Track market-moving stories before they get noisy

Key Points:Softer U.S. economic data have reduced expectations for another Fed rate increase, putting renewed pressure on the dollar.Markets are watching the Fed's July meeting minutes for clues on how policymakers assess slowing growth and inflation risks.Expectations for tighter ECB policy are supporting the euro as markets assess inflation, growth and upcoming activity data.DXY has broken its rising trendline and is testing the critical 99.38–99.42 support zone, leaving the technical bias vulnerable.EUR/USD remains bullish above 1.1580, while GBP/USD is approaching its next major resistance around 1.3587.

In this article:GBP/USD

+0.11%

GBP/USD ForecastEUR/USD

+0.29%

EUR/USD ForecastUS Dollar News: Fed Hike Bets Fade as Euro and Pound Gain Support The U.S. dollar begins the day on Wednesday, August 17, under pressure after a slow release of economic data reduced the likelihood of another rate hike from the Federal Reserve. U.S. retail sales slipped in July for the first time in nine months and cited worsening consumer sentiment in addition to last week’s trends in the CPI and PPI. The odds of a September rate hike have dropped to 30% from 50%. It is now expected that rates will hold at current levels, as the markets’ prediction is at a 70% chance of no change. There are now expectations that the Fed’s July meeting documents will be released to see if the economic slowdown is of concern.

The euro’s outlook is looking more favorable with the expectation that the European Central Bank will be the first to hike in September. A Reuters poll conducted August 10-13, showed 57 of 69 economists showed the expectation for a 25-basis point increase to 2.50%. The eurozone’s inflation data increased to 2.9% in July, citing persistent inflationary pressures due to the conflict in the Middle East. Economists also increased their outlook for growth from 2026 to 0.8%. The outlook for the flash PMIs and confidence indices for later this week will determine if growth has improved.

Sterling still has a relatively strong domestic base following the quickening of UK second-quarter GDP growth by 0.4% and by 0.3% in June. For the first half of the year, Reuters noted UK growth was the fastest among G7 economies. Even with the data, markets envisage about one bank rate increase for the UK this year making data releases for inflation and the labour market due this week very important.

From a currency point of view, the focus for August 17 is shrinking policy divergence. Slower U.S. data means the Fed is less likely to hike while the ECB and BoE both have tightening possibilities This means the EUR/USD, USD/JPY, and GBP/USD pairs shall be in focus for currency traders.

U.S. Dollar Index Technical Analysis: DXY Breaks Rising Trendline as $99.42 Support Comes Under Pressure Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is currently testing $99.41 on the daily chart after dropping to below the rising trendline showing the broad recovery after the spring lows. Price is also under the $100.23 50-day EMA and the $99.90 100-day EMA, and continues to put pressure on the structure. The latest bearish candle has pushed $DXY into the $99.38-$99.42 support zone, making this region critical for the next move.

RSI is at 36, showing weak momentum and is approaching oversold territory. Immediate resistance is at $100.06, then $100.82 and $101.62. Breaking below $99.38 would take out $98.76 and $98.18.

I still believe the dollar is vulnerable until the broken trendline is cleared along with the EMA cluster. A move back above $100.06 would improve the outlook, and a break below $99.38 would negatively impact the dollar.

GBP/USD Technical Analysis: Pound Extends Bullish Run Toward $1.3587 GBP/USD Price Chart – Source: Tradingview GBP/USD is trading around $1.3558 on the 2-hour chart and is moving higher in a clear trend of higher highs and higher lows. Price is above the 50-EMA at $1.3514 and the 100-EMA at $1.3493, and rising trendline to further support the overall positive trend. Recent bullish candlesticks show steady buying, but are not impulsive, as price is moving much closer to important resistance.

RSI is at 67 which is an strong increase and shows the pair moving in the bearish direction towards overbought territory. At the moment the resistance is projected at $1.3587, then $1.3627 and then at $1.3670. For the GBP/USD, from a bullish perspective, you are likely to find support at $1.3539, then $1.3475 and $1.3434.

Where I stand, GBP/USD is especially bullish as long as it holds above $1.3510 and $1.3539. A break above $1.3587 would likely ignite a run toward $1.3627. If the bulls lose the trendline, it could weaken the bullish structure.

EUR/USD Technical Analysis: Euro Breaks Higher as Momentum Reaches Overbought Territory EUR/USD Price Chart – Source: Tradingview EUR/USD is currently at $1.1598 on the 4-hour chart. It has broken above the recent consolidation zone and $1.1580. Price is above the 50-EMA at $1.1539 and the 100-EMA at $1.1512 and therefore, is showing that short-term momentum is in the hands of buyers. EUR/USD is also above the trend line that has been supporting the recovery from the recent lows, which were made in July.

RSI is at the overbought region at 72, and therefore, could potentially mean a pullback or consolidation will happen in the short-term. Resistance is located at $1.1622, $1.1655, and $1.1686. Support is at $1.1580, $1.1545, and $1.1515.

In my opinion, the structure is bullish as long as EUR/USD stays above the $1.1580 level. If there is a clean break of the $1.1622 level, the move could end at $1.1655. If there is a break of the $1.1545 level, the latest breakout will not be valid.

About the Author

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

Latest news and analysis

GBP/USD could extend its three-month high if UK jobs and inflation data reinforce Bank of England rate hike expectations, while softer Fed bets keep the Dollar under pressure. The Pound US Dollar (GBP/USD) exchange rate appreciated last week amid a dovish repricing of Federal Reserve interest rate hike bets.

At the time of writing, GBP/USD was trading at around $1.3539. Up around 0.3% from the start of last week’s session.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.353874 (+0.04%)

Euro to Dollar (EUR/USD): 1.157046 (0.00%)

Dollar to Yen (USD/JPY): 159.28259 (-0.02%)

DAILY RECAP:

Trade in the US Dollar (USD) was mixed last week amid shifting risk appetite and a repricing of Federal Reserve interest rate expectations.

In terms of risk appetite, the 'Greenback' was able to garner support throughout the session amid the ongoing uncertainty in the Middle East as the odds of the US and Iran agreeing upon a new ceasefire appeared to fall by the day.

However, the US Dollar still faced headwinds as the odds of the Fed raising interest rates next month appeared to collapse, amid signs that US inflationary pressures continued to ease through July.

The end of the week then saw the emergence of a clear USD selling bias, linked to a worrying spike in US long-dated borrowing costs and a shock slump in domestic retail sales in July.

The Pound (GBP) trended broadly higher through the first part of last week, with the currency winning bids despite a lull in data, which left the move without a clear fundamental driver.

As this initial rally lost steam, Sterling was left mostly adrift through the middle of the week, barring a brief spike against the US Dollar in the immediate wake of the US inflation data.

