Fundamental Market Analysis for 01.06.2026 (EURUSD, GBPUSD, USDJPY)
Event to pay attention to today:
17:00 EET. USD - ISM Manufacturing Index
EURUSD:
EUR/USD is declining near 1.1645 after a cautious start to the week. The US dollar is supported by demand for safe-haven assets as markets monitor the conflict in the Middle East, risks to oil supplies through the Strait of Hormuz, and central bank responses to inflationary pressure. Investors are also focused on US labor market data due later this week, which may affect expectations for the Federal Reserve’s interest rate policy.
The situation for the euro remains mixed. Inflationary pressure in the eurozone is still elevated, while ECB representatives allow for a possible rate hike in June. This limits the decline of the single currency. However, the market has already partly priced in this scenario, so the short-term movement of the pair depends more on the US dollar, energy prices, and investor risk sentiment. If tensions persist, demand for the dollar may remain stable.
The base scenario for today is a decline in EUR/USD. Pressure on the pair may increase if comments from Federal Reserve officials confirm readiness to maintain a strict policy stance due to inflation risks. For the euro to recover, geopolitical pressure on oil prices and demand for European assets would need to ease, but these conditions are currently insufficient. Therefore, selling from current levels remains preferable.
Trading recommendation: SELL 1.1645, SL 1.1675, TP 1.1555
GBPUSD:
GBP/USD is trading near 1.3450 and remains under pressure after a weak end to last week. The pound is limited by cautious expectations for the UK economy and the Bank of England’s position: the regulator is in no hurry to raise rates despite inflation risks caused by higher energy prices. This is especially sensitive for the British currency, as the UK economy depends on imported energy more than the US economy.
Additional pressure comes from the external background. The US dollar remains supported by uncertainty around the Middle East and expectations of important US employment data. If the labor market confirms the resilience of the US economy, investors may continue to revise their expectations for the Federal Reserve’s policy toward a longer period of high interest rates. In this case, the dollar’s advantage over the pound may persist.
The base scenario for today is a decline in GBP/USD. The pound may stabilize if oil prices begin to fall and geopolitical risks ease, but the market currently does not see strong domestic drivers for a confident recovery in sterling. With investor caution and weak expectations for the UK economy remaining in place, selling from the current area is preferable.
Trading recommendation: SELL 1.3450, SL 1.3480, TP 1.3360
USDJPY:
USD/JPY is holding near 159.45–159.50, as the US dollar keeps its advantage amid the yield gap and demand for the US currency. The yen remains vulnerable despite expectations of a possible rate hike by the Bank of Japan in June. Investors are waiting for new signals from Governor Kazuo Ueda, but the market does not yet see a sufficiently firm position that could quickly shift the balance in favor of the Japanese currency.
The fundamental background supports the US dollar. Geopolitical tensions and rising oil-related risks increase inflation concerns in the US, which may encourage the Federal Reserve to maintain a stricter position. For Japan, expensive energy is also a problem, but the Bank of Japan is acting cautiously to avoid damaging the economic recovery. Therefore, even expectations of a rate hike do not guarantee a stable strengthening of the yen.
The base scenario for today is growth in USD/JPY. The main risk for buying is the pair’s proximity to the area where Japanese authorities may intensify verbal warnings about the currency market. Nevertheless, there are currently no direct signs of intervention, while the difference in monetary policy expectations remains in favor of the US dollar. Therefore, with the current news background preserved, buying remains preferable.
Trading recommendation: BUY 159.45, SL 159.15, TP 160.35
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