Action Insight Daily Report 6-26-25

Dollar Slides to Multi-Year Lows Against Euro, Pound on NATO Spending Boost

Dollar weakness deepened in Asian session, with the greenback falling to multi-year lows against both Euro and Sterling. For now, downside pressure remains concentrated against European majors. The latest catalyst is a show of fiscal resolve from NATO allies, who agreed to more than double their defense spending target to 5% of GDP by 2035, seen as a long-term fiscal and industrial boost to Europe’s economy and security posture.

The NATO decision breaks down into 3.5% spending on traditional military capabilities and 1.5% on broader resilience like cyber and infrastructure. While symbolic in the short term, the commitment highlights the region’s renewed strategic coherence and investment direction—drawing investor confidence at a time when the US outlook is clouded by trade policy and inflation uncertainty.

Meanwhile, Dollar has now fully reversed its recent safe-haven gains after last week's escalation in the Middle East. With the Israel-Iran ceasefire holding, even amid minor violations, markets are turning back to broader US vulnerabilities, especially fiscal risks, tariffs, and the greenback's trustworthiness as a haven asset.

Monetary policy divergence is also weighing on Dollar. While ECB may be near the end of its cycle, Fed is still expected to resume cuts later this year. Markets are increasingly convinced that a September cut is likely. And after all, Fed’s latest dot plot reflects two cuts this year, with the 2025 median rate at 3.9%,.....

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GBP/USD Daily Outlook

Daily Pivots: (S1) 1.3613; (P) 1.3642; (R1) 1.3694; More...

GBP/USD's rally continues today and intraday bias stays on the upside. Current rise from 1.2099 should target 100% projection of 1.2099 to 1.3206 from 1.3138 at 1.3813 next. On the downside, below 1.3589 minor support will turn intraday bias neutral and bring consolidations. But downside should be contained above 1.3369 support to bring another rally.

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