TapeEUR/USD1.0842+0.18%GBP/USD1.2731-0.09%USD/JPY152.36+0.24%XAU/USD2,412.60+0.61%DXY104.28-0.14%US10Y4.31%+3bpWTI78.42-0.53%BTC/USD61,180+1.42%Illustrative snapshot · Wednesday, 5 August 2026
Wednesday, 5 August 2026London edition · All times GMT
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Issue #245 · The morning brief

Euro firms as core inflation sticks; gold eyes 2,400 reclaim

Hotter European CPI trims ECB-cut bets and lends EUR/USD a fundamental tailwind.

Sunday, 2 August 2026·3 min read·5 items·By the PipDigest desk
01Inflation

Eurozone core CPI came in hot and the ECB doves went quiet

Sticky core inflation is doing the heavy lifting for the single currency. Thursday's flash eurozone print landed above consensus, and the core measure — the one the Governing Council actually watches — proved stickier than the easing camp had assumed. Markets promptly trimmed the pace of ECB cuts penciled in for the rest of the year, narrowing the rate differential that had capped EUR/USD through late July.

Why it matters

This is the first genuinely fundamental euro tailwind in a month. Technical rallies fail; repricing rallies tend to stick.

02EUR/USD

1.0800 is either a launchpad or a ceiling by tonight

Euro-dollar lifted off 1.0765 and stopped dead at the handle. The pair traded up to 1.0800 on the CPI repricing and has been unable to convert it into support. A push through 1.0820 opens 1.0840 and validates the move; slipping back under 1.0785 hands the initiative straight back to dollar bulls. The daily candle printed a bullish engulfing off 1.0765, which is the constructive read.

Why it matters

Round numbers are where repricing rallies get tested. If the CPI story is real, 1.0800 becomes the floor within two sessions.

03Gold

The 2,400 tug-of-war is the intraday chart to watch

Gold clawed back toward the handle and stalled short of a clean reclaim. A softer dollar and steady haven flows lifted the metal off its lows, but it could not close the reclaim of 2,400. A decisive break targets 2,415; rejection risks a fade to 2,382. The swing factor is US yields — any climb above 4.35% on the 10-year caps both gold and the euro quickly.

Why it matters

Gold and EUR/USD are currently trading the same variable from two directions. Doubling up on both is one position, not two.

04Rates

US yields are the ceiling on everything right now

The 10-year at 4.32% is cushioning dollar losses even as the data softens. Resilient Treasury yields have kept the DXY's slide to 104.60 orderly rather than disorderly. The front end has moved on labour data, but the long end has not followed, which leaves the curve doing very little. Until the 10-year breaks 4.25% convincingly, dollar downside stays capped.

Why it matters

Watching only the dollar index misses half the picture. The yield that decides your EUR/USD trade is on a screen most FX traders never open.

Yields and policy rates, in one table
05Crosses

Sterling tracked the euro, the Aussie did not

Cable lifted to 1.2775 on nothing more than euro strength. GBP/USD shrugged off a soft domestic data point and rode the single currency higher, a reminder that on inflation-driven sessions the euro leads the European complex. The Aussie lagged on renewed China growth concerns while the loonie firmed with crude. The correlation map is behaving exactly as the textbook says it should.

Why it matters

When cable is following the euro rather than its own data, UK releases are noise until the Bank of England prints.

The overnight session

Asia → early Europe

The euro found a bid overnight after Thursday's flash eurozone CPI came in a touch above consensus, with the core measure proving stickier than the doves had hoped. EUR/USD lifted off 1.0765 to trade 1.0800 as markets pared expectations for the pace of ECB easing into year-end. The DXY eased to 104.60 in sympathy, though dollar losses were cushioned by resilient US yields, with the 10-year holding 4.32%. Gold clawed back toward the 2,400 handle, drawing support from the softer dollar and steady haven flows, though it stalled short of a clean reclaim. USD/JPY drifted to 152.30 as the rate gap kept the carry trade attractive despite official warnings. Sterling tracked the euro higher to 1.2775, shrugging off a soft UK data point. Commodity currencies were mixed; the Aussie lagged on China growth concerns while the loonie firmed with crude. The overnight signal was cleanly fundamental: sticky European inflation is doing the heavy lifting for the single currency.

Today's watch

Scenarios & invalidation

The euro's fate today hinges on whether 1.0800 becomes a launchpad or a ceiling. A push through 1.0820 opens 1.0840 and validates the CPI-driven repricing; slipping back under 1.0785 hands the initiative back to dollar bulls. Gold's tug-of-war around 2,400 is the standout intraday chart — a decisive reclaim targets 2,415, while rejection risks a fade to 2,382. Watch US yields: any renewed climb above 4.35% on the 10-year would cap both EUR/USD and gold quickly. Sterling looks constructive above 1.2760 but needs the euro to lead.

Key levels

Illustrative
InstrumentSupportPivotResistanceBias
EUR/USD1.07851.08001.0840Bullish
XAU/USD2,3822,4002,415Neutral
GBP/USD1.27601.27751.2810Bullish
USD/JPY152.00152.30152.70Neutral
Price action schematic
EUR/USD daily: a bullish engulfing candle off 1.0765 on sticky eurozone CPI puts the 1.0840 swing high back in focus.

On the calendar

Full calendar
12:30

Initial Jobless Claims

USDMediumf/c 232K · prev 235K

A weekly count of new unemployment-benefit filings. Fewer claims signal a tight labour market and support the dollar; a jump higher feeds rate-cut bets.

14:00

ISM Services PMI

USDHighf/c 51.4 · prev 50.8

A survey of purchasing managers in the dominant US services sector. Above 50 means expansion. A soft read reinforces the easing narrative and pressures the dollar.

12:30

Nonfarm Payrolls (NFP)

USDHighf/c 175K · prev 206K

The headline US jobs number — the month's marquee release. It sets the tone for Fed expectations and can move every major pair, gold and yields in seconds.

← Issue #244August opens with a firmer dollar as month-end flows unwindIssue #246 →Payrolls hangover: dollar bid fades into the weekend gap
How to read this issue. Each numbered item is written to stand alone — skim the bold lead-in, read the “why it matters” line, and stop there if that is all you need. The overnight narrative and level table below are for when you want the full picture. Every figure is illustrative and set at the time of filing.