EUR/USD

The EUR/USD pair is holding near 1.1115, waiting for the emergence of new drivers to strengthen the upward momentum. At the end of last week, the euro showed a moderate decline, retreating from the record highs of February 2022 and updating local lows from July 12 on the back of technical factors, as well as expectations of further tightening of monetary policy by the US Federal Reserve. On Wednesday, the regulator's two-day meeting will end, which, according to forecasts, will result in an increase in the interest rate by 25 basis points to 5.50%. Experts note that the current "hawkish" cycle may end here, after which officials are likely to take a wait-and-see attitude, while a decrease in the cost of borrowing before the end of the year is unlikely. On Thursday, July 27, the decision of the European Central Bank (ECB) on interest rates will be made public with an accompanying press conference. Regulatory officials are expected to adjust the rate by 25 basis points to 4.25%. At the same time, the ECB may once again signal in favor of further tightening of monetary conditions, given the stronger inflationary risks compared to the United States. On Friday, revised data on inflation dynamics in Germany and France for July will be published. Current forecasts suggest that the annual Consumer Price Index in France may slow down from its preliminary estimates from 5.3% to 5.0%, and in Germany from 6.4% to 6.2%.

GBP/USD

The GBP/USD pair shows a slight increase, recovering from a confident "bearish" series last week, as a result of which the instrument retreated to its local lows from July 10. The pound is again testing the level of 1.2860 for a breakout, receiving support from technical factors, as well as statistics from the UK, published on Friday. Retail Sales in June increased by 0.7% after rising by 0.1% in the previous month, while analysts had expected 0.2%, and in annual terms, the figure fell by 1.0% after -2.3% with a forecast of -1.5%. In turn, the volume of retail sales excluding fuel amounted to 0.8% in monthly terms and -0.9% in annual terms, while experts assumed 0.1% and -1.6%, respectively. At the same time, the Consumer Confidence Index from the analytical portal Gfk Group fell from -24.0 points to -30.0 points in July, ahead of market forecasts of -26.0 points. This week the focus of investors will be the results of the meetings of the European Central Bank (ECB) and the US Federal Reserve. Both regulators are expected to raise interest rates by 25 basis points. The meeting of the Bank of England will be held next week and may also be marked by an increase in the cost of borrowing by a similar amount. Today, data on business activity in the manufacturing and the services sectors in the US and the UK from S&P Global will be published.

AUD/USD

The AUD/USD pair shows a moderate decline in the area of 0.6730, developing a fairly strong "bearish" momentum formed at the end of last week. Pressure on the position of the instrument is exerted by expectations of further tightening of monetary conditions by the US Federal Reserve at a meeting on Wednesday. The regulator may raise the interest rate by 25 basis points to 5.50%, thus ending the current "hawkish" monetary policy cycle. On the same day, inflation statistics are expected to be published, which may have a significant impact on the position of the Reserve Bank of Australia (RBA). Forecasts suggest that the Consumer Price Index in the second quarter will slow down from 7.0% to 6.2% in annual terms and from 1.4% to 1.0% in quarterly terms. Today's data on business activity in Australia for July does not have a significant impact on the dynamics of the instrument. However, the Commonwealth Bank Services PMI fell from 50.3 points to 48.0 points, and the Manufacturing PMI rose from 48.2 points to 49.6 points, while the Composite PMI fell from 50.1 points to 48.3 points.

USD/JPY

The USD/JPY pair shows a moderate decline, correcting after a sharp increase last week, as a result of which local highs from July 10 were updated. The instrument is testing the level of 141.40 for a breakdown, waiting for new drivers to appear. Today, investors will evaluate data on business activity from S&P Global in the US. Current forecasts suggest that the Manufacturing PMI will correct from 46.3 points to 46.4 points, and in the Services PMI may adjust from 54.4 points to 54.1 points. In turn, in Japan, the July data on business activity were published this morning: the indicator from Jibun Bank in the Manufacturing sector fell from 49.8 points to 49.4 points with neutral forecasts, and in the Services sector remained at the same level of 52.1 points. Considerable support for the US currency is still provided by expectations regarding further tightening of monetary policy by the US Federal Reserve this week. The interest rate is expected to rise again by 25 basis points to 5.50%, and this could be the last adjustment in the current cycle. The Bank of Japan maintains a negative cost of borrowings and refuses to revise its position due to insufficient inflationary risks. At the same time, investors are afraid of possible foreign exchange interventions by the Japanese regulator, when the yen shows a sharp weakening.

XAU/USD

The XAU/USD pair shows mixed trading dynamics, holding near 1960.00. The instrument is developing a "bearish" momentum, formed in the middle of last week, when gold retreated from its local highs from May 17. The pressure on quotes, as before, is exerted by expectations regarding further tightening of monetary policy by the US Federal Reserve and the European Central Bank (ECB) this week: the American regulator will announce its decision on Wednesday, and the European one on Thursday. Both regulators may raise interest rates by 25 basis points, to 5.50% and 4.25%, respectively. At the same time, analysts are inclined to believe that the July adjustment from the US Federal Reserve may be the last in the current cycle, given the sharp decline in inflationary pressures in the country. In turn, the ECB is likely to give new signals to increase the cost of borrowing, which may support the single currency in the medium and long term. On Thursday, the US will publish data on the growth rate of Gross Domestic Product (GDP) for the second quarter. Forecasts suggest a slowdown in the national economy in annual terms from 2.0% to 1.6%. In turn, the GDP Price Index, which is used as an additional marker of inflation, may be corrected from 4.1% to 3.1%.