Markets Cautious Ahead of ECB and BoE (02.04.2026)

The dollar index held near 97.4 on Wednesday, pausing its recent advance as the partial US government shutdown postponed key economic releases and kept traders cautious. 

Major assets are trading in tight ranges as investors wait for key central bank decisions. The euro is holding near multi-year highs ahead of the ECB meeting, while the yen has slipped to two-week lows amid election-related fiscal concerns in Japan. Gold has moved back above $5,000 on renewed geopolitical tensions and delayed US data, silver is stabilizing after sharp liquidation, and sterling remains range-bound ahead of the Bank of England’s policy announcement.

Euro Steady Near $1.1820

The euro traded near $1.1820 on Wednesday, staying close to last week’s multi-year high as traders look toward the upcoming ECB meeting. Most expect the central bank to keep interest rates steady, much like the Federal Reserve. Policymakers are currently studying how a weaker dollar and cheap Chinese imports might lower inflation. While the current policy seems balanced, officials worry that if the euro keeps climbing, they may need to cut rates sooner than planned.

For EUR/USD, the first resistance level is at 1.1870, while the nearest support stands at 1.1780.

Yen Hits Two-Week Low Before Election

The Japanese yen dropped past 156 per dollar on Wednesday, marking its fourth day of losses. This is its weakest level in nearly two weeks as the country prepares for a snap election this Sunday. Prime Minister Sanae Takaichi’s party is expected to win big. Her plans for more government spending and tax cuts are making investors nervous about rising debt, which is pulling the currency down. Earlier gains from intervention talk have now mostly disappeared.

Technically, resistance stands near 156.60, while support is firm at 155.50.

Gold Breaks $5,000 Barrier Again

Gold climbed back above $5,000 on Wednesday, continuing its recovery after the massive rally seen earlier this week. Investors are seeking safety again following a U.S. strike on an Iranian drone. While diplomatic talks remain an option, the military tension is supporting prices. Even with Kevin Warsh’s hawkish reputation, markets still expect two rate cuts this year. Meanwhile, the ongoing government shutdown has delayed official jobs data, making gold even more attractive as an alternative to the dollar.

Gold sees support near $4950, while resistance is around $5100.

Pound Holds Steady Near $1.37

The British pound hovered around $1.37 on Wednesday as traders stayed cautious before tomorrow’s Bank of England meeting. The central bank will likely keep rates at 3.75%. Hopes for future rate cuts are fading because the UK economy is staying strong and inflation remains the highest in the G7. While a 17-month high in manufacturing is good news for the economy, a strong U.S. dollar is currently preventing the pound from climbing any higher.

From a technical view, support stands near 1.3650, with resistance around 1.3740.

Silver Reclaims $86 Level

Silver climbed above $86 per ounce on Wednesday. It is regaining ground after a violent two-day crash wiped out significant gains. The panic selling from forced liquidations has slowed, which has allowed buyers to hunt for bargains at lower prices. Fresh tension between the U.S. and Iran has also reignited safe-haven interest. Beyond the headlines, silver remains backed by a long-term supply shortage and heavy industrial demand. This helps the metal stabilize after its recent wild ride.

From a technical view, resistance stands near $89.30 while support is located around $85.10.