The Fed is going to have a meeting and make a decision on the interest rate on Wednesday this week. While market participants do not anticipate the central bank to change its course during this event, traders and investors will watch closely the comments by the voting members of the Federal Reserve. According to the latest updates, the Fed is likely to make another dovish step in June 2025 and is likely to cut rates by 100 basis points this year. 

Meanwhile, financial markets remain volatile due to the ongoing trade wars between the United States and its main counterparts. Trade negotiations are still in action, which supports risky assets, but gold is also in demand due to fears of higher tariffs staying in place for longer.

EUR/USD: Markets Are Looking Forward to Hearing Some Updates from Powell and Co

The currency pair is currently supported by the upcoming Fed meeting, as market participants anticipate the FOMC members to announce future rate cuts. On the other hand, EUR is under some pressure amid the rising expectations that the European Central Bank is going to cut rates for the seventh time in a row, as the ECB voting members are convinced that inflation is on track to reach the target levels.

Additionally, fears of economic decline in the Eurozone will push the European currency even lower as trade wars may lead to recession, and the ECB will be pressed to develop its dovish stance.

From the technical analysis perspective, EUR/USD is trading close to the SMA50, which means that currently there is a balance between bulls and bears. The RSI indicator is neutral, meaning there is no overbought or oversold condition as well. On the upside, the current resistance level is at 1.1340, from where traders can buy targeting 1.1400. On the downside, the closest support level is at 1.1300, from where traders can sell, targeting 1.1265 and 1.1200.

GBP/USD: The BoE and Fed Meetings are in Focus

The Bank of England will hold a meeting this week. According to the latest forecasts, the central bank is likely to cut rates by 25 basis points. All nine voting members are expected to vote for the monetary policy easing. However, mixed UK data may prevent the central bank from making any other dovish steps in the near future.

When it comes to trade wars, they may stimulate the BoE to cut rates faster. Especially in a situation when other central banks signal uncertainty about future economic growth. On the other hand, rising inflation may create a floor for further monetary policy easing.

The currency pair fluctuates in a range on Tuesday as market participants evaluate the possible outcome of upcoming meetings. GBP/USD stays above the SMA50, but it stays close to the moving average. On the upside, traders can buy above 1.3340. The next resistance level where you can close a trade is 1.3400. On the downside, traders can sell below 1.3260, targeting 1.3200. 

XAU/USD: Gold is Moving Higher on Switching Market Sentiment

Gold gains support and makes attempts to push higher as trade wars and geopolitics support the precious metal. While the United States is conducting negotiations with its main trade partners, there are still no results, which makes traders and investors seek to protect their funds by investing in safe-haven assets.

Additionally, Middle East tensions are in place again. Israeli Prime Minister Benjamin Netanyahu threatens to strike back at Houthis, while Iran is ready to respond to any attack coming from Israel or the United States. 

Gold stays far above the simple moving average, confirming the bullish bias. However, currently it is testing 3385 in an attempt to push higher. Traders can go long once the precious metal breaks above this level. On the downside, the closest support level is at 335,0, from where traders can sell XAU/USD. 

WTI: Oil Recovers After a Significant Plunge on Monday

Crude oil quotes have closed the gap that was formed on Monday morning after OPEC+ decided to increase output by 411,000 barrels per day in June again. More oil in the market will lead to some additional pressure on WTI. Trade tensions add to bearish sentiment as recession in major economies may cut oil demand. However, the downside is capped by the ongoing tensions in the Middle East. Oil supply ruptures that may arise in the region provide some support to crude oil. 

Oil has closed the gap and makes attempts to move higher, which are limited, by the way, as the quotes are close to 58.50, which is the closest resistance level. Traders can buy from there targeting 59.40 and 60.00. On the downside, the SMA50 acts as a local resistance level. Traders and investors can sell from there, targeting 56.40 and 55.50.