints of new Russian sanctions or for countries buying its oil. Several analysts see any indication that geopolitical tensions will persist as reasons to be accumulation of pivot assets as dollars. This may influence major currency pairs, as traders favour safety in times of uncertainty.

According to UK's official data, the UK's economy did better than expected in Q2 2025, supporting the GBP/USD exchange rate against the Dollar, though growth slowed relative to earlier in the year. Although these figures were affected by adverse trade tariffs and a lower stamp of the job market, the UK grew by 0.3% in its Gross Domestic Product (GDP) vis-a-vis the prior quarter. This was a deceleration, but compared with the 0.7% expansion enjoyed in Q1, it was very robust, liquidating the expectations of 0.1% growth that had been estimated by analysts. Different analysts suggest that the better-than-expected performance suggests that the UK economy is not that bad, a sign of relief to the currency markets, as traders continue to grapple to find equilibrium among the factors surrounding the global economy.

According to market commentators, investors are seeking a new direction on the UK’s CPI inflation data coming next Tuesday after remaining glued to recent global headlines. In addition, it is believed that the monthly Core CPI is expected to increase by 3.7% year-on-year in July. Various analysts indicate that if inflation appears higher than anticipated, it may influence expectations concerning whether the Bank of England (BoE) will reduce interest rates in September, although the outcome is unpredictable and may have an impact on the British pound against the US dollar. London Stock Exchange Group (LSEG) data show that the market no longer expects a rate cut this year, although the next move is perfectly priced in February 2026.

EUR/USD Approaches 1.1870 Resistance, Support Levels Hold at 1.1690 and 1.1666

EUR/USD traded around 1.1710, a little lower in the Asian session on Monday, after rising approximately 0.5% in the last session. The global marketers believe that in spite of the slight disappointment, the general consideration is optimistic. On the daily chart, the technical indicators suggest that the bullish trend is gaining strength since the pair is still moving in an expanding trend line. It is believed that this is expected to be indicative of a consistent upward trendline, and investors to remain in control. According to some analysts, this trend is being monitored intensively by traders, especially as price action inside the channel can be used as a bullish indicator to keep moving in the same direction of gains.

For the global marketers the 14-day Relative Strength Index (RSI) was seen remaining above the 50 level that would indicate a low bearish development for the market. This shows that buyers still have the upper hand, also that momentum is inclining upwards. According to the investors, the EUR/USD pair has maintained its position on the other side of the nine-day Exponential Moving Average (EMA). Traders believe that this is another green sign, a sign that in the near-term price is likely to continue an upward trend. According to some analysts, when RSI and EMA are both trending the same way, it often indicates on-going strength & increases the likelihood of continuing the advance.

The investors believe that the EUR/USD pair can increase to near the six weeks level of 1.1789, reached on July 24, in the event it gains momentum. Moreover, it is believed that another upward movement might propel the pair to 1.1830 which has been its most robust since September 2021. The pair may attempt to break the top of the ascending channel, which is currently at 1.1870, once again, according to some analysts, if there is additional bullish momentum. According to global marketers, these levels present as the main constraints of resistance, and every change beyond such points would evidence a higher upward ability in the currency duo in the upcoming future.

Various analysts believe that the lower, one of the boundaries of the rising channel of the EUR/USD pair is likely to become its strong support at about 1.1690, the following one is to be at nine-day EMA at about 1.1666. According to some technical analysis, if the price falls below this range, marketers expect to see short-term momentum fall and decline, moving the pair down to a 50-day EMA at 1.1585. According to the investors, a further drop can result in a challenge to the two-month bottom of 1.1391, on August 1. Market analysts believe that these levels will be important to establish the direction of the pair, whether it maintains its uptrend or becomes bearish.

USD/JPY Nears 147.50, Eyes 145.00 Support Amid BoJ-Fed Policy Divergence

Japanese Yen (JPY) continued to be weaker (around 147.5) against the US Dollar (USD) during Monday morning in the Asian session, but selling was capped by some contradictory influences. It is believed that because of this markets grew optimistic on hopes that the war between Russia and Ukraine might end and spark a risk appetite. According to global investors, the Yen is being held down by uncertainty as to when the Bank of Japan (BoJ) may increase interest rates. According to the global commentators, the USD/JPY pair is also being sustained by a slight increase in the US Dollar, which is keeping the pair in minimal positive territory today even though there is no clear sign of any selling pressure.

