A US holiday today. So the price action was limited.

At the start of the US session, the USD was mixed with the following gains/losses vs the major currencies showing:

  • EUR +0.20%
  • JPY -0.56%
  • GBP, -0.06%
  • CHF +0.27%
  • CAD +0.07%
  • AUD-0.17%
  • NZD. -0.09%

At the end of the session the changes are currently showing:

  • EUR +0.10%
  • JPY -0.58%
  • GBP -0.28%
  • CHF +0.17%
  • CAD +0.02%
  • AUD -0.14%
  • NZD -0.14%
GBPUSD

The GBPUSD was the biggest mover in the U.S. session, showing strong bullish momentum. On the hourly chart, the pair broke above a key swing area between 1.2596 and 1.2614 for the second time in two trading days. While Friday's breakout failed, today's price action suggests that buyers are maintaining control, keeping the pair above this level.

To sustain the bullish bias, the price must stay above 1.2596. A move back below this level would weaken the bullish outlook. However, as long as the pair holds above support, the next upside targets include a swing area between 1.2659 and 1.2670, followed by the falling 100-day moving average (currently at 1.2687 and trending lower).

A break above the 100-day moving average (the highest blue line on the chart above) would be a significant technical development, marking the first breakout above this level since November 2024. This would further reinforce bullish momentum and open the door for additional upside potential.

Although there was no economic data release released, feds Harker and Fed's Bowman spoke

  • Philadelphia Fed President Patrick Harker stated that the current economic conditions justify maintaining the Fed's steady rate policy for now, with any future adjustments remaining data-dependent. While inflation has been sticky in recent months, Harker remains confident that it will gradually return to the 2% target within two years.The labor market remains balanced and strong, but Harker acknowledged uncertainties surrounding the impact of new government policies. Additionally, he flagged rising home insurance costs as a growing economic challenge and cautioned that inflation, while declining, still carries risks that must be carefully monitored.On the Fed’s balance sheet, Harker anticipates a quicker contraction in bank reserves and supports a transition toward an all-Treasury bond portfolio. However, he noted that the endpoint for the balance sheet wind-down remains uncertain. He also emphasized that liquidity conditions have not yet tightened enough to warrant an immediate halt to the process.
  • Federal Reserve Governor Michelle Bowman stated that while inflation is expected to decline, upside risks remain, requiring greater confidence before considering additional rate cuts. She emphasized the need for patience, allowing time to assess the impact of new government policies on the economy. Although hiring has slowed, the labor market remains strong, with unemployment still below full employment estimates. Bowman also highlighted that wage growth remains above levels consistent with the Fed's 2% inflation target, and high asset prices may be contributing to slower inflation progress. Additionally, she is closely monitoring supply chains and potential pent-up demand as further inflationary risks.

In other news, US Pres Trump reiterated that he would impose a reciprocol tariffs for countries that tariffed, imposed VAT on imported US products or that subsidized products.

EU leaders also met and are recognizing the new normal with regard to self defense. Trump is looking for $500B as payback for the US role in the Ukraine/Russian war.

In the new trading day, the RBA will cut rates for the first time in 4-years. For a view of the technicals in play in the AUDUSD through the rate decision, click here.

Source: Forex Live