Scotiabank’s conditional GBP/USD objective sits above consensus after Pound Sterling tests the 1.3650/60 resistance area The Pound to US Dollar (GBP/USD) exchange rate has tested the mid-1.36s, putting Scotiabank’s conditional route towards 1.41 into focus.
ERUK market data show GBP/USD reached an intraday high near 1.3675 before slipping back towards 1.3645, so the sustained push required by Scotiabank has not yet occurred.
The bank’s scenario depends on a durable advance beyond the 1.3650/60 area, which has contained Sterling near its early-May peak.
It is a notably bullish technical case: ERUK’s Research Currency Forecast Sentiment Survey places the median fourth-quarter forecast at 1.3446 and the top of the surveyed range at 1.40.
Scotiabank analysts noted the recent move reflected broad US Dollar weakness more than a sudden improvement in UK fundamentals.
Nevertheless, the bank judged the technical structure to be firmly positive after GBP/USD twice defended the 1.3150 area during April and June.
The strategists said “a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year”.
That makes 1.41 a possible extension rather than a guaranteed year-end destination, with Sterling still needing to establish former resistance as support.
1.3848 as the intermediate test Sucden Financial analysts highlighted 1.3650/60 as the breakout zone and said the next broader objective was 1.3848.
Sucden described the set-up as one “with the January high around 1.3848 representing a broader upside target”.
The level therefore offers an intermediate test of whether Scotiabank’s larger scenario is gaining traction.
The two institutions reach a similar bullish conclusion but on different horizons.
Sucden’s 1.3848 is the first substantial obstacle above the trigger, while Scotiabank’s conditional 1.41 objective extends through the balance of 2026.
Sucden placed initial support near 1.3600 and a deeper cushion around 1.3500, where the 20-day average and 30-day volume-weighted average price reinforce the technical floor.
A daily close below 1.3600 would weaken the breakout case and expose 1.3500, while a sustained hold above 1.3650/60 would strengthen the route towards 1.3848 and 1.41.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
DXY 210826 4h Chart U.S. Dollar Index continues its attempts to rebound as traders react to PMI reports. Manufacturing PMI declined from 53.9 in July to 53.2 in August, compared to analyst forecast of 53.9. Services PMI improved from 54.6 to 56.8, compared to analyst consensus of 54. Numbers above 50 show expansion. The reports indicated that U.S. economy remained in good shape.
In case U.S. Dollar Index stays above the support at 98.60 – 98.75, it will head towards the nearest resistance level, which is located in the 99.25 – 99.40 range. On the support side, a move below the 98.60 level will push U.S. Dollar Index towards the support at 97.85 – 98.00.
EUR/USD Remains Stuck Near 1.1700
EUR/USD 210826 4h Chart EUR/USD was mostly flat as traders focused on Euro Area PMI data. Manufacturing PMI improved from 51.9 in July to 52.8 in August, compared to analyst consensus of 51.8. Services PMI remained unchanged at 51.7, while analysts expected that it would decline to 51.5. The reports indicated that the European economy expanded despite high oil prices.
Currently, EUR/USD is trying to settle above the resistance level at 1.1685 – 1.1700. In case EUR/USD manages to settle above the 1.1700 level, it will head towards the next resistance level, which is located in the 1.1775 – 1.1790 range. RSI has recently moved into oversold territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Gained Some Ground As Traders Focused On PMI Data GBP/USD 210826 4h Chart GBP/USD moved higher as UK Services PMI exceeded analyst expectations. The report showed that UK Services PMI improved from 52.1 in July to 52.8 in August, compared to analyst forecast of 51.8.
From the technical point of view, GBP/USD continues its attempts to settle above the resistance level at 1.3635 – 1.3650. If GBP/USD climbs above the 1.3650 level, it will head towards the resistance at 1.3720 – 1.3735.
USD/CAD Tested New Lows USD/CAD 210826 4h Chart USD/CAD remains under pressure as traders focus on the strong rally in precious metals markets. Gold climbed above the $4600 level, while silver moved above $69.00. Other commodity-related currencies are also moving higher in today’s trading session.
A successful test of the support level at 1.3735 – 1.3750 will open the way to the test of the next support at 1.3635 – 1.3650. On the upside, a move above the 1.3775 level will open the way to the test of the 1.3800 level. In case USD/CAD climbs above 1.3800, it will head towards the resistance at 1.3825 – 1.3840.
USD/JPY Moved Lower As Japan’s Inflation Rate Exceeded Estimates
USD/JPY 210826 4h Chart USD/JPY pulled back despite rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled above 4.73%. Treasury yields are rising despite Bessent’s attempts to push them lower via verbal interventions.
Traders also focus on inflation data from Japan. Inflation Rate increased from 1.6% in June to 1.9% in July, compared to analyst forecast of 1.7%. Core Inflation Rate grew from 1.6% to 1.8%, in line with analyst estimates.
The nearest support level for USD/JPY is located in the 157.50 – 158.00 range. If USD/JPY declines below 157.50, it will head towards the next support at 155.00 – 155.50. On the upside, a move above the 50 MA at 159.15 will open the way to the test of the resistance level at 159.50 – 160.00.
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British Pound eases as UK sales drop, US services beatThe Pound Sterling loses some ground against the US Dollar, though it remains poised to end the week with gains of over 0.60%, even as UK Retail Sales disappointed investors and US business activity improved in August. The GBP/USD trades at 1.3626, down some 0.02%.
Data in the US was mixed, with S&P Global revealing Flash PMIs. On the positive side, the Services PMI in August rose from 54.6 to 56.8, crushing estimates of 54, while the Manufacturing PMI was 53.2, below estimates and July’s print of 53.9. Read more...
British Pound: Mixed data but Sterling supported – BBHBrown Brothers Harriman’s (BBH) Elias Haddad says GBP/USD is firmer on broad US Dollar (USD) weakness despite mixed United Kingdom (UK) data. Haddad notes July retail sales fell, partly reversing prior strong gains, while the August PMI surprised to the upside with a four-month high composite reading. Haddad judges market pricing of 50 bps Bank of England (BoE) hikes over twelve months as too aggressive, though the UK’s growth-inflation mix still supports the Pound.
"GBP/USD is firmer on broad USD weakness. Today’s UK set of economic data was mixed. Retail sales declined in July, partly reversing the previous two months’ strong gains." Read more...
1.3670: British Pound hits six-month highs as UK PMI beats expectationsThe British Pound (GBP) rallied to fresh six-month highs against the US Dollar (USD) on Friday, boosted by stronger-than-expected UK business activity data, while the US Dollar remains depressed following the US Treasury’s plan to boost bond buybacks. The GBP/USD pair has breached the 1.3660 level for the first time since February and is trading just above 1.3670 at the time of writing.
Preliminary data released by S&P Global revealed that July’s UK Services Purchasing Managers Index (PMI) improved to 52.8 from June’s 52.1 reading, against expectations of a slight decline to 51.8. Manufacturing Activity slowed down to 51.5, from 51.9 in the previous month, in line with market expectations, and the Composite PMI ticked up to 52.5 from 52.2 in June, also beating forecasts of a decline to 51.6. Read more...
British Pound holds gains against a weak US Dollar despite downbeat UK Retail SalesThe British Pound (GBP) trades firm against the US Dollar (USD) on Friday, with the GBP/USD pair pushing against six-month highs in the 1.3660 area at the time of writing, on track for a 0.8% weekly rally. UK Retail Sales confirmed that consumption fell in July, but the pair maintains its bullish tone intact, as the US Dollar remains on its back foot, hammered by the Treasury’s bond buyback plans.
Data released by National Statistics on Friday revealed that retail consumption contracted 0.5% in the UK in July, in line with market expectations, following a 0.7% increase in June. Year-over-year, sales increased at a 1.6% pace, down from 3.8% in June and below the consensus 2.2%. Read more...
British Pound edges higher to near 1.3650, UK Retail Sales data loomsThe GBP/USD pair gathers strength near 1.3645 during the early Asian trading hours on Friday. The US Dollar (USD) softens against the British Pound (GBP) amid fading Federal Reserve (Fed) rate hike expectations. Traders brace for the UK Retail Sales data for July, which will be published later on Friday.
Softer US economic data and uncertainty over Fed policy exert some selling pressure on the Greenback. Charu Chanana, chief investment strategist at Saxo, said that higher Treasury yields do not necessarily underpin the USD if investors believe the increase reflects fiscal risk, heavier government borrowing or persistent inflation, rather than stronger US growth or tighter monetary policy. Read more...
GBP/USD at three-month high: Outlook hinges on economic dataGBP/USD surged to 1.3613 on Wednesday, reaching a three-month high. Investors are digesting fresh UK inflation and labour market data.
Consumer inflation accelerated to 2.9% in July, up from 2.6% in June and in line with forecasts. Core inflation held steady at 2.6%. Following the release, markets slightly scaled back expectations of a Bank of England rate hike before year-end. Read more...
Pound Sterling jumped to $1.3675 after UK services activity unexpectedly accelerated, adding to signs that the economy is holding up better than feared. The Pound to Dollar (GBP/USD) exchange rate surged to an intraday high of 1.3675 on Friday after a much stronger-than-expected UK services survey delivered a fresh positive surprise for Sterling.
The S&P Global flash PMI survey showed the UK Services PMI rising to 52.8 in August from 52.1 in July, its strongest reading for six months and well above the 51.8 consensus in a Reuters poll.
The composite PMI also strengthened to 52.5 from 52.2, compared with expectations for 51.6, while manufacturing eased to 51.5 from 51.9.
GBP/USD later eased back to around 1.3656 by late morning, still 0.09% higher on the day and 0.91% stronger over the previous five sessions.
Pound Sterling reaction around the 09:30 BST UK Services PMI release, showing GBP/USD and GBP/EUR. Services Surprise Strengthens the UK Resilience Story S&P Global said the survey was consistent with UK GDP growth of around 0.3% in the third quarter, with services benefiting from better domestic conditions, favourable weather and technology investment.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: “The expansion is being helped by sunny weather and tech investment”.