The second half of the week finally brought some impetus for the Pound in the form of the UK's latest GDP figures.

Despite reporting a healthy 0.4% expansion in the UK economy, the preliminary estimate for growth in the second quarter failed to ignite much support among GBP investors, who voiced scepticism about whether this pace of growth could be sustained through the second half of 2026.

Near-Term GBP/USD Forecast: Cooling US Inflation to Punish the 'Greenback'? Turning to the week to come, a glut of high-tier UK economic data promises to inject fresh volatility into the Pound to US Dollar exchange rate.

Of all the data, the spotlight will undoubtedly be on the UK's latest jobs report and consumer price index, both of which carry significant weight for Bank of England (BoE) rate expectations.

Should the upcoming data suggest underlying price and wage pressures remain persistent enough to warrant some monetary tightening, Sterling is likely to rally.

Meanwhile, the spotlight for USD investors is likely to centre on the minutes from the Fed's latest policy meeting as they look for any clues for whether policymakers are likely to back an interest rate hike later in the year.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

Key Points:EUR/USD moved higher as traders focused on U.S. Retail Sales data. USD/CAD tested new lows as oil prices moved higher. USD/JPY climbed back towards the 159.50 level amid rising Treasury yields.

In this article:EUR/USD

+0.29%

EUR/USD ForecastGBP/USD

+0.31%

GBP/USD ForecastUSD/CAD

-0.37%

USD/CAD ForecastUSD/JPY

-0.04%

USD/JPY Forecast

U.S. Dollar Retreats As Retail Sales Miss Estimates

DXY 140826 4h Chart
U.S. Dollar Index is losing ground as traders focus on the disappointing Retail Sales report. The report indicated that Retail Sales decreased by -0.6% month-over-month in July, compared to analyst forecast of +0.1%.

Traders also had a chance to take a look at the Michigan Consumer Sentiment report. The report showed that Michigan Consumer Sentiment declined from 55.2 in July to 51.0 in August, compared to analyst consensus of 54.5.

The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will move towards the next support level, which is located in the 98.60 – 98.75 range.

EUR/USD Tests New Highs As Traders Focus On U.S. Economic Data
EUR/USD 140826 4h Chart
EUR/USD gains ground as traders react to Wholesale Prices report from Germany. The report showed that Wholesale Prices increased by +0.2% month-over-month in July, compared to analyst forecast of +0.4%.

If EUR/USD stays above the 1.1550 level, it will head towards the nearest resistance, which is located in the 1.1600 – 1.1615 range. A successful test of this level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.

GBP/USD Tests Resistance At 1.3550 – 1.3565
GBP/USD 140826 4h Chart
GBP/USD moves higher as traders focus on economic reports from the U.S. Traders bet that weak economic data will force the Fed to be more dovish.

Currently, GBP/USD is trying to settle above the resistance level at 1.3550 – 1.3565. In case GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance level, which is located in the 1.3635 – 1.3650 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Tests New Lows As Pullback Continues
USD/CAD 140826 4h Chart
USD/CAD pulled back as traders focused on rising precious metals markets and reacted to the weak Retail Sales report from the U.S. Gold climbed towards the $4400 level, while silver moved back towards the $65.00 level. Other commodity-related currencies were also moving higher in today’s trading session.

USD/CAD settled below the previous support at 1.3920 – 1.3935 and is trying to settle below the 1.3870 level. In case this attempt is successful, USD/CAD will head towards the next support level, which is located in the 1.3825 – 1.3840 range.

USD/JPY Climbs Back Towards The 159.50 Level
USD/JPY 140826 4h Chart
USD/JPY rebounded from session lows and moved back towards the key 159.50 level. Treasury yields are moving higher despite weak Retail Sales data, providing additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.15% level, while the yield of 10-year Treasuries settled above 4.69%. Treasury yields moved higher as bond traders focused on rising oil prices.

If USD/JPY manages to settle above the resistance level at 159.50 – 160.00, it will head towards the next resistance at 161.50 – 162.00. It remains to be seen whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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MUFG’s Lee Hardman reports the British Pound (GBP) is the best performing major currency in August, with GBP/USD back above 1.3500. The United Kingdom (UK) economy is proving resilient to the energy price shock linked to the US-Iran conflict, with Q2 GDP up 0.4% after 0.6% in Q1. Strong private consumption, recovering business investment and robust services and IT activity are supporting the currency.

UK data and carry back Pound strength"The pound is continuing to perform well this year."

"It has been the best performing major currency so far in August with cable rising back above the 1.3500."

"The pound has been supported by further evidence yesterday that the UK economy is proving more resilient than expected to the negative energy price shock triggered by the US-Iran conflict."

"It was revealed yesterday that the UK economy expanded by 0.4% in Q2 following strong growth of 0.6% in Q1."

"After stagnating following the Brexit vote in 2016 until the COVID shock in 2020, business investment has since regained upward momentum providing a tailwind for the UK economy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report GBP/USD price action remains confined, with intraday moves seen between 1.3475 and 1.3515 as momentum has faded. For the coming 1–3 weeks, they expect the Pound to trade in a broader 1.3440–1.3540 band after a brief test of 1.3540, while longer-term signals point to range-trading with supports at 1.3210/1.3160 and resistance at 1.3610/1.3655.

Pound momentum fades into ranges"24-HOUR VIEW: GBP rose briefly to 1.3540 two days ago before dropping back down to a low of 1.3488. When it was at 1.3500 in the early Asian session yesterday, we indicated that “the current price movements appear to be part of a range-trading phase between 1.3475 and 1.3525.” Our view of range-trading was not wrong, even though GBP traded within a narrower range than expected (1.3475/1.3513). The price movements still appear to be part of a range-trading phase. Today, we expect GBP to trade between 1.3475 and 1.3515."

"1-3 WEEKS VIEW: We have held a slightly positive GBP view since last Monday. In our most recent narrative from Tuesday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” GBP rose briefly to 1.3540 two days ago and then pulled back, printing a low of 1.3475 yesterday. Although our ‘strong support’ level at 1.3460 has not been breached yet, upward momentum has largely faded. For the time being, we expect GBP to trade in a range, most likely between 1.3440 and 1.3540."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Key Points:Softer U.S. CPI and PPI have strengthened expectations for a less restrictive Federal Reserve policy outlook.EUR/USD is testing major trendline resistance near 1.1569, with a breakout potentially exposing 1.1620 and 1.1674.UK GDP expanded 0.4% quarter-on-quarter, giving the Bank of England more room to focus on persistent inflation risks.DXY continues defending the critical 99.40 trendline support but needs to reclaim 100.36 to strengthen its recovery.GBP/USD remains constructive above its rising trendline, though buyers need to clear 1.3515 to confirm another bullish leg.

