Euro Rides Dollar Slide to Fresh Highs as Hawkish ECB Bets Reshape the | Technical Analysis – European Session, 31 July 2026
Euro Rides the Dollar Slide as Hawkish ECB Bets Reshape the European Session
EUR/USD · GBP/USD · Silver · Wheat · FTSE 100 · EU 10Y · ETH/USD · Litecoin — live London, Frankfurt and Paris coverage through the European session
A broadly softer Dollar, a hawkish ECB repricing and a Black Sea grain shock are doing most of the driving as London comes online.
The Dollar’s retreat that began with Wednesday’s Federal Reserve decision has now run through two full sessions, and it is the single biggest theme carrying into European trading. The Fed held its policy rate at 3.50%–3.75%, but three regional presidents dissented in favour of a hike — a hawkish-looking vote split that the market nonetheless read as confirmation that further tightening is off the table, since a one-in-three chance of a surprise hike had already been priced in beforehand. That Dollar softness was then turbocharged overnight by suspected Japanese Ministry of Finance intervention that sent USD/JPY sharply lower, and this morning’s Bank of Japan decision to hold its policy rate at 1.00% has done little to reverse the move. The Dollar Index is now sitting close to 100.10, its softest level in roughly a month.
Europe has its own story layered on top of the Dollar weakness. Eurozone GDP expanded 0.4% in the second quarter, more than double the 0.2% consensus, with Spain leading a broad-based beat and firmer German and Spanish inflation readings reinforcing the case for a second European Central Bank rate hike this year, plausibly as soon as September. ECB Governing Council members Christodoulos Patsalides and Philip Lane have both flagged in recent days that time is working against the central bank on inflation, and German Bund yields are sitting close to last week’s 15-year high near 3.20% as a result. The next major test of that hawkish repricing lands this morning: Eurostat’s flash estimate of July Eurozone HICP inflation, due at 10:00 CET, following June’s reading of 2.8%.
Across the Channel, the Bank of England delivered its own hold on Thursday, keeping the Bank Rate at 3.75% in a narrower-than-expected 6–3 vote split, even as UK inflation cooled to a 15-month low of 2.6% in June. Sterling has extended its gains into the European session on the back of that decision and the broader Dollar weakness. The FTSE 100 is pushing to a fresh intraday record, lifted by miners tracking firmer metals prices and a wave of strong corporate earnings, from Rolls-Royce’s upgraded guidance to Shell’s strongest quarterly profit since early 2022, with NatWest results due later today. Elsewhere, Wheat is the session’s standout mover, extending its surge toward the two-year high near $7.06 a bushel as intensifying Russia-Ukraine hostilities disrupt shipping through the Black Sea and reports emerge of exports being halted at three major Russian ports. Silver has cleared the $60 handle for the first time since 8 July, helped by the same Dollar-weakness theme. Crypto majors are the session’s laggards, with ETH and Litecoin both consolidating in tight ranges as a Fear & Greed reading of 29 keeps risk appetite subdued even as the broader Dollar retreat offers a mild tailwind.
European Session News Feed
The stories moving markets right now, sourced from Reuters, Bloomberg, Investing.com and FXStreet
European Session Economic Calendar — 31 July 2026
Key releases and events shaping price action through London, Frankfurt and Paris trading hours (times in BST/CET as noted)
| Time | Event | Forecast / Detail | Impact | Market Read |
|---|---|---|---|---|
| 🇯🇵Overnight | BOJ Policy Decision & Suspected MOF Intervention Aftermath | Rates held at 1.00% as expected; USD/JPY still digesting Thursday’s sharp drop | 🔴 CRITICAL | Anchors the broad Dollar-weakness backdrop carrying into Europe |
| 🇩🇪07:55 BST | German Unemployment Change (July) | Labour market expected to remain broadly stable | 🟢 MEDIUM | Feeds into the Eurozone growth-and-inflation narrative ahead of the HICP print |
| 🇫🇷🗖🇹 | France & Italy Flash July HICP | Both due ahead of the Eurozone aggregate; watch for further firming | 🟢 MEDIUM | Early read on the direction of today’s bloc-wide inflation surprise |
| 🇪🇺10:00 CET / 09:00 BST | Eurozone Flash HICP (July) | June print was 2.8%; risk skewed toward a firmer reading given energy costs | 🔴 CRITICAL | The key swing factor for EUR/USD and Bund yields into the weekend |
| 🇨🇭Morning | Swiss Retail Sales (June) | Modest growth expected | ⚪ LOW | Background read on Swiss consumer demand; limited cross-asset impact |
| 🇺🇦🇷🇺 | Black Sea Grain Corridor Disruption Continues | Exports reportedly halted at three major Russian ports; Ukraine pushing to keep vessel traffic open | 🔴 CRITICAL | Primary driver of today’s Wheat rally toward the two-year high |