There were still reasons for the Bank of England to remain cautious. Employment continued to fall and price pressures picked up again as higher energy costs fed into business expenses.
The combination leaves the BoE facing stronger activity alongside persistent inflation risks, reducing the urgency for any near-term policy easing.
For GBP/USD, the fresh 1.3675 high is now the immediate resistance point. A sustained break above that area would put the 1.3700 level in focus, while a retreat below 1.3600 would suggest the post-PMI momentum is beginning to fade.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Gold stays poised to post third straight week of gainsUS Treasury move risks creating unintended consequences for markets and the economyWhy markets care more about the signal than the size of the Treasury buybackHow have interest rate expectations changed after this week's events?Stock market sector rotation explained: Where investors are moving their money nowECB's Kazāks says September decision will be based on data, adds there are pros and cons to hiking furtherFrench business activity contracts further in August as demand conditions remain subduedGermany August flash manufacturing PMI 54.1 vs 52.0 expectedEuro area business activity sees further pick up in August despite France, Germany softnessUK August flash services PMI 52.8 vs 51.8 expectedUK retail sales fall in July as early summer buzz fadesMarkets:
AUD leads, USD lags on the dayGold up 1.7% to $4,596WTI crude oil up 0.4% to $87.20US 10-year yields down 0.6 bps to 4.692%European indices slightly higher; S&P 500 futures up 0.4%Bitcoin up 6.6% to $77,502Markets continue to debate the US Treasury decision to double long-term debt buybacks this week, with the dollar falling off again as Treasury yields stall after a bounce yesterday.
10-year yields in the US climbed back to 4.70% while 30-year yields pushed to 5.25% before easing back a little and that is sustaining the relief as the "Bessent put" stays in place. In turn, the dollar is seen falling across the board with EUR/USD testing waters above 1.1700 and GBP/USD hitting fresh 6-month highs of 1.3660. Elsewhere, USD/JPY is down 0.3% to 158.60 while AUD/USD is up 0.8% to 0.7165 on the day.
In terms of economic data releases, euro area PMI data saw France and Germany disappoint but the overall Eurozone data was more positive in being carried by a better showing by the rest of the region. Menawhile, UK PMI data was also more positive but it also saw inflation pressures ramp up. So, there's that.
But in terms of market impact, the PMI data didn't do much. It's all on the continued focus on the reaction to the US Treasury move from earlier this week.
Gold is the biggest winner it would seem, climbing further to briefly clip $4,600 earlier and still up by 1.7% to $4,596 currently. Silver also briefly touched $70 and is up 2.6% to $69.90 at the moment.
In other markets, equities are looking to find a steadier footing to close out the week with European indices up a little while Wall Street looks to bounce back from yesterday's setback. S&P 500 futures are up 0.4% while Nasdaq futures are up 0.6%.
And quietly, we're also seeing cryptocurrencies surge higher again in extending gains from earlier this week with Bitcoin keeping above $77,000.
United Overseas Bank’s (UOB) Quek Ser Leang reports GBP/USD at 1.3640 remains supported after breaking key resistance levels, with intraday gains likely capped between 1.3605 and 1.3670. Over the next 1–3 weeks, he expects the Pound to continue rising toward 1.3700, provided it holds above 1.3570, while longer-term signals still point to range trading.
Pound advance eyes major resistance"24-HOUR VIEW: GBP soared to a high of 1.3630 two days ago. Yesterday, we highlighted the following: “The sharp rise appears to be overdone. This, combined with deeply overbought conditions, suggests that instead of continuing to rise, GBP is more likely to consolidate between 1.3570 and 1.3630.” Our view of consolidation was incorrect as GBP rose to a high of 1.3661. GBP closed 0.19% higher at 1.3632. Further GBP strength is not ruled out, but deeply overbought conditions suggest any advance could be contained within a 1.3605/1.3670 range. Even if GBP breaks above 1.3670, it is unlikely to reach the major resistance at 1.3700."
"1-3 WEEKS VIEW: We highlighted on Monday (17 Aug, spot at 1.3540) that “the upside bias in GBP remains intact, but any advance is expected to face firm resistance at 1.3600.” After GBP surged and broke above 1.3600, we highlighted yesterday (19 Aug, spot at 1.3600) that “further GBP strength remains likely, but with negative divergence forming on momentum indicators, this time around, any advance is expected to face firm resistance at 1.3655.” We underestimated the strength of the upward momentum as GBP subsequently broke above 1.3655 with a high of 1.3661. Having surpassed 1.3655, GBP could continue to rise toward 1.3700. To keep the momentum going, GBP must hold above 1.3570 (‘strong support’ level was at 1.3535 yesterday)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Pound-Dollar can hold above $1.36 if pressure on the US Dollar from fiscal concerns and softer Fed bets offsets any drag from weaker UK retail sales and PMI data. The Pound US Dollar (GBP/USD) exchange rate maintained a positive trajectory on Thursday, with the pairing being propelled to its best levels since mid-February.
At the time of writing, GBP/USD was trading at around $1.3646. Up around 0.3% from Thursday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.362643 (+0.20%)
Euro to Dollar (EUR/USD): 1.167162 (-0.02%)
Dollar to Yen (USD/JPY): 159.0647 (+0.51%)
DAILY RECAP:
The US Dollar (USD) remained under pressure on Thursday, slipping to fresh multi-month lows as concerns over the US fiscal outlook continued to weigh on sentiment towards the ‘Greenback’.
The latest warning sign came as America’s national debt surpassed the $40tn mark for the first time, reinforcing concerns over the sustainability of the country’s finances and the growing cost of servicing its debt.
The milestone came alongside ongoing volatility in the US bond market, where long-term borrowing costs had climbed sharply, forcing the US Treasury to step in and announce it would at least double the size of its planned buybacks of longer-dated government debt.
The Pound (GBP) traded with modest support on Thursday, firming on the back of the Confederation of British Industry's (CBI) latest industrial trends orders index.
The index printed at -25 this month, marking a continued contraction in order books, but a marked improvement from the -45 recorded in July and striking its best levels since late 2024.
The data points to surprising resilience in the UK manufacturing sector, despite headwinds posed by the war in the Middle East and rising energy prices.
Near-Term GBP/USD Forecast: UK retail sales and PMIs could test Sterling strength Turning to Friday's session, the Pound to US Dollar (GBP/USD) exchange rate may be pressured by the final UK economic releases of the week.
Friday's European session opens with the release of the UK's latest retail sales data, which is forecast to report a contraction in consumer spending and sap Sterling sentiment.
The subsequent publication of the UK's latest PMIs could then drag the Pound even lower, as economists forecast that growth in the UK's dominant services sector is likely to have slowed this month.
Closing out the session will be the publication of the latest US S&P PMIs. While not as influential as the ISM indexes, they could still lend the US Dollar support if they point to further resilience in the US private sector.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
British Pound climbs as UK inflation keeps BoE hike bets aliveThe Pound Sterling (GBP) advances on Thursday during the North American session, up 0.25% after US economic data showed that the labor market remains solid, despite a weaker Nonfarm Payrolls in July. The GBP/USD pair trades at 1.3639 after reaching a daily high of 1.3659, its highest level since February.
The Greenback has recovered some ground after posting losses, following the US Department of the Treasury's announcement of a bond buyback program. The Treasury’s goal is to provide liquidity for the long end of the curve, but markets interpreted the move as a form of Yield Curve Control (YCC). Read more...
British Pound: Sustained break above 1.3650 may open 1.41 – ScotiabankScotiabank strategists Shaun Osborne and Eric Theoret note that GBP/USD gains into the mid-1.36s are driven more by US Dollar (USD) weakness than intrinsic British Pound (GBP) strength, though United Kingdom (UK) survey data show improving manufacturing orders and pricing power. Technically, Cable has met the near-term objective of retesting the May peak, and a sustained move above 1.3650/60 is seen implying scope for an extension towards 1.41 this year.
"Sterling gains to the mid-1.36s largely reflect our general outlook for the pound but the story is clearly more about USD weakness than GBP strength at the moment." Read more...
British Pound gains as US Dollar softens on Treasury bond buybacksGBP/USD extends its gains for the second successive day, trading around 1.3630 during the European hours on Thursday. The pair appreciates as the US Dollar (USD) faces challenges, driven by the decision of the US Treasury Department to stabilize domestic bond markets.
US Treasury announced plans to curb surging yields and alleviate market liquidity concerns by doubling its buyback operations for long-dated securities maturing in 10 to 30 years. This increased intervention aims to cap long-term borrowing costs and enhance overall global US Dollar liquidity, which could ultimately exert downside pressure on the currency moving forward. Read more...
Key Points:GBP/USD moved higher as rally continued. USD/CAD pulled back as traders reacted to the rally in the oil markets. USD/JPY rebounded towards 159.00 as traders focused on rising Treasury yields.
EUR/USD
0.00%
EUR/USD ForecastGBP/USD
+0.22%
GBP/USD ForecastUSD/CAD
-0.14%
USD/CAD ForecastUSD/JPY
+0.46%
USD/JPY Forecast
U.S. Dollar Gains Ground As Traders Buy The Dip
DXY 200826 4h Chart U.S. Dollar Index attempts to rebound after the strong sell-off, which was triggered by Treasury’s decision to boost buybacks of long-dated bonds.
Today, U.S. Treasury Secretary Scott Bessent indicated that Treasury could increase buybacks to more than $4 billion per issue.
Traders also focused on the Initial Jobless Claims report. The report indicated that 206,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 210,000.
U.S. Dollar Index failed to settle below the support level at 98.60 – 98.75 and is moving towards the 99.00 level. In case U.S. Dollar Index climbs above 99.00, it will head towards the nearest resistance at 99.25 – 99.40. A move above 99.40 will push U.S. Dollar Index towards the 50 MA at 99.58.
