Daily Market Report
07/27/2026
EUR/USD ranged in the high 1.13s to the low 1.14s overnight. EUR/USD holds sizeable gains near the 1.1400 mark in the European session on Monday. The intraday strength is sponsored by a broadly weaker US Dollar, weighed down by renewed optimism over a diplomatic resolution to end a five-month-old US-Iran war.
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. Money markets are currently pricing in roughly a 35.8% chance of a Fed rate hike this month, alongside an 82.1% probability of at least a quarter-point hike in September.
GBP/USD builds on Friday’s modest bounce from a three-week low and gains strong follow-through positive traction at the start of a new week on Monday. This marks the second straight day of gains, with the major trading near 1.3350 in European trading amid a pause in the Middle East conflict and a broadly weaker US Dollar. Traders brace for the Fed and BoE policy announcements later in the week.
Analysts at Scotiabank note that policy expectations remain firmly anchored ahead of next week’s BoE decision, with “markets … expecting no policy change at the next MPC rate decision, where the Bank Rate is expected to be held at 3.75%.” This steady policy outlook, they suggest, continues to frame near-term trading conditions for the Pound against the US Dollar as investors look toward upcoming UK data for further direction.
The Japanese Yen (JPY) pares recent losses against the US Dollar (USD) on Monday, favored by a relief rally, as the US and Iran halted their hostilities, opening the door for further negotiations. The USD/JPY pair has pulled back from fresh 40-year highs right below 164.00, but it remains contained at the 163.50 area, keeping the broader bullish trend intact.
Bears, however, remain contained above previous highs, in the mid-ranges of the 163.00s, with key support at the confluence of the mentioned trendline and July 6 and 8 highs in the 162.70-162.90 area. A confirmation below these levels puts sellers in control and adds pressure towards the July 17 and 20 lows at the 162.15 area.
Source: FX Street