EUR / USD
The EUR/USD pair has demonstrated notable strength recently, primarily driven by President Trump's decision to postpone EU tariffs and the subsequent boost in market confidence. Technical indicators support this bullish momentum, with the currency pair trading comfortably above 1.13 as well as both its 50-day and 200-day moving averages at 1.1169 and 1.08 respectively, suggesting a robust upward trend.
ECB President Christine Lagarde's strategic push for a stronger international role for the euro, coupled with declining dollar dominance in global foreign exchange reserves, has provided additional fundamental support for the pair. The recent price action, which saw EUR/USD touch 1.142 before consolidating around 1.138, indicates potential for further upside movement, particularly if the pair can break above the key resistance level at 1.14.
USD / JPY
The USD/JPY pair faces significant downward pressure as Japan grapples with accelerating core inflation, which reached 3.5% in April 2025, while the Bank of Japan maintains a cautious stance amid global economic uncertainties. The substantial yield differential between US and Japanese bonds, with US 10-year yields at 4.5% compared to Japan's 30-year yields at 3.05%, continues to be a crucial factor influencing currency movements.
Technical analysis reveals the pair trading near 142.70, well below key moving averages, including the 200-day SMA at 149.58 and the 50-day SMA at 145.48, suggesting sustained bearish momentum. A potential bullish reversal would require breaking above the immediate resistance at 145.28, while a bearish continuation could see the pair testing support at 142.34 and potentially moving toward the April low of 139.92.
The BOJ's patient approach to further rate hikes, with October being the earliest anticipated timing for policy adjustments, combined with ongoing trade uncertainties and monetary policy divergence between the Fed and BOJ, should keep the yen elevated in the meantime.
GBP / USD
The GBP/USD pair has demonstrated exceptional strength, reaching multi-year highs amid a confluence of supportive factors in the global financial landscape. The currency pair's robust performance is primarily underpinned by the Bank of England's hawkish monetary stance, which contrasts sharply with other major central banks' more dovish positions.
Technical analysis reveals strong momentum, with the pair trading well above all major moving averages and establishing significant support levels at 1.32 (50-day MA). The positive sentiment is further reinforced by Trump's decision to delay EU tariffs, creating a risk-positive environment that benefits sterling against a broadly weakening US dollar.
Recent solid UK economic data and Britain's favourable position in US trade relations have contributed to the pound's appeal, though some analysts warn that current gains might be overextended.
The immediate technical outlook suggests that 1.36 is now a crucial resistance level, and a breach above it could trigger further gains towards 1.37.
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