| 🇬🇧Ongoing | FTSE 100 Corporate Earnings Slate | NatWest results due; follows Thursday’s Rolls-Royce, Shell and Lloyds beats | 🟢 MEDIUM | Stock-specific catalyst reinforcing the index’s record-high push |
| 🇪🇺Ongoing | ECB Speakers Reinforce Hawkish Tone | Patsalides and Lane both flag the case for further tightening this week | 🟢 MEDIUM | Underpins the Bund-yield move toward the 15-year high near 3.20% |
| 🇺🇸13:30 BST / 08:30 ET | US Employment Cost Index (Q2) | Wage-pressure gauge expected to moderate to 0.8% from 0.9% | 🟢 MEDIUM | Could extend or reverse the Dollar’s slide heading into the weekend |
| 🇺🇸14:45 & 15:00 BST | US Chicago PMI & Final UMich Consumer Sentiment (July) | Both due in the early US afternoon | ⚪ LOW | Secondary US data points rounding out the week’s macro picture |
| 📅All Session | Month-End Portfolio and Index Rebalancing Flows | Friday’s date-end flows can add intraday volatility across asset classes | 🟢 MEDIUM | Background factor for FX, equities and rates into the London close |
European Session Trade Ideas
Technical setups and fundamental context across the session’s eight key instruments
EUR/USD
Fundamental Backdrop
EUR/USD is trading at fresh one-month highs near 1.1558, riding the Dollar Index’s slide toward 100.10 as suspected Japanese intervention and this morning’s Bank of Japan hold compound the fallout from Wednesday’s dovishly-received Fed decision. On the Euro side, Wednesday’s Q2 GDP beat (0.4% versus 0.2% forecast) and firmer German and Spanish inflation have reinforced hawkish ECB rate-hike bets, with today’s flash July HICP print at 10:00 CET the next major catalyst.
Technical Outlook
The pair has broken decisively above the 1.1440-1.1520 congestion zone that had capped it for much of the past week, with momentum indicators turning constructive. A hold above the 1.1490 entry zone on dips keeps the bullish structure intact and exposes the 1.1680 target; a break below the 1.1420 stop-loss level would risk a slide back toward the 1.1350 area, particularly if today’s inflation print undershoots.
Session Catalysts
Watch for: (1) the Eurozone flash HICP release at 10:00 CET and any surprise relative to June’s 2.8%; (2) German unemployment and the French/Italian national CPI prints that precede it; (3) further confirmation or denial of Japanese MOF intervention; (4) the US Employment Cost Index and Chicago PMI later in the session; (5) month-end flows given Friday’s date.
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GBP/USD
Fundamental Backdrop
Sterling is building on Thursday’s Bank of England-driven gains, trading near 1.3522 after the MPC held the Bank Rate at 3.75% in a closer-than-expected 6-3 vote split. UK inflation cooled to a 15-month low of 2.6% in June, supporting the case for the pause, though officials flagged that higher energy prices could push price pressures back up later in the year. The broader Dollar-weakness theme is providing an additional tailwind.
Technical Outlook
Cable has cleared the 1.3450 resistance level that had capped it earlier in the week, with momentum turning higher without yet reaching overbought territory. A hold above the 1.3440 entry zone on dips keeps the bullish structure intact and exposes the 1.3650 target; a break below the 1.3370 stop-loss level would risk a slide back toward the 1.3280 area.
Session Catalysts
Watch for: (1) any follow-up commentary from BoE Governor Andrew Bailey or other MPC members digesting Thursday’s narrow vote; (2) the Eurozone flash HICP print and its read-through for broader European sentiment; (3) the US Employment Cost Index and Chicago PMI later in the session; (4) month-end portfolio flows.
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Silver
Fundamental Backdrop
Silver has pushed back above the psychologically important $60 an ounce level for the first time since 8 July, supported by the broad Dollar-weakness theme and a physical market now in its fifth consecutive annual supply deficit. The gold-silver ratio remains stretched near 69-70, a setup that has historically preceded periods of silver outperformance, while continued Middle East tension supports haven demand more broadly.
Technical Outlook
The metal has cleared the $58.50-$59.50 resistance band that had capped it since early July, with momentum turning constructive on the daily chart. A hold above the $58.60 entry zone on dips keeps the bullish structure intact and exposes the $63.50 target; a break below the $57.30 stop-loss level would risk a slide back toward the $55.50 area.
Session Catalysts
Watch for: (1) the direction of the Dollar Index into today’s US data; (2) any fresh escalation in Middle East tensions; (3) the Eurozone flash HICP print and its knock-on effect for broad Dollar positioning; (4) industrial demand read-through from the ongoing AI-driven tech-earnings cycle.