In this article:GBP/USD

+0.13%

GBP/USD ForecastEUR/USD

+0.11%

EUR/USD ForecastUS Dollar News: Fed Rate Cut Bets Rise as Euro and Pound Navigate Domestic Risks As of August 14, the U.S. dollar is facing pressure due to changing expectations for the Fed after release of slower inflation data provided further evidence of a case for increased easing. The July report for the Producer Price Index (PPI) indicated that inflation for wholesale goods was unchanged compared to the month prior, and core PPI also increased by 0.2% after the latest CPI report indicated a slower-than-expected rise. The data released further eased the concerns for inflation rising again and suggested that the Fed was likely to begin cutting rates in September.

For the Fed, the labor market is still the most important factor. The recent data for July hiring indicated slower hiring, and more of a need to strike a balance between inflation concerns and an economy likely to be slowing. However, Fed officials reassure the market that the inflation data is still well above the Fed’s target for inflation being set at 2%.

The euro is benefitting from the slower expectations of Fed rate movements, but is also dealing with domestic challenges. The European Central Bank is still maintaining a cautious stance by keeping policy the same as they assess the impact of the disruptions to Middle East energy supply and inflation as well as consumer demand. Recent reports of the activity of the euro zone have shown signs of stabilizing, but still have the potential to grow at a lower level due to slow demand and geopolitical challenges.

Sterling faces considerable pressure as the UK’s second-quarter GDP showed a 0.4% quarterly rise, following stronger early quarter growth. The data published reflects the economy’s resilience, especially as price rises for energy have been high and global uncertainties remain. Still, the Bank of England must continue to balance inflation and the threats caused by the increasing growth of nominal wages and energy price rises.

For currency markets, the most important factor continues to be the difference in interest rates and the expected changes. Easing US inflation has lowered expectations of further rate hikes by the FOMC, and the euro and pound are now being evaluated on whether their respective domestic economies can continue to grow without re-igniting inflation.

U.S. Dollar Index Technical Analysis: DXY Holds 99.40 Support as Bulls Attempt Recovery Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is hovering around 99.95, as it stabilized above the significant 99.40 support area. The daily chart depicts DXY still as a sell into the 101.60 area; however, bulls defend the rising trendline which has been a key topside recovering support line since the March lows. The index is currently trading sideways between resistance and support, potentially forming a base and accumulating ahead of a new strong trending move.

Price is just above the 100.00 level, with the 50-day EMA at 100.29 and acting as resistance. The 100-day EMA at 99.91 is currently acting as support and along with the current price makes this area of the market very important. RSI at 42 reflects zero momentum and a low level, but is also neutral and showing signs of the potential beginning of a new recovery if buyers show strength.

Breaking above 100.36 would provide a strong outlook for further recovery to the 100.82 and also 101.61 levels. Below the 99.40 support would lead to a sell off at 98.75 and possibly 98.18. The current outlook maintains a bullish recovery strategy, but is cautious as long as the rising trendline is intact.

GBP/USD Technical Analysis: Cable Tests 1.3515 Resistance While Trendline Supports Buyers

GBP/USD Price Chart – Source: Tradingview GBP/USD is at 1.3487 after a highly bullish response to the 1.3270 lows. An ascending trendline is currently following the upward structure, with price having trouble breaching the 1.3515 resistance area, which has led to sideways movement in this area.

The 50-day EMA is at 1.3477 and the 100-day EMA is at 1.3446, which puts this pair slightly in favor of bulls. RSI is at 48 and shows that this pair may be losing some of its bullish momentum.

Breaching 1.3515 would show an upward movement with targets of 1.3545 and 1.3586. 1.3437 and 1.3400 offer support. The overall structure is bullish as long as price remains above the trendline. For bulls to resume their momentum, 1.3515 is an important level to take out.

EUR/USD Technical Analysis: Euro Faces Trendline Resistance Near 1.1570 EUR/USD Price Chart – Source: Tradingview The EUR/USD currency cross currently trades around 1.1530. It has recovered from the 1.1350 July lows, but it’s facing a downward trendline and a resistance zone from the early year highs. The daily chart shows an attempt at recovery, but buyers will need a clear break above the trendline and the 1.1569 level to continue the trend higher.

The cross currently is trading above the 1.1499 50 day moving average and the 1.1541 100 day moving average. This indicates short term momentum is positive, but vague. Further, RSI is at 57, positive but not overbought.

A close above 1.1569 should confirm the breakout and may allow for a move toward 1.1620 and 1.1674. In the opposite direction, the first support is at 1.1500 and falls at 1.1455 and 1.1357. The cross is currently at a pivotal point, and the next move is likely based on if buyers break the long-term downtrend line or if sellers hold the current resistance.

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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

Latest news and analysis

Key Points:EUR/USD moved higher as traders focused on U.S. economic reports. USD/CAD declined towards the support at 1.3920 - 1.3935 despite the pullback in precious metals markets. USD/JPY remained stuck near the 159.50 level.

In this article:EUR/USD

+0.01%

EUR/USD ForecastGBP/USD

-0.11%

GBP/USD ForecastUSD/CAD

-0.07%

USD/CAD ForecastUSD/JPY

+0.09%

USD/JPY Forecast

U.S. Dollar Is Losing Ground As Traders Focus On Producer Prices Data

DXY 130826 4h Chart U.S. Dollar Index continues its attempts to settle above the resistance level at 99.85 – 100.00 as traders focus on Producer Prices report.

The report indicated that PPI was unchanged on a month-over-month basis in July, compared to analyst forecast of +0.2%. Core PPI increased by +0.2%, compared to analyst forecast os +0.3%.

Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 209,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 202,000.

In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance level, which is located in the 100.50 – 100.65 range.

EUR/USD Moved Higher As Euro Area Industrial Production Beat Estimates EUR/USD 130826 4h Chart EUR/USD gained some ground as traders focused on the Euro Area Industrial Production report. The report showed that Industrial Production was unchanged in June, compared to analyst consensus of -0.1%.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. In case EUR/USD manages to settle below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450.

GBP/USD Moved Lower Despite Strong GDP Data GBP/USD 130826 4h Chart GBP/USD pulled back despite the better-than-expected GDP Growth Rate report from the UK. The report indicated that UK GDP Growth Rate was +1.2% in the second quarter, compared to anlayst forecast of +1.1%.

Traders also focused on the Industrial Production and Manufacturing Production reports. Industrial Production declined by -0.2% month-over-month in june, compared to anlayst forecast of +0.1%. Manufacturing Production decreased by -0.5%, while anlaysts expected that it would decline by -0.2%.