EUR/USD Is Mostly Flat Amid Profit-Taking EUR/USD 200826 4h Chart EUR/USD is mostly flat as traders take some profits off the table and react to Germany’s PPI report. The report indicated that PPI increased by +3% year-over-year, compared to analyst forecast of +2.7%.
From the technical point of view, EUR/USD attempts to settle above the resistance level at 1.1685 – 1.1700. If EUR/USD moves above the 1.1700 level, it will head towards the next resistance at 1.1775 – 1.1790.
GBP/USD Tests Resistance At 1.3635 – 1.3650 GBP/USD 200826 4h Chart GBP/USD tested new highs as rally continued. Traders bet that Treasury’s bond buybacks will put additional pressure on the American currency.
Currently, GBP/USD is trying to settle above the resistance level at 1.3635 – 1.3650. In case this attempt is successful, GBP/USD will move towards the next resistance, which is located in the 1.3720 – 1.3735 range.
USD/CAD Tests New Lows
USD/CAD 200826 4h Chart USD/CAD remains under pressure as traders focus on rising oil prices. Other commodity-related currencies are mixed in today’s trading session.
In Canada, traders focus on the New Housing Price Index report. The report showed that new housing prices decreased by -0.1% month-over-month in July, compared to analsyt forecast of 0%.
The nearest support level for USD/CAD is located in the 1.3735 – 1.3750. A successful test of this level will push USD/CAD towards the support level at 1.3635 – 1.3650.
On the upside, a move above the 1.3800 level will open the way to the test of the resistance level at 1.3825 – 1.3840. RSI has recently moved out of the oversold territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
USD/JPY Gains Ground As Treasury Yields Rise USD/JPY 200826 4h Chart USD/JPY rebounds as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 4.20% level, while the yield of 10-year Treasrueis settled above 4.70%. Treasury yields are moving higher despite Bessent’s efforts to push them lower as bond traders remain worried about long-term rate outlook.
If USD/JPY climbs above the 50 MA at 159.18, it will move towards the nearest resistance level at 159.50 – 160.00. A move above 160.00 will push USD/JPY towards the 162.00 level. 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.
GBP/USD surged to 1.3613 on Wednesday, reaching a three-month high. Investors are digesting fresh UK inflation and labour market data.
Consumer inflation accelerated to 2.9% in July, up from 2.6% in June and in line with forecasts. Core inflation held steady at 2.6%. Following the release, markets slightly scaled back expectations of a Bank of England rate hike before year-end.
Earlier labour market data showed unemployment holding at 4.9%, above expectations, while the number of payrolled employees fell by 86,000 year-on-year. Meanwhile, growth in regular pay remained fairly stable at 3.5%.
Additional support for the pound is coming from a weaker dollar. Soft US economic data have led investors to reduce expectations of further Federal Reserve tightening. At the same time, elevated oil prices and uncertainty surrounding the US–Iran conflict continue to pose inflation risks for the UK.
Technical Analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3523 level. The market has moved towards its upper boundary. A new compact consolidation range is expected to form below 1.3631. A downside breakout from this range would open the way for a move lower towards 1.3500. The MACD supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3607 level, currently extending between 1.3588 and 1.3618. A move lower towards 1.3572 is expected, followed by a move higher to 1.3600. The Stochastic oscillator confirms this scenario, with its signal line below 80 and trending downward towards 20, indicating short-term downside pressure.
Conclusion GBP/USD has climbed to a three-month high, supported by a weaker dollar and UK economic data that largely met expectations. Inflation accelerated to 2.9% in July, while core inflation held steady, prompting markets to slightly lower BoE rate hike expectations. Labour market data showed unemployment above forecasts and a decline in payroll employment, though wage growth remained stable. The dollar remains under pressure from soft US data, which has reduced Fed tightening expectations. However, elevated oil prices and geopolitical uncertainty continue to pose inflation risks for the UK. Technically, the pair may see a short-term pullback towards 1.3572, with potential for a further decline to 1.3500. The near-term direction will depend on upcoming economic releases and central bank signals.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
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GBP/USD surged to 1.3613 on Wednesday, reaching a three-month high. Investors are digesting fresh UK inflation and labour market data.
Consumer inflation accelerated to 2.9% in July, up from 2.6% in June and in line with forecasts. Core inflation held steady at 2.6%. Following the release, markets slightly scaled back expectations of a Bank of England rate hike before year-end.
Earlier labour market data showed unemployment holding at 4.9%, above expectations, while the number of payrolled employees fell by 86,000 year-on-year. Meanwhile, growth in regular pay remained fairly stable at 3.5%.
Additional support for the pound is coming from a weaker dollar. Soft US economic data have led investors to reduce expectations of further Federal Reserve tightening. At the same time, elevated oil prices and uncertainty surrounding the US–Iran conflict continue to pose inflation risks for the UK.
Technical analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3523 level. The market has moved towards its upper boundary. A new compact consolidation range is expected to form below 1.3631. A downside breakout from this range would open the way for a move lower towards 1.3500. The MACD supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3607 level, currently extending between 1.3588 and 1.3618. A move lower towards 1.3572 is expected, followed by a move higher to 1.3600. The Stochastic oscillator confirms this scenario, with its signal line below 80 and trending downward towards 20, indicating short-term downside pressure.
ConclusionGBP/USD has climbed to a three-month high, supported by a weaker dollar and UK economic data that largely met expectations. Inflation accelerated to 2.9% in July, while core inflation held steady, prompting markets to slightly lower BoE rate hike expectations. Labour market data showed unemployment above forecasts and a decline in payroll employment, though wage growth remained stable. The dollar remains under pressure from soft US data, which has reduced Fed tightening expectations. However, elevated oil prices and geopolitical uncertainty continue to pose inflation risks for the UK. Technically, the pair may see a short-term pullback towards 1.3572, with potential for a further decline to 1.3500. The near-term direction will depend on upcoming economic releases and central bank signals.
The Pound to Dollar (GBP/USD) exchange rate jumped above 1.3600 on Wednesday, reaching its strongest level since May as falling Treasury yields hit the US Dollar.
Pound Sterling's own UK inflation backdrop was broadly neutral.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.360955 (+0.55%)
Euro to Dollar (EUR/USD): 1.167557 (+0.86%)
Dollar to Yen (USD/JPY): 158.12827 (-0.89%)
DAILY RECAP:
GBP/USD climbed around 0.5% as the Dollar sold off sharply across the major currencies.
The decisive move came after the US Treasury announced it would double buybacks of longer-dated government bonds, sending 10 and 30-year yields lower and easing financial conditions.
Deutsche Bank strategist George Saravelos warned that failure by the Federal Reserve to recognise that effect would amount to “an additional dollar negative driver.”
The subsequent FOMC minutes were more hawkish.
Several policymakers had been prepared to raise rates in July, while many judged that another increase would be needed if inflation failed to return towards target.
Markets largely looked through that message following softer jobs, inflation and retail sales data released since the meeting.
ING's Chris Turner said: “Our base case is that it does not, and the dollar softens a little,” referring to the prospect of a September Fed hike.
Scotiabank remains similarly cautious on the US currency, stating: “We remain bearish on the outlook for the USD in the short/medium term.”
Pound Sterling had earlier shown little reaction to UK inflation.
Headline CPI rose as expected to 2.9%, while services inflation eased to 3.4% and producer input prices dropped 1.7%.
Those figures, combined with Tuesday's softer labour data, leave the Bank of England with little urgency to raise rates again.
Near-Term GBP/USD Forecast: 1.3650 in Focus After Dollar Sell-Off Thursday brings US jobless claims, forecast at 210,000, alongside the Philadelphia Fed manufacturing index.
Friday is busier for Sterling. UK retail sales are forecast to fall 0.5%, before manufacturing and services PMIs at 09:30 BST.
US flash PMIs follow at 14:45 BST.
Strong UK activity alongside softer US figures could push GBP/USD through 1.3650 and expose 1.3700.
Weak UK retail sales combined with resilient US data would put 1.3500 back in view.
The broader Pound to Dollar exchange rate (GBP/USD) remains constructive while the pair holds above the low-1.35 area.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Key Points:EUR/USD rallied as traders focused on U.S. bonds' buyback. GBP/USD climbed above 1.3600 as traders reacted to inflation data from the UK. USD/CAD declined towards the 1.3800 level as precious metals markets rallied.
In this article:EUR/USD
+0.78%
EUR/USD ForecastGBP/USD
+0.52%
GBP/USD ForecastUSD/CAD
-0.62%
USD/CAD ForecastUSD/JPY
-0.69%
USD/JPY Forecast
U.S. Dollar Retreats As Traders Focus On Bond Buybacks
DXY 190826 4h Chart U.S. Dollar Index is under strong pressure as U.S. Treasury announced that it would boost buybacks of longer-dated government debt.
The yield of 30-year Treasuries pulled back towards the 5.20% level as bond traders reacted to the announcement. The yield of 10-year Treasuries declined below the 4.67% level.
The American currency is losing ground as debt buybacks pushed longer-term yields lower.
The nearest support level for U.S. Dollar Index is located in the 98.60 – 98.75 range. In case U.S. Dollar Index manages to settle below the 98.60 level, it will head towards the next support at 97.85 – 98.00. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.
EUR/USD Soars After U.S. Treasury Decides To Boost Bond Buybacks EUR/USD 190826 4h Chart EUR/USD rallied as traders focused on U.S. Treasury decision to buy back bonds. The moved showe that Bessent was worried that longer-dated bond market will get out of control.
EUR/USD is moving towards the resistance level at 1.1685 – 1.1700. If EUR/USD manages to settle above the 1.1700 level, it will head towards the next resistance level, which is located in the 1.1775 – 1.1790 range.
GBP/USD Rallies As Traders Focus On UK Inflation Data GBP/USD 190826 4h Chart GBP/USD gained ground as traders focused on general weakness of the American currency. Traders also had a chance to take a look at inflation data from the UK.
