Forex Today: Draghi set to rock EUR/USD, PM Boris Johnson culls cabinet, top-tier US data eyed

Yohay Elam FXStreet

Here is what you need to know on Thursday, July 25th, the European session:
- The European Central Bank is left, right, and center. President Mario Draghi has pledged to provide fresh monetary stimulus but analysts are split on the timing: now or in September. Moreover, it is unclear if the ECB will settle for only cutting interest rates or also opening the door to resuming the QE program. Markit's latest PMIs have been downbeat and increase expectations for imminent action. German IFO Business Climate will provide the last data point before the event. EUR/USD has been on the back foot.

- UK PM Boris Johnson has announced his new cabinet which includes Thatcherite Sajid Javid as Chancellor of the Exchequer and hardline Brexiteer Dominic Raab as Foreign Secretary, lowering the chances of a deal with the EU. Political experts suspect the UK is heading to elections. GBP/USD has been steady amid the change of the guard.

- US data was mostly disappointing with New Home Sales coming out at 646K annualized – another worrying sign for the sector. Today's Durable Goods Orders provides critical insight for Friday's GDP. The USD is stable and next week's Fed decision is awaited.

- Cryptocurrencies are recovering with Bitcoin topping $10,000. Oil and gold are stable.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.