Daily Market Report

07/23/2026

EUR/USD ranged in the low 1.14s overnight. EUR/USD holds its upbeat momentum for the second consecutive day, above 1.1400, in the European session on Thursday. The pair stays supported ahead of the European Central Bank’s interest rate decision, with any hints on further rate hikes to be closely eyed.

Momentum 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 stalls its rebound and stays below 1.3400 in the European trading hours on Thursday. The pair’s upside remains capped by a modest US Dollar bounce and cooler-than-expected UK inflation data amid escalating Middle East tensions.

Traders anticipate the Bank of England (BoE) to keep its benchmark interest rate at 3.75% next week as it continues to assess the impact of the Middle East conflict. Financial markets were pricing in one or possibly two quarter-point interest rate hikes by the end of 2026, little changed from Tuesday, according to Reuters.

The USD/JPY pair ticks lower during the Asian session on Thursday as bulls opt to move to the sidelines amid speculations that Japanese authorities will step in to prop up the domestic currency. Nevertheless, spot prices remain close to a four-decade high, touched on Tuesday, and currently trade just above the 163.00 mark.

USD/JPY 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. 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