Inflation Rate increased from 2.6% in June to 2.9% in July, in line with analyst consensus. Core Inflation Rate remained unchanged at 2.6%, while analysts expected that it would drop to 2.9%.
USD/CAD Tests New Lows
USD/CAD 190826 4h Chart USD/CAD pulled back as traders reacted to the strong rally in precious metals markets. Gold climbed towards the $4500 level, while silver moved towards $66.00. Other commodity-related currencies have also gained upside momentum in today’s trading session.
Currently, USD/CAD is trying to settle below the support level at 1.3825 – 1.3840. In case USD/CAD manages to settle below the 1.3825 level, it will head towards the next support, which is located in the 1.3735 – 1.3750 range. RSI has recently moved into oversold territory, but there is enough room to gain momentum in case the right catalysts emerge.
USD/JPY Moves Away From Weekly Highs USD/JPY 190826 4h Chart USD/JPY pulled back as traders focused on U.S. bonds’ buyback. The Japanese yen is fundamentally weak due to ultra-dovish policy of the Bank of Japan. Falling yields in the U.S. will put pressure on USD/JPY.
However, it remains to be seen whether buyback will provide major support to U.S. bond prices and pushes their yields to lower levels. Meanwhile, shorter-term U.S. Treasuries have found themselves under pressure. The yield of 2-year Treasuries climbed above the 4.19% level.
The nearest support level for USD/JPY is located in the 157.50 – 158.00 range. If USD/JPY manages to settle below the 157.50 level, it will head towards the next support level at 155.00 – 155.50.
On the upside, a move above the 50 MA at 159.10 will push USD/JPY towards the resistance level at 159.50 – 160.00.
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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.
The British Pound (GBP) is up 0.2% to near 1.3557 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair trades higher as the US Dollar faces selling pressure, with traders scaling back Federal Reserve (Fed) interest rate hike bets due to weak United States (US) economic data for August.
Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes of the July policy meeting, which will be published at 18:00 GMT. Read more...
British Pound edges up within range following hotter UK inflation dataThe British Pound (GBP) ticked up against the US Dollar (USD) on Monday, following the release of UK inflation data. The GBP/USD pair has returned to the mid-range of the 1.3500s on Wednesday, trading a few pips above 1.3550 at the time of writing, although it remains trapped within previous days’ range, below the 1.3570 resistance area.
Data released by National Statistics on Wednesday revealed that UK inflation accelerated in line with market expectations in July. UK's Consumer Price Index (CPI) grew at a 0.3% rate on the month and 2.9% year-over-year (Y-o-Y) from 0.1% and 2.6% respectively last month. The Core CPI grew at a 2.6% Y-o-Y rate, unchanged from the previous month, against the market consensus for a downtick to 2.5%. Read more...
British Pound shows limited reaction to expected increase in UK headline inflationThe British Pound (GBP) reflects a slight market action against the Japanese Yen (JPY) near its day’s low at around 215.70 after the release of the United Kingdom (UK) Consumer Price Index (CPI) data for July.
The Office for National Statistics (ONS) has reported that the headline inflation accelerated to 2.9% Year-on-Year (YoY), as expected, from 2.5% in June. The core CPI – which excludes volatile components of food, energy, alcohol and tobacco – grew at a steady pace of 2.6% YoY, while it was expected to slow down to 2.5%. Read more...
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The British Pound (GBP) is up 0.2% to near 1.3557 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair trades higher as the US Dollar faces selling pressure, with traders scaling back Federal Reserve (Fed) interest rate hike bets due to weak United States (US) economic data for August.
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD-0.29%-0.20%-0.37%-0.22%0.10%-0.13%-0.29%EUR0.29%0.08%-0.07%0.09%0.39%0.14%0.01%GBP0.20%-0.08%-0.13%0.00%0.34%0.07%-0.08%JPY0.37%0.07%0.13%0.15%0.45%0.21%0.06%CAD0.22%-0.09%-0.00%-0.15%0.30%0.06%-0.09%AUD-0.10%-0.39%-0.34%-0.45%-0.30%-0.24%-0.37%NZD0.13%-0.14%-0.07%-0.21%-0.06%0.24%-0.14%CHF0.29%-0.01%0.08%-0.06%0.09%0.37%0.14% 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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes of the July policy meeting, which will be published at 18:00 GMT.
Dollar steadies as FOMC minutes eyed for limited hawkish surpriseAnalysts at ING highlight that “for today, the focus will be on tonight's release of the FOMC minutes for the July meeting,” noting that the earlier decision saw “the vote… 9-3 for unchanged rates and the event proved a dovish one for the short end of the US curve and the Dollar, while the long end sold off.” ING argues that “the suspicion is that the 12-member FOMC is less hawkish than the participants whose projections delivered forecasts of a 9:9 split for a hike in the June set of Dot Plots.” As a result, while they concede “there may be a few hawkish references in tonight's minutes that could nudge the Dollar and short-dated rates a little firmer,” they stress that “we do not see the minutes as a game changer.”
Ahead of the FOMC minutes, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.26% lower to near 99.38, close to its two-month low of 99.29 posted on Monday.
On the United Kingdom (UK) front, the headline Consumer Price Index (CPI) data for July has come in higher at 2.9% Year-on-Year (YoY), as expected, from 2.6% in June. The core CPI growth remains steady at 2.6% YoY, while it was expected to cool down to 2.5%.
GBP/USD Technical Analysis
GBP/USD trades near 1.3560. The pair maintains a bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 1.3475 and the former resistance trend line, now acting as support around 1.3436.
The Relative Strength Index (14) near 64 stays in positive territory, hinting at sustained upward momentum without yet reaching extreme overbought conditions.
On the downside, the immediate support emerges at the 20-day EMA at 1.3475, followed by the trend-line break level near 1.3436. On the topside, the pair needs to break above the three-month high at 1.3571 to extend the advance towards 1.3600, followed by the May high at 1.3658.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index (YoY) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.
The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Key Points:Today's Fed minutes are the primary dollar catalyst as traders look for details on policymakers' views on rates and inflation.Markets currently favor a September Fed hold, according to the probabilities cited in your draft, reducing support from U.S. rate expectations.ECB tightening expectations are providing fundamental support for the euro as inflation remains above the central bank's target.UK inflation data are an important sterling catalyst as the BoE balances persistent price pressures against a cooling labor market.DXY remains vulnerable below the 99.89–100.19 EMA cluster, with 99.38 acting as the critical downside support.
In this article:GBP/USD
+0.07%
GBP/USD ForecastEUR/USD
+0.11%
EUR/USD ForecastUS Dollar News: Fed Minutes, ECB Hike Bets and UK Inflation Drive FX
Opening today, the focus is on upcoming minutes from the July Fed meeting. These will offer insight on how divided members were on the call regarding another potential rate hike. Although recent domestic data has shown signs of slowing (i.e. negative jobs report, milder inflation reports, lack of retail spending) current markets lean towards a chance of the Fed holding rates at the September meeting at about 65%, whereas a potential tightening is at 35%. Middle East supply concerns also mean that the dollar is not safe from another surprise inflation surge and a potential for more rate hikes.
On the other hand, the Euro has the potential to harden against the dollar given that, although inflation in the EU is at 2.9% (compared to the ECB’s target of 2%), eurozone inflation is still due to energy costs, which of course are transitory. A Reuters survey shows that 57 out of the 69 economists surveyed anticipate an increase of 25 basis points in the interest rate by the ECB from 2% to 2.5% in September, with a pause on interest rate hikes until the middle of 2027 at least.
Although inflation is falling in the UK as seen in the cooling of labor put in (i.e. dip in job vacancies and private sector wage growth), it is still signaling a negative outlook for GBP.
Investors are waiting for UK July inflation data coming Wednesday lunchtime. Analysts expect an increase in headline inflation to 2.9% from 2.6%. 56 of 64 economists surveyed by Reuters expect the BoE to maintain Bank Rate at 3.75% through the end of 2023.
For August 19, the main FX theme is policy divergence: fading Fed-hike expectations, a more hawkish ECB, and a BoE becoming more constrained by cooling jobs data, even with mounting inflationary pressures.
U.S. Dollar Index Technical Analysis: DXY Pressures $99.38 Support as Momentum Stays Weak
Dollar Index Price Chart – Source: Tradingview
The U.S. Dollar Index is trading at approximately $99.55 after a long slide from the $101.60 zone. The price, which remains below the 50 and 100-day EMAs positioned at $100.19 and $99.89, respectively, keeps the short term outlook negative. The last few candles are clustering above the ascending trendline and the $99.38 support zone, making this area crucial for the potential continuation of the broader recovery.
The RSI line is at 38, indicating weak momentum and raising the risk for another test to the downside. Immediate resistance is at $100.06, then at $100.66, $101.30 and $101.77. In the case of a confirmed break below $99.38, we may see $98.94, $98.41 and $97.84
While the DXY is trading below the $99.89 – $100.19 zone, it is vulnerable in my opinion. The DXY can bounce to $100.06 if it holds $99.38, however, a daily close below $99.38 would be a much stronger bearish signal.
GBP/USD Technical Analysis: Pound Consolidates Above Rising Trendline Near $1.3540
GBP/USD Price Chart – Source: Tradingview
GBP/USD stands at $1.3541 in the 2-hour chart, consolidating after moving towards the resistance area of $1.3565. For now, price resides above the 50-EMA at $1.3529 and the 100-EMA at $1.3510. The bullish structure is supported by an ascending trendline. The recent price action in the form of sideways candlesticks is signaling a pause in the price action rather than a reversal.
At the momentistics index (RSI) stands at the 53 level, which indicates neutral momentum after a decline from higher level. The price area of $1.3565 is the next resistance zone, followed by $1.3596, $1.3629 and $1.3660. On the opposite side, we see support zone at $1.3520, $1.3476, and $1.3434.
