Last Friday, during a speech, San Francisco Federal Reserve Bank President Mary Daly suggested that policymakers would soon be ready to cut interest rates, adding that tariff-driven inflation is likely to prove temporary.

"Soon it will be time to adjust policy so that it better meets the needs of our economy," Daly said on Friday. She noted that the price increases associated with tariffs "will be a one-off event." "It will take time before we know this for sure. But we cannot wait without risking damage to the labor market."

Daly's remarks came amid growing concern about slowing economic growth caused by the U.S. trade war with the rest of the world. Many economists and investors increasingly fear that rising tariffs could reduce consumer spending and investment, which in turn would negatively affect GDP.

The market interpreted Daly's comments as a signal of a possible easing of the Federal Reserve's monetary policy. Traders hope that cutting interest rates will help support the economy in times of uncertainty. However, it is worth noting that other Fed officials have not yet shown such a clear readiness to cut rates. They prefer to take a wait-and-see approach while assessing incoming macroeconomic data.

This year, the Fed leadership has kept interest rates unchanged at each meeting, within the 4.25–4.5% range. Daly's comments echo those of Fed Chair Jerome Powell, who at the Jackson Hole symposium left the door open for a rate cut as early as the next policy meeting in September, pointing to recent economic data indicating a sharp slowdown in hiring.

"Congress has given the Fed two goals: full employment and price stability. Both of these goals are currently at risk: tariffs are fueling inflation, and the labor market is showing signs of slowing," Daly said.

Policymakers are still trying to assess the economic consequences of Trump's aggressive changes to trade policy. Data released last Friday showed that the Personal Consumption Expenditures (PCE) index rose for the fourth consecutive month in July, confirming signs of economic resilience.

It is worth noting that the head of the San Francisco Fed does not have a vote on monetary policy decisions this year.

As for the current technical picture of EUR/USD, buyers now need to break through the 1.1715 level. Only this will allow the pair to aim for a test of 1.1750. From there, it could climb to 1.1780, though doing so without support from major players will be challenging. The farthest target is the 1.1820 high. In the event of a decline, I expect serious buying interest only near the 1.1685 level. If no large buyers appear there, it would be advisable to wait for a retest of the 1.1655 low or consider opening long positions from 1.1630.

As for the current technical picture of GBP/USD, buyers need to take out the nearest resistance at 1.3540. Only then will it be possible to aim for 1.3565, above which breaking through will be quite difficult. The farthest target is the 1.3590 level. In the event of a decline, the bears will attempt to regain control at 1.3495. If they succeed, a break of this range will deal a serious blow to the bulls' positions and push GBP/USD toward the 1.3470 low, with the prospect of extending to 1.3440.