A successful test of the support level at 1.3465 – 1.3480 will open the way to the test of the next support at 1.3335 – 1.3350. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

USD/CAD Remained Stuck Near Support At 1.3920 – 1.3935 USD/CAD 130826 4h Chart USD/CAD moved away from session highs despite the pullback in precious metals markets. Gold declined towards the $4350 level, while silver settled back below $65.00. Other commodity-related currencies moved lower in today’s trading session.

Currently, USD/CAD is trying to settle back below the support level at 1.3920 – 1.3935. In case USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level at 1.3825 – 1.3840.

USD/JPY Settled Near The 159.50 Level USD/JPY 130826 4h Chart USD/JPY remains stuck below the key resistance level at 159.50 – 160.00 as traders ignored the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.15% level, while the yield of 10-year Treasuries settled below 4.65%.

Analysts expect that BoJ will raise rates at the next meeting in September, but these expectations do not provide support to the Japanese currency.

If USD/JPY moves above the 160.00 level, it will gain additional upside momentum and head towards the resistance level at 161.50 – 162.00. The key question is whether BoJ is ready to intervene again in case USD/JPY climbs above the psychologically important 160.00 level.

If you’d like to know more about how to trade forex, please visit our educational area.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

Latest news and analysis

The Pound-Dollar exchange rate is holding below $1.35 after resilient UK GDP data, with Sterling unable to make significant headway against a broadly steady US Dollar. The Pound to US Dollar (GBP/USD) exchange rate remained under modest pressure on Thursday morning despite stronger-than-expected monthly UK growth data.

At the time of writing, GBP/USD was trading around $1.3481, down approximately 0.12% on the day after touching an intraday high just above $1.3500.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.348267 (-0.11%)

Euro to Dollar (EUR/USD): 1.151794 (-0.09%)

Dollar to Yen (USD/JPY): 159.38744 (+0.04%)

DAILY RECAP The Pound received some support after the Office for National Statistics reported that the UK economy expanded by 0.4% during the second quarter.

The quarterly increase matched consensus forecasts and represented a slowdown from 0.6% growth during the opening three months of 2026.

The more encouraging element came from the monthly figures, with GDP increasing 0.3% in June compared with expectations for no growth.

May's estimate was also revised to show that the economy was unchanged rather than expanding 0.1%.

Services provided the main support during June, recording a 0.4% increase as activity benefited from the temporary Gulf ceasefire, the start of the World Cup and favourable weather.

The figures indicated that the UK economy remained relatively resilient during the first half of 2026, although there are still concerns that momentum will weaken during the second half of the year.

The US Dollar has resisted further selling pressure despite investors cutting expectations for another Federal Reserve interest-rate increase.

US headline inflation slowed from 3.5% to 3.4% in July, while core inflation eased from 2.6% to 2.5%.

Markets subsequently reduced the implied probability of a September Federal Reserve rate increase to around 40%, compared with 54% before the inflation release.

Nevertheless, the Dollar index remained close to the 100 level on Thursday morning.

The US currency has continued to attract some defensive demand amid renewed uncertainty surrounding the Middle East, limiting the ability of GBP/USD to capitalise on the more favourable interest-rate backdrop.

Near-Term GBP/USD Forecast: $1.35 Remains Key Resistance The latest UK GDP data should offer Sterling some protection, particularly as the stronger June reading reduces immediate fears of a sharp economic slowdown.

However, the muted GBP/USD reaction suggests that much of the resilience in UK activity was already reflected in market expectations.

The $1.3500 level remains the immediate barrier for GBP/USD.

A sustained move above this level would bring this week's highs around $1.3540 back into focus, followed by $1.36 if Dollar sentiment deteriorates further.

Conversely, failure to regain $1.35 could encourage renewed selling, with initial support around $1.3450 followed by the $1.3420 area.

Attention will now turn back towards the United States, with retail sales and consumer sentiment data likely to influence expectations surrounding the Federal Reserve.

Further evidence of weaker US demand could reduce September rate-hike expectations again and give GBP/USD another opportunity to challenge $1.35.

Stronger US data, however, would reinforce the Dollar's current resilience and leave Sterling vulnerable to further modest losses.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD briefly traded above 1.3535 to 1.3540 before slipping back to close at 1.3496. Intraday, the pair is seen range-trading between 1.3475 and 1.3525. Over 1–3 weeks, they maintain a mildly constructive view, with scope to test 1.3555 but limited prospects for sustained gains beyond that level.

Pound-Dollar holds in tight consolidation band"24-HOUR VIEW: While we indicated yesterday that “there is a chance for GBP to edge higher,” we pointed out that “any advance is likely to be contained within a 1.3490/1.3535 range.” During the early NY session, GBP rose briefly above 1.3535, printing a high of 1.3540 before dropping back down to a low of 1.3488. GBP closed little changed at 1.3496 (-0.09%). The current price movements appear to be part of a range-trading phase, most likely between 1.3475 and 1.3525."

"1-3 WEEKS VIEW: We have held a slightly positive GBP view since last Monday. In our most recent narrative from Tuesday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” Yesterday, GBP rose briefly to 1.3540 before pulling back to close at 1.3496 (-0.09%). Upward momentum is starting to slow, and a breach of 1.3460 (no change in ‘strong support’ level) would indicate that GBP has entered a range-trading phase."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

GBPUSD: ⬇️ Sell

– GBPUSD reversed from resistance level 1.3555

– Likely to fall to support level 1.3450

GBPUSD currency pair recently reversed down sharply from the key resistance level 1.3555 (which stopped the previous sharp impulse wave 1 in the middle of July) intersecting with the upper daily Bollinger Band.

The downward reversal from the resistance level 1.3555 is likely to form the daily Japanese candlesticks reversal pattern daily Shooting Star.

GBPUSD currency pair can be expected to fall to the next support level 1.3450, low of the previous correction ii.

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Key Points:EUR/USD pulled back as traders reacted to U.S. CPI report. USD/CAD failed to settle below the support level at 1.3920 - 1.3935.USD/JPY gained some ground as traders ignored the pullback in Treasury yields.

In this article:EUR/USD

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EUR/USD ForecastGBP/USD

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GBP/USD ForecastUSD/CAD

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USD/CAD ForecastUSD/JPY

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USD/JPY Forecast

U.S. Dollar Moves Higher As Inflation Rate Drops To 3.4%

DXY 120826 4h Chart U.S. Dollar Index gains some ground as traders focus on CPI report. The report indicated that Inflation Rate declined from 3.5% in June to 3.4% in July, in line with analyst estimates. Core Inflation Rate decreased from 2.6% to 2.5%. Core Inflation Rate has also met analyst expectations.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.