GBP/USD is bullish above $1.3510 – $1.3520. A break above $1.3565 will stimulate the buying amongst traders and push the price higher towards $1.3596, while a move below the trendline will likely push the price down towards $1.3476.
EUR/USD Technical Analysis: Euro Holds Rising Trendline Above $1.1570
EUR/USD Price Chart – Source: Tradingview
The price of EUR/USD is at $1.1586, while the broader bullish structure is above the rising trendline. The price is above the 50 EMA and 100 EMA located at $1.1569 and $1.1553, respectively. The latest price consolidation shows buyers are supporting the pullbacks after the advance to $1.1614
The RSI line is at 59 and is a good indicator of momentum as it is not in the overbought area. The next resistance price levels are at $1.1614, $1.1649 and $1.1684. Support levels are at $1.1570, $1.1545, $1.1515 and $1.1480.
I think that EUR/USD is technically positive above $1.1545-$1.1570 and the rising trendline. If $1.1614 is broken to the upside, then the $1.1649 level comes next. Selling EUR/USD below $1.1545 will shift the bias to the downside and target the lower EMAs.
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JPMorgan's GBP/USD exchange rate forecast falls to 1.28 by December 2026, putting Pound Sterling at the bottom of the latest consensus range. Foreign exchange analysts a JPMorgan expect the Pound to Dollar exchange rate to fall from 1.3541 to 1.28 by the end of 2026, a decline of roughly 5.5% if its forecast is realised.
Image: GBP/USD price movement over the month to 18 August 2026. The bank's end-period path puts GBP/USD at 1.31 in September, 1.28 in December, 1.29 in March 2027 and 1.28 in June 2027.
The signal therefore extends beyond one policy meeting and across 2027.
That is a conspicuously bearish destination: the Exchange Rates UK Research Currency Forecast Sentiment Survey has a fourth-quarter median of 1.3446 and a range of 1.28 to 1.40.
JPMorgan's 1.28 therefore sits at the survey floor rather than near its centre.
Image: ERUK bank forecast consensus ranges for GBP/USD across eight quarters, as of 18 August 2026. The UK rate gap is the pressure point JPMorgan's table supplies the path rather than a pair-specific explanation; Goldman Sachs offers a separate rates argument for Sterling weakness.
Goldman said its economists are calling for "no hikes this year (30bps priced), and two cuts next year, which relative to current pricing (shown below) remains a risk for GBP over the medium-term".
Such a repricing would erode Pound Sterling's carry support.
The Bank of England held Bank Rate at 3.75% on 29 July, although three of nine policymakers preferred an increase to 4%.
Lloyds said "payrolled employment has now declined in each of the past six months", with timely indicators continuing "to point to subdued labour demand". Private-pay data, it added, "provide little evidence that domestically generated inflation pressures are beginning to re-intensify".
Yet the conflict-driven energy shock means the path is not one-way.
Lloyds observed that "financial markets continue to anticipate Bank Rate moving higher over the coming months", while the policy outlook "continues to hinge largely on global developments".
It added that "a 25bp increase is not currently fully priced until the December MPC meeting, suggesting investors do not expect policymakers to respond aggressively in the near term". That timing makes JPMorgan's 1.28 destination a challenge to the current UK rate curve, not merely to spot sentiment.
That leaves the JPMorgan GBP/USD forecast as a test of which influence wins: weaker domestic labour conditions or another inflation impulse from energy.
If rate expectations are repriced towards Goldman's path, 1.28 becomes easier to defend; if the Bank tightens, the survey's higher Sterling outcomes remain live.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound Sterling steadies on Tuesday as geopolitical tensions rise in the Middle East, while housing data misses estimates and US Industrial Production decelerates. The GBP/USD trades at 1.3547. Read More...
British Pound trades lower against US Dollar after soft UK employment dataThe British Pound (GBP) is down 0.1% to near 1.3530 against the US Dollar (USD) during the European trading session on Tuesday. The British currency comes under pressure after the release of the United Kingdom (UK) employment data for three months ending June. Read More...
British Pound dips to fresh lows near 1.3520 after mixed UK employment dataThe British Pound (GBP) extends its reversal against the US Dollar (USD) on Tuesday as June’s UK unemployment data fails to convince investors in an already risk-off market, as tensions in the Middle East rise. The GBP/USD trades at 1.3522 at the time of writing, following rejection at the 1.3570 area on Monday. Read More...
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In comparison to the U.S. dollar, the euro has a stronger monetary policy backdrop. According to a Reuters survey, 57 of 69 economists expected the ECB to raise its deposit rate of 2.50 percent in September, while inflation continues to be above the ECB’s target of 2 percent. Policy divergence in favor of the euro continues to increase as the expectations surrounding the Fed’s policy continue to decline.
Sterling is also benefiting from policy divergence. UK growth for the second quarter was at 0.4 percent, and the Bank of England’s Chief Economist, Huw Pill, indicated that the recent growth that was also in excess of expectations, is a good reason for policy to be tightened. Currently markets are calling for at least one additional hike by the BoE in 2026. New data on the labor market and inflation in the U.K. will be released this week that will be useful in evaluating this position.
The main issue for all three currencies is the Middle East. Renewed U.S.-Iran tensions and ongoing disruptions through the Strait of Hormuz pose risks for another energy-related inflation shock, which could once again bring expectations of tighter policy if price pressures begin to accelerate.
U.S. Dollar Index Technical Analysis: DXY Defends $99.38 Support but Remains Below Key EMAs
GBP/USD could extend its three-month high if stronger UK jobs data boosts BoE rate expectations, while softer US employment keeps the US Dollar under pressure. The Pound US Dollar (GBP/USD) exchange rate edged higher at the start of this week, striking its best levels since mid-May amid a further dovish repricing of Federal Reserve interest rate expectations.
At the time of writing, GBP/USD was trading at around $1.3556. Up around 0.2% from Monday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.356146 (+0.21%)
Euro to Dollar (EUR/USD): 1.158915 (+0.16%)
Dollar to Yen (USD/JPY): 159.36153 (+0.03%)
DAILY RECAP:
The US Dollar (USD) stumbled on Monday, reaching fresh multi-month lows as investors continued to unwind expectations for further Federal Reserve interest rate hikes.
A recent run of softer-than-expected US economic releases has increasingly challenged expectations the Fed will tighten monetary policy in the coming months, with the majority of investors no longer pricing in a September rate hike.
The latest setback came from Friday’s US retail sales figures, which revealed an unexpected 0.6% contraction in consumer spending during July, the first decline in retail sales for nine months.
The disappointing retail sales figures followed a series of other lacklustre releases, including a much weaker-than-expected July payrolls report and relatively soft inflation data, that have also weakened Fed bets in recent weeks.
While able to tick higher against the US Dollar, the Pound (GBP) was left to trade in a narrow range against the bulk of its other peers on Monday, with GBP investors reluctant to alter their positions in the currency ahead of several UK economic releases.
Trading is set to pick up considerably as the week unfolds, starting with official labour market statistics and inflation figures in the first half of the session, before attention shifts to retail sales and flash PMI numbers towards the tail end of the week.
Investors will pay particularly close attention to the employment and CPI reports, which are likely to steer the Bank of England's (BoE) interest rate outlook heading into autumn.
Should the data reveal enduring economic resilience and persistent underlying price pressures, renewed expectations of BoE policy tightening could give Sterling a meaningful lift.
Near-Term GBP/USD Forecast: Will a Stronger UK Jobs Market Boost Sterling? Turning to Tuesday's session, the UK's data glut begins with the publication of the UK's latest jobs report.
The data could extend the upside in the Pound to US Dollar (GBP/USD) exchange rate as consensus forecasts predict an acceleration in employment growth will have pulled unemployment lower in June.
That said, any gains for Sterling could prove limited if an accompanying moderation in wage growth dampens market appetite for further central bank rate increases.
Meanwhile, the US Dollar may face further headwinds if the latest ADP employment data, reports that US employment growth continued to slow through the last week of July.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD started a decent increase and climbed above 1.3520. A bullish trend line is forming with support near 1.3510 on the 4-hour chart. Bitcoin could continue to face heavy resistance near $64,650 and $65,500. EUR/USD gained traction and cleared the 1.1580 resistance. GBP/USD Technical Analysis The British Pound found support near 1.3440 against the US Dollar. GBP/USD started another increase above the 1.3500 resistance zone.
Looking at the 4-hour chart, the pair settled above 1.3520, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair even attempted to settle above the 1.3565 resistance zone.
On the upside, the pair is now facing a major hurdle at 1.3580. The next major resistance might be 1.3620. A close above 1.3620 could start another steady increase. In the stated case, the bulls could aim for a move to 1.3700.
Any further gains might open the door for a test of 1.3750. If there is a fresh decline, the pair might find bids near 1.3500. There is also a bullish trend line forming with support at 1.3510. The next major support could be near 1.3450 and the 100 simple moving average (red, 4-hour).
The main support might be 1.3420 and the 200 simple moving average (green, 4-hour). A downside break and close below 1.3420 might send the pair toward 1.3315. Any more losses could open the door for a test of 1.3250.
Looking at Bitcoin, the price must settle above $64,650 and $65,500 to decrease bearish pressure and start a steady increase.
Upcoming Key Economic Events:
UK Claimant Count Change for July 2026 – Forecast 11.2K, versus 6.7K previous. UK ILO Unemployment Rate for June 2026 (3M) – Forecast 4.8%, versus 4.9% previous.
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The Pound Sterling (GBP) registers modest gains of 0.14% on Monday against the US Dollar (USD) as investors digest softer-than-expected US inflation data and brace for the release of crucial UK jobs and inflation data. The GBP/USD pair trades at 1.3552 after hitting a three-month high of 1.3571. Read More...
GBP/USD Price Forecast: Bulls press toward 1.3600 as uptrend strengthensGBP/USD edges higher on Monday as fading expectations of an imminent Federal Reserve (Fed) rate hike drag the US Dollar (USD) lower and lift the British Pound (GBP) to its highest level since May 12. At the time of writing, the pair trades around 1.3555, building on its late-July recovery after clearing several key moving averages. Read More...
