Fundamental Market Analysis for July 15, 2026 (EURUSD, GBPUSD, USDJPY)

Event to watch today:

17:00 EET. USD – Fed Governor Kevin Warsh to deliver the semi-annual report to the US Congress

EURUSD:

The euro enters the session with moderate support after US inflation slowed. The softer June Consumer Price Index reduced expectations of an imminent Federal Reserve rate hike. This pushed US Treasury yields lower and weakened the US dollar. The shift creates room for EUR/USD to recover, although the market remains cautious ahead of further US data.

The domestic backdrop in the eurozone remains mixed. Slower regional inflation reduces the need for immediate action from the ECB. However, renewed growth in energy prices is increasing uncertainty about the inflation outlook and the economy. As a result, the euro is benefiting mainly from changing Federal Reserve expectations rather than a significant improvement in its own fundamentals.

Today, the market will assess US producer price data and another speech by the Federal Reserve Chair. Stronger inflation signals could restore demand for the dollar. However, following the softer consumer inflation report, the session’s underlying momentum remains unfavorable for the US currency. If the current reassessment of interest rate expectations continues, the upside scenario for EUR/USD remains preferable.

Trading idea: BUY 1.1440, SL 1.1410, TP 1.1515

GBPUSD:

The pound enters the European session on a firmer footing after softer US inflation reduced expectations of an imminent Federal Reserve rate hike. Lower US Treasury yields weakened the dollar’s advantage and supported GBP/USD. However, the move remains restrained as the market awaits further evidence that the slowdown in US price pressures was not temporary.

The UK’s domestic backdrop provides limited but noticeable support for sterling. The Bank of England Governor noted that renewed escalation in the Middle East had increased uncertainty but had not yet materially changed the UK inflation outlook. This reduces the risk of an abrupt shift in the central bank’s policy stance, although high oil prices and elevated borrowing costs remain vulnerabilities for the economy.

Political and fiscal uncertainty limits the potential for one-sided gains in the British currency. Nevertheless, during the current session, the broader dollar factor appears stronger than the pound’s domestic risks. The weaker US inflation report has already changed expectations for the Federal Reserve’s near-term policy. If producer price data does not reverse this signal, the baseline scenario supports further gains in GBP/USD.

Trading idea: BUY 1.3405, SL 1.3370, TP 1.3480

USDJPY:

The yen is receiving support from lower US Treasury yields following softer US inflation data. USD/JPY is particularly sensitive to changes in the yield differential. Therefore, reduced expectations of an imminent Federal Reserve rate hike are weakening the main driver behind the pair’s recent advance. The dollar continues to benefit from defensive demand, but during the current session this factor is being outweighed by the market’s response to inflation.

The yen is also supported by the Japanese government’s intention to emphasize the Bank of Japan’s independence in setting monetary policy. This partly reduces concerns that the authorities could prevent further policy tightening. The yen remains close to multi-year lows, so the risk of additional official warnings or unexpected action in the foreign exchange market remains elevated.

The interest rate differential between the United States and Japan continues to limit the potential for sustained yen appreciation. US producer price data could also change the market outlook. However, the current reassessment of Federal Reserve policy and sensitivity to possible action by the Japanese authorities favor a decline in USD/JPY. If US Treasury yields remain lower, the selling scenario is consistent with the fundamental backdrop.

Trading idea: SELL 162.20, SL 162.50, TP 161.50

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