Euro Slides as Inflation Hits ECB Target (01.08.2026)

Markets are focused on upcoming jobless claims and Friday’s employment report, expecting the Federal Reserve to keep rates unchanged in the near term while still pricing in cuts later this year. 

The euro slipped below 1.17 after Eurozone inflation cooled to the ECB’s target, pushing expectations for further rate hikes off the table. The yen weakened toward 157 amid geopolitical frictions and soft domestic wage data, while gold eased as mixed US labor signals kept traders cautious ahead of the jobs report. Sterling held near three-month highs on policy divergence, and silver stabilized above key support as markets assessed the near-term outlook.

Euro Dips Below $1.17 on Cooling Inflation

The euro fell below $1.17 on Thursday, reaching its lowest point since early December. This decline follows data showing Eurozone inflation hit the ECB’s 2% target, with core inflation coming in softer than the expectations. Coupled with weak German retail sales and slowing labor market momentum, these cooling price pressures have dampened growth prospects. Yet, markets have priced out potential ECB rate hikes through 2026, leaving the currency under significant downward pressure.

Technically, 1.1630 is the key support, while resistance is seen at 1.1740.

Yen Weakens Toward 157 Amid Geo-Frictions

The Japanese yen weakened toward 157 per dollar on Thursday, marking its third straight daily decline. This slide was fueled by broad U.S. dollar strength and rising geopolitical tensions. Specifically, frictions intensified after Beijing restricted military-use exports to Japan. Locally, Japan's real wages fell 2.8% in November as inflation continued to outpace salary growth. These weak labor figures complicate the Bank of Japan's plans for further policy tightening, despite its generally hawkish outlook

Technically, resistance stands near 157.30, while support is firm at 156.30.

Gold Prices Soften Toward $4,440

Gold prices softened to approximately $4,440 per ounce on Thursday. This decline came as investors weighed mixed U.S. economic signals against global instability. While weaker job openings indicated a cooling labor market, strong services data provided a counter-balance. Market focus has now shifted to Friday’s nonfarm payrolls for definitive clues on Federal Reserve rate cuts. Meanwhile, ongoing tensions in Venezuela and Greenland, alongside consistent gold purchases by China, continue to provide a baseline for safe-haven demand.

Gold sees support near $4380, while resistance is around $4500.

Sterling Holds Near Three-Month Highs

The British pound remained steady near $1.346, holding close to its recent three-month peak. Sterling is finding support as investors navigate the diverging policies of the Bank of England and the Federal Reserve. While the Fed is expected to deliver at least two rate cuts this year, markets anticipate a more cautious approach from the BoE. Recent UK data showed resilient consumer borrowing despite softer mortgage approvals, helping the pound maintain its footing.

From a technical view, support stands near 1.3400, with resistance around 1.3500.

Silver Stabilizes Near $78.00

Silver traded around the $78.00 level during Thursday’s Asian session, showing limited intraday direction but holding above key support near $77.00. The price structure continues to favor dip-buying at lower levels, with momentum indicators signaling stabilization after the recent pullback. As long as this support holds, the near-term outlook remains cautiously positive. However, a clear break below the trend support could open the door to a deeper corrective move.

From a technical view, resistance stands near $79.60 while support is located around $76.40.