EUR/USD Retreats After U.S. CPI Report

EUR/USD 120826 4h Chart EUR/USD pulled back as traders focused on U.S. inflation data. Traders also monitored the dynamics of the oil markets. Oil prices were swinging between gains and losses amid geopolitical uncertainty and did not have a material impact on forex market dynamics.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. in case EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

GBP/USD Pulls Back From Weekly Highs GBP/USD 120826 4h Chart GBP/USD moved away from session highs as traders reacted to U.S. CPI report. It looks that some traders hoped that U.S. inflation numbers would be lower than analyst estimates.

In case GBP/USD manages to settle below the 1.3500 level, it will head towards the support level at 1.3465 – 1.3480. A move below the 1.3465 level will push GBP/USD towards the next support, which is located in the 1.3335 – 1.3350 range.

On the upside, GBP/USD needs to settle above the resistance at 1.3550 – 1.3565 to have a chance to gain upside momentum in the near term.

USD/CAD Rebounds From Multi-Week Lows USD/CAD 120826 4h Chart USD/CAD attempts to rebound despite rising precious metals markets. Gold settled above the $4400 level, while silver made an attempt to settle above $66.00. Other commodity-related currencies were mixed in today’s trading session.

If USD/CAD settles above the 1.3950 level, it will head towards the 50 MA at 1.3995. A move above the 50 MA will push USD/CAD towards the resistance level at 1.4010 – 1.4025.

On the support side, USD/CAD needs to settle back below the 1.3920 level to gain downside momentum in the near term. In this case, USD/CAD will head towards the support at 1.3825 – 1.3840.

USD/JPY Moves Back Towards The 159.50 Level USD/JPY 120826 4h Chart USD/JPY gains some ground despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.19% level, while the yield of 10-year Treasuries settled below 4.68%.

The nearest resistance level for USD/JPY is located in the 159.50 – 160.00 range. A successful test of this level will open the way to the test of the next resistance at 161.50 – 162.00. It remains to be seen whether BoJ is ready to defend the Japanese yen in case USD/JPY attempts to settle above the 162.00 level.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP. US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally. 1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.

The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).

Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).

Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages). Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs. Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective

Oscillating within minor ascending channel after a bullish breakout ex-post NFB Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.

In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).

These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.

Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).

On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.

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MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.

In this article:GBP/USD

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EUR/USD ForecastUS Dollar News: CPI Test Puts Fed, Euro and Pound in Focus The U.S. dollar begins the week with July CPI due out later today. The data release may dictate whether the Federal Reserve pauses its interest rate hike cycle or continues to hike in September. Team Reuters forecasts 0.1% month over month increase in headline CPI after the June reported drop of 0.4% with expected annual inflation coming in at 3.4%. Forecasts expect a 0.2% month over month increase in core CPI and a 2.5% year over year increase. Given recent market action, most expect the Fed to stay on hold in September. Thus, today’s CPI number may have some consequence.

The Falling U.S. July employment numbers combined with the current geopolitical situation has the Fed in a tricky spot. Atlanta Fed interim President says very high inflation and the uncertainty of energy flows out of the Middle East are significant issues the Fed is facing. Three of the Fed board members urged a rate hike in the July meeting.

The euro is in the same dilemma of growth versus inflation as the Fed. The ECB recently said the Ukraine-Russia conflict disrupted eurozone household spending; however, recent manufacturing numbers for July showed factory output was the best it has been in nearly four and a half years. The ECB has expressed some concern that the growing AI industry in Europe will help counter the downturn of the economy that is caused by trade and geopolitical uncertainty.

The Pound has its focus on the Thursday release of UK Q2 GDP. Forecasts currently put the number at 0.4% for the quarter following Q1’s 0.6% gain. The Bank of England is expected to keep interest rates at their current level and remain focused on inflation so the BoE will be watching the economy closely in case the focus shifts to falling growth.

For all three currencies, U.S. CPI is the primary concern of the moment. Lighter CPI would lessen the likelihood of another Fed hike. Conversely, a steepening CPI would give more weight to a Fed hike for this year.

U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but $100.06 Still Caps Recovery Dollar Index Price Chart – Source: Tradingview Currently, the USD Index is at $99.87 and is trading right above the rising trendline and the key support area of $99.42. There have been signs of buyers coming in around the rising trend line, but the price still has a long way to go to reach the 50-day moving average (MA) at $100.30, 100-day moving average at $99.91, and is currently resting just below the rising trend line and the 50-day moving average. The recovery has not begun until these averages are crossed.

The Relative Strength Index (RSI) is at 41, and although it has begun to show a reversal as momentum has started to slow, there is still a strong bearish trend and it is still below 50. Immediate resistance is at $100.06 before $100.36 and $100.82. If the price can sustainably trade above these levels, then it will confirm a short-term bullish view and retest $101.62.

If there is a break down to the support of $99.42, then the rising trend line will also fall and provide a break to the support of $98.76. Until the price has the potential to test $100.36-$100.06, the USD Index is a cautious recovery scenario above $99.42.

GBP/USD Technical Analysis: Pound Holds Above $1.3515 Pivot as Bulls Target $1.3559

GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading at $1.3508, with bulls defending the $1.3515 support level. Pound bulls display impressive momentum as price continues to trend above the moving average convergence divergence (MACD) and the lower trendline. A combination of a series of higher lows and the bullish MACD support a strong upward price move. The MACD, currently at 61, is approaching overbought territory, however it does indicate a solid bullish momentum.

The identified resistance levels are $1.3515, $1.3559 and $1.3601. In case of a breakdown, bulls should base their defense at the $1.3437 low, $1.3401 low, and $1.3343 levels. The trendline will continue to act as an important structural support line. From my perspective, if bulls are able to successfully defend the trendline, a run towards $1.3559 is expected. However, if bulls fail to defend the trendline, a significant part of the bullish structure will be lost.

EUR/USD Technical Analysis: Euro Compresses Beneath Descending Trendline Near $1.1540 EUR/USD Price Chart – Source: Tradingview The pair is at $1.1537, consolidating beneath the long-term descending trendline limiting bullish momentum. EUR/USD is above the 50-period and 100-period EMAs at the $1.1523 and $1.1495 levels, respectively, keeping the short-term structure positive, with resistance above. Smaller candlesticks are forming between $1.1530 and $1.1540, suggesting consolidation rather than a reversal.

The RSI is at around 49, showing neutral momentum after the recent rally. $1.1569 is the next resistance level followed by $1.1621 and $1.1674. Support is found at $1.1532, with major support at $1.1516 and $1.1500 and $1.1456. In my opinion, if the pair breaks above $1.1569, it is a clear bullish sign. If price breaks the descending trendline, it has potential to break out of the consolidation.

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The British Pound (GBP) remains in a limited range at around 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair is expected to remain sideways, with investors awaiting the United States (US) Consumer Price Index (CPI) data for July in the North American session and the United Kingdom (UK) Q2 Gross Domestic Product (GDP) data on Thursday.

