EUR / USD
EUR/USD has extended its advance amid persistent US dollar weakness, with the pair reaching a peak near 1.1903 before consolidating around 1.1871. Broad-based dollar selling has been underpinned by expectations of a more accommodative Federal Reserve, geopolitical uncertainty, and speculation over potential coordinated action to stabilise yen volatility, all of which have provided steady tailwinds for the euro.
The forthcoming Federal Reserve meeting remains a key event risk, with markets increasingly pricing further policy accommodation despite resilient US data. Tariff uncertainty and concerns surrounding potential leadership transition at the Fed have sustained a “sell America” narrative that is overwhelming traditional rate differentials.
From a technical perspective, EUR/USD trades comfortably above key support at 1.17, where the 200-, 50-, and 20-day SMAs cluster. However, the daily RSI near 70 highlights stretched conditions, suggesting that a continuation toward the 2018 high near 1.2556 will require fresh catalysts beyond current dollar softness. A rejection at 1.1895 resistance risks profit-taking back towards the 1.17 support zone.
USD / JPY
USD/JPY continues to navigate a challenging environment shaped by policy divergence and elevated intervention sensitivity. While the sizeable rate differential remains supportive of the dollar, speculation over coordinated yen support and firmer US data releases have helped contain downside.
Technically, the pair sits below key resistance at 157, defined by the 20- and 50-day SMAs, while maintaining support above the 200-day SMA at 151. The daily RSI has fallen to an unusually low 31, indicating oversold conditions following a sharp weekly decline of more than 2%.
Positioning data reveal extreme yen shorts that are vulnerable to rapid reversal should intervention materialise, though verbal signals have thus far proved more effective than direct action. This week’s Federal Reserve meeting will provide critical guidance on the policy trajectory, with roughly 50bp of easing expected, an outcome that could intensify pressure on the rate differential and support yen stabilisation.
GBP / USD
Sterling has demonstrated notable resilience at the start of 2026, gaining approximately 1.52% year-to-date and marking three successive sessions of appreciation, lifting the pair to its highest level since July 2025. We see this strength reflecting monetary divergence between a comparatively hawkish Bank of England and an increasingly accommodative Federal Reserve, while geopolitical tensions, tariff uncertainty and US fiscal concerns reinforce underlying dollar vulnerability.
Technically, GBP/USD has produced a robust bullish impulse, peaking near 1.371 before settling around 1.368. The pair is trading well above key SMAs, with the 200- and 50-day levels at 1.34 and the 30-day VWAP at 1.35 providing substantial support. However, the daily RSI at 70.5 signals overbought conditions and leaves scope for corrective moves toward the 20-day SMA at 1.35. A bullish continuation scenario would see consolidation above 1.365 and a break through 1.371 to test the three-month high near 1.378, with Federal Reserve communications acting as the primary catalyst.
