Forex markets entered the week in a relatively quiet mode, with lower liquidity due to U.S. and Asian holidays. Traders are positioning ahead of major economic data, central bank communications, and macro releases that will drive FX volatility later in the week.
Dollar & Rupee:
• The U.S. dollar (DXY) has shown strength, edging higher, which may keep pressure on risk-linked currencies.
• The Indian rupee (INR) traded in a tight range near 90.66 per USD, with reduced volatility expectations, though continued dollar strength suggests pressure could resume later this week if Fed cues remain hawkish.
Global Equities & Macro:
• Global equities rebounded, easing previous jitters on tech disruption. However, the euro softened on speculation around ECB leadership change, which can ripple into currency markets.
📅 Key Events to Watch
According to multiple market calendars and macro previews:
High-impact catalysts this week include:
✔ FOMC Minutes (Fed policy tone & rate guidance)
✔ U.S. advance GDP & core PCE inflation data (Friday)
✔ Flash PMIs from Europe, UK, and U.S. (Thursday–Friday)
✔ UK inflation and labour market data 🏴☠
✔ Canada CPI (Tuesday)
✔ RBNZ monetary policy decision (Wednesday)
✔ Japan CPI data (Thursday, local night session)
• Liquidity is lighter due to holidays in the U.S., China, and other regions.
Market implications:
• Fed minutes and U.S. GDP/PCE will likely dictate USD trend and global risk sentiment.
• UK and Canada inflation data could shift odds on future rate moves for GBP and CAD.
• New Zealand’s RBNZ meeting could influence the NZD tone.
💱 Forex Pairs – Technical & Fundamental Themes
EUR/USD
📌 Consolidation with bullish bias
• The pair trades sideways in the ~1.1850–1.1900 zone, reflecting consolidation after stronger U.S. labour market data.
• Key support zone: 1.1750–1.1760; resistance near 1.2000–1.2080.
• Sustained above support keeps moderate bulls alive; break lower opens deeper correction risk.
GBP/USD
• Mixed sentiment with mild bearish undercurrent after limited USD weakness early in the week.
• Traders eye UK labour and inflation data for direction shifts.
Positioning (COT data)
• Futures traders remain net-short USD, while EUR longs hover near elevated levels.
• GBP’s short exposure increased, and CAD flipped net-long, suggesting positioning shifts ahead of data.
EUR/JPY & Crosses
• EUR/JPY recently dipped below key levels as traders await German inflation and sentiment survey data, which could drive cross volatility.
🪙 Regulatory & Regional Drivers
• India’s RBI proposed draft norms to support forex hedging and market-making — potentially boosting market liquidity and hedging activity if enacted.
📈 Weekly Snapshot – What Traders Are Watching
Bullish Drivers:
✔ Strong US labour data supporting USD strength
✔ Resilient global equities easing risk aversion
Bearish/Neutral Factors:
✔ Consolidation in EUR/USD and wider ranges
✔ Data dependence on inflation and GDP numbers
✔ Light markets early in week due to holidays
Volatility Triggers:
🔹 Fed Minutes & U.S. core PCE
🔹 Flash PMIs across major economies
🔹 Central bank signals (RBNZ, BoC, BoE inflation)
🧠 Summary Outlook
➡ USD: Leaning stronger but data-dependent — Friday’s GDP/PCE are the biggest events of the week.
➡ EUR/USD: Range-bound with a slight bullish bias until breakout levels are tested.
➡ Commodity-linked FX (AUD/NZD/CAD): Likely reactionary to global data and rates cues.
➡ Crosses: EUR/JPY and GBP crosses may see sharper moves around inflation and sentiment updates.