British Pound hits three-month highs at 1.3570 amid generalised US Dollar weaknessThe British Pound (GBP) extends gains for the second consecutive day on Monday, as investors cut back US Dollar (USD) long positions, amid a dovish repricing of the Federal Reserve’s (Fed) monetary policy. The pair has reached levels above Friday’s peak at 1.3561 to hit three-month highs at 1.3571 so far. Read More...
Key Points:EUR/USD tested multi-week highs as traders remained bullish. USD/CAD moved away from session lows as traders reacted to inflation data from Canada. USD/JPY remained stuck below the key resistance level as traders focused on Japan's GDP Growth Rate report.
EUR/USD
+0.13%
EUR/USD ForecastGBP/USD
+0.11%
GBP/USD ForecastUSD/CAD
-0.03%
USD/CAD ForecastUSD/JPY
+0.09%
USD/JPY Forecast
U.S. Dollar Tested New Lows
DXY 170826 4h Chart U.S. Dollar Index is losing some ground as traders reduce bets on hawkish Fed. Traders also focus on the NAHB Housing Market Index report for August. The report indicated that NAHB Housing Market Index increased from 34 in July to 35 in August, compared to analyst forecast of 33.
Currently, U.S. Dollar Index is trying to settle below the support level at 99.25 – 99.40. In case U.S. Dollar Index manages to settle below the 99.25 level, it will head towards the next support, which is located in the 98.60 – 98.75 range.
EUR/USD Tests Resistance At 1.1600 – 1.1615
EUR/USD 170826 4h Chart EUR/USD gained ground as traders focused on general weakness of the American currency. Treasury yields were mixed. The yield of 2-year Treasuries pulled back below the 4.17% level, while the yield of 10-year Treasuries settled above 4.70%.
The nearest resistance level for EUR/USD is located in the 1.1600 – 1.1615 range. in case EUR/USD manages to settle above the 1.1615 level, it will head towards the next resistance at 1.1685 – 1.1700. RSI has recently moved back into moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Tests Multi-Week Highs GBP/USD 170826 4h Chart GBP/USD moved higher as traders remained bullish at the start of the week. Traders bet that Fed will leave the federal funds rate unchanged at the next meeting in September.
From the technical point of view, GBP/USD continues its attempts to settle above the resistance level at 1.3550 – 1.3565. If GBP/USD climbs above the 1.3565 level, it will head towards the next resistance, which is located in the 1.3635 – 1.3650 range.
USD/CAD Moves Away From Session Lows As Traders Focus On Canada’s Inflation Data USD/CAD 170826 4h Chart USD/CAD attempts to rebound from multi-week lows as traders react to inflation data from Canada. Inflation Rate increased from 2.8% in June to 3% in July, compared to analyst forecast of 2.9%. Core Inflation Rate grew from 2.1% to 2.3%, compared to analyst consensus of 2.2%.
If USD/CAD settles back above the 1.3880 level, it will head towards the nearest resistance at 1.3920 – 1.3935. On the support side, a successful test of the support at 1.3825 – 1.3840 will open the way to the test of the next support level at 1.3735 – 1.3750.
USD/JPY Is Mostly Flat As Japan’s GDP Growth Rate Misses Estimates
USD/JPY 170826 4h Chart USD/JPY remains stuck below the key resistance level at 159.50 – 160.00 as traders react to Japan’s GDP Growth Rate report. The report showed that GDP Growth Rate was +0.3% in the second quarter, compared to analyst forecast of +0.5%.
Traders are focused on Fed policy outlook and are worried about potential interventions from the BoJ. The Japanese yen is fundamentally weak due to the difference in interest rates, but recent interventions have made traders cautious.
If USD/JPY climbs above the 160.00 level, it will move towards the next resistance level at 161.50 – 162.00. A move above the 162.00 level will push USD/JPY towards the 164.00 level.
On the support side, a move below the 50 MA at 158.79 will open the way to the test of the nearest support level at 157.50 – 158.00.
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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.
In the short-term forex markets, we have seen a bit of US dollar soften a touch. At this point, the markets continue to see volatility.
In this article:EUR/USD
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EUR/USD ForecastUSD/CAD
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USD/CAD ForecastGBP/USD
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GBP/USD Forecast In the short-term forex markets, the euro has risen a bit in early trading on Monday. It is starting to pull back just a touch, but it looks supported to me.
Now, I’m not massively bullish this market, but I recognize that we are starting to see some softness in the U.S. dollar. I’ll be watching right around 1.1550 for signs of support to take advantage of, as we’ve had a nice bottoming pattern from a longer-term consolidation area.
I recognize that right around 1.1650 there could be some resistance, so short-term bounce play might be what I’m looking to do here, all things being equal.
USD/CAD The U.S. dollar has fallen against the Canadian dollar. I am particularly interested in the 1.39 level on any bounce for signs of exhaustion, assuming that the U.S. dollar continues to lose strength.
There are reports out there in the media right now about a potential ceasefire between the United States and Iran. We’ll see what influence that has on the market. There was an initial jolt of risk appetite coming back into the market that seems to have been abated.
GBP/USD The British pound against the U.S. dollar is another one I’m watching. On the hourly chart, we’re forming a rising wedge. A pullback toward the 1.3525 area might be interesting for value. It is also the measured move of that pattern if it does break.
The British pound has been one of the better performers against the dollar for a while, so when I find myself in a situation where I’d rather buy the dollar, I actually avoid this pair. But selling the dollar, it has performed fairly well in comparison to some of its contemporaries.
We did just recently break a swing high at the 1.3550 level, so that would be a retest, something worth watching. We’ll see. If I get that opportunity to buy it a little cheaper, I might just do so.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
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
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GBP/USD ForecastEUR/USD
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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.
United Overseas Bank’s (UOB) Quek Ser Leang notes GBP/USD invalidated a recent neutral call by breaking above 1.3555 and closing higher near 1.3532. Intraday, the British Pound (GBP) may extend toward 1.3570, with 1.3600 as firm resistance. Over the next 1–3 weeks, the upside bias remains intact while above 1.3495, though gains are expected to stall near 1.3600.
Sterling maintains constructive upside bias"24-HOUR VIEW: We expected GBP “to trade between 1.3475 and 1.3515” last Friday. We were incorrect, as GBP soared to a high of 1.3561 before pulling back to close at 1.3532 (+0.33%). While upward momentum has slowed somewhat with the pullback, GBP could rise further toward 1.3570. We do not expect the major resistance at 1.3600 to come into view. To keep the momentum going, GBP must hold above 1.3510, with minor support at 1.3525."
"1-3 WEEKS VIEW: After holding a slightly positive GBP view for about two weeks, we revised our view to neutral last Friday (14 Aug, spot at 1.3490). We highlighted that “upward momentum has largely faded.” We also highlighted that “for the time being, GBP is likely to trade in a range between 1.3440 and 1.3540.” Our shift in view was premature, as GBP rose sharply, breaking above the major resistance at 1.3555 (high was 1.3561). While we would have preferred a more decisive break above 1.3555, the move is sufficient to indicate that the upward bias remains intact. That said, any advance is expected to face firm resistance at 1.3600. Overall, only a breach of 1.3495 (‘strong support’ level) would indicate that GBP is not ready to move toward 1.3600."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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.
Pound Sterling is pressing August highs as firmer yield spreads and fading bearish hedges support Scotiabank's bullish GBP/USD view. The Pound to Dollar (GBP/USD) exchange rate is pushing back towards its August highs, trading around 1.3545 early on Monday after reaching 1.3560 last week.
Scotiabank sees a stronger underlying backdrop for Sterling than the relatively modest price move suggests.
“The pound is up 0.3% vs. the USD and threatening a break of this week’s local high in the mid-1.35s,” the bank said.
Yield spreads are helping. Scotiabank notes that UK-US spreads have extended their recent recovery, offering fresh fundamental support for GBP at the same time as demand for protection against Sterling weakness has eased.
The options market is telling a similar story.
“Risk reversals are extending their recovery and fading the premium for protection against GBP weakness,” Scotiabank said, linking the move to “a sustained improvement in the market’s perception of moderating political risk.”
That gives the latest advance a broader base than simple Dollar weakness.
Image: GBP/USD one-month chart GBP/USD has recovered strongly from its late-July low below 1.33, with the pair now trading above its rising 20-day moving average and close to the top of its one-month range.
Bank of England communication has also remained supportive.
Scotiabank highlighted comments from BoE Chief Economist Huw Pill which “reaffirmed a call for higher rates”, helping to keep Sterling's rate backdrop constructive despite a relatively quiet UK data calendar.
Short-Term GBP/USD Outlook: 1.3600 Is the Next Test Scotiabank's technical view has turned firmly bullish.
“The RSI has climbed to a fresh local high in the lower 60s, threatening the July high,” the bank said. “The gains are suggestive of renewed bullish momentum and a potential break of the midweek high just below 1.3550.”
That level has effectively already come under pressure, with GBP/USD reaching 1.3560 during the latest advance.
Scotiabank sees additional resistance at 1.3600 and then 1.3650, while retaining a near-term trading range of 1.3480-1.3580.
Image: Pound-to-Dollar exchange rate performance over 2016 GBP/USD remains well below its January high near 1.3860, but the latest recovery has carried spot above both its 20-day and 50-day moving averages and back into positive territory for 2026.
The immediate question is whether Sterling can convert improving positioning and yield support into a clean move through the mid-1.35s.
Scotiabank's signals suggest the pressure is building.
A sustained break above 1.3550 would bring 1.3600 quickly into view, while 1.3480 marks the lower edge of the bank's preferred near-term range.
For Pound Sterling bulls, the balance has shifted from defending 1.35 to testing how far above it the market can go.
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
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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.