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Wheat
Fundamental Backdrop
Wheat is the session’s standout mover, extending its surge toward the two-year high near $7.06 a bushel set on 22 July as escalating Russia-Ukraine hostilities disrupt shipping through the Black Sea. Reports have circulated of exports being halted at three major Russian ports, and consultancy SovEcon has cut its forecast for Russia’s 2026-27 wheat exports by roughly 4% due to closures around the Sea of Azov. Ukraine is reportedly pushing to keep vessel traffic moving through its own ports despite official denials.
Technical Outlook
The complex has broken decisively above the $6.50-$6.70 congestion zone on rising volume, with the daily trend now firmly higher. A hold above the $6.55 entry zone on dips keeps the bullish structure intact and exposes the $7.10 target and two-year high; a break below the $6.30 stop-loss level would risk a reversion back toward the $6.00 area.
Session Catalysts
Watch for: (1) further Black Sea attack or blockade headlines and any confirmation of the reported Russian port halts; (2) any signs of a Russia-Ukraine ceasefire or de-escalation; (3) US weather developments relevant to the broader grain complex; (4) the next weekly export sales data.
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FTSE 100
Fundamental Backdrop
The FTSE 100 is trading at a fresh intraday record near 10,948, extending Thursday’s record run as precious and industrial metal miners track firmer metals prices amid the broad Dollar weakness. A strong corporate earnings slate is reinforcing the move, with Rolls-Royce, Shell and Lloyds among Thursday’s standout gainers after upgraded guidance and strong results, and NatWest’s earnings due later today alongside Linde, Enel, AXA and ENGIE across the wider European market.
Technical Outlook
The index is holding comfortably above its prior 10,850-10,900 range, with the uptrend that began with the mid-July breakout still fully intact. A hold above the 10,820 entry zone on dips keeps the bullish structure intact and exposes the 11,150 target; a break below the 10,700 stop-loss level would risk a pullback toward the 10,500 area.
Session Catalysts
Watch for: (1) NatWest’s earnings release and its read-through for the wider banking sector; (2) broader risk sentiment tied to the AI-trade momentum out of Wall Street following Microsoft and Amazon’s results; (3) any follow-up Bank of England commentary; (4) month-end index rebalancing flows.
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EU 10Y (German Bund Yield)
Fundamental Backdrop
Germany’s 10-year Bund yield is sitting near 3.19%, just below last week’s 15-year high above 3.20%, as stronger-than-expected Q2 Eurozone GDP (0.4% versus 0.2% forecast) and firmer German and Spanish inflation reinforce hawkish ECB rate-hike bets. Money markets are now pricing close to two ECB hikes by March 2027, with Governing Council members Christodoulos Patsalides and Philip Lane both flagging this week that time is working against the central bank on inflation.
Technical Outlook
Yields are holding just below the multi-year high, with the uptrend from the past several sessions still intact. A hold above the 3.10% entry zone on dips keeps the bullish-yield structure intact and exposes the 3.35% target; a drop below the 3.02% stop-loss level would suggest the hawkish repricing is fading and risk a slide back toward 2.90%.
Session Catalysts
Watch for: (1) today’s flash Eurozone HICP print at 10:00 CET, the key near-term catalyst; (2) further ECB speaker commentary; (3) German unemployment data; (4) spillover from US Treasury yield moves around the Employment Cost Index; (5) month-end duration-buying flows, which can temporarily cap yields.
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ETH/USD
Fundamental Backdrop
Ether is trading near $1,918, firmer amid the broader Dollar retreat but with gains capped by a cautious risk backdrop, with the Fear & Greed Index sitting at 29 (“Fear”) and trading volume declining. Spot ETF flows remain mixed, with BlackRock’s fund continuing to draw net inflows even as Grayscale’s trust sees ongoing outflows, leaving the net picture for institutional demand unclear this week.
Technical Outlook
ETH is consolidating for a second straight session within its $1,900-$1,940 range, with the divergence between declining volume and price suggesting weakening upward momentum in the very near term. A hold above the $1,860 entry zone on dips keeps the tactical bullish structure intact and exposes the $2,050 target; a break below the $1,790 stop-loss level would risk a slide toward $1,700.
Session Catalysts
Watch for: (1) the direction of the Dollar Index; (2) any fresh spot ETH ETF flow data; (3) broader crypto risk sentiment tied to the AI-trade momentum in equities; (4) weekend liquidity conditions as the session winds down.
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Litecoin
Fundamental Backdrop
Litecoin is trading near $46.30, holding inside its familiar $42-$46 consolidation range. The token continues to benefit at the margin from expanding institutional custody infrastructure and steady network activity, but short-term sentiment remains fragile, with lingering US Treasury sanctions headlines and broader altcoin caution keeping conviction limited heading into the weekend.
