A highly anticipated week for global FX markets as key central bank decisions from the Federal Reserve, Bank of Japan, and Bank of England will shape USD performance across major pairs. Policy signals and forward guidance will likely drive volatility in EURUSD, USDJPY, and GBPUSD.
Heightened geopolitical tensions in the Middle East have added an additional layer of uncertainty, fuelling safe-haven demand and driving increased volatility in XAUUSD. Careful positioning will be key as markets navigate shifting macroeconomic signals and rising geopolitical headwinds.
The BoJ is expected to keep rates unchanged. However, any signal of policy normalization may support Japanese Yen, dragging USDJPY lower toward lower bound (141.01) of the Bloomberg’s potential 7-day trading range. A dovish message could push USDJPY to 145 level.
The Fed is expected to hold rates steady, but the updated dot plot and Jerome Powell’s press conference will be critical for EURUSD direction. A hawkish Fed could push EURUSD lower, potentially testing support near 1.13996. A dovish tone may weaken the dollar, opening room for EURUSD to test the 1.16323 level.
The BoE is expected to keep rates on hold, with markets focused on any guidance around the timing of potential cuts. A hawkish hold or firmer tone may support GBP, pushing GBPUSD towards 1.37380. Conversely, a more dovish signal could weigh on the pound.
The escalation of geopolitical tensions in the Middle East are fuelling safe haven flows into gold. Elevated uncertainty may keep XAUUSD supported. A sustained rise in tensions could drive further upside toward the all-time high (~3,500), while any signs of de-escalation may trigger profit-taking, bringing XAUUSD back toward 21-day SMA.
Here’s a comprehensive list of other key economic data and events due this week:
Monday, June 16
Tuesday, June 17
Wednesday, June 18
Thursday, June 19
Friday, June 20
Sunday, June 22