The Pound Sterling (GBP) rises by some 0.40% on Friday as a batch of US data supports a Federal Reserve (Fed) dovish stance, with consumer sentiment deteriorating while the disinflation process showed further progress. The GBP/USD pair trades at 1.3545 after hitting a three-month high of 1.3561 earlier in the day. Read More...
British Pound strengthens against US Dollar as traders price out hawkish Fed betsThe British Pound (GBP) trades 0.35% higher to near 1.3533 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair reflects strength as the US Dollar declines, with traders pricing out the possibility of an interest rate hike by the Federal Reserve (Fed) in the September policy meeting. Read More...
British Pound strengthens to near 1.3500 as Fed rate hike bets easeThe GBP/USD pair gathers strength to near 1.3495 during the early European trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) as cooler-than-expected US consumer and producer price data have limited the Federal Reserve's (Fed) room for further interest rate hikes. Traders will keep an eye on the US July Retail Sales report later on Friday. Read More...
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The British Pound (GBP) trades 0.35% higher to near 1.3533 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair reflects strength as the US Dollar declines, with traders pricing out the possibility of an interest rate hike by the Federal Reserve (Fed) in the September policy meeting.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.23% lower to near 99.70.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.34%-0.39%-0.24%-0.35%-0.31%-0.65%-0.27%EUR0.34%-0.05%0.07%-0.06%0.03%-0.32%0.06%GBP0.39%0.05%0.15%0.00%0.08%-0.25%0.12%JPY0.24%-0.07%-0.15%-0.11%-0.08%-0.43%-0.03%CAD0.35%0.06%-0.00%0.11%0.04%-0.29%0.08%AUD0.31%-0.03%-0.08%0.08%-0.04%-0.34%0.05%NZD0.65%0.32%0.25%0.43%0.29%0.34%0.39%CHF0.27%-0.06%-0.12%0.03%-0.08%-0.05%-0.39%
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The CME FedWatch tool shows that the odds of the Fed holding policy rates steady in September have increased to almost 65%. This represents a major repricing from the 75% odds of two Fed hikes by the September meeting recorded a month earlier.
Soft United States (US) Consumer Price Index (CPI) data for July allowed traders to pare back hawkish Fed interest rate expectations.
US inflation data temper September Fed hike oddsAnalysts at Commerzbank note that "July US CPI came in broadly in line with expectations," reinforcing the view that price pressures, while still elevated, are not re-accelerating. They highlight that "overall, the report suggested that underlying inflation remains above the Fed's target but showed no broad-based re-acceleration, giving policymakers more room to remain on hold." In response, Commerzbank points out that "the Fed funds futures subsequently pared expectations for a September rate hike, with markets pricing around a 40% probability of a 25bp increase compared with 52% on Monday," underscoring a modest but notable shift in near-term Fed tightening expectations.
Meanwhile, the British Pound is expected to trade highly volatile next week as the United Kingdom (UK) labor market data for three months ending June and the CPI data for July are scheduled to be released on Tuesday and Wednesday, respectively.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3535, having pushed decisively above the former downward resistance trend line, which now offers support around 1.3451. Price action above this reclaimed structural level suggests a bullish near-term bias, while the Relative Strength Index (14) at 62.7 shows firm positive momentum without yet reaching overbought territory, hinting that buyers retain control.
On the downside, the broken trend-line region near 1.3451 is immediate support, and a daily close back below that level would signal waning bullish pressure. On the topside, the next notable hurdle is the origin of the previous trend line around 1.3871, where a sustained break would open the way for a broader continuation of sterling gains against the dollar.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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.)
The British Pound (GBP) pares losses against a weaker US Dollar (USD) on Friday, as a run of soft US inflation figures and growing signs of labour market deterioration have cast doubt about the odds for an immediate Federal Reserve (Fed) rate hike. The GBP/USD has returned to the 1.3520 area from Thursday’s lows at 1.3474, inching towards a key resistance around 1.3550.
The focus on Friday is on the US Retail Sales, which are expected to show a 0.1% uptick in July, after a 0.2% gain in June, alongside the University of Michigan survey, which is foreseen to be little changed in August.
FX Strategists at ING state that these are "second-tier releases" that would "likely need to deliver significant surprises to trigger a meaningful dollar reaction," reinforcing the sense that, absent a major data shock, the Dollar is unlikely to break decisively from its current, relatively stable trading pattern.
Technical Analysis: Key resistance is at the 1.3550 area
GBP/USD trades at 1.3520 at the time of writing, trapped within the weekly trading range, with key resistance area around 1.3550. Momentum indicators show an incipient bullish traction with the 4-hour Relative Strength Index (14) above 60, yet with the Moving Average Convergence Divergence (MACD) indicator flat near the zero line, which suggests that the move is far from impulsive.
Pound bulls would need to confirm above the July 15 and August 12 highs, around 1.3550, to resume their broader bullish trend, aiming for a retest of the early May highs in the mid-range of the 1.3600s.
Downside attempts, on the other hand, have been contained at Thursday's low of 1.3474, ahead of the previous week's trading bottom, just above 1.3400. Further down, there is no clear support until the July 27 low, at 1.3273.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD-0.20%-0.26%-0.25%-0.28%-0.16%-0.44%-0.09%EUR0.20%-0.06%-0.06%-0.11%0.05%-0.24%0.11%GBP0.26%0.06%0.02%-0.05%0.11%-0.16%0.18%JPY0.25%0.06%-0.02%-0.01%0.09%-0.20%0.18%CAD0.28%0.11%0.05%0.01%0.11%-0.16%0.20%AUD0.16%-0.05%-0.11%-0.09%-0.11%-0.28%0.09%NZD0.44%0.24%0.16%0.20%0.16%0.28%0.38%CHF0.09%-0.11%-0.18%-0.18%-0.20%-0.09%-0.38%
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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.)
Pound-Dollar could move back above $1.35 if weaker US retail sales and consumer sentiment further reduce expectations for another Federal Reserve rate hike.
The Pound to US Dollar (GBP/USD) exchange rate traded in a narrow range on Thursday as UK GDP, softer US producer prices and shifting risk appetite failed to generate a decisive move.
At the time of writing, GBP/USD was trading around $1.3498, little changed from Thursday's opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.348601 (-0.09%)
Euro to Dollar (EUR/USD): 1.15327 (+0.03%)
Dollar to Yen (USD/JPY): 159.50006 (+0.11%)
DAILY RECAP:
The Pound (GBP) traded with little direction on Thursday, with the latest UK GDP figures doing little to give Sterling a lift.
UK economic growth eased in the second quarter, although the economy continued to expand at a respectable pace. GDP rose by 0.4% in Q2, slowing from the 0.6% growth recorded in Q1.
However, Sterling found little encouragement in the figures, as the result matched expectations and part of the expansion was linked to temporary and seasonal factors. The World Cup in June and unusually warm summer weather both provided a boost to GDP.
Meanwhile, some economists cautioned that the pace of growth could weaken during the second half of the year. Persistent inflation, alongside the ongoing conflict in the Middle East, could create further headwinds for the UK economy.
Such concerns kept a lid on the Pound's gains.
The US Dollar (USD) initially enjoyed some support on Thursday as worries about the US-Iran war lifted demand for the safe-haven currency.
However, USD later faced pressure as markets reacted to the latest US producer price index.
Factory gate inflation stalled in July, rather than rising by 0.2%.
The data provided further evidence that inflationary pressures in the US may not be as severe as feared, which in turn dampened expectations for another Federal Reserve interest rate hike.
Near-Term GBP/USD Forecast: US Data to Dent the Dollar?
Looking ahead, Friday's session brings two key US economic releases that could pressure the ‘Greenback’.
The first is the latest US retail sales report. Economists expect sales growth to have slowed from 0.2% in June to just 0.1% in July, with weaker consumer spending potentially raising concerns about the health of the US economy.
The University of Michigan will then publish its preliminary consumer sentiment index for August. Markets expect confidence to have deteriorated, which could further undermine the US Dollar.
Meanwhile, broader risk appetite could continue to influence GBP/USD.
If markets remain anxious about tensions in the Middle East, safe-haven demand could provide the US Dollar with support and limit any Sterling gains.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
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 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.
The Pound Sterling (GBP) registers modest gains versus the Greenback on Thursday as US inflation data in the producer side came in below or in line with estimates, showing that the disinflation process continues. At the time of writing, the GBP/USD pair trades at 1.3503, up 0.06%. Read More...
British Pound recovers early losses against US Dollar, US PPI data eyedThe British Pound (GBP) claws back its early losses against the US Dollar (USD) and flattens at around 1.3495 during the European trading session on Thursday. The GBP/USD pair bounces back as the US Dollar (USD) comes under pressure with investors prioritizing easing fears of the Federal Reserve’s (Fed) interest rate hikes in the near term over ongoing Middle East tensions. Read More...
British Pound drifts away from 1.3500 as UK GDP slows down and Industrial Production fallsThe British Pound (GBP) treads water against the US Dollar (USD), trading practically flat, a few pips below the 1.3500 level on Thursday's early London session. A rather positive UK Gross Domestic Product (GDP) report has been offset by downbeat factory output figures, while the US Dollar keeps wavering within range, as Federal Reserve (Fed) monetary tightening expectations shrink. Read More...
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.
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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.
The British Pound (GBP) claws back its early losses against the US Dollar (USD) and flattens at around 1.3495 during the European trading session on Thursday. The GBP/USD pair bounces back as the US Dollar (USD) comes under pressure with investors prioritizing easing fears of the Federal Reserve’s (Fed) interest rate hikes in the near term over ongoing Middle East tensions.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 99.90.
Traders have trimmed Fed interest rate hike bets due to easing United States (US) upside inflation risks and growing downside labor market risks.
According to the CME FedWatch tool, the odds of the Fed holding policy rates steady in the September meeting have increased to almost 60% from 30.4% seen a month ago.
