Weekly FX Technical Analysis - 1st June 2026

Major FX pairs continue to trade around key technical levels as markets remain focused on central bank policy expectations.

The US dollar remains supported by resilient economic data, while investors continue reassessing the timing and scale of potential Federal Reserve rate cuts.

GBP/USD has recovered toward 1.35, EUR/USD remains capped below major resistance, and USD/JPY continues to test levels where intervention risk becomes increasingly important.

GBP/USD

GBP/USD is trading around 1.3470, recovering from recent lows and moving back toward an important technical area around 1.3500. The pair continues to trade within a wider consolidation pattern, with resistance from the descending trendline still limiting further upside momentum.

Potential Scenarios

• Bullish: A sustained break above 1.3500/1.3600 would strengthen momentum and could reopen a move toward the previous highs near 1.3800.

• Bearish: Failure to break higher could see GBP/USD rotate back toward support around 1.3300, with a break below this area exposing the wider support zone near 1.3150/1.3200.

Macro Backdrop to Consider

Sterling has recovered some ground as markets continue to assess the future path of Bank of England policy. Inflation remains above target, creating uncertainty around the pace of future rate cuts, while weaker UK growth indicators continue to act as a limiting factor. For the US dollar, investors remain focused on whether incoming labour market and inflation data will justify Federal Reserve easing later in the year, with stronger data continuing to support the dollar through higher yields.

House View

Neutral GBP/USD, with a decisive move above 1.3600 needed to suggest a stronger bullish shift.

GBP/USD: JUNE ‘25 - PRESENT

EUR/GBP

EUR/GBP is trading around 0.8655, remaining firmly within its established trading range. The pair continues to find support around 0.8600, while upside momentum has repeatedly struggled around the 0.8700/0.8750 resistance region.

Potential Scenarios

• Bullish: A move above 0.8750 would indicate improving euro momentum and could open the door toward 0.8800/0.8850.

• Bearish: A sustained break below 0.8600 would weaken the current structure and expose further downside toward 0.8500.

Macro Backdrop to Consider

The euro and sterling remain closely linked as both the ECB and Bank of England move cautiously through their respective easing cycles. Markets are monitoring whether inflation continues cooling enough to justify further cuts, while policymakers remain wary of cutting too quickly. Relative economic performance between the UK and Eurozone remains the key driver, with both regions facing subdued growth conditions.

House View

Neutral EUR/GBP, with the pair continuing to favour rangebound trading until either 0.8600 support or 0.8750 resistance breaks.

EUR/GBP: JUNE ‘25 - PRESENT

EUR/USD

EUR/USD is trading around 1.1660, attempting to stabilise after pulling back from resistance near the 1.1800 region. Price action remains constructive above medium-term support, although the pair has yet to regain enough momentum to challenge previous highs.

Potential Scenarios

• Bullish: A move back above 1.1800 would improve sentiment and bring the psychological 1.2000 level back into focus.

• Bearish: Failure to hold current levels could see EUR/USD retest support around 1.1500.

  
  

Macro Backdrop to Consider

The dollar remains highly sensitive to changing expectations around the Federal Reserve, with markets reducing expectations for aggressive cuts following resilient US data. In Europe, inflation progress has allowed the ECB to consider further policy easing, although officials remain cautious due to sticky wage growth and services inflation. Broader market attention remains on US fiscal concerns, trade policy uncertainty and geopolitical developments, all of which continue influencing dollar sentiment.

House View

Neutral EUR/USD, with the pair needing a confirmed break above 1.1800 to continue the broader move higher.

EUR/USD: JUNE ‘25 - PRESENT

USD/JPY

USD/JPY is trading around 159.50, continuing to hold close to the psychologically significant 160 level. The broader uptrend remains intact, although price action is increasingly cautious as intervention risks grow.

Potential Scenarios

• Bullish: A confirmed break above 160.00 could allow another move toward 162.00.

• Bearish: Rejection from current levels could trigger a pullback toward 158.00, with deeper support around 156.00.

Macro Backdrop to Consider

The Japanese yen remains under pressure as the interest rate gap between the US and Japan continues to dominate market direction. While the Bank of Japan has started moving away from ultra loose policy, markets remain unconvinced that tightening will happen quickly enough to materially support the yen. With USD/JPY near historically sensitive levels, the risk of verbal or direct intervention from Japanese authorities remains a key factor for traders.

House View

Cautiously bullish USD/JPY, although risks of sharp reversals increase around the 160 intervention zone.

USD/JPY: JUNE ‘25 - PRESENT

As always, if you’d like to discuss these moves in more detail, or how they could impact your business or personal requirements, please don’t hesitate to get in touch.

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Disclaimer: The information in this publication is provided for general information purposes only. It does not constitute financial or investment advice, nor should it be relied upon as such. Readers should consider their own circumstances and seek independent advice where appropriate.