Investors expect the US CPI data to have a meaningful impact on Federal Reserve (Fed) interest rate expectations, as comments from Chairman Kevin Warsh in the July policy meeting press conference signaled heightened concerns regarding upside inflation risks.

Analysts at Danske Bank highlight that “today's most important data release will be the US July CPI,” with the bank forecasting “headline inflation at 0.2% MoM SA, 3.4% YoY (prior: -0.4% MoM, 3.5% YoY) and core inflation at 0.2% MoM SA, 2.5% YoY (prior: 0.0% MoM, 2.6% YoY).” The projections point to a modest month-on-month rebound in both headline and core price pressures, alongside slightly lower annual rates compared with June.

On Thursday, the UK Q2 GDP data is expected to arrive lower at 0.4% from 0.6% in the first quarter this year. On an annualized basis, the GDP growth is seen at 1.1%, faster than the previous reading of 0.9%.

GBP/USD Technical Analysis

GBP/USD trades at around 1.3500 above the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now offering support around 1.3465, which together suggests a constructive bullish bias while price consolidates near recent highs.

The Relative Strength Index (14) at about 60 keeps upward momentum intact without yet entering overbought territory, hinting that buyers still control the near-term direction as long as spot remains anchored above these supports.

On the downside, initial support is seen at the former trend-line break level near 1.3465, followed by the 20-day EMA at 1.3437, where a deeper pullback would be expected to attract dip-buying interest. Below the 20-day EMA, the pair would be exposed to the July 28 low at 1.3273. Looking up, the pair could advance towards 1.3600 if it rebounds above the August 10 high at 1.3530.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator Gross Domestic Product (QoQ) The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

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Scotiabank strategists Shaun Osborne and Eric Theoret observe that the British Pound (GBP) is consolidating gains near the top of its one-month and multi-month ranges, with price action closely tied to fading downside risk reversals. Improved United Kingdom (UK) political risk perception and slightly more constructive yield spreads support GBP/USD, while technicals point to resistance around 1.3600–1.36s and support in the mid/lower 1.34s.

Sterling consolidates near recent highs"The pound is quiet, consolidating its recent gains toward the upper end of both its local (one month) and medium term (multi-month) range."

"Price action continues to be driven by sentiment as we note the GBP’s tight correlation to risk reversals, which continue to fade their premium for protection against downside movement."

"The recovery is important, reflecting an overall improvement in the market’s assessment of UK (specifically political) risk and offers scope for further near-term strength for the pound."

"The release calendar is limited ahead of Thursday’s Q3 GDP (2nd), as well as the trade and industrial production figures for June. Yield spreads are also looking slightly more constructive for the pound as well, showing signs of a renewed recovery following their modest mid/late July pullback."

"Bullish – the overall technical setup remains constructive as the GBP recovers back toward its mid-July peak in the mid-1.35s, as well as the upper end of its range since mid-February."

"We note the potential for additional near-term resistance closer to 1.3600 and the May peaks in the mid-1.36s. We see support in the mid/lower 1.34s, and look to a near-term range bound between 1.3450 and 1.3550."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The Pound Sterling (GBP) holds firm against the US Dollar (USD) on Tuesday following the release of softer-than-expected US jobs data, while investors await US inflation data on Wednesday and UK GDP releases on Thursday. At the time of writing, the GBP/USD pair trades at 1.3508, nearly unchanged. Read More...

British Pound consolidates around 1.3500 vs USD; looks to US CPI, UK GDP for fresh impetusThe GBP/USD pair seesaws between tepid gains and minor losses through the early European session on Tuesday, though it remains close to the highest level since July 16 set the previous day. Spot prices currently trade around the 1.3500 psychological mark, nearly unchanged for the day, as traders opt to wait for this week's important macro releases from the US and the UK. Read More...

British Pound clings to gains against US Dollar, US CPI in focusThe British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term. Read More...

The GBP/USD pair trades marginally lower at around 1.3500 during the European trading session on Tuesday. The Cable edges down as the US Dollar (USD) ticks up; however, financial markets doubt the slight recovery move seen this week, with traders paring hawkish Federal Reserve (Fed) bets for the September policy meeting due to weak United States (US) Nonfarm Payrolls (NFP) data for July.

US payrolls stumble as July jobs data disappointsEconomists at ING describe the July US jobs report as "surprisingly weak," noting that nonfarm payrolls "fell 23k" on the month. They highlight that the softness was compounded by "103K of downward revisions to the past two months' data," which has dragged the "3M average" gain in payrolls down to just "20,000." ING argues that this combination of an outright monthly decline and sizeable revisions paints a notably softer picture of underlying labour market momentum.

According to the CME FedWatch tool, the odds of the Fed holding interest rates steady in the September meeting have increased to 50% from 30.4% seen a month ago.

Going forward, investors will focus on the US Consumer Price Index (CPI) data for July and the United Kingdom (UK) Q2 and June Gross Domestic Product (GDP) data, which will be released on Wednesday and Thursday, respectively.

GBP/USD Technical Analysis

GBP/USD trades around 1.3501, holding a bullish near‑term bias as spot remains above the 20-period exponential moving average (EMA) at 1.3429 and the downward-sloping border of the Descending Triangle pattern offering support near 1.3455.

The pair is thus supported by both dynamic and structural levels, while the Relative Strength Index (14) at about 60 points to firm but not overextended bullish momentum, suggesting buyers still control the near-term direction.

On the downside, initial support is seen at the former resistance trend line turned floor around 1.3455, followed by the 20-period EMA at 1.3429, where dip buyers may re-emerge if corrective pressure unfolds. Looking up, the pair could advance towards 1.3600 if it manages to extend the advance sustainably above the July 15 high at 1.3558.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

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The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.

US Dollar News: CPI Test Puts Fed and FX Policy in Focus As we enter August 11, attentions are on the anticipated July CPI data to be released on Wednesday. The result of this CPI data will ultimately decide if the Fed continues its pause on rate increases or if it resumes tightening in September. Economists expect a 0.2% month-on-month increase in the core CPI. Pocket appreciations, consistent with that forecast, would likely reflect inflation returning to the Fed’s 2% target. In June, the Fed’s preferred core inflation measure was reported at 3.3% with an increase from the previous year at 2.8%.

Prior expectations around interest rates have become unpredictable as the persistent inflation and regional energy shocks challenge Chair Warsh’s decision to keep rates the same in the last meeting, despite the three dissents for a rate increase. Additionally, President Trump’s Larry-Kudlow-like policies to undermine the Fed’s deliberations and autonomy by targeting a Fed Governor have added to the already increasing fundamental risks of the dollar.