US inflation data seen as broadly in line, giving the Fed room to stay on holdAnalysts at Commerzbank note that "July US CPI came in broadly in line with expectations," with the report indicating that "underlying inflation remains above the Fed's target but showed no broad-based re-acceleration, giving policymakers more room to remain on hold." Echoing that assessment, the Danske Bank research team highlights that "in the US, July CPI was broadly in line with expectations, with headline inflation at 3.4% y/y and core inflation at 2.5% y/y." They add that "the monthly details were also close to expectations, as headline inflation increased 0.1% m/m and core inflation increased 0.2% m/m," reinforcing the view that inflation is moving closer to target-consistent levels without signs of renewed upward momentum.
Going forward, investors will focus on the US Producer Price Index (PPI) data for July, which will be published at 12:30 GMT. The headline and the core PPI growth are expected to have cooled down to 4.9% and 4.2% Year-on-Year (YoY), respectively.
Meanwhile, the recovery move in GBP/USD seems to be supported by the British currency too. The United Kingdom (UK) currency attracted bids after the release of the Q2 Gross Domestic Product (GDP) data during the day.
UK growth beats expectations but fails to shift BoE outlookAccording to TD Securities, "UK GDP surprised to the upside in June, coming in at 0.3% m/m (TDS: 0.0%; mkt: -0.1%; prior: 0.0%), and driven by strength in the services sector of 0.4% m/m (TDS/mkt: 0.0%; prior: 0.1%)." The bank notes that services growth was "broad-based, with only wholesale trade showing any real contraction." Despite the stronger monthly print, TD points out that "ultimately though, on a quarterly basis, UK economy grew in line with market expectations of 0.4% q/q, which is just above the BoE projections of 0.3% q/q," suggesting the upside surprise does little to alter the broader policy narrative.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3491. The pair holds a bullish near-term bias as spot advances above the 20-period Exponential Moving Average (EMA) at 1.3441 and above the broken downward resistance trend line, now acting as support around 1.3457. The Relative Strength Index (14) at 58.5 stays in positive territory without reaching overbought conditions, which suggests steady upside momentum while the recent breakout above the trend barrier is being defended.
On the downside, immediate support is clustered between the trend-line break at 1.3457 and the 20-period EMA at 1.3441, with the current price area around 1.3491 acting as a near-term pivot. As long as GBP/USD holds above this support band, bulls could look for the pair to consolidate gains and extend the advance, while a daily close back below 1.3457 would hint at a false break and expose the EMA area as the next line of defense.
(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.
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.
Key Points:Softer U.S. CPI has reduced pressure for additional Fed tightening, making PPI the next major inflation test for the dollar.U.S. PPI could reshape September Fed expectations if producer inflation differs materially from the recent CPI signal.EUR/USD has been rejected near $1.1569 trendline resistance, putting the $1.1500 support area back in focus.DXY is attempting to recover from $99.42 trendline support but still needs to clear its 50-day EMA near $100.29.GBP/USD has slipped below the $1.3515 pivot, with the $1.3474–$1.3437 area becoming the key downside support zone.
In this article:GBP/USD
-0.10%
GBP/USD ForecastEUR/USD
-0.01%
EUR/USD ForecastUS Dollar News: PPI and UK GDP Reshape FX Outlook Today’s main driver of the US dollar is the reassessment of FED policy after the soft US consumer inflation numbers for July. The headline CPI increased by only 0.1% (month on month) and annual inflation slowed down to 3.4%, further dampening expectations for an FED rate hike in September. The focus now is on the release of the PPI (Production Price Index) scheduled for Thursday. Another soft reading will support the FED’s decision to pause. The FED will be more relaxed with higher inflation concerns if the PPI numbers show persistence in pipeline inflation.
The euro is trading in an environment reflective of mixed fundamentals. The current holding patterns from the ECB after the policy unchanged announcement in July, together with some stabilization of the eurozone activity in manufacturing, are in place. The eonjomy’s lingering stress from the Middle East energy crisis and weak household demand, are still evident. Investors will be watching to see if the softer US inflation narrows the policy gap more between the FED and ECB, which is a major currency driver.
Sterling got a new domestic catalyst from the release of the second quarter UK GDP that showed an expansion of 0.4% over the previous quarter. This was following the 0.6% expansion in the first quarter. The data provides some evidence that the expansion of the UK economy was sustained throughout the period of elevated energy costs and geopolitical tensions.
For the Bank of England, stronger growth makes policy more difficult. Inflation is starting to fall, but Energy costs means it could easily get worse again. Luckily for them, strong activity gives policymakers the ability to focus on price stability, effects of which should be seen over time.
For August 13, the immediate FX focus is U.S. PPI. Weaker PPI could strengthen the possibility of a longer pause from the Fed, while higher PPI could make a more hawkish September scenario likely.
U.S. Dollar Index Technical Analysis: DXY Attempts Recovery Above $99.42 Trendline Support Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is currently at $100.03, attempting to climb above the rising trendline and horizontal support at $99.42 that had previously acted as repeated support. Price has climbed above the 100 day EMA at $99.91; however, the 50 day EMA at $100.29 still acts as resistance. Recent candles show some buying pressure, but the index has yet to break above the resistance cluster to confirm the start of a stronger recovery.
RSI is around 44, on the path to recovery after being in weaker territory, but continues to be below 50. Resistance zones are at $100.06, $100.29, and $100.82. For support zones, we have $99.42, $98.76, and $98.18. From my perspective, the recovery continues to be valid as long as support is found above the trend line. If support is found above $100.29, I would lean more toward an extension to $100.82.
GBP/USD Technical Analysis: Pound Breaks Below $1.3515 Pivot as Momentum Weakens GBP/USD Price Chart – Source: Tradingview GBP/USD is trading at $1.3483 and has broken below the $1.3515 pivot area and the trendline that provided support to the recent movement. While price is above the 50 EMA at $1.3474, and the 100 EMA at $1.3443, the breakdown of the recovery structure has not occurred. The momentum has definitely shifted to the downside.
The Relative Strength Index (RSI) has moved down to around 46 and recently has lost bullish pressure as price was rejected from the $1.3515-$1.3540 area. Price movement resistance can be expected at $1.3515, $1.3559, $1.3601, while support can be expected at $1.3474 with stronger support expected at $1.3437, $1.3401, and $1.3343. Price action in GBP/USD has to break $1.3515 in order to retain the bullish scenario. Without that, emphasis will remain focused on the $1.3437-$1.3474zone.
EUR/USD Technical Analysis: Euro Rejected at Descending Trendline Near $1.1570 EUR/USD Price Chart – Source: Tradingview Currently at $1.1520 on the 4 hour chart, EUR/USD rejected the descending trendline again at $1.1569. The market is now heading down towards the 50 EMA at $1.1525, where the 100 EMA at $1.1499 is the next major dynamic support. The latest candles show the loss of upside momentum, with RSI heading down to 42, and the trendline, at the same time, showing loss of bullish momentum.
Immediate resistance lies at $1.1569, $1.1621, and $1.1674. On the other hand, $1.1500 and $1.1456 are the key support levels. In my opinion, the market remains bearish as long as it is trading below the descending trendline. A break above $1.1569 will put the bullish market back in play. However, if the market falls beneath $1.1500, the $1.1456 level may become active.
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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.)
The GBP/USD pair trades with a negative bias for the second consecutive day and trades below the 1.3500 psychological mark during the Asian session on Thursday amid modest US Dollar (USD) strength. The downside potential, however, seems limited as traders might opt to wait for the UK macro data dump, including the Q2 GDP report, before placing directional bets.
In the meantime, inflation risks stemming from volatile oil prices underpin prospects for a rate hike by the US Federal Reserve (Fed). This, along with persistent geopolitical uncertainties due to the US-Iran standoff, assists the USD in building on the previous day's bounce from the post-CPI swing low and turns out to be a key factor acting as a headwind for the GBP/USD pair.
From a technical perspective, spot prices, barring the overnight bullish spike, have been oscillating in a one-week-old range. This might be categorized as a bullish consolidation phase against the backdrop of the rally since late July. Moreover, the GBP/USD pair maintains a mildly bullish near-term bias above the 100-period Simple Moving Average (SMA) on the 4-hour chart.
However, momentum indicators are less supportive. In fact, the Relative Strength Index (RSI) is hovering near the neutral 50 line, and the Moving Average Convergence Divergence (MACD) is slipping slightly below zero. This, in turn, hints at an extension of the consolidative price action rather than strong near-term directional conviction, warranting caution for aggressive traders.
Meanwhile, further weakness below the current pivot area around 1.3491 might prompt some technical selling and make spot prices vulnerable to accelerating the fall to the 100-period SMA near 1.3415. A sustained defence of these supports would keep the bullish bias intact, while a clean break below would expose a deeper corrective phase for the GBP/USD pair on the four-hour chart.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
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.
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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The Pound Sterling (GBP) holds firm within familiar levels on Wednesday after the US inflation report was in line with estimates, a relief for the Federal Reserve (Fed), which is laser-focused on tackling higher prices. The GBP/USD pair trades at around 1.3500 after reaching a high of 1.3546. Read More...
Pound Sterling retains gains as US CPI trims September Fed hike oddsGBP/USD trades modestly higher on Wednesday as the US Dollar (USD) comes under mild pressure following the release of the latest US inflation figures. However, the market reaction remains limited as the data broadly matched expectations. At the time of writing, GBP/USD trades around 1.3523, near its highest level since July 16. Read More...
British Pound holds steady above 1.3500 vs USD as traders eye US CPI ahead of UK GDPThe GBP/USD pair extends its sideways consolidation around the 1.3500 psychological mark through the first half of the European session on Wednesday. Traders opt to wait on the sidelines ahead of important macro data from the US and the UK. Read More...
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
-0.15%
EUR/USD ForecastGBP/USD
-0.09%
GBP/USD ForecastUSD/CAD
+0.13%
USD/CAD ForecastUSD/JPY
+0.07%
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.