Investors believe that the Bank of Japan (BoJ) will further pursue normalization of policies whereas the US Federal Reserve (Fed) may begin to reduce in September 2025. According to global commentators, this divergence policy does not allow the US Dollar (USD) to build up a strong momentum and also lends support in favour of the Japanese Yen (JPY) which is favoured by low yields. Traders are waiting, not willing to make uncertain shifts, until they can better understand the intentions of the Fed regarding rate cuts. The global commentators also believe that the focus in the market has shifted to future FOMC Minutes and the address by Jerome Powell at the Jackson Hole.

According to the investors, the USD/JPY pair has been trading in a stable area (over the last couple of weeks) that depicts a period of consolidation. It is believed that it can be more profitable to wait until there is a clear breakout to take on a new directional position, particularly as daily technical indicators are neutral. Technical analysis indicates that as the pair closes above the 23.6 Fibonacci retracement level in the short-term chart, this is in favour of further gains. Investors believe that renewed attempts to jump above the 200-period SMA on the 4-hour chart may meet with stiff resistance at the 148.00 mark, which coincides with the 38.2 Fibonacci retracement.

Global marketers believe that as long as USD/JPY stays above the aforementioned level, the short- term picture can become bullish. It is also believed that both USD/JPY may climb to the 148.55-148.60 areas, converging with 50% retracement rate and may put even more pressure to reach the 149.00 level, providing investors with power within the short term.

According to global investors, USD/JPY may immediate support at the 147.10 147.00 level. The global market believes that a decrease in the pair to below this amount may see it retreat to last week's low of around 146.20. Some analysts think that the drop to below 146.00 level will most probably be accompanied with increased selling actions, indicating a bearish trend. According to some analysts, this may turn the couple south towards 145.40-145.30 and potentially test the bigger psychological level of 145.00 and this may leave the market exposed to more downward pressure at least in the short run.

NZD/USD Steady as Markets Await Fed, RBNZ Rate Decisions and Minutes Release

The NZD/USD earlier in the European session on Monday traded around 0.5935 making the US Dollar weaker. According to the market commentators, the action follows an anticipation by investors that the Federal Reserve may decrease interest rates. It is also believed that the market is keenly focussed on an interest rate decision next week by the Reserve Bank of New Zealand, which may also have a bearing on the fate of the Kiwi. It is believed that markets are also looking forward to the release of the minutes of the US Federal Reserve on Wednesday to get more indication of their future monetary policy.

Global investors believe that the US dollar remains at a weak position following the recent economic figures that are in favour of an anticipated September Federal Reserve rate reduction. It is believed that there is a high probability, as interpreted by the traders, that the US Fed Reserve may cut rates by 0.25%, but the confidence has dropped to some extent. According to some analysts, the CME FedWatch Tool indicates that markets today assigned an 84% chance of a cut compared to 98% at the last survey, reflecting less confidence, albeit continued faith that a looser monetary policy is on the way.

According to the international market, the US Retail Sales started growing very strongly in July and this might be restricted by slow growth in employment and increasing prices in the next quarter. The University of Michigan survey revealed that the consumer inflation expectations rose in August. Most economists believe that this might increase the possibility that the US Fed Reserve may not provide a substantial interest rate reduction when its September meeting rolls around, given that the inflation issues still hang around despite a strong spending record in the first half of the summer.

The Jackson Hole Economic Policy Symposium later this month is already under close consideration by traders as Fed Chair Jerome Powell may deliver a speech pointing out that it would be probable that the US Fed Reserve may reduce interest rates in September. His remarks will be noteworthy following current US economic data. In the meantime, the BusinessNZ data published in New Zealand indicated a jump in the Performance of Services Index (PSI) during the month of July to 48.9 as against 47.6 in June. Global marketers also indicate that this improvement, although not yet at the point of growth, has the potential to hold the NZD against the USD.

It is widely expected that the Reserve Bank of New Zealand (RBNZ) would reduce the official cash rate to 3.0% in August, making a total 250 basis point cut so far in this easing cycle. Various analysts believe that there is also a probability of additional downwards adjustment to 2.75% early next year at the markets. The global commentators anticipate that investors might be interested in the new interest rate views presented by RBNZ and the dovish tone by the central bank might leave the New Zealand dollar (NZD) weaker in the near-term.

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