There are also many uncertainties for the euro. Recent news out of Washington indicate that the yen was propped up by the recent dollar selling done by the U.S. Treasury. This has also sparked questions around currency coordination and if the U.S. Treasury was working to support the dollar while avoiding pressure on the bond market. For the ECB, that equates to staying the course for now following their last policy meeting in July.

Sterling is focusing on this week’s second-quarter UK GDP data. Most economists say the economy grew by around 0.4% in Q2. This would follow Q1’s 0.6% growth. Despite the challenges of the Iran situation and supply chain issues, activity remained resilient. The data will matter for the Bank of England as stronger data means the bank can keep an eye on inflation risks. The data will also affect the U.S. dollar, euro, and pound. Weaker figures would mean the BoE would do more to fight inflation. For now, U.S. CPI is the most important data for the currency markets. PPI and retail sales data are also important this week.

U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but Remains Below Key EMAs Dollar Index Price Chart – Source: Tradingview The US Dollar Index currently trades at $99.88. The index is currently trading slightly above the rising trendline and a key horizontal support at $99.42. Although the index trades above the rising trendline and horizontal support, the index is currently trading below the 50-day EMA ($100.32) and the 100-day EMA ($99.91) and therefore bears still control the index. Buying pressure is apparent from the most recent candles defending the rising trendline. This, however, is not enough to be considered a bullish trend, and is currently lacking confirmation.

The RSI is currently at 41, which indicates that the selling pressure has diminished, however the RSI is still below the neutral mark at 50. Resistance for the index is expected at $100.36, $100.82, and $101.62. In the event the index falls, support is expected at $99.42. Below $99.42 is expected support at $98.76 and $98.18.

GBP/USD Technical Analysis: Sterling Tests Rising Trendline Near $1.3500 GBP/USD Price Chart – Source: Tradingview GBP/USD is trading around $1.3499, and is still trading above the rising trendline which supported the recovery since late July. The price is also still above the 50-period EMA at $1.3456 and the 100-period EMA at $1.3427, and although the price has been consolidating, the structure is still Bullish. Smaller bodies around the $1.3500 area suggest hesitation.

They are not large enough to indicate a reversal. The RSI is at 58, suggesting there is bullish momentum, which is healthy, but still not overbought. The areas of resistance for this momentum are $1.3516, $1.3559 and $1.3601. Moving in the other direction, support for this momentum is $1.3437, $1.3401 and $1.3343. In my opinion, if the GBP/USD is able to trade above the rising trendline, the Bullish setup is intact. I also believe that a break above $1.3516 could extend the move toward $1.3559.

EUR/USD Technical Analysis: Euro Stalls Below Long-Term Trendline at $1.1556

EUR/USD Price Chart – Source: Tradingview EUR/USD currently stands at $1.1534. Price activity shows the Euro trading along the long term falling trendline from where multiple attempts to move higher have been capped. The 50 day moving average (MA) stands at $1.1496, while the 100 day MA stands at $1.1542, and the EUR/USD is positioned below the 50 day MA indicating recent resistance.

Recent price movement has shown that the buyers could be losing steam after the strong bounce from $1.1357, and resistance has been built at $1.1556. The RSI (relative strength index) has an open bullish setup at 58, although a clean break above is what is called for.

In the short term, $1.1556 is the first resistance level, followed by $1.1674 and then $1.1790. In the short term, $1.1455 is the first major support level with the next support level standing firmly at $1.135

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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

The British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term.

Pound Sterling Price This week The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHFUSD0.08%-0.18%0.89%-0.14%0.08%0.12%0.29%EUR-0.08%-0.27%0.79%-0.29%-0.06%-0.06%0.11%GBP0.18%0.27%1.01%-0.03%0.21%0.23%0.36%JPY-0.89%-0.79%-1.01%-0.71%-0.47%-0.59%-0.39%CAD0.14%0.29%0.03%0.71%0.25%0.12%0.47%AUD-0.08%0.06%-0.21%0.47%-0.25%0.00%0.14%NZD-0.12%0.06%-0.23%0.59%-0.12%-0.00%0.15%CHF-0.29%-0.11%-0.36%0.39%-0.47%-0.14%-0.15% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Strategists at Rabobank point out that “for the UK, the market is currently pricing in a reduced expectation of a rate hike by the end of the year,

This week, the major trigger for the British currency will be the preliminary United Kingdom (UK) Q2 and the June month Gross Domestic Product (GDP) data, which will be released on Thursday. In the April-June period, the UK economy is expected to have grown at a moderate pace of 0.4% vs. the previous reading of 0.6%. On a monthly basis, the GDP is seen contracting by 0.1%.

Meanwhile, the US Dollar Index (DXY) trades almost flat at press time, holding onto Monday’s recovery move at around 99.80. The USD Index is expected to remain sideways as investors await the United States (US) Consumer Price Index (CPI) data for July, which will be released on Wednesday.

US inflation seen firming but not reaccelerating in JulyBrown Brothers Harriman’s Elias Haddad expects the upcoming US July CPI report to show inflation "firm modestly but stop short of signaling a renewed acceleration in inflation." He notes that "headline CPI is expected to rise +0.1% m/m vs. -0.4% in June and ease to 3.4% y/y vs. 3.5% in June," while "core CPI is expected to rise +0.2% m/m vs. 0.0% in June and ease to 2.5% y/y vs. 2.6% in June." The data are due Wednesday and, in Haddad’s view, should confirm a gradual cooling in underlying price pressures rather than a renewed upswing.

The US inflation data will have a significant impact on the Federal Reserve's (Fed) interest rate expectations, as the July monetary policy statement showed heightened concerns among policymakers toward upside inflation risks.

Lately, traders have priced out the possibility of a Fed interest rate hike in the September meeting after the release of weak US Nonfarm Payrolls (NFP) data for July.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3500, retaining a bullish near-term tone as spot holds above the 60-day exponential moving average (EMA) at 1.3403 and the broken downward resistance trend line now offering support around 1.3456. The Relative Strength Index (14) at 61.1 leans into positive territory, suggesting buyers remain in control while momentum is not yet stretched into overbought conditions.

On the downside, immediate support emerges at the former trend-line cap turned floor near 1.3456, followed by the 60-day EMA at 1.3403, where a deeper pullback would be expected to attract fresh demand. As long as GBP/USD defends these layers of underlying support, the pair would likely continue to favor the topside, with bulls eyeing further gains above the recent 1.3509 close in the sessions ahead.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Read more.

The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

Key Points:EUR/USD settled near the 1.1550 level as traders focused on the strong rally in the oil markets. USD/CAD pulled back as precious metals markets moved higher. USD/JPY climbed towards the 159.00 level amid rising Treasury yields.

