EUR/USD looks to the ECB rate decision
EUR/USD is trading at a three-month high ahead of the ECB interest rate decision later today. The central bank is expected to keep interest rates on hold at 3.75%.With no change to rate cuts, expected attention will be on whether the ECB will prepare the market for a September rate cut. Policymakers will likely want to proceed cautiously as inflation remains above the 2% target at 2.5% and wage growth remains strong.The market expects two more 25 basis point rate cuts this year, most likely in the September and December meetings. Policymakers haven’t pushed back against market expectations, and investors are looking for more cues today.Inflation is not yet where the ECB wants it to be. They will likely signal that the next move will be a rate cut. However, guidance is expected to be vague and with caveats.Meanwhile, the US dollar is trading at a three-month low versus its major peers as the market is convinced that the Fed will cut interest rates in September and potentially up to three times this year.U.S. jobless claims are in focus and are expected to rise modestly to 230K from 222 K. Fed speakers Lorie Logan and Mary Daly are scheduled to speak, and the data will be watched carefully for further clues about the future path of interest rates.
EUR/USD forecast – technical analysisEUR/USD has recovered from the July low of 1.0670, rising above the 200 SMA and 1.0915, the June high. The RSI supports further gains while remaining out of overbought territory.Buyers will look for a rise above 1.0980, the March high, and 1.10, the psychological level.Support can be seen at 1.0915. Below here, the 200 SMA at 1.08 comes into focus. 
GBP/USD falls after wage data reignites August BoE rate cuts
The pound is falling as unemployment remains at a 2 1/2-year high of 4.4% and wage growth slows in May in line with predictions.Average earnings, including excluding bonuses, eased to 5.7% in May, down from 5.9% in April. This was in line with expectations and marked the slowest pace of growth in almost two years, keeping hopes of an interest rate cut next month alive. The market has lifted expectations for an August rate cut from 30% on Wednesday to 40% today.The Bank of England will be watching wage growth closely, given that it is intrinsically tied to service sector inflation.Wage growth and service sector inflation are areas that the BoE has consistently expressed concern about, so moving wage growth in the right direction will bring some relief to policymakers.The numbers came after UK inflation data yesterday showed that CPI was stickier than expected at 2%. Meanwhile, service sector inflation was also sticky than expected at 5.7%, failing to cool in line with expectations of 5.6%.
GBP/USD forecast – technical analysisGBP/USD has recovered from a low of 1.2680, the lower band of the rising channel, and has rebounded higher to the upper band of the channel. The price is testing 1.30 as it trades around a one-year high. Buyers will look to rise above 1.30 and 1.3044, the 2024 high, to push onwards to 1.3135, the July 2023 high.Note that the RSI is in overbought territory so some consolidation or a move lower could be on the cards.Support can be seen at 1.29, the March high. Belo ether 1.2860, the June high, comes into play. 
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