RBNZ data due today. The RBNZ view 2 years as a reasonable time frame for monetary policy changes to impact the economy, hence it's the 2 year inflation expectations number that policy makers pay the most attention to. I'll have more to come on this separately. This article was written by Eamonn Sheridan at investinglive.com.
Source: Finnhub
GBP/USD is maintaining a short-term uptrend above the 1.3479 level, having successfully broken above a medium-term descending trendline following the recent Non-Farm Payrolls report. The pair's bullish momentum reflects renewed sterling strength as the dollar faces uncertainty ahead of the upcoming US Consumer Price Index release. The NFP-driven breakout above the descending trendline marks a significant technical shift, suggesting buyers have regained control of the pair's medium-term trajectory. However, the upcoming CPI print poses a key risk event for the pair. A hotter-than-expected core CPI reading could reignite expectations for further Federal Reserve rate hikes, strengthening the dollar and putting downward pressure on GBP/USD. Immediate support sits at 1.3479, which now serves as a pivotal level for the short-term uptrend, while a sustained hold above this level could open the door to further gains. Traders should closely monitor the inflation data, as a significant deviation from consensus could trigger sharp volatility in the pair and potentially reverse the current bullish bias.
GBPUSD
Sentiment:
Positive
Source: Marketaux
Forex markets are navigating heightened uncertainty as geopolitical tensions in the Middle East combine with anticipation of the upcoming US CPI release to create a volatile trading environment. Conflicting signals surrounding a potential US-Iran agreement and ongoing concerns about shipping disruptions through the Strait of Hormuz are weighing on risk sentiment across asset classes. Safe-haven currencies such as the Japanese yen and Swiss franc are seeing intermittent demand as traders assess the implications of potential supply chain disruptions on global energy markets and inflation dynamics. The uncertainty around Hormuz shipping lanes has also supported crude oil prices, indirectly influencing commodity-linked currencies like the Canadian dollar and Norwegian krone. With US CPI data imminent, markets face a dual risk scenario where geopolitical escalation could amplify the impact of any inflation surprise. Traders should monitor developments in the Middle East alongside the CPI print, as the convergence of these factors could drive significant directional moves across major and cross pairs in the near term.
USDJPY
USDCHF
USDCAD
Sentiment:
Neutral
Source: Marketaux
Geopolitical tensions between the US and Iran are escalating after Iran reportedly declared that no ceasefire discussions are taking place, asserting that the previous agreement no longer exists. According to Iranian officials, the US violated the agreement within 48 hours of it being reached and subsequently withdrew days later. Iran maintains there is no ceasefire start date and therefore nothing to extend. Discussions are reportedly centered on the US returning to conditions outlined in a memorandum of understanding, including defining a timeframe for implementing commitments, though no progress has been made. This breakdown in diplomatic channels elevates Middle Eastern geopolitical risk, which traditionally supports safe-haven currencies such as JPY, CHF, and gold while weighing on risk-sensitive assets. Oil prices may also face upward pressure given Iran's role as a major crude producer, potentially benefiting commodity-linked currencies like CAD and NOK. Traders should monitor USD pairs and crude oil closely, as further deterioration in US-Iran relations could trigger significant volatility across forex and commodity markets in the near term.
USDJPY
USDCHF
USDCAD
Sentiment:
Negative
Source: Finnhub
Asia-Pacific markets are showing mixed sentiment as oil prices edge higher amid geopolitical developments in the Gulf region, while regional equity indices diverge with South Korea's Kospi rallying on chip stocks and Japan's Nikkei holding steady ahead of the US CPI release. The Australian dollar faces potential pressure after Australia announced a world-leading pay floor for 250,000 gig delivery workers, a move that could stoke wage-driven inflation expectations and influence RBA policy considerations. Gulf states are reportedly bypassing strategic choke points as Strait of Hormuz risks persist, with a Saudi-Oman deal fitting a broader pattern of regional infrastructure diversification. President Trump's assertion of total control over Hormuz adds a layer of geopolitical risk premium to crude oil, which could support commodity-linked currencies like AUD and CAD while weighing on oil-importing nations' currencies such as JPY. Traders should closely monitor the upcoming US CPI print, as it will be critical in shaping Fed rate expectations and broad USD direction. Near-term, USD/JPY remains sensitive to both the inflation data and risk sentiment shifts across Asian markets.
AUDUSD
USDJPY
USDKRW
USDCAD
Sentiment:
Neutral
Source: Finnhub
The US dollar index is facing downside pressure as Goldman Sachs chief economist Jan Hatzius projects a benign July CPI report, with headline inflation expected at approximately 0.05% month-over-month and core CPI near 0.19%. Both figures would come in at or slightly below market consensus, reinforcing the disinflationary trend that Hatzius says began in June. A softer-than-expected inflation print would significantly ease pressure on the Federal Reserve heading into its September meeting, bolstering expectations for a rate cut. Lower rate expectations typically weigh on the greenback, potentially benefiting pairs such as EUR/USD and GBP/USD. Traders should closely monitor the actual CPI release for confirmation, as any upside surprise could quickly reverse dollar weakness. If the data aligns with Goldman's forecast, the dollar could test nearby support levels against major counterparts, with EUR/USD potentially pushing toward recent resistance zones. The report carries outsized importance given the Fed's data-dependent stance and the proximity to the September FOMC decision, making it a critical catalyst for near-term USD positioning.
EURUSD
GBPUSD
USDJPY
Sentiment:
Negative
Source: Finnhub
