**EUR/USD, GBP/USD, and EUR/GBP Forecasts: US Dollar Fights Back on Tuesday**
*Based on content by Bob Mason via FX Empire. For the latest Forex news and analysis, visit [FX Empire](https://www.fxempire.com/forecasts/article/eur-usd-gbp-usd-and-eur-gbp-forecasts-us-dollar-fighting-back-on-tuesday-1570339).*
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## Macro Overview: US Dollar Pulls Ahead as Markets Digest Fresh Economic Cues
The US dollar started the week consolidating its position, demonstrating renewed resilience by Tuesday’s session. Investors across the major currency pairs, notably EUR/USD, GBP/USD, and EUR/GBP, reacted to a stream of economic data and evolving monetary policy expectations, recalibrating their outlooks accordingly.
Recent market movements suggest a shifting tide, as the dollar attempts to regain lost ground against its European counterparts. In this analysis, we break down the technical setups and fundamental drivers for these key pairs, drawing on the insights originally provided by Bob Mason at FX Empire.
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## EUR/USD Analysis: Euro Struggles as Dollar Regains Footing
### Recent Price Action
– The EUR/USD pair started the week by cautiously holding above the 1.0800 support zone. However, a bout of US dollar buying pressure trimmed gains, with the euro experiencing renewed selling interest.
– Investors focused on US economic indicators, re-evaluating their expectations for Federal Reserve monetary policy, especially in light of persistent inflation and mixed economic momentum.
### Fundamental Drivers
– **US Economic Data:**
– The US economy displayed resilience, with recent releases pointing to continued growth in employment and consumer spending.
– Inflationary pressures have persisted, prompting speculation that the Fed could maintain restrictive monetary conditions for longer.
– **ECB Policy Outlook:**
– The European Central Bank (ECB) remains cautious, with policymakers acknowledging soft inflation and uneven economic recovery across member states.
– Divergence between the Fed and ECB remains a core driver, as any hint of ECB dovishness relative to the US central bank puts further pressure on the euro.
### Technical Picture
– **Key Support Levels:** 1.0800, 1.0780, 1.0730
– **Resistance Levels:** 1.0850, 1.0890, 1.0950
– The EUR/USD pair faces immediate support at the 1.0800 handle. A sustained move below this threshold could open the door for a deeper correction toward 1.0780 and ultimately the 1.0730 mark, which is a medium-term pivot.
– To the upside, any recovery is likely to encounter resistance at 1.0850 and then at 1.0890, which represents the consolidation area observed in May. Only a sustained break above 1.0950 would negate the current bearish bias.
### Outlook and Scenarios
– If the US economy continues to outperform expectations, dollar strength could persist, challenging the EUR/USD’s ability to mount a significant rally in the short term.
– Conversely, any dovish surprise by the Federal Reserve or a hawkish shift at the ECB would be a catalyst for the euro.
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## GBP/USD Forecast: Sterling Corrects After Strong Start
### Recent Price Action
– GBP/USD enjoyed an uptrend in recent weeks, buoyed by resilient UK economic data and speculation the Bank of England (BoE) might hold off on rate cuts.
– This rally, however, faced headwinds as the dollar regrouped, causing the pair to lose steam near the 1.2800 level and retrace toward 1.2700 by Tuesday.
### Fundamental Drivers
– **UK Economic Indicators:**
– Sticky inflation and strong service sector activity have underpinned sterling, allowing the BoE to maintain a hawkish tone, at least relative to the ECB.
– Wage growth and labor market health are
Read more on GBP/USD trading.