Fundamental Market Analysis for 29.05.2026 (EURUSD, GBPUSD, USDJPY)

EURUSD:

EUR/USD is trading near 1.1640 after the US dollar weakened on reports of a possible extension of the ceasefire between the US and Iran. However, the euro’s recovery looks limited: the April US Personal Consumption Expenditures index rose to 3.8% year-on-year, while the core indicator increased to 3.3% year-on-year, reducing the likelihood of a rapid shift by the Federal Reserve toward policy easing.

For the euro, weak economic dynamics in the eurozone and the region’s dependence on energy prices remain additional limiting factors. A decline in the geopolitical premium in oil partially improves market sentiment, but does not remove risks for industry and consumer demand. Against this backdrop, the ECB remains cautious, while market participants see no sufficient reasons for a sustained strengthening of the single currency.

In the coming hours, EUR/USD will depend on how investors assess US inflation and comments from Federal Reserve officials. If the market continues to price in a long period of high rates in the US, the dollar may recover part of its losses. Under the current balance of factors, sellers retain the advantage in EUR/USD.

Trading recommendation: SELL 1.1640, SL 1.1670, TP 1.1550

Event to watch today:

11:20 EET. GBP - BOE Governor Andrew Bailey Speaks

GBPUSD:

GBP/USD is holding near 1.3400 after falling to its lowest levels since mid-May. Pressure on the pound is linked not only to the stronger US dollar amid high US inflation, but also to domestic political uncertainty in the UK. Investors are cautiously assessing risks for the government and the possible impact of political tensions on the economic agenda.

The British currency is also receiving limited support from the Bank of England. The regulator maintains a cautious approach: inflation remains elevated, but the economy is showing signs of cooling, including weaker demand and slower hiring. This reduces the pound’s appeal, as the market does not see a clear UK advantage over the US in monetary policy.

For the pair, the key factor remains the US dollar. The high US Personal Consumption Expenditures index strengthens expectations that the Federal Reserve will keep rates at current levels for longer. If demand for the dollar remains stable and UK political risks stay in focus, GBP/USD may continue to decline toward the nearest target levels.

Trading recommendation: SELL 1.3400, SL 1.3430, TP 1.3310

USDJPY:

USD/JPY is trading above 159.00, remaining close to the area where expectations of possible action by Japanese authorities previously increased. The dollar is supported by high US inflation and the Federal Reserve’s cautious stance, but further growth in the pair is limited by the risk of intervention from Japan and reports of easing tensions around the US and Iran.

The yen remains weak due to softer Tokyo inflation data, which reduced market confidence in a near-term rate hike by the Bank of Japan. However, the proximity of USD/JPY to 160.00 makes dollar buying less comfortable: market participants remember that such levels were previously accompanied by strong warnings from Japanese officials and sharp movements in the pair.

For today, the base scenario suggests a cautious decline in USD/JPY from current levels. If the dollar continues to lose support after reports of a ceasefire, and investors start reducing risk ahead of a possible reaction from Japan, the yen may recover part of its positions. Therefore, selling looks preferable, especially while the market remains cautious around the 160.00 area.

Trading recommendation: SELL 159.35, SL 159.65, TP 158.45

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