Technical Outlook
The $42-$46 zone remains the key consolidation range flagged by technical desks; a volume-backed breakout above $48 would open the way toward $53-$56, while a slip back below $42 would risk a retest of the $40 level. A hold above the $44.20 entry zone on dips keeps the tactical bullish case intact.
Session Catalysts
Watch for: (1) the broader direction of Bitcoin and Ether, which LTC tends to follow; (2) any fresh regulatory or sanctions-related headlines; (3) weekend liquidity conditions, which have historically amplified LTC’s moves in either direction.
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European Session FAQ
Answers to the questions traders are asking about today’s session
Why is EUR/USD rallying if the ECB hasn’t actually hiked rates yet?
Why did Wheat jump so sharply today when there’s no US weather story?
Is the FTSE 100’s record high sustainable given Sterling is also strengthening?
What would today’s Eurozone flash HICP print need to show to move markets?
European Session Summary — Friday, 31 July 2026 (Live Update)
Friday’s European session is being shaped by a Dollar that simply will not stop sliding, with the Dollar Index pinned near 100.10 as the fallout from Wednesday’s dovishly-read Fed hold, Thursday’s suspected Japanese intervention and this morning’s Bank of Japan rate hold at 1.00% compounds across three consecutive sessions. EUR/USD has pushed to fresh one-month highs near 1.1558 heading into today’s pivotal flash Eurozone HICP release at 10:00 CET, a print that carries extra weight after Wednesday’s Q2 GDP beat (0.4% versus 0.2% forecast) and firmer German and Spanish inflation reinforced bets on a second ECB rate hike this year. GBP/USD is extending Thursday’s Bank of England gains toward 1.3522 after the MPC’s narrower-than-expected 6-3 hold at 3.75%. German Bund yields, at 3.19%, sit just below last week’s 15-year high as the same hawkish ECB repricing plays out in rates markets, while the FTSE 100 has pushed to a fresh intraday record near 10,948, lifted by miners and a strong earnings slate from Rolls-Royce, Shell and Lloyds. On the commodity side, Wheat is the session’s standout, surging 2.2% toward its two-year high near $7.06 a bushel as Black Sea shipping disruption intensifies and exports are reportedly halted at three major Russian ports, while Silver has cleared the $60 handle for the first time since 8 July. Crypto majors are the laggards, with ETH near $1,918 and Litecoin near $46.30 both consolidating in tight ranges as a Fear & Greed reading of 29 keeps conviction low. Highest-conviction session idea: buy EUR/USD dips toward 1.1490, targeting 1.1680 — the combination of a structurally weaker Dollar, a hawkish ECB repricing already reinforced by Wednesday’s GDP beat, and today’s flash HICP print as a fresh potential catalyst make this the cleanest multi-driver setup of the session, though a softer-than-expected inflation number is a genuine two-sided risk given how much hawkish repricing is already priced in.
For the individual instruments: EUR/USD buy dips toward 1.1490, stop 1.1420, target 1.1680 — the Dollar-weakness and hawkish-ECB tailwinds are genuine, though a soft flash HICP print is a real source of two-way risk. GBP/USD buy dips toward 1.3440, stop 1.3370, target 1.3650 — the BoE-hold and broad Dollar-weakness tailwinds are genuine, though the narrow 6-3 vote split leaves room for a hawkish walk-back that could cap gains. Silver buy dips toward $58.60, stop $57.30, target $63.50 — the Dollar-weakness and structural supply-deficit tailwinds are genuine, though a reversal in Middle East risk sentiment is a real headwind. Wheat buy dips toward $6.55, stop $6.30, target $7.10 — the Black Sea supply-disruption tailwind is genuine and acute, though any ceasefire or de-escalation headline is a real source of sharp two-way risk. FTSE 100 buy dips toward 10,820, stop 10,700, target 11,150 — the earnings and miner-led tailwinds are genuine, though a further leg higher in Sterling is a real offsetting headwind. EU 10Y buy yield dips toward 3.10%, stop 3.02%, target 3.35% — the hawkish-ECB tailwind is genuine and well-supported by recent data, though a soft flash HICP print would undercut the case sharply. ETH/USD buy dips toward $1,860, stop $1,790, target $2,050 — the Dollar-weakness tailwind is a mild positive, though the low Fear & Greed reading suggests limited near-term conviction. Litecoin buy dips toward $44.20, stop $42.50, target $49.50 — institutional custody momentum is a mild long-term tailwind, though the token remains range-bound with limited near-term catalysts. The decisive variable for the remainder of the session is today’s Eurozone flash HICP print at 10:00 CET, alongside any further confirmation of Japanese intervention, the US Employment Cost Index and Chicago PMI later in the day, NatWest’s earnings, and any fresh Black Sea escalation. Size positions accordingly, and note that today’s backdrop carries genuine event risk around the 10:00 CET inflation print that could reshape sentiment sharply intraday.
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