EURUSD, USDJPY & GBPUSD Technical Analysis: USD Firmer into North American Session

• USD firmer into the NA session, supported by weaker UK inflation and higher US yields, with EURUSD edging lower to 1.1714, holding above 1.1700 and key midpoint support ahead of an ECB decision expected to leave rates unchanged with a data-dependent tone.

• USDJPY softer at 155.45, trading between the 4-hour 200-bar (155.265) and 100-bar (155.700) MAs, as sellers continue to lean against resistance, while markets price a 25 bp BoJ hike on Friday and focus on forward guidance.

• GBPUSD the weakest major, down to 1.3335 (-0.63%) after softer-than-expected UK inflation, reinforcing expectations that the BoE could cut rates tomorrow and keeping the bias tilted toward future rate cuts.

IN the forex as the NA session begins, the USD is higher helped by weaker inflation data out the UK and higher yields in the US to start the North American session. The EURUSD is edging lower at 1.1714, down -0.26% on the day, holding above the 1.1700 level (the low price came in at 1.1704). And above the midpoint of the move down from the mid September high to the November low at 1.16929. Tomorrow the ECB will announce their interest rate decision, and market expect the ECB to hold rates unchanged, with policymakers likely to emphasize a data-dependent stance. Inflation has eased somewhat but core prices remain sticky, so the ECB is expected to signal that it’s watching incoming data closely before making further moves.

The USDJPY is shorter at 155.46, down 0.48% , with buyers pressing the pair back between the 200 and 100 bar moving averages on the 4 hour chart at 155.265 and 155.700. The current price is trading at 155.45 between those levels. Last week toward the 2nd half of the week, sellers leaned in near the 100 bar moving average keeping the bias to the downside. The Bank of Japan on answer interest rate decision on Friday. Markets are expecting the Bank of Japan to raise interest rates by 25 basis points on Friday, lifting the policy rate from 0.50% to 0.75%, which would mark the highest level in roughly three decades. The expectation is driven by firmer inflation trends, improving wage growth, and stronger business sentiment, all of which have reinforced confidence that Japan can continue its gradual exit from ultra-easy policy. With a hike largely priced in, the market focus will be on the BoJ’s guidance and tone, particularly whether it signals further tightening ahead or emphasizes a cautious, step-by-step approach.

Meanwhile, the GBPUSD is the weakest of the three, trading at 1.3335, -0.63% after weaker than expected inflation data. The BOE is now expected to cut the policy rate tomorrow, following softer-than-expected UK inflation data overnight. Given the soft UK employment and inflation data this week, the BoE might not only deliver the rate cut, but also a more dovish tone. The market has been expecting at least one more rate cut in 2026, but traders are now starting to bet on at least two more cuts next year.

In the video above, I (Greg Michalowski, author of Attacking Currency Trends) look at these three major pairs from a technical perspective and outline the bias, the risks, and the targets for each as the North American session unfolds

UK: Inflation cooled more than expected

UK inflation data came in softer across the board, reinforcing the narrative that price pressures continue to ease.

• Headline CPI y/y fell to 3.2%, below 3.5% expected and 3.6% prior, confirming further disinflation.

• Core CPI y/y eased to 3.2%, missing forecasts of 3.4%, signaling broader-based cooling.

• RPI y/y dropped to 3.8% vs 4.2% expected, another downside surprise.

• House price inflation (HPI y/y) slowed to 1.7% vs 2.4% expected, highlighting continued housing-market softness.

• PPI input prices rose 0.3% m/m, slightly below expectations, while PPI output prices rose 0.1%, matching forecasts.

UK takeaway:

Inflation undershot expectations, strengthening the case for BoE rate cuts later and it has led to sharp downside pressure in the GBPUSD. The price of the pair is now below both the 100 and 200 day MAs again below 1.3359 and 1.33465 respectively.

Eurozone: Data mixed, growth concerns persist

Eurozone data was less dramatic than the UK release but leaned mildly dovish.

• German Ifo Business Climate fell to 87.6, below 88.2 expected, signaling ongoing weakness in Germany.

• Final Eurozone CPI y/y at 2.1%, slightly below forecasts of 2.2%.

• Final Core CPI y/y held at 2.4%, unchanged and in line with expectations.

Eurozone takeaway:

Core inflation remains sticky, but close to the 2.0% target. Growth indicators remain soft, keeping the ECB cautious and firmly data-dependent.

Overall market view

• UK data delivered a clear downside inflation surprise, supportive of a dovish BoE outlook.

• Eurozone data was mixed, with soft growth offsetting steady core inflation.

• Relative surprise favored GBP weakness, while EUR reaction was more muted.

As North American traders enter the fray for the day, US equity futures are implying a positive open, looking to shake off yesterday’s mixed performance. While US debt yields are ticking higher, the commodity sector is seeing significant strength—led by a sharp rally in Silver—while European markets show a divergent picture.

US Stock Futures & Yesterday’s Recap

Wall Street looks set to open on firmer footing this morning.

• Dow Jones Industrial Average: Futures are implying a gain of 82 points.

• S&P 500: Futures are indicating a rise of 18.49 points.

• NASDAQ: The tech-heavy index continues to show relative strength, with futures up 97 points.

This pre-market optimism follows a divergent session yesterday where the Dow fell -302.30 points (-0.62%) and the S&P 500 slipped -16.25 points (-0.24%). The NASDAQ, however, bucked the trend, rising 54.05 points (0.23%), and looks to extend that momentum today.

US Treasury Yields Edge Higher

Selling pressure in the bond market is pushing yields up across the curve as the session begins:

• 2-Year Yield: Up 3.1 basis points to 3.510%.

• 10-Year Yield: Up 2.9 basis points to 4.178%.

• 30-Year Yield: Up 2.3 basis points to 4.845%.

Commodities & Crypto: Silver Outshines Gold

The commodity complex is flashing green this morning, with precious metals and energy finding support. However, cryptocurrencies are lagging.

• Silver: The standout performer, surging +3.45% to trade at $65.92.

• Crude Oil (USOIL): Trading firmly higher at $56.22, up +1.92%.

• Gold: Continues its ascent, trading up +0.36% at $4,317.79.

• Bitcoin (BTCUSD): In contrast to the metals, Bitcoin is under pressure, down -0.97% trading at $86,994.

European Markets: A Mixed Picture

European indices are trading with mixed results, with the UK’s FTSE 100 significantly outperforming its continental peers.

• UK FTSE 100 (UKX): Leading the pack with a strong gain of +1.48%.

• Germany (DEU40): Roughly flat, trading down slightly by -0.06%.

• France (CAC40): Showing softness, down -0.23%.

• Italy (FTMIB): Trading in positive territory, up +0.47%.

• Spain (IBEX35): Also edging higher, up +0.26%.