The US inflation data will be released this week. Yearly CPI in the United States is expected to rise from 2.3% in April to 2.5% in May. The core monthly inflation is also expected to rise from 0.2% to 0.3% in May. Monthly inflation is likely to remain unchanged at 0.2%.

If inflation becomes higher, the Fed is likely to continue its wait-and-see approach. This is likely to provide support to the US dollar, which is under pressure due to the ongoing tensions between the US and China.

The negotiations between the two sides moved to London, where US and Chinese officials are trying to reach a deal. The US president is getting good reports from there, which contributes to the positive market sentiment.

EUR/USD: The Currency Pair is Under Pressure

The euro retraced some previous losses on Tuesday as market participants are evaluating the intermediate results of negotiations between the United States and China. Traders and investors are watching this event closely as they look for more information and preliminary outcomes of negotiations. The currency pair remains under pressure on the eve of the US inflation data that will be released on Wednesday.

When it comes to the Eurozone, the Sentix Investors data was released, which showed some improvement in June as the indicator jumped to the positive zone for the first time in one year. Moreover, some ECB officials reinforce the bank’s hawkish stance, which can support the euro.

From the technical analysis perspective, the currency pair is trading slightly above the SMA50 and is testing the resistance level. However, the price is testing the resistance for the third time, which means that there is no trend at the moment, and the price is moving inside a range. 

Traders can place buy stop orders above 1.4300. On the downside, it is recommended to sell below 1.4000. 

GBP/USD: The UK Labor Market Data Boosts BoE Dovish Bets

The labor market data released on Tuesday supports BoE dovish bets. The unemployment rate in the United Kingdom increased by 4.6% from 4.5%. The number of unemployed increased significantly in May and reached 33,1K. On the other hand, the data showed that the UK economy added almost 90K fresh workers. The highest jobless rate supports expectations that the BoE will continue to cut rates during the upcoming summer meetings. 

On the US dollar front, the currency is supported by the recent labor market data, as the unemployment rate in the United States remained unchanged. As for the number of new jobs, payrolls were higher as compared to forecast, which also provided some support to the USD. 

From the technical analysis perspective, the currency pair fluctuates below the SMA50, which means that bears are currently controlling the market. The UK labor market data pushed the currency pair lower. Traders can sell below 1.3470, targeting 1.3400 and 1.3350. On the upside, market participants can buy above the SMA50, targeting 1.3580 and 1.3615.

XAU/USD: Gold Remains Under Pressure

Gold quotes remain under pressure on Tuesday as the negotiations between the United States and China are taking place. These negotiations improve global sentiment. According to the US representatives, discussions between the two sides continue. Market participants remain focused on the outcome of the second day of trade-related negotiations.

The recent news from London says that the discussions are progressing well. US representatives expect the talks to continue. 

From the technical analysis perspective, XAU/USD is trading above the SMA50, meaning that buyers are in control. Traders can buy above 3350, targeting 3400. On the downside, market participants can sell from 3320, targeting 3300 and 3280.

WTI: Oil Moves Higher

Oil quotes set new highs on Tuesday on the ongoing talks between the US and China. The negotiations between leading economies support positive market sentiment, creating additional demand for black gold. However, the gradual increase in output by OPEC+ puts pressure on oil prices in the long term.

From a technical analysis perspective, oil is trading above the SMA50, which indicates the domination of buyers in the market. Traders can buy above 65.00, targeting 65.50 and 66.00. However, a deeper correction may occur as the RSI indicator is close to the overbought area. On the downside, if the price breaks below the SMA50, traders can sell from 64.00, targeting 63.50 and 63.20