**Weekly Forex Outlook: EUR/USD, XAU/USD, and XAG/USD**
*Based on analysis from the original article by Crispus Nyaga (FXStreet) and supplemented with additional market insights as of June 2024.*
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## 1. Introduction
This article examines the near-term outlook for three significant financial markets: the euro against the US dollar (EUR/USD), gold (XAU/USD), and silver (XAG/USD). With persistent macroeconomic volatility, central bank policy speculation, and shifting investor sentiment, these markets present both opportunities and risks. Insights are drawn from the original analysis by Crispus Nyaga for FXStreet, enhanced by the latest data and observations from major financial sources.
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## 2. EUR/USD: Outlook and Key Drivers
### Recent Performance
– The euro has seen a moderate pullback against the US dollar, pressed by both technical and fundamental factors.
– In late June and early July, EUR/USD failed to break above the 1.0900 region, consolidating near 1.0810–1.0860.
– The US dollar index (DXY) has rebounded, gaining support from resilient US economic data and hawkish Federal Reserve commentary.
### Macro Drivers
#### Federal Reserve Policy
– The Federal Reserve’s stance remains data-dependent. While rate cuts were expected in 2024, sticky inflation and robust jobs data have delayed this timeline.
– Fed Chair Jerome Powell and other officials highlight caution, emphasizing that inflation has not reached desired levels.
– The likelihood of a rate cut later in 2024 remains, but a more dovish stance is on hold until there is clearer evidence of slowing inflation.
#### European Central Bank Policy
– The ECB began its rate-cutting cycle in June, becoming one of the first major central banks to do so.
– Divergence between Fed and ECB policy has weighed on the euro, as relative yield spreads favor the dollar.
– Ongoing political risks in the eurozone, such as French parliamentary uncertainty, add to market hesitancy.
#### Economic Data
– US economic data, particularly nonfarm payrolls and services PMI, show ongoing strength. This supports the dollar.
– Eurozone data remain mixed. While inflation is easing and the ECB is easing rates, weak growth weighs on sentiment.
### Technical Analysis
– EUR/USD faces immediate resistance near 1.0900; a sustained move above could spark acceleration to 1.1000.
– On the downside, support sits near 1.0780 and then 1.0700.
– Daily and weekly charts suggest consolidation unless a major breakout occurs.
### Market Sentiment and Positioning
– Speculators have trimmed euro-long positions as political risks and US dollar strength return.
– Near-term flows favor the dollar, but medium-term risks remain two-sided given potential Fed policy shifts.
### Summary
EUR/USD is trapped in a consolidation range, capped by central bank divergence, cautious macro outlooks, and summer market volumes
Read more on AUD/USD trading.