U.S. Dollar Rebounds As Oil Markets Rally

DXY 100826 4h Chart U.S. Dollar Index gains some ground as traders focus on the strong rally in the oil markets. Oil prices are up by +5% as U.S. and Iran did not reach any deal over the weekend. President Trump signaled that he would use economic pressure to force Iran back to negotiations.

High oil prices may push inflation towards higher levels and force the Fed to raise rates at the next meeting in September, which will be bullish for the American currency.

The nearest resistance level for U.S. Dollar Index is located in the 99.85 – 100.00 range. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.

EUR/USD Moves Away From Multi-Week Highs EUR/USD 100826 4h Chart EUR/USD moved lower as traders took some profits off the table near multi-week highs. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. If EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

GBP/USD Tests New Highs GBP/USD 100826 4h Chart GBP/USD climbed above the 1.3500 level as traders ignored rising oil prices and bet on dovish Fed.

In case GBP/USD stays above 1.3500, it will head towards the nearest resistance level at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the 1.3650 level.

On the support side, a move below the support at 1.3465 – 1.3480 will open the way to the test of the 50 MA at 1.3444. If GBP/USD manages to settle below the 50 MA, it will head towards the next support level at 1.3335 – 1.3350.

USD/CAD Attempts To Settle Below The Support At 1.3920 – 1.3935

USD/CAD 100826 4h Chart USD/CAD pulls back as traders focus on rising precious metals markets. Gold climbed above the $4350 level, while silver settled above $65.00. Other commodity-related currencies are mostly flat in today’s trading session.

Currently, USD/CAD is trying to settle below the support at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level, which is located in the 1.3825 – 1.3840 range.

USD/JPY Moves Higher As Treasury Yields Rise USD/JPY 100826 4h Chart USD/JPY gains ground as the yen continues to lose ground after interventions. Rising Treasury yields provide additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled near 4.70%.

At this point, forex traders are not worried that BoJ would intervene again to support the yen. Fundamentally, the yen remains weak due to the difference in interest rates in U.S. and Japan.

If USD/JPY settles above the 50 MA at 158.84, it will head towards the resistance level at 159.50 – 160.00. A move above the 160.00 level will push USD/JPY towards the 162.00 level.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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The pair gained momentum following the release of the US labour market report for July 2026 on 7 August. Non-farm employment fell by 23,000 jobs, compared with a forecast for an increase of 80,000 jobs among economists surveyed by Reuters. Employment data for May and June were also revised downwards, according to the Bureau of Labor Statistics. The dollar responded with broad-based weakness. Earlier, on 30 July, the Bank of England kept its interest rate at 3.75% by a six-to-three vote, with three members of the committee voting for a rate hike. The regulator’s decision also highlighted inflation risks associated with volatility in energy prices.

Technical Analysis of GBP/USD

After a sharp rise from around 1.3280 towards 1.3500 in late July, the pair entered a narrowing range between the upper and lower boundaries of the current profile at 1.3483 and 1.3440, respectively. The two boundaries gradually converged, forming a pattern resembling a contracting triangle. The green impulse candle subsequently broke above the pattern’s upper boundary, while the price is attempting to establish itself above both the trendline and the profile boundary. If the bullish scenario develops, the price could move towards the red resistance level at 1.3555.

If the current breakout from consolidation proves to be false and the price returns inside the profile, the POC at 1.3465 and the lower profile boundary at 1.3440 will regain their importance for market participants. Below these levels lies the green support area at 1.3420. The RSI + MAs indicator shows three readings of 61, 57 and 57. All three values are above the neutral zone, while the moving averages are coloured green. It is also worth noting that vertical volume has declined compared with the late-July impulse.

Summary The attempt to break above the triangle’s upper boundary could open the way towards a test of the red resistance area at 1.3555, but the sustainability and potential of the move may also depend on the flow of further US economic data.

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Key Points:EUR/USD climbed above the 1.1550 level as traders focused on U.S. job market data. USD/CAD moved lower as precious metals markets rallied. USD/JPY pulled back amid falling Treasury yields.

U.S. Dollar Is Under Pressure After Disappointing NFP Report

DXY 070826 4h Chart U.S. Dollar Index is losing ground as traders focus on the surprising Non Farm Payrolls report. The report indicated that U.S. economy lost -23,000 jobs in July, compared to analyst forecast of +80,000.

Unemployment Rate declined from 4.2% in June to 4.1% in July as Participation Rate decreased from 61.5% to 61.4%.

The weak Non Farm Payrolls report put significant pressure on the American currency as traders reduced bets on hawkish Fed. FedWatch Tool indicates that there is a 58.1% chance that Fed will keep rates unchanged at the next meeting in September.

The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will head towards the next support level at 98.60 – 98.75.

EUR/USD Tests New Highs As Traders Focus On NFP Data EUR/USD 070826 4h Chart EUR/USD gained ground as traders reacted to U.S. job market data. In the EU, traders focused on Germany’s Exports report. The report indicated that Exports increased by +0.9% month-over-month in June, compared to analyst consensus of +0.2%.

In case EUR/USD settles above the 1.1550 level, it will head towards the resistance level at 1.1600 – 1.1615. A move above the 1.1615 level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.

GBP/USD Tests The 1.3500 Level GBP/USD 070826 4h Chart GBP/USD moved higher as traders focused on dovish changes in Fed policy outlook and reacted to Lloyds House Price Index report from the UK. The report indicated that house prices increased by +0.1% year-over-year in July, compared to analyst consensus of +0.4%.

GBP/USD moved above the resistance at 1.3465 – 1.3480 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will head towards the next resistance at 1.3550 – 1.3565. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in the near term.

USD/CAD Tests Support At 1.3920 – 1.3935

USD/CAD 070826 4h Chart USD/CAD pulled back as traders reacted to the strong rally in precious metals markets. Gold climbed above the $4300 level, while silver settled above $63.00. Other commodity-related currencies are also moving higher in today’s trading session.

Traders also focused on the Unemployment Rate report from Canada. The report showed that Unemployment Rate declined from 6.5% in June to 6.4% in July, compared to analyst consensus of 6.5%.

Currently, USD/CAD is trying to settle below the support level at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level at 1.3825 – 1.3840.

USD/JPY Retreats As Treasury Yields Fall USD/JPY 070826 4h Chart USD/JPY moved lower as traders focused on falling Treasury yields. The yield of 2-year Treasuries declined towards the 4.20% level, while the yield of 10-year Treasuries settled near 4.65%.

If USD/JPY settles below the 157.00 level, it will move towards the support level at 154.50 – 155.00. On the upside, a successful test of the resistance at 157.50 – 158.00 will push USD/JPY towards the next resistance level, which is located in the 159.50 – 160.00 range.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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