Europe’s acute energy vulnerability from the Middle East conflict, combined with zero Fed cut expectations and a broadly bid dollar, creates a fundamental headwind. Institutional baseline still calls for renewed USD depreciation in H2 2026 as geopolitical tensions ease — creating a potential medium-term reversal story. Do not over-commit on the short side without monitoring ECB Lagarde’s speech on Wednesday.

GBP/USD remains in a structurally bullish position on the longer timeframe — the pair ran from the 1.3000 psychological level in November to a 42-day high above 1.38 in February, a substantial impulsive move of over 850 pips. However, the current pullback from those highs has now reached the 0.618 Fibonacci retracement at 1.3352, with price testing into the 0.786 level at 1.3213. This constitutes a normal corrective phase within the broader bull trend.

The pair recorded a “late rebound” from near three-month lows, testing the 1.3440 supply zone before being rejected — a classic supply-zone rejection sequence on the daily timeframe. The daily structure is one of the cleanest corrective patterns in the current market environment. The key 1.3641 level must hold on a weekly close basis to maintain the bullish structural integrity.

The 0.618–0.786 Fibonacci compression zone between 1.3213 and 1.3352 is historically where buyers re-engage in bull-trend corrections. Patient traders await confirmation candles in this zone before establishing medium-term longs.

Cable’s situation is nuanced. Structurally it remains the most attractive USD-weakness play among major pairs, with institutional year-end forecasts ranging from 1.36 to 1.47. The UK does not face the same acute energy vulnerability as mainland Europe given North Sea production as a partial buffer. However, in the immediate term, risk-off USD safe-haven demand is the dominant force overriding fundamentals.

USD/JPY remains in a multi-month ascending structure from the April 2025 lows near 140.25, holding a pattern of higher highs and higher lows consistent with a confirmed uptrend. The pair came within 10 pips of the critical 160.00 level last Thursday before a sharp sell-off triggered by BoJ Governor Ueda’s press conference. That 160.00 level has historically been a line-in-the-sand for the Japanese Finance Ministry.

Monday’s modest recovery of +0.11% suggests the immediate downside pressure from Ueda’s comments has been absorbed. The pair is in a critical inflection zone: bulls want a clean break above 160 to extend toward 161.95, bears want to use every rejection as confirmation of a medium-term top.

The Fibonacci grid shows the 0.236 level at 157.710, 0.382 at 156.891, and 0.618 at 154.974. The current price of 159.431 sits above all retracement levels — in the 0 to 0.236 zone — reflecting the dominant uptrend at extreme extension. The 159.994 (0 Fib / prior high) is the key break point.

AUD faces a combination of geopolitical risk-off (risk currencies sell in safe-haven environments), the Fed repricing to zero cuts, and multi-year technical resistance all converging simultaneously. China demand data remains critical; any deterioration in Chinese PMI or trade data would add a further bearish layer. The RBA rate at 4.10% provides fundamental support but cannot offset the current macro headwinds.