Daily Market Report
07/22/2026
EUR/USD ranged in the high 1.3s to the low 1.14s overnight. EUR/USD holds positive ground above 1.1400 in European trading on Wednesday, helped by hawkish ECB expectations and a broad US Dollar retreat. However, persisting Middle East tensions and surging Oil prices keep the pair’s upside elusive.
Indicators together suggest waning bullish momentum and reinforce the downside bias while the EUR/USD pair remains capped beneath the 200-period SMA. This, in turn, backs the case for an eventual break below the 1.1400 round figure and a further decline towards retesting the year-to-date low, around the 1.1325 region, touched on June 24.
GBP/USD erases recovery gains and slips toward 1.3350 in the European session on Wednesday. The UK annual Consumer Price Index (CPI) inflation cooled to 2.6% in June against the market forecast of 2.7%, tempering the British Pound’s rebound from weekly troughs. Traders also assess the ongoing Mideast tensions amid a pause in the US Dollar uptrend.
Traders are still pricing in the possibility of at least one interest rate hike by the US central bank amid concerns over energy-driven inflation. Against the backdrop of the closure of the Strait of Hormuz, Yemen’s Iran-aligned Houthis declared a naval blockade against Saudi Arabia. This, in turn, pushed crude oil prices to a fresh high since June 12, fueling inflation fears. Traders also seem reluctant to place aggressive bullish bets on the British Pound (GBP) and opt to wait for the release of the latest UK consumer inflation figures for more cues about the Bank of England’s (BoE) near-term policy path.
USD/JPY sits at 40-year highs above 163.00 in the Asian session on Wednesday, with gains capped amid speculation that authorities will step in to prop up the Japanese Yen. However, the wide US-Japan rate gap and economic risks stemming from energy supply disruptions in the Middle East might cap any rebound in the Japanese Yen.
Trades at 162.36, holding a modest bullish bias as it consolidates near the multi-decade high of 162.84. The pair trades close to the 20-period Exponential Moving Average (EMA) at 162.31, reflecting a sideways trend. The price, which sits just under the multi-decade high at 162.84, while a mid-50s Relative Strength Index (RSI) at 53.83 suggests steady but not overextended buying pressure